Document:

Exhibit
10.39

 

MUTUAL
RELEASE AGREEMENT

 

THIS MUTUAL RELEASE AGREEMENT (the “Release
Agreement”) is entered into effective this 7th day of August, 2003
(the “Release Date”), by and among
Peregrine Systems, Inc., a Delaware corporation and Debtor and Debtor In
Possession (“PSI”) under Case No.
02-12740 (JKF), jointly administered (the “Case”)
in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) and Peregrine Remedy,
Inc., a Delaware corporation and Debtor and Debtor In Possession (“Remedy”) in the Case and those PSI and
Remedy subsidiaries and other affiliates who are also signatories to this
Release Agreement (collectively, the “Peregrine
Parties” and individually, a “Peregrine
Party”), on the one hand, and Fleet Business Credit, LLC, a Delaware
limited liability company (“Fleet”),
in its individual capacity and in its capacity as “Purchaser Bank Agent” as
defined in the hereinafter defined Plan (in its individual capacity, and in its
capacity as Purchaser Bank Agent, the “Lender,”
and, together with the Peregrine Parties, the “Parties”),
on the other hand, with respect to the following facts and circumstances:

 

A.  Pursuant
to that certain Order Pursuant to Section 1129 of the Bankruptcy Code
Confirming Debtors’ Fourth Amended Plan of Reorganization, as Modified, Dated
July 14, 2003, the Bankruptcy Court has approved and confirmed the Fourth
Amended Plan of Reorganization of Peregrine Systems, Inc. and Peregrine Remedy,
Inc. (as modified, the “Plan”).

 

B.  Section
V.B.2.a(4) of the Plan provides that the Parties shall mutually execute and
deliver a release agreement on the Effective Date (as defined in the Plan).

 

C.  The
Parties are executing and delivering this Agreement in satisfaction of the
requirements of Section V.B.2.a (4).

 

D.  Except
for terms specifically defined herein, the capitalized terms used herein shall
have the same meanings as such terms have when utilized in that certain
Agreement Regarding Purchaser Bank Arrangements of even date herewith, among
the Peregrine Parties, Lender and others (as amended, modified or supplemented
from time to time, the “Purchaser Bank
Agreement”).

 

NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which each of the Parties hereby agrees:

 

1.  Peregrine Parties’ Release.

 

(a)           Peregrine
and Remedy, for themselves and anyone claiming by, through or under them,
hereby release and absolutely discharge Lender and each and all of its
successors and assigns (collectively, the “Debtor
Lender Releasees”) of and from any and all rights, claims, demands,
debts, fees, penalties, payments, liabilities, accounts, reckonings,
obligations, costs, expenses, liens, interests, security interests, actions,
and causes of action, of every kind and nature whatsoever, whether known or
unknown, matured or unmatured, absolute or contingent (the foregoing are
collectively referred to herein as “Claims”),
which Peregrine and/or Remedy may now have, own, or at any time heretofore have
ever had, owned, or held against Lender (hereinafter collectively referred to
as the “Debtor Released Claims”);
provided, however, nothing herein shall be deemed to release, discharge or
affect any Excluded Claims (as hereinafter defined) and the Debtor Released
Claims shall not include any Excluded Claims.

 

1

 

(b)           The Peregrine Parties, for themselves and each and all of
their respective successors, assigns, affiliates, and anyone claiming by,
through or under them, hereby release and absolutely discharge Lender and each
and all of its affiliates, successors, and assigns, and all present and former
representatives, agents, employees, attorneys, shareholders, partners,
venturers, members, principals, officers, and directors (collectively, the “Lender Releasees”) of and from any and all
Claims, which the Peregrine Parties may now have, own, or at any time
heretofore have ever had, owned, or held against the Lender Releasees, or any
of them, to the extent that (and only to the extent) such Claims arise out of,
under or in connection with or relate to the Fleet Purchase Documents, the
Forbearance Agreement, or, in each case, the transactions contemplated thereby
(hereinafter collectively referred to as the “Peregrine
Released Claims”); provided, however, nothing herein shall be deemed
to release, discharge or affect any Excluded Claims and the Peregrine Released
Claims shall not include any Excluded Claims.

 

(c)           As used in this Agreement, “Excluded Claims” means any Claims, to the extent (and only to
the extent) they:

 

(i)            (A) constitute Claims owned or held
by Peregrine or Remedy against Lender or constitute Claims owned or held by
Lender against Peregrine or Remedy, (B) arise out of, under or in connection
with or relate to the Fleet Purchase Documents, or the transactions
contemplated thereby, and (C) constitute Claims to be performed, paid or
observed solely after the Release Date (it being expressly understood, that if
any Claim is to be performed, paid or observed multiple times (whether before
or after the Release Date), that each such performance, payment or observation
shall for purposes hereof be deemed and considered a separate and individual
Claim); and/or

 

(ii)           are liens, interests or security
interests arising under the Fleet Purchase Documents in the Fleet Purchased
Accounts; and/or

 

(iii)          arise out of or under the Purchaser
Bank Agreement; and/or

 

(iv)          arise out of or under any agreement or
transaction between any one or more Peregrine Parties and any one or more other
persons or entities, with respect to which agreement or transaction (in whole
or in part) Lender has acquired, directly or indirectly, a security interest or
other interest from one or more of such other persons or entities and such
Claim arises out of the security interest or other interest acquired by Lender;
provided, however, that to the extent that any such security interest or other
interest is in a “Past Due Purchase Obligation” (as defined in the Forbearance
Agreement), such Claim shall be subject to the terms of the Releases (as
defined in Paragraph 3 below) and shall in no event be deemed an Excluded Claim
hereunder (subject to the immediately preceding proviso, but without otherwise
limiting the generality of the foregoing, this clause (iv) shall include as
Excluded Claims any Claims arising as a result of Lender acquiring a security
interest or other interest in any account, payment intangible or other payment
obligations owed by any Peregrine Party from the person or entity to which such
account, payment intangible or other payment obligations is owed); and/or

 

(v)           arise out of or under the agreements
or arrangements described on Exhibit “A”
attached hereto and incorporated herein by this reference.

 

2

 

2.  Lender’s Release.

 

(a)           The Lender, for itself and anyone claiming by, through or
under it, hereby releases and absolutely discharges Peregrine, Remedy and each
and all of their respective successors and assigns (collectively, the “Debtor Releasees”) of and from any and all
Claims which the Lender may now have, own, or at any time heretofore have ever
had, owned, or held against Peregrine and/or Remedy (hereinafter collectively
referred to as the “Lender Released Debtor
Claims”); provided, however, nothing herein shall be deemed to
release, discharge or affect any Excluded Claims and the Lender Released Debtor
Claims shall not include any Excluded Claims.

 

(b)           The Lender, for itself and anyone claiming by, through or
under it, hereby releases and absolutely discharges the Peregrine Parties and
each and all of their respective successors, and assigns, and all present and
former representatives, agents, employees, attorneys, shareholders, members,
principals, officers, and directors (collectively, the “Peregrine Releasees”) of and from any and
all Claims which the Lender may now have, own, or at any time heretofore have
ever had, owned, or held against the Peregrine Releasees, or any of them, to
the extent that (and only to such extent) such Claims arise out of, under or in
connection with or relate to the Fleet Purchase Documents, the Forbearance
Agreement, or, in each case, the transactions contemplated thereby (hereinafter
collectively referred to as the “Lender
Released Claims”); provided, however, nothing herein shall be deemed
to release, discharge or affect any Excluded Claims and the Lender Released
Claims shall not include any Excluded Claims.

 

3. Scope of Release. The releases provided
for in Paragraphs 1 and 2 of this Release Agreement (collectively, the “Releases”) shall be effective as full and
final accords and satisfactions and general releases of and from all Lender
Released Claims, Lender Released Debtor Claims, Debtor Released Claims and
Peregrine Released Claims. In furtherance of this intention, the Peregrine Parties
and Lender each hereby acknowledge that that they are fully familiar with
Section 1542 of the California Civil Code, which Section provides as follows:

 

“A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with debtor.”

 

The Peregrine Parties and Lender further each
hereby waive and relinquish any right or benefit which they have or may have
under Section 1542 of the California Civil Code or any similar provision of
statutory or non-statutory law of California or any other jurisdiction to the
fullest extent that the Parties may lawfully waive such rights and benefits
pertaining to the subject matter of the Releases. In that regard, the Parties
further acknowledge that they are aware that they or their attorneys may
hereafter discover Claims or facts in addition to or different from those which
they now know or believe to exist with respect to the subject matter of the
Releases, and that it is the Lender’s and Peregrine Parties’ intention,
respectively, fully, finally, and forever to settle and release all of its
possible Claims (other than Excluded Claims) with respect to the matters which
are the subject matter of the Releases. It is expressly understood that
notwithstanding the discovery or existence of any such additional or different
claims or facts, such Releases shall be and remain in full force and effect as
full and complete releases with respect to Debtor Released Claims, Lender
Released Claims, Lender Released Debtor Claims and Peregrine Released Claims,
as applicable. The Peregrine Parties and Lender each further acknowledge that
the other(s) has not made any representation of any kind or character
whatsoever in order to induce the execution of this Agreement.

 

3

 

4. Applicable Law, Etc.
This Release Agreement shall be enforced, interpreted, and construed in
accordance with internal laws of the State of California, without regard to
conflicts of laws principles. Whenever the context of this Release Agreement
may so require, the singular shall include the plural, the male gender shall
include the female gender and/or the neuter and vice versa.

 

5. Authority, No Prior Transfer.
The persons executing this Release Agreement on behalf of a Party hereby
represent and warrant that they are duly-authorized to execute and deliver this
Agreement on behalf of such Party, and that when so executed and delivered,
this Release Agreement will be binding upon and enforceable against that
Party.  The Lender, as to the Lender
Released Claims and the Lender Released Debtor Claims, and the Peregrine
Parties, as to the Debtor Released Claims and the Peregrine Released Claims,
each represent and warrant to the other(s) that they have not heretofore
transferred or assigned, or granted to any third party any interest of any kind
in or with respect to, the Lender Released Claims, the Lender Released Debtor
Claims, the Debtor Released Claims, or the Peregrine Released Claims, as
applicable, or purported to take any of the foregoing actions.

 

6. Bankruptcy Court
Jurisdiction; Waiver of Jury Trial. Until substantial
consummation (as defined in 11 U.S.C. sec. 1101(2)) of the Plan, the Bankruptcy
Court shall have exclusive jurisdiction to resolve and determine all disputes
and other matters arising in connection with the interpretation or enforcement
of this Release Agreement (collectively, “Disputed Matters”) and each Party
hereby expressly consents and submits to such jurisdiction. Following such
substantial consummation, jurisdiction shall be non-exclusive and shall lie in
such state or federal court(s) as may properly assert jurisdiction over the
Disputed Matter in question. In addition,
each of the Parties hereby expressly and irrevocably waives all right to trial
by jury in any action, proceeding or claim arising out of or relating to this
Release Agreement.

 

7. Payment of Expenses.
In the event any action (whether or not in a court proceeding) shall be
required or initiated to interpret, implement, modify, or enforce the terms and
provisions of this Release Agreement, and/or to declare any Party’s rights
hereunder, the prevailing party in such action shall be entitled to recover
from the losing party all of its reasonable fees and costs.

 

8. Complete Agreement of
Parties. This Release Agreement constitutes the entire agreement
among the Parties with respect to the subject matter hereof. Any supplements,
modifications, waivers or terminations of this Release Agreement shall not be
binding unless executed in writing by the parties to be bound thereby. No
waiver of any provision of this Release Agreement shall constitute a waiver of
any other provisions of this Release Agreement (whether similar or not), nor
shall such waiver constitute a continuing waiver unless otherwise expressly so
provided.

 

9. Execution In Counterparts.
This Release Agreement may be executed in any number of counterparts each of
which, when so executed and delivered, shall be deemed an original, and all of
which together shall constitute but one and the same agreement.

 

10. Consultation with Counsel.
Each Party acknowledges that it is freely and voluntarily entering into this
Release Agreement. Moreover, each Party also acknowledges that it has been
represented by counsel of its own choice in the preparation and negotiation of
this Release Agreement.

 

11. Benefited Parties.
Those parties comprising Debtor Lender Releasees, Lender Releasees, Debtor
Releasees and Peregrine Releasees who are not signatories to this Release

 

4

 

Agreement are intended third party
beneficiaries of this Release Agreement and the Releases provided for herein.

 

12. Purchaser Bank Agent.
To the extent any Claim is being released by Fleet in its capacity as Purchaser
Bank Agent pursuant hereto, such release shall only extend to any Claims held
by Fleet in its capacity as Purchaser Bank Agent and shall not extend to any
Claims of any “Purchaser Bank” as defined in the Plan. The release of any
Claims of any Purchaser Bank (other than Fleet) shall be governed by the terms
and conditions of a mutual release to be entered into among such Purchaser Bank
and the Peregrine Parties. The release of any Claims by Fleet in its individual
capacity shall be governed by the terms and conditions of this Release
Agreement as if Fleet were entering into this Release Agreement solely in its
individual capacity and not in its capacity as Purchaser Bank Agent

 

[Remainder
of page intentionally left blank.]

 

5

 

IN WITNESS WHEREOF, the Parties have executed this Release
Agreement as of this 7th day of August, 2003.

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  FLEET BUSINESS CREDIT,
  LLC,

  
	
   

  	
  a Delaware limited
  liability company, in its individual

  
	
   

  	
  capacity and in its capacity as Purchaser Bank Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Senior Vice President

  

 

6

 

	
   

  	
  PEREGRINE PARTIES:

  
	
   

  	
   

  
	
   

  	
  PEREGRINE
  SYSTEMS, INC.,

  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO and President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE
  REMEDY, INC.,

  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G.
  Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TELCO
  RESEARCH CORPORATION,

  	
   

  
	
   

  	
  a Tennessee corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gary G.
  Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  DIAMOND, INC.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gary G.
  Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  CALIFORNIA PADRES, INC., a

  Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G.
  Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  ONTARIO BLUE JAYS, INC.,

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G.
  Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO and President

  	
   

  
					

 

7

 

	
   

  	
  BALLGAME
  ACQUISITION CORPORATION, a

  Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G.
  Greenfield

  	
   

  
	
   

  	
  Its:

  	
  President and CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OCTOBER
  ACQUISITION CORPORATION, a

  
	
   

  	
  Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  BODBA, INC.,

  	
   

  
	
   

  	
  a California corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By.

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  FEDERAL SYSTEMS, INC.,

  an Illinois
  corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  CEO President and Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LORAN
  NETWORK SYSTEMS, LLC,

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  SYSTEMS OF CANADA. INC., a

  
	
   

  	
  corporation organized under
  the laws of Canada

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  

 

8

 

	
   

  	
  PEREGRINE
  NOVA SCOTIA COMPANY,

  
	
   

  	
  a Nova Scotia unlimited
  liability company,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  SYSTEMS LTD.,

  	
   

  
	
   

  	
  a
  corporation organized under the laws of Ontario

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathryn Vizas

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  OTTAWA NOVA SCOTIA COMPANY,

  
	
   

  	
  a Nova Scotia unlimited
  liability company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  NETWORKS CANADA INC.,

  
	
   

  	
  a corporation organized
  under the laws of Canada

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LORAN
  INTERNATIONAL TECHNOLOGIES INC., a

  corporation organized under the laws of Canada

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LORAN
  NETWORK SYSTEMS INC.,

  	
   

  
	
   

  	
  a corporation organized
  under the laws of Canada

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  

 

9

 

	
   

  	
  REMEDY
  CANADA LTD.,

  	
   

  
	
   

  	
  a corporation organized
  under the laws of Ontario

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By.

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXTRICITY
  (CANADA) CORP.,

  	
   

  
	
   

  	
  a Nova Scotia unlimited
  liability company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  	
   

  
	
   

  	
  Its:

  	
  Director and President

  	
   

  

 

10Exhibit
10.40

 

PROMISSORY
NOTE

 

	
  $52,056,266.01

  	
  August
  26, 2002

  Los Angeles, California

  

 

FOR VALUE RECEIVED, the undersigned (hereinafter “Maker”), hereby promises to pay
to the order of FLEET BUSINESS CREDIT, LLC, a Delaware limited liability
company (hereinafter “Holder”), in such coin or currency of the United
States which shall be legal tender in payment of all debts and dues, public and
private, at the time of payment, the principal sum of $52,056,266.01 (which
said principal sum represents the Past Due Purchase Obligations of Maker to
Holder as of the date hereof in accordance with Schedule A to the Forbearance
Agreement (as defined below)), or such greater or lesser amount as may be
outstanding hereunder from time to time in accordance with the terms hereof,
together with interest from and after the date hereof on the unpaid principal
balance outstanding as set forth herein.

 

Forbearance
Agreement. This
Promissory Note (this “Note”) is one of the “Promissory Notes” referred
to in, and is issued pursuant to, that certain Forbearance Agreement (the “Forbearance
Agreement”), dated as of the date hereof, among Maker, the subsidiaries of
Maker identified on the signature pages thereof, Fleet Business Credit, LLC, a
Delaware limited liability company, as successor to Sanwa Business Credit
Corporation (“Fleet”), Wells Fargo HSBC Trade Bank, N.A., a national
banking association (the “Trade Bank”), and Silicon Valley Bank, a
California state bank (“SVB”; together with Fleet and the Trade Bank,
each, a “Purchaser”, collectively “Purchasers”), and Fleet, as
agent for the Purchasers (in such capacity, together with its successors in
such capacity, “Purchaser Agent”). All of the terms, covenants and
conditions of the Forbearance Agreement and the other Forbearance Documents are
hereby made a part of this Note and are deemed incorporated herein in full.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in the Forbearance Agreement.

 

Senior
Debt. The obligations
of Maker hereunder (whether of principal, interest or otherwise) shall
constitute “Senior Debt” under the Indenture.

 

Payments
of Principal and Interest. The principal amount and accrued interest of this Note shall be due
and payable on the dates and in the manner hereinafter set forth:

 

(a)
Interest. Interest on the outstanding principal balance hereof shall
accrue at a per annum rate of 6.00%; provided, however, that upon
the occurrence and during the continuation of a New Event of Default, interest
on the outstanding principal balance hereof shall accrue at a per annum rate of
9.00%. Interest shall accrue monthly and shall be due and payable on the first
day of each calendar month, in arrears, until such time as the full principal
balance hereof, together with all other amounts owing hereunder, shall have
been paid in full. The foregoing to the contrary notwithstanding, upon the
commencement of the first, if any, Chapter 11 Proceeding filed by or against
maker, (a) during the period from the Filing Date thereof through

 

 

the Moratorium End Date,
interest shall accrue during the period from such Filing Date through the
Moratorium End Date (without compounding during such period) and on the
Moratorium End Date shall be added to the outstanding principal balance hereof,
(b) any interest accruing for any period prior to such Filing Date and due and
payable after such Filing Date shall be payable in accordance with the
immediately preceding sentence, and (c) after the Moratorium End Date, interest
shall accrue and be due and payable in accordance with the immediately
preceding sentence. Notwithstanding the date of this Note, in addition to the
interest otherwise payable hereunder, on the first due date of interest
hereunder, Maker shall pay interest on the outstanding Past Due Purchase
Obligations during the period from August 1, 2002 through and including the
date of this Note at the rate applicable to the principal amount hereof.
Without limiting Maker’s obligation to pay interest on the due date thereof,
subject to the interest moratorium provisions above, any interest not paid when
due shall be added to the outstanding principal balance hereof and thereafter
interest shall accrue on such amount in accordance with the terms hereof.

 

(b)           Principal. (i) The principal
balance of this Note shall be amortized over three years commencing on August
1, 2003 as set forth in the below table;

 

 

	
  Period

  	
   

  	
  Annual Amortization (as a

  percentage of the “Adjusted

  Original Principal Balance” (as

  hereinafter defined) of each

  Promissory Note”

  
	
  August 1, 2003 through
  July 31, 2004

  	
   

  	
  20%

  
	
  August 1, 2004 through
  July 31, 2005

  	
   

  	
  30%

  
	
  August 1, 2005 through
  July 31, 2006

  	
   

  	
  30%

  

 

(ii)           Principal on this Note shall be
payable in monthly installments commencing on the first day of each period set
forth above and continuing on the first day of each calendar month during each
such period until paid in full, in an amount equal to (a) the “Adjusted
Original Principal Balance” (as hereinafter defined) of this Note (as of the
date on which such payment is due), multiplied by (b) a fraction, (i) the
numerator of which is the “Annual Amortization” for such period (as set forth
in the table above), and (ii) the denominator of which is 12. As used herein
the “Adjusted Original Principal Balance” of this Note shall mean the original
principal amount hereof plus the aggregate amount that is added to the original
principal balance hereof after the date hereof as a result of Holder or any
other holder hereof exercising its rights under its Purchase

 

2

 

Documents to have any
Peregrine Party repurchase any of Holder’s Purchased Accounts, plus the amount
of any accrued interest added to the principal balance of such Promissory Note
pursuant to section (a) above on the Moratorium End Date minus the aggregate
amount that is subtracted from the original principal balance hereof after the
date hereof as a result of any payments received by Holder from the account
debtor or other obligor on any Purchased Account the repurchase price of which
is evidenced hereby.

 

The entire remaining
principal amount then outstanding, together with all accrued and unpaid
interest and any and all other amounts due hereunder, shall be due and payable
in full on July 31, 2006.

 

Prepayments. 
This Note may be prepaid in full or in port without penalty or premium.
This Note is subject to mandatory prepayment in accordance with the terms of
the Forbearance Agreement. Any prepayment of less than the outstanding amount
of principal, accrued interest, and other amounts payable hereunder, shall be
applied first to accrued interest, then to the outstanding principal balance,
and then to the other amounts payable hereunder.

 

Past
Due Purchase Obligations.  If any Past Due Purchase Obligations owing
to Holder arise after the date hereof, then such Past Due Purchase Obligations
may be added to the outstanding principal balance hereof in accordance with the
terms of the Forbearance Agreement.

 

Holder’s
Books and Records.  Holder is authorized, at Holder’s option, to
note the date and amount of each payment or prepayment of principal hereunder
and the incurrence of any new Past Due Purchase Obligations in its books and
records, including computer records. Such books and records reasonably and in
good faith maintained shall constitute conclusive evidence, absent manifest
error, of the accuracy of the information contained therein. From time to time,
on Holder’s request, Maker shall execute and deliver to Holder, a new
promissory note, in the same form as this Note, in substitution of this
promissory note in a principal amount equal to the then outstanding principal
balance hereof.

 

Rights
and Remedies.  Upon the occurrence of a New Event of
Default, Holder (at its election but without notice of its election and without
demand) shall have all of the rights and remedies set forth in Section X
of the Forbearance Agreement.

 

Collection
Costs.  In addition to Holder’s other rights and
remedies, in the event Maker shall fail to pay any payment of principal or
interest, or both, required hereunder, Maker shall pay all collection costs
(including attorneys’ fees and expenses) incurred by Holder.

 

Remedies
Cumulative.  The rights and remedies of Holder under this
Note, the Forbearance Agreement and the other Forbearance Documents shall be
cumulative. Holder shall have all other rights and remedies not inconsistent
herewith as provided under the Uniform Commercial Code (as in effect in
California from time to time), by law, or in equity. No exercise by Holder of
one right or remedy shall be deemed an election, and no

 

3

 

waiver by Holder of any Event of Default
shall be deemed a continuing waiver. No delay by Holder shall constitute a
waiver, election, or acquiescence by it.

 

Intent
to Limit Charges to Maximum Lawful Rate.  In
no event shall the interest rate or rates payable under this Note, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Maker and Holder, in executing and delivering
this Note, intend legally to agree upon the rate or rates of interest and
manner of payment stated within it; provided, however, that, anything contained
herein to the contrary notwithstanding, if said rate or rates of interest or
manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Note,
Maker is and shall be liable only for the payment of such maximum as allowed by
law, and payment received from Maker in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of Maker’s
obligations hereunder to the extent of such excess.

 

Time
is of the essence of this Note.  Subject to the provisions of
the Forbearance Agreement and/or Forbearance Documents requiring the giving of
notices, to the fullest extent permitted by applicable law, Maker, for itself
and its legal representatives, successors and assigns, expressly waives
presentment, demand, protest, notice of dishonor, notice of non-payment, notice
of maturity, notice of protest, presentment for the purpose of accelerating
maturity, diligence in collection, and the benefit of any exemption or
insolvency laws.

 

Wherever possible, each
provision of this Note shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Note shall be
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or remaining provisions of this Note. No delay or
failure on the part of Holder in the exercise of any right or remedy hereunder
shall operate as a waiver thereof, nor as an acquiescence in any default, nor
shall any single or partial exercise by Holder of any right or remedy preclude
any other right or remedy. Holder, at its option, may enforce its rights
against any collateral securing this Note without enforcing its rights against
Maker, any guarantor of the indebtedness evidenced hereby or any other property
or indebtedness due or to become due to Maker. Maker agrees that, without
releasing or impairing Maker’s liability hereunder, Holder may at any time
release, surrender, substitute or exchange any collateral securing this Note
and may at any time release any party primarily or secondarily liable for the
indebtedness evidenced by this Note.

 

Governing
Law.  This Note shall be governed by, and
construed and enforced in accordance with, the laws of the State of California.

 

[Remainder
of page intentionally left blank.]

 

4

 

IN WITNESS WHEREOF, Maker has caused this Note to be duly
executed and delivered on the date first above written.

 

	
   

  	
  PEREGRINE
  SYSTEMS, INC.

  a Delaware corporation (“Maker”)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary G. Greenfield

  
	
   

  	
  Title:

  	
  CEO

  
				

 

S-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}]]