Document:

Exhibit 10.35

 

INTERCREDITOR AGREEMENT

 

 

THIS
INTERCREDITOR AGREEMENT,
dated as of August 26, 2002 (as may be amended, supplemented or otherwise
modified from time to time, the “Agreement”), is made by and among FOOTHILL CAPITAL CORPORATION, a California
corporation, in its capacity as (i) arranger and administrative agent (in such
capacity, together with its successors and assigns in such capacity, the “Senior
Agent”) for certain lenders that are signatory to the Senior Loan Agreement
defined below (such lenders, each a “Senior Lender”, and collectively,
the “Senior Lenders”; such Senior Lenders, together with Senior Agent,
individually and collectively, the “Senior Lender Group”), and (ii) as a
Senior Lender; ABLECO FINANCE LLC,
a Delaware limited liability company, as a Senior Lender, FLEET BUSINESS CREDIT LLC, a Delaware
limited liability company, as successor to Sanwa Business Credit Corporation
(“Fleet”), in its capacity as (i) agent (in such capacity, together with its
successors and assigns in such capacity, the “Junior Agent”) for certain
creditors that are signatory to the Forbearance Agreement described below (such
creditors, each a “Junior Creditor”, and collectively, the “Junior
Creditors”; such Junior Creditors, together with Junior Agent, individually
and collectively, the “Junior Creditor Group”), and (ii) as a Junior
Creditor, WELLS FARGO HSBC TRADE BANK, N.A.,
a national banking association, as a Junior Creditor, SILICON VALLEY BANK, a California state bank, as a Junior
Creditor, and PEREGRINE SYSTEMS, INC.,
a Delaware corporation (the “Parent”), and all those subsidiaries of
Parent that are party to the Senior Loan Agreement defined below (each
individually as a “Borrower”, and individually and collectively, jointly
and severally, as the “Borrowers”) and those subsidiaries of Parent that
are party to any of the Guaranties defined below (each a “Guarantor” and
together with Borrowers, the “Obligors”).

 

WITNESSETH:

 

WHEREAS, the Senior Lender Group and Borrowers have
executed and delivered that certain Loan and Security Agreement, dated as June
12, 2002 (as amended, restated, modified, renewed or extended from time to
time, the “Senior Loan Agreement”), pursuant to which (a) the Senior
Lender Group has agreed to make loans and other extensions of credit to
Borrowers, and (b) Borrowers have granted to Senior Agent, for the benefit of
the Senior Lender Group, a security interest in and to that portion of the
Collateral (as herein defined) owned by Borrowers in order to secure Borrowers’
obligations arising in connection with the Senior Loan Agreement and the other
Senior Loan Documents (as herein defined);

 

WHEREAS, certain of Borrowers’ Affiliates (each a “Guarantor”)
have executed and delivered to Senior Agent those certain Guaranties, dated as
of June 12, 2002, in favor of Senior Agent, for the benefit of the Senior
Lender Group (each a “Senior Guaranty”), with respect to the obligations
of Borrowers owing to the Senior Lender Group under the Senior Loan Agreement
and the other Senior Loan Documents;

 

WHEREAS, pursuant to certain security and pledge
documents executed and delivered in connection with the Senior Loan Agreement
and the Senior Guaranties, Guarantors

 

 

have granted to Senior
Agent, for the benefit of the Senior Lender Group, security interests in and to
substantially all of their assets in order to secure their respective
obligations under the Senior Guaranties, and the other Senior Loan Documents;

 

WHEREAS, pursuant to the terms and conditions of that
certain Non-Recourse Receivables Purchase Agreement, dated as of September 27,
2000, between Parent and Silicon Valley Bank (as amended from time to time, the
“SVB Receivables Purchase Agreement”), Parent sold certain Accounts,
Payment Intangibles, Chattel Paper, Promissory Notes, and other rights to
payment and obtained certain other extensions of credit from Silicon Valley
Bank;

 

WHEREAS, pursuant to the terms and conditions of that
certain Accounts Purchase and Security Agreement, dated as of March 15, 2000,
between Parent and Wells Fargo HSBC Trade Bank, N.A., and that certain Payment
Purchase Agreement between Peregrine Extricity Inc. and HSBC Trade Bank, N.A.
(as each may be amended from tune to time, collectively, the “Wells
Receivables Purchase Agreements”), Parent sold certain Accounts, Payment
Intangibles, Chattel Paper, Promissory Notes, and other rights to payment to
Wells Fargo HSBC Trade Bank, N.A., and granted Wells Fargo HSBC Trade Bank,
N.A. a security interest in certain collateral to secure their respective
obligations under the Wells Receivables Purchase Agreements;

 

WHEREAS, pursuant to the terms and conditions of that
certain Purchase Agreement, dated as of June 27, 1997, between Parent and Fleet
Business Credit, LLC, as successor in interest thereunder to Sanwa Business
Credit Corporation, and that certain Purchase Agreement dated December 28,
2001, between Parent and Fleet Business Credit, LLC, (as each may be amended
from time to time, the “Fleet Receivables Purchase Agreements” and
together with the Wells Receivables Purchase Agreements and the SVB Receivables
Purchase Agreement, the “Receivables Purchase Agreements”), Parent sold
certain Accounts, Payment Intangibles, Chattel Paper, Promissory Notes, and
other rights to payment, obtained certain other extensions of credit from Fleet
Business Credit LLC, and granted Fleet Business Credit LLC a security interest
in certain collateral to secure Parent’s obligations under the Fleet
Receivables Purchase Agreements;

 

WHEREAS, Parent is in default of its obligations
under the Receivables Purchase Agreements;

 

WHEREAS, pursuant to that certain Forbearance
Agreement dated as of August     , 2002 (the “Forbearance
Agreement” and together with the Receivables Purchase Agreements, the
Junior Guaranties defined below and all other documents and agreements to be
delivered to Junior Creditors or Junior Agent thereunder or in connection
therewith, the “Junior Credit Documents”), Junior Creditors have
appointed Junior Agent as their agent and have agreed, among other things, to
forbear from collection of certain amounts owing under the Receivables Purchase
Agreements, and Parent and Obligors have agreed, among other things, to grant
to Junior Agent, for the benefit of the Junior Creditors, in addition to any
security interest that may be provided for in the Receivables Purchase
Agreements, a security interest in the Collateral to secure Parent’s
obligations under the Receivables Purchase Agreements and the

 

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obligations
of the Obligors under the Forbearance Agreement and the other Junior Credit
Documents;

 

WHEREAS, certain Obligors other than Parent have
executed and delivered to, or will substantially contemporaneously herewith
execute and deliver to, Junior Agent those certain Guaranties, dated as of
August    , 2002, in favor of Junior Creditors (the “Junior
Guaranties”), with respect to the obligations of Parent owing to Junior
Creditors under the Receivables Purchase Agreements and the Forbearance
Agreement;

 

WHEREAS, pursuant to certain security and pledge
documents executed and delivered in connection with the Junior Credit
Documents, Obligors have granted to Junior Agent a security interest in and to
substantially all of their assets in order to secure their obligations under
the Junior Guaranties and the other Junior Credit Documents; and

 

WHEREAS, the parties hereto desire to execute and
deliver this Agreement (a) to establish the relative priorities of their
respective security interests in and liens on the Collateral, and (b) to
provide for the orderly sharing among them, in accordance with such priorities,
of the proceeds of such Collateral upon any foreclosure or other realization
thereon, collection thereof, or other disposition thereof.

 

NOW, THEREFORE, in consideration of the premises, the
parties hereto hereby agree as follows:

 

1.                                    Definitions.

 

(a)
As used in this Agreement, (i) the terms defined in the preamble and recitals
shall have the meanings assigned thereto, (ii) initially capitalized terms that
are used herein without being defined herein shall have the meanings assigned
thereto in the Senior Loan Agreement, and (iii) the following terms shall have
the following meanings:

 

“Accounts”
means all of a Person’s now owned or hereafter acquired right, title, and
interest with respect to “accounts” (as that term is defined in the Code), and
any and all supporting obligations in respect thereof.

 

“Agreement”
shall have the meaning set forth in the preamble to this Agreement.

 

“Bankruptcy
Code” means United States Bankruptcy Code, as in effect from time to time.

 

“Borrower”
and “Borrowers” shall have the meaning set forth in the preamble to this
Agreement.

 

“Chattel
Paper” shall have the meaning set forth in the Code.

 

“Code”
means the New York Uniform Commercial Code, as in effect from time to time.

 

3

 

“Collateral”
means all assets and all other property of Obligors of any kind or nature,
whether real or personal, tangible or intangible, now existing or hereafter
created or acquired, wherever located, and any proceeds thereof, at any time
subject to (a) a Lien in favor of Senior Agent, for the benefit of the Senior
Lender Group, under the Senior Loan Documents to secure the Senior Loan
Obligations, or (b) a Lien in favor of Junior Agent, for the benefit of Junior
Creditors, or in favor of any Junior Creditor under the Junior Credit
Documents, to secure the Junior Obligations (for the avoidance of doubt, not
including any Lien in favor of Fleet’s European affiliate in respect of any
accounts or other rights to payment of any Obligor or any subsidiary of any
Obligor purchased by Fleet’s European affiliate and not including any Lien
securing any obligations owed by any Obligor in respect of the accounts or
other rights to payment of such Obligor to EMC Corporation or PeopleSoft, Inc.
purchased by Fleet to the extent such Lien was granted pursuant to the contract
to which such account or right to payment relates), including the Junior
Creditor First Priority Collateral.

 

“Controlled
Collateral” shall have the meaning set forth in Section 2(e).

 

“DIP
Financing” shall have the meaning set forth
in Section 6(e).

 

“IBM/SOW
Accounts” means all Accounts and the proceeds thereof resulting from
transactions between Borrower and International Business Machines Corporation
pursuant to that certain contract entitled SOW #4901S9001 and dated as of March
29, 2001.

 

“Insolvency
Proceeding” means (a) any case, action, or proceeding before any court or
other governmental authority having jurisdiction over the applicable Person or its assets relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up, or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshaling of assets for creditors, or other similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case whether undertaken under Federal (including the
Bankruptcy Code), State, or local law.

 

“Junior
Agent” shall have the
meaning set forth in the preamble to this Agreement.

 

“Junior
Credit Documents” means the
Receivables Purchase Agreements, the Forbearance Agreement, the Junior
Guaranties and any other agreements, instruments, and certificates executed and
delivered in connection therewith.

 

“Junior
Creditor” and “Junior
Creditors” shall have the respective meanings set forth in the preamble to
this Agreement.

 

“Junior
Creditor New Event of
Default” means a “New Event of Default” as defined in the Forbearance Agreement
in effect as of the date hereof.

 

“Junior
Creditor First Priority Collateral” means (a) Accounts, Payment
Intangibles, Chattel Paper, Promissory Notes, and other rights to payment purchased prior to

 

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June
1, 2002, by Silicon Valley Bank pursuant to the terms of the SVB Account
Receivables Purchase Agreement and listed on Schedule “A” attached hereto and
incorporated herein by this reference, and any and all identifiable proceeds
thereof, (b) Accounts, Payment Intangibles, Chattel Paper, Promissory Notes,
and other rights to payment purchased prior to June 1, 2002, by Wells Fargo
HSBC Trade Bank, N.A. pursuant to the terms of the Wells Receivables Purchase
Agreements and listed on Schedule “B” attached hereto and incorporated herein
by this reference, and any and all identifiable proceeds thereof, (c) Accounts,
Payment Intangibles, Chattel Paper, Promissory Notes, and other rights to
payment purchased prior to June 1, 2002, by Fleet Business Credit LLC pursuant
to the terms of the Fleet Receivables Purchase Agreements and listed on
Schedule “C” attached hereto and incorporated herein by this reference, and any
and all identifiable proceeds thereof, and (d) any collateral subject to the
grant of any lien or security interest set forth in the Receivables Purchase
Agreements to the extent that such collateral secures a Purchaser’s right to
receive the payments assigned to such Junior Creditor as set forth on Schedule
A, B or C hereto, as applicable, or to enforce its rights and remedies with
respect thereto and all identifiable proceeds thereof, excluding  however,
from all of the above categories, Ongoing Maintenance Accounts and all IBM/SOW
Accounts (other than the IBM/SOW Account owing from IBM with respect to the
Florida Power and Light receivable arising on or about April 9, 2002 in an
amount of approximately $725,000) to the extent that such IBM/SOW Accounts
secure payments received from and after August 1, 2002, in an aggregate amount
in excess of $2,374,857.87. The inclusion of any rights to payment or other
property on more than one of Schedules A, B or C shall not be construed in any
way to mean that such property is not Junior Creditor First Priority
Collateral, instead, Junior Creditors intend to resolve, among themselves, any
such overlapping claims by them to the same property.

 

“Junior
Creditor Group” shall have the meaning set forth in the preamble to this Agreement.

 

“Junior
Creditor Liens” means the Liens in and to the Collateral granted pursuant
to the Junior Credit Documents to secure the Junior Obligations.

 

“Junior
Guaranties” shall have the meaning
set forth in the recitals to this Agreement.

 

“Junior
Obligations” means all of the
obligations, liabilities, and indebtedness of Borrowers under or in connection
with the Junior Credit Documents, irrespective of whether on account of
principal, premium, interest, fees, costs, or expenses and including without
limitation, premiums, interest, fees, costs, or expenses which would accrue and
become due but for the commencement of an Insolvency Proceeding, whether or not
such premiums, interest, fees, costs, or expenses are allowed or are allowable
in whole or in part in any such Insolvency Proceeding. For the avoidance of
doubt, “Junior Obligations” shall not include any obligations, liabilities or
indebtedness of any Obligor as an account debtor or obligor under any accounts
or rights to payment purchased by Fleet from EMC Corporation or PeopleSoft,
Inc., nor any obligations, liabilities, or indebtedness of any Obligor to
Fleet’s European affiliate.

 

“Lien”
means any interest in an asset securing an obligation owed to, or a claim by,
any Person other than the owner of the asset, whether such interest shall be based on the

 

5

 

common
law, statute, or contract, whether such interest shall be recorded or
perfected, and whether such interest shall be contingent upon the occurrence of
some future event or events or the existence of some future circumstance or
circumstances, including the lien or security interest arising from a mortgage,
deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
arrangement, security agreement, conditional sale, or trust receipt.

 

“Ongoing
Maintenance Accounts” means Accounts of any Obligor for annual maintenance
or other services other than (a) such Accounts that were included as part of
bundled payments that relate not only to annual maintenance or other services
but also to license fees, where a Junior Creditor purchased such bundled
payment, and (b) such Accounts for annual maintenance or other services as are
capable of being specifically calculated from the terms of the contracts (as
amended through the date hereof) or initial invoices relating to such Accounts
where it is clear from the subject transaction documents that a Junior
Creditor, in addition to the purchase of Accounts, if any, arising from license
fees owing to an Obligor as reflected in such contract (as amended through the
date hereof) or initial invoice, purchased such Account relating to annual
maintenance or other services by giving value to any such Obligor in an amount
consistent with other purchases of Accounts by Junior Creditors. Without
limiting the generality of the foregoing, “Ongoing Maintenance Accounts” shall
include indeterminate future Accounts for annual maintenance or other services
with respect to which value was not advanced by a Junior Creditor, and shall
not include Accounts for annual maintenance or other services where it is clear
from the transaction documents that a Junior Creditor purchased such Accounts
by giving value to any such Obligor in an amount consistent with other
purchases of Accounts by Junior Creditors.

 

“Parent”
shall have the meaning set forth in the preamble to this Agreement.

 

“Payment
Intangible” shall have the meaning set forth in the Code.

 

“Promissory
Note” shall have the meaning set forth in the Code.

 

“Qualified Offer” shall have the
meaning set forth in the Forbearance Agreement as in effect on the date hereof.

 

“Receivables
Purchase Agreements” shall have the
meaning set forth in the recitals to this Agreement.

 

“Senior
Agent” shall have the meaning
set forth in the preamble to this Agreement.

 

“Senior
Guaranties” shall have the
meaning set forth in the recitals to this Agreement.

 

“Senior
Lender First Priority
Collateral” means all of the Collateral, other than the Junior Creditor First
Priority Collateral.

 

6

 

“Senior
Lender” and “Senior Lenders” shall have the respective meanings set forth in the preamble to this
Agreement.

 

“Senior
Liens” means the Liens in and to the Collateral granted pursuant to the
Senior Loan Documents to secure the Senior Loan Obligations.

 

“Senior
Loan Agreement” shall have the meaning set forth in the recitals of this
Agreement.

 

“Senior
Loan Documents” means the Loan Documents as defined in the Senior Loan Agreement.

 

“Senior
Loan Obligations” means: (a) the Supplemental Senior Loan Obligations; and
(b) all of the obligations, liabilities, and indebtedness (including without
limitation, interest, premiums, fees, costs, or expenses, and other amounts
owing thereunder not consisting of principal, whether or not those amounts have
been converted into principal as a result of making Advances under the Senior
Loan Documents in order to pay such amounts, and all premiums, interest, fees,
costs, or expenses which would accrue and become due but for the commencement
of an Insolvency Proceeding, whether or not such premiums, interest, fees, costs,
or expenses are allowed or are allowable in whole or in part in any such
Insolvency Proceeding) of Obligors under any of the Senior Loan Documents in an
aggregate amount not to exceed $100,000,000 ($140,000,000 after the date of the
commencement by any Obligor of an Insolvency Proceeding) (minus the amount of
any reductions in the Senior Maximum Revolver Amount), plus all amounts in
excess of the foregoing maximum amount to the extent such excess amounts
consist of interest, premiums, fees, costs, or expenses, and other amounts
owing thereunder not consisting of principal, whether or not those amounts have
been converted into principal as a result of making Advances under the Senior
Loan Documents in order to pay such amounts, to the extent such amounts accrue
or become due and payable from and after the time at which the obligations,
liabilities, and indebtedness of Obligors under any of the Senior Loan
Documents equal or exceed the foregoing maximum amount.

 

“Senior
Maximum Revolver Amount” means the Maximum Revolver Amount, as such term is defined in the Senior Loan
Agreement.

 

“Supplemental
Senior Loan Obligations” means all of the obligations, liabilities, and
indebtedness of Obligors (other than the obligations, liabilities and
indebtedness of the Obligors under the Senior Loan Documents) in connection
with any supplemental, further or additional loan facilities extended to
Obligors by Senior Lenders or any other lender(s) (including, without
limitation all obligations, liabilities and indebtedness arising under any DIP
Financing (as defined in Section 5(e)) in an aggregate amount (including
without limitation, premiums, interest, fees, costs, or expenses accruing or
incurred thereunder, including those which would accrue and become due but for
the commencement of an Insolvency Proceeding, whether or not such premiums,
interest, fees, costs, or expenses are allowed or are allowable in whole or in part in any such Insolvency
Proceeding) not to exceed, at any time, $250,000,000 minus the amount of cash proceeds received by Obligors in
connection with any sale or other disposition of assets occurring on or after
August 26, 2002, and on or before the effectiveness of

 

7

 

the
credit agreement and other documents evidencing such supplemental, further or
additional loan facilities, minus
the amount of liens having a priority senior to the Junior Creditor Liens (by
contract, law or otherwise) other than the Senior Liens, and minus the amount of the obligations, liabilities,
and indebtedness of Obligors under the Senior Loan Documents outstanding at the
time of any calculation (other than amounts thereof which are to be refinanced
by such supplemental, further or additional loan facilities); plus all amounts
consisting of interest, premiums, fees, costs, or expenses, and other amounts
owing thereunder not consisting of principal (including without limitation,
premiums, interest, fees, costs, or expenses which would accrue and become due
but for the commencement of an Insolvency Proceeding, whether or not such
premiums, interest, fees, costs, or expenses are allowed or are allowable in
whole or in part in any such Insolvency Proceeding), whether or not those
amounts have been converted into principal as a result of making advances in
order to pay such amounts, to the extent such amounts accrue or become due and
payable from and after the time at which the obligations, liabilities, and
indebtedness of Obligors in connection with any such supplemental, further or
additional loan facilities equal or exceed the foregoing maximum amount.

 

(b)
The words “hereof,” “herein” and “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and paragraph references are to this
Agreement unless otherwise specified. The phrases “prior payment in full,”
“payment in full,” “paid in full” and any other similar terms or phrases when
used herein with respect to any Senior Loan Obligations or Junior Obligations
shall mean the final indefeasible payment in full in cash of all such Senior
Loan Obligations or such Junior Obligations, as the case may be (in each case
other than contingent indemnity obligations of Obligors that shall survive payment
in full).

 

(c)
The meanings given to terms defined herein shall be equally applicable to both
the singular and plural forms of such terms.

 

2.                                       Acknowledgments:
Agreements.

 

(a)
Junior Creditors hereby acknowledge that the Senior Agent has been granted Liens
upon all or substantially all of the assets of Obligors pursuant to the Senior
Loan Documents and hereby consents thereto. Senior Agent hereby acknowledges
that the Junior Agent has been
granted Liens upon all or substantially all of the assets of Obligors pursuant
to the Junior Credit Documents and hereby consents thereto.

 

(b)
Junior Creditors hereby acknowledge and agree that (i) the Junior Creditor
Liens in and to the Senior Lender First Priority Collateral (including without
limitation all deposit or securities accounts of Borrowers) shall under all
circumstances be junior in priority and subordinated to the Senior Liens in and
to such Senior Lender First Priority Collateral and that Junior Creditors shall
not have any claim to or in respect of such Senior Lender First Priority
Collateral, or any proceeds or realization of such Senior Lender First Priority
Collateral, on a parity with or prior to the claim of the Senior Lender Group,
(ii) any Lien at any time granted to or otherwise obtained by the Senior Lender
Group with respect to the Senior Lender First Priority Collateral shall have
priority over, and shall be senior to, any Lien therein at any time granted to
or otherwise obtained by any Junior Creditor, and (iii) until the Senior Loan
Obligations have been paid in full, the exercise of rights and remedies in
respect of the Junior

 

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Creditor
Liens by Junior Agent under the Junior Credit Documents and applicable law
shall be limited to the extent set forth in, and shall be governed by, this
Agreement.

 

(c)
Each member of the Senior Lender Group hereby acknowledges and agrees that (i)
the Senior Liens in and to the Junior Creditor First Priority Collateral shall
under all circumstances be junior in priority and subordinated to the Junior
Creditor Liens in and to such Junior Creditor First Priority Collateral and
that no member of the Senior Lender Group shall have any claim to or in respect
of such Junior Creditor First Priority Collateral, or any proceeds of or
realization in and to such Junior Creditor First Priority Collateral, on a
parity with or prior to the claim of Junior Creditors, (ii) any Lien at any
time granted to or otherwise obtained by the Junior Agent or the Junior
Creditors with respect to the Junior Lender First Priority Collateral shall
have priority over, and shall be senior to, any Lien therein at any time
granted to or otherwise obtained by any member of the Senior Lender Group,
(iii) until the Junior Obligations have been paid in full, the exercise of
rights and remedies in respect of the Senior Liens by any member of the Senior
Lender Group under the Senior Loan Documents and applicable law shall be
limited to the extent set forth in, and shall be governed by, this Agreement, and
(iv) Junior Creditors would not have executed the Forbearance Agreement in the
absence of the execution and delivery of this Agreement by the parties hereto.

 

(d)
The priority agreements set forth in subsections (b) and (c) above shall
be applicable irrespective of the order, time, or method of the creation,
attachment, or perfection of any Lien of any member of the Senior Lender Group
or any Junior Creditor upon all or any portion of the Collateral, or the order
or time of filing or recordation of any document or instrument for perfecting a
Lien in favor of any member of the Senior Lender Group or any Junior Creditor
in any such Collateral, and notwithstanding any conflicting terms or conditions
that may be contained in any of the Senior Loan Documents or the Junior Credit
Documents.

 

(e)
Junior Creditors and the Senior Lender Group acknowledge and agree that until
the Senior Loan Obligations have been paid in full, Senior Agent shall (i) hold
or control all of the Collateral (other than the Junior Creditor First Priority Collateral) as to which the
security interest therein is perfected by obtaining possession or dominion and
control, as applicable, of such Collateral (the “Controlled Collateral”)
pledged to Senior Agent pursuant to the Senior Loan Documents, and (ii) for so
long as the Controlled Collateral forms a part of the Collateral for the Junior
Obligations, hold or control in its capacity as bailee for Junior Agent all of
the Controlled Collateral pledged to Junior Agent pursuant to the Junior Credit
Documents. To the extent permitted by law, Senior Agent shall deliver such
Controlled Collateral possessed by it to the Junior Agent at such time as the
Senior Loan Obligations have been paid in full.

 

(f)
Each member of the Senior Lender Group hereby acknowledges and agrees that, to
the extent that the Senior Liens secure obligations, liabilities, or
indebtedness under the Senior Loan Documents in excess of the amount of such
obligations, liabilities or indebtedness that constitute Senior Loan Obligations
under clause (b) of the definition of Senior Loan Obligations, then such excess
shall be paid from the Collateral only after payment in full of both the Senior
Loan Obligations and the Junior Obligations. Each member of the Senior Lender
Group that is or hereafter becomes a lender in respect of any Supplemental
Senior Loan Obligations and each other lender in respect of any Supplemental
Senior Loan Obligations by its agreement to be bound by the terms hereof
acknowledges and agrees that, to the extent that the

 

9

 

Senior
Liens secure obligations, liabilities, or indebtedness of the Obligors in
connection with any supplemental, further or additional loan facilities (other
than the obligations, liabilities and indebtedness of the Obligors under the
Senior Loan Documents) in excess of the amount of such obligations, liabilities
or indebtedness that constitute Supplemental Senior Loan Obligations, then such
excess shall be paid from the Collateral only after payment in full of both the
Supplemental Senior Loan Obligations and the Junior Obligations.

 

3.                                       Rights in
Collateral.

 

(a)
So long as this Agreement has not been terminated pursuant to the provisions hereof, and regardless of whether or not the
Senior Loan Obligations or the Junior
Obligations have been accelerated or any bankruptcy proceeding or similar event
or proceeding has been commenced by or against any Borrower:

 

(i)
Except as otherwise provided in subsection (b), until payment in full of
the Senior Loan Obligations, no Junior Creditor shall exercise any rights or
remedies in respect of the Senior Lender First Priority Collateral or the
Junior Creditor Liens with respect thereto, whether under the Junior Credit
Documents, applicable law or otherwise, including without limitation (A) rights
of recoupment or set-off of any Junior Creditor in respect of any deposit or
securities account of any Borrower maintained with any Junior Creditor or any
of their respective Affiliates, or (B) any action to institute any judicial or
nonjudicial or similar action or proceeding in respect of the Junior Creditor
Liens or to seek relief from the automatic stay pursuant to Section 362 of the
Bankruptcy Code with respect to such Collateral, and Junior Creditors shall have
no right whatsoever to direct Senior Agent to exercise or seek to exercise or
refrain from exercising any rights or remedies in respect of such Collateral;

 

(ii)
Subject to the terms of the Senior Loan Documents, Senior Agent shall have the
exclusive right to exercise rights and remedies in respect of (A) the Senior
Lender First Priority Collateral (including without limitation with respect to
all deposit or securities accounts of Borrowers), (B) on and after the date on
which all Junior Obligations have been paid in full, the Junior Creditor First
Priority Collateral, in each case under the Senior Loan Documents, applicable
law or otherwise. In exercising such rights and remedies with respect to such
Collateral, Senior Agent may enforce the provisions of the Senior Loan
Documents and exercise remedies thereunder and under applicable law (or refrain
from enforcing any such rights and exercising any such remedies), all in such
order and in such manner as it may determine in the exercise of its discretion.
Such exercise and enforcement shall include, without limitation, the rights of
Senior Agent to sell or otherwise dispose of such Collateral (such sale to be
free and clear of the Junior Creditor Liens and Junior Agent agrees to execute
any and all Lien releases requested by Senior Agent in connection therewith, so
long as the proceeds from such disposal of Collateral are applied to repay the
Senior Loan Obligations), to incur reasonable expenses in connection with such
exercise and enforcement, and to exercise all the rights and remedies of a
secured lender under the Uniform Commercial Code of any applicable jurisdiction
and of a secured creditor under bankruptcy or similar laws of any applicable
jurisdiction;

 

(iii)
Except as otherwise provided in subsection (c), until payment in full of
the Junior Obligations, no member of the Senior Lender Group shall exercise any
rights or remedies in respect of the Junior Creditor First Priority Collateral
or the Senior Liens with

 

10

 

respect
thereto, whether under the Senior Loan Documents, applicable law or otherwise,
including without limitation, any action to institute any judicial or
nonjudicial or similar action or proceeding in respect of the Senior Liens or
to seek relief from the automatic stay pursuant to Section 362 of the
Bankruptcy Code with respect to such Collateral, and no member of the Senior
Lender Group shall have any right whatsoever to direct Junior Agent to exercise
or seek to exercise or refrain from exercising any rights or remedies in
respect of such Collateral;

 

(iv)
Subject to the terms of the Junior Credit Documents, Junior Creditors shall
have the exclusive right to exercise rights and remedies in respect of the
Junior Creditor First Priority Collateral, and, on and after the date on which
all Senior Loan Obligations have been paid in full, Junior Agent shall have the
exclusive right to exercise rights and remedies in respect of the Senior Lender
First Priority Collateral, in each case under the Junior Credit Documents,
applicable law or otherwise. In exercising such rights and remedies with
respect to such Collateral, Junior Agent and/or Junior Creditors, as
applicable, may enforce the provisions of the Junior Credit Documents and
exercise remedies thereunder and under applicable law (or refrain from
enforcing any such rights and exercising any such remedies), all in such order
and in such manner as it may determine in the exercise of its discretion. Such
exercise and enforcement shall include, without limitation, the rights of
Junior Agent and/or Junior Creditors, as applicable, to sell or otherwise
dispose of such Collateral (such sale to be free and clear of the Senior Liens
and Senior Agent agrees to execute any and all Lien releases requested by Junior
Agent and/or Junior Creditors, as applicable, in connection therewith, so long
as the proceeds from such disposal of Collateral are applied in accordance with
any applicable terms of this Agreement), to incur expenses in connection with
such exercise and enforcement, and to exercise all the rights and remedies of a
secured lender under the Uniform Commercial Code of any applicable jurisdiction
and of a secured creditor under bankruptcy or similar laws of any applicable
jurisdiction;

 

(v)
Notwithstanding anything to the contrary contained in the Junior Credit
Documents, prior to the date on which the Senior Loan Obligations have been
paid in full, subject to Senior Agent’s compliance with Section 11 with respect
to any sale of the assets or Stock of Remedy (as defined in Section 11), if and
to the extent that Senior Agent shall have permitted or approved the sale,
transfer, or other disposition of any Senior Lender First Priority Collateral,
then Junior Creditors shall in each case be bound by such permission or
approval and shall execute any and all Lien releases (and, in the case of the
sale of a Subsidiary of Parent, a release of such Subsidiary from all of its
obligations under the Junior Guaranties and other Junior Credit Documents)
reasonably requested by Senior Agent in connection therewith, with the Junior
Creditors’ liens to attach thereto to the extent that said proceeds are not
used to repay the Senior Loan Obligations;

 

(vi)
Notwithstanding anything to the contrary contained in the Senior Loan Documents,
prior to the date on which the Junior Obligations have been paid in full, if
and to the extent that the affected Junior Creditors shall have permitted or
approved the sale, transfer, or other disposition of any Junior Creditor First
Priority Collateral before the date on which the Junior Obligations have been
paid in full, then the Senior Lender Group shall in each case be bound by such
permission or approval and shall execute any and all Lien releases reasonably
requested by the affected Junior Creditors in connection therewith;

 

11

 

(vii)
Junior Creditors shall not (A) contest, protest, object to, interfere with,
seek to enjoin or invoke or utilize any provision of any document, law or
equitable principle, or otherwise take any other action whatsoever which might
prevent, delay or impede, any exercise of rights or remedies by Senior Agent
under any Senior Loan Document or applicable law in respect of the Senior
Lender First Priority Collateral or the Senior Liens, including without
limitation, any action of foreclosure, provided that such exercise of rights
and remedies by Senior Agent is undertaken in accordance with and subject to
the express provisions of this Agreement, or (B) directly or indirectly contest
the validity or enforceability of the Senior Loan Obligations or the validity,
perfection, priority or enforceability of the Senior Liens (it being understood
and agreed that the terms of this Agreement shall govern even if part or all of
the Senior Loan Obligations or the Senior Liens are avoided, disallowed, set
aside, or otherwise invalidated in any judicial proceeding or otherwise);

 

(viii)
No member of the Senior Lender Group shall (A) contest, protest, object to,
interfere with, seek to enjoin or invoke or utilize any provision of any
document, law or equitable principle, or otherwise take any other action
whatsoever which might prevent, delay or impede, any exercise of rights or
remedies by Junior Agent and/or Junior Creditors, as applicable, under any
Junior Credit Document or applicable law in respect of the Junior Creditor
First Priority Collateral or the Junior Creditor Liens, including without
limitation, any action of foreclosure, provided that such exercise of rights
and remedies by Junior Agent and/or Junior Creditors, as applicable, is
undertaken in accordance with and subject to the express provisions of this
Agreement, or (B) contest the validity or enforceability of the Junior
Obligations or the validity, perfection, priority or enforceability of the
Junior Creditor Liens (it being understood and agreed that the terms of this
Agreement shall govern even if part or all of the Junior Obligations or the
Junior Creditor Liens are avoided, disallowed, set aside, or otherwise invalidated
in any judicial proceeding or otherwise);

 

(ix)
Unless and until the Senior Loan Obligations have been paid in full, any money,
property, securities, or other direct or indirect distributions of any nature
whatsoever received by any Junior Creditor resulting from the sale,
disposition, or other realization upon or other exercise of remedies in respect
of all or any part of the Collateral (other than (w) the Junior Creditor First
Priority Collateral, (x) payments by any Obligor to Fleet in respect of the accounts
or rights to payment owing by an Obligor that were purchased by Fleet from EMC
Corporation or PeopleSoft, Inc., (y) payments by any Obligor or any subsidiary
of any Obligor to Fleet’s European affiliate in respect of accounts or other
rights to payment of such Obligor or such subsidiary that were purchased by
Fleet’s European affiliate, and (z) payments permitted to be made pursuant to
Section 2(f) and Section 4 hereof), in each case regardless of whether such
money, property, securities, or other distributions are received directly or
indirectly during the pendency of or in connection with any Insolvency
Proceeding or otherwise, shall be delivered to Senior Agent in the form
received, duly indorsed, if required, and applied by Senior Agent as provided
in the Senior Loan Documents. Until so delivered, such payment or distribution
to the extent received by any such Junior Creditor shall be held in trust by
such party as the property of Senior Agent, segregated from other funds and
property held by such party; and

 

12

 

(x)
Unless and until the Junior Obligations have been paid in full, any money,
property, securities, or other direct or indirect distributions of any nature
whatsoever received by any member of the Senior Lender Group (A) resulting from
the sale, disposition, or other realization upon or other exercise of remedies
in respect of all or any part of the Junior Creditor First Priority Collateral,
or (B) resulting from the sale, disposition, or other realization upon or other
exercise of remedies in respect of all or any part of the Senior Lender First
Priority Collateral which remains after the payment in full of the Senior Loan
Obligations, in each case regardless of whether such money, property,
securities, or other distributions are received directly or indirectly during
the pendency of or in connection with any Insolvency Proceeding or otherwise,
shall be delivered to Junior Agent in the form received, duly indorsed, if
required, and applied by Junior Agent as provided in the Junior Credit
Documents. Until so delivered, such payment or distribution to the extent
received by a member of the Senior Lender Group shall be held in trust by such
party as the property of Junior Agent, segregated from other funds and property
held by such party.

 

(b)
The limitations set forth in clause (a)(i) above notwithstanding, Junior Agent
shall be entitled and subject to the provisions contained herein with respect
to the turn-over of any proceeds or any other amounts realized, to exercise the
rights and remedies available to Junior Agent under the Junior Credit Documents
in respect of the Senior Lender First Priority Collateral after the 180th day following the
delivery by Junior Agent of notice to Senior Agent of the occurrence and
continuance of a Junior Creditor New Event of Default and an intention to so
exercise such rights and remedies in respect of such Senior Lender First
Priority Collateral so long as prior to the expiration of such 180 day period
(x) the subject Junior Creditor New Event of Default has not been cured or
waived, and (y) Senior Agent has not theretofore initiated the exercise of its
rights and remedies provided under the Senior Loan Documents in respect of such
Senior Lender First Priority Collateral; provided, that if Senior Agent
exercises rights and remedies in respect of the Senior Lender First Priority
Collateral after Junior Agent has commenced the exercise of its rights and
remedies in accordance with the foregoing, Junior Agent shall, upon the
direction of Senior Agent, promptly cease any such exercise and shall take such
steps as shall be reasonably requested by Senior Agent to substitute Senior
Agent as a party to any pending action.

 

(c)
The limitations set forth in clause (a)(iii) above notwithstanding, the Senior
Lender Group shall be entitled (with respect to that portion of the Junior
Creditor First Priority Collateral as to which a Junior Creditor claims
ownership under any of the Receivables Purchase Agreements, if a court makes a
final non-appealable determination that the transactions which form the subject
of the Receivables Purchase Agreements with respect to such portion of the
Junior Creditor First Priority Collateral do not constitute a “true sale”, and
subject to any applicable provisions of Section 5 hereof) and subject to the
provisions contained herein with respect to the turn-over of any proceeds or
any other amounts realized, to exercise any rights and remedies available to
the Senior Lender Group under the Senior Loan Documents in respect of all or
any portion of the Junior Creditor First Priority Collateral after the 180th day following the
delivery by Senior Agent of notice to Junior Agent of the occurrence and
continuance of an Event of Default and an intention to so exercise such rights
and remedies in respect of such Junior Creditor First Priority Collateral so
long as prior to the expiration of such 180 day period (y) the subject Event of
Default has not been cured or waived, and (z) with respect to any portion

 

13

 

of
the Junior Creditor First Priority Collateral, Junior Agent (or with respect to
that portion of the Junior Creditor First Priority Collateral as to which a
Junior Creditor claims ownership, a Junior Creditor) has not theretofore
initiated the exercise of its rights and remedies provided under the Junior
Credit Documents in respect of any such portion of the Junior Creditor First
Priority Collateral; provided, that if Junior Agent (or with respect to that
portion of the Junior Creditor First Priority Collateral as to which a Junior
Creditor claims ownership, a Junior Creditor) exercises rights and remedies
after the Senior Lender Group has commenced the exercise of its rights and
remedies in accordance with the foregoing, the Senior lender Group shall, upon
the direction of Junior Agent (or such Junior Creditor), promptly cease any
such exercise in respect of the subject portion of the Junior Creditor First
Priority Collateral and shall take such steps as shall be reasonably requested
by Junior Agent (or such Junior Creditor) to substitute Junior Agent (or such
Junior Creditor) as a party to any such pending action.

 

(d)
Junior Creditors hereby waive any right to require Senior Agent to marshal any
security or collateral or otherwise to compel Senior Agent to seek recourse
against or satisfaction of the indebtedness owing to Senior Agent from one
source before seeking recourse or satisfaction from another source. To the
extent that it is entitled to receive and apply the same pursuant to the
provisions of this Agreement, Senior Agent shall be authorized to apply any and
all payments, collections, and proceeds of (i) Senior Lender First Priority
Collateral, and (ii) on or after the date on which all Junior Obligations have
been paid in full, Junior Creditor First Priority Collateral, received by it to
such portion of the Senior Loan Obligations as Senior Agent lawfully may elect
consistent with the provisions of the Senior Loan Documents.

 

(e)
Each member of the Senior Lender Group hereby waives any right to require
Junior Agent and/or Junior Creditors, as applicable, to marshal any security or
collateral or otherwise to compel Junior Agent and/or Junior Creditors, as
applicable, to seek recourse against or satisfaction of the indebtedness owing
to Junior Creditors from one source before seeking recourse or satisfaction
from another source. To the extent that it is entitled to receive and apply the
same pursuant to the provisions of this Agreement, Junior Agent and/or Junior
Creditors, as applicable, shall be authorized to apply any and all payments,
collections, and proceeds of (i) Junior Creditor First Priority Collateral, and
(ii) on or after the date on which all Senior Loan Obligations have been paid
in full, Senior Lender First Priority Collateral, received by it to such
portion of the Junior Obligations as Junior Agent and/or Junior Creditors, as
applicable, lawfully may elect consistent with the provisions of the Junior
Credit Documents.

 

(f)
The Senior Lender First Priority Collateral shall be deemed to include
insurance proceeds and, therefore, the priorities set forth herein shall govern
the ultimate disposition of casualty insurance proceeds related to some or all
of the Senior Lender First Priority Collateral. Senior Agent shall have the
sole and exclusive right, as against Junior Agent, to adjust settlement of
insurance claims in the event of any covered loss, theft, or destruction of the
Senior Lender First Priority Collateral. All proceeds of such insurance shall
inure to the benefit of Senior Agent, and Junior Agent shall cooperate (if
necessary) in a reasonable manner in effecting the payment of insurance
proceeds to Senior Agent. Senior Agent shall have the right (as between the
parties hereto) to determine whether such proceeds will be applied to the
Senior Loan Obligations or used to rebuild, replace, or repair such affected
Senior Lender First Priority Collateral. If such proceeds are applied to the
Senior Loan Obligations, any proceeds

 

14

 

remaining
after payment of the Senior Loan Obligations and all expenses of collection,
including reasonable costs, fees, and expenses, shall be remitted promptly to
(i) the Junior Agent, and (ii) after payment of the Junior Obligations and all
expenses of collection, including reasonable costs, fees, and expenses, to
Borrowers.

 

4.                                    Rights to Payment
of Junior Creditors; Reduction of Commitments of Senior Lenders.

 

Except
as otherwise provided in Section 3(a)(ix) hereof, no Obligor shall be entitled
to make, and no Junior Creditor shall be entitled to demand, receive, accept,
or retain any payments of any kind or nature in respect of the Junior
Obligations (other than from the proceeds of the Junior Creditor First Priority
Collateral), provided however, that: (a) Junior Creditors may demand,
receive, accept and retain the payments set forth in Section V.E.1.(a),
and the reimbursement for legal fees contemplated by Section V.A., in
the Forbearance Agreement in effect on the date hereof; (b) Junior Creditors
shall be entitled to demand, receive, accept and retain regularly scheduled
installments of principal on the Past Due Purchase Obligations (as defined in
the Forbearance Agreement) to the extent provided for in Section V.E.l.(b)
of the Forbearance Agreement in effect on the date hereof; (c) Junior Creditors
shall be entitled to demand, receive, accept and retain monthly payments of
interest accruing on the amount of the Past Due Purchase Obligations at the
rate of interest specified in the Forbearance Agreement in effect as of the
date hereof; (d) Junior Creditors shall be entitled to demand, receive, accept
and retain the mandatory prepayments on the Past Due Purchase Obligations to
the extent provided for in Section V.E.l.(c) the Forbearance Agreement
in effect on the date hereof, and (e) Junior Creditors shall be entitled to
retain any payments made prior to the date hereof (subject to the limitations
in the Forbearance Agreement, as in effect on the date hereof, on payments in
respect of the IBM/SOW Account received from and after August 1, 2002).

 

5.            Obligations
Unconditional; Waivers, Covenants and Agreements of Junior Creditors and of
Senior Lender Group.

 

(a)
All rights, interests agreements and obligations of the Senior Lender Group
hereunder and all rights, interests, agreements and obligations of Junior
Creditors hereunder shall remain in full force and effect irrespective of:

 

(i)
any lack of validity or enforceability of the Senior Loan Obligations, the Senior
Liens, any Senior Loan Document, or any other document or agreement in respect
of the Senior Loan Obligations or the Senior Liens, including without
limitation, any exchange, release, or non-perfection of the Senior Liens;

 

(ii)
any change in the time, manner, or place of payment, or in any other term, of
all or any of the Senior Loan Obligations (including without limitation, any
rescission, in whole or in part, by the Senior Lender Group of any demand for
payment of any Senior Loan Obligations), or any participation, sale,
assignment, or other transfer of any of the Senior Loan Obligations, or any
amendment, waiver, deferral, extension, renewal, refinancing, replacement,
refunding, acceleration, compromise, release, alteration, supplementation, termination,
or other modification, in whole or in part, including (subject to the
provisions of Section 2(f) hereof) any increase in the amount thereof, whether
by course of conduct or otherwise, of the Senior Loan

 

15

 

Obligations
or of the terms of the Senior Loan Agreement, any other Senior Loan Document or
any other document or agreement relating to the Senior Loan Obligations or the
Senior Liens; or

 

(iii)
any other circumstances which otherwise might constitute a defense available
to, or a discharge of, any Borrower in respect of the Senior Loan Obligations
or the Senior Liens, including without limitation, the avoidance or
disallowance in any bankruptcy, insolvency or other like proceeding or
otherwise, of the Senior Loan Obligations or the Senior Liens.

 

(b)
All rights, interests, agreements and obligations of Junior Creditors hereunder
and all rights, interests, agreements and obligations of the Senior Lender
Group hereunder shall remain in full force and effect irrespective of:

 

(i)
any lack of validity or enforceability of the Junior Obligations, the Junior
Creditor Liens, any Junior Credit Document, or any other document or agreement
in respect of the Junior Obligations or the Junior Creditor Liens, including
without limitation, any exchange, release, or non-perfection of the Junior
Creditor Liens;

 

(ii)
other than any change or amendment described in Section 10 of this
Agreement, any change in the manner, or place of payment, or in any other term,
of all or any of the Junior Obligations (including without limitation, any
rescission, in whole or in part, by any Junior Creditor of any demand for
payment of any Junior Obligations), or any participation, sale, assignment, or
other transfer of any of the Junior Obligations, or any amendment, waiver,
deferral, extension, renewal, refinancing, replacement, refunding,
acceleration, compromise, release, alteration, supplementation, termination, or
other modification, in whole or in part (subject to the limitations in the
definition of Junior Obligations), whether by course of conduct or otherwise,
of the Junior Obligations or of the terms of the Junior Credit Document or any
other document or agreement relating to the Junior Obligations or the Junior
Creditor Liens; or

 

(iii)
any other circumstances which otherwise might constitute a defense available
to, or a discharge of, any Borrower in respect of the Junior Obligations or the
Junior Creditor Liens, including without limitation, the avoidance or
disallowance in any bankruptcy, insolvency or other like proceeding or
otherwise, of the Junior Obligations or the Junior Creditor Liens.

 

(c)
Junior Creditors hereby waive (i) any defense that they may have to the
enforceability of this Agreement based on the reliance (or alleged lack
thereof) by the Senior Lender Group upon the subordination and other
intercreditor arrangements set forth in this Agreement, and (ii) any notice of
the creation, renewal, extension, or accrual of any of the Senior Loan
Obligations and notice of, or proof of reliance by, the Senior Lender Group
upon this Agreement. The Senior Loan Obligations shall be deemed conclusively
to have been created, contracted, or incurred in reliance on this Agreement,
and all dealings between Parent, its Subsidiaries, Junior Creditors, and the
Senior Lender Group shall be deemed to have been consummated in reliance upon
this Agreement.

 

(d)
Each member of the Senior Lender Group hereby waives (i) any defense that it
may have to the enforceability of this Agreement based on the reliance (or
alleged lack thereof)

 

16

 

by
Junior Creditors upon the subordination and other intercreditor arrangements
set forth in this Agreement, and (ii) notice of, or proof of reliance by, Junior
Creditors upon this Agreement. All dealings between Junior Creditors and the
Senior Lender Group shall be deemed to have been consummated in reliance upon
this Agreement.

 

(e)
Junior Creditors hereby waive any claim against any member of the Senior Lender
Group with respect to, or arising out of, any action or inaction or any error
of judgment, negligence, or mistake, or oversight whatsoever on the part of any
member of the Senior Lender Group or any of their respective directors,
officers, employees, or agents (other claims arising as a result of willful
conduct or gross negligence on the part of any such Person) (i) with respect to
any exercise of (or any delay in exercising, failure to exercise or decision to
refrain from exercising) any rights or remedies in respect of the Senior Loan
Obligations and the Senior Liens under the Senior Loan Documents or applicable
law, or (ii) in connection with any transaction relating to the Collateral. No
member of the Senior Lender Group nor any of their respective directors,
officers, employees, or agents shall be liable for failure to demand, collect,
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of Parent, its Subsidiaries or any other person or entity or to take
any other action whatsoever with regard to the Collateral or any part thereof,
except as specifically provided in this Agreement.

 

(f)
Each member of the Senior Lender Group hereby waives any claim against Junior
Agent and Junior Creditors with respect to, or arising out of, any action or
inaction or any error of judgment, negligence, or mistake, or oversight
whatsoever on the part of Junior Agent or Junior Creditors or any of their
respective directors, officers, employees, or agents (i) with respect to any
exercise of (or any delay in exercising, failure to exercise or decision to
refrain from exercising) any rights or remedies in respect of the Junior
Obligations and the Junior Creditor Liens under the Junior Credit Documents or
applicable law, or (ii) in connection with any transaction relating to the
Collateral. Neither Junior Agent nor Junior Creditors nor any of their
respective directors, officers, employees, or agents shall be liable for
failure to demand, collect, or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of Parent, its Subsidiaries or any other
person or entity or to take any other action whatsoever with regard to the
Collateral or any part thereof, except as specifically provided in this
Agreement.

 

(g)
Senior Agent represents and warrants to the Junior Creditors that it has the
authority to enter into and perform this Agreement on behalf of the Senior
Lenders. No member of the Senior Lender Group has made, and does not hereby or
otherwise make to Junior Creditors, any representations or warranties, express
or implied (other than Senior Agent’s authority to enter into this Agreement),
nor does the Senior Lender Group assume any liability to Junior Creditors with
respect to the financial or other condition of Parent, its Subsidiaries, the
title of any Borrower to, the value of, or any other matter in respect of any Collateral
or the enforceability, validity, priority, value or collectability of the
Senior Loan Obligations, any Senior Loan Document, the Senior Liens, the Junior
Obligations, the Junior Credit Documents, or the Junior Creditor Liens.

 

17

 

(h)
Junior Agent represents and warrants to the Senior Lender Group that it has the
authority to enter into and perform this Agreement on behalf of the Junior
Creditors. Neither Junior Agent nor Junior Creditors have made, nor does Junior
Agent or any Junior Creditor hereby or otherwise make to any member of the
Senior Lender Group any representations or warranties, express or implied
(other than the authority of Junior Agent to enter into this Agreement), nor
does Junior Agent or any Junior Creditor assume any liability to the Senior
Lender Group with respect to the financial or other condition of Parent, its
Subsidiaries, the title of any Borrower to, the value of, or any other matter
in respect of any Collateral or the enforceability, validity, priority, value
or collectability of the Senior Loan Obligations, any Senior Loan Document, the
Senior Liens, the Junior Obligations, the Junior Credit Documents, or the
Junior Creditor Liens.

 

(i)
If Senior Agent honors a request by Borrowers for an Advance or other extension
of credit pursuant to any of the Senior Loan Documents, whether Senior Agent
has knowledge that the honoring of any such request would constitute a Junior
Creditor New Event of Default under the terms of any Junior Credit Document or
an act, condition, or event that, with the giving of notice or the passage of
time, or both, would constitute a Junior Creditor New Event of Default under
any Junior Credit Document, or if Senior Agent otherwise should exercise any of
its contractual rights or remedies under the Senior Loan Documents (subject to
the express terms and conditions hereof), no member of the Senior Lender Group
shall have any liability whatsoever to any Junior Creditor as a result of such
Junior Creditor New Event of Default or as the result of such other exercise
(so long as such other exercise does not breach the express terms and
provisions hereof) and, without limiting the generality of the foregoing, each
Junior Creditor agrees that no member of the Senior Lender Group shall have any
liability for tortious interference with contractual relations or for any
inducement by any member of the Senior Lender Group for any Borrower to breach
the Junior Credit Documents. Nothing in this Section 5(i) shall limit or
waive any right any member of the Senior Lender Group may have to enforce any
of the provisions of the Senior Loan Documents against any Borrower so long as
such enforcement does not breach any express provision of any other section of
this Agreement.

 

(j)
If Junior Agent or any Junior Creditor should exercise any of its contractual
rights or remedies under the Junior Credit Documents (subject to the express
terms and conditions hereof), neither Junior Agent nor any Junior Creditor
shall have any liability whatsoever to any member of the Senior Lender Group as
a result of such event of default entitling Junior Agent or such Junior
Creditor to so exercise its rights and remedies or as the result of such other
exercise (so long as such other exercise does not breach the express terms and
provisions hereof) and, without limiting the generality of the foregoing, each
member of the Senior Lender Group agrees that neither Junior Agent nor any
Junior Creditor shall have any liability for tortious interference with
contractual relations or for any inducement by Junior Agent or any Junior
Creditor for any Obligor to breach the Senior Loan Documents. Nothing in this Section
5(j) shall limit or waive any right Junior Agent or any Junior Creditor may
have to enforce any of the provisions of the Junior Credit Documents against
any Obligor so long as such enforcement does not breach any express provision
of any other section of this Agreement.

 

18

 

 

6.                                       Provisions
Applicable After Bankruptcy.

 

The
intercreditor arrangements set forth in this Agreement, including without
limitation, the subordination of the Junior Creditor Liens to the Senior Liens
(to the extent set forth herein), and the subordination of the Senior Liens to the
Junior Creditor Liens (to the extent set forth herein), shall continue in full
force and effect notwithstanding the occurrence of any case under the
Bankruptcy Code, and in furtherance thereof:

 

(a)
the Senior Liens shall be reinstated to the extent any member of the Senior
Lender Group is required to turn over or otherwise pay to the bankruptcy estate
of any Borrower any amount of the Senior Loan Obligations (and as a result
thereof any portion of the Senior Liens that is released), and the Senior Liens
so reinstated shall have the same benefits hereunder as if the Senior Loan
Obligations had never been paid;

 

(b)
the Junior Creditor Liens shall be reinstated to the extent Junior Agent or any
Junior Creditor is required to turn over or otherwise pay to the bankruptcy
estate of any Borrower any amount of the Junior Obligations (and as a result
thereof any portion of the Junior Creditor Liens that is released), and the
Junior Creditor Liens so reinstated shall have the same benefits hereunder as
if the Junior Obligations had never been paid;

 

(c)
to the extent that Junior Agent has or acquires any rights under Section 363 or
Section 364 of the Bankruptcy Code with respect to the Junior Creditor Liens,
(i) Junior Agent will only assert such rights with respect to the Senior Lender
First Priority Collateral in a manner consistent with the provisions hereof,
including without limitation, in a manner consistent with the subordination,
pursuant to this Agreement, of the Junior Creditor Liens to the Senior Liens (to
the extent set forth herein), and (ii) the benefit of the existence,
acquisition, or assertion of any such rights with respect to the Senior Lender
First Priority Collateral shall be subject to the subordination and other terms
of this Agreement;

 

(d)
to the extent that Senior Agent has or acquires any rights under Section 363 or
Section 364 of the Bankruptcy Code with respect to the Senior Liens, (i) Senior
Agent will only assert such rights with respect to the Junior Lender First
Priority Collateral in a manner consistent with the provisions hereof,
including without limitation, in a manner consistent with the subordination,
pursuant to this Agreement, of the Senior Liens to the Junior Creditor Liens
(to the extent set forth herein), and (ii) the benefit of the existence,
acquisition, or assertion of any such rights with respect to the Junior Lender
First Priority Collateral shall be subject to the subordination and other terms
of this Agreement; and

 

(e)
in connection with any financing made by the Senior Agent or Senior Lender
Group or use of cash collateral (other than cash collateral generated by Junior
Creditor First Priority Collateral) or other Collateral of Parent or its
Subsidiaries specifically permitted by the Senior Agent subsequent to the commencement
of a case under the Bankruptcy Code (collectively, “DIP Financing”),
Junior Creditors shall be deemed to have consented to any DIP Financing and
shall have no further right to adequate protection in respect of the Junior
Obligations in connection therewith, provided that (i) any such DIP Financing
consisting of financing shall fall within the definition of Senior Loan
Obligations and shall be subject to the terms and conditions hereof (including,
without limitation, Section 2(f) hereof), (ii) Junior Agent

 

19

 

is
granted replacement Liens in respect of the Junior Obligations on any Senior
Lender First Priority Collateral that are subordinate and junior in all
respects (on the same terms as are provided herein) to the Liens of the Senior
Lender Group on such Collateral granted in connection with such DIP Financing,
(iii) Junior Agent or the applicable Junior Creditor is granted replacement
Liens in respect of the Junior Obligations on Junior Creditor First Priority
Collateral that have priority over (on the same terms as are provided herein)
the Liens of the Senior Lender Group on such Collateral granted in connection
with such DIP Financing, and (iv) Junior Agent and each Junior Creditor is
granted status as a holder of an administrative claim of the same type as
provided to the Senior Lender Group, but subordinate and junior to any
administrative claim granted to the Senior Lender Group to the extent, and only
to the extent, that the adequate protection set forth above is insufficient to
adequately protect Junior Creditors against diminution in the value of their
interests in the Collateral as a result of such DIP Financing. For the
avoidance of doubt, each Junior Creditor shall have, and hereby expressly
reserves, any right it may have to adequate protection in respect of any
obligations, liabilities or indebtedness owing to it by any Obligor that are
not Junior Obligations.

 

7.            Further
Assurances. Parent, its Subsidiaries and Junior Creditors, at Borrowers’
expense and at any time from time to time, upon the reasonable request of
Senior Agent, will promptly and duly execute and deliver such further
instruments and documents (including amendments to financing statements filed
against any Borrower stating that the rights of Junior Creditors are subject to
the terms hereof and together with such assignments or endorsements as Senior
Agent may reasonably deem necessary) and take such further actions as Senior
Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted.
Parent, its Subsidiaries, Senior Lenders and Senior Agent, at Borrowers’
expense and at any time from time to time, upon the reasonable request of Junior
Agent or any Junior Creditor, will promptly and duly execute and deliver such
further instruments and documents (including amendments to financing statements
filed against any Borrower stating that the rights of Senior Agent with respect
to the Junior Creditor First Priority Collateral are subject to the terms
hereof and together with such assignments or endorsements as Junior Agent or
any Junior Creditor may reasonably deem necessary) and take such further
actions as Junior Agent or any Junior Creditor may reasonably request for the
purposes of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted.

 

8.            Provisions
Define Relative Rights. This Agreement is intended solely for the purpose
of defining the relative rights of the Senior Lender Group and Junior Creditors
in respect of the Collateral and no other Person or entity shall have any
right, benefit or other interest under this Agreement. Nothing contained in
this Agreement is intended to affect or limit, in any way whatsoever, the
security interests, Liens, and other rights that the Senior Lender Group and
Junior Creditors have under the Senior Loan Documents and the Junior Credit
Documents, respectively, insofar as the rights of Parent, its Subsidiaries, or
any other Person or entity are involved. To the extent that any Junior Creditor
or any affiliate of any Junior Creditor has rights with respect to any right to
payment due from any Obligor that such Junior Creditor or such affiliate
acquired from a third party (such as, without limitation, from PeopleSoft, Inc.
or from EMC Corporation), which rights to payment are not related to the Junior
Obligations, the rights of such Junior Creditor or such affiliate with respect
to such rights to payment owed by Obligors are not covered by or limited by
this Agreement; provided,  however, that such rights to payment

 

20

 

shall
not be permitted to be secured by Liens on any portion of the Collateral other
than the property and rights that are the subject of the contract to which any
such rights to payment relate.

 

9.            Termination of Agreement.
Upon payment in full of the Senior Loan Obligations, this Agreement (other than
those provisions that expressly survive the termination hereof or, that by
their express terms, are to be performed after payment in full of the Senior
Loan Obligations) shall terminate, and the exercise of rights and remedies by
the Junior Agent in respect of the Collateral shall thereafter be governed by
the Junior Credit Documents. If Senior Agent receives as part of any
enforcement or collection proceedings any amounts or property in excess of that
required to pay the Senior Loan Obligations in full, then Senior Agent shall
pay to Junior Agent as promptly as is commercially reasonable all such amounts,
in the same form as received, with any necessary non-recourse endorsement.

 

10.           No Amendments to Junior Credit
Documents. No Junior Creditor nor any Borrower shall agree to amend the
Forbearance Agreement, the Junior Guaranties, any other agreement executed in
connection therewith, or any provision of any other Junior Credit Document
which is addressed in the Forbearance Agreement, without the prior written
consent of Senior Agent, the effect of which is to (a) increase the maximum
principal amount of the Junior Obligations, or the rate of interest on or any
fee with respect to any of the Junior Obligations (it being understood that the
imposition of a default rate of interest contained in the Junior Credit
Documents as of the date hereof shall not be restricted by this Section 10),
(b) accelerate the dates on which payments (including any scheduled mandatory
prepayments) of principal or interest on the Junior Obligations are due, or
require any additional payments or prepayments of principal or interest on the
Junior Obligations which are not required under the Junior Credit Documents as
in effect as of the date of this Agreement, (c) change or add any event of
default or any covenant under the Junior Credit Documents that has the effect
of changing the obligations of the Obligors, (d) change any redemption,
scheduled payment or prepayment provisions under the Junior Credit Documents
that has the effect of changing the obligations of the Obligors, (e) alter the
subordination provisions with respect to the Liens in the Senior Lender First
Priority Collateral securing the Junior Obligations, (f) accelerate the
maturity date of any of the Junior Obligations or otherwise to alter the
repayment terms of the Junior Obligations, (g) change or amend any financial or
other covenant to make it more restrictive on Parent or any Subsidiary than the
covenants contained in the Receivables Purchase Agreements as in effect as of
the date of this Agreement, or (h) change or amend any other term of the Junior
Credit Documents if such change or amendment would further restrict the ability
of any Borrower to incur, or make payment upon, the Senior Loan Obligations, or
would require or permit the Borrowers to make larger or more frequent payments
to Junior Creditors.

 

11.           Right of Junior Agent to Purchase
the Interests of Senior Lenders Upon a Proposed Disposition of Remedy.

 

(a)
Provided that, at such time, an Insolvency Proceeding shall have not been
instituted and be continuing with respect to Borrower or Peregrine Remedy, Inc.
(“Remedy”), Senior Lenders (for themselves and all other Lenders that are
successors to or assignees of the either of them) hereby agree that, if Senior
Lenders receive a request from Borrower or Remedy for Senior Lenders to consent
to any sale or other disposition of all, or any portion, of the issued and
outstanding stock of Remedy or all, or any portion, of less the assets of
Remedy pursuant to

 

21

 

a
Qualified Offer then, unless Senior Lenders intend to refuse such request, and
notwithstanding anything in Section 3 (a) (v) hereof to the contrary,
Senior Agent on behalf of the Senior Lenders, shall give Junior Agent written
notice of any such request (together with a good faith calculation of the
purchase price to be paid by Junior Agent should it elect to exercise its
rights hereunder), not less than 2 Business Days prior to consenting to such
request, Senior Lenders will not give their consent to such sale or other
disposition, if Senior Agent receives, on or before the second Business Day
following the date such written notice is given, a written notice from Junior
Agent (the “Committed Buy-out Notice”) pursuant to which the Junior Agent
irrevocably commits to acquire (either for its own account or on behalf of one
or more Junior Creditors) all (but not less than all) of all remaining right,
title, and interest of the Senior Lenders and all parties that are successors
to or assignees of the Senior Lenders, or either of them, in and to the Senior
Loan Obligations owing under the Senior Loan Documents, the Commitments, and
the Senior Loan Documents. In the event that the Junior Agent elects to acquire
all (but not less than all) of all remaining right, title, and interest of the
Senior Agent and all other Lenders that are successors to or assignees of the
Senior Agent in and to the Senior Loan Obligations owing under the Senior Loan
Documents, the Commitments, and the Senior Loan Documents, (i) Senior Agent shall
have the right, but not the obligation (other than as set forth in the
immediately following clause), to resign under Section 16.9 of the Loan
Agreement without providing the 45 day notice required therein, and (ii) and
the Junior Agent shall have the right, but not the obligation, to require
Senior Agent to resign under Section 16.9 of the Loan Agreement without
providing the 45 day notice required therein; in each case, effective
immediately upon the receipt by the Senior Lenders and Senior Agent of written
notice by the Junior Agent of the exercise by the Junior Agent of such right to
acquire such remaining right, title, and interest in and to the Senior Loan
Obligations owing under the Senior Loan Documents, the Commitments, and the
Senior Loan Documents (and, if applicable, such right to require Senior Agent
to resign).

 

(b)
Upon the receipt by the Senior Agent of the Committed Buy-out Notice, the
Junior Agent shall be irrevocably committed to acquire from Senior Lenders (and
all other Lenders that are successors or assignees of the Senior Lenders), and
the Senior Lenders (and all other Lenders that are successors or assignees of
the Senior Lenders) shall irrevocably be committed to sell, within 3 Business
Days following such receipt, all (but not less than all) of the remaining
right, title, and interest of the Senior Lenders (and all other Lenders that
are successors to or assignees of the Senior Lenders) in and to the Senior Loan
Obligations owing under the Senior Loan Documents, the Commitments, and the
Senior Loan Documents by paying to the Senior Lenders (and all other Lenders
that are successors to or assignees of the Senior Lenders) in cash a purchase
price equal to: (y) 100% of the then outstanding Senior Loan Obligations owing
under the Senior Loan Documents (including, without limitation, principal,
interest accrued and unpaid thereon, any unpaid fees and premiums to the extent
earned, accrued, or due and payable in accordance with the Senior Loan
Agreement (including, without limitation, annual facility fees, unused line
fees, float charges, anniversary fees, and collateral management fees),
expenses to the extent earned or due and payable in accordance with the Senior
Loan Agreement (including the reimbursement of extraordinary expenses, financial
examination expenses, and loan documentation review charges); plus an amount
equal to the Applicable Prepayment Premium (as if all Senior Loan Obligations
owing under the Senior Loan Documents were repaid in full and the Senior Loan
Agreement was terminated as of the date payment of the purchase price from
Junior Agent is due); whereupon the Senior Lenders (and all other Lenders that
are

 

22

 

successors
to or assignees of the Senior Lenders) shall assign to the Junior Agent,
without any representation, recourse, or warranty whatsoever, all of their
respective right, title, and interest with respect to the Senior Loan
Obligations owing under the Senior Loan Documents, the Commitments, and the
Senior Loan Documents, at no additional expense to the Junior Agent other than
the reimbursement by the Junior Agent of the reasonable out-of-pocket expenses
of the Senior Lenders (and all other Lenders that are successors to or
assignees of the Senior Lenders) and the reasonable fees and expenses of legal
counsel in connection with documenting and effecting such assignment and in
connection with the related delivery to the Junior Agent of the original Senior
Loan Documents in the possession of the Senior Lenders (and all other Lenders
that are successors to or assignees of the Senior Lenders), and, in connection
with such assignment, the Senior Lenders (and all other Lenders that are
successors to or assignees of the Senior Lenders) shall deliver to the Junior
Agent any original Senior Loan Documents and any Collateral in their possession
and execute such other documents, instruments, and agreements reasonably
necessary to effect such assignment, whereupon the Senior Lenders (and all
other Lenders that are successors to or assignees of the Senior Lenders) shall
be relieved from any further duties, obligations, or liabilities to the Junior
Creditors pursuant to this Agreement. The Obligors, jointly and severally,
shall reimburse the Junior Creditors for any expenses, costs and fees of the
Senior Lenders reimbursed by any Junior Creditor in connection with the
foregoing assignment and for the reasonable out-of-pocket expenses of the
Junior Creditors and Junior Agent and the reasonable fees and expenses of legal
counsel in connection with documenting and effecting such assignment, and, in
connection with such assignment.

 

12.                                 Powers Coupled
With An Interest.

 

(a)
All powers, authorizations, and agencies contained in this Agreement are
coupled with an interest and are irrevocable until either the Senior Loan
Obligations or the Junior Obligations are paid in full.

 

(b)
Senior Agent and Junior Agent are hereby authorized to demand specific
performance of the provisions of this Agreement when any party hereto has
failed to comply with any terms or provisions hereof, and each party waives any
defense based on the adequacy of a remedy at law that might be asserted as a
bar to such remedy of specific performance.

 

13.           Notices. (i) All notices,
requests and demands to or upon Senior Agent, Parent or its Subsidiaries to be
effective shall be made in accordance with the provisions of the Senior Loan
Agreement, and (ii) all notices, requests, and demands to or upon the Junior
Agent to be effective shall be made in accordance with the provisions of the
Forbearance Agreement.

 

14.           Counterparts. This Agreement
may be executed by one or more of the parties on any number of separate
counterparts (including by facsimile transmission), each of which shall
constitute an original, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

 

15.           Severability. Any provision of
this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition

 

23

 

or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

16.          Integration.
This Agreement constitutes the entire agreement of the parties hereto
concerning the subject matter hereof and may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the parties hereto.
The parties hereto agree that the terms of this Agreement shall govern and
control in the event, and to the extent, of any inconsistency between the terms
of this Agreement and either of the Senior Loan Documents or the Junior Credit
Documents.

 

17.           Interpretation. Neither this
Agreement nor any uncertainty or ambiguity herein shall be construed against
any party hereto, whether under any rule of construction or otherwise. On the
contrary, this Agreement has been reviewed by all parties and shall be
construed and interpreted according to the ordinary meaning of the words used
so as to accomplish fairly the purposes and intentions of all parties hereto.

 

18.           Amendments in Writing; Cumulative
Remedies.

 

(a)
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed and
delivered by each member of the Senior Lender Group and Junior Agent; it being
expressly understood and agreed that the execution and delivery of such
instrument by Borrowers shall not be required unless it creates additional
burdens or obligations on Borrowers.

 

(b)
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law. No failure to exercise, nor any delay in exercising, on the part of
Senior Agent, any right, power or privilege hereunder or under any Senior Loan
Document shall operate as a waiver thereof. No failure to exercise, nor any
delay in exercising, on the part of Junior Agent, any right, power or privilege
hereunder or under any Junior Credit Document shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

 

19.           Successors and Assigns.

 

(a)
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns to the same extent
as if any such successor or assign was an original party hereto.

 

(b)
In the event the Senior Loan Obligations are paid in full as a result of a
replacement, refinancing or refunding of the Senior Loan Obligations, the lenders
under any such new credit facility or facilities shall be entitled (without any
action by any party hereto) to succeed to the benefits of the subordination of
the Junior Creditor Liens to the extent afforded to the Senior Lender Group, as
set forth herein, so long as such lenders agree to be bound by the provisions
of this Agreement. In furtherance thereof, each Junior Creditor agrees to
execute and deliver an agreement containing terms substantially identical to
those contained herein in favor of any third person who causes the Senior Loan
Obligations to be paid in full, whether such

 

24

 

successor
financing, refinancing or replacement occurs by transfer, assignment,
“takeout”, or any other means or vehicle.

 

(c)
In the event the Junior Obligations are sold, assigned or otherwise disposed,
the assignees of such Junior Obligations shall be entitled (without any action
by any party hereto) to succeed to the benefits of this Agreement to the extent
afforded to the Junior Agent and the Junior Creditors, as set forth herein, so
long as such assignees agree to be bound by the provisions of this Agreement.
In furtherance thereof, each member of the Senior Lender Group agrees to
execute and deliver an agreement containing terms substantially identical to
those contained herein in favor of any third person who purchases the Junior
Obligations.

 

20.          Expenses.

 

(a)
Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the
Senior Lender Group, including the reasonable fees, charges, and disbursements
of counsel for the Senior Lender Group in connection with the preparation and
administration of this Agreement, and (ii) all reasonable out-of-pocket
expenses incurred by the Senior Lender Group, including the reasonable fees,
charges and disbursements of any counsel for the Senior Lender Group, in
connection with the enforcement or protection of any rights under this
Agreement.

 

(b)
Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by
Junior Agent and Junior Creditors, including the reasonable fees, charges, and
disbursements of counsel for Junior Agent and Junior Creditors in connection
with the preparation and administration of this Agreement, and (ii) all
reasonable out-of-pocket expenses incurred by Junior Agent and Junior
Creditors, including the reasonable fees, charges and disbursements of any
counsel for Junior Agent and Junior Creditors, in connection with the
enforcement or protection of any rights under this Agreement.

 

(c)
Without limiting the indemnity obligations of any Borrower under the Senior
Loan Documents or any indemnity obligations of any Borrower under the Junior
Credit Documents, Borrowers shall pay, indemnify, and hold each member of the
Senior Lender Group and each Junior Creditor (each such Person, an “Indemnitee”)
harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions (whether sounding in contract, tort, or on any
other ground), judgments, suits, costs, expenses, or disbursements of any kind
or nature whatsoever (including without limitation fees, reasonable fees and
disbursements of any counsel for any Indemnitee) arising out of, in connection
with, or as a result of (i) the execution and delivery of this Agreement by
Parent and Borrowers, or (ii) any action taken or omitted to be taken by Parent
or any Borrower with respect to this Agreement, provided that such indemnity
under clauses (i) and (ii) above shall not be available to the extent such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or wilful misconduct of such Indemnitee.

 

25

 

21.           Governing Law; Jurisdiction.  This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
Each party hereto agrees that all judicial proceedings brought against it
arising out of or relating to this Agreement or its obligations hereunder shall
be brought in any state or federal court of competent jurisdiction in the State
of New York, County of New York, and accepts generally and unconditionally the
nonexclusive jurisdiction and venue of such courts.

 

22.           NO
JURY TRIAL.  EACH PARTY
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE
OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER.

 

26

 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.

 

	
   

  	
  FOOTHILL CAPITAL CORPORATION,

  
	
   

  	
  a
  California corporation,

  as Senior Agent and as a Senior Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  [ILLEGIBLE]

  
	
   

  	
  Name:

  	
      [ILLEGIBLE]

  
	
   

  	
  Title:

  	
      VICE PRESIDENT

  
	
   

  	
   

  
	
   

  	
  ABLECO FINANCE LLC,

  
	
   

  	
  a
  Delaware limited liability company,

  as a Senior Lender and on behalf of its affiliate assigns

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/ [ILLEGIBLE]

  
	
   

  	
  Name:

  	
      [ILLEGIBLE]

  
	
   

  	
  Title:

  	
      Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FLEET BUSINESS CREDIT LLC,

  
	
   

  	
  a
  Delaware limited liability company,

  as Junior Agent and as a Junior Creditor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/ Mark A. Holmes

  
	
   

  	
  Name:

  	
      Mark A. Holmes

  
	
   

  	
  Title:

  	
      First V. P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SILICON VALLEY BANK,

  
	
   

  	
  a
  California state bank,

  as a Junior Creditor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/ C. D. Lemay

  
	
   

  	
  Name:

  	
      C. D. Lemay

  
	
   

  	
  Title:

  	
      Senior Vice
  President

  
				

 

S-1

 

	
   

  	
  WELLS FARGO HSBC TRADE BANK, N.A.

  
	
   

  	
  a
  National Banking Association,

  
	
   

  	
  as
  a Junior Creditor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/ [ILLEGIBLE]

  
	
   

  	
  Name:

  	
      [ILLEGIBLE]

  
	
   

  	
  Title:

  	
        VP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE SYSTEMS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/ Gary G.
  Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
        CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE REMEDY, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/ Gary G.
  Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
        PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARBINGER HOLDINGS, INC.,

  
	
   

  	
  a
  California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE E-MARKETS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

S-2

 

	
   

  	
  TELCO RESEARCH CORPORATION,

  
	
   

  	
  a
  Tennessee corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         CEO and PRESIDENT

  
	
   

  	
   

  
	
   

  	
  PEREGRINE CONNECTIVITY, INC.,

  
	
   

  	
  a
  Georgia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE DIAMOND. INC,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         CEO and
  PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE CALIFORNIA PADRES, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         CEO and
  PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE ONTARIO BLUE JAYS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         CEO and
  PRESIDENT

  
					

 

S-3

 

	
   

  	
  BALLGAME ACQUISITION CORPORATION,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         CEO
  and PRESIDENT

  
	
   

  	
   

  
	
   

  	
  OCTOBER ACQUISITION CORPORATION,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         CEO
  and PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE BODHA, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         CEO
  and PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE FEDERAL SYSTEMS, INC.,

  
	
   

  	
  an
  Illinois corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         CEO
  and PRESIDENT

  
	
   

  	
   

  
	
   

  	
  LORAN NETWORK  SYSTEMS,
  LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         DIRECTOR

  
					

 

S-4

 

	
   

  	
  PEREGRINE SYSTEMS OF CANADA, INC.,

  
	
   

  	
  a
  corporation organized under the laws of Canada

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         PRESIDENT

  
	
   

  	
   

  
	
   

  	
  PEREGRINE NOVA SCOTIA COMPANY,

  
	
   

  	
  a
  Nova Scotia unlimited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         PRESIDENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PEREGRINE SYSTEMS LTD.,

  
	
   

  	
  a
  corporation organized under the laws of Ontario

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE OTTAWA NOVA SCOTIA COMPANY,

  
	
   

  	
  a
  Nova Scotia unlimited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PEREGRINE NETWORKS CANADA INC.,

  
	
   

  	
  a
  corporation organized under the laws of Canada

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         PRESIDENT

  
					

 

S-5

 

	
   

  	
  LORAN INTERNATIONAL TECHNOLOGIES INC.,

  
	
   

  	
  a
  corporation organized under the laws of Canada

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY G.
  GREENFIELD

  
	
   

  	
  Title:

  	
         PRESIDENT

  
	
   

  	
   

  
	
   

  	
  LORAN NETWORK SYSTEMS INC.,

  
	
   

  	
  a
  corporation organized under the laws of Canada

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
           /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY
  G. GREENFIELD

  
	
   

  	
  Title:

  	
         PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXTRICITY (CANADA) CORP.,

  
	
   

  	
  a
  Nova Scotia unlimited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
           /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
      GARY
  G. GREENFIELD

  
	
   

  	
  Title:

  	
         PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REMEDY CANADA LTD.,

  
	
   

  	
  a
  corporation organized under the laws of Ontario

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
           /s/
  Gary G. Greenfield

  
	
   

  	
  Name:

  	
     GARY
  G. GREENFIELD

  
	
   

  	
  Title:

  	
       PRESIDENT

  
					

 

S-6Exhibit
10.36

 

SETTLEMENT AGREEMENT

 

This
Settlement Agreement (this “Agreement”) is made effective as of the 19th day of
January, 2003, between Peregrine Systems, Inc. (“Peregrine”) and Peregrine
Remedy, Inc. (“Remedy” and with Peregrine, collectively, the “Debtors”), on the
one hand, and Motive Communications, Inc. (“Motive”), on the other hand. The
parties agree as follows:

 

1.             Recitals.

 

1.1           On September 22, 2002  (the  “Petition Date”),  Debtors filed petitions for relief under chapter 11 of the Bankruptcy
Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”), in the United
States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”),
commencing the Debtors’ bankruptcy cases, jointly administered under Case No.
02-12740 (the “Cases”);

 

1.2           As of the Petition Date, Peregrine and Motive were parties to a
Software Source Code License Agreement (“License Agreement”);

 

1.3           As of the Petition Date, there was pending an action brought by Motive
against Peregrine and Remedy (and others) styled Motive Communications, Inc. v Peregrine Systems, Inc., Peregrine
Remedy, Inc., Stephen P. Gardner and Malthew Glass, No. GN 203283 in
261st District Court for Travis County, Texas (the “State Action”);

 

1.4           On October 23, 2002, Motive filed a Complaint against Debtors in the
Bankruptcy Court initiating an adversary proceeding (the “Adversary
Proceeding”) to impose a constructive trust on $27,000,000 of the proceeds of
the sale of assets of Remedy (the “Sale”);

 

1.5           On November 4, 2002, the Bankruptcy Court ordered $27,000,000 of the
proceeds of the Sale to be escrowed (the “Escrow”) pending the outcome of the
Adversary Proceeding;

 

1.6           Peregrine rejected the License Agreement;

 

1.7           On December 3, 2002, the State Action was removed by Defendant Stephen
P. Gardner to the United States Bankruptcy Court for the Western District of
Texas and Defendant Gardner filed a motion to transfer the State Action to the
Bankruptcy Court, and on January 2, 2003, Motive filed a motion to remand the
State Action to the state District Court in Texas;

 

1.8           On December 19, 2002, Motive filed proofs of claim against each of the
Debtors in the amount of $27,000,000; and filed an unrelated proof of claim for
$275,157.47 against Peregrine (the “Unrelated Claim”);

 

1.9           Debtors have filed a Motion to Dismiss the Adversary Proceeding and
Motive has filed Objections thereto;

 

 

2.             Agreements.

 

2.1           The Effective Date (the “Effective Date”) of any plan of reorganization
filed or supported by Debtors shall be the eleventh (11th) day
following entry of an order confirming such plan and Debtors shall actively
oppose any other effective date in any plan of reorganization. On the Effective
Date of a Plan of Reorganization (the “Plan”) confirmed by the Bankruptcy Court
and providing for the actions and payments specified in this 2.1:

 

a.             Prior to payment in respect of any unsecured
nonpriority claims, Debtors (or one of them) shall pay Motive four million
dollars ($4,000,000) in cash out of the Escrow and re-transfer to Motive
subject to no liens, encumbrances and adverse interests (with full warranty of
title) one million six hundred sixty-six thousand six hundred sixty-seven
(1,666,667) shares of common stock of Motive currently registered in the name
of Peregrine;

 

b.             Peregrine shall agree to pay to Motive,
without interest, five million
dollars ($5,000,000) cash in regular, equal annual payments over the period
ending four years after the Effective Date, commencing on the end of the first
year after the Effective Date, and the Plan shall provide that this obligation
is general unsecured debt and has priority over payments with respect to
prepetition equity of either of the Debtors;

 

c.             The Plan will provide that the Escrow shall
be terminated upon the Effective Date after giving effect to the payment and
re-transfer referred to in § 2.1 (a) above;

 

d.             The Plan will provide that on the Effective
Date, Debtors will release, acquit, and forever discharge, both for themselves
and their successors and assigns, Motive and its subsidiaries and affiliates,
and their present and former agents, successors, employees, and attorneys from
any and all claims, or causes of action of any nature whatsoever, whether in
contract or in tort, at law or in equity, known or unknown, including all
reasonable attorneys fees and cost incurred relating thereto (other than such
claims and matters as relate solely to the Unrelated Claim); provided, however,
that nothing herein shall be deemed to release any covenants, obligations, or
agreements undertaken under or pursuant to this Agreement;

 

e.             The Plan will provide that on the Effective
Date, Motive will release, acquit, and forever discharge, both for itself and
its subsidiaries and affiliates, and their successors and assigns, the Debtors
and their respective present and former agents, successors, employees, and
attorneys from any and all claims, or causes of action of any nature
whatsoever, whether in contract or in tort, at law or in equity, known or
unknown, including all reasonable attorneys fees and cost incurred relating
thereto (other than claims and matters as relate solely to the Unrelated
Claim); provided, however, that nothing herein shall be deemed to release any
covenants, obligations, or agreements undertaken under or pursuant to this
Agreement;

 

f.              Motive and Debtors shall dismiss with
prejudice the State Action and Motive shall dismiss with prejudice the
Adversary Proceeding and withdraw or modify its proofs of claim (other than the
Unrelated Claim) to the extent that those proofs of claim seek payment inconsistent
with the provisions of § 2.1a and b hereof; and

 

2

 

g.             Motive will re-transfer to Peregrine, subject
to no liens, encumbrances and adverse interests (with full warranty of title)
one million (1,000,000) shares of common stock of Peregrine currently
registered in the name of Motive.

 

2.2           From the date of this Agreement until the earlier of (i) the Effective
Date or (ii) the earliest to occur of any of the Change of Circumstances
specified in 2.3 of this Agreement:

 

a.             Debtors and Motive shall seek a stay of ,and
neither either of Debtors nor Motive will pursue or schedule any hearing on,
the State Action or the Adversary Proceeding, nor will any of them file claims
against any other based on the facts alleged in either of the State Action or
the Adversary Proceeding.

 

b.             The Escrow will remain in full force and
effect.

 

2.3           Debtors shall not file or support (and shall actively oppose) any plan
of reorganization that does not include the actions and payments specified in
2.1 of this Agreement or that provides for installment payments on any general
unsecured nonpriority debt (other than unsecured debt in such classes as may be
established therein under §1122(b) of the Bankruptcy Code) more frequent than the
frequency of installments paid to Motive thereunder. If at any time a plan of
reorganization other than one providing for the actions and payments specified
in § 2.1 of this Agreement is confirmed or if either of the Cases is converted
to a proceeding under Chapter 7 of the Bankruptcy Code (each of which being a
“Change of Circumstances”):

 

a.             The Escrow shall be maintained on its terms
and Debtors shall not seek or support (and shall actively oppose) any
modification thereof until the claims of Motive against Debtors have been
finally adjudicated, subject to any intervening order(s) of the Bankruptcy
Court.

 

b.             No further stay of action of the State Action
and the Adversary Proceeding will apply, and any of Debtors or Motive may file
claims based on the facts alleged in either of the State Action or the
Adversary Proceeding.

 

c.             The Debtors and Motive shall cooperate to
ensure to the best of their abilities that the Debtors and Motive shall have
all rights, remedies, claims and defenses available to them, both procedural
and substantive, that they would have had but for 2.2.a. of this Agreement,
such cooperation shall include not asserting defenses based upon statute of
limitations, laches or the like, all of which are waived and abandoned.

 

2.4           Debtors shall cause to be filed with the Bankruptcy Court on January
20, 2003 a plan of reorganization incorporating the provisions of § 2.1 above,
and will promptly (but no later than January 23, 2003) seek and announce an
indefinite adjournment of the hearing on Debtors’ motion to dismiss the
Adversary Proceeding currently set for January 28, 2003 before the Bankruptcy
Court.

 

2.5           Motive agrees to support the Plan, provided that the Plan incorporates
the provisions of § 2.1, above and no “Change of Circumstances” specified in §
2.3,

 

3

 

above, has occurred, and
neither of the Debtors has violated § 2.2, above. Subject to (x) the Bankruptcy
Court’s determination that the Debtors have provided adequate information in
respect of the Plan of the provisions described in § 2.1 above to be included
therein, and (y) the Debtors’ subsequent solicitation of Motive’s vote in
respect of the Plan pursuant to section 1125 of the Bankruptcy Code through the
dissemination to Motive of the Plan and a disclosure statement describing such
Plan approved by the Bankruptcy Court, Motive shall express such support by
voting all of its claims against either of the Debtors in favor of confirmation
of the Plan.

 

2.6           Motive and Debtors will cooperate in good faith with each other to
resolve customer support issues regarding Motive products as sold by Peregrine
to third-party customers under the Distribution Agreement and License
Agreement, it being understood that in connection with such cooperation Motive
will receive such reasonable compensation as is consistent with undertakings by
Motive hereunder, and that the undertakings of Motive and the Debtors in this §
2.6 do not affect the undertakings set out in § 2.1 above.

 

3.             Representations.

 

3.1           Each party represents that, subject to the Bankruptcy Court’s
confirmation of the Plan, it is authorized to enter into, deliver and perform
its undertakings set out in this Agreement and is not under any impediment,
legal or otherwise, that would impair the effectiveness of this Agreement and
the enforceability of any covenant or duty contained in it. Any agent signing
this Agreement on behalf of any party hereby binds himself/herself personally
to this specific section and its representations and warranties.

 

3.2           Each party represents to the other that this Agreement constitutes its
legally valid and binding obligation, enforceable in accordance with its terms.

 

3.3           Each party represents that before executing this Agreement, it has been
informed of the terms, contents, conditions, and effect of this Agreement.  Each party further represents that, in
making this settlement, it has had the benefit and advice of counsel of its own
choosing.

 

3.4           Motive represents and warrants that it has not heretofore assigned or
transferred, or purported to assign or transfer, to any person, firm, or
corporation any claim herein treated or released.  Motive agrees to indemnify and hold harmless the Debtors against
any claim based on, arising out of or in connection with any such transfer or
assignment or proposed transfer or assignment.

 

4.             General Provisions.

 

4.1           Each party understands and acknowledges that the consideration
described in this Agreement is all that is to be received in satisfaction of
any claims under this Agreement.

 

4

 

4.2           This Agreement constitutes the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof, and shall
not be modified except by a written agreement signed by the party against which
an additional understanding or agreement is asserted. No party, nor any party’s
representative or attorney shall be deemed the drafter of this Agreement for
the purpose of construing or interpreting its provisions in any judicial
proceeding.

 

4.3           This Agreement is to be construed, interpreted and enforced under the
laws of the State of Delaware and of the United States, without regard to
conflict of laws jurisprudence.

 

4.4           The parties agree that the Bankruptcy Court shall have exclusive
jurisdiction regarding any dispute relating to this Agreement or the
interpretation of any provision hereof. The parties further agree not to
contest such exclusive jurisdiction.

 

4.5           This Agreement is binding upon and inures to the benefit of the parties
to this Agreement and their respective representatives, successors and assigns.

 

4.6           This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which, when taken together, shall
constitute one instrument, and is effective as of the date first mentioned
above, and copies containing facsimile signatures shall be deemed to be
originals.

 

	
  PEREGRINE SYSTEMS, INC.

  	
  MOTIVE COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Gary G.  Greenfield

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Gary G.  Greenfield

  	
   

  	
  Name:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Executive
  Officer

  	
   

  	
  Title:

  	
  Chief Operating
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PEREGRINE REMEDY, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Gary G.  Greenfield

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Gary G.  Greenfield

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Executive
  Officer

  	
   

  	
   

  
										

 

5

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