EXHIBIT 4.1
PEREGRINE SYSTEMS, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made as of April
2, 1999, by and among Peregrine Systems, Inc., a Delaware corporation (the
"Company"), and RL Investment Limited, a company incorporated in Guernsey
(the "Stockholder"). The Stockholder has received shares of the Company's
Common Stock, $.001 par value per share (the "Company Common Stock"), in
connection with the purchase of all of the outstanding share capital of
F.Print UK Limited, a company registered in England and Wales ("F.Print"), by
the Company pursuant to the Share Acquisition Agreement dated as of April __,
1999 (the "Acquisition Agreement").
1. DEFINITIONS. As used in this Agreement:
(a) "Effective Time" means the 30th day after the date the
Company files its Annual Report on Form 10-K for the year ending March 31,
1999.
(b) "Exchange Act" means the United States Securities Exchange
Act of 1934, as amended.
(c) "Holder" means: (i) the Stockholder or the Escrow Agent (as
defined in the Acquisition Agreement), or (iii) a transferee to whom
registration rights granted under this Agreement are assigned pursuant to
Section 8 of this Agreement.
(d) "Registrable Securities" means for all Holders the number
of shares of the Company Common Stock issued to the Stockholder pursuant to
the Acquisition Agreement and for each Holder, the sum of all Registrable
Securities held by it; PROVIDED, HOWEVER, that such shares of the Company
Common Stock shall cease to be Registrable Securities at such time as (i)
they have been registered for resale pursuant to a prospectus included in a
Registration Statement under the Securities Act or (ii) they are otherwise
available for resale under Rule 144 of the Securities Act.
(e) "Securities Act" means the United States Securities Act of
1933, as amended.
(f) "SEC" means the United States Securities and Exchange
Commission.
(g) Terms not otherwise defined herein have the meanings given
to them in the Acquisition Agreement.
2. HOLDER REGISTRATION.
(a) In case the Company shall receive from a Holder or Holders
who own not less than a majority of the then outstanding Registrable
Securities, a written request that the Company effect any registration under
the Securities Act, the Company shall (i) promptly give written notice of the
proposed registration to all other Holders; and (ii) use its best efforts to
effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act and
any other governmental requirements or regulations) as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in such request,
1
together with all or such portion of the Registrable Securities of any Holder
or Holders joining in such request as are specified in a written request
received by the Company within ten (10) days after receipt of such written
notice from the Company. In connection with such registration, the Company
shall prepare and file with the SEC within twenty-one (21) days following the
date of receipt of the initial request (which may not be submitted prior to
the Effective Time) a registration statement in such form as is then
available under the Securities Act covering that number of Registrable
Securities as may be requested in writing by the Holders; PROVIDED, HOWEVER,
that each Holder shall provide all such information and materials and take
all such action as may be required in order to permit the Company to comply
with all applicable requirements of the Securities Act, the Exchange Act, and
of the SEC, and to obtain any desired acceleration of the effective date of
such registration statement, such provision of information and materials to
be a condition precedent to the obligations of the Company pursuant to this
Agreement to register the Registrable Securities held by each such Holder.
The offering made pursuant to such registration shall not be underwritten.
The Company shall not be obligated to take any action to effect any such
registration pursuant to this Section 2(a) after one year from the date of
this Agreement.
(b) The Company shall (i) prepare and file with the SEC the
registration statement in accordance with Section 2 hereof with respect to
the Registrable Securities and shall use its best efforts to cause such
registration statement to become effective as promptly as practicable after
filing and to keep such registration statement effective until the sooner to
occur of (A) the date on which all Registrable Securities included within
such registration statement have been sold or (B) the expiration of
forty-five (45) days after the day on which such registration statement has
been declared effective; (ii) prepare and file with the SEC such amendments
to such registration statement and amendments or supplements to the
prospectus used in connection therewith as may be necessary to comply with
the provisions of the Securities Act with respect to the sale or other
disposition of all securities registered by such registration statement;
(iii) furnish to each Holder such number of copies of any prospectus
(including any preliminary prospectus and any amended or supplemented
prospectus) in conformity with the requirements of the Securities Act, and
such other documents, as each Holder may reasonably request in order to
effect the offering and sale of the Registrable Securities to be offered and
sold, but only while the Company shall be required under the provisions
hereof to cause the registration statement to remain effective; (iv) use its
best efforts to register or qualify the Registrable Securities covered by
such registration statement under the securities or blue sky laws of such
jurisdictions as each Holder shall reasonably request (provided that the
Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such jurisdiction where it has not been qualified), and do any
and all other acts or things which may be necessary or advisable to enable
each Holder to consummate the public sale or other disposition of such
Registrable Securities in such jurisdictions; and (v) notify each Holder,
promptly after it shall receive notice thereof, of the date and time the
registration statement and each post-effective amendment thereto has become
effective or a supplement to any prospectus forming a part of such
registration statement has been filed;
3. UNDERWRITTEN SALE.
(a) On or before the Effective Time, the Company may determine
to provide for the firmly underwritten sale of the Company Common Stock for
its own account and/or the account of other stockholders, and in connection
with such determination, shall file on or before the 45th day after the
Effective Time with the SEC a registration statement to register such Common
Stock (an "Underwritten Sale"). In the event of such determination, the
Company will promptly give to each Holder written notice thereof, and will
include in the Underwritten Sale (and any related qualification under blue
sky laws or other related compliance) all the Registrable Securities
specified by the Holders in their notice to the Company, subject, however, to
the marketing limitation set forth in
2
Section 3(b) below. An Underwritten Sale, including the form of underwriting
agreement to be entered into by the Company, the underwriter(s) and any
selling stockholders, shall be on customary terms. The underwriter(s) for an
Underwritten Sale shall be selected by the Company in its sole discretion.
(b) The right of any Holder to registration pursuant to this
Section 3 shall be conditioned upon such Holder's participation in the
Underwritten Sale and the inclusion of Registrable Securities in the
Underwritten Sale to the extent provided herein. All Holders shall (together
with the Company and the other holders distributing their securities through
the Underwritten Sale) enter into an underwriting agreement in customary form
with the managing underwriter. Notwithstanding any other provision of this
Section 3, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit the Registrable Securities to be included in such
registration to a minimum of 30% of the total shares to be included in the
Underwritten Sale, allocated among the Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities requested to
be included by such Holders. To facilitate the allocation of shares in
accordance with the above provision, the Company or the underwriters may
round the number of shares allocated to any Holder to the nearest 100 shares.
If any Holder disapproves of the terms of the Underwritten Sale, he or she
may elect to withdraw therefrom by written notice to the Company and the
managing underwriter.
(c) The completion by the Company of an Underwritten Sale in
accordance with the provisions of this Section 3 shall be in lieu of the
registration requirements under Section 2 above and shall relieve the Company
of its obligation under Section 2, provided that the registration statement
for the Underwritten Sale has been filed on or before the 45th day after the
Effective Time. In addition, any withdrawal from or failure to participate in
the Underwritten Sale by a Holder or Holders (with respect to all or any part
of the Registrable Securities) shall also relieve the Company of its
obligations under Section 2. However, if the managing underwriter limits the
Registrable Securities to be included in such registration in accordance with
Section 3(b) above, then the registration requirements under Section 2 above
shall be reinstated as to (i) the Registrable Securities not included in the
Underwritten Sale and (ii) any Registrable Securities which a Holder or
Holders did not elect to include in the Underwritten Sale.
4. SUSPENSION OF PROSPECTUS. Under any registration statement filed
pursuant to Section 2 hereof, the Company may restrict disposition of
Registrable Securities, and a Holder will not be able to dispose of such
Registrable Securities, if the Company shall have delivered a notice in
writing to such Holder stating that a delay in the disposition of such
Registrable Securities is necessary because the Company, in its reasonable
judgment, has determined that such sales would require public disclosure by
the Company of material nonpublic information that is not included in such
registration statement. In the event of the delivery of the notice described
above by the Company, the Company shall use its best efforts to amend such
registration statement and/or amend or supplement the related prospectus if
necessary and to take all other actions necessary to allow the proposed sale
to take place as promptly as possible, subject, however, to the right of the
Company to delay further sales of Registrable Securities until the conditions
or circumstances referred to in the notice have ceased to exist or have been
disclosed. Such right to delay sales of Registrable Securities shall not
exceed thirty (30) days, and may not be exercised by the Company more than
once for the registration under Section 2. Any such delay shall result in a
corresponding extension of the period of time that the Company is required to
maintain the effectiveness of the registration statement under Section 2.
5. EXPENSES. All of the out-of-pocket third party expenses incurred in
connection with any registration of Registrable Securities pursuant to this
Agreement, including, without limitation, all SEC, Nasdaq National Market and
blue sky registration and filing fees, printing expenses, transfer
3
agents' and registrars' fees, and the reasonable fees and disbursements of
the Company's outside counsel and independent accountants and a single
counsel for all of the Holders, shall be paid: (i) in respect of a
registration under Section 2, one-half by the Company and one-half by the
Holders in the proportion of the Registrable Securities included in such
registration; and (ii) in respect of an Underwritten Sale under Section 3, by
the Company. Underwriting discounts and commissions shall be paid by the
Holders.
6. INDEMNIFICATION. In the event of any offering registered pursuant to
this Agreement:
(a) The Company will indemnify each Holder, each of its
officers, directors and partners and such Holder's legal counsel and
independent accountants, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against
all expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or
any amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they
are made, not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act, or state securities laws, or
common law, applicable to the Company in connection with any such
registration, qualification or compliance, and will reimburse each such
Holder, each of its officers, directors and partners and such Holder's legal
counsel and independent accountants, and each person controlling such Holder,
each such underwriter and each person who controls any such underwriter, for
any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability
or action, provided that the Company will not be liable to a Holder or
underwriter in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based in 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 in an
instrument duly executed by such Holder or underwriter, respectively, and
stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers and its legal counsel and independent accountants,
each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers and directors and each person
controlling such Holder within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company, such Holders, such directors, officers, legal counsel,
independent accountants, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written
4
information furnished to the Company by an instrument duly executed by such
Holder and stated to be specifically for use therein; provided, however, that
the obligations of such Holders hereunder shall be limited to an amount equal
to the gross proceeds before expenses and commissions to each such Holder of
Registrable Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section 6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has written notice of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably withheld), and the Indemnified Party may participate in
such defense at such party's expense, and provided further that the failure
of any Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Agreement, except to the
extent, but only to the extent, that the Indemnifying Party's ability to
defend against such claim or litigation is impaired as a result of such
failure to give notice. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to the Indemnified Party of a release from all liability in respect
to such claim or litigation.
(d) The obligations of the Company and each Holder under this
Section 6 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement and otherwise.
(e) Notwithstanding the foregoing, to the extent the provisions
of this Section 6 are inconsistent with or conflict with the terms of any
underwriting, indemnification, selling or similar agreement entered into by a
Holder in connection with the offer and sale of Registrable Securities
pursuant to a registration effected pursuant to this Agreement, the terms of
such agreement shall govern and shall supersede the provisions of this
Agreement.
(f) If the indemnification provided for in the first and second
paragraphs of this Section 6 is unavailable to, or insufficient to hold
harmless, an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party under such
paragraphs, in lieu of indemnifying such Indemnified Party thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party or Parties on the one
hand and the Indemnified Party or Parties on the other in connection with the
statements or omissions (or alleged statements or omissions) that resulted in
such losses, claims, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. The relative fault of
the parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company on the one hand or by the Holders on the other, the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission and any other equitable considerations
appropriate under the circumstances.
(g) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose)
or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by
5
an Indemnified Party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, in no event shall a Holder
be required to contribute any amount in excess of the amount by which
proceeds received by such Holder from sales of Registrable Securities exceeds
the amount of any damages that such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No party guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution
from any Party who was not guilty of such fraudulent misrepresentation.
(h) The indemnity and contribution agreements contained in this
Section 6 will be in addition to any liability that the Indemnifying Parties
may otherwise have to the Indemnified Parties referred to above.
7. REPORTS UNDER EXCHANGE ACT. Company agrees to:
(a) use its commercially reasonable efforts to file with the
SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
(b) furnish to each Holder, forthwith upon request (i) a
written statement by the Company that it has complied with the reporting
requirements of the Securities Act and the Exchange Act, or that it qualifies
as a registrant whose securities may be resold pursuant to Form S-3, and (ii)
a copy of the most recent annual or quarterly report of the Company.
8. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Agreement may be assigned
by a Holder to a transferee of Registrable Securities only if: (a) the
Company is, prior to such transfer, furnished with written notice of the name
and address of such transferee and the Registrable Securities with respect to
which such registration rights are being assigned and a copy of a duly
executed written instrument in form reasonably satisfactory to the Company by
which such transferee assumes all of the obligations and liabilities of its
transferor hereunder and agrees itself to be bound hereby; (b) immediately
following such transfer the disposition of such Registrable Securities by the
transferee is restricted under the Securities Act; and (c) such assignment
includes all of the Registrable Securities originally issued to the
transferee, or such lesser amount if not less than 10,000 shares of
Registrable Securities; PROVIDED, HOWEVER, that such 10,000 share limitation
shall not apply to transfers by a Holder to shareholders, partners, retired
partners of the Holder (including spouses and ancestors, lineal descendants,
and siblings of such partners or spouses who acquire Registrable Securities
by right, will, or intestate succession) or beneficiaries of any trusts which
are shareholders of a Holder if all such transferees or assignees agree in
writing to appoint a single representative as their attorney-in-fact for the
purpose of receiving any notices and exercising their rights under this
Agreement.
9. ESCROW SHARES. Shares of the Company Common Stock which are subject
to the Escrow in accordance with Article VII of the Acquisition Agreement are
eligible for inclusion as Registrable Securities hereunder, but only to the
extent that the Holder agrees to remit all proceeds resulting from the sale
of such shares (net of any underwriting discounts or commissions) to the
Escrow Agent as substitute collateral.
6
10. AMENDMENT OF REGISTRATION RIGHTS. This Agreement may be amended at
any time upon the written consent of the Holders of a majority of the
outstanding Registrable Securities and the Company.
11. COUNTERPART SIGNATURES. This Agreement may be executed in
counterparts, all of which together shall constitute a single agreement.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]
7
In witness whereof the parties have signed this Agreement on the day
and year first above written.
"COMPANY"
PEREGRINE SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
"STOCKHOLDER"
RL INVESTMENT LIMITED
By: /s/ M.E. Xxxx
--------------------------
Name: M.E. Xxxx - Director
--------------------------
Address: Anson Court
--------------------------
St. Xxxxxx
--------------------------
Guernsey
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
8
