Document:

Exhibit
10.43

 

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 Silicon Valley Bank, a California
state bank (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.c(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.c(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.

 

(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

 

1

 

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 SVB 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 SVB 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 SVB Purchase Documents in the SVB 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. 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

 

2

 

which the Lender may now have, own, or at any
lime 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 SVB 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.

 

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.

 

3

 

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

 

4

 

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

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  SILICON VALLEY BANK

  a California state bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Marla Johnson

  	
   

  
	
   

  	
  Senior Vice President

  

 

5

 

	
   

  	
  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

  	
   

  
					

 

6

 

	
   

  	
  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:

  	
  Director, CEO
  and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE
  BODHA, 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

  	
   

  

 

7

 

	
   

  	
  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
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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

  	
   

  

 

8

 

	
   

  	
  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

  	
   

  

 

9Exhibit
10.44

 

PROMISSORY
NOTE

 

	
  $6,165,065.14

  	
  August
  26, 2002

  Los Angeles, California

  

 

FOR VALUE RECEIVED, the undersigned (hereinafter “Maker”),
hereby promises to pay to the order of SILICON VALLEY BANK, a California state
bank (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 $6,165,065.14 (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 witb
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 part
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/ [ILLEGIBLE]

  
	
   

  	
  Title:

  	
    CEO

  
				

 

S-1

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