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EXHIBIT 4.2  


 
 

PEREGRINE SYSTEMS, INC.
  
    DECLARATION OF REGISTRATION RIGHTS    
  



    This Declaration of Registration Rights ("Declaration") is made as of December 24, 2001, by Peregrine
Systems, Inc., a Delaware corporation ("Parent"), for the benefit of shareholders of Bodha.com, Inc., a California corporation
("Company"), acquiring shares of Parent Common Stock pursuant to and as a result of that Agreement and Plan of Reorganization, dated as of
November 30, 2001 (the "Reorganization Agreement"), by and among Parent, Company and Middle Acquisition Corporation, a California corporation and
wholly owned subsidiary of Parent. 


    1.  Definitions.  Any capitalized term not otherwise defined herein shall have the meanings ascribed to
such term in the Reorganization Agreement. As used in this Declaration: 


        (a) "Holder" means (i) a shareholder of Company to whom shares of Parent Common Stock are issued pursuant to the
Reorganization Agreement or (ii) a transferee to whom registration rights granted under this Declaration are assigned pursuant to Section 7(a) of this Declaration. 


        (b) The
terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement. 


        (c) "Registration Expenses" shall mean all expenses incurred in complying with Section 2 of this Agreement,
including, without limitation, all registration, qualification and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for Parent, blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration; provided, however, Registration Expenses shall not include any selling
commissions, transfer taxes or fees and disbursements of any Holder's counsel (which expenses shall be borne by the Holder incurring such expense and not by Parent). 


        (d) "Registrable Securities" means, for each Holder, the number of shares of Parent Common Stock issued to such Holder
pursuant to the Reorganization Agreement; provided, however, that such shares of Parent Common Stock shall cease to be Registrable Securities at such
time as (i) they have been registered for resale pursuant to a prospectus included in an effective Registration Statement on Form S-3 and such securities shall have been
disposed of in accordance with such registration statement and with Section 2 hereof or (ii) they are otherwise available for resale under Rule 144 of the Securities Act within a
single 90 day period. 


        (e) "SEC" means the United States Securities and Exchange Commission. 


        (f)  "Securities Act" shall mean the United States Securities Act of 1933, as amended. 


    2.  Holder Registration.  


        (a) Parent
shall use its best efforts to cause the Registrable Securities held by the Holders to be registered under the Securities Act so as to permit the resale
thereof, and in connection therewith shall prepare and file with the SEC within 30 days following the Effective Time a registration statement on Form S-3 covering the
Registrable Securities; provided, however, if Parent shall furnish to the Holders a certificate signed by the an executive officer of Parent stating
that, in the good faith judgment of the Board of Directors of Parent, it would be seriously detrimental to Parent or its stockholders for such registration statement to be filed within such
30 day period, then, Parent's obligation to use its best efforts to file a registration statement under this Section 2(a) shall be deferred for a period not to exceed
90 days from the date of delivery of such certificate. The offerings made pursuant to such registration shall not be underwritten. 


        (b) Parent
shall (i) prepare and file with the SEC the registration statement in accordance with Section 2 hereof with respect to the Registrable
Securities and shall use its commercially 





 


reasonable best efforts to cause such registration statement to become effective as promptly as practicable after filing and to keep such registration statement effective until the sooner to occur of
(A) the date on which all Registrable Securities included within such registration statement have been sold or (B) the expiration of 5 days after the day on which such
registration statement has been declared effective, (ii) prepare and file with the SEC such amendments to such registration statement and amendments or supplements to the prospectus used in
connection therewith as may be necessary to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities registered by such registration statement,
(iii) furnish to each Holder such number of copies of any prospectus (including any amended or supplemented prospectus) in conformity with the
requirements of the Securities Act, and such other documents, as each Holder may reasonably request in order to effect the offering and sale of the Registrable Securities to be offered and sold, but
only while Parent shall be required under the provisions hereof to cause the registration statement to remain effective, (iv) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities or blue sky laws of such jurisdictions as each Holder shall reasonably request (provided that Parent shall not be required in
connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdiction where it has not been qualified), and do any
and all other acts or things which may be necessary or advisable to enable each Holder to consummate the public sale or other disposition of such Registrable Securities in such jurisdictions; and
(v) notify each Holder, promptly after it shall receive notice thereof, of the date and time the registration statement and each post-effective amendment thereto has become
effective or a supplement to any prospectus forming a part of such registration statement has been filed. 


    3.  Suspension of Prospectus.  Under any registration statement filed pursuant to Section 2
hereof, Parent may restrict the disposition of the Registrable Securities, and the Holders will not be able to dispose of such Registrable Securities, if Parent shall have delivered a notice in
writing to the Holders stating that a delay in the disposition of such Registrable Securities is necessary because Parent, in its reasonable judgment, has determined that such sales would require
public disclosure by Parent of material nonpublic information that is not included in such registration statement. In the event of the delivery of the notice described above by Parent, Parent shall
use its best efforts to amend such registration statement and/or amend or supplement the related prospectus if necessary and to take all other actions necessary to allow the proposed sale to take
place as promptly as possible, subject, however, to the right of Parent to delay further sales of Registrable Securities until the conditions or circumstances referred to in the notice have ceased to
exist or have been disclosed. Such right to defer sales of Registrable Securities shall not exceed 90 days. Any such delay shall result in a corresponding extension of the period of time that
Parent is required to maintain the effectiveness of the registration statement under Section 2. 


    4.  Indemnification.  


        (a) Parent
will indemnify and hold harmless each Holder, each of its officers and directors and partners and members, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement against all expenses, claims, losses,
damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading, or any violation by Parent of any rule or regulation promulgated under the Securities Act applicable to Parent or any
state securities law applicable to Parent in connection with 


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any such registration, qualification or compliance, and Parent will reimburse (on an as incurred basis), each Holder, each of its officers and directors and partners and members, and each person
controlling such Holder, for any reasonable legal and other expenses incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action;  provided, however, that Parent will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of
or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to Parent by a Holder; and  provided, further, that Parent will not be liable to any such person or entity with respect to any such untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus that is corrected in the final prospectus filed with the SEC pursuant to Rule 424(b) promulgated under the Securities Act (or any
amendment or supplement to such prospectus) if the person asserting any such loss, claim, damage or liability purchased securities but was not sent or given a copy of the prospectus (as amended or
supplemented) at or prior to the written confirmation of the sale of such securities to such person in any case where such delivery of the prospectus (as amended or supplemented) is required by the
Securities Act, unless such failure to deliver the prospectus (as amended or supplemented) was a result of Parent's failure to provide such prospectus (as amended or supplemented). 



        (b) Each
Holder participating in the registration described in Section 2 shall indemnify Parent, each of its directors and officers and each person who controls
Parent within the meaning of Section 15 of the Securities Act against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and will reimburse Parent and such
directors, officers and partners and members, persons, or control persons of Parent for any reasonable legal or other expenses incurred in connection with investigating or defending any such claim,
loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to Parent by such Holder;  provided, however, that the
liability of such Holder for indemnification under this Section 4(b) shall not exceed the proceeds from the offering
received by such Holder, prior to deducting any commissions, transfer taxes or other selling expenses incurred with respect to such sale. 



        (c) Each
party entitled to indemnification under this Section 4 (the "Indemnified Party") shall give notice to
the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in
such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under
this Section 4 unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Any Indemnified Party shall
reasonably cooperate with the Indemnifying Party in the defense of any claim or litigation brought against such Indemnified Party. 


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        (d) If the indemnification provided for in this Section 4 is for any reason not available to an Indemnified Party with respect to any loss, liability, claim,
damage, or expense referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party
on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense as will as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or the alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The liability of Holder under this Section 4(d) shall not exceed the proceeds from the offering received by such Holder, prior to deduction of any
commissions, transfer taxes or other selling expenses incurred with respect to such sale. 


    5.  Expenses.  All Registration Expenses incurred in connection with any registration pursuant to
Section 2 shall be borne by Parent. 


    6.  Information by Holder.  Each Holder shall furnish to Parent such information regarding such Holder,
the Registrable Securities held by it, the manner in which such Holder holds any securities of Parent and the distribution proposed by such Holder as Parent may request in writing and as shall be
required in connection with any registration, qualification or compliance referred to in this Agreement. 


    7.  Miscellaneous.  


        (a)  Limitation on Assignment of Registration Rights.  The rights to cause Parent to register Registrable
Securities pursuant to this Declaration may not be assigned by a Holder unless such a transfer is to shareholders, partners or retired partners, or members or retired members of a Holder (including
spouses and ancestors, lineal descendants, and siblings of such shareholders, partners, members or spouses who acquire Registrable Securities by right, will or intestate succession). Prior to a
permitted transfer of registration rights under this Declaration, Holder must furnish Parent with written notice of the name and address of such transferee and the Registrable Securities with respect
to which such registration rights are being assigned and a copy of a duly executed written instrument in form reasonably satisfactory to Parent by which such transferee assumes all of the obligations
and liabilities of its transferor hereunder and agrees itself to be bound hereby. No transfer of registration rights
under this Declaration shall be permitted if immediately following such transfer the disposition of such Registrable Securities by the transferee is not restricted under the Securities Act. 


        (b)  Third Parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party,
other than the parties to this Agreement, and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement provided, however, it is intended that the shareholders of Company shall be third party beneficiaries to this Declaration. 


        (c)  Governing Law.  This Agreement shall be construed in accordance with, and governed in all respects
by, the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. 



        (d)  Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. 


        (e)  Severability.  If one or more provisions of this Agreement are held to be unenforceable under
applicable law, portions of such provisions, or such provisions in their entirety, to the extent 


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necessary, shall be severed from this Agreement, and the balance of this Agreement shall be enforceable in accordance with its terms. 


        (f)  Amendment and Waiver.  Holders of a majority of the Registrable Securities from time to time
outstanding may, with the consent of Parent, amend the registration rights granted hereunder. 


*****  


    In Witness Whereof, the undersigned has executed this Declaration of Registration Rights as of the date first
above written. 



	 	 	/s/ RICHARD T. NELSON   
 Richard T. Nelson

Senior Vice President




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PEREGRINE SYSTEMS, INC. DECLARATION OF REGISTRATION RIGHTS