Exhibit 10.2

 

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REGISTRATION RIGHTS AGREEMENT

 

Dated May 5, 2003

 

among

 

MSC.Software Corporation

 

and

 

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

 

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REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (the “Agreement”) is made and entered into
this fifth day of May, 2003, among MSC.Software Corporation, a Delaware
corporation (the “Company”), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“Initial Purchaser”).

 

This Agreement is made pursuant to that certain Purchase Agreement, dated April
29, 2003, among the Company and the Initial Purchaser (the “Purchase
Agreement”), which provides for the sale by the Company to the Initial Purchaser
of $85,000,000 principal amount of the Company’s 2½% Senior Subordinated
Convertible Notes due 2008 (the “Notes”), plus an additional $15,000,000
aggregate principal amount of Notes as to which the Initial Purchaser may
exercise its over-allotment option set forth in Section 2(b) of the Purchase
Agreement.  In order to induce the Initial Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to the Initial Purchaser’s
obligations thereunder, the Company has agreed to provide to the Initial
Purchaser and its direct and indirect transferees and assigns the registration
rights set forth in this Agreement.  The execution and delivery of this
Agreement is a condition to the closing under the Purchase Agreement.

 

In consideration of the foregoing, the parties hereto agree as follows:

 

1.             Definitions.

 

As used in this Agreement, the following capitalized defined terms shall have
the following meanings:

 

“1933 Act” shall mean the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the SEC promulgated thereunder.

 

“1934 Act” shall mean the Securities Exchange Act of l934, as amended from time
to time, and the rules and regulations of the SEC promulgated thereunder.

 

“Closing Date” shall mean the Closing Time as defined in the Purchase Agreement.

 

“Common Stock” shall mean common stock of the Company.

 

“Company” shall have the meaning set forth in the preamble to this Agreement and
also includes the Company’s successors.

 

“Depositary” shall mean The Depository Trust Company, or any other depositary
appointed by the Company; provided, however, that any such depositary must have
an address in The Borough of Manhattan, The City of New York.

 

“Effectiveness Period” shall have the meaning set forth in Section 2.1(a)
hereof.

 

“Effectiveness Target Date” shall mean the one hundred eightieth (180th) day
after the Closing Date.

 

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“Event Date” shall have the meaning set forth in Section 2.4 hereof.

 

“Filing Date” shall mean the ninetieth (90th) day after the Closing Date.

 

“Holder” shall mean an Initial Purchaser, for so long as it owns any Registrable
Securities, and each of its successors, assigns and direct and indirect
transferees who become registered owners of Registrable Securities under the
Indenture.

 

“Indenture” shall mean the Indenture relating to the Securities, dated as of May
5, 2003, between the Company and J.P. Morgan Trust Company, National
Association, as trustee, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.

 

“Initial Purchaser” shall have the meaning set forth in the preamble to this
Agreement.

 

“Liquidated Damages” shall have the meaning set forth in Section 2.4 hereof.

 

“Majority Holders” shall mean the Holders of a majority of the aggregate
principal amount of Registrable Securities outstanding; provided, that whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
any of its affiliates (as such term is defined in Rule 405 under the 1933 Act)
shall be disregarded in determining whether such consent or approval was given
by the Holders of such required percentage.

 

“NASD” shall mean the National Association of Securities Dealers, Inc.

 

“Notes” shall have the meaning set forth in the preamble to this Agreement.

 

“Person” shall mean an individual, partnership, corporation, limited liability
company, joint venture, trust or unincorporated organization, or a government or
agency or political subdivision thereof.

 

“Prospectus” shall mean the prospectus included in any Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to any such
prospectus, including post-effective amendments, and in each case including all
material incorporated or deemed to be incorporated by reference therein.

 

“Purchase Agreement” shall have the meaning set forth in the preamble to this
Agreement.

 

“Registrable Securities” shall mean the Notes and the shares of Common Stock
into which the Notes are convertible, upon original issuance thereof, and at all
times subsequent thereto; provided, however, that any Securities shall cease to
be Registrable Securities when (i) a Registration Statement with respect to such
Securities shall have been declared effective under the 1933 Act and such
Securities shall have been disposed of pursuant to such Registration Statement,
(ii) such Securities shall have been sold to the public pursuant to Rule l44 (or
any

 

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similar provision then in force, but not Rule 144A) under the 1933 Act, (iii)
expiration of the holding period that would be applicable to such Securities
under Rule 144(k) under the 1933 Act were they not held by an affiliate of the
Company or (iv) such Securities shall have ceased to be outstanding.

 

“Registration Default” shall have the meaning set forth in Section 2.4 hereof.

 

“Registration Expenses” shall mean any and all expenses incident to performance
of or compliance by the Company with this Agreement, including without
limitation:  (i) all SEC, stock exchange or NASD registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state or
other securities or blue sky laws and compliance with the rules of the NASD
(including reasonable fees and disbursements of counsel for any underwriters or
Holders in connection with qualification of any Registrable Securities under
state or other securities or blue sky laws and any filing with and review by the
NASD), (iii) all expenses of any Persons in preparing or assisting in preparing,
word processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting agreements,
securities sales agreements, certificates representing the Securities and other
documents relating to the performance of and compliance with this Agreement,
(iv) all fees and expenses incurred in connection with the listing, if any, of
any of the Registrable Securities on any securities exchange or exchanges or on
any quotation system, (v) all rating agency fees, (vi) all fees and
disbursements relating to the qualification of the Indenture under applicable
securities laws, (vii) the fees and disbursements of counsel for the Company and
the fees and expenses of independent public accountants for the Company or for
any other Person, business or assets whose financial statements are included in
any Registration Statement or Prospectus, including the expenses of any special
audits or “cold comfort” letters required by or incident to such performance and
compliance, (viii) the fees and expenses of the Trustee, any registrar, any
depositary, any paying agent, any escrow agent or any custodian, in each case
including their respective counsel, (ix) the reasonable fees and disbursements
of one law firm representing the Holders of Registrable Securities and (x) the
reasonable fees and expenses of the Initial Purchaser in connection with the
Shelf Registration, including the reasonable fees and expenses of one counsel to
the Initial Purchaser, and (xi) any fees and disbursements of the underwriters
customarily paid by issuers or sellers of securities and the fees and expenses
of any special experts retained by the Company in connection with any
Registration Statement, but excluding underwriting discounts and commissions and
any transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.

 

“Registration Statement” shall mean any registration statement of the Company
pursuant to the provisions of Section 2 of this Agreement that covers all of the
Registrable Securities held by Holders that have provided the information
required pursuant to the terms of Section 2.1(d) hereof on an appropriate form
under Rule 415 under the 1933 Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated or deemed
to be incorporated by reference therein.

 

“SEC” shall mean the United States Securities and Exchange Commission or any
successor agency or government body performing the functions currently performed
by the United States Securities and Exchange Commission.

 

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“Securities” shall mean the Notes and the shares of Common Stock into which the
Notes are convertible, upon original issuance thereof, and at all times
subsequent thereto.

 

“Shelf Registration” shall have the meaning set forth in Section 2.1(a) hereof.

 

“TIA” shall mean the Trust Indenture Act of 1939, as amended from time to time,
and the rules and regulations of the SEC promulgated thereunder.

 

“Trustee” shall mean the trustee with respect to the Securities under the
Indenture.

 

“Underwriters” shall have the meaning set forth in Section 4(a) hereof.

 

For purposes of this Agreement, (i) all references in this Agreement to any
Registration Statement or Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to include the copy filed with the SEC pursuant to
its Electronic Data Gathering, Analysis and Retrieval system; (ii) all
references in this Agreement to financial statements and schedules and other
information which is “contained”, “included” or “stated” in any Registration
Statement or Prospectus (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated or deemed to be incorporated by reference in
such Registration Statement or Prospectus, as the case may be; and (iii) all
references in this Agreement to amendments or supplements to any Registration
Statement or Prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated or deemed to be incorporated
by reference in such Registration Statement or Prospectus, as the case may be.

 

2.             Registration Under the 1933 Act.

 

2.1           Shelf Registration.

 

(a)           As promptly as practicable, but no later than the Filing Date, the
Company shall file with the SEC, a Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 under the 1933 Act covering all
of the Registrable Securities held by Holders that have provided the information
required pursuant to the terms of Section 2.1(d) hereof (the “Shelf
Registration”).  The Shelf Registration shall be on Form S-3 under the 1933 Act
or another appropriate form permitting registration of such Registrable
Securities for resale by the Holders in the manner or manners reasonably
designated by them (including, without limitation, one or more underwritten
offerings); provided, however, that if the manner of resale involves an
underwritten offering, the Holders’ selection of the underwriter shall be
subject to the consent of the Company, which consent shall not be unreasonably
withheld.  The Company shall use its reasonable best efforts to cause the
Registration Statement to be declared effective by the SEC as promptly as
practicable, but no later than the Effectiveness Target Date, and to keep such
Registration Statement continuously effective, supplemented and amended, as
required in order to permit the Prospectus forming a part thereof to be useable
by the Holders until the earliest of (i) the date when the Holders are able to
sell all of their Securities immediately without restriction pursuant to the
volume limitation provisions of Rule 144 under the 1933 Act or otherwise, or
(ii) all of the Registrable Securities covered by the Registration Statement
have been sold pursuant to the Registration Statement (the “Effectiveness
Period”);  provided, however, that the Effectiveness Period in respect of the
Registration Statement shall be

 

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extended to the extent required to permit dealers to comply with the applicable
prospectus delivery requirements of Rule 174 under the 1933 Act and as otherwise
provided herein.

 

(b)           Notwithstanding any other provisions hereof, the Company shall use
its reasonable best efforts to ensure that (i) any Registration Statement and
any amendment thereto and any Prospectus forming a part thereof and any
supplements thereto complies in all material respects with the 1933 Act, (ii)
any Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming a part of any
Registration Statement and any amendment or supplement to such Prospectus, does
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

(c)           The Company further agrees, if necessary, to supplement or amend
the Registration Statement, as required by Section 3(b) below, and to furnish to
the Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the SEC.

 

(d)           No Holder of Registrable Securities may include any of its
Registrable Securities in the Registration Statement pursuant to this Agreement
unless the Holder furnishes to the Company a completed questionnaire in the form
attached as Annex A to the Offering Memorandum and such other information in
writing as the Company may reasonably request for use in connection with the
Registration Statement or Prospectus included therein and in any application to
be filed with or under state securities laws.  Before the effectiveness of the
Registration Statement, each Holder of Registrable Securities must furnish this
information to the Company in writing no later than the 20th business day after
receipt of a request from the Company therefor and the Company will include this
information in the Registration Statement in a manner so that upon effectiveness
the Holders will be permitted to deliver the Prospectus to purchasers of the
Holder’s Securities.  From and after the date that the Registration Statement is
first declared effective, upon receipt of a completed questionnaire (in the form
attached as Annex A to the Offering memorandum), the Company will, as promptly
as practicable but in any event within 5 business days of receipt, file any
amendments or supplements to the Registration Statement necessary for the
relevant Holders to be named as selling securityholders in the Prospectus
contained therein to be permitted to deliver the Prospectus to purchasers of the
Holder’s Securities (subject to the Company’s right to suspend the Registration
Statement as described in Sections 3(e)(ii), 3(e)(iii) and 3(e)(v) through
3(e)(vii) below); provided, however, that the Company will not be obligated to
file more than one such amendment or supplement to the Registration Statement in
any 30-day period following the date the Registration Statement is declared
effective for the purpose of naming Holders  as selling securityholders who were
not named in the Registration Statement at the time of effectiveness.  Holders
that do not complete and deliver the questionnaire in a timely manner will not
be named as selling securityholders in the Prospectus.  Each Holder as to which
the Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make information
previously furnished to the Company by the Holder not materially misleading.

 

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2.2           Expenses.  The Company shall pay all Registration Expenses in
connection with the Shelf Registration and any Registration Statement.  Each
Holder shall pay all fees and disbursements of its counsel (other than as set
forth in the preceding sentence or in the definition of Registration Expenses)
and all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder’s Registrable Securities
pursuant to the Registration Statement.

 

2.3           Effectiveness.  The Registration Statement shall not be deemed to
have become effective unless it has been declared effective by the SEC;
provided, however, that if, after it has been declared effective, the offering
of Registrable Securities pursuant to the Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement shall be
deemed not to have been effective during the period of such interference, until
the offering of Registrable Securities pursuant to such Registration Statement
may legally resume.

 

2.4           Liquidated Damages.  The Company and the Initial Purchaser agree
that the Holders of Registrable Securities will suffer damages if the Company
fails to fulfill its obligations under Section 2.1 hereof and that it would not
be feasible to ascertain the extent of such damages with precision. 
Accordingly, the Company agrees to pay liquidated damages on the Registrable
Securities (“Liquidated Damages”) under the circumstances and to the extent as
set forth below.  In the event that (a) the Registration Statement has not been
filed with the SEC on or prior to the Filing Date, (b) the Registration
Statement is not declared effective by the SEC on or prior to the Effectiveness
Target Date, (c) the Registration Statement has been declared effective by the
SEC and such Registration Statement ceases to be effective or usable at any time
during the Effectiveness Period for any reason without being succeeded within
five business days by a post-effective amendment to such Registration Statement
or a report filed with the SEC pursuant to the 1934 Act that cures such failure
or (d) the Company suspends the use of any Prospectus related to the
Registration Statement for a period exceeding forty-five (45) days in any
consecutive three-month period or exceeding an aggregate of ninety (90) days in
any consecutive twelve-month period (each such event referred to in clauses (a)
through (d) above, a “Registration Default”), then the interest rate borne by
the Notes shall be increased as Liquidated Damages (x) by one-quarter of one
percent (0.25%) per annum upon the occurrence of such Registration Default up to
and including the ninetieth (90th) day following such Registration Default and
(y) by one half of one percent (0.50%) from and after the ninety-first (91st)
day following the occurrence of such Registration Default, provided that the
aggregate increase in such interest rate will in no event exceed one half of one
percent (0.50%) per annum.  Upon the cure of such Registration Default, the
accrual of Liquidated Damages will cease and the interest rate will revert to
the original rate so long as no other Registration Default shall have occurred
and shall be continuing at such time; provided, however, that, if after any such
reduction in interest rate, one or more Registration Defaults shall again occur,
the interest rate shall again be increased pursuant to the foregoing
provisions.  A Registration Default under clause (a) above shall be cured on the
date that the Shelf Registration is filed with the SEC; a Registration Default
under clause (b) above shall be cured on the date that the Shelf Registration is
declared effective by the SEC; a Registration Default under clause (c) above
shall be cured on the date the Shelf Registration is declared effective or
useable; and a Registration Default under clause (d) above shall be cured on the
date the Prospectus is declared useable by the Company.  In the event of a
Registration Default, the Company shall pay Liquidated Damages to (x) the
holders of Notes and

 

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(y) the holders of Common Stock issued upon conversion of Notes in proportion to
the principal amount of such Notes converted.

 

The Company shall notify the Trustee within three business days after each and
every date on which a Registration Default occurs (an “Event Date”).  Liquidated
Damages shall be paid by the Company to the Holders of Notes by depositing with
the Trustee, in trust, for the benefit of the Holders of Notes, on or before the
applicable semiannual interest payment date, immediately available funds in sums
sufficient to pay the Liquidated Damages then due.  Such Liquidated Damages due
shall be payable on each interest payment date to the record Holder of
Securities entitled to receive the interest payment to be paid on such date as
set forth in the Indenture.  Liquidated Damages in respect of Common Stock
issued upon conversion of Notes shall be payable by the Company to the holders
of Common Stock issued upon conversion of such Notes concurrently with the
payment of Liquidated Damages to the holders of Notes.  Each obligation to pay
Liquidated Damages shall be deemed to accrue from and including the day
following the applicable Event Date.

 

2.5           Specific Enforcement.  Without limiting the remedies available to
the Initial Purchaser and the Holders, the Company acknowledges that any failure
by the Company to comply with its obligations under this Section 2 may result in
material irreparable injury to the Initial Purchaser or the Holders for which
there is no adequate remedy at law, that it would not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchaser or any Holder may obtain such relief as may be required to
specifically enforce the Company’s obligations under this Section 2.

 

3.             Registration Procedures.

 

In connection with the obligations of the Company with respect to the Shelf
Registration and the Registration Statement pursuant to Section 2 hereof, the
Company shall:

 

(a)           prepare and file with the SEC a Registration Statement within the
period specified in Section 2, on the appropriate form under the 1933 Act, which
form (i) shall be selected by the Company, (ii) shall be available for the sale
of the Registrable Securities by the selling Holders thereof, and (iii) shall
comply as to form in all material respects with the requirements of the
applicable form and include or incorporate by reference all financial statements
required by the SEC to be filed therewith or incorporated by reference therein,
and use its reasonable best efforts to cause such Registration Statement to
become effective and remain effective in accordance with Section 2 hereof;

 

(b)           cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provision then in force) under the 1933 Act; and comply with the
provisions of the 1933 Act and the 1934 Act with respect to the disposition of
all securities covered by a Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the selling
Holders thereof;

 

(c)           (i) notify each Holder of Registrable Securities, as promptly as
practicable, but in any event no less than five business days prior to filing,
that a Registration Statement with

 

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respect to the Registrable Securities is being filed and advising such Holders
that the distribution of Registrable Securities will be made in accordance with
the method elected by the Majority Holders subject to Section 2.1(a) above; (ii)
furnish to each Holder of Registrable Securities, to counsel for the Holders, to
counsel for the Initial Purchaser and to each underwriter of an underwritten
offering of Registrable Securities, if any, without charge, as many copies of
each Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder, counsel or
underwriter may reasonably request, including financial statements and schedules
and, if such Holder, counsel or underwriter so requests, all exhibits (including
those incorporated by reference) in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) subject to any notice by
the Company in accordance with Section 3(j) of the existence of any fact or
event of the kind described in Section 3(e)(v) or 3(e)(vi), the Company hereby
consents to the use of the Prospectus, including each preliminary Prospectus, or
any amendment or supplement thereto by each of the Holders and underwriters of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by any Prospectus or any amendment or supplement
thereto;

 

(d)           use its reasonable best efforts to register or qualify (or
establish an exemption from such registration or qualification for) the
Registrable Securities under all applicable state securities or “blue sky” laws
of such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request, to cooperate with the Holders
and the underwriters of any Registrable Securities in connection with any
filings required to be made with the NASD, to keep each such registration or
qualification effective during the period such Registration Statement is
required to be effective, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d) or (ii) take any action which would subject it to general service
of process or taxation in any such jurisdiction if it is not then so subject;

 

(e)           notify each Holder of Registrable Securities as promptly as
reasonably practicable and, if requested by such Holder, confirm such advice in
writing as promptly as reasonably practicable (i) when a Registration Statement
has become effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the SEC or any state securities
authority for post-effective amendments or supplements to a Registration
Statement or Prospectus or for additional information after a Registration
Statement has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if between the effective date of a Registration Statement and the closing
of any sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to such offering
cease to be true and correct in all material respects, (v) of the happening of
any event or the discovery of any facts during the period a Registration
Statement is effective which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or which

 

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constitutes an omission to state a material fact in such Registration Statement
or Prospectus or which requires the making of any changes in such Registration
Statement or Prospectus in order to make the statements therein not misleading,
(vi) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose
and (vii) of any determination by the Company that a post-effective amendment to
a Registration Statement would be appropriate;

 

(f)            furnish counsel for the Holders of Registrable Securities and, if
known, counsel for any underwriters of Registrable Securities copies of any
comment letters received from the SEC or any other request by the SEC or any
state securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;

 

(g)           make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as practicable
and provide notice as promptly as reasonably practicable to each Holder of the
withdrawal of any such order;

 

(h)           furnish to each Holder of Registrable Securities, and each
underwriter, if any, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules (without documents incorporated or deemed to
be incorporated therein by reference or exhibits thereto, unless requested);

 

(i)            cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends; and
cause such Registrable Securities to be in such denominations (consistent with
the provisions of the Indenture) and registered in such names as the selling
Holders or the underwriters, if any, may reasonably request in writing at least
five business days prior to the closing of any sale of Registrable Securities;

 

(j)            upon the occurrence of any event or the discovery of any facts,
each as contemplated by Sections 3(e)(v) and 3(e)(vi) hereof, as promptly as
practicable after the occurrence of such an event, use its reasonable best
efforts to prepare a supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain at the time of such delivery any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  The Company agrees to notify each Holder to suspend use
of the Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission.  At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such determination
and to furnish each Holder such number of copies of the Prospectus, as amended
or supplemented, as such Holder may reasonably request;

 

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(k)           obtain CUSIP numbers for all Registrable Securities not later than
the effective date of a Registration Statement, and provide the Trustee with
printed certificates for the Registrable Securities in a form eligible for
deposit with the Depositary;

 

(l)            (i)  cause the Indenture to be qualified under the TIA in
connection with the registration of the Registrable Securities, (ii) cooperate
with the Trustee and the Holders to effect such changes, if any, to the
Indenture as may be required for the Indenture to be so qualified in accordance
with the terms of the TIA and (iii) execute, and use its reasonable best efforts
to cause the Trustee to execute, all documents as may be required to effect such
changes, if any, and all other forms and documents required to be filed with the
SEC to enable the Indenture to be so qualified in a timely manner;

 

(m)          subject to Section 2.1(a), enter into agreements (including
underwriting agreements) and take all other customary and appropriate actions in
order to expedite or facilitate the disposition of such Registrable Securities
and in such connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration:

 

(i)    make such representations and warranties to the Holders of such
Registrable Securities and the underwriters, if any, in form, substance and
scope as are customarily made by issuers to underwriters in similar underwritten
offerings as may be reasonably requested by such Holders and underwriters;

 

(ii)   in connection with any underwritten offering, seek to obtain opinions of
counsel to the Company and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Holders of a majority in principal amount of the
Registrable Securities being sold) addressed to each selling Holder (where
reasonably possible) and the underwriters, if any, covering the matters
customarily covered in opinions requested in sales of securities or underwritten
offerings and such other matters as may be reasonably requested by such Holders
and underwriters;

 

(iii)  in connection with any underwritten offering, seek to obtain “comfort
letters” and updates thereof with respect to such Registration Statement and the
Prospectus included therein, all amendments and supplements thereto and all
documents incorporated or deemed to be incorporated by reference therein from
the Company’s independent certified public accountants and (where reasonably
possible) from the independent certified public accountants for any other Person
or any business or assets whose financial statements are included or
incorporated by reference in the Registration Statement or Prospectus, each
addressed to the underwriters, if any, and (where reasonably possible) to have
such letter addressed to the selling Holders of Registrable Securities, such
letters to be in customary form and covering matters of the type customarily
covered in “comfort letters” to underwriters in connection with similar
underwritten offerings;

 

(iv)  if an underwriting agreement is entered into in the case of any
underwritten offering, cause the same to set forth indemnification and
contribution provisions and procedures substantially equivalent to the
indemnification and contribution provisions and procedures set forth in Section
4 hereof with respect to the underwriters and all other parties to

 

10

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be indemnified pursuant to Section 4 hereof or, at the request of any
underwriters, in the form customarily provided to such underwriters in similar
types of transactions; and

 

(v)   deliver such other documents and certificates as may be reasonably
requested and as are customarily delivered in similar offerings to the Holders
of a majority in principal amount of the Registrable Securities being sold and
the managing underwriters, if any.

 

The above shall be done at (i) the effectiveness of such Registration Statement
(and, if appropriate, each post-effective amendment thereto) and (ii) each
closing under any underwriting or similar agreement as and to the extent
required thereunder;

 

(n)           if reasonably requested in writing in connection with a
disposition of Registrable Securities pursuant to a Registration Statement, make
reasonably available for inspection during normal business hours by
representatives of the Holders of the Registrable Securities and any
underwriters participating in any disposition pursuant to a Registration
Statement and any counsel or accountant retained by such Holders or
underwriters, all relevant financial and other records, documents and properties
of the Company reasonably requested by any such Persons, and cause the
appropriate officers, directors, employees, and any other agents of the Company
to make all information reasonably requested by any such representative,
underwriter, special counsel or accountant in connection with a Registration
Statement reasonably available for inspection during normal business hours, and
make such representatives of the Company reasonably available for discussion
during normal business hours of such documents as shall be reasonably requested
by the Initial Purchaser; provided, however, that such persons shall first agree
in writing with the Company that any information that is reasonably designated
by the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons and shall be used solely
for the purposes of exercising rights under this Agreement, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities; provided,
however, that such persons shall as promptly as reasonably practicable, provide
written notice to the Company of any request by any such regulatory authority
for any such confidential information of the Company in order to allow the
Company a reasonable amount of time to seek an appropriate protective order to
prevent the disclosure of such information, (ii) disclosure of such information
is required by law (including any disclosure requirements pursuant to federal
securities laws in connection with the filing of any Registration Statement or
the use of any Prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement or otherwise obligated to
keep such information confidential.

 

(o)           a reasonable time prior to filing any Registration Statement, any
Prospectus forming a part thereof, any amendment to such Registration Statement
or amendment or supplement to such Prospectus (other than supplements that do
nothing more substantive than name one or more Holders), provide copies of such
document upon request to the Initial Purchaser, to the underwriter or
underwriters of an underwritten offering of Registrable Securities, if any, and,
if known, to counsel for the Initial Purchaser or underwriters, and make such
changes in any such document prior to the filing thereof as the Initial
Purchaser or the

 

11

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underwriter or underwriters, or any of their respective counsel may reasonably
request within three business days after the delivery of such copies by the
Company; cause the representatives of the Company to be available for discussion
of such documents during normal business hours as shall be reasonably requested
by the Initial Purchaser on behalf of the Holders or any underwriter; and shall
not at any time make any filing of any such document of which the Initial
Purchaser on behalf of the Holders, their counsel or any underwriter shall not
have previously been advised and furnished a copy or to which the Majority
Holders, the Initial Purchaser on behalf of the Holders, their counsel or any
underwriter shall reasonably object within a reasonable time period;

 

(p)           use its reasonable best efforts to cause all Registrable
Securities to be listed on any securities exchange or inter-dealer quotation
system such as NASDAQ on which similar debt or equity securities issued by the
Company are then listed, if any;

 

(q)           use its reasonable best efforts to cause the Registrable
Securities to be rated with the appropriate rating agencies, if so requested by
the Majority Holders or by the underwriter or underwriters of an underwritten
offering of Registrable Securities, if any, unless the Registrable Securities
are already so rated;

 

(r)            otherwise comply with all applicable rules and regulations of the
SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least twelve (12) months which
shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder; and

 

(s)           cooperate and assist in any filings required to be made with the
NASD.

 

The Company may (as a condition to such Holder’s participation in the Shelf
Registration) require each Holder of Registrable Securities to furnish to the
Company such information regarding such Holder and the proposed distribution by
such Holder of such Registrable Securities as the Company may from time to time
reasonably request in writing.  Each Holder further agrees promptly to furnish
to the Company in writing all information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
misleading, any other information regarding such Holder and the distribution of
such Registrable Securities as may be required to be disclosed in the
Registration Statement under applicable law or pursuant to SEC comments and any
information otherwise required by the Company to comply with applicable law or
regulations.  Each Holder further agrees, following termination of the
Effectiveness Period, to notify the Company, within ten business days of a
request, of the amount of Registrable Securities sold pursuant to the
Registration Statement and, in the absence of a response, the Company may assume
that all of the Holder’s Registrable Securities were so sold.

 

Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts, each of the kind described
in Sections 3(e)(ii), 3(e)(iii) or 3(e)(v) through 3(e)(vii) hereof, such Holder
will forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until receipt by such Holder of (i) the copies of the
supplemented or amended Prospectus contemplated by Section 3(j) hereof or (ii)
written notice from the Company that the Shelf Registration is once again
effective or that no

 

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supplement or amendment is required.  If so directed by the Company, such Holder
will deliver to the Company (at the Company’s expense) all copies in such
Holder’s possession, other than permanent file copies then in such Holder’s
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice.  Nothing in this paragraph shall prevent
that accrual of Liquidated Damages on any Securities.

 

If any of the Registrable Securities covered by any Registration Statement are
to be sold in an underwritten offering, the underwriter or underwriters and
manager or managers that will manage such offering will be selected by the
Majority Holders of such Registrable Securities included in such offering and
shall be reasonably acceptable to the Company.  No Holder of Registrable
Securities may participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements and
(c) provides the Company with the information required in Section 2.1(d) above.

 

4.             Indemnification and Contribution.

 

(a)           The Company agrees to indemnify and hold harmless the Initial
Purchaser, each Holder, each Person who participates as an underwriter (each, an
“Underwriter”) and each Person, if any, who controls any Initial Purchaser,
Holder or Underwriter within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:

 

(i)    against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment or supplement thereto) pursuant to which Registrable Securities were
registered under the 1933 Act, including all documents incorporated therein by
reference, or any omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged untrue statement
of a material fact contained in any Prospectus (or any amendment or supplement
thereto) or any omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

 

(ii)   against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 4(d) below) any such
settlement is effected with the written consent of the Company; and

 

(iii)  against any and all expense whatsoever, as incurred (including the
reasonable fees and disbursements of counsel chosen by any indemnified party),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim

 

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whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;

 

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Initial Purchaser, any Holder or Underwriter (or any person who
expressly controls such Initial Purchaser, Holder or Underwriter) expressly for
use in a Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) provided further that this indemnity
agreement shall not apply to any loss, liability, claim, damage or expense if
the Holder fails to deliver at or prior to the written confirmation of sale, the
most recent Prospectus, as amended or supplemented, and such Prospectus, as
amended or supplemented, would have corrected such untrue statement or omission
or alleged untrue statement or omission of a material fact and the delivery
thereof was required by law.

 

(b)           Each Holder, severally but not jointly, agrees to indemnify and
hold harmless the Company, the Initial Purchaser, each Underwriter and the other
selling Holders, and each of their respective directors and officers, and each
Person, if any, who controls the Company, the Initial Purchaser, any Underwriter
or any other selling Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any Prospectus included therein (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
with respect to such Holder furnished to the Company by or on behalf of such
Holder or any other person who controls such Holder expressly for use in the
Registration Statement (or any amendment thereto) or such Prospectus (or any
amendment or supplement thereto); provided, however, that no such Holder shall
be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities pursuant to such
Registration Statement.

 

(c)           Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement.  An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party. 
In no event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any

 

14

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litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

 

(d)           If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than forty-five (45)
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least thirty (30) days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.

 

(e)           If the indemnification provided for in this Section 4 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand and of
the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.

 

The relative fault of such indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or parties or such
indemnified party or parties, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

 

(f)            The Company, the Holders and the Initial Purchaser agree that it
would not be just or equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (e)
above.  The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
4 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

 

Notwithstanding the provisions of this Section 4, no Initial Purchaser, Holder
or Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which Registrable Securities sold by it
pursuant to a Registration Statement were offered exceeds the amount of any
damages that such Initial Purchaser, Holder or Underwriter

 

15

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has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission.

 

No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 4, each Person, if any, who controls an Initial
Purchaser, Holder or Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
such Initial Purchaser, Holder or Underwriter, as the case may be, and each
director of the Company, each officer of the Company who signed the Registration
Statement and each Person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.  The respective obligations of the
Initial Purchaser, Holders, and Underwriters to contribute pursuant to this
Section 4 are several in proportion to the principal amount of Securities sold
by them pursuant to a Registration Statement and not joint.

 

The indemnity and contribution provisions contained in this Section 4 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any Initial
Purchaser, Holder or Underwriter or any Person controlling any Initial
Purchaser, Holder or Underwriter, or by or on behalf of the Company, its
officers, or directors or any Person controlling the Company and (iii) any sale
of Registrable Securities pursuant to a Registration Statement.

 

5.             Miscellaneous.

 

5.1           Rule 144 and Rule 144A.  If the Company ceases to be subject to
the reporting requirements of Section 13 or 15 of the 1934 Act, it will upon the
request of any Holder or beneficial owner of Registrable Securities (a) make
publicly available such information (including, without limitation, the
information specified in Rule 144A(d)(4) under the 1933 Act) as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver or cause to be
delivered, promptly following a request by any Holder or beneficial owner of
Registrable Securities or any prospective purchaser or transferee designated by
such Holder or beneficial owner, such information (including, without
limitation, the information specified in Rule 144A(d)(4) under the 1933 Act) as
is necessary to permit sales pursuant to Rule 144A under the 1933 Act and it
will take such further action as any Holder or beneficial owner of Registrable
Securities may reasonably request, and (c) take such further action that is
reasonable in the circumstances, in each case, to the extent required from time
to time to enable such Holder to sell its Registrable Securities without
registration under the 1933 Act within the limitation of the exemptions provided
by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to
time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time
to time or (iii) any similar rules or regulations hereafter adopted by the SEC. 
Upon the request of any Holder or beneficial owner of Registrable Securities,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.

 

5.2           No Inconsistent Agreements.  The Company has not entered into nor
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent

 

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with the rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof.  The rights granted
to the Holders hereunder do not and will not in any way conflict with and are
not and will not be inconsistent with the rights granted to the holders of any
of the Company’s other issued and outstanding securities under any other
agreements entered into by the Company or any of its subsidiaries.

 

5.3           Amendments and Waivers.  The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure.  Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders of Registrable Securities may
be given by Holders of at least a majority of the Registrable Securities being
sold by such Holders pursuant to such Registration Statement; provided that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence.  Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 5.3, whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

 

5.4           Notices.  All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telecopier or any courier guaranteeing overnight delivery (a)
if to a Holder (other than the Initial Purchaser), at the most current address
set forth on the records of the registrar under the Indenture, (b) if to an
Initial Purchaser, at the most current address given by such Initial Purchaser
to the Company by means of a notice given in accordance with the provisions of
this Section 5.4, which address initially is the address set forth in the
Purchase Agreement with respect to such Initial Purchaser, (c) if to the
Company, initially at the Company’s address set forth in the Purchase Agreement,
and thereafter at such other address of which notice is given in accordance with
the provisions of this Section 5.4, and (d) if to any Underwriter, at the most
current address given by such Underwriter to the Company by means of a notice
given in accordance with the provisions of this Section 5.4, which address
initially is the address set forth in the applicable underwriting agreement.

 

All such notices and communications shall be deemed to have been duly given:  at
the time delivered by hand, if personally delivered; two business days after
being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered to
an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

 

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5.5           Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, that (a) this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquires Registrable
Securities from a Holder and (b) nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Securities in violation
of the terms hereof or of the Purchase Agreement or the Indenture.  If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such person shall be entitled to
receive the benefits hereof.

 

5.6           Third Party Beneficiaries.  The Initial Purchaser (even if the
Initial Purchaser is not a Holder of Registrable Securities) shall be a third
party beneficiary of the agreements made hereunder between the Company, on the
one hand, and the Holders, on the other hand, and shall have the right to
enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder.  Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchaser, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights hereunder.

 

5.7           Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

 

5.8           Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

 

5.9           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICT OF LAWS THEREOF.

 

5.10         Counterparts.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

 

MSC.SOFTWARE CORPORATION

 

 

 

 

 

By:

/s/  Louis A. Greco

 

 

Name:

Louis A. Greco

 

 

Title:

Executive Vice President, Chief
Financial Officer and Corporate
Secretary

 

Confirmed and accepted as of the date first above written:

 

MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

 

 

By:

/s/ Leonard Chung

 

 

Leonard Chung

 

Vice President

 

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