Exhibit 10.36

 

AMENDED AND RESTATED

SECURED TERM NOTE

 

$15,000,000.00

 

December 11, 2002

 

FOR VALUE RECEIVED, and intending to be legally bound, the undersigned, THE
TRIZETTO GROUP, INC., a Delaware corporation (“TriZetto”), CREATIVE BUSINESS
SOLUTIONS, INC., a Texas corporation, FINSERV HEALTH CARE SYSTEMS, INC., a New
York corporation, HEALTHCARE MEDIA ENTERPRISES, INC., a Delaware corporation,
HEALTHWEB, INC., a Delaware corporation, MARGOLIS HEALTH ENTERPRISES, INC., a
California corporation, NOVALIS CORPORATION, a Delaware corporation, TRIZETTO
APPLICATION SERVICES, INC., a Colorado corporation, DIGITAL INSURANCE SYSTEMS
CORPORATION, an Ohio corporation, HEALTH NETWORKS OF AMERICA, INC., a Maryland
corporation, NOVALIS DEVELOPMENT CORPORATION, a Delaware corporation, NOVALIS
DEVELOPMENT & LICENSING CORPORATION, an Indiana corporation, NOVALIS SERVICES
CORPORATION, a Delaware corporation, ERISCO, INC., a New York corporation,
RESOURCE INFORMATION MANAGEMENT SYSTEMS, INC., an Illinois corporation, WINTHROP
FINANCIAL GROUP, INC., an Illinois corporation, OPTION SERVICES GROUP, INC., an
Illinois corporation and INFOTRUST COMPANY, an Illinois corporation
(collectively, “Borrower”), jointly and severally, promise to pay, in lawful
money of the United States, to the order of HELLER HEALTHCARE FINANCE, INC., a
Delaware corporation, its successors and assigns (“Lender”), the principal sum
of FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00), or so much of such sum
as shall have been advanced by Lender (the “Principal Sum”) in accordance with
the terms of this Amended and Restated Secured Term Note, together with interest
and other fees as further set forth in this Note, to be paid in accordance with
the terms set forth below. This Amended and Restated Secured Term Note (the
“Note”) amends and restates in its entirety that certain Secured Term Note dated
September 14, 2001 previously executed and delivered by Borrower and made
payable to Lender (the “Original Note”).

 

1. Principal and Interest.

 

(a) If not sooner repaid, Borrower agrees to repay the Principal Sum by making
the following payments to Lender: (i) on the last Business Day (as defined
below) of each calendar quarter beginning June 30, 2003, installment payments
equal to Three Million Seven Hundred Fifty Thousand and No/100 Dollars
($1,875,000.00) each; and (ii) a final payment, equal to the remaining amount of
the Principal Sum (including any amount of the Principal Sum not repaid pursuant
to Section 1(a)(i)), if any, plus all interest, fees and charges due Lender
hereunder, on December 11, 2004 (the “Maturity Date”). The Maturity Date shall
not be extended unless the term of the Loan and Security Agreement dated as of
September 11, 2000 by and among Borrower and Lender pursuant to which Borrower
and Lender have entered into a revolving credit arrangement in a principal
amount not to exceed $20,000,000.00 (as such agreement may be amended, modified
or restated from time to time, the “Loan Agreement”), is extended to the same
date.

 

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(b) In addition to the repayment of the Principal Sum, on a quarterly basis from
the date of this Note until the Maturity Date, Borrower shall pay to Lender
interest at the Base Rate (as defined below) on the total amount of the
Principal Sum, with such interest payable in arrears on the first Business Day
of each quarter. For purposes hereof, “Base Rate” shall mean, at Borrower’s
option absent an Event of Default (as defined below), either (i) a fluctuating
rate per annum compounded daily (on the basis of the actual number of days
elapsed over a 360-day year) equal to the Prime Rate (as defined below) plus one
percent (1.0%) (the “Index Rate”), or (ii) for one (1), two (2) or three (3)
month periods, at Borrower’s option absent an Event of Default, commencing on
the date of this Note (each, an “Interest Period”), a fixed rate per annum equal
to LIBOR (as defined below) plus three and one quarter percent (3.25%) (the
“LIBOR Rate”). For purposes hereof:

 

(x) “LIBOR” shall mean the rate published in The Wall Street Journal under the
caption “Money Rates, London Interbank Offered Rates (LIBOR)” for notes maturing
one (1), two (2) or three (3) months, as applicable, after issuance on the
second full Business Day next preceding any applicable Interest Period. If The
Wall Street Journal discontinues or fails to publish such rate, then Lender
shall, in its discretion, choose an alternative publication, reference or source
for the rate Lender believes most closely approximates the London Interbank
Offered Rates (LIBOR); and

 

(y) “Prime Rate” shall mean that rate of interest designated as such by
Citibank, N.A., or any successor to such bank, as the rate may from time to time
fluctuate. If such bank ceases to designate such a base lending rate, Lender
shall reasonably select an alternate, nationally recognized commercial bank as
the designator of such interest rate.

 

Any portion of the Principal Sum that bears interest at the Index Rate shall be
referred to herein, in the aggregate, as an “Index Rate Loan”. Any portion of
the Principal Sum that bears interest at the LIBOR Rate shall be referred to
herein, in the aggregate, as a “LIBOR Loan”. At any time absent an Event of
Default, Borrower shall have the option to (A) convert all or any part of the
outstanding Principal Sum from Index Rate Loans to LIBOR Loans, (B) convert any
LIBOR Loan to an Index Rate Loan, or (C) continue all or any portion of any Loan
as a LIBOR Loan upon the expiration of the applicable Interest Period and the
succeeding Interest Period of that continued LIBOR Loan shall commence on the
first day after the last day of the Interest Period of the LIBOR Loan to be
continued; provided that, notwithstanding the foregoing, there shall be no more
than four (4) LIBOR Loans outstanding at any time under this Note and the Loan
Agreement together. Notwithstanding anything in this Section 1(b) to the
contrary, at any time after the occurrence and during the continuance of an
Event of Default, the LIBOR pricing option identified in subparagraph (ii) above
shall no longer be available to Borrower, and the rate of interest applicable to
the total amount of the Principal Sum hereunder shall be the equal to the then
applicable Index Rate plus five percent (5.0%) (the “Default Interest Rate”).
After the Maturity Date, and until the entire Principal Sum plus any other
amount due and unpaid shall be paid in full, without limiting any of Lender’s
other rights and remedies, all outstanding amounts of the Principal Sum shall
bear interest, payable on demand, at the Default Interest Rate, but in no event
shall the interest payable exceed the maximum lawful rate.

 

(c) Repayment of Borrower’s obligations under this Note is secured by, among
other things, the Collateral defined and described in Section 7 of this Note.

 

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2. Fees. In consideration for the extension of credit by Lender as evidenced by
this Note, among other things, Borrower shall pay to Lender the fee set forth in
Section 5(a) of Amendment No. 4 to Loan and Security Agreement (the “Loan
Agreement Amendment”) executed of even date with this Note.

 

3. Additional Payments. Borrower further promises to pay to Lender, as soon as
practicable but in any event no later than thirty (30) days after written
request, any and all other sums and charges that may at the time become due and
payable under this Note, and all reasonable costs and disbursements in
connection with the preparation of this Note (including without limitation
reasonable attorneys’ fees (both in-house and outside counsel, as applicable),
audit fees and search fees), and in the collection of any payments due under
this Note and in any action, suit or proceeding to protect, sustain or enforce
the rights and remedies of Lender under this Note. Notwithstanding the
foregoing, the total amount of legal fees to be reimbursed by Borrower in
connection with the negotiation and documentation of this Note, the Loan
Agreement Amendment and related documents shall not exceed $15,000. In addition,
notwithstanding the foregoing, Borrower shall be required to reimburse Lender
for up to $35,000 in connection with semi-annual audits and appraisals of
Borrower’s books and records; provided, however, that on and after and during
the occurrence of any Event of Default hereunder, the foregoing cap shall not
apply, and Borrower shall be required to reimburse Lender, in accordance with
the above, for all out-of-pocket audit and appraisal fees incurred by Lender in
connection with any audits or appraisals performed by Lender during such period,
and such audits and appraisals shall not be counted as “semi-annual” audits or
appraisals for purposes hereof. Borrower shall pay all taxes (other than taxes
based upon or measured by Lender’s income or revenues or any personal property
tax), if any, in connection with the issuance of the Note and the recording of
the security documents therefor. The obligations of Borrower under this Section
3 shall survive the payment of Borrower’s indebtedness under this Note and the
termination of this Note.

 

4. Conditions to Borrowing; Prepayment.

 

(a) Subject to the terms and conditions of this Note, Lender shall make
available to Borrower that portion of the Principal Sum in excess of the
principal amount outstanding as of the Effective Date (such outstanding amount,
the “Outstanding Principal Amount”) in immediately available funds not later
than 12:00 Noon (Maryland time) on the Business Day on which the following
conditions precedent are satisfied (such Business Day, the “Effective Date”):

 

(i) Borrower shall have executed and delivered or caused to be executed and
delivered to Lender the following documents (collectively, the “Loan
Documents”):

 

(A) this Note duly executed by an authorized officer of each entity comprising
Borrower;

 

(B) that certain Amendment No. 4 to Loan and Security Agreement dated of even
date with this Note by and among the Borrower and Lender (the “Amendment”) duly
executed by an authorized officer of each entity comprising Borrower;

 

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(C) Lender shall have received updated Schedules to the Loan Agreement and this
Note, which updated Schedules shall be satisfactory to Lender; and

 

(D) that certain Fourth Amended and Restated Revolving Credit Note dated of even
date with the Amendment duly executed by an authorized officer of each entity
comprising Borrower and made payable to Lender;

 

(ii) Lender shall have received payment in full of the Fee (as defined in the
Loan Agreement Amendment);

 

(iii) Lender shall be satisfied that it has a perfected first priority security
interest in the Collateral, with only such exceptions thereto as shall have been
approved by it;

 

(iv) Borrower shall have provided Lender with resolutions of the Board of
Directors, members or partners, as the case may be, of each Borrower,
authorizing the execution, delivery and performance of this Note, the Amendment,
the Fourth Amended and Restated Revolving Credit Note and otherwise in such form
as shall be reasonably satisfactory to Lender; and

 

(v) No Event of Default or any event that, with the giving of notice or the
passage of time or both, could be a default or an Event of Default, shall have
occurred or be continuing under this Note, the Loan Agreement, the Loan
Documents (as defined in the Loan Agreement) or the Loan Agreement Amendment
(collectively, the “Revolving Loan Documents”).

 

The obligations of Lender under this Note are further conditioned on Borrowers’
agreement, by its signature below as such, to execute and deliver to Lender, by
the date that is no later than twenty (20) days following the date of this Note,
a Copyright Security Agreement, in form and substance reasonably satisfactory to
Lender, for filing by Lender with the U.S. Copyright Office to enable Lender to
perfect Lender’s lien on and security interest in Borrowers’ registered
copyrights, including the proceeds thereof. The failure of Borrowers to have
executed and delivered such Copyright Security Agreement to Lender as and when
required hereunder shall render Lender’s obligations in connection with this
Note void ab initio, and shall constitute an immediate and automatic Event of
Default under the Note, without notice or further action by Lender.

 

(b) Borrower hereby irrevocably authorizes Lender to disburse the full amount of
the Principal Sum to be disbursed by Lender pursuant to Section 4(a) by wire
transfer to such bank account as may be designated by Borrower from time to time
or elsewhere if pursuant to written direction from Borrower.

 

(c) Lender will account to Borrower monthly with a statement of advances,
charges and payments made pursuant to this Note, and the account rendered by
Lender shall be deemed final, binding and conclusive upon Borrower absent
manifest error.

 

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(d) Borrower may prepay all or any part of the Principal Sum outstanding
(inclusive of the Fee) without penalty, together with all interest accrued on
the Principal Sum and all other sums that are payable pursuant to this Note and
terminate this Note without penalty.

 

(e) By completing the transactions contemplated by this Note, Lender does not
waive a breach of any representation, warranty or covenant of Borrower under
this Note or under any other Loan Documents, and all of Lender’s claims and
rights resulting from any breach or misrepresentation by Borrower are
specifically reserved by Lender.

 

(f) All outstanding principal, interest, fees and other amounts due under this
Note shall be prepaid in full simultaneously with repayment of all Obligations
under and termination of the Loan Agreement and the Revolving Loan Documents for
any reason.

 

5. Payment Office. The Principal Sum, the interest on the Principal Sum, and any
other amounts payable under this Note are payable in lawful money of the United
States of America at the office of Lender, at 2 Wisconsin Circle, 4th Floor,
Chevy Chase, Maryland 20815, Attention: Pascale Bissainthe, Chief Counsel, or at
such other place as Lender may specify in writing to Borrower. Any payment in
other than immediately available funds shall be subject to collection. Interest
shall continue to accrue until the funds by which payment is made are available
to Lender for its use. Any payment stated to be due on a day on which banks in
Maryland are required or permitted to be closed for business shall be due and
payable on the next business day (each such day, a “Business Day”) and such
extension of time shall be included in the computation of interest in connection
with such payment.

 

6. No Presentment; Acceleration. On the Maturity Date or upon the occurrence of
an Event of Default, the outstanding Principal Sum, accrued and unpaid interest
on the Principal Sum, and all other sums owed by Borrower to Lender in
connection with this Note (including without limitation the Fee) or the other
Loan Documents shall become and be immediately due and payable upon declaration
to that effect delivered by Lender to Borrower; provided that on the happening
of any event specified in Section 12(f), this Note shall be immediately due and
payable without declaration or other notice to Borrower. Borrower hereby
expressly waives any presentment for payment, demand for payment, notice of
nonpayment or dishonor, protest and notice of protest of any kind.

 

7. Security Agreement. This Note shall constitute a security agreement as that
term is used in the UCC and Borrower hereby grants to Lender, to secure
Borrower’s obligations under this Note and the other Loan Documents, and under
the Loan Agreement, the Revolving Loan Documents and any other Affiliated Loan
Documents (as defined in the Loan Agreement), a security interest in the
following (collectively, the “Collateral”); provided that, notwithstanding
anything in this Section 7 to the contrary, the term “Collateral” shall not
include any assets described below to the extent such assets are subject to a
capital lease agreement if the grant of a security interest in such property to
Lender hereunder would constitute a breach or violation of such capital lease
agreement:

 

(a) all of Borrower’s Accounts, and all of Borrower’s money, contract rights,
chattel paper, documents, deposit accounts, securities, investment

 

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property and instruments with respect thereto, and all of Borrower’s rights,
remedies, security, Liens and supporting obligations, in, to and in respect of
the foregoing, including, without limitation, rights of stoppage in transit,
replevin, repossession and reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, guaranties or other contracts of
suretyship with respect to the Accounts, deposits or other security for the
obligation of any Account Debtor, and credit and other insurance;

 

(b) to the extent not listed above, all of Borrower’s money, securities,
investment property, deposit accounts, instruments and other property and the
proceeds thereof that are now or hereafter held or received by, in transit to,
in possession of, or under the control of Lender or a bailee or Affiliate of
Lender, whether for safekeeping, pledge, custody, transmission, collection or
otherwise;

 

(c) to the extent not listed above, all of Borrower’s now owned or hereafter
acquired deposit accounts into which Accounts or the proceeds of Accounts are
deposited, including the Lockbox Account;

 

(d) all of Borrower’s right, title and interest in, to and in respect of all
goods relating to, or which by sale have resulted in, Accounts, including,
without limitation, all goods described in invoices or other documents or
instruments with respect to, or otherwise representing or evidencing, any
Account, and all returned, reclaimed or repossessed goods;

 

(e) all of Borrower’s general intangibles (including, but not limited to,
payment intangibles) and other property of every kind and description with
respect to, evidencing or relating to its Accounts, including, but not limited
to, all existing and future customer lists, choses in action, claims, books,
records, ledger cards, contracts, licenses, formulae, tax and other types of
refunds, returned and unearned insurance premiums, rights and claims under
insurance policies, and computer programs, information, software, records, and
data, as the same relates to the Accounts;

 

(f) all of Borrower’s other money, securities, investment property, deposit
accounts, instruments, documents, supporting obligations and chattel paper;

 

(g) all of Borrower’s letter-of-credit rights and commercial tort claims;

 

(h) all of Borrower’s other general intangibles (including, without limitation,
any proceeds from insurance policies after payment of prior interests), patents,
unpatented inventions, trade secrets, copyrights, contract rights, goodwill,
literary rights, rights to performance, rights under licenses, choses-in-action,
claims, information contained in computer media (such as data bases, source and
object codes, and information therein), things in action, trademarks and
trademarks applied

 

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for (together with the goodwill associated therewith) and derivatives thereof,
trade names, including the right to make, use, and vend goods utilizing any of
the foregoing, and permits, licenses, certifications, authorizations and
approvals, and the rights of Borrower thereunder, issued by any governmental,
regulatory, or private authority, agency, or entity whether now owned or
hereafter acquired, together with all cash and non-cash proceeds and products
thereof;

 

(i) all of Borrower’s now owned or hereafter acquired inventory of every
description which is held by Borrower for sale or lease or is furnished by
Borrower under any contract of service or is held by Borrower as raw materials,
work in process or materials used or consumed in a business, wherever located,
and as the same may now and hereafter from time to time be constituted, together
with all cash and non-cash proceeds and products thereof;

 

(j) all of Borrower’s now owned or hereafter acquired machinery, equipment,
computer equipment, tools, tooling, furniture, fixtures, goods, supplies,
materials, work in process, whether now owned or hereafter acquired, together
with all additions, parts, fittings, accessories, special tools, attachments,
and accessions now and hereafter affixed thereto and/or used in connection
therewith, all replacements thereof and substitutions therefor, and all cash and
non-cash proceeds and products thereof; and

 

(k) to the extent not listed above as original collateral, the proceeds
(including, without limitation, insurance proceeds) and products of all of the
foregoing.

 

8. Use of Funds. Borrower covenants and agrees that the Principal Sum shall be
used solely for working capital, for acquisitions and for other purposes not
prohibited under this Agreement.

 

9. Representations. Each entity comprising Borrower hereby warrants and
represents to Lender that:

 

(a) Borrower is a corporation (i) duly incorporated, validly existing, and in
good standing under the laws of its state of incorporation, (ii) is in good
standing as a foreign corporation in each jurisdiction in which the character of
the properties owned or leased by it or the nature of its business makes such
qualification necessary except where the failure to so qualify could not have a
Material Adverse Effect (as defined below), (iii) has the corporate power and
authority to own its assets and transact the business in which it is engaged,
and (iv) has obtained all certificates, licenses and qualifications required
under all laws, regulations, ordinances, or orders of public authorities
necessary for the ownership and operation of all of its properties and
transaction of all of its business, except where the failure to obtain such
certificates, licenses and qualifications could not have a Material Adverse
Effect. For the purposes of this Note, “Material Adverse Effect” shall mean any
event or condition which, alone or when taken with other events or conditions
occurring or existing concurrently with such event or condition (v) has or is
reasonably expected to have a material

 

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adverse effect on the business, operations, condition (financial or otherwise),
assets, liabilities, or properties of the Borrower taken as a whole; (w) has or
is reasonably expected to have any material adverse effect on the validity or
enforceability of this Note or any Loan Document; (x) materially impairs or is
reasonably expected to materially impair the ability of Borrower to pay and
perform the obligations under this Note; (y) materially impairs or is reasonably
expected to materially impair the ability of Lender to enforce its rights and
remedies under this Note or any of the Loan Documents; or (z) has or is
reasonably expected to have any material adverse effect on the Collateral, the
liens of Lender in the Collateral or the priority of such liens.

 

(b) Borrower has full corporate power and authority to borrow the Loan and to
enter into, execute, and deliver this Note, and to incur and perform its
obligations under this Note and the other Loan Documents, all of which have been
duly authorized by all necessary corporate action. Except as set forth on
Schedule 9(b), no consent or approval of stockholders of, or lenders to,
Borrower, and no consent, approval, filing or registration with any governmental
authority is required as a condition to the validity of this Note or the other
Loan Documents or the performance by Borrower of its obligations under this Note
or the other Loan Documents.

 

(c) This Note, when issued and delivered for value received, and all other Loan
Documents constitute the valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms.

 

(d) The execution and delivery by Borrower of this Note and the other Loan
Documents do not, and the performance of Borrower’s obligations under this Note
and the other Loan Documents will not, violate, conflict with, constitute a
default under, or result in the creation of a lien or encumbrance (other than a
lien, security interest, charge or other encumbrance in favor of Lender) upon
the property of Borrower under (i) any provision of Borrower’s certificate of
incorporation or bylaws, (ii) any provision of any law, rule or regulation
applicable to Borrower, or (iii) any of the following (A) any indenture or other
agreement or instrument to which Borrower is a party or by which Borrower or its
property is bound (other than indentures, agreements and instruments, the
violation, conflicts, or defaults of which, individually or in the aggregate, do
not have a Material Adverse Effect), or (B) any judgment, order or decree of any
court, arbitration tribunal, or governmental entity which is applicable to
Borrower or Borrower’s properties or assets, other than such judgments, orders
or decrees from such governmental entities, the violation of which, individually
or in the aggregate, do not have a Material Adverse Effect.

 

(e) Except as disclosed in Schedule 9(e), there are no actions, suits,
proceedings or investigations pending or threatened against Borrower before any
court or arbitrator or before or by any Governmental Authority which, in any one
case or in the aggregate, if determined adversely to the interests of Borrower,
could have a Material Adverse Effect on the business, properties, condition
(financial or otherwise) or operations, current or prospective, of Borrower, or
upon its ability to perform its obligations under the Loan Documents. Borrower
is not in default with respect to any order of any court, arbitrator, or
Governmental Authority applicable to Borrower or its properties.

 

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(f) The audited financial statements of Borrower as of and for the period ending
December 31, 2001 and the unaudited financial statements of Borrower as of and
for the period ending September 30, 2002, all certified by the chief financial
officer of Borrower, which were previously delivered to Lender, are true,
correct and complete and fairly present the financial condition of Borrower and
the results of Borrower’s operations and changes in financial condition as of
the dates and for the periods referred to, and have been prepared in accordance
with generally accepted accounting principles. There are no material unrealized
or anticipated liabilities, direct or indirect, fixed or contingent, of Borrower
as of the dates of such financial statements that are not reflected in the
financial statements or the notes thereto. There has been no material adverse
change in the business, properties, condition (financial or otherwise) of
Borrower since December 31, 2001. Borrower’s fiscal year ends on December 31.

 

(g) Borrower is not in default under or with respect to any obligation in any
respect that could have a Material Adverse Effect on its business, operations,
property or financial condition, or that could have a Material Adverse Effect on
the ability of Borrower to perform its obligations under this Note or the other
Loan Documents. No Event of Default or event that, with the giving of notice or
lapse of time, or both, could become an Event of Default, has occurred and is
continuing.

 

(h) Borrower has good and marketable title to its properties and assets,
including the Collateral and the properties and assets reflected in the
financial statements as described in paragraph (f) above, subject to no lien,
mortgage, pledge, encumbrance or charge of any kind, other than Permitted Liens.
Borrower has not agreed or consented to cause any of its properties or assets,
whether owned now or hereafter acquired, to be subject in the future (upon the
happening of a contingency or otherwise) to any lien, mortgage, pledge,
encumbrance or charge of any kind, other than Permitted Liens. For purposes
hereof, “Permitted Liens” shall mean: (i) deposits or pledges to secure
obligations under workmen’s compensation, social security or similar laws, or
under unemployment insurance; (ii) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), operating and capital
leases, statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of business; (iii) mechanic’s,
workmen’s, materialmen’s or other like liens arising in the ordinary course of
business with respect to obligations which are not due, or which are being
contested in good faith by appropriate proceedings which suspend the collection
thereof and in respect of which adequate reserves have been made (provided that
such proceedings do not, in Lender’s sole discretion, involve any substantial
risk of the sale, loss or forfeiture of such property or assets or any interest
therein); (iv) liens and encumbrances in favor of Lender; (v) liens on equipment
of Borrower to secure borrowed money incurred for the sole purpose of financing
all or a portion of the purchase price of the equipment subject to such lien
(i.e. purchase money security interests) in the ordinary course of business;
provided that such liens attach only to the assets subject to such purchase
money debt and such purchase money debt does not exceed one hundred percent
(100%) of the purchase price of the subject assets; and (vi) liens set forth on
Schedule 9(h).

 

(i) Borrower has filed, or has obtained extensions for the filing of, all
federal, state and other tax returns which are required to be filed, and has
paid all taxes shown as due on those returns and all assessments, fees and other
amounts due as of the date hereof. All tax liabilities

 

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of Borrower were, as of December 31, 2001 and are now, adequately provided for
on Borrower’s books. No tax liability has been asserted by the Internal Revenue
Service or other taxing authority against Borrower for taxes in excess of those
already paid. Immaterial exceptions to this Section 9(i) are set forth on
Schedule 9(i)

 

(j) The use of the proceeds of the Loan and Borrower’s issuance of this Note
will not, directly or indirectly, violate or result in a violation of the
Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, or
any regulations issued pursuant thereto, including without limitation
Regulations U, T, or X of the Board of Governors of the Federal Reserve System.
Borrower is not engaged in the business of extending credit for the purpose of
the purchasing or carrying “margin stock” within the meaning of those
regulations. No part of the proceeds of the Loan will be used to purchase or
carry any margin stock or to extend credit to others for such purpose.

 

(k) Borrower is not an investment company within the meaning of the Investment
Company Act of 1940, as amended, nor is it, directly or indirectly, controlled
by or acting on behalf of any Person which is an investment company within the
meaning of that Act.

 

(l) Borrower is not in violation of any statute, rule or regulation of any
governmental authority (including, without limitation, any statute, rule or
regulation relating to employment practices or to environmental, occupational
and health standards and controls), the violation of which could, individually
or in the aggregate, have a Material Adverse Effect. Borrower has obtained all
licenses, permits, franchises, and other governmental authorizations necessary
for the ownership of its properties and the conduct of its business, unless the
failure to obtain such licenses, individually or in the aggregate, could not
have a Material Adverse Effect. Borrower is current with all reports and
documents required to be filed with any state or federal securities commission
or similar governmental authority and is in full compliance with all applicable
rules and regulations of such commissions, unless the failure to comply,
individually or in the aggregate, could not have a Material Adverse Effect.

 

(m) To Borrower’s best knowledge, no use, exposure, release, generation,
manufacture, storage, treatment, transportation or disposal of hazardous
material has occurred or is occurring on or from any real property on which the
Collateral is located (the “Premises”) or which is owned, leased or otherwise
occupied by Borrower, or has occurred off the Premises as a result of any action
of Borrower. To Borrower’s best knowledge, all hazardous material used, treated,
stored, transported to or from, generated or handled on the Premises, or off the
Premises by Borrower, has been disposed of on or off the Premises by or on
behalf of Borrower in a lawful manner. To Borrower’s best knowledge, there are
no underground storage tanks present on or under the Premises owned or leased by
Borrower. To Borrower’s best knowledge, no other environmental, public health or
safety hazards exist with respect to the Premises.

 

(n) The only places of business of Borrower, and the places where it keeps and
intends to keep the Collateral and records concerning the Collateral, are at the
addresses set forth in Schedule 9(n), which also lists the owner of record of
each such property. Immaterial exceptions to this Section 9(n) are set forth on
Schedule 9(n).

 

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(o) Borrower exclusively owns or possesses all the patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
franchises, licenses, and rights with respect to the foregoing necessary for the
current and planned future conduct of its business, without any conflict with
the rights of others, except to the extent that failure to own or possess such
property could not have a Material Adverse Effect. A list of all such patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, franchises, licenses, and rights with respect to the
foregoing (indicating the nature of Borrower’s interest), as well as all
outstanding franchises and licenses given by or held by Borrower, is attached as
Schedule 9(o), except for such patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, franchises,
licenses, and rights with respect to the foregoing (indicating the nature of
Borrower’s interest) which in the aggregate could not have a Material Adverse
Effect. Borrower is not in default of any obligation or undertaking with respect
to such intellectual property or rights. Borrower is not infringing on any
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, franchises, licenses, any rights with respect to the
foregoing, or any other intellectual property rights of others except for
infringement which individually or in the aggregate could not have a Material
Adverse Effect, and the Borrower is not aware of any infringement by others of
any such rights owned by Borrower.

 

(p) The identity of the greater than five percent (5%) stockholders of record of
all of the outstanding common stock of TriZetto, together with the respective
ownership percentages held by such stockholders as of March 8, 2002 are as set
forth in the Proxy Statement of TriZetto filed with the Securities and Exchange
Commission on April 15, 2002. In addition, the owner(s) of any and all classes
of stock (other than the common stock of TriZetto) or other equity interests of,
and/or holders of notes (other than this Note and the Revolving Credit Note)
issued by, TriZetto and each other Borrower as of the Effective Date are set
forth in Schedule 9(p).

 

(q) Neither this Note nor any other Loan Document nor any other agreement,
document, certificate, or statement furnished to Lender by or on behalf of
Borrower in connection with the transactions contemplated hereby contains any
untrue statement of material fact or omits to state a material fact necessary to
make the statements contained in this Note or in the other Loan Documents or
such other documents not misleading. Except as disclosed in the “risk factors”
section of the Borrower’s Annual Report on Form 10-K and subsequent filings with
the Securities and Exchange Commission, there is no fact known to Borrower that
would have a Material Adverse Effect or in the future could have a Material
Adverse Effect on the business, operations, affairs or financial condition of
Borrower, or any of its properties or assets.

 

(r) Borrower does not own or hold any equity or long-term debt investments in,
have any outstanding advances to, have any outstanding guarantees for the
obligations of, or have any outstanding borrowings from, any Person except as
otherwise disclosed in the financial statements and except to the extent such
items, individually or in the aggregate, could not have a Material Adverse
Effect on Borrower. Except as otherwise disclosed in the financial statements of
the Borrower, Borrower is not a party to any contract or agreement, or subject
to any corporate restriction, which could have a Material Adverse Effect.

 

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(s) Within five (5) years before the date of this Note, neither the business,
property or assets, or operations of Borrower has been adversely affected in any
way by any strike, lockout, combination of workers, or order of the United
States of America or other governmental authority, directed against Borrower.
There are no pending or, to Borrower’s best knowledge, threatened labor
disputes, strikes, lockouts, or similar occurrences or grievances against
Borrower or its business, which individually or in the aggregate could have a
Material Adverse Effect on Borrower.

 

(t) Within five (5) years before the date of this Note, Borrower has not
conducted business under or used any other name (whether corporate, partnership
or assumed) except as listed on Schedule 9(t). Borrower is the sole owner of all
names listed on that Schedule and any and all business done and invoices issued
in such names are Borrower’s sales, business, and invoices. Each trade name of
Borrower represents a division of Borrower and not an Affiliate (except for any
Affiliate that is also a “Borrower” hereunder). For purposes hereof, “Affiliate”
means, with respect to any specified Person, any Person directly or indirectly
controlling, controlled by, or under common control with the specified Person,
including without limitation their stockholders and any Affiliates thereof. A
Person shall be deemed to control a corporation or other entity if the Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and business of the corporation or other entity, whether through
the ownership of voting securities, by contract or otherwise.

 

(u) Except for Borrower entities which are subsidiaries of other Borrower
entities and except as set forth on Schedule 9(u), Borrower has no subsidiaries.
None of the subsidiaries set forth on Schedule 9(u) has any assets or
operations.

 

(v) To the extent that and for so long as (a) Borrower is a “covered entity”
within the meaning of HIPAA or (b) Borrower and/or its business and operations
are subject to or covered by the so-called “Administrative Simplification”
provisions of HIPAA, Borrower (i) has undertaken or will promptly undertake all
necessary surveys, audits, inventories, reviews, analyses and/or assessments
(including any necessary risk assessments) of all areas of its business and
operations required by HIPAA that could be adversely affected by the failure of
Borrower to be HIPAA Compliant (as defined below); (ii) has developed or will
promptly develop a detailed plan and time line for becoming HIPAA Compliant (a
“HIPAA Compliance Plan”); and (iii) has implemented or will implement those
provisions of such HIPAA Compliance Plan in all material respects necessary to
ensure that Borrower is or becomes HIPAA Compliant. For purposes hereof, “HIPAA
Compliant” shall mean that Borrower (x) is or will be in compliance with each of
the applicable requirements of the so-called “Administrative Simplification”
provisions of HIPAA on and as of each date that such requirement becomes
effective in accordance with its terms (each such date, a “HIPAA Compliance
Date”), and (y) is not, as of any date following any such HIPAA Compliance Date,
the subject of any civil or criminal penalty, process, claim, action or
proceeding, or any administrative or other regulatory review, survey, process or
proceeding in connection with HIPAA (other than routine surveys or reviews
conducted by any government health plan or other accreditation entity), in the
case of either (x) or (y), to the extent that such non-compliance or penalty,
process, claim, action, proceeding, review or survey, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
For purposes hereof, “HIPAA”

 

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means the Health Insurance Portability and Accountability Act of 1996, as the
same may be amended, modified or supplemented from time to time, and any
successor statute thereto, and any and all rules or regulations promulgated from
time to time thereunder.

 

10. Affirmative Covenants.

 

Each entity constituting Borrower covenants and agrees that until this Note
shall be repaid in full:

 

(a) Financial Statements and Collateral Reports. Borrower will furnish to Lender
(i) a sales and collections report and accounts receivable aging schedule on a
form acceptable to Lender within fifteen (15) Business Days after the end of
each calendar month, which shall include, but not be limited to, a report of
sales, credits issued, and collections received; (ii) payables aging schedules
within fifteen (15) Business Days after the end of each calendar month; (iii)
internally prepared unaudited monthly financial statements for Borrower,
certified by the chief financial officer (or other financial officer if such
other financial officer has executed the secretary’s certificate on file with
Lender) of Borrower, within twenty (20) Business Days of the end of each
calendar month; (iv) all unaudited quarterly financial statements for Borrower,
certified by the chief financial officer of Borrower, within forty five (45)
calendar days of the end of each calendar month (including the last month of any
fiscal quarter or fiscal year); (v) INTENTIONALLY DELETED; (vi) INTENTIONALLY
DELETED; (vii) annual audited financial statements for Borrower prepared by a
firm of independent public accountants satisfactory to Lender, within one
hundred twenty (120) calendar days after the end of each of Borrower’s fiscal
years; (vii) promptly upon receipt thereof, copies of any reports submitted to
Borrower by the independent accountants in connection with any interim audit of
the books of Borrower and copies of each management control letter provided to
Borrower by independent accountants, unless the disclosure of such reports is
prohibited by applicable laws; (ix) as soon as available, copies of all
financial statements and notices provided by Borrower to all of its
stockholders; (x) such additional information, reports or statements as Lender
may from time to time reasonably request; and (xi) as soon as available, but in
any event by the last day of each fiscal year of Borrower, an annual operating
plan for Borrower for the following fiscal year (each, an “Operating Plan”),
which (i) includes a statement of all of the material assumptions on which such
plan is based and (ii) includes at least quarterly balance sheets, income
statements and statements of cash flows for the following year, all prepared on
the same basis and in similar detail as that on which operating results are
reported and including plans for personnel, Capital Expenditures (as defined
below) and facilities. Annual financial statements shall set forth in
comparative form figures for the corresponding periods in the prior fiscal year.
All financial statements shall include a balance sheet and statement of earnings
and shall be prepared in accordance with GAAP.

 

(b) Payments Hereunder. Borrower will make all payments of principal, interest,
fees, and all other payments required under this Note, and under any other
agreements with Lender to which Borrower is a party, as and when due.

 

(b) Existence, Good Standing, and Compliance with Laws. Borrower will do or
cause to be done all things necessary (except where the failure to do so could
not have a Material

 

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Adverse Effect), to (i) obtain and keep in full force and effect all corporate
existence, rights, licenses, privileges, and franchises of Borrower necessary to
the ownership of its property or the conduct of its business, and comply with
all applicable present and future laws, ordinances, rules, regulations, orders
and decrees of any governmental authority having or claiming jurisdiction over
Borrower; and (ii) maintain and protect the properties used or useful in the
conduct of the operations of Borrower, in a prudent manner, including without
limitation the maintenance at all times of such insurance upon its insurable
property and operations as required by law or by subsection (e) below.

 

(d) Taxes and Charges. Borrower will timely file all tax reports and pay and
discharge all taxes, assessments and governmental charges or levies imposed upon
Borrower, or its income or profits or upon its properties or any part thereof,
before the same shall be in default and prior to the date on which penalties
attach thereto, as well as all lawful claims for labor, material, supplies or
otherwise which, if unpaid, might become a lien or charge upon the properties or
any part thereof of Borrower; provided, however, that Borrower shall not be
required to pay and discharge or cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith and by appropriate proceedings by Borrower, as
determined in the reasonable judgement of Lender, and Borrower shall have set
aside on their books adequate reserve therefor; and provided further, that such
deferment of payment is permissible only so long as Borrower’s title to, and its
right to use, the Collateral is not adversely affected thereby and Lender’s lien
and priority on the Collateral are not adversely affected, altered or impaired
thereby.

 

(e) Insurance. Borrower will carry adequate public liability and professional
liability insurance with responsible companies reasonably satisfactory to Lender
in such amounts and against such risks as is customarily maintained by similar
businesses and by owners of similar property in the same general area.

 

(f) General Information. Borrower will furnish to Lender such information as
Lender may, from time to time, reasonably request with respect to the business
or financial affairs of Borrower, and permit any officer, employee or agent of
Lender to visit and inspect (upon reasonable notice of not less than two (2)
Business Days) any of the properties during regular business hours, to examine
the minute books, books of account and other records, including management
letters prepared by Borrower’s auditors, of Borrower, and make copies thereof or
extracts therefrom, and to discuss its and their business affairs, finances and
accounts with, and be advised as to the same by, the accountants and officers of
Borrower, all at such times and as often as Lender may reasonably require.

 

(g) Maintenance of Property. Borrower will maintain, keep and preserve the
Collateral in good repair, working order and condition, normal wear and tear
excepted, and from time to time make all reasonably needful and proper repairs,
renewals, replacements, betterments and improvements to the Collateral.

 

(h) Notification of Events of Default and Adverse Developments. Borrower
promptly will notify Lender upon the occurrence of: (i) any Event of Default;
(ii) any event which, with the giving of notice or lapse of time, or both, is
reasonably likely to constitute an Event of

 

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Default; (iii) any event, development or circumstance whereby the financial
statements previously furnished to Lender hereunder fail in any material respect
to present fairly, in accordance with GAAP, the financial condition and
operational results of Borrower as of the dates of such financial statements;
(iv) any judicial, administrative or arbitration proceeding pending against
Borrower, and any judicial or administrative proceeding known by Borrower to be
threatened against it which, if adversely decided, could have a Material Adverse
Effect on the condition (financial or otherwise) or operations (present or
prospective) of Borrower or which may expose Borrower to uninsured liability of
$1,000,000.00 or more; (v) any default claimed by any other creditor for
borrowed money of Borrower other than Lender in excess of $500,000; and (vi) any
other development in the business or affairs of Borrower which may have a
Material Adverse Effect; in each case describing the nature thereof and (in the
case of notification under clauses (i) and (ii)) the action Borrower proposes to
take with respect thereto.

 

(i) Employee Benefit Plans. No employee benefit plan (a “Plan”) subject to the
Employee Retirement Income Security Act of 1974 (“ERISA”) and regulations issued
pursuant to ERISA that is maintained by Borrower or under which Borrower could
have any material liability under ERISA (i) has failed to meet minimum funding
standards established in Section 302 of ERISA, (ii) has failed to substantially
comply with all applicable requirements of ERISA and of the Internal Revenue
Code, including all applicable rulings and regulations thereunder, or (iii) has
engaged in or been involved in a prohibited transaction (as defined in ERISA)
under ERISA or under the Internal Revenue Code. Neither Borrower nor any member
of a Controlled Group that includes Borrower has assumed, or received notice of
a claim asserted against Borrower or another member of the Controlled Group for,
withdrawal liability (as defined in the Multi-Employer Pension Plan Amendments
Act of 1980, as amended) with respect to any multi-employer pension plan.
Borrower has timely made when due all contributions with respect to any
multi-employer pension plan in which it participates and no event has occurred
triggering a material claim against Borrower for withdrawal liability with
respect to any multi-employer pension plan in which Borrower participates.

 

(j) Financial Records. Borrower shall keep current and accurate books of records
and accounts in which full and correct entries will be made of all of its
business transactions, and will reflect in its financial statements provided
hereunder adequate accruals and appropriations to reserves, all in accordance
with GAAP.

 

(k) Places of Business. Borrower shall give fifteen (15) calendar days’ prior
written notice to Lender of any change in the location of any of its places of
business, of the places where its records concerning its Accounts are kept, of
the places where the Collateral is kept, or of the establishment of any new, or
the discontinuance of any existing, places of business.

 

(l) Business Conducted. Borrower shall continue in the business presently
conducted by it using its commercially reasonable best efforts to maintain its
customers and goodwill. Borrower shall not engage, directly or indirectly, in
any line of business substantially different from the business conducted by it
immediately prior to the Closing Date, or engage in business or lines of
business which are not reasonably related thereto.

 

(m) INTENTIONALLY DELETED.

 

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(n) Licensure. Borrower will maintain all licenses necessary to conduct its
business as currently conducted, and take any steps required to comply with any
such new or additional requirements that may be imposed on Borrower, except
where failure to do so could not have a Material Adverse Effect.

 

(o) Tangible Net Worth. TriZetto will not at any time allow its consolidated
“tangible net worth” to fall below $50,000,000. For purposes of this Section
10(r), “tangible net worth” shall be defined as TriZetto’s net worth, on a
consolidated basis, minus all intangibles, including without limitation
goodwill, in each case calculated in accordance with GAAP; provided that, for
purposes of calculating “tangible net worth”, TriZetto shall be entitled to
include deferred tax liability associated with any intangibles generated from
acquisitions made by it.

 

(p) Further Assurances. Borrower will defend its title to the Collateral against
all persons and will, upon request of the Lender, (i) furnish such further
assurances of title as may be reasonably required by the Lender, (ii) deliver
and execute or cause to be delivered and executed, in form and content
reasonably satisfactory to the Lender, any financing statements, notices,
certificates of title, and other documents and pay the cost of filing or
recording the same in all public offices deemed necessary by the Lender, as well
as any recordation, documentary, or transfer tax required by law to be paid in
connection with such filing or recording, and (iii) do such other acts as the
Lender may reasonably request in order to perfect, preserve, maintain, or
continue the perfection of the Lender’s security interest in the Collateral
and/or its priority.

 

(r) Excess Cash Balance. At all times after the Effective Date and throughout
the term of this Note thereafter, TriZetto shall maintain an excess cash balance
equal, in the aggregate, to at least Thirty-Five Million and No/100 Dollars
($35,000,000.00) (the “Cash Balance”); provided, that, the Cash Balance required
to be maintained hereunder shall be automatically decreased dollar-for-dollar on
and contemporaneously with Lender’s receipt of any required amortization or
other principal repayments under this Note; and, provided, further, if at any
time after the Effective Date, TriZetto shall fail to maintain the Cash Balance
as required hereunder, TriZetto shall be required to notify Lender in writing of
such event. For purposes hereof, “excess cash balance” shall mean the sum of
TriZetto’s consolidated cash (not including any restricted cash or cash held on
deposit as security for other obligations of any Borrower), cash equivalents,
short term-investments and certificates of deposit and/or commercial paper with
a maturity date of less than ninety (90) days that TriZetto can sell on the open
market at any time, and may also include the amounts available to be advanced
under the Loan Agreement.

 

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(s) Minimum EBITDA. As of the end of each fiscal quarter of TriZetto, TriZetto,
on a consolidated basis, shall have EBITDA equal to at least seventy percent
(70%) of the amount set forth in the Operating Plan corresponding with such
period. For purposes hereof, “EBITDA” means, for any period, an amount equal to
Consolidated Net Income for such period, plus the following, to the extent
deducted in computing such Consolidated Net Income: (i) Interest Expense; (ii)
taxes; and (iii) depreciation, amortization and other non-cash charges. For
purposes hereof, “Consolidated Net Income” means the consolidated net income of
TriZetto and its subsidiaries as determined in accordance with GAAP. For
purposes hereof, “Interest Expense” means, for any fiscal period, the
consolidated interest expense (including imputed interest on capitalized lease
obligations) on indebtedness of TriZetto and its subsidiaries for such period,
excluding any interest expense that is incurred by any other person or entity
with respect to obligations that TriZetto or any of its subsidiaries has
guaranteed.

 

(t) Recurring Revenue. As of the end of each fiscal quarter of TriZetto,
TriZetto, on a consolidated basis, shall have “recurring revenue” (as identified
on TriZetto’s financial statements consistent with TriZetto’s past practice)
equal to at least seventy percent (70%) of the amount set forth in the Operating
Plan corresponding with such period.

 

(u) Termination of or Default under Customer Contracts. Borrower will notify
Lender of any termination of or default (that would give rise to a termination)
under any Customer Contract that represents twenty percent (20%) or more of
TriZetto’s consolidated gross revenues during the immediately preceding twelve
(12) month period (a “Material Customer Contract”) as soon as possible but in
any event not later than three (3) Business Days after any notice of termination
or default thereunder, in each case other than any such termination or default
notices that originate with Borrower, which notices must be sent concurrently to
Lender. Notwithstanding anything in this Section 10(u) to the contrary, no
provision in this Section 10(u) shall modify, reduce or otherwise affect
Lender’s rights hereunder or under any other Loan Document.

 

11. Negative Covenants.

 

Each entity constituting Borrower covenants and agrees that until this Note
shall be repaid in full:

 

(a) Borrowing. Borrower will not create, incur, assume or suffer to exist any
liability for borrowed money except: (i) indebtedness to Lender, together with
any refinancing, renewal or extension thereof; (ii) indebtedness of Borrower
secured by mortgages, encumbrances or liens permitted by Section 11(b) together
with any refinancing, renewal or extension thereof so long as the aggregate
principal amount and material terms of such indebtedness are not increased or
worsened thereby; (iii) accounts payable to trade creditors and current
operating expenses (other than for borrowed money) which are not aged more than
one hundred twenty (120) calendar days from the billing date or more than thirty
(30) calendar days from the due date, in each case incurred in the ordinary
course of business and paid within such time period, unless the same are being
contested in good faith and by appropriate and lawful proceedings, and Borrower
shall have set aside such reserves, if any, with respect thereto as are required
by GAAP and deemed adequate by Borrower and its independent accountants; (iv)
the indebtedness set forth on Schedule 11(a) together with any

 

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refinancing, renewal or extension thereof so long as the aggregate principal
amount and material terms of such indebtedness are not increased or worsened
thereby; and (v) to the extent not included in subparagraphs (i)-(iv) above,
borrowings incurred in the ordinary course of its business and not and not
exceeding $500,000 in the aggregate outstanding at any one time. Borrower will
not make prepayments on any existing or future indebtedness for borrowed money
to any third person or entity (other than Lender, to the extent permitted by
this Note or any subsequent agreement between Borrower and Lender).

 

(b) Liens and Encumbrances. Borrower will not create, incur, assume or suffer to
exist any mortgage, pledge, lien or other encumbrance of any kind (including the
charge upon property purchased under a conditional sale or other title retention
agreement) upon, or any security interest in, any of the Collateral, whether now
owned or hereafter acquired, except for Permitted Liens.

 

(c) Restriction on Fundamental Changes. Borrower will not, without the prior
written consent of Lender: (a) liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution); provided that, with respect to any liquidation
or dissolution of a Borrower in connection with which the assets and liabilities
of such Borrower are transferred to another entity that is then a Borrower under
this Note, the prior written consent of Lender shall not be required; or (b)
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of related transactions, by merger, consolidation, sale of assets or
otherwise (i) all or substantially all of its assets or (ii) the capital stock
of any of its subsidiaries, in each case whether now owned or hereafter
acquired. Borrower agrees that compliance with this Section 11(c) is a material
inducement to Lender’s advancing credit under this Note. Borrower further agrees
that in addition to all other remedies available to Lender, Lender shall be
entitled to specific enforcement of the covenants in this Section 11(c),
including without limitation injunctive relief.”

 

(d) Sale and Leaseback. Borrower will not, directly or indirectly, enter into
any arrangement whereby Borrower sells or transfers all or any part of its
assets and thereupon and within one year thereafter rents or leases the assets
so sold or transferred without the prior written notice to, and the prior
express written consent of, Lender, which consent shall not be unreasonably
withheld.

 

(e) Dividends, Distributions, and Management Fees. Borrower will not make,
declare or pay any dividends or distributions with respect to, purchase, redeem
or otherwise acquire for value any of its outstanding stock now or hereafter
outstanding, or return any capital of its stockholders, except pursuant to the
Borrower’s existing or future Restricted Stock Agreements or as otherwise
approved by the Board of Directors of the applicable Borrower (provided, that
such issuances, in the aggregate shall not exceed fifteen percent (15%) of the
outstanding shares of the capital stock of any such Borrower), nor shall
Borrower pay management fees or fees of a similar nature to any person other
than to other entities which constitute the Borrower (in accordance with the
terms hereof); provided that, so long as no Event of Default is occurring or
continuing hereunder, Borrower shall be permitted to pay dividends to its
Affiliates (regardless of whether any such Affiliate is a “Borrower” hereunder).

 

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(f) Loans. Borrower will not make loans or advances to any Person, other than
(i) trade credit extended in the ordinary course of its business, and (ii)
advances for business travel and similar temporary advances made in the ordinary
course of business to officers, stockholders, directors, and employees.

 

(g) Contingent Liabilities. Except as set forth on Schedule 11(g), Borrower will
not assume, guarantee, endorse, contingently agree to purchase or otherwise
become liable upon the obligation of any Person, except by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.

 

(h) Subsidiaries. Except for subsidiaries which are also certain of the entities
which constitute Borrower, those subsidiaries set forth on Schedule 9(u) and any
subsidiary formed or acquired in connection with an acquisition made by a
Borrower, Borrower does not have, and will not form, any subsidiary, or make any
equity investment in or any loan in the nature of an equity investment to, any
other person, without the prior written consent of Lender, which consent shall
not be unreasonably withheld. In the event that any subsidiary listed on
Schedule 9(u) or any other subsidiary of a Borrower which is not itself a
Borrower hereunder at any time acquires or otherwise obtains any assets or
commences operations of any kind, Borrower agrees that it shall request that
such subsidiary be added as a “Borrower” entity under this Note and shall ensure
that such subsidiary as well as the other Borrower entities execute all
documents required, among other things, to include such subsidiary as a
“Borrower” under this Note and to include the collateral of such subsidiary in
the Collateral hereunder.

 

(i) Transactions with Affiliates and Subsidiaries. Borrower will not enter into
any transaction, including without limitation the purchase, sale, or exchange of
property, or the loaning or giving of funds to any Affiliate (except for any
Affiliate that is also a “Borrower” hereunder) or subsidiary, except in the
ordinary course of business and pursuant to the reasonable requirements of
Borrower’s business and upon terms substantially the same and no less favorable
to Borrower as it would obtain in a comparable arm’s length transaction with any
Person not an Affiliate (except for any Affiliate that is also a “Borrower”
hereunder) or subsidiary, and so long as the transaction is not otherwise
prohibited under this Note. For purposes of the foregoing, Lender consents to
the transactions described on Schedule 11(i). Notwithstanding the foregoing, no
Borrower will transfer any assets to any subsidiary of Borrower identified on
Schedule 9(u) or any other subsidiary of a Borrower entity which is not a
Borrower hereunder nor cause any such subsidiary to commence operations without
the prior written consent of Lender until such subsidiary is added as a
“Borrower” entity hereunder as set forth in paragraph 11(h) above for purposes
of including the assets of such subsidiary in the Collateral; provided, however,
that Lender shall not be required to increase the amount of this Note in
connection with the addition to the Collateral of the assets of any such
subsidiary that is added as a Borrower entity.

 

(j) Change in Capital Structure. From and after the Effective Date, there shall
occur no change in the ownership of the equity securities (other than the common
stock of TriZetto) of TriZetto or any other Borrower, in each case from such
ownership as set forth in Schedule 9(p).

 

 

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(k) Contracts and Agreements. Borrower will not become or be a party to any
contract or agreement which would breach this Note, or breach any other
instrument, agreement, or document to which Borrower is a party or by which it
is or may be bound, except for such breach which individually or in the
aggregate could not have a Material Adverse Effect.

 

(l) Compliance with ERISA. Borrower will not permit with respect to any Plan
covered by Title IV of ERISA any Prohibited Transaction or any Reportable Event.

 

(m) Qualifications. Borrower will not amend, alter or suspend or terminate or
make provisional in any material way, any qualification required to operate its
business without the prior written consent of Lender, except in the event where
such action could not have a Material Adverse Effect.

 

(n) Use of Lender’s Name/Press Releases. Borrower will not use Lender’s name (or
the name of any of Lender’s affiliates) in connection with any of its business
operations. Borrower will not and will not permit its Affiliates to, in the
future, issue any press release or other public disclosure using the name of
Lender, General Electric Capital Corporation or any of their respective
Affiliates or referring to the Loan Agreement or the other Loan Documents
without at least two (2) Business Days prior written notice to Lender and
without the prior written consent of Lender unless (and only to the extent that)
Borrower or such Affiliate of Borrower is required to so disclose under law and
then, in any event, such Borrower or Affiliate will notify Lender of such press
release or other public disclosure. Borrower consents to the publication by
Lender of a tombstone or similar advertising material relating to the financing
transactions contemplated by the Loan Agreement. Borrower may disclose to third
parties that Borrower has a borrowing relationship with Lender. Nothing
contained in the Loan Agreement is intended to permit or authorize Borrower to
make any contract on behalf of Lender.

 

(o) Margin Stock. Borrower will not carry or purchase any “margin security”
within the meaning of Regulations U, T or X of the Board of Governors of the
Federal Reserve System.

 

(p) Truth of Statements and Certificates. Borrower will not furnish to Lender
any certificate or other document that contains any untrue statement of a
material fact or that omits to state a material fact necessary to make it not
misleading in light of the circumstances under which it was furnished.

 

(q) Capital Expenditures. With respect to each consecutive six (6) month period
during the term of this Note, commencing on the Effective Date, TriZetto, on a
consolidated basis, shall not make Capital Expenditures during such period in
excess of an amount equal to one hundred twenty percent (120%) of the amount set
forth in the Operating Plan corresponding with such period. For purposes hereof,
“Capital Expenditures” means all expenditures (by the expenditure of cash or the
incurrence of indebtedness) during any period for any fixed assets or
improvements or for replacements, substitutions or additions thereto that have a
useful life of more than one (1) year and that are required to be capitalized
under GAAP.

 

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12. Events of Default. The following events are each an “Event of Default” under
this Note:

 

(a) Borrower fails to make any payment of principal when due or fails to make
any payment of interest, fees or other amounts owed to or for the account of
Lender under this Note and such payment remains unpaid for ten (10) calendar
days after written notice of the default or breach from Lender to Borrower; or

 

(b) Borrower has made any representations or warranties in this Note, the other
Loan Documents, any financial statement delivered to Lender or otherwise in
connection with this Note or the related transaction that contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained in this Note or in such document or financial statement not
misleading; or

 

(c) Borrower shall fail to perform or observe, or cause to be performed or
observed, any other term, obligation, covenant, condition or agreement contained
in this Note or the other Loan Documents and any such failure shall have
continued for a period of fifteen (15) Business Days after written notice of
such failure; or

 

(d) Any obligation of Borrower (other than its obligations under this Note) for
the payment of borrowed money (excluding trade accounts payable) in an amount
greater than $200,000 is not paid when due or within any applicable grace
period, or such obligation becomes or is declared to be due and payable before
the expressed maturity of the obligation, or there shall have occurred an event
which, with the giving of notice or lapse of time, or both, would cause any such
obligation to become, or allow any such obligation to be declared to be, due and
payable; or

 

(e) Borrower shall (i) apply for, or consent in writing to, the appointment of a
receiver, trustee or liquidator; or (ii) file a voluntary petition seeking
relief under the Bankruptcy Code, or be unable, or admit in writing Borrower’s
inability, to pay their debts as they become due; or (iii) make a general
assignment for the benefit of creditors; or (iv) file a petition or an answer
seeking reorganization or an arrangement or a readjustment of debt with
creditors, apply for, take advantage, permit or suffer to exist the commencement
of any insolvency, bankruptcy, suspension of payments, reorganization, debt
arrangement, liquidation, dissolution or similar event, under the law of the
United States or of any state in which Borrower is a resident; or (v) file an
answer admitting the material allegations of a petition filed against Borrower
in any such bankruptcy, reorganization or insolvency case or proceeding or (vi)
take any action authorizing, or in furtherance of, any of the foregoing; or

 

(f) Either (i) an involuntary case is commenced against Borrower and the
petition is not contested within ten (10) calendar days or is not dismissed
within sixty (60) calendar days after the commencement of the case or (ii) an
order, judgment or decree shall be entered by any court of competent
jurisdiction on the application of a creditor adjudicating Borrower bankrupt or
insolvent, or appointing a receiver, trustee or liquidator of Borrower or of all
or substantially all of the assets of Borrower and the order, judgment or decree
shall continue unstayed and in effect for a period of sixty

 

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(60) calendar days or shall not be discharged within ten (10) calendar days
after the expiration of any stay of such order, judgment, or decree; or

 

(g) One or more final judgments in excess of $500,000 against Borrower or
attachments against its property not fully and unconditionally covered by
insurance shall be rendered by a court of record and shall remain unpaid,
unstayed on appeal, undischarged, unbonded and undismissed for a period of
twenty (20) calendar days; or

 

(h) Borrower ceases any material portion of its business operations as presently
conducted; or

 

(i) Any indication or evidence is received by Lender that Borrower may have
directly or indirectly been engaged in any type of activity which, in Lender’s
discretion, may result in the forfeiture of any property of Borrower to any
governmental authority, which default shall have continued unremedied for a
period of fifteen (15) calendar days after written notice from Lender; or

 

(j) Borrower or any Affiliate of Borrower, shall challenge or contest, in any
action, suit or proceeding, the validity or enforceability of this Note, or any
of the other Loan Documents, the legality or the enforceability of any of the
obligations under this Note or under any of the Loan Documents or the perfection
or priority of any lien granted to Lender;

 

(k) Borrower shall be criminally convicted under any law and such conviction
shall have a Material Adverse Effect; or

 

(l) There shall occur an adverse change in the financial condition or business
prospects of Borrower (which change meets the standard of Material Adverse
Effect hereunder), or Lender in good faith shall deem itself insecure as a
result of acts or events bearing upon the financial condition of Borrower or the
repayment of this Note, which default shall have continued unremedied for a
period of twenty (20) calendar days after written notice from Lender; or

 

(m) An Event of Default shall have occurred under the Revolving Loan Documents
or Affiliated Loan Documents.

 

13. Lender’s Rights.

 

(a) Upon the occurrence of an Event of Default under this Note or the other Loan
Documents, Lender may, in addition to its rights and remedies set forth in
Sections 6 and 7 above, proceed, to the extent permitted by law, to protect and
enforce its rights either by suit in equity or by action at law, or both,
whether for the specific performance of any covenant, condition or agreement
contained in this Note or in aid of the exercise of any power granted in this
Note, or proceed to enforce the payment of this Note or to enforce any other
legal or equitable right of Lender. No right or remedy in this Note or the other
Loan Documents, in the Loan Agreement or the Revolving Loan Documents, the
Affiliated Loan Documents or any in other agreement or instrument to the benefit
of Lender is intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and shall be in addition to every
other right and remedy given under this

 

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Note or now or hereafter existing at law or in equity or by statute or
otherwise. Without limiting the generality of the foregoing, if the outstanding
Principal Sum, or any of the other obligations of Borrower to Lender, including
but not limited to any obligations of Borrower to Lender under the Loan
Agreement, the Revolving Loan Documents or the Affiliated Loan Documents, shall
not be paid when due, Lender shall not be required to resort to any particular
security, right or remedy or to proceed in any particular order of priority, and
Lender shall have the right at any time and from time to time, in any
commercially reasonable manner and in any order, to enforce its security
interests with respect to the Collateral, liens, rights and remedies, or any of
them, as it deems appropriate in the circumstances, and apply the proceeds of
any Collateral to the obligations of Borrower, in any order, under (x) this Note
and the Loan Documents, (y) the obligations of Borrower under the Loan Agreement
and the Revolving Loan Documents or (z) the obligations under the Affiliated
Loan Documents.

 

(b) If an Event of Default has occurred as provided above and Borrower has not
paid all amounts outstanding, including all principal, together with interest
accrued on such amounts, upon demand by Lender, then Borrower shall pay to
Lender interest on such outstanding amounts at a rate per annum equal to the
Default Interest Rate from the date such outstanding amounts are due until the
date this Note is paid in full. Borrower promises to pay all costs of
collection, including reasonable attorneys’ fees, if this Note is referred to an
attorney for collection after the Event of Default.

 

14. No Defenses. Borrower’s obligations under this Note shall not be subject to
any set-off, counterclaim or defense to payment that Borrower now has or may
have in the future.

 

15. No Waiver; Cumulative Rights. No failure or delay on the part of Lender in
exercising any right, power or privilege under this Note or the other Loan
Documents, nor any course of dealing between Borrower and Lender, shall operate
as a waiver of the right, power or privilege, nor shall a single or partial
exercise of any right, power or privilege preclude any other or further exercise
of, or the exercise of any other, right, power or privilege. The remedies
provided for in this Note are cumulative and are not exclusive of any remedies
that may be available to any party to this Note at law, in equity or otherwise.

 

16. Writing Required. No modification or waiver of any provisions of this Note
or any other Loan Documents, and no consent to any departure by Borrower, shall
in any event be effective, without respect to any course of dealing between the
parties, unless the modification or waiver shall be in a writing executed by
Lender (and Borrower with respect to a modification) and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on Borrower in any case shall thereby
entitle Borrower to any other or further notice or demand in the same, similar
or other circumstances.

 

17. Usury Limitation. Notwithstanding anything contained to the contrary in this
Note, Lender shall never be entitled to receive, collect or apply as interest
any amount in excess of the maximum rate of interest permitted to be charged by
applicable law. If Lender receives, collects or applies as interest any such
excess, the amount that would be excessive interest shall be applied to the
reduction of the Principal Sum; and if the Principal Sum is paid in full, any
remaining excess

 

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shall be paid to Borrower. In determining whether or not the interest paid or
payable in any specific case exceeds the highest lawful rate, Lender and
Borrower shall to the maximum extent permitted under applicable law: (i)
characterize any non-principal payment as an expense, fee or premium rather than
as interest; and (ii) “spread” the total amount of interest throughout the
entire term of the obligation so that the interest rate is deemed to have been
uniform throughout the entire term.

 

18. Notices. Any notice or demand given under this Note shall be given by
delivering it, sending by telecopier (with a confirming copy by regular mail),
or by mailing it by certified or registered mail, postage prepaid, return
receipt requested, or sent by prepaid overnight courier service addressed to
Borrower at: The TriZetto Group, Inc., 567 San Nicolas Drive, Suite 360, Newport
Beach, California 92660, Attention: Mr. Michael Sunderland, CFO, Telephone:
(949) 719-2200, Telecopier: (949) 219-2199, with a copy James J. Sullivan, Vice
President, General Counsel for TriZetto, Telephone: (949) 719-2215, Telecopier:
(949) 219-2197. Any notice to be given to Lender under this Note shall be given
by personally delivering it, sending by telecopier (with a confirming copy by
regular mail), or mailing it by certified or registered mail, return receipt
requested, or sent by prepaid overnight courier service, addressed to Lender at:
2 Wisconsin Circle, 4th Floor, Chevy Chase, Maryland 20815 Attention: Pascale
Bissainthe, Chief Counsel, Telephone: (301) 961-1640, Telecopier: (301)
664-9866, or at such other place as Lender may specify in writing to Borrower.
Each party may designate a change of address by notice to the other given in
accordance with this Section 18 at least fifteen (15) calendar days before such
change of address is to become effective. A notice given under this Note shall
be deemed received upon receipt if it is personally delivered or sent by
telecopier or overnight courier service and five (5) calendar days after it is
deposited in the U.S. mail if it is sent by regular mail.

 

19. Section Headings. The headings of the several paragraphs of this Note are
inserted solely for convenience of reference and are not a part of and are not
intended to govern, limit or aid in the construction of any term or provision.

 

20. Severability. If any term, provision, covenant or condition of this Note or
the application of such term, provision, covenant or condition to any party or
circumstance shall be found by a court of competent jurisdiction to be, to any
extent, invalid or unenforceable, the remainder of this Note and the application
of such term, provision, covenant, or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, provision, covenant or condition shall be valid
and enforced to the fullest extent permitted by law. Upon determination that any
such term, provision, covenant or condition is invalid, illegal or
unenforceable, Lender may, but is not obligated to, advance funds to Borrower
under this Note until Borrower and Lender amend this Note so as to effect the
original intent of the parties as closely as possible in a valid and enforceable
manner.

 

21. Survival of Terms. All covenants, agreements, representations and warranties
made in this Note or in any financial statements delivered pursuant to this Note
shall survive Borrower’s execution and delivery of this Note to Lender and shall
continue in full force and effect so long as this Note or any other obligation
under this Note shall be outstanding and unpaid or any other obligation of
Borrower to Lender or its affiliates under this Note shall remain unperformed.

 

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22. Indemnity. Borrower hereby agrees to indemnify and hold harmless Lender, its
partners, officers, agents and employees (collectively, “Indemnitee”) from and
against any liability, loss, cost, expense, claim, damage, suit, action or
proceeding ever suffered or incurred by Lender (including reasonable attorneys’
fees and expenses) arising from Borrower’s failure to observe, perform or
discharge any of its covenants, obligations, agreements or duties under this
Note or from the breach of any of the representations or warranties contained in
this Note. In addition, Borrower shall defend Indemnitee against and save it
harmless from all claims of any Person with respect to the Collateral.
Notwithstanding any contrary provision in this Note, the obligations of Borrower
under this Section 22 shall survive the payment in full of the all obligations
under this Note and the termination of this Note.

 

23. Joint and Several Liability. Each entity comprising Borrower shall be
jointly and severally liable for all of the obligations of Borrower under this
Note.

 

24. Commissions. The transaction contemplated by this Note was brought about by
Lender and Borrower acting as principals and without any brokers, agents, or
finders being the effective procuring cause. Borrower represents that it has not
committed Lender to the payment of any brokerage fee, commission, or charge in
connection with this transaction. If any such claim is made on Lender by any
broker, finder, or agent or other person, Borrower will indemnify, defend, and
hold Lender harmless from and against the claim and will defend any action to
recover on that claim, at Borrower’s cost and expense, including Lender’s
counsel fees. Borrower further agrees that until any such claim or demand is
adjudicated in Lender’s favor, the amount demanded will be deemed a liability of
Borrower under this Note, secured by the Collateral.

 

25. Third Parties. No rights are intended to be created under this Note or under
any other Loan Document for the benefit of any third party donee, creditor, or
incidental beneficiary of Borrower. Nothing contained in this Note shall be
construed as a delegation to Lender of Borrower’s duty of performance, including
without limitation Borrower’s duties under any account or contract in which
Lender has a security interest.

 

26. Discharge of Borrower’s Obligations. Lender, in its sole discretion, shall
have the right at any time, and from time to time, without prior notice to
Borrower if Borrower fails to do so, to: (a) obtain insurance covering any of
the Collateral as required under this Note; (b) pay for the performance of any
of Borrower’s obligations under this Note; (c) discharge taxes, liens, security
interests, or other encumbrances at any time levied or placed on any of the
Collateral in violation of this Note unless Borrower is in good faith with due
diligence by appropriate proceedings contesting those items; and (d) pay for the
maintenance and preservation of any of the Collateral. Reasonable expenses and
advances hereunder shall be added to the Loan, until reimbursed to Lender and
shall be secured by the Collateral. Any such payments and advances by Lender
shall not be construed as a waiver by Lender of an Event of Default.

 

27. Lender Approvals. Unless expressly provided herein to the contrary, any
approval, consent, waiver or satisfaction of Lender with respect to any matter
that is the subject of this Note, the other Loan Documents may be granted or
withheld by Lender in its sole and absolute discretion.

 

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28. Governing Law; Consent to Jurisdiction. THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD
TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS. IF ANY ACTION
ARISING OUT OF THIS NOTE OR THE OTHER LOAN DOCUMENTS IS COMMENCED BY LENDER IN
THE STATE COURTS OF THE STATE OF MARYLAND OR IN THE U.S. DISTRICT COURT FOR THE
DISTRICT OF MARYLAND, BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH ACTION AND TO THE LAYING OF VENUE IN THE STATE OF MARYLAND.
ANY PROCESS IN ANY SUCH ACTION SHALL BE DULY SERVED IF MAILED BY REGISTERED
MAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADRESS DESCRIBED IN SECTION 18 OR IF
SERVED BY ANY OTHER MEANS PERMITTED BY APPLICABLE LAW.

 

29. Cooperation in Discovery and Litigation. In any litigation, trial,
arbitration or other dispute resolution proceeding relating to this Note or any
of the other Loan Documents, all directors, officers, employees and agents of
Borrower or of its Affiliates shall be deemed to be employees or managing agents
of Borrower for purposes of all applicable law or court rules regarding the
production of witnesses by notice for testimony (whether in a deposition, at
trial or otherwise). Borrower agrees that Lender’s counsel in any such dispute
resolution proceeding may examine any of these individuals as if under
cross-examination and that any discovery deposition of any of them may be used
in that proceeding as if it were an evidence deposition. Borrower in any event
will use all commercially reasonable efforts to produce in any such dispute
resolution proceeding, at the time and in the manner requested by Lender, all
Persons, documents (whether in tangible, electronic or other form) or other
things under its control and relating to the dispute in any jurisdiction that
recognizes that (or any similar) distinction.

 

30. Waiver of Trial by Jury. EACH OF BORROWER AND LENDER HEREBY (A) COVENANTS
AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUES TRIABLE OF RIGHT BY A
JURY, AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY
SUCH RIGHT SHALL NOW HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY EACH OF BORROWER AND LENDER, AND
THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. EACH PARTY IS
HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS NOTE TO ANY COURT HAVING
JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES TO THIS NOTE, SO AS TO
SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY TRIAL.
FURTHER, EACH OF BORROWER AND LENDER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR
AGENT OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION.

 

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31. Confession of Judgment. BORROWER AUTHORIZES ANY ATTORNEY ADMITTED TO PRATICE
BEFORE ANY COURT OF RECORD IN THE UNITED STATES OR THE CLERK OF SUCH COURT TO
APPEAR ON BEHALF OF BORROWER IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE
ANY CLERK THEREOF OR PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS
JUDGMENT AGAINST BORROWER IN FAVOR OF LENDER IN THE FULL AMOUNT DUE ON THIS NOTE
(INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES, FEES AND COSTS)
PLUS ATTORNEYS FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE AMOUNT DUE, PLUS COURT
COSTS, ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF BORROWER FOR PRIOR HEARING.
NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION, THE LENDER ACKNOWLEDGES
THAT ATTORNEYS’ FEES ARE STATED TO BE FIFTEEN PERCENT (15%) SOLELY FOR PURPOSES
OF FIXING A SUM CERTAIN FOR WHICH JUDGEMENT CAN BE ENTERED BY CONFESSION; AND
THE LENDER AGREES THAT IN ENFORCING ANY JUDGEMENT BY CONFESSION, LENDER SHALL
NOT DEMAND, SOLELY WITH RESPECT TO ATTORNEYS’ FEES INCURRED BY THE LENDER IN
CONNECTION WITH SUCH INDEBTEDNESS AFTER SUCH JUDGEMENT IS RENDERED, ANY AMOUNTS
IN EXCESS OF THE ACTUAL AMOUNT OF ATTORNEYS’ FEES CHARGED OR BILLED TO THE
LENDER (WHICH ATTORNEYS’ FEES SHALL BE CHARGED OR BILLED TO THE LENDER AT THE
STANDARD HOURLY RATES). BORROWER AGREES AND CONSENTS THAT VENUE AND JURISDICTION
SHALL BE PROPER IN THE CIRCUIT COURT OF ANY COUNTY OF THE STATE OF MARYLAND OR
OF BALTIMORE COUNTY, MARYLAND, OR IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MARYLAND. BORROWER WAIVES THE BENEFIT OF ANY AND EVERY STATUTE,
ORDINANCE, OR RULE OF COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON
BORROWER ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF
EXECUTION, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR
IMMEDIATE ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT. THE
AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST BORROWER SHALL NOT
BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE
THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO;
SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO
TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS LENDER SHALL DEEM
NECESSARY, CONVENIENT AND PROPER.

 

32. Appointment of Agent under this Note.

 

(a) Each of the entities comprising Borrower (other than TriZetto) hereby
irrevocably appoints and constitutes TriZetto as its agent to request and
receive the Loan (and to otherwise act on behalf of each such entity pursuant to
this Note and the other Loan Documents) from Lender in the name or on behalf of
each such entity. Lender may disburse the Loan to the bank account of any one or
more of such entities without notice to any of the other entities comprising

 

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Borrower or any other Person at any time obligated on or in respect of the
Obligations.

 

(b) Each of the entities comprising Borrower (other than TriZetto) hereby
irrevocably appoints and constitutes TriZetto as its agent to receive statements
of account and all other notices from Lender with respect to the Obligations or
otherwise under or in connection with this Note and the other Loan Documents.

 

(c) No purported termination of the appointment of TriZetto as agent hereunder
shall be effective without the prior written consent of Lender.

 

33. Cross-Guaranty.

 

(a) Each Borrower hereby agrees that such Borrower is jointly and severally
liable for, and hereby absolutely and unconditionally guarantees to Agent and
Lenders and their respective successors and assigns, the full and prompt payment
(whether at stated maturity, by acceleration or otherwise) and performance of,
all Obligations owed or hereafter owing to Agent and Lenders by each other
Borrower. Each Borrower agrees that its guaranty obligation hereunder is a
continuing guaranty of payment and performance and not of collection, that its
obligations under this Section 33 shall not be discharged until payment and
performance, in full, of the Obligations has occurred, and that its obligations
under this Section 33 shall be absolute and unconditional, irrespective of, and
unaffected by (i) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Note, any other Loan Document or any
other agreement, document or instrument to which any Borrower is or may become a
party; (ii) the absence of any action to enforce this Note (including this
Section 33) or any other Loan Document or the waiver or consent by Agent and
Lenders with respect to any of the provisions thereof; (iii) the existence,
value or condition of, or failure to perfect its lien against, any security for
the Obligations or any action, or the absence of any action, by Lender in
respect thereof (including the release of any such security); (iv) the
insolvency of any Borrower; or (v) any other action or circumstances that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor.

 

(b) Each Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.

 

(c) Each Borrower expressly waives all rights it may have now or in the future
under any statute, or at common law, or at law or in equity, or otherwise, to
compel Agent or Lenders to marshal assets or to proceed in respect of the
Obligations guaranteed hereunder against any other Borrower, any other party or
against any security for the payment and performance of the Obligations before
proceeding against, or as a condition to proceeding against, such Borrower. It
is agreed among each Borrower, Agent and Lenders that the foregoing waivers are
of the essence of the transaction contemplated by this Note and the other Loan
Documents and that, but for the provisions of this Section 33 and such waivers,
Agent and Lenders would decline to enter into this Note.

 

(d) Each Borrower agrees that the provisions of this Section 33 are for the
benefit of Agent and Lenders and their respective successors, transferees,
endorsees and assigns, and nothing

 

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herein contained shall impair, as between any other Borrower and Lender, the
obligations of such other Borrower under the Loan Documents.

 

(e) Notwithstanding anything to the contrary in this Note or in any other Loan
Document, and except as set forth in this Section 33, each Borrower hereby
expressly and irrevocably subordinates to payment of the Obligations any and all
rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety, guarantor or accommodation co-obligor until the Obligations are
indefeasibly paid in full in cash. Each Borrower acknowledges and agrees that
this subordination is intended to benefit Lender and shall not limit or
otherwise affect such Borrower’s liability hereunder or the enforceability of
this Section 33, and that Lender and its successors and assigns are intended
third party beneficiaries of the waivers and agreements set forth in this
Section 33.

 

(f) If Lender may, under applicable law, proceed to realize its benefits under
any of the Loan Documents giving Lender a lien upon any Collateral, whether
owned by any Borrower or by any other Person, either by judicial foreclosure or
by non-judicial sale or enforcement, Lender may, at its sole option, determine
which of its remedies or rights it may pursue without affecting any of its
rights and remedies under this Section 33. If, in the exercise of any of its
rights and remedies, Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Borrower or any
other Person, whether because of any applicable laws pertaining to “election of
remedies” or the like, each Borrower hereby consents to such action by Lender
and waives any claim based upon such action, even if such action by Lender shall
result in a full or partial loss of any rights of subrogation that each Borrower
might otherwise have had but for such action by Lender. Any election of remedies
that results in the denial or impairment of the right of Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower’s
obligation to pay the full amount of the Obligations. In the event Lender shall
bid at any foreclosure or trustee’s sale or at any private sale permitted by law
or the Loan Documents, Lender may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Lender but shall be
credited against the Obligations. The amount of the successful bid at any such
sale, whether Lender or any other party is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations guaranteed
under this Section 33, notwithstanding that any present or future law or court
decision or ruling may have the effect of reducing the amount of any deficiency
claim to which Lender might otherwise be entitled but for such bidding at any
such sale.

 

(g) Notwithstanding any provision herein contained to the contrary, each
Borrower’s liability under this Section 33 (which liability is in any event in
addition to amounts for which such Borrower is primarily liable under Section 2)
shall be limited to an amount not to exceed as of any date of determination the
greater of:

 

(i) the net amount of all Loans advanced to any other Borrower under this Note
and then re-loaned or otherwise transferred to, or for the benefit of, such
Borrower; and

 

29

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(ii) the amount that could be claimed by Agent and Lenders from such Borrower
under this Section 33 without rendering such claim voidable or avoidable under
Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
statute or common law after taking into account, among other things, such
Borrower’s right of contribution and indemnification from each other Borrower
under Section 33.

 

(h) To the extent that any Borrower shall make a payment under this Section 33
of all or any of the Obligations (other than Loans made to that Borrower for
which it is primarily liable) (a “Guarantor Payment”) that, taking into account
all other Guarantor Payments then previously or concurrently made by any other
Borrower, exceeds the amount that such Borrower would otherwise have paid if
each Borrower had paid the aggregate Obligations satisfied by such Guarantor
Payment in the same proportion that such Borrower’s Allocable Amount (as defined
below) (as determined immediately prior to such Guarantor Payment) bore to the
aggregate Allocable Amounts of each of the Borrowers as determined immediately
prior to the making of such Guarantor Payment, then, following indefeasible
payment in full in cash of the Obligations and termination of the Commitments,
such Borrower shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, each other Borrower for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment.

 

(i) As of any date of determination, the “Allocable Amount” of any Borrower
shall be equal to the maximum amount of the claim that could then be recovered
from such Borrower under this Section 33 without rendering such claim voidable
or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.

 

(j) This Section 33 is intended only to define the relative rights of Borrowers
and nothing set forth in this Section 33 is intended to or shall impair the
obligations of Borrowers, jointly and severally, to pay any amounts as and when
the same shall become due and payable in accordance with the terms of this Note,
including Section 33. Nothing contained in this Section 33 shall limit the
liability of any Borrower to pay the Loans made directly or indirectly to that
Borrower and accrued interest, fees and expenses with respect thereto for which
such Borrower shall be primarily liable.

 

(k) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Borrower to which such
contribution and indemnification is owing.

 

(l) The rights of the indemnifying Borrowers against other credit parties under
this Section 33 shall be exercisable upon the full and indefeasible payment of
the Obligations and the termination of the commitments of Lender hereunder.

 

(m) The liability of Borrowers under this Section 33 is in addition to and shall
be cumulative with all liabilities of each Borrower to Lender under this Note
and the other Loan Documents to which such Borrower is a party or in respect of
any Obligations or obligation of the

 

30

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other Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.

 

31

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34. No Novation. This Amended and Restated Secured Term Note (together with any
other document executed in connection herewith) is not intended to be, nor shall
it be construed as, a novation of the Borrower’s obligations with respect to the
Outstanding Principal Amount or otherwise with respect to its continuing
obligations under the Original Note, all of which obligations remain and shall
continue in full force and effect under this Note as if originally set forth
herein.

 

[THIS SPACE INTENTIONALLY BLANK]

 

32

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IN WITNESS WHEREOF, intending to be legally bound, and intending that this
Amended and Restated Term Note constitute an instrument executed under seal, the
Borrower has caused this Amended and Restated Term Note to be executed under
seal as of the date first written above.

 

BORROWER:

THE TRIZETTO GROUP, INC.,

a Delaware corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

CREATIVE BUSINESS SOLUTIONS, INC.,

a Texas corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

FINSERV HEALTH CARE SYSTEMS, INC.,

a New York corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

33

--------------------------------------------------------------------------------

 

HEALTHCARE MEDIA ENTERPRISES, INC.,

a Delaware corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

HEALTHWEB, INC., a Delaware corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

MARGOLIS HEALTH ENTERPRISES, INC.,

a California corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

NOVALIS CORPORATION,

a Delaware corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

34

--------------------------------------------------------------------------------

 

TRIZETTO APPLICATION SERVICES, INC.,

a Colorado corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

DIGITAL INSURANCE SYSTEMS

CORPORATION, an Ohio corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

HEALTH NETWORKS OF AMERICA, INC.,

a Maryland corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

NOVALIS DEVELOPMENT CORPORATION,

 

a Delaware corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

35

--------------------------------------------------------------------------------

 

NOVALIS DEVELOPMENT & LICENSING

CORPORATION, an Indiana corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

NOVALIS SERVICES CORPORATION,

a Delaware corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

ERISCO, INC., a New York corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

RESOURCE INFORMATION

MANAGEMENT SYSTEMS, INC.,

an Illinois corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

36

--------------------------------------------------------------------------------

 

WINTHROP FINANCIAL GROUP, INC.,

an Illinois corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

OPTION SERVICES GROUP, INC.,

an Illinois corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

INFOTRUST COMPANY,

an Illinois corporation

By:

 

(SEAL)

--------------------------------------------------------------------------------

Name: Michael J. Sunderland

Title:   Chief Financial Officer/Secretary

 

 

37