Document:

Exhibit 4.4

 

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

	
  In re:

  	
  Chapter 11

  
	
   

  	
   

  
	
  PEREGRINE SYSTEMS, INC., et
  al., 

  	
  Jointly Administered

  
	
   

  	
  Case No. 02-12740 (JKF)

  
	
  Debtors.

  	
   

  
	
   

  	
  Final
  Hearing Date: November 4, 2003 at

  
	
   

  	
  9:00
  a.m. (ET)

  
	
   

  	
  Objection
  Deadline: October 22, 2003

  

 

FINAL
ORDER (A) CERTIFYING CLASSES FOR

SETTLEMENT
PURPOSES ONLY PURSUANT TO FEDERAL RULES OF CIVIL

PROCEDURE
23(a) AND 23(b)(1)(B); (B) APPOINTING SETTLEMENT CLASS

REPRESENTATIVES;
(C) APPROVING AND AUTHORIZING CLASS

REPRESENTATIVES
TO ENTER INTO AND IMPLEMENT SETTLEMENT

AGREEMENT
PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 23(e); (D)

ESTIMATING
VALUE OF CLASS 9 INDEMNITY CLAIMS OF DIRECTORS AND

OFFICERS,
FOR PURPOSES OF IMPLEMENTING SETTLEMENT AGREEMENT

AND
MAKING PLAN DISTRIBUTIONS; AND (E) APPROVING ADEQUACY OF

NOTICE
PROCEDURES FOR CLASS ACTION SETTLEMENT

 

WHEREAS the joint motion filed by Peregrine Systems,
Inc., the reorganized debtor herein (“Peregrine”), the Post-Emergence Equity
Committee(1), and David Levy, Leighton Powell, David Schenkel, John Virden,
Conrad Willemse, Bill Holman, Bob Benesko, Michael Slavich, Richard Maheu and
Mark Rollins (collectively, the “Loran Group”) and joined in by Heywood Waga
(“Waga” and, collectively with the Loran Group, the “Lead Plaintiffs”)(2) for
an Order pursuant to Rules 23(a), 23(b)(l)(B) and 23(e) of the Federal Rules of
Civil Procedure, made applicable to these cases pursuant to Rules 7023 and 9014
of the Federal Rules of

 

(1)           All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the joint

motion
or the Modified Agreement (defined below).

(2)                 The moving parties are
referred to collectively as the “Parties”.

 

 

Bankruptcy Procedure, to:
(A) certify classes for settlement purposes only, (B) appoint settlement class
representatives, (C) approve and authorize entry into a settlement agreement,
(D) estimate the value of Class 9 directors’ and officers’ indemnity claims for
purposes of implementing the Agreement and making distributions under the Plan,
and (E) approve the adequacy of the notice procedures for class certification
and for approval of the Agreement (the “Motion”), came on regularly for final
hearing on November 4, 2003 at 9:00 a.m.; and

 

WHEREAS the
Court having jurisdiction to consider the Motion, pursuant to 28 U.S.C. §§ 157
and 1334, section 105 of the Bankruptcy Code and Rule 7023 of the Federal Rules
of Bankruptcy Procedure; and

 

WHEREAS the
Court having considered the Motion and all papers filed in connection therewith,
as well as the evidence and arguments presented by all interested parties at
the hearing;

 

WHEREAS the
Court having entered on October 3, 2003, a preliminary order (the “Preliminary
Order”), provisionally approving the Motion upon the terms and conditions more
fully set forth therein; and

 

WHEREAS
Messrs. Moores, Nelson, Savoy, Noell, Hosley and van den Berg (collectively,
the “Former Directors”) having withdrawn their objections to the Motion upon
condition that the Court approve (a) a revised settlement agreement (as further
modified by this Order, the “Modified Agreement”) by and among the Parties and
filed with the Court on October 28, 2003 and (b) that certain Stipulation
Resolving Objection by John J. Moores, Charles E. Noell, III, Norris van den Berg,
William D. Savoy, Richard A. Hosley, and Richard T. Nelson to Final Approval of
Joint Motion Pursuant to Federal Rules of Civil Procedure 23(a), 23(b)(l)(B)

 

2

 

and 23(e) to (A) Certify Classes for Settlement Purposes Only, (B)
Appoint Settlement Class Representatives, (C) Approve Settlement Agreement, (D)
Estimate Value of Class 9 Officer and Director Indemnity Claims For Purposes of
Settlement and Plan Distributions, and (E) Approve Adequacy of Notice Procedures,
filed with the Court on October 29, 2003 (the “Stipulation”), a true and
correct copy of which is attached hereto as Exhibit “A” and incorporated herein
by this reference as though fully set forth herein.

 

THE COURT HEREBY FINDS AS
FOLLOWS:

 

1.             The
members of the proposed Securities Class are so numerous that joinder of all
members of the proposed class, for purposes of entering into the Modified
Agreement, is impracticable. “Securities Class” shall comprise all persons and
entities who purchased or otherwise acquired the securities of Peregrine from
July 22, 1999 through May 3, 2002, inclusive but excluding all Defendants named
in that certain action (as modified, consolidated and amended from time to
time, the “Securities Action”) commenced on or about May 6, 2002 against
Peregrine and other individuals and entities as Case No. 02-CV-0870J (RBB)
before the United States District Court, Southern District of California (the
“District Court”); all officers and directors of Peregrine; members of their
families; Peregrine and any of its parents, subsidiaries, officers, directors
or affiliates; any entity in which any excluded person has a controlling
interest directly or indirectly; and each of their respective legal
representatives, heirs, successors and assigns. Notwithstanding the foregoing,
the Securities Class shall expressly include Barry Ariko.

 

3

 

2.             The members of the proposed Equity Class(3) are so
numerous that joinder of all members of the proposed class, for purposes of
entering into the Modified Agreement, is impracticable.

 

3.             There are one or more questions of law and/or fact common to
members of the proposed Securities Class.

 

4.             There are one or more questions of law and/or fact common to
members of the proposed Equity Class.

 

5.             The claims of the Lead Plaintiffs, as representative parties
of the Securities Class, are typical of the claims of the members of the
proposed Securities Class, in respect to the matters resolved by the Modified
Agreement.

 

6.             The claims of the Post Emergence Equity Committee, as
proposed representative party of the Equity Class, are typical of the claims of
the members of the proposed Equity Class, in respect to the matters resolved by
the Modified Agreement.

 

7.             The Lead Plaintiffs, as representatives of the Securities
Class, fairly and adequately protect the interests of the Securities Class, in
respect to the matters addressed by the Modified Agreement.

 

8.             The Post Emergence Equity Committee, as representative of the Equity Class, fairly
and adequately protect the interests of the Equity Class, in respect to the
matters addressed by the Modified Agreement.

 

(3)           The “Equity Class” is
defined as all persons or entities holding common shares in
the Debtors as of the effective date of the Debtors’ Plan of Reorganization.

 

4

 

 

9.             The prosecution of separate actions
by the members of the Securities Class would create a risk of adjudications
with respect to individual members of the Securities Class which may as a
practical matter be dispositive of the interests of the other members not
parties to the adjudications or may substantially impair or impede their
ability to protect their interests.

 

10.           The prosecution of separate actions
by the members of the Equity Class would create a risk of adjudications with
respect to individual members of the Equity Class which would as a practical
matter be dispositive of the interests of the other members not parties to the
adjudications or substantially impair or impede their ability to protect their
interests.

 

11.           The Modified Agreement is fair,
reasonable, and adequate with respect to all members of the proposed Securities
Class and the proposed Equity Class.

 

12.           The Litigation Trustee is properly
deemed to be the successor in interest to the attorney-client and work-product
privileges formerly held by the Debtors (or jointly held by the Debtors and
others, including the Former Directors) with respect to the Litigation Claims,
and as successor-in-interest to such privileges, the sharing by Peregrine of
everything that is within the attorney-client and work-product privileges with
the Litigation Trustee will not be deemed a waiver of the attorney-client and
work-product privileges.

 

13.           The Securities Class likely has a
substantial aggregate damages claim against the Debtors pursuant to Section
10(b) of the Securities Exchange Act of 1934 and Section 11 of the Securities
Act of 1933.

 

14.           The notice employed by the Parties in
seeking class certification and approval of the Modified Agreement was adequate
for purposes of complying with Federal Rule of Civil Procedure 23(e).

 

5

 

 

15.           With the exception of Paragraphs 11,
12 and 14, above, the foregoing findings are binding only with respect to these
proceedings and the implementation of the Modified Agreement and shall not
otherwise be binding or preclusive in or upon any other court or tribunal,
including, without limitation, the District Court.

 

WHEREFORE,
based upon the foregoing findings, and good cause appearing therefor,

 

THE COURT HEREBY ORDERS
AS FOLLOWS:

 

(a)   The Motion, as modified, is granted and the
Modified Agreement and the Stipulation are approved, the provisions of which
Stipulation shall be binding upon the Successor Litigation Trustee. To the
extent of any inconsistency between the Modified Agreement and this Order, the
terms and conditions of the Order shall govern.

 

(b)   The Securities Class and the Equity Class are
certified for the sole purpose of entering into and implementing the terms of
the Modified Agreement under Rules 23(a) and 23(b)(l)(B).

 

(c)   The Lead Plaintiffs are jointly appointed as
class representatives for the Securities Class for the sole purpose of entering
into and implementing the terms of the Modified Agreement under Rules 23(a) and
23(b)(l)(B).

 

(d)   The Post-Emergence Equity Committee is
appointed as class representative for the Equity Class for the sole purpose of
entering into and implementing the terms of the Modified Agreement under Rules
23(a) and 23(b)(l)(B).

 

(e)   Two hundred and twenty-five thousand
(225,000) shares of the Class 9 New PSI Common Stock (said 225,000 shares
hereinafter referred to as the “Class 9

 

6

 

 

Indemnification Stock”)
shall be set aside and allocated exclusively for distribution to the Holders of
Class 9 Indemnification Claims. Distributions to the Holders of Class 9
Indemnification Claims shall be made exclusively from the Class 9
Indemnification Stock in full and final settlement of all Class 9
Indemnification Claims and the Holders of such Class 9 Indemnification Claims
shall not be entitled to a distribution of any other portion of the Class 9
Consideration with respect to such Class 9 Indemnification Claims. The
allocation and distribution of the Class 9 Indemnification Stock to individual
Holders of the Class 9 Indemnification Claims shall be subject to a stipulation
by and between all Holders of Class 9 Indemnification Claims or further Order
of this Court, upon notice to all of the other Parties and to all individuals
and entities who have timely filed Class 9 Indemnification Claims. Pending such
stipulation or further order(s) of this Court, the Class 9 Indemnification Class
Stock shall be held by Peregrine in trust for the Holders of the Class 9
Indemnification Claims.

 

(f)    After setting aside the Class 9
Indemnification Stock, eighty-five percent (85%) of the balance of the Class 9
New PSI Common Stock shall be distributed Pro Rata to members of the Equity
Class in accordance with the terms and conditions of the Plan.

 

(g)   After setting aside the Class 9
Indemnification Stock, fifteen percent (15%) of the balance of the Class 9 PSI
New Common Stock shall be allocated to the Securities Class and distributed to
the Successor Litigation Trustee for the sole and exclusive benefit of the
Securities Class. Further, the Successor Litigation Trustee shall hold any and
all Litigation Proceeds (including, without limitation, any unused portion of
the $3.2 million advanced to the Litigation Trust pursuant to Article VII I. of
the Plan), in trust for the sole and exclusive benefit of the Securities Class.
The Successor Litigation Trustee may only distribute

 

7

 

the Class 9 New PSI
Common Stock allocated to the Securities Class pursuant to, and consistent with
order(s) of the District Court (or any successor court having jurisdiction over
the Securities Action). The portion of the Class 9 New PSI Common Stock held by
the Successor Litigation Trustee herein shall, pending distribution to the
members of the Securities Class in accordance with the provisions hereof, be
held subject to the terms and conditions of the Amended Litigation Trust Agreement
(which provides, among other things, that the Successor Litigation Trustee may
only vote, sell, distribute or otherwise transfer said Class 9 New PSI Common
Stock in accordance with written instructions given by or on behalf of the Lead
Plaintiffs and/or any order of the District Court (or any successor court
having jurisdiction over the Securities Action)).

 

(h)   Individuals or entities may be members of the
Equity Class and/or the Securities Class and/or Holders of Class 9 Indemnification Claims and their
entitlement to receive distributions under the Plan, pursuant to the Securities
Action, pursuant to the Modified Agreement or otherwise as a member of the
Equity Class or as a Holder of a Class 9 Indemnification Claim shall not in any
way affect or impair their rights to receive distributions as a member of the
Securities Class, and vice versa.

 

(i)    Subject to, and as limited by the
Stipulation, Peregrine shall use reasonable best efforts to fully cooperate in
good faith with the Lead Plaintiffs and the Successor Litigation Trustee in the
prosecution of the Litigation Claims. Peregrine shall (a) provide to the
Successor Litigation Trustee full and complete access to any and all records of
Peregrine and documents in Peregrine’s possession, (b) provide to Lead
Plaintiffs all documents that Peregrine has previously produced to the United
States Congress, the Securities and Exchange Commission, the United States
Department of Justice, the National Association of Securities

 

8

 

Dealers, and any other
regulatory agency and/or authority in connection with any investigation or
inquiry of Peregrine by such agencies, (c) provide additional documents to the
Lead Plaintiffs in accordance with the Stipulation, (d) make employee witnesses
available to the Successor Litigation Trustee and the Lead Plaintiffs for
interviews and/or deposition, (e) take reasonably necessary steps to ensure the
preservation of evidence, including electronic records, e-mail and computer hard
drives, and (f) deem the Successor Litigation Trustee to be the successor in
interest to the attorney-client and work-product privileges formerly held (or
jointly held) by the Debtors with respect to the Litigation Claims, and
Peregrine agrees to share everything that is within the attorney-client and
work-product privileges with the Successor Litigation Trustee, and because the
Successor Litigation Trustee shall be a successor to the Debtors’
attorney-client and work-product privileges, such a sharing will not be deemed
a waiver of the attorney-client and work-product privileges.

 

(j)    The certification of the Securities Class
shall only be binding with respect to the Modified Agreement and for purposes
of carrying out the terms of the Modified Agreement and shall not otherwise be
binding upon any other court or tribunal including, without limitation, the District Court.

 

(k)   Nothing herein shall constitute the allowance
or disallowance of any individual claim asserted against the Debtors nor a determination of the appropriate
classification of any such claim under the Plan or under the Modified
Agreement.

 

9

 

(l)    The Holders of the Other Securities Proofs
of Claim shall only be entitled to a recovery from the Debtors on account of
the Class 9 Consideration allocated to the Securities Class pursuant to the
Modified Agreement, only as a member of the Securities Class and only in
accordance with order(s) of the District Court.

 

(m)  Robert C. Friese is approved as the Successor
Litigation Trustee.

 

(n)   The Parties are authorized to enter into and implement the Modified
Agreement in accordance with its terms and conditions and to take any actions
reasonably necessary to carry out the purpose and intent of the Modified
Agreement.

 

(o)   The Amended Litigation Trust Agreement, in
the form previously filed by the Parties with the Court, is hereby approved.

 

10

 

 

(p)   The Litigation Trustee shall be and is the
successor in interest to the attorney-client and work-product privileges
formerly held (or jointly held) by the Debtors with respect to the Litigation
Claims, and as successor in interest to such privileges, the sharing by
Peregrine of everything that is within the attorney-client and work-product
privileges with the Litigation Trustee will not be deemed a waiver of the
attorney-client and work-product privileges.

 

Dated: 11/12, 2003

 

	
   

  	
  /s/ Judith K. Fitzgerald

  	
   

  
	
   

  	
  Honorable Judith K.
  Fitzgerald

  
	
   

  	
  United States Bankruptcy
  Judge

  
	
   

  	
   

  
	
  APPROVED AS TO FORM:

  	
   

  
	
   

  	
   

  
	
  Dated:
  November 10, 2003

  	
   

  
	
   

  	
  PACHULSKI, STANG, ZIEHL, YOUNG, JONES &
  WEINTRAUB P.C.

  
	
   

  	
   

  
	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  Laura
  Davis Jones (DE Bar No. 2436)

  
	
   

  	
  Scotta
  E. McFarland (DE Bar No. 4184)

  
	
   

  	
  Jeremy
  V. Richards (CA Bar No. 102300)

  
	
   

  	
  Linda
  F. Cantor (CA Bar No. 153762)

  
	
   

  	
  919
  North Market Street, 16th Floor

  
	
   

  	
  P.O.
  Box 8705

  
	
   

  	
  Wilmington,
  Delaware 19899-8705

  
	
   

  	
  (Courier
  19801)

  
	
   

  	
  Tel:
  (302) 652-4100 / Fax: (302) 652-4400

  
	
   

  	
   

  
	
   

  	
  Counsel
  for Peregrine Systems, Inc.

  
				

 

11

 

	
  Dated: November 7,  2003

  	
  KRONISH LIEB WEINER
  & HELLMAN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John A. Morris

  	
   

  
	
   

  	
  John A. Morris

  
	
   

  	
  Kronish Lieb Weiner
  & Hellman LLP

  
	
   

  	
  1114 Avenue of the
  Americans

  
	
   

  	
  New York, NY 10036

  
	
   

  	
  Telephone:

  	
  (212) 479-6140

  
	
   

  	
  Facsimile:

  	
  (212) 479-6275

  
	
   

  	
   

  
	
   

  	
  Counsel for Post
  Emergence Equity Committee

  
	
   

  	
   

  
	
  Dated: November 7, 2003

  	
  GOLD BENNETT CERA &
  SIDENER LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Solomon B. Cera

  	
   

  
	
   

  	
  Solomon B. Cera, Esq.

  
	
   

  	
  Gold Bennett Cera &
  Sidener LLP

  
	
   

  	
  595 Market Street,
  Suite 2300

  
	
   

  	
  San Francisco, CA
  94105-2835

  
	
   

  	
  Telephone: 

  	
  (415) 777-2230

  
	
   

  	
  Facsimile:

  	
  (415)777-5189

  
	
   

  	
   

  
	
   

  	
  Counsel for The Loran
  Group / Co-Lead

  Plaintiff

  
	
   

  	
   

  
	
  Dated: November, 2003

  	
  LOWENSTEIN SANDLER PC

  
	
   

  	
   

  
	
   

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
  Michael
  S. Etkin, Esq.

  
	
   

  	
  65
  Livingston Ave

  
	
   

  	
  Roseland,
  NJ 07068-1791

  
	
   

  	
  Telephone:
  

  	
  973-597-2500

  
	
   

  	
  Facsimile:

  	
  973-597-2400

  
	
   

  	
   

  
	
   

  	
  Counsel
  for Heywood Waga/Co-Lead Plaintiff

  
					

 

12

 

 

 

	
  Dated:
  November 10, 2003

  	
  VINSON
  & ELKINS L.L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Josiah M. Daniel, III

  	
   

  
	
   

  	
  Josiah
  M. Daniel, III

  
	
   

  	
  3700
  Trammel Crow Center

  
	
   

  	
  2001
  Ross Avenue 

  
	
   

  	
  Dallas,
  TX 75201-2975

  
	
   

  	
  Telephone:
  

  	
  214-220-7718

  
	
   

  	
  Facsimile:

  	
  214-999-718

  
	
   

  	
   

  
	
   

  	
  Counsel
  for John J. Moores

  
	
   

  	
   

  
	
  Dated:
  November 10, 2003

  	
  TESTA,
  HURWITZ & THIBEAULT, LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Brian E. Pastuszenski

  	
   

  
	
   

  	
  Brian
  E. Pastuszenski

  
	
   

  	
  125
  High Street, High Street Tower

  
	
   

  	
  Boston,
  MA 02110

  
	
   

  	
  Telephone:
  

  	
  617-248-7000

  
	
   

  	
  Facsimile:

  	
  617-248-7100

  
	
   

  	
   

  
	
   

  	
  Counsel
  for Charles E. Noell, III

  
	
   

  	
  Norris
  van den Berg and Richard A. Hosley

  
	
   

  	
   

  
	
  Dated:
  November     , 2003

  	
  McGUIREWOODS LLP

  
	
   

  	
   

  
	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  Sally E. Edison

  
	
   

  	
  Dominion
  Tower

  
	
   

  	
  625
  Liberty Avenue, 23rd Floor

  
	
   

  	
  Pittsburgh,
  PA 15222

  
	
   

  	
  Telephone:
  

  	
  412-667-6000

  
	
   

  	
  Facsimile:

  	
  412-667-6050

  
	
   

  	
   

  
	
   

  	
  Counsel
  for Richard T. Nelson

  
					

 

13

 

	
  Dated: November 7, 2003

  	
  MCNAUL EBEL NAWROT HELGREN

  & VANCE PLLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert D. Stewart

  	
   

  
	
   

  	
  Robert D. Stewart

  
	
   

  	
  600 University Street,
  Suite 2700

  
	
   

  	
  Seattle, WA 98101-3143

  
	
   

  	
  Telephone:

  	
  206-467-1816

  
	
   

  	
  Facsimile:

  	
  206-624-5128

  
	
   

  	
   

  
	
   

  	
  Counsel for William D.
  Savoy

  
	
   

  	
   

  
	
  Dated: November 7, 2003

  	
  HOWARD RICE NEMEROVSKI
  CANADY

  FALK & RASKIN

  
	
   

  	
  A Professional
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gary M. Kaplan

  	
   

  
	
   

  	
  Gary M. Kaplan

  
	
   

  	
  Three Embarcadero
  Center, 7th Floor

  
	
   

  	
  San Francisco, CA
  94111-4024

  
	
   

  	
  Telephone:

  	
  415-434-1600

  
	
   

  	
  Facsimile

  	
  415-217-5910

  
	
   

  	
   

  
	
   

  	
  Counsel
  for Barry Ariko

  
				

 

14

 

IN THE UNITED STATES BANKRUPTCY COURT

 

FOR THE DISTRICT OF DELAWARE

 

	
  In re:

  	
  )

  	
   

  	
  Chapter 11

  
	
   

  	
  )

  	
   

  	
   

  
	
  PEREGRINE SYSTEMS, INC., et al.,

  	
  )

  	
   

  	
  Case No. 02-12740 (JKF)

  
	
   

  	
  )

  	
   

  	
  (Jointly Administered)

  
	
  Debtors.

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
  Hearing Date: November 4,
  2003 at 9:00 a.m.

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  

 

STIPULATION
RESOLVING OBJECTION BY JOHN J. MOORES,

CHARLES
E. NOELL, III, NORRIS VAN DEN BERG, WILLIAM D. SAVOY,

RICHARD A.
HOSLEY, AND RICHARD T. NELSON TO FINAL APPROVAL

OF JOINT
MOTION PURSUANT TO FEDERAL RULES OF CIVIL

PROCEDURE
23(a), 23(b)(l)(B) AND 23(e) TO (A) CERTIFY CLASSES FOR

SETTLEMENT
PURPOSES ONLY, (B) APPOINT SETTLEMENT CLASS

REPRESENTATIVES,
(C) APPROVE SETTLEMENT AGREEMENT,

(D)
ESTIMATE VALUE OF CLASS 9 OFFICER AND DIRECTOR INDEMNITY

CLAIMS
FOR PURPOSES OF SETTLEMENT AND PLAN DISTRIBUTIONS,

AND (E)
APPROVE ADEQUACY OF NOTICE PROCEDURES (DKT #2489)

 

WHEREAS Peregrine Systems, Inc., a Delaware
corporation (“Peregrine”), the Post-Emergence Equity Committee (as defined in
the Plan), the Loran Group, and Heywood Waga (collectively, the “Settling
Parties”) have entered into that certain Settlement and Assignment Agreement
(the “Agreement”) dated as of October 4, 2003; and

 

WHEREAS the Settling Parties have filed a Joint
Motion (Docket #2489) seeking approval by the Court of said Agreement; and

 

WHEREAS this Court preliminarily approved the
Agreement, subject to any objections, by Order dated October 3, 2003; and

 

1

 

WHEREAS John
J. Moores, Richard T. Nelson, Charles E. Noell III, Norris van den Berg,
Richard A. Hosley, and William D. Savoy (collectively, the “Objecting Parties”)
have objected (the “Objection”) to certain provisions of the Agreement; and

 

WHEREAS in order to resolve the Objection, the
Settling Parties and the Objecting Parties by this Stipulation have clarified
certain provisions of the Agreement relating to the scope of cooperation that
can be provided by and between the Successor Litigation Trustee (the “Trustee”)
and the Loran Group, Waga, their respective counsel, and counsel for any other
named plaintiffs in the Securities Action (as those three capitalized terms are
defined in the Agreement) (collectively, the “Lead Plaintiffs”), in light of
claims of attorney-client, joint defense, and work product privileges being
asserted by the Objecting Parties; and

 

WHEREAS the Trustee has not yet been approved by the
Bankruptcy Court but Peregrine and the Lead Plaintiffs nonetheless believe the
Trustee is a necessary party to the resolution of any potential disputed claims
of attorney-client, joint defense and/or work product privilege referenced in
the Objection;

 

IT IS HEREBY STIPULATED AND
AGREED, by and between
the parties hereto, through their counsel of record, as follows:

 

1.             The
Order of the Bankruptcy Court approving the Joint Motion shall incorporate the
material provisions of this Stipulation.

 

2.             Peregrine
shall, immediately upon final approval by the Bankruptcy Court of a Trustee,
provide to the Trustee full and complete access to any and all records of
Peregrine and documents in its possession, whether or not a claim of privilege
has been asserted thereto by any of the Objecting Parties. Any such access to
documents provided by Peregrine to the Trustee shall not be deemed a waiver of
any privileges being asserted by the Objecting Parties as to such

 

2

 

documents.
Likewise, nothing in this Stipulation shall be deemed to be an admission by the
Lead Plaintiffs or Peregrine of the existence of any such privileges as to any
such documents.

 

3.             Peregrine
shall, immediately upon final approval of the Joint Motion (Docket No. 2489),
as may have been amended and revised, deliver to Lead Plaintiffs any and all
documents that it has previously produced to the United States Congress, the
Securities and Exchange Commission (“SEC”), the United States Department of
Justice (“DOJ”), the National Association of Securities Dealers (“NASDAQ”), and
any other state or federal regulatory agency and/or authority in connection
with any preliminary, informal, or formal investigation and/or inquiry of
Peregrine by said agencies. In addition, Peregrine shall be permitted to provide
any and all other company documents to Lead Plaintiffs save and except that,
subject to Paragraph 4 below and pending further proceedings described in
Paragraphs 5-8 below, Peregrine and the Trustee shall both be prohibited from
voluntarily producing, providing access to, or otherwise disclosing information
contained in the documents described in Paragraphs 3 (a) through (e) below,
inclusive, to the Lead Plaintiffs. The Trustee shall also be prohibited from
voluntarily producing, providing access to, or otherwise disclosing information
contained in the documents described in Paragraphs 3(a) through (e) below,
inclusive, to Other Persons. (For purposes of this Stipulation, the term “Other
Persons” shall include all persons and entities other than the Lead Plaintiffs,
but shall not include persons and entities (other than the Lead Plaintiffs) who
are retained and/or used by the Trustee as counsel, experts, consultants, or
other professionals solely in connection with the performance of the Trustee’s
duties with respect to the Litigation Trust. Any and all such counsel, experts,
consultants, and/or other professionals referred to in the preceding sentence
shall be bound by the terms of this Stipulation in the same manner as the
Trustee, and shall be required to sign a written acknowledgment that they have
read this Stipulation and agree to be so bound before they

 

3

 

are provided with any
documents described in Paragraph
3(a) through Paragraph 3(e)
below, or any information contained in those documents.):

 

a.             All
documents concerning communications to, from, between, or among: (1)
Peregrine’s in-house counsel (including without limitation Kathy Vizas) and/or
outside counsel for Peregrine (including without limitation Pachulski Stang
Ziehl Young Jones & Weintraub, Charles LaBella and/or LaBella &
McNamara LLP, and the Legal Strategies Group firm) and (2) Gibson Dunn &
Crutcher, Wilson Sonsini Goodrich & Rosati, or other counsel for any of the
individual director or officer defendants in the various securities and
shareholder lawsuits relating to Peregrine filed starting in May 2002
(including without limitation John J. Moores, Richard T. Nelson, Charles E.
Noell III, Norris van den Berg, Richard A. Hosley, and William D. Savoy)
(collectively “Individual Defendants”) through the date of the filing of
Peregrine’s opposition to the Official Committee of Unsecured Creditors’ (the
“Committee”) Trustee Motion and Motion to Pursue Claims concerning issues or
factual matters relating to (a) the defense of the above-mentioned litigations
in which Peregrine and one or more officers or directors were jointly named as
defendants (the “Lawsuits”); and/or (b) the assertions made in the Committee’s
above-mentioned motion papers and/or the motion of the Copley Press to obtain
access to the report of investigation prepared by the Latham & Watkins
firm, Peregrine’s response to those assertions, or the former outside
directors’ position with respect to such;

 

b.             All
documents concerning communications with Gibson Dunn & Crutcher or other
counsel for the Individual Defendants concerning any of the Lawsuits or in
anticipation of litigation, including any underlying facts relating to such
litigation matters;

 

c.             All
documents prepared by in-house or outside counsel for Peregrine prior to the
bankruptcy concerning defense of the Lawsuits or in anticipation of litigation,
including

 

4

 

any
underlying facts relating to such litigation matters;

 

d.             All
documents prepared by in-house or outside counsel for Peregrine (or concerning
communications with such counsel or with Gibson Dunn & Crutcher or other
counsel for the Individual Defendants) concerning Peregrine’s response to or
defense of any SEC, DOJ, Congressional, or NASDAQ investigation, including
without limitation any subpoena or other document request, prior to the
resignation of the former outside directors in March 2003; and

 

e.             All
documents concerning communications between any Individual Defendant (or Gibson
Dunn & Crutcher or his personal counsel) and in-house or outside counsel
for Peregrine (including the Pachulski firm) regarding their potential
indemnification by Peregrine during the bankruptcy disputes concerning
insurance coverage for the Lawsuits with Peregrine’s D&O liability
insurance carriers.

 

(For purposes of this Stipulation, the term “documents” shall include
all hard copy documents as well as any other electronic, audio, magnetic, or
other format in which information may be stored.)

 

4.             Notwithstanding
anything to the contrary in Paragraph 3 above, nothing in this Stipulation shall
prohibit Peregrine or the Trustee from disclosing factual information to the
Lead Plaintiffs that came into, and/or was already in, the possession of Peregrine
or the Trustee from a source other than the alleged privileged communications
and other documents described in Paragraphs 3(a) through 3(e).

 

5.             As
to all documents and information described in Paragraph 3(a) through (e) above, the Objecting Parties shall be entitled to
thirty (30) calendar days’ written notice from the Trustee or Peregrine that he
or it intends to produce, provide access to, or otherwise disclose documents
and/or information (other than as provided for in Paragraph 4 above) contained in any such documents to the Lead Plaintiffs
(and/or, in the case of the Trustee, to any Other Persons). Such notice shall

 

5

 

provide a reasonably specific identification of the category and/or
nature of the documents so as to enable the Objecting Parties to evaluate
whether or not such matter contains material which they believe may implicate
the attorney-client, joint defense, and/or work product privileges. Within the
aforementioned thirty (30) day time period, the Objecting Parties shall be
entitled to take whatever action they deem appropriate to obtain an Order of a
Court of competent jurisdiction preventing production of, access to, and
disclosure of any information contained in such documents claimed to be
privileged to the Lead Plaintiffs (and/or, in the case of the Trustee, to Other
Persons). Peregrine or the Trustee, as the case may be, shall be entitled to
produce, provide access to, or otherwise disclose any document as to which no
such action has been taken within such thirty (30) day period, or, if such
action is taken, after any legal proceedings concerning such document brought
pursuant to this Stipulation have been finally resolved in favor of disclosure
to the Lead Plaintiffs (and/or, in the case of the Trustee, to Other Persons).

 

6.             Prior
to the expiration of the thirty (30) day period provided for in Paragraph 5
hereof, and/or in the event the Objecting Parties file in any Court of
competent jurisdiction a motion or other proceeding challenging the right of
the Trustee or Peregrine to produce, provide access to, or otherwise disclose
documents to the Lead Plaintiffs (and/or, in the case of the Trustee, to Other
Persons) which the Objecting Parties claim are privileged, the Lead Plaintiffs
(and/or, in the case of the Trustee, Other Persons) shall not be entitled to
obtain or receive access to such documents or any information contained in them
(other than as provided for in Paragraph 4 above), and neither the Trustee nor
Peregrine shall be entitled to produce such documents to the Lead Plaintiffs
(and/or, in the case of the Trustee, to Other Persons), until such legal
challenge has been finally resolved through agreement of the parties or a
non-appealable order of a court of competent jurisdiction.

 

6

 

7.             Nothing herein
shall be deemed to prevent the Lead Plaintiffs and/or the Trustee from
cooperating with one another, except that there shall be no exchange between
them of documents described in Paragraphs 3 (a) through
3(e) above, or any information contained in them (other than as provided for in
Paragraph 4 above), until such time as the thirty-day
notice period referenced in. Paragraph 5 above has expired and the legal challenge
referenced in Paragraph 5 above, if any, is finally resolved.

 

8.             Nothing
herein shall be deemed to prevent the Lead Plaintiffs and/or the Trustee from
initiating proceedings for a determination by a Court of competent jurisdiction
that the Trustee is entitled to provide to the Lead Plaintiffs, and the Lead
Plaintiffs can properly receive from the Trustee, the documents claimed by the
Objecting Parties to be protected by a claim of attorney-client, joint defense,
and/or work product privilege. In the event that the Lead Plaintiffs or the
Trustee seek such a Court determination, (a) the Lead Plaintiffs or Trustee
shall upon initiating any such proceedings provide the Objecting Parties with
written notice providing reasonably specific identification of the category and/or
nature of the documents so as to enable the Objecting Parties to evaluate
whether or not such matter contains material which they believe may implicate
the attorney-client, joint defense, and/or work product privileges; and (b)
there shall be no exchange between the Trustee and the Lead Plaintiffs (or
Other Persons) of documents described in Paragraphs 3(a) through
3(e) above, or any information contained in them (other than as provided for in
Paragraph 4 above), until such time as all proceedings
relating to such determination have been finally resolved through agreement of
the parties or a non-appealable order of a court of competent jurisdiction.

 

9.               Nothing in this Stipulation shall
prevent Peregrine or the Trustee from producing materials described in Paragraphs 3(a) through 3(e) above in response to a lawful subpoena or other
compulsory process; provided that, if Peregrine or the Trustee receives any
such subpoena or

 

7

 

process
he or it (i) shall as soon as reasonably practical give notice thereof to
counsel for the Objecting Parties by telephone or facsimile and shall furnish
such counsel with a copy of the subpoenas or other compulsory process; and (ii)
if application for a protective order or motion to quash is made by one or more
of the Objecting Parties before the time set forth in the subpoena or other
compulsory process for compliance therewith, neither Peregrine nor the Trustee
shall produce such materials prior to receiving a court order or the consent of
the Objecting Parties.

 

10.           Nothing
herein shall be deemed to alter the substantive law applicable to establishing
the prerequisites to the existence of any privilege and whether or not there
has been any waiver thereof.

 

11.           Upon
execution of this Stipulation by counsel to all Objecting Parties, the
Objection shall be deemed withdrawn and the Objecting Parties will not
otherwise object to final approval of the Joint Motion.

 

8

 

	
  IT IS
  SO STIPULATED.

  	
   

  
	
   

  	
   

  
	
  Dated:
  October 28, 2003

  	
  PEREGRINE SYSTEMS, INC.

  
	
   

  	
  A Delaware Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeremy Richards

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLD
  BENNETT CERA & SIDENER LLP

  
	
   

  	
  595
  Market Street, Suite 2300

  
	
   

  	
  San
  Francisco, California 94105

  
	
   

  	
  Telephone:
  (415) 777-2230

  
	
   

  	
  Facsimile:
  (415) 777-5189

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Solomon B. Cora

  	
   

  
	
   

  	
  Solomon B. Cora

  	
   

  
	
   

  	
   

  
	
   

  	
  Attorneys
  for the Loran Group

  
	
   

  	
   

  
	
   

  	
  STULL,
  STULL & BRODY

  
	
   

  	
  6
  East 45th Street, 4th Floor

  
	
   

  	
  New
  York, NY 10017

  
	
   

  	
  Telephone:
  (212) 687-7230

  
	
   

  	
  Facsimile:
  (212) 490-2022

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Howard T. Longman

  	
   

  
	
   

  	
  Howard T. Longman

  	
   

  
	
   

  	
  -and-

  	
   

  
	
   

  	
   

  
	
   

  	
  Jeffrey Abraham

  
	
   

  	
  ABRAHAM
  AND ASSOCIATES

  
	
   

  	
  One
  Penn Plaza, Suite 1910

  
	
   

  	
  New
  York, NY 10119

  
	
   

  	
  Telephone:
  (212) 714-2444

  
	
   

  	
  Facsimile:
  (212) 279-3655

  
	
   

  	
   

  
	
   

  	
  Attorneys
  for Heywood Waga

  
					

 

9

 

	
   

  	
  V1NSON & ELKINS LLP.

  
	
   

  	
  3700 [ILLEGIBILE] Crow Center

  
	
   

  	
  2001 Rose Avenue

  
	
   

  	
  Dallas, Texas 75201-2975

  
	
   

  	
  Telephone: (214) 220-7718

  
	
   

  	
  Facsimile: (214) 999-7718

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Josiah M. Daniel III

  	
   

  
	
   

  	
   

  	
  Josiah M. Daniel, III Texas, Bar #05358500

  
	
   

  	
  -and-

  	
   

  
	
   

  	
   

  
	
   

  	
  Russell C Sitbargtied

  
	
   

  	
  RICHARDS LAYTON &
  FINGER

  
	
   

  	
  One Rodney Square

  
	
   

  	
  P.O. Box 551

  
	
   

  	
  Wilmington, Delaware
  19209-0551

  
	
   

  	
  Telephone: (302) 651-7700

  
	
   

  	
  Facsimile: (302) 651-7701

  
	
   

  	
   

  
	
   

  	
  Attorneys for John J. Mores

  
	
   

  	
   

  
	
   

  	
  TESTA, HURWITZ & THIBRAULT, LLP

  
	
   

  	
  125 High Street, High Street Tower

  
	
   

  	
  Boston, [ILLEGIBILE] 02110

  
	
   

  	
  Telephone: (617)
  248-7000

  
	
   

  	
  Facsimile: (617)
  248-7100

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBILE]

  	
   

  
	
   

  	
  [ILLEGIBILE]

  	
   

  
	
   

  	
  -and-

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Gregory W. [ILLEGIBILE]

  
	
   

  	
  NORRIS, NICHOLS,
  [ILLEGIBILE] & TUNNELL

  
	
   

  	
  1201 North Market Street

  
	
   

  	
  Wilmington, DE 19899-1347

  
	
   

  	
  Telephone: (302)
  658-9200

  
	
   

  	
  Facsimile: (302)
  638-3989

  
	
   

  	
   

  
	
   

  	
  Attorneys for Charles E. Noell, III,

  
	
   

  	
  Norris van den Berg and Richard A.Hosley

  
							

 

10

 

	
   

  	
  McGUIREWOODS LLP

  
	
   

  	
  Dominion Tower

  
	
   

  	
  625 Liberty Avenue, 23rd
  Floor

  
	
   

  	
  Pittsburgh,
  Pennsylvania 15222

  
	
   

  	
  Telephone: (412)
  667-6000

  
	
   

  	
  Facsimile: (412)
  667-6050

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sally E. Edison

  	
   

  
	
   

  	
  Sally E. Edison

  	
   

  
	
   

  	
   

  
	
   

  	
  Attorneys for Richard
  T. Nelson.

  
	
   

  	
   

  
	
   

  	
  McNAUL EBEL NAWROT HELGREN

  & VANCE PLLC

  
	
   

  	
   

  
	
   

  	
  Cyrus R. Vance, Jr.
  (WSBA No. 18615)

  
	
   

  	
  600 University Street,
  Suite 2700

  
	
   

  	
  Seattle, Washington
  98101-3143

  
	
   

  	
  Telephone: (206)
  467-1816

  
	
   

  	
  Facsimile: (206)
  624-5128

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Robert D. Stewart

  	
   

  
	
   

  	
  Robert D. Stewart

  	
   

  
	
   

  	
  -and-

  	
   

  
	
   

  	
  Yvonne M. Dutton

  
	
   

  	
  ALLEN MATKINS LECK GAMBLE

  & MALLORY LLP

  
	
   

  	
  501 West Broadway,
  Ninth Floor

  
	
   

  	
  San Diego, California
  92101

  
	
   

  	
  Telephone: (619)
  233-1155

  
	
   

  	
  Facsimile: (619)
  233-1158

  
	
   

  	
   

  
	
   

  	
  Attorneys for William
  D. Savoy

  
								

 

11Exhibit
10.1

 

PEREGRINE
SYSTEMS, INC.

 

INDEMNIFICATION
AGREEMENT

 

This
Indemnification Agreement (the “Agreement”) is effective as of
                      ,
2003 by and between Peregrine Systems, Inc., a Delaware corporation (the
“Company”), and                         
(the “Indemnitee”).

 

WHEREAS, the
Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company and its related entities;

 

WHEREAS, the
Company’s Restated Certificate of Incorporation and Amended and Restated Bylaws
allow the Company to indemnify its directors, officers, employees and agents to
the maximum extent permitted under Delaware law;

 

WHEREAS, in order
to induce Indemnitee to continue to provide services to the Company, the
Company wishes to provide for the indemnification of, and advancement of
expenses to, Indemnitee to the maximum extent permitted by law and/or the
Company’s Restated Certificate of Incorporation;

 

WHEREAS,
Indemnitee does not regard the current protection available as adequate under
the present circumstances, and Indemnitee and other directors, officers,
employees, agents, and fiduciaries of the Company may not be willing to
continue to serve in such capacities without additional protection;

 

WHEREAS, the
Company and Indemnitee recognize the continued difficulty in obtaining
liability insurance for the Company’s directors, officers, employees, agents,
and fiduciaries, the significant increases in the cost of such insurance, and
the general reductions in the coverage of such insurance;

 

WHEREAS, the
Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers, employees, agents, and
fiduciaries to expensive litigation risks at the same time as the availability
and coverage of liability insurance has been severely limited; and

 

WHEREAS, in view
of the considerations set forth above, the Company desires that Indemnitee
shall be indemnified by the Company as set forth herein;

 

NOW, THEREFORE,
the Company and Indemnitee hereby agree as set forth below.

 

1.             Certain
Definitions.

 

(a)           “Change
in Control” shall mean, and shall be deemed to have occurred if, on or after
the date of this Agreement, (i) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company acting in such capacity or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or indirectly,
of securities of the Company representing more than 50% of the total voting
power represented by the Company’s then outstanding Voting Securities, (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company and any new director
whose election by the Board of Directors or nomination for election by the
Company’s stockholders was approved by a vote of at least two thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 80% of

 

 

the total voting power
represented by the Voting Securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of (in one transaction or
a series of related transactions) all or substantially all of the Company’s
assets.

 

(b)           “Claim”
shall mean any threatened, pending or completed action, suit, proceeding or
alternative dispute resolution mechanism, or any hearing, inquiry or
investigation that Indemnitee in good faith believes might lead to the
institution of any such action, suit, proceeding or alternative dispute
resolution mechanism, whether civil, criminal, administrative, investigative or
other.

 

(c)           References
to the “Company” shall include, in addition to Peregrine Systems, Inc., any
constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger to which Peregrine Systems, Inc. (or any of its
wholly owned subsidiaries) is a party which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, employees, agents or fiduciaries, so that if Indemnitee is or was a
director, officer, employee, agent or fiduciary of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.

 

(d)           “Expenses”
shall mean any and all expenses (including attorneys’ fees and all other costs,
expenses and obligations incurred in connection with investigating, defending,
being a witness in or participating in (including on appeal), or preparing to
defend, to be a witness in or to participate in, any action, suit, proceeding,
alternative dispute resolution mechanism, hearing, inquiry or investigation),
judgments, fines, penalties and amounts paid in settlement (if such settlement
is approved in advance by the Company, which approval shall not be unreasonably
withheld) of any Claim regarding any Indemnifiable Event and any federal,
state, local or foreign taxes imposed on Indemnitee as a result of the actual
or deemed receipt of any payments under this Agreement.

 

(e)           “Expense
Advance” shall mean an advance payment of Expenses to Indemnitee pursuant to
Section 3(a).

 

(f)            “Indemnifiable
Event” shall mean any event or occurrence related to the fact that Indemnitee
is or was a director, officer, employee, agent or fiduciary of the Company, or
any subsidiary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise, or by
reason of any action or inaction on the part of Indemnitee while serving in
such capacity.

 

(g)           “Independent
Legal Counsel” shall mean an attorney or firm of attorneys, selected in
accordance with the provisions of Section 2(c) hereof, who shall not have
otherwise performed services for the Company or Indemnitee within the last
three years (other than with respect to matters concerning the rights of
Indemnitee under this Agreement, or of other indemnitees under similar
indemnity agreements).

 

(h)           References
to “other enterprises” shall include employee benefit plans; references to
“fines” shall include any excise taxes assessed on Indemnitee with respect to
an employee benefit plan; and references to “serving at the request of the
Company” shall include any service as a director, officer, employee, agent or
fiduciary of the Company which imposes duties on, or involves services by, such
director, officer, employee, agent or fiduciary with respect to an employee
benefit plan, its participants or its beneficiaries; and if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan, Indemnitee
shall be deemed to have acted in a manner “not opposed to the best interests of
the Company”  as referred to in this
Agreement.

 

2

 

(i)            “Reviewing
Party” shall have the meaning as set forth in Section 2(b) of this Agreement.

 

(j)            “Voting
Securities” shall mean any securities of the Company that vote generally in the
election of directors.

 

2.             Indemnification.

 

(a)           Indemnification
of Expenses.  The Company shall
indemnify Indemnitee to the fullest extent permitted by law and/or the
Company’s Restated Certificate of Incorporation if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any Claim by reason of (or
arising in part out of) any Indemnifiable Event against Expenses, including all
interest, assessments and other charges paid or payable in connection with or
in respect of such Expenses.  Such
payment of Expenses shall be made by the Company as soon as practicable but in
any event no later than five (5) business days after written demand by
Indemnitee therefor is presented to the Company.

 

(b)           Reviewing
Party.  Indemnitee shall be
conclusively presumed to have met the relevant standards of conduct, as defined
by Delaware law, for indemnification pursuant to this Agreement, unless a
determination is made that Indemnitee has not met such standards (i) by the
board of directors of the Company acting by a majority vote of a quorum thereof
consisting of directors who were not parties to the Claim for which Indemnitee
seeks indemnification under this Agreement, (ii) by a committee of directors
designated by a majority vote of such directors, even though less than a
quorum, (iii) by the stockholders of the Company acting by a majority vote of a
quorum thereof consisting of stockholders who are not parties to the Claim for
which Indemnitee seeks indemnification under this Agreement, or (iv) in a
written opinion by the Independent Legal Counsel referred to in Section 2(c)
hereof (such determining body is referred to herein as the “Reviewing
Party”).  The obligation of the Company
to make an Expense Advance shall be subject to the condition that, if, when and
to the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid.  Notwithstanding the foregoing, if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as
to which all rights of appeal therefrom have been exhausted or lapsed).  Indemnitee’s obligation to reimburse the
Company for any Expense Advance shall be unsecured and no interest shall be
charged thereon.  If there has not been
a Change in Control, the Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to such Change in Control), the
Reviewing Party shall be the Independent Legal Counsel.  If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part
under applicable law, Indemnitee shall have the right to commence litigation
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of
process and to appear in any such proceeding.  Absent
such litigation, any determination by the Reviewing Party shall be conclusive
and binding on the Company and Indemnitee.

 

(c)           Change
in Control.  The Company agrees that
if there is a Change in Control of the Company (other than a Change in Control
which has been approved by a majority of the Company’s Board of Directors who
were directors immediately prior to such Change in Control), then with respect
to all matters thereafter arising concerning the rights of Indemnitee to
payments of Expenses and Expense Advances under this Agreement or any other
agreement or under the Company’s Certificate of Incorporation or Bylaws as now
or

 

3

 

hereafter in effect,
Independent Legal Counsel, if desired by Indemnitee, shall be selected by
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld).  Such counsel,
among other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent Indemnitee would be permitted to be
indemnified under applicable law and the Company agrees to abide by such
opinion.  The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to
indemnify fully such counsel against any and all expenses (including attorneys’
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. 
Notwithstanding any other provision of this Agreement, the Company shall
not be required to pay Expenses of more than one Independent Legal Counsel in
connection with all matters concerning a single Indemnitee, and such
Independent Legal Counsel shall be the Independent Legal Counsel for any or all
other Indemnitees unless (i) the Company otherwise determines or
(ii) any Indemnitee shall provide a written statement setting forth in
detail a reasonable objection to such Independent Legal Counsel representing
other Indemnitees.

 

(d)           Mandatory
Payment of Expenses. 
Notwithstanding any other provision of this Agreement other than
Section 10 hereof, to the extent that Indemnitee has been successful on
the merits or otherwise, including, without limitation, the dismissal of an
action without prejudice, in defense of any Claim regarding any Indemnifiable
Event, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.

 

3.             Expenses;
Indemnification Procedure.

 

(a)           Advancement
of Expenses.  The Company shall advance
all Expenses incurred by Indemnitee. 
The advances to be made hereunder shall be paid by the Company to
Indemnitee as soon as practicable but in any event no later than five (5)
business days after written demand by Indemnitee therefor to the Company.  Expenses incurred in defending any
proceeding may be advanced by the Company prior to the final disposition of the
proceeding; provided, that so long as Delaware law so requires, such
advance shall be made only upon receipt of an undertaking in writing by or on
behalf of Indemnitee to repay the Expenses incurred to the extent that it is
ultimately determined that Indemnitee is not entitled to indemnification.

 

(b)           Notice/Cooperation
by Indemnitee.  Indemnitee
shall  give the Company notice in
writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement; provided,
that the omission to so notify the Company will not relieve the Company from
any liability that it otherwise may have to Indemnitee under this
Agreement.  Notice to the Company shall
be directed to the General Counsel of the Company at the address shown on the
signature page of this Agreement (or such other address as the Company shall
designate in writing to Indemnitee).  In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee’s power.

 

(c)           No
Presumptions; Burden of Proof.  For
purposes of this Agreement, the termination of any Claim by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a
presumption that Indemnitee did not meet any particular standard of conduct or
have any particular belief or that a court has determined that indemnification
is not permitted by applicable law.  In
addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law, shall be a defense to Indemnitee’s claim or create a
presumption that Indemnitee has not met any particular standard of conduct or
did not have any particular belief.

 

(d)           Notice
to Insurers.  If, at the time of the
receipt by the Company of a notice of a Claim pursuant to Section 3(b)
hereof, the Company has liability insurance in effect which may cover such
Claim, the Company shall give prompt notice of the commencement of such Claim
to the insurers in accordance with the procedures set forth in the respective
policies.  The Company shall thereafter
take all necessary or desirable action to cause

 

4

 

such insurers to pay, on
behalf of Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.

 

(e)           Selection
of Counsel.  In the event the
Company shall be obligated hereunder to pay the Expenses of any Claim the
Company, if appropriate, shall be entitled to assume the defense of such Claim
with counsel approved by Indemnitee (not to be unreasonably withheld) upon the
delivery to Indemnitee of written notice of the Company’s election so to
do.  After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with respect to the
same Claim; provided that, (i) Indemnitee shall have the right to employ
Indemnitee’s separate counsel in any such Claim at Indemnitee’s expense and
(ii) if (A) the employment of separate counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, or (C) the Company shall
not continue to retain such counsel to defend such Claim, then the fees and
expenses of Indemnitee’s separate counsel shall be at the expense of the
Company.

 

4.             Additional
Indemnification Rights; Nonexclusivity.

 

(a)           Scope.  The Company hereby agrees to indemnify
Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or
by statute.  In the event of any change
after the date of this Agreement in any applicable law, statute or rule which
expands the right of a Delaware corporation to indemnify a member of its board
of directors or an officer, employee, agent or fiduciary, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change.  In
the event of any change in any applicable law, statute or rule which narrows
the right of a Delaware corporation to indemnify a member of its board of
directors or an officer, employee, agent or fiduciary, such change, to the
extent not otherwise required by such law, statute or rule to be applied to
this Agreement, shall have no effect on this Agreement or the parties’ rights
and obligations hereunder except as set forth in Section 9(a) hereof.

 

(b)           Nonexclusivity.  The indemnification provided by this
Agreement shall be in addition to any rights to which Indemnitee may be
entitled under the Company’s Certificate of Incorporation, its Bylaws, any
other agreement, any vote of stockholders or disinterested directors, the
General Corporation Law of the State of Delaware, or otherwise.  The indemnification provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though Indemnitee may have ceased
to serve in such capacity.

 

5.             No
Duplication of Payments.  The
Company shall not be liable under this Agreement to make any payment in
connection with any Claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance policy, provision of the
Company’s Certificate of Incorporation, bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder.

 

6.             Partial
Indemnification.  If Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of Expenses incurred in connection with any
Claim, but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of such Expenses to which
Indemnitee is entitled.

 

7.             Mutual
Acknowledgment.  Both the Company
and Indemnitee acknowledge that in certain instances, federal law or applicable
public policy may prohibit the Company from indemnifying its directors,
officers, employees, agents or fiduciaries under this Agreement or
otherwise.  Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future
to undertake with the Securities and

 

5

 

Exchange Commission to
submit the question of indemnification to a court in certain circumstances for
a determination of the Company’s right under public policy to indemnify
Indemnitee.

 

8.             Liability
Insurance.

 

(a)           The
Company hereby covenants and agrees that, as long as Indemnitee continues to
serve as a director, officer, employee, agent or fiduciary of the Company and
thereafter as long as Indemnitee may be subject to any possible Claim, the
Company shall maintain in full force and effect directors’ and officers’
liability insurance (“D&O Insurance”) in reasonable amounts from
established and reputable insurers.

 

(b)           Indemnitee
shall be covered by such D&O Insurance policies in such a manner as to
provide Indemnitee the same rights and benefits as are provided to the most
favorably insured of the Company’s directors, if Indemnitee is a director; or
of the Company’s officers, if Indemnitee is not a director of the Company but
is an officer; or of the Company’s key employees, agents or fiduciaries, if
Indemnitee is not an officer or director but is a key employee, agent or
fiduciary.

 

9.             Exceptions.  Notwithstanding any other provision of this
Agreement, the Company shall not be obligated pursuant to the terms of this
Agreement:

 

(a)           Excluded
Action or Omissions.  To indemnify
Indemnitee for acts, omissions or transactions from which Indemnitee may not be
relieved of liability under applicable law.

 

(b)           Claims
Initiated by Indemnitee.  To
indemnify or advance expenses to Indemnitee with respect to Claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except (i) with
respect to actions or proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other agreement or insurance policy
or under the Company’s Certificate of Incorporation or Bylaws now or hereafter in
effect relating to Claims for Indemnifiable Events, (ii) in specific cases if
the Board of Directors has approved the initiation or bringing of such Claim,
or (iii) as otherwise required under Section 145 of the Delaware General
Corporation Law, regardless of whether Indemnitee ultimately is determined to
be entitled to such indemnification, advance expense payment or insurance
recovery, as the case may be.

 

(c)           Lack
of Good Faith.  To indemnify
Indemnitee for any expenses resulting from Indemnitee’s conduct which is
finally adjudged to have been willful misconduct, knowingly fraudulent or
deliberately dishonest;

 

(d)           Claims
Under Section 16(b).  To
indemnify Indemnitee for expenses and the payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended, the
rules and regulations promulgated thereunder and amendments thereto, or similar
provisions of any federal, state or local statutory law.

 

10.           Period
of Limitations.  No legal action
shall be brought and no cause of action shall be asserted by or in the right of
the Company against Indemnitee, Indemnitee’s estate, spouse, heirs, executors
or personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, and any claim or cause of action of
the Company shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within such two-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such
cause of action, such shorter period shall govern.

 

11.           Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall constitute an original.

 

6

 

12.           Binding
Effect; Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors, assigns
(including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the
Company), spouses, heirs and personal and legal representatives.  The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part,
of the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.  This Agreement shall continue in effect so
long as Indemnitee shall be subject to any possible Claim commenced or
continued after execution of this Agreement, regardless of whether Indemnitee
continues to serve as a director, officer, employee, agent or fiduciary (as
applicable) of the Company or of any other enterprise at the Company’s request.

 

13.           Attorneys’
Fees.  In the event that any action
is instituted by Indemnitee under this Agreement or under any liability
insurance policies maintained by the Company to enforce or interpret any of the
terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses
incurred by Indemnitee with respect to such action, regardless of whether
Indemnitee is ultimately successful in such action, and shall be entitled to
the advancement of Expenses with respect to such action, unless as a part of
such action a court of competent jurisdiction over such action determines that
each of the material assertions made by Indemnitee as a basis for such action
were not made in good faith or were frivolous. 
In the event of an action instituted by or in the name of the Company
under this Agreement to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee in defense of such action (including costs and expenses incurred
with respect to Indemnitee’s counterclaims and cross-claims made in such
action), and shall be entitled to the advancement of Expenses with respect to
such action, unless as a part of such action a court having jurisdiction over
such action determines that each of Indemnitee’s material defenses to such
action were made in bad faith or were frivolous.

 

14.           Notice.  All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
duly given (i) if delivered by hand and signed for by the party addressed,
on the date of such delivery, or (ii) if mailed by domestic certified or
registered mail with postage prepaid, on the third business day after the date
postmarked.  Addresses for notice to
either party are as shown on the signature page of this Agreement, or as
subsequently modified by written notice. 
A copy of any notice under this Agreement shall be directed to Kenneth
R. Heitz, Irell & Manella LLP, 1800 Avenue of the Stars, Suite 900, Los
Angeles, CA  90067, Telephone Number
(310) 277-1010, Fax Number (310) 203-7199.

 

15.           Consent
to Jurisdiction.  The Company and
Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of
the State of Delaware for all purposes in connection with any action or proceeding
which arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be commenced, prosecuted and continued
only in the Court of Chancery of the State of Delaware in and for New Castle
County, which shall be the exclusive and only proper forum for adjudicating
such a claim.

 

16.           Severability.  The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court
of competent jurisdiction to be invalid, void or otherwise unenforceable, and
the remaining provisions shall remain enforceable to the fullest extent
permitted by law.  Furthermore, to the
fullest extent possible, the provisions of this Agreement (including, without
limitations, each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

 

17.           Savings
Clause.  If this Agreement or any
provision hereof is invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify Indemnitee as to any
Expenses incurred

 

7

 

with respect to any Claim
to the fullest extent permitted by any applicable provision of this Agreement
that has not been invalidated or by any other applicable provision of Delaware
law.

 

18.           Interpretation;
Choice of Law.  This Agreement shall
be construed as a whole and in accordance with its fair meaning.  Headings are for convenience only and shall
not be used in construing meaning.  This
Agreement shall be governed by and its provisions construed and enforced in
accordance with the laws of the State of Delaware as applied to contracts
between Delaware residents entered into and to be performed entirely within the
State of Delaware, without regard to the rules relating to conflicts of laws.

 

19.           Subrogation.  In the event of payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all documents
required and shall do all acts that may be necessary to secure such rights and
to enable the Company effectively to bring suit to enforce such rights.

 

20.           Amendment
and Termination.  No amendment,
modification, termination or cancellation of this Agreement shall be effective
unless it is in writing signed by the party against whom enforcement is
sought.  No waiver of any of the
provisions of this Agreement shall be deemed to be or shall constitute a waiver
of any other provisions hereof (whether or not similar), nor shall such waiver constitute
a continuing waiver.  The
indemnification rights afforded to Indemnitee hereby are contract rights and
may not be diminished, eliminated or otherwise affected by amendments to the
Company’s Restated Certificate of Incorporation, Amended and Restated Bylaws or
by other agreements, including D&O Insurance policies.

 

21.           Absence
of Third Party Beneficiary Rights. 
No provision of this Agreement is intended nor shall be interpreted to
provide or create any third party beneficiary rights or any other rights of any
kind in any client, customer, affiliate, shareholder or partner of any party to
this Agreement or any other person; unless specifically provided otherwise
herein, and except as so provided, all provisions hereof shall be personal
solely between the parties to this Agreement.

 

22.           Integration
and Entire Agreement.  This
Agreement sets forth the entire understanding between the parties hereto and
supersedes and merges all previous written and oral negotiations, commitments,
understandings and agreements relating to the subject matter hereof between the
parties hereto.

 

23.           No
Construction as Employment Agreement. 
Nothing contained in this Agreement shall be construed as giving
Indemnitee any right to be retained in the employ of the Company or any of its
subsidiaries or affiliated entities.

 

8

 

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

 

	
   

  	
  (“INDEMNITEE”)

  	
   

  	
  PEREGRINE
  SYSTEMS, INC. (“COMPANY”)

  
	
  Print Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Name:

  	
  Kevin N. Courtois

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Title:

  	
  Senior Vice President & General Counsel

  	
   

  
	
   

  	
   

  	
  3611 Valley Centre Drive

  
	
   

  	
   

  	
  San Diego, California 92130

  
													

 

9

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