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EXECUTION COPY  

 
 

EXHIBIT 10.1    
    

 
 

REGISTRATION RIGHTS AGREEMENT
      
    
    Dated May 5, 2003    
    
    among    
    
    MSC.Software Corporation    
    
    and    
    
    Merrill Lynch, Pierce,
Fenner & Smith
  Incorporated    
    

 
 

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 21/2% 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 1934, 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. 

        "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 144 (or any 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 

2

 

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. 

        "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); 

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 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 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 

4

 

required
to be disclosed in order to make information previously furnished to the Company by the Holder not materially misleading. 

        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 (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 

5

 

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 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; 

6

  

        (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 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 

8

 

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; 

        (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; 

9

 

        (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 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 

10

 

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 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 

11

 

the
Company that the Shelf Registration is once again effective or that no 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 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  

12

 

 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 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 

13

 

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 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 

14

 

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 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 

15

 

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. 

        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. 

16

        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      
	
 	

 
	 	Name:	Leonard Chung	 	 
	 	Title:	Vice President	 	 

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EXHIBIT 10.1

REGISTRATION RIGHTS AGREEMENT Dated May 5, 2003 among MSC.Software Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated

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EXECUTION COPY  

  
 

    EXHIBIT 10.2    
    

COLLATERAL PLEDGE

AND SECURITY AGREEMENT 

Dated
as of May 5, 2003 

among

MSC.Software
Corporation

as Pledgor, 

J.P.
Morgan Trust Company, National Association

as Trustee, and 

J.P.
Morgan Trust Company, National Association

as Collateral Agent 

 

        This
Collateral Pledge and Security Agreement (this "Pledge Agreement") is made and entered into as of May 5, 2003 among MSC.SOFTWARE CORPORATION, a Delaware corporation (the
"Pledgor"), having its principal offices at 2 MacArthur Place, Santa Ana, California 92707, J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, having its principal
corporate trust office in San Francisco at 560 Mission St., 13th Fl., San Francisco, CA 94105, as trustee (in such capacity, the "Trustee") for the holders (the "Holders") of the Notes
(as defined herein) issued by the Pledgor under the Indenture referred to below, and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, having a corporate trust office at the above address, as
collateral agent for the Trustee and the holders from time to time of the Notes referred to below (in such capacity, the "Collateral Agent") and securities intermediary. 

 
 

W I T N E S S E T H:    
    

        WHEREAS, the Pledgor and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Initial Purchaser") are parties to a Purchase Agreement dated
April 29, 2003 (the "Purchase Agreement"), pursuant to which the Pledgor will issue and sell to the Initial Purchaser $85,000,000 aggregate principal amount of 21/2% Senior
Subordinated Convertible Notes due 2008 (the "Notes"), plus up to 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; 

        WHEREAS,
the Pledgor and J.P. Morgan Trust Company, National Association, as Trustee, have entered into that certain indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), pursuant to which the Pledgor is issuing the Notes on the date hereof; 

        WHEREAS,
pursuant to the Indenture, the Pledgor is required to purchase, or cause the purchase of, and pledge to the Collateral Agent for the benefit of the Trustee and the Holders, at
the Closing Time (as defined in the Purchase Agreement), U.S. Government Obligations (as defined in the Indenture) in an amount that will be sufficient upon receipt of scheduled interest and principal
payments of such securities, in the written determination of KPMG LLP or another nationally recognized firm of independent public accountants selected by the Pledgor and delivered to the Trustee, to
provide for payment in full of all scheduled interest payments due on the Notes (such obligation, together with the obligation to repay the principal, Liquidated Damages (as defined in the Indenture),
if any, fees, expenses or otherwise on the Notes and under the Indenture, this Agreement and any other transaction document related thereto in the event that the Notes become due and payable prior to
such time as the ten scheduled interest payments thereon shall have been paid in full, being collectively referred to herein as the "Obligations"); 

        WHEREAS,
the Pledgor has established an account (the "Collateral Account") with JPMorgan Chase Bank, a New York state chartered banking corporation (the "Custodian"), at its office at 4
New York Plaza, 1st Fl., New York, New York 10004-2413, Account No. 10205092.1, in the name of J.P. Morgan Trust Company, National Association, as Collateral Agent for
the benefit of the trustee and holders of the 21/2% Senior Subordinated Convertible Notes due 2008 of MSC.Software Corporation; and 

        WHEREAS,
it is a condition precedent to the purchase of the Notes by the Initial Purchaser pursuant to the Purchase Agreement that the Pledgor purchase the Pledged Securities (as defined
below) and deposit such Pledged Securities into the Collateral Account to be held therein subject to the terms of this Pledge Agreement and shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Pledge Agreement. 

1

 

        NOW,
THEREFORE, in consideration of the premises herein contained, and in order to induce the Initial Purchaser to purchase the Notes, the Pledgor, the Trustee and the Collateral Agent
hereby agree, for the benefit of the Initial Purchaser and for the ratable benefit of the Holders, as follows: 

        SECTION
1.    Definitions; Appointment; Deposit and Investment.    

        1.1    Definitions.    

        (a)   Unless
otherwise defined in this Pledge Agreement, terms defined or referenced in the Indenture are used in this Pledge Agreement as such terms are defined or referenced
therein. 

        (b)   Unless
otherwise defined in the Indenture or in this Pledge Agreement, terms defined in Article 8 or 9 of the Uniform Commercial Code in effect in the State of
New York ("N.Y. Uniform Commercial Code") from time to time and/or in Section 357.2 of the Treasury Regulations (as defined in Section 1.1(c)) are used in this Pledge Agreement as such
terms are defined in such Article 8 or 9 and/or such Section 357.2. 

        (c)   In
this Pledge Agreement, the following terms have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms
defined): 

        "Account
Control Agreement" has the meaning specified in Section 1.3 hereof. 

        "Cash
Equivalents" means, to the extent owned by the Pledgor free and clear of all Liens other than Liens created hereunder, U.S. Government Obligations. 

        "C.F.R."
means U.S. Code of Federal Regulations. 

        "Closing
Time" has the meaning specified in the Purchase Agreement. 

        "Collateral"
has the meaning specified in Section 1.3 hereof. 

        "Collateral
Account" has the meaning specified in the recitals of the parties hereof. 

        "Collateral
Agent" has the meaning specified in the recitals of the parties hereto. 

        "Collateral
Investments" has the meaning specified in Section 5 hereof. 

        "Entitlement
holder" has the meaning specified in N.Y. Uniform Commercial Code Section 8-102(a)(7) or in respect of any Book-entry Security, the meaning
specified for "Entitlement Holder" in 31 C.F.R. Section 357.2 or as applicable to such Book-entry Security, the corresponding federal book-entry regulations. 

        "Holders"
has the meaning specified in the recitals of the parties hereto. 

        "Notes"
has the meaning specified in the recitals of the parties hereof. 

        "N.Y.
Uniform Commercial Code" has the meaning specified in Section 1.1(b). 

        "Obligations"
has the meaning specified in the recitals of the parties hereof. 

        "Initial
Purchaser" has the meaning specified in the recitals of the parties hereof. 

        "Purchase
Agreement" has the meaning specified in the recitals of the parties hereof. 

        "Pledged
Securities" has the meaning specified in Section 1.3 hereof. 

        "Pledgor"
has the meaning specified in the recitals of the parties hereto. 

        "securities
intermediary" means a Person that is a "securities intermediary" (as defined in N.Y. Uniform Commercial Code Section 8-102(a)(14)) and, in respect of any
Book-entry Security, a "Securities Intermediary" (as defined in 31 C.F.R. Section 357.2 or, as applicable to such Book-entry Security, as defined in the corresponding
federal book-entry regulations). 

2

 

        "Security"
has the meaning specified in Section 8-102(a)(15) of the N.Y. Uniform Commercial Code or, in respect of any Book-entry Security, has the meaning
specified for "Security" in 31 C.F.R. Section 357.2 (or as applicable to such Book-entry Security, the corresponding federal book-entry regulations). 

        "Security
entitlement" has the meaning specified in N.Y. Uniform Commercial Code Section 8-102(a)(17) or, in respect of any Book-entry Security, has the
meaning specified for "Security Entitlement" in 31 C.F.R. Section 357.2 (or, as applicable to such Book-entry Security, the corresponding federal book-entry
regulations). 

        "Settlement
Date" means, as to any U.S. Government Obligations, the date on which the purchase of such U.S. Government Obligations shall have been settled. 

        "Termination
Date" means the earlier of (a) the date of the payment in full in cash of each of the ten scheduled interest payments due on the Notes under the terms of the
Indenture and (b) the date of the payment in full in cash of all obligations due and owing under this Pledge Agreement, the Indenture and the Notes, in the event such obligations become due and
payable prior to the payment of the ten scheduled interest payments on the Notes. 

        "Treasury
Regulations" means (a) the federal regulations contained in 31 C.F.R. Part 357 (including, without limitation, Section 357.2, Section 357.10 through
Section 357.14 and Section 357.41 through Section 357.44 of 31 C.F.R.) and (b) to the extent substantially identical to the federal regulations referred to in
clause (a) above (as in effect from time to time) the federal regulations governing other U.S. Government Obligations. 

        "Trustee"
has the meaning specified in the recitals of parties hereto. 

        "Uncertificated
Security" has the meaning specified in Section 8-102(a)(18) of the N.Y. Uniform Commercial Code. 

        1.2    Appointment of the Collateral Agent.    The Trustee hereby appoints the Collateral Agent as Collateral Agent in
accordance with the terms and conditions set forth herein and the Collateral Agent hereby accepts such appointment. 

        1.3    Pledge and Grant of Security Interest.    As security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the Obligations, the Pledgor hereby assigns and pledges to the Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders and hereby grants to the Collateral Agent for the benefit of the Trustee and for the ratable benefit of the Holders, a lien on and first priority perfected security interest in
all of the Pledgor's right, title and interest in, to and under the following property: (a) the U.S. Government Obligations identified by CUSIP No. in Schedule I to this Pledge Agreement
(the "Pledged Securities") and the certificates representing the Pledged Securities (if any), the scheduled payments of principal and interest thereon which will be sufficient to provide for payment
in full of the ten scheduled interest payments due on the Notes, (b) the security entitlements described in said Schedule I with respect to the financial assets described, the securities
intermediary named, and the securities account referred to therein, (c) the Collateral Account, all security entitlements from time to time carried in the Collateral Account, all funds held
therein and all certificates and instruments, if any, from time to time representing or evidencing the Collateral Account, (d) any "Deposit Accounts" at the Custodian, as defined in and
maintained pursuant to that certain Account Control Agreement dated as of even date herewith by and between the Pledgor, the Collateral Agent and the Custodian (the "Account Control Agreement"), and
all funds held therein and all certificates and instruments, if any, from time to time representing or evidencing such Deposit Accounts, (e) all Collateral Investments (as hereinafter defined)
from time to time and all certificates and instruments, if any, representing or evidencing the Collateral Investments, and any and all security entitlements to the Collateral Investments, and any and
all related securities accounts in which any security entitlements to the 

3

 

Collateral
Investments is carried, (f) all notes, certificates of deposit, deposit accounts, checks and other instruments, if any, from time to time hereafter delivered to or otherwise
possessed by the Collateral Agent for or on behalf of the Pledgor and specifically designated by the Pledgor to be in substitution for any or all of the then existing Collateral, (g) all
interest, dividends, cash, instruments and other property, if any, from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing
Collateral and (h) all proceeds of any and all of the foregoing Collateral (including, without limitation, proceeds that constitute property of the types described in clauses (a)-(g) of this
Section 1.3) and, to the extent not otherwise included, all (i) payments under insurance (whether or not the Trustee is the loss payee thereof) or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral and (ii) cash proceeds of any and all of the foregoing Collateral (such property described in
clauses (a) through (g) of this Section 1.3 being collectively referred to herein as the "Collateral"). Without limiting the generality of the foregoing, this Pledge Agreement
secures the payment of all amounts that constitute part of the Obligations and would be owed by the Pledgor to the Trustee under the Notes, the Indenture, this Pledge Agreement and any other
transaction documents related thereto but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Pledgor. 

        SECTION
2.    Establishment and Maintenance of Collateral Account.    

        (a)   Prior
to or concurrently with the execution and delivery hereof, the Collateral Agent shall establish the Collateral Account with the Custodian at its office in the City
of New York and shall hold such account on its books as a separate account segregated from all other custodial or collateral accounts. The Pledgor and the Collateral Agent will maintain the Collateral
Account as a securities account with the Custodian in the State of New York. The following provisions shall apply to the establishment and maintenance of the Collateral Account: 

        (i)    The
Collateral Agent shall cause the Collateral Account to be, and the Collateral Account shall be, separate from all other accounts maintained by the Collateral Agent. 

        (ii)   The
Collateral Agent shall, in accordance with all applicable laws, have sole dominion and control over the Collateral Account. 

        (iii)  It
shall be a term and condition of the Collateral Account and the Pledgor irrevocably instructs the Collateral Agent, notwithstanding any other term or condition to
the contrary in any other agreement, that no amount (including interest on Collateral Investments) shall be released to or for the account of, or withdrawn by or for the account of, the Pledgor or any
other Person except as expressly provided in this Pledge Agreement. 

        (b)   At
the Closing Time, the Pledgor shall transfer, or cause to be transferred, to the Custodian in the name of the Collateral Agent, approximately $11,839.452.09 of U.S.
Government Obligations listed on Schedule I hereto by depositing such securities into the Collateral Account. The Collateral Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System and of any other appropriate banking or governmental authority, as may now or hereafter be in effect. 

        (c)   The
Collateral Agent will, from time to time, cause the reinvestment of the proceeds of Collateral that may mature or be sold in such Collateral Investments (in the name
of the Collateral Agent) as it will be directed in writing by the Pledgor, and cause such Collateral Investments to be credited to the Collateral Account as Collateral hereunder. Any such proceeds
that the Pledgor directs the Collateral Agent in writing not to reinvest in Collateral Investments shall be held in the Collateral Account. 

4

 

        SECTION
3.    Delivery and Control of Collateral.    

        (a)   All
certificates or instruments representing or evidencing Collateral shall be delivered to and held by or on behalf of the Collateral Agent pursuant hereto and shall be
in suitable form for transfer or delivery, or, at the request of the Collateral Agent, shall be accompanied by duly executed instruments of transfer or assignment in blank. In addition, the Collateral
Agent shall have the right at any time to exchange certificates or instruments representing or evidencing Collateral for certificates or instruments of smaller or larger denominations. 

        (b)   With
respect to any Collateral that constitutes a security and is not represented or evidenced by a certificate or instrument, the Pledgor shall cause the issuer thereof
either (i) to register the Collateral Agent as the registered owner of such security or (ii) to agree in writing with the Collateral Agent and the Pledgor that such issuer will comply
with instructions with respect to such security originated by the Collateral Agent without further consent of the Pledgor, the terms of such agreement to be consistent with the terms of this Agreement
(if applicable). 

        (c)   With
respect to any Collateral that constitutes a security entitlement, the Pledgor, Custodian and Collateral Agent have entered into the Account Control Agreement,
pursuant to which the Custodian has agreed to comply with entitlement orders (that is, notifications communicated to the Custodian directing transfer or redemption of the financial asset to which
Pledgor has a security entitlement) originated by the Collateral Agent in accordance with this Pledge Agreement without further consent of the Pledgor. 

        (d)   With
respect to any Collateral that constitutes a securities account, the Pledgor will comply with subsection (c) of this Section 3 with respect to all
security entitlements carried in such securities account. 

        (e)   Subject
to Section 12.01(g) of the Indenture, Pledgor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in the Office
of the Secretary of State of California and any other filing office in the United States any initial financing statements and amendments thereto that (a) contain a description of collateral of
an equal or lesser scope as the Collateral described in this Pledge Agreement, but such description may contain greater detail than is contained in this Pledge Agreement, and (b) contain any
other information required by part 5 of Article 9 of the Uniform Commercial Code as in effect in any applicable jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment therein, including whether the Pledgor is an organization, the type of organization and any organization identification number issued to the Pledgor. The Pledgor
agrees to furnish any such information to the Collateral Agent promptly upon request. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law. 

        SECTION
4.    Delivery of Collateral Other than U.S. Government Obligations.    

        (a)   Collateral
consisting of cash will be deemed to be delivered to the Collateral Agent (such that the Collateral Agent will have an enforceable lien and security interest
thereon and therein) when it has been (and for so long as it shall remain) deposited in or credited to the Collateral Account. 

        (b)   Collateral
consisting of uncertificated securities (other than U.S. Government Obligations) will be deemed delivered to the Collateral Agent when the Collateral Agent
(A) shall indicate or cause to be indicated by book entry that such securities have been credited to the Collateral Account or (B) shall receive such security (or a financial asset based
on such security) for the Collateral Account from or at the direction of the Pledgor, and shall accept such security (or such financial asset) for credit to the Collateral Account. 

5

 

        (c)   Collateral
consisting of securities, and represented or evidenced by certificates or instruments (other than U.S. Government Obligations), will be deemed delivered to
the Collateral Agent when all such certificates or instruments representing or evidencing the Collateral, including, without limitation, amounts invested as provided in Section 5, shall be
delivered to the Collateral Agent and held by or on behalf of the Collateral Agent pursuant hereto and shall be in registered form and specially indorsed to the Collateral Agent by an effective
indorsement, all in form and substance sufficient to convey a valid security interest in such Collateral to the Collateral Agent or shall be credited to the Collateral Account. 

        SECTION
5.    Investing of Amounts in the Collateral Account.    The Collateral Agent shall advise the Pledgor if, at
any time, any amounts shall exist in the Collateral Account uninvested, and if directed in writing by the Pledgor, the Collateral Agent will, subject to the provisions of Section 6 and
Section 13; 

        (a)   invest
such amounts on deposit in the Collateral Account in such Cash Equivalents in the name of the Collateral Agent as the Pledgor may direct in writing; and 

        (b)   invest
interest paid on the Cash Equivalents referred to in clause (a) above, and reinvest other proceeds of any such Cash Equivalents that may mature or be sold,
in each case in such Cash Equivalents in the name of the Collateral Agent, as the Pledgor may direct in writing (the Cash Equivalents referred to in clauses (a) and (b) above, together
with the Pledged Securities, being collectively referred to herein as "Collateral Investments"); provided, however, that the amount in cash and Pledged Securities on deposit in the Collateral Account,
collectively, at any time during the term of this Pledge Agreement, is sufficient to provide for the payment in full of the remaining interest payments at such time on the Notes up to and including
the tenth and final scheduled interest payment. Interest and proceeds that are not invested or reinvested in Collateral Investments as provided above shall be deposited and held in the Collateral
Account. Except as otherwise provided in Sections 11 and 12, the Collateral Agent shall not be liable for any loss in the investment or reinvestment of amounts held in the Collateral Account. The
Collateral Agent is not at any time under any duty to advise or make any recommendation for the purchase, sale, retention or disposition of the Collateral Investments. 

        (c)   If
the Pledgor does not select Cash Equivalents when required to do so pursuant the preceding subparagraphs (a) or (b) of this Section 5, then the
Collateral Agent shall, without any further direction from the Pledgor, invest any uninvested amounts on deposit in the Collateral Account in money market funds invested in government obligations for
which the Collateral Agent or an affiliate may act as an investment provider. 

        SECTION
6.    Disbursements.    The Collateral Agent shall hold the Collateral in the Collateral Account and release
the same, or a portion thereof, only as follows: 

        (a)   Prior
to each of the ten scheduled interest payments on the Notes, the Collateral Agent shall liquidate sufficient Collateral and release from the Collateral Account and
pay to the Trustee for the benefit of, and payment to, the Holders of the Notes in accordance with the provisions of the Indenture an amount sufficient to pay the interest due on the Notes on such
interest payment date and will take any action necessary to provide for the payment of the interest on the Notes to the Holders in accordance with the payment provisions of the Indenture from (and to
the extent of) proceeds of the Collateral in the Collateral Account. Nothing in this Section 6 shall affect the Collateral Agent's rights to apply the Collateral to the payments of amounts due
on the Notes upon acceleration thereof. 

        (b)   If,
prior to the date on which the tenth and final scheduled interest payment on the Notes is due: 

        (i)    an
Event of Default under the Notes occurs and is continuing and 

6

 

        (ii)   the
Trustee or the Holders of 25% in aggregate principal amount of the Notes accelerate the Notes by declaring the principal amount of the Notes to be immediately due
and payable in accordance with the provisions of the Indenture, except for the occurrence and continuance of an Event of Default under Section 6.01(5) and (6) of the Indenture, upon
which the Notes will be accelerated automatically pursuant to the Indenture, 

then
the Collateral Agent shall promptly, subject to applicable bankruptcy laws, liquidate sufficient Collateral and release the proceeds from the Collateral Account and pay such proceeds to the
Trustee for the benefit of, and payment to, the Holders of the Notes in accordance with the provisions of the Indenture. Distributions from the Collateral Account shall be applied, for the ratable
benefit of the Holders, as follows: 

        (x)   first,
to any accrued and unpaid interest on the Notes and 

        (y)   second,
to the extent available, to the repayment of the remaining Obligations, including the principal amount of the Notes. 

        Any
surplus of such proceeds held by the Collateral Agent and remaining after payment in full of all of the Obligations shall be paid over to the Pledgor. 

        (c)   In
the event that the Collateral held in the Collateral Account is less than 100% of the amount sufficient, in the written determination of KPMG LLP or another
nationally recognized firm of independent public accountants selected by the Pledgor, to provide for payment in full of the ten scheduled interest payments due on the Notes (or, in the event an
interest payment or payments have been made, an amount sufficient to provide for payment in full of all interest payments remaining, up to and including the tenth and final scheduled interest
payment), the Pledgor shall deposit cash into the Collateral Account in the amount of such deficiency within five (5) days of the occurrence of such deficiency. 

        (d)   In
the event that the Collateral held in the Collateral Account exceeds 100% of the amount sufficient, in the determination of KPMG LLP or another nationally recognized
firm of independent public accountants selected by the Pledgor, to provide for payment in full of the ten scheduled interest payments due on the Notes (or, in the event an interest payment or payments
have been made, an amount sufficient to provide for payment in full of all interest payments remaining, up to and including the tenth and final scheduled interest payment), the Collateral Agent shall
release to the Pledgor, at the Pledgor's written request, accompanied by a written determination prepared by KPMG LLP or such other nationally recognized firm of independent public accountants, any
such excess Collateral. 

        (e)   Upon
the release of any Collateral from the Collateral Account, in accordance with the terms of this Pledge Agreement, the security interest and lien evidenced by this
Pledge Agreement in such released Collateral will automatically terminate and be of no further force and effect; provided that the foregoing shall not affect the security interest and lien on any
Collateral not so released. 

        (f)    Except
as expressly provided in this Section 6, nothing contained in this Pledge Agreement shall (i) afford the Pledgor any right to issue entitlement
orders with respect to any security entitlement to the Pledged Securities or Collateral Investments or any securities account in which any such security entitlement may be carried, or otherwise afford
the Pledgor control of any such security entitlement or (ii) otherwise give rise to any rights of the Pledgor with respect to the Collateral Investments, any security entitlement thereto or any
securities account in which any such security entitlement may be carried, other than the Pledgor's rights under this Pledge Agreement as the beneficial owner of Collateral pledged to and subject to
the exclusive dominion and control (including, without limitation, securities control) of the Collateral Agent in its capacity as such (and not as a securities intermediary) before the payment in
full, when due, of the scheduled 

7

 

interest
payments on the Notes. The Pledgor acknowledges, confirms and agrees that the Collateral Agent holds a first priority perfected security interest, lien and security entitlement to the
Collateral Investments solely as collateral agent for the Trustee and the Holders and not as a securities intermediary for the Pledgor. 

        SECTION
7.    Representations and Warranties.    The Pledgor hereby represents and warrants, as of the date hereof,
that: 

        (a)   The
execution and delivery by the Pledgor of, and the performance by the Pledgor of its obligations under, this Pledge Agreement will not contravene any provision of
applicable law binding on the Pledgor or the certificate of incorporation, bylaws or equivalent organizational instruments of the Pledgor or any material agreement or other material instrument binding
upon the Pledgor or any of its subsidiaries or any material judgment, order or decree of any governmental body, agency or court having jurisdiction over the Pledgor or any of its subsidiaries, or
result in the creation or imposition of any Lien on any assets of the Pledgor, except for the lien and security interests granted under this Pledge Agreement; no consent, approval, authorization or
order of, or qualification with, and no notice to or filing with, any governmental body or agency or other third party is required on the part of the Pledgor (i) for the performance by the
Pledgor of its obligations under this Pledge Agreement, (ii) for the pledge by the Pledgor of the Collateral pursuant to this Pledge Agreement or for the execution, delivery or performance of
this Agreement by the Pledgor or (iii) for the perfection or maintenance of the pledge, assignment and security interest created hereby (including the first priority nature of such pledge,
assignment or security interest), except for the filing of financing and continuation statements under the Uniform Commercial Code of applicable jurisdictions, or (iv) except for any such
consents, approvals, authorizations or orders required to be obtained by the Collateral Agent (or the Holders) for reasons other than the consummation of this transaction, for the exercise by the
Collateral Agent of the rights provided for in this Pledge Agreement or the remedies in respect of the Collateral pursuant to this Pledge Agreement. 

        (b)   The
Pledgor is the legal and beneficial owner of the Collateral, free and clear of any Lien or claims of any Person (except for the lien and security interests granted
under this Pledge Agreement). No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any public office other than the financing
statements, if any, to be filed pursuant to this Pledge Agreement. 

        (c)   This
Pledge Agreement has been duly authorized, validly executed and delivered by the Pledgor and (assuming the due authorization and valid execution and delivery of
this Pledge Agreement by each of the Trustee and the Collateral Agent and enforceability of the Pledge Agreement against each of the Trustee and the Collateral Agent in accordance with its terms)
constitutes a valid and binding agreement of the Pledgor, enforceable against the Pledgor in accordance with its terms, except as (i) the enforceability hereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, preference, reorganization, moratorium or similar laws now or hereafter in effect relating to or affecting the rights or remedies of creditors generally,
(ii) the availability of equitable remedies may be limited by equitable principles of general applicability and the discretion of the court before which any proceeding therefor may be brought,
(iii) the exculpation provisions and rights to indemnification hereunder may be limited by U.S. federal and state securities laws and public policy considerations and (iv) the waiver of
rights and defenses contained in Section 13(b), Section 17.10 and Section 17.14 hereof may be limited by applicable law. 

        (d)   Upon
the delivery to the Collateral Agent of the Collateral in accordance with the terms hereof, the pledge of and grant of a security interest in the Collateral
securing the payment of the Obligations for the benefit of the Trustee and the Holders will constitute a valid, first priority, 

8

 

perfected
security interest in such Collateral (except, with respect to proceeds, only to the extent permitted by Section 9-315 of the N.Y. Uniform Commercial Code). 

        (e)   There
are no legal or governmental proceedings pending or, to the best of the Pledgor's knowledge, threatened to which the Pledgor or any of its subsidiaries is a party
or to which any of the properties of the Pledgor or any of its subsidiaries is subject that would materially adversely affect the power or ability of the Pledgor to perform its obligations under this
Pledge Agreement or to consummate the transactions contemplated hereby. 

        (f)    The
pledge of the Collateral pursuant to this Pledge Agreement is not prohibited by law or governmental regulation (including, without limitation, Regulations T, U and X
of the Board of Governors of the Federal Reserve System) applicable to the Pledgor. 

        (g)   No
Event of Default exists. 

        (h)   The
Pledgor is a corporation duly organized and validly existing under the laws of the State of Delaware. The Pledgor's name as it appears in official filings in the
State of Delaware is MSC.SOFTWARE CORPORATION. 

        SECTION
8.    Further Assurances.    The Pledgor will, promptly upon the reasonable request by the Collateral Agent
(which request the Collateral Agent may submit at the direction of the Holders of a majority in aggregate principal amount of the Notes then outstanding), execute and deliver or cause to be executed
and delivered, or use its reasonable best efforts to procure, all assignments, instruments and other documents, deliver any instruments to the Collateral Agent and take any other actions that are
necessary to perfect, continue the perfection of, or protect the first priority of the Collateral Agent's security interest in and to the Collateral, to protect the Collateral against the rights,
claims or interests of third persons (other than any such rights, claims or interests created by or arising through the Collateral Agent) or to effect the purposes of this Pledge Agreement. Without
limiting the generality of the foregoing, the Pledgor will, if any Collateral shall be evidenced by a promissory note or other instrument, deliver to the Collateral Agent in pledge hereunder such note
or instrument duly indorsed and accompanied by duly executed instruments of transfer or assignment; and execute and file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary, or as the Collateral Agent may reasonably request, in order to perfect and preserve the pledge, assignment and first priority perfected security
interest granted or purported to be granted hereby. The Pledgor will promptly pay all costs incurred in connection with any of the foregoing within 45 days of receipt of an invoice therefor.
The Pledgor also agrees, whether or not requested by the Collateral Agent, to use its commercially reasonable efforts to perfect or continue the perfection of, or to protect the first priority of, the
Collateral Agent's security interest in and to the Collateral, and to protect the Collateral against the rights, claims or interests of third persons (other than any such rights, claims or interests
created by or arising through the Collateral Agent). 

        SECTION
9.    Covenants.    The Pledgor covenants and agrees with the Collateral Agent, Trustee and the Holders that
from and after the date of this Pledge Agreement until the Termination Date: 

        (a)   it
will not (i) (and will not purport to) sell or otherwise dispose of, or grant any option or warrant with respect to, any of the Collateral nor
(ii) create or permit to exist any Lien upon or with respect to any of the Collateral (except for the liens and security interests granted under this Pledge Agreement and any Lien created by or
arising through the Collateral Agent) and at all times will be the sole beneficial owner of the Collateral; 

        (b)   it
will not (i) enter into any agreement or understanding that restricts or inhibits or purports to restrict or inhibit the Trustee's or the Collateral Agent's
rights or remedies hereunder, including, without limitation, the Collateral Agent's right to sell or otherwise dispose of the Collateral or (ii) fail to pay or discharge any tax, assessment or
levy of any nature with respect to its beneficial interest in the Collateral not later than five Business Days prior to the date of any proposed sale under any judgment, writ or warrant of attachment
with respect to the Collateral; 

9

  

        (c)   it
will maintain its jurisdiction of organization in the State of Delaware, or upon 30 days' prior written notice to the Collateral Agent, in another jurisdiction
where all actions required by Sections 3(f) and 8 have been taken with respect to the Collateral; 

        (d)   it
will not, and acknowledges that it is not authorized to, file any financing statement or amendment or termination statement with respect to any financing statement in
favor of the Collateral Agent without the prior written consent of Collateral Agent and agrees that it will not do so without the prior written consent of Collateral Agent, subject to the Pledgor's
rights under Section 9-509(d)(2) of the N.Y. Uniform Commercial Code. 

        SECTION
10.    Power of Attorney; Agent May Perform.    

        (a)   Subject
to the terms of this Pledge Agreement, the Pledgor hereby appoints and constitutes the Collateral Agent as the Pledgor's attorney-in-fact
(with full power of substitution) to exercise to the fullest extent permitted by law all of the following powers upon and at any time after the occurrence and during the continuance of an Event of
Default: 

	(i)
	collection
of proceeds of any Collateral;

	(ii)
	conveyance
of any item of Collateral to any purchaser thereof;

	(iii)
	giving
of any notices or recording of any Liens hereof; and

	(iv)
	paying
or discharging taxes or Liens levied or placed upon the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by the
Collateral Agent in its sole reasonable discretion, and such payments made by the Collateral Agent to become part of the Obligations secured hereby, due and payable immediately upon demand. The
Collateral Agent's authority under this Section 10 shall include, without limitation, the authority to endorse and negotiate any checks or instruments representing proceeds of Collateral in the
name of the Pledgor, execute and give receipt for any certificate of ownership or any document constituting Collateral, transfer title to any item of Collateral, sign the Pledgor's name on all
financing statements (to the extent permitted by applicable law) or any other documents necessary or appropriate to preserve, protect or perfect the security interest in the Collateral and to file the
same, prepare, file and sign the Pledgor's name on any notice of Lien (to the extent permitted by applicable law), and to take any other actions arising from or necessarily incident to the powers
granted to the Trustee or the Collateral Agent in this Pledge Agreement. This power of attorney is coupled with an interest and is irrevocable by the Pledgor. 

        (b)   If
the Pledgor fails to perform any agreement contained herein, the Collateral Agent may, but is not obligated to, after providing to the Pledgor notice of such failure
and five Business Days to effect such performance, itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be payable
by the Pledgor under Section 14. 

        SECTION
11.    No Assumption of Duties; Reasonable Care.    The rights and powers granted to the Collateral Agent
hereunder are being granted in order to preserve and protect the security interest of the Collateral Agent for the benefit of the Trustee and the Holders in and to the Collateral granted hereby and
shall not be interpreted to, and shall not impose any duties on, the Collateral Agent in connection therewith other than those expressly provided herein or imposed under applicable law. Except as
provided by applicable law or by the Indenture, the Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the Collateral Agent accords similar 

11

 

property
held by the Collateral Agent for similar accounts, it being understood that the Collateral Agent in its capacity as such 

        (a)   may
consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; and 

        (b)   shall
not have any responsibility for 

	(i)
	ascertaining
or taking action with respect to calls, conversions, exchanges, maturities or other matters relative to any Collateral, whether or not the Collateral Agent has or is
deemed to have knowledge of such matters,

	(ii)
	taking
any necessary steps for the existence, enforceability or perfection of any security interest of the Collateral Agent or to preserve rights against any parties with respect to
any Collateral or

	(iii)
	except
as otherwise set forth in Section 5, investing or reinvesting any of the Collateral. 

        In
no event shall the Collateral Agent be liable for the existence, validity, enforceability or perfection of any security interest of the Collateral Agent, or for special indirect or
consequential damages or lost profits or loss of business, arising in connection with this Agreement, even if the Collateral Agent has been advised of such damages or loss and regardless of the form
of action. 

        SECTION
12.    Indemnity.    The Pledgor shall fully indemnify, hold harmless and defend the Collateral Agent and its
directors and officers from and against any and all claims, losses, actions, obligations, liabilities and expenses, including reasonable defense costs, reasonable investigative fees and costs, and
reasonable legal fees, expenses, and damages arising from the Collateral Agent's appointment and performance as Collateral Agent under this Pledge Agreement, except to the extent that such claim,
action, obligation, liability or expense is directly caused by the bad faith, gross negligence or willful misconduct of such indemnified person. The provisions of this Section 12 shall survive
termination of this Pledge Agreement and the resignation and removal of the Collateral Agent. 

        SECTION
13.    Remedies upon Event of Default.    Subject to Section 6(b), if any Event of Default under the
Indenture shall have occurred and be continuing and the Notes shall have been accelerated in accordance with the provisions of the Indenture: 

        (a)   The
Trustee, the Collateral Agent and the Holders shall have, in addition to all other rights given by law or by this Pledge Agreement or the Indenture, all of the
rights and remedies with respect to the Collateral of a secured party upon default under the N.Y. Uniform Commercial Code (whether or not the N.Y. Uniform Commercial Code applies to the affected
Collateral) at that time. In addition, with respect to any Collateral that shall then be in or shall thereafter come into the possession or custody of the Collateral Agent, the Collateral Agent may
and, at the written direction of the Trustee or the Holders of a majority in aggregate principal amount of the Notes then outstanding, shall appoint a broker or other expert to sell or cause the same
to be sold at any broker's board or at public or private sale, in one or more sales or lots, at such price or prices such broker or other expert may deem commercially reasonable, for cash or on credit
or for future delivery, without assumption of any credit risk. The purchaser of any or all Collateral so sold shall thereafter hold the same absolutely, free from any claim, encumbrance or right of
any kind whatsoever created by or through the Pledgor. Unless any of the Collateral threatens, in the reasonable judgment of the Collateral Agent, to decline speedily in value, the Collateral Agent
will give the Pledgor reasonable notice of the time and place of any public sale thereof, or of the time after which any private sale or other intended disposition is to be made. Any sale of the
Collateral conducted in conformity with reasonable commercial practices of banks, insurance companies, 

12

 

commercial
finance companies, or other financial institutions disposing of property similar to the Collateral shall be deemed to be commercially reasonable. Any requirements of reasonable notice shall
be met if notice of the time and place of any public sale or the time after which any private sale is to be made is given to the Pledgor as provided in Section 17.1 hereof at least ten
(10) days before the time of the sale or disposition. The Collateral Agent or any Holder may, in its own name or in the name of a designee or nominee, buy any of the Collateral at any public
sale and, if permitted by applicable law, at any private sale. The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Collateral
Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which
it was so adjourned. All expenses (including court costs and reasonable attorneys' fees, expenses and disbursements) of, or incident to, the enforcement of any of the provisions hereof shall be
recoverable from the proceeds of the sale or other disposition of the Collateral. 

        (b)   The
Pledgor further agrees to use its reasonable best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any
portion of the Collateral pursuant to this Section 13 valid and binding and in compliance with any and all other applicable requirements of law. The Pledgor further agrees that a breach of any
of the covenants contained in this Section 13 will cause irreparable injury to the Trustee and the Holders, that the Trustee and the Holders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this Section 13 shall be specifically enforceable against the Pledgor, and the Pledgor hereby waives and agrees not to
assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred. 

        (c)   All
cash proceeds received by the Collateral Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the
discretion of the Collateral Agent, be held by the Collateral Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Collateral Agent or
the Trustee pursuant to Section 14) by the
Collateral Agent for the ratable benefit of the Holders first against any accrued and unpaid interest on the Notes and thereafter against the remaining Obligations. Any surplus of such cash or cash
proceeds held by the Collateral Agent and remaining after payment in full of all of the Obligations shall be paid over to the Pledgor. 

        (d)   The
Collateral Agent may, but is not obligated to, exercise any and all rights and remedies of the Pledgor in respect of the Collateral. 

        (e)   Subject
to and in accordance with the terms of this Pledge Agreement, all payments received by the Pledgor in respect of the Collateral shall be received in trust for
the benefit of the Collateral Agent, shall be segregated from other funds of the Pledgor and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary
indorsement). 

        (f)    The
Collateral Agent may, without notice to the Pledgor except as required by law and at any time or from time to time, charge, set-off and otherwise apply
all or any part of the Obligations against the Collateral Account or any part thereof. 

        (g)   The
Pledgor shall cease to be entitled to direct the investment of amounts held in the Collateral Account under Section 5 hereof and the Collateral Agent shall
not accept any direction from the Pledgor to invest amounts held in the Collateral Account. 

        SECTION
14.    Fees and Expenses.    Pledgor agrees to pay to Collateral Agent the fees as may be agreed upon from
time to time in writing. The Pledgor will within five days after demand pay to the Trustee and the Collateral Agent the amount of any and all expenses, including, without limitation, the 

13

 

reasonable
fees, expenses and disbursements of counsel, experts and agents retained by the Trustee and the Collateral Agent, that the Trustee and the Collateral Agent may incur in connection with 

        (a)   the
review, negotiation and administration of this Pledge Agreement; 

        (b)   the
custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral; 

        (c)   the
exercise or enforcement of any of the rights of the Collateral Agent, the Trustee and the Holders hereunder; or 

        (d)   the
failure by the Pledgor to perform or observe any of the provisions hereof. 

        SECTION
15.    Security Interest Absolute.    All rights of the Collateral Agent, the Trustee and the Holders and
security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of: 

        (a)   any
lack of validity or enforceability of the Indenture or any other agreement or instrument relating thereto; 

        (b)   any
change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any
departure from the Indenture; 

        (c)   any
exchange, surrender, release or non-perfection of any Liens on any other collateral for all or any of the Obligations; 

        (d)   any
change, restructuring or termination of the corporate structure or the existence of the Pledgor or any of its subsidiaries; 

        (e)   to
the extent permitted by applicable law, any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Pledgor in respect of
the Obligations or of this Pledge Agreement; or 

        (f)    any
manner of application of other collateral, or proceeds thereof, to all or any item of the Obligations, or any manner of sale or other disposition of any item of
Collateral for all or any of the Obligations. 

        SECTION
16.    Collateral Agent's Representations, Warranties and Covenants.    The Collateral Agent hereby: 

        (a)   covenants
that it shall not, subject to applicable law, knowingly take any action inconsistent with, and represents and covenants that it is not and so long as this
Pledge Agreement remains in effect will not
knowingly become, party to any agreement the terms of which are inconsistent with, the provisions of this Pledge Agreement; 

        (b)   agrees
that any item of property credited to the Collateral Account shall be treated as a financial asset; 

        (c)   agrees
to maintain the Collateral Account and maintain appropriate books and records in respect thereof in accordance with its usual procedures and subject to the terms
of this Pledge Agreement; and 

        (d)   agrees
that it will comply with the Account Control Agreement. 

14

 

        SECTION
17.    Miscellaneous Provisions.    

        17.1    Notices.    Any notice, approval, direction, consent or other communication shall be sufficiently given if in
writing and delivered in person or mailed by first class mail, commercial courier service or telecopier communication, addressed as follows: 

if
to the Pledgor: 

MSC.Software
Corporation

2 MacArthur Place

Santa Ana, California 92707

Attention: Chief Financial Officer

Fax No.: (714) 784-4155 

if
to the Collateral Agent: 

J.P.
Morgan Trust Company, National Association

560 Mission St., 13th Fl.

San Francisco, CA 94105

Attention: Mitch Gardner

Fax No.: (415) 315-7585 

if
to the Trustee: 

J.P.
Morgan Trust Company, National Association

560 Mission St., 13th Fl.

San Francisco, CA 94105

Attention: Mitch Gardner

Fax No.: (415) 315-7585 

or,
as to any such party, at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. All such notices
and other communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt is confirmed, if telecopied; and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery. 

        17.2    No Adverse Interpretation of Other Agreements.    This Pledge Agreement may not be used to interpret another
pledge, security or debt agreement of the Pledgor or any subsidiary thereof. No such pledge, security or debt agreement (other than the Indenture) may be used to interpret this Pledge Agreement. 

        17.3    Severability.    The provisions of this Pledge Agreement are severable, and if any clause or provision shall
be held invalid, illegal or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect in that jurisdiction only such clause or provision, or part
thereof, and shall not in any manner affect such clause or provision in any other jurisdiction or any other clause or provision of this Pledge Agreement in any jurisdiction. 

        17.4    Headings.    The headings in this Pledge Agreement have been inserted for convenience of reference only, are
not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. 

        17.5    Counterpart Originals.    This Pledge Agreement may be signed in two or more counterparts, each of which shall
be deemed an original, but all of which shall together constitute one and the same agreement. 

15

 

        17.6    Benefits of Pledge Agreement.    Nothing in this Pledge Agreement, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, and the Holders, any benefit or any legal or equitable right, remedy or claim under this Pledge Agreement. 

        17.7    Amendments, Waivers and Consents.    Any amendment or waiver of any provision of this Pledge Agreement and any
consent to any departure by the Pledgor, the Trustee or the Collateral Agent or from any provision of this Pledge Agreement shall be effective only if made or duly given in compliance with all of the
terms and provisions of the Indenture, and none of the Trustee, the Collateral Agent, the Pledgor, or any Holder shall be deemed, by any act, delay, indulgence, omission or otherwise, to have waived
any right or remedy hereunder or to have acquiesced in any default or Event of Default or in any breach of any of the terms and conditions hereof. Failure of the Trustee, the Pledgor, the Collateral
Agent or any Holder to exercise, or delay in exercising, any right, power or privilege hereunder shall not preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Trustee, the Pledgor, the Collateral Agent or any Holder of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the
Trustee, the Pledgor, the Collateral Agent or such Holder would otherwise have on any future occasion. The Collateral Agent and the Trustee shall sign any amendment hereof authorized or permitted
pursuant to Section 12.01(c) of the Indenture if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Collateral Agent and the Trustee. If it does, the
Collateral Agent and the Trustee may, in their sole discretion, but need not, sign it. In signing and refusing to sign such amendment, the Collateral Agent and the Trustee shall be entitled to receive
and, subject to Section 11 and 17.11, shall be fully protected in relying upon, an Opinion of Counsel (as defined in the Indenture) stating that such amendment is authorized or permitted by the
Indenture. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law. 

        17.8    Continuing Security Interest; Termination.    

        (a)   This
Pledge Agreement shall create a continuing first priority perfected security interest in and to the Collateral and shall, unless otherwise provided in the Indenture
or in this Pledge Agreement, remain in full force and effect until the Termination Date. This Pledge Agreement shall be binding upon the parties hereto and their respective transferees, successors and
assigns, and shall inure, together with the rights and remedies of the Trustee and the Collateral Agent hereunder, to the benefit of the Trustee, the Collateral Agent, the Pledgor, the Holders and
their respective successors, transferees and assigns. 

        (b)   Upon
the Termination Date, without any action on the part of the Pledgor, the pledge, assignment and security interest granted hereby shall terminate and all rights to
the Collateral shall revert to the Pledgor. At such time, the Collateral Agent shall, in accordance with the Pledgor's instructions, promptly reassign and redeliver to the Pledgor all of the
Collateral hereunder that has not been sold, disposed of, retained or applied by the Collateral Agent in accordance with the terms of this Pledge Agreement and the Indenture and execute and deliver to
the Pledgor such documents as the Pledgor shall reasonably request to evidence such termination. Such reassignment and redelivery shall be without warranty by or recourse to the Collateral Agent or
the Trustee in its capacity as such, except as to the absence of any Liens on the Collateral created by or arising through the Collateral Agent or the Trustee, and shall be at the reasonable expense
of the Pledgor. 

        17.9    Survival Provisions.    All representations, warranties and covenants contained herein shall survive the
execution and delivery of this Pledge Agreement, and shall terminate only upon the termination of this Pledge Agreement. The obligations of the Pledgor under Sections 12 and 14 hereof and the
obligations of the Collateral Agent under Section 17.8(b) hereof shall survive the termination of this Pledge Agreement. 

16

 

        17.10    Waivers.    The Pledgor waives presentment and demand for payment of any of the Obligations, protest and
notice of dishonor or default with respect to any of the Obligations, and all other notices to which the Pledgor might otherwise be entitled, except as otherwise expressly provided herein or in the
Indenture. 

        17.11    Authority of the Collateral Agent.    

        (a)   The
Collateral Agent shall have and be entitled to exercise all powers hereunder that are specifically granted to the Collateral Agent by the terms hereof, together with
such powers as are reasonably incident thereto. The Collateral Agent may perform any of its duties hereunder or in connection with the Collateral by or through agents or attorneys, shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder and shall be entitled to retain counsel and to act in reliance upon the advice
of counsel concerning all such matters. Except as otherwise expressly provided in this Pledge Agreement or the Indenture, neither the Collateral Agent nor any director, officer, employee, attorney or
agent of the Collateral Agent shall be liable to the Pledgor for any action taken or omitted to be taken by the Collateral Agent, in its capacity as Collateral Agent, hereunder, except for its own bad
faith, gross negligence or willful misconduct, and the Collateral Agent shall not be responsible for the validity, effectiveness or sufficiency hereof or of any document or security furnished pursuant
hereto. The Collateral Agent and its directors, officers, employees, attorneys and agents shall be entitled to rely conclusively on any communication, instrument or document believed by it or them to
be genuine and correct and to have been signed or sent by the proper Person or Persons. The Collateral Agent shall have no duty to cause any financing statement or continuation statement to be filed
in respect of the Collateral. 

        (b)   The
Pledgor acknowledges that the rights and responsibilities of the Collateral Agent under this Pledge Agreement with respect to any action taken by the Collateral
Agent or the exercise or non-exercise by the Collateral Agent of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this
Pledge Agreement shall, as between the Collateral Agent and the Holders, be governed by the Indenture and by such other agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Pledgor, the Collateral Agent shall be conclusively presumed to be acting as agent for the Trustee and the Holders with full and valid authority so to act or
refrain from acting, and the Pledgor shall not be obligated or entitled to make any inquiry respecting such authority. 

        17.12    Final Expression.    This Pledge Agreement, together with the Indenture and any other agreement executed
among the parties to this Agreement in connection herewith, is intended by the parties as a final expression of this Pledge Agreement and is intended as a complete and exclusive statement of the terms
and conditions thereof. 

        17.13    Rights of Holders.    No Holder shall have any independent rights hereunder other than those rights granted
to individual Holders pursuant to Sections 6.05, 6.06 and 6.07 of the Indenture; provided that nothing in this subsection shall limit any rights granted to the Trustee under the Notes or the
Indenture. 

        17.14    GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER OF DAMAGES.    

        (a)   THIS
PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, 

17

 

IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THE PLEDGOR, THE TRUSTEE, THE COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH THIS PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. NOTWITHSTANDING THE FOREGOING, THE MATTERS IDENTIFIED IN 31 C.F.R. SECTIONS 357.10 AND 357.11 (AS IN EFFECT ON THE DATE OF THIS
PLEDGE AGREEMENT) SHALL BE GOVERNED SOLELY BY THE LAWS SPECIFIED THEREIN AND THE MATTERS IDENTIFIED IN SECTION 9305(a)(3) OF THE N.Y. UNIFORM COMMERCIAL CODE WILL BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK. 

        (b)   THE
PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AGREEMENT AND FOR ACTIONS BROUGHT UNDER THE U.S.
FEDERAL OR STATE SECURITIES LAWS BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED IN THE CITY OF NEW YORK (EACH A "NEW YORK COURT") AND CONSENTS THAT ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING SHALL BE MADE BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE PLEDGOR AT THE ADDRESS INDICATED IN SECTION 17.1. EACH OF THE PARTIES HERETO SUBMITS TO THE JURISDICTION OF ANY
NEW YORK COURT AND TO THE COURTS OF ITS CORPORATE DOMICILE WITH RESPECT TO ANY ACTIONS BROUGHT AGAINST IT AS DEFENDANT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THE PLEDGOR, THE TRUSTEE, THE COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH THIS PLEDGE AGREEMENT, AND EACH OF THE PARTIES HERETO WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LAYING OF VENUE, INCLUDING ANY PLEADING OF FORUM NON CONVENIENS, WITH RESPECT TO ANY SUCH ACTION AND WAIVES ANY RIGHT TO WHICH IT MAY BE ENTITLED ON ACCOUNT OF PLACE
OF RESIDENCE OR DOMICILE. 

        (c)   THE
PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, TO PROCEED AGAINST THE PLEDGOR OR THE COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE PLEDGOR OR THE COLLATERAL, AS
THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY
COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH
COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT ASSERTED IN ANY SUCH PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. 

        (d)   THE
PLEDGOR AGREES THAT NEITHER ANY HOLDER NOR (EXCEPT AS OTHERWISE PROVIDED IN THIS PLEDGE AGREEMENT OR THE INDENTURE) THE COLLATERAL AGENT IN ITS CAPACITY AS
COLLATERAL AGENT SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED
TO, THE TRANSACTIONS CONTEMPLATED 

18

 

AND
THE RELATIONSHIP ESTABLISHED BY THIS PLEDGE AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT
THAT IS BINDING ON THE TRUSTEE OR SUCH HOLDER, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR SUCH HOLDERS, AS THE CASE MAY BE,
CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. 

        (e)   TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE, THE COLLATERAL AGENT OR ANY HOLDER IN CONNECTION
WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER PERTAINING TO THIS PLEDGE AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE, THE
COLLATERAL AGENT OR ANY HOLDER, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION, THIS PLEDGE AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT
BETWEEN THE PLEDGOR, ON THE ONE HAND, AND THE TRUSTEE, THE COLLATERAL AGENT AND/OR THE HOLDERS, ON THE OTHER HAND. 

        17.15    Effectiveness.    This Pledge Agreement shall become effective upon the effectiveness of the Indenture. 

19

        IN
WITNESS WHEREOF, the Pledgor, the Trustee and the Collateral Agent have each caused this Pledge Agreement to be duly executed and delivered as of the date first above written. 

	 	 	Pledgor:
	

 	
 	

MSC.SOFTWARE CORPORATION
	

 	
 	

 	

 
	

 	
 	

By:	

/s/  LOUIS A. GRECO      
 Louis A. Greco
 Executive Vice President, Chief Financial Officer and Corporate
Secretary
	

 	
 	

Trustee:
	

 	
 	

J.P. Morgan Trust Company, National Association,

as Trustee
	

 	
 	

 	

 
	

 	
 	

By:	

/s/  MITCH GARDNER      
 Name: Mitch Gardner

Title: Vice President
	

 	
 	

Collateral Agent:
	

 	
 	

J.P. Morgan Trust Company, National Association,

as Collateral Agent
	

 	
 	

 	

 
	

 	
 	

By:	

/s/  MITCH GARDNER      
 Name: Mitch Gardner

Title: Vice President

  

 
 

SCHEDULE I    
    

PLEDGED SECURITIES AND SECURITY ENTITLEMENTS  

	Description of Debt
 
	 	CUSIP No(s).
	 	Final Maturity
	 	Original Principal

Amount
	 	Cost at Closing Time

	 	 	912795NU1	 	10/30/03	 	1,250,000	 	1,243,139.59
	 	 	912833CK4	 	2/15/04	 	1,250,000	 	1,238,850.00
	 	 	912833CL2	 	8/15/04	 	1,250,000	 	1,230,825.00
	 	 	912833CM0	 	2/15/05	 	1,250,000	 	1,219,312.50
	 	 	912803AG8	 	8/15/05	 	1,250,000	 	1,203,587.50
	 	 	912833CP3	 	2/15/06	 	1,250,000	 	1,184,312.50
	 	 	912833CQ1	 	8/15/06	 	1,250,000	 	1,167,175.00
	 	 	912820BW6	 	2/15/07	 	1,250,000	 	1,142,162.50
	 	 	912820CA3	 	8/15/07	 	1,250,000	 	1,116,750.00
	 	 	912833CT5	 	2/15/08	 	1,250,000	 	1,093,337.50

S-1

QuickLinks

EXHIBIT 10.2

W I T N E S S E T H

SCHEDULE I

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