Document:

Exhibit
10.47

 

DATED: 9th SEPTEMBER 2002

 

(1)           PEREGRINE
SYSTEMS, INC. (as “Lender”)

 

(2)           PEREGRINE
SYSTEMS OPERATIONS LIMITED (as “Borrower”)

 

lending
to be replaced by funding agreement to be redrafted by MOP

 

FACILITY
FUNDING AGREEMENT

 

This
is a lending agreement with recall.

 

NICHOLSON
GRAHAM & JONES

110
CANNON STREET LONDON ECAN 6AR

TEL:
020 7648 9000

FAX:
020 7648 9001

REF:
AXG/P-503-18

 

 

THIS DEED is made on the 9th day of September 2002

 

PARTIES:-

 

(1)           PEREGRINE
SYSTEMS, INC.,
a company incorporated in Delaware, United States of America, whose registered
office is at 3611 Valley Center Drive, San Diego, California, USA (the
“Lender”); and

 

(2)           PEREGRINE
SYSTEMS OPERATIONS LIMITED,
a company incorporated in the Republic of Ireland (Registered Number 324176)
whose registered office is at Unit 3094, National Digital Park, Citywest,
Dublin 24 (the “Borrower”).

 

WHEREAS:

 

(A)          The Lender is the ultimate
parent company of the Borrower and each of the European Subsidiaries

 

(C)           The Lender has agreed to make
available and the Borrower has agreed to accept a working capital facility.

 

(D)          This Deed sets out the terms and
conditions of the working capital facility.

 

THIS DEED WITNESSES as follows:-

 

1.             DEFINITIONS

 

	
  “Advance”

  	
   

  	
  means each advance made or to be made under the Facility;

  
	
   

  	
   

  	
   

  
	
  “Bank Account Threshold”

  	
   

  	
  means US$9.5 million;

  
	
   

  	
   

  	
   

  
	
  “Business
  Day”

  	
   

  	
  means a day (other than
  a Saturday or Sunday) on which banks and financial markets are open for
  business in Dublin and New York;

  
	
   

  	
   

  	
   

  
	
  “Commencement of Insolvency”

  	
   

  	
  means:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)   the appointment of a receiver and manager or
  administrative receiver over all or any part of the property of the Borrower
  and/or one or more of the European Subsidiaries;

  

 

1

 

	
   

  	
   

  	
  (b)   the making of an administration or winding up order in
  relation to the Borrower and/or one or more of the European Subsidiaries or
  of an order which subjects the Borrower and/or one or more of the European
  Subsidiaries to any procedure under the Insolvency Law of a country outside
  of Great Britain;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)   the presentation by the Borrower and/or one or more of the
  European Subsidiaries or their senior management of proposals to the
  Borrowers and/or one or more of the European Subsidiaries’ creditors, or to
  their principal financial creditors, for any rescheduling, refinancing or
  restructuring of all or a substantial part of the Borrower’s and/or one or
  more of the European Subsidiaries’ indebtedness;

  
	
   

  	
   

  	
   

  
	
  “Euro”

  	
   

  	
  means the lawful currency for the time being of Austria,
  Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
  Netherlands, Portugal and Spain;

  
	
   

  	
   

  	
   

  
	
  “European Subsidiaries”

  	
   

  	
  means Peregrine Systems
  Global Limited,
  Remedy Software Ireland Limited, International Limited (UK), Ramedy Software
  Ireland Limited, Peregrine Systems SRL (Italy), Peregrine Systems GmbH
  (Germany), Peregrine Systems Limited (UK), Peregrine Systems GmbH
  (Switzerland), Peregrine Systems AB (Sweden), Peregrine Systems AS (Norway),
  Peregrine Systems OY (Finland), Peregrine Systems SA (Spain), Peregrine
  Systems BV (Netherlands), Peregrine Systems BVBA (Belgium), Peregrine Systems
  A/S (Denmark), Peregrine Systems SA (France), Apsylog Inc (US), Acquisition
  Et Gestion Dc Donnees Et Sig (France), FPrint UK Limited, Remedy
  (Switzerland) GmbH, Remedy GmbH (Germany), Remedy Software AB (Sweden),
  Remedy Spain SL, Remedy (UK) Limited, Remedy S.r.1 (Italy), Remedy Software
  Solutions BV (The Netherlands), Remedy S.A.R.L. (France), Remedy France
  Holding S.A.S., Remedy Services S.A.S (France);

  
	
   

  	
   

  	
   

  
	
  “Facility”

  	
   

  	
  means subject to termination under clause 7 below, the
  loan facility granted by the Lender to the Borrower under this Deed;

  

 

2

 

	
  “Loan”

  	
   

  	
  means the aggregate principal amount of the Advances from
  time to time outstanding under this Deed;

  
	
   

  	
   

  	
   

  
	
  “Notice of Drawing”

  	
   

  	
  means a Notice of Drawing requesting an Advance in the
  form annexed to this Deed as Appendix 1, duly completed and signed by two
  directors on behalf of the Borrower;

  
	
   

  	
   

  	
   

  
	
  “Repayment Date”

  	
   

  	
  means the date specified in Clause 6 or such later date
  upon which sums become payable to the Lender in accordance with Clause 8;

  
	
   

  	
   

  	
   

  
	
  “Sterling and £”

  	
   

  	
  means the lawful currency for the time being of the United
  Kingdom; and

  
	
   

  	
   

  	
   

  
	
  “Termination”

  	
   

  	
  means the occurrence of each or any of the events set out
  in clause 7 below.

  

 

1.1           Further
Definitions

 

	
  (a)      Any
  reference in this Deed for

  
	
   

  	
   

  	
   

  
	
  “Lender”

  	
   

  	
  includes its successors immediate or derivative;

  
	
   

  	
   

  	
   

  
	
  “month”

  	
   

  	
  or a period of one or more “months” is a reference to a
  period which ends on the day (“the corresponding day”) in the relevant
  calendar month numerically corresponding to the day of the calendar month on
  which the period started or, if there is no corresponding day, a period which
  ends on the last day of the relevant calendar month;

  
	
   

  	
   

  	
   

  
	
  “persons”

  	
   

  	
  includes individuals, bodies corporate, unincorporated
  associations, partnerships, governments, states and state agencies (whether
  or not having separate legal personality);

  
	
   

  	
   

  	
   

  
	
  “tax(es)”

  	
   

  	
  includes any tax levy, import duty, charge, fee, deduction
  or withholding of any nature and however called, levied, collected, withheld
  or assessed by any person;

  

 

3

 

2.             INTERPRETATION

 

In
this Deed references to the deed or document are to such deed or document as
from time to time amended, novated, supplemented or replaced by a document
having a similar effect, a reference to any statute includes that statute as
amended, extended or re-enacted and to any bye-law, regulation, order,
instrument or subordinate legislation made under the relevant statute, the
singular includes the plural and vice versa, references to clauses and
sub-clauses and to schedules are to the clauses and sub-clauses of and to the schedules
to this Agreement, the word “including” will not limit the generality of any
preceding words, the words “other” and “otherwise” will not be limited by any
words preceding them, headings to clauses and sub-clauses are to be ignored in
construing this Deed and references to time are to London time unless otherwise
specified.

 

3.             AMOUNT AND
PURPOSE

 

3.1           The minimum amount which is required to be advanced under
this Facility shall not be less than the sum necessary from time to time to
maintain the aggregate value of funds available to the Borrower and to the
European Subsidiaries in their respective bank accounts (the “Accounts”) at not
less than US$6 million (the “Minimum Amount”).

 

3.2           Sums advanced under this Facility may only be utilised by
the Borrower and the European Subsidiaries for their working capital purposes
and reorganisation costs.

 

3.3           Any single advance required under the Facility in excess of
US$1 million for the purposes of only one of the European Subsidiaries shall be
subject to the prior approval in writing of the Cheif Financial Officer of the
Lender such approval not to be unreasonably withheld or delayed in the case of
expenditure reasonably and properly required for the purpose of the business of
the relevant European Subsidiary.

 

4.             FACILITY

 

4.1           Availability

 

Subject
to the terms of this Deed the Facility shall be available to the Borrower for
drawing on its own behalf and on behalf of the European Subsidiaries until the
Repayment Date.

 

4.2           Advance of the
Facility

 

A
Notice of Drawing requesting drawdown of any Advance under the Facility must be
received by the Lender no later than 10.00 a.m. (Los Angeles time) on the
second Business Day before the date on which the Advance is required. The
Notice of Drawing must be accompanied by a reconciliation of the Account and a
cash flow (the

 

4

 

“Cash Flow”) covering a period of not less than three months. The
Notice of Drawing must specify:-

 

(a)           the amount required and the
European Subsidiary to whom it is to be paid;

 

(b)           the purpose for which the
Advance is required in so far as the same is not clear from the Cash Flow;

 

(c)           the date on which the Advance is
required, which must be a Business Day;

 

(d)           the name and address of the bank and the title and number of
the account to which the Advance is to be remitted; and

 

(e)           whether the Advance is to be
paid in Euros or Pounds Sterling.

 

4.3           Conditions
precedent

 

The
Lender’s obligation to make the Facility available will only be effective when
all of the following conditions precedent have been satisfied:-

 

(a)           this Deed is executed
by the Borrower;

 

(b)           the Borrower has provided the
first cash flow forecast to the Lender; and

 

(c)           the Lender has confirmed its
agreement to the first cash flow forecast.

 

5.             FINANCIAL
INFORMATION

 

The Lender shall provide
to the Borrower copies of the Lender’s monthly management accounts together
with a monthly cash flow forecast within 14 days of the last day of each
calendar month to enable the Borrower to satisfy itself that the Lender will be
able to continue to make the Facility available to the Borrower. The Borrower
shall be entitled to pass this information on to the European Subsidiaries.

 

6.             REPAYMENT

 

6.1           Subject as provided in Clause 8 the Borrower shall repay the
Loan or shall procure that the European Subsidiaries shall repay the Loan
within 12 months of Termination or such other period as the parties shall
agree.

 

6.2           Prior to Termination, the Borrower shall repay or shall
procure that the other European Subsidiaries shall repay to the Lender a sum
equivalent to the balance available to the Borrower in the Account in excess of
the Bank Account Threshold (“Threshold
Repayment”).

 

5

 

6.3           Subject to the terms of
this Deed, the Threshold Repayment shall be eligible for re-borrowing in the
event that sums available to the Borrower and/or the European Subsidiaries in
the Accounts fall below the Minimum Amount.

 

7.             TERMINATION

 

7.1           Termination will occur or will
be deemed to occur in the following events:-

 

(a)           the Lender declaring
the Facility is cancelled, provided that the Lender provides the Borrower with
ninety days written notice of such cancellation and further provided that the Facility shall
not be cancelled prior to 31 October 2003;

 

(b)           the Borrower fails to
make Threshold Repayments or to procure that they shall have been made in
accordance with clause 6 of this Deed within seven days of the Borrower becoming aware that a Threshold
Repayment is due to be made to the Lender.

 

(c)           any warranty,
representation or statement made in this Deed proves to have been incorrect or misleading in
any material respect and is not remedied to the satisfaction of the other party
within twenty-eight days of notification by the other party;

 

(d)           the Lender or the Borrower fails duly to perform or comply with any of the
obligations expressed in this Deed;

 

(e)           the Borrower commences negotiations with all or a material
part of its creditors with a view to the general re-adjustment or re-scheduling
of its indebtedness
or makes a general assignment for the benefit of or a composition with its
creditors other than with the prior written consent of the Lender provided that
such consent shall not be unreasonably withheld;

 

(f)            any creditor of the Borrower
takes any corporate action or other steps are taken or legal proceedings are
started for the winding-up, dissolution or re-organisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of the
Borrower or of all or a material part of the Borrower’s revenues and assets,
other than in each case with the prior written consent of the Lender provided
that such consent shall not be unreasonably withheld;

 

(g)           any judgment or any other judicial determination of liability is issued against
the Borrower or any of its subsidiaries or any distress, execution, diligence,
attachment or other process affects any asset of the Borrower in respect of a

 

6

 

 

liability in excess of
£50,000 or its equivalent and is not discharged within seven days thereafter.

 

8.             SUBORDINATION

 

The
Lender agrees that following the Commencement of Insolvency of the Borrower or
of one or more of the European Subsidiary it shall take no step or action for
the repayment of the Facility or any part of it until such time that all other
creditors of the Borrower and/or the European Subsidiary have been paid in full
and the Lender further agrees that any sums received by it in respect of the
Facility after such date shall be held by it on trust for such other creditors
of the Borrower so that the Lender shall be bound to pay any such sums so
received to such person or persons who may be responsible for arranging for the
payment of the Borrower’s creditors.

 

9.             PAYMENTS

 

9.1           All payments to be made under this Deed shall be made in
Pounds Sterling and/or in Euros and in immediately available funds.

 

9.2           All payments to be made under this Deed shall be made
without set off or counterclaim and free and clear of and without deduction of
any taxes, levies, duties, charges, fees, deductions, withholdings,
restrictions or conditions of any description. 
If the Lender or Borrower is required at any time by any applicable law
to make any such deduction from any payment, the sum due from the Borrower or
the Lender in respect of such payment shall be increased by such an amount as
will result, notwithstanding the making of such deduction, in the Lender’s or
the Borrower’s receipt on the due date for payment of each amount of a net sum
equal to the sum that the Lender or the Borrower would have received had no
such deductions been required to be made.

 

10.           REPRESENTATIONS
WARRANTIES AND UNDERTAKINGS

 

10.1         The Lender represents, warrants
and undertakes to the Borrower that:-

 

(a)           it has full power to enter into and perform its obligations
under this Deed (which has been duly accepted by the Borrower), and that this
Deed is valid, enforceable and binding upon it in accordance with its terms, and
that it has obtained and will maintain in effect all necessary corporate
authorisations and all other necessary consents; licences and authorities;

 

(b)           the execution, delivery and performance by the Lender of
this Deed and the events contemplated by this Deed; will not violate:-

 

(i)            its By-laws and articles of
incorporation;

 

7

 

 

(ii)           any provision of any applicable law, regulation or decree to
which it is subject;

 

(iii)          any provision of any contract, banking facility or arrangement to which it is a party or
any other obligations on the Lender,

 

or
result in the execution or imposition of any lien, charge or encumbrance on the
assets of the Lender,

 

(c)           the Lender is not in default under any agreement (save as
disclosed in writing to the Borrower) to which it is a party which would have a
material adverse effect on its business and financial condition; and

 

(d)           prior to Termination, the Lender will not call for payment
of any sums due from the Borrower to the Lender save for the Threshold
Repayment in accordance with Clause 6 of this Deed.

 

10.2         The Borrower represents and
warrants to the Lender that:-

 

(a)           it has full power to enter into and perform its obligations
under this Deed (which has been duly accepted by the Lender), and that the Deed
is valid enforceable and binding upon it in accordance with its terms, and that
it has obtained and will maintain in effect all necessary corporate
authorisations and all other necessary consents; licences and authorities;

 

(b)           the execution, delivery and performance by the Borrower of
this Deed and the events contemplated by this Deed; will not violate:-

 

(i)            its memorandum and articles of
association;

 

(ii)           any provision of any applicable law, regulation or decree to
which it is subject;

 

(iii)          any provision of any contract, banking facility or
arrangement to which it is a party or any other obligations on the Borrower;

 

or result in the execution or
imposition of any lien, charge or encumbrance on the assets of the Borrower;
and

 

(c)           the Borrower is not in default under any agreement (save as
disclosed in writing to the Lender) to which it is a party which would have a
material adverse effect on its business and financial condition.

 

8

 

10.3         The warranties given by
the Lender and the Borrower herein shall be continuing and deemed to be
repeated on each date on which any payment is made under this Deed and on the
making of any request for an Advance by reference to the facts existing on each
such date.

 

11.           ASSIGNMENT AND TRANSFERS

 

The Borrower may not assign or transfer any of its
rights or obligations under this Deed without the written consent of the
Lender.

 

11.1         Leader

 

The Lender may at any time assign all or any part of
the Leader’s rights, obligations and interests under this Agreement to any
person.

 

11.2         Disclosure of Information

 

The Lender may disclose to a potential assignee (or
any other person with whom the Lender is contemplating entering into
contractual relations with respect to this Agreement) such information about
the Borrower as the Lender considers material to a potential assignee.

 

12.           MISCELLANEOUS

 

12.1         Time of the essence

 

Time will be of the essence of the performance of the
obligation of the Borrower under or in connection with this Deed.

 

12.2         Severability

 

Each of the provisions of this Deed is severable and
distinct from the others and if at any time one or more of such provisions is
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Deed will not in any way be affected or
impaired.

 

12.3         Rights
cumulative

 

All rights of the Leader are cumulative and any
express right conferred on the Lender or the Borrower under this Deed may be
exercised without prejudicing or being limited by any other express or implied
right of the Lender.

 

9

 

13.           LAW
AND JURISDICTION

 

13.1         This Deed shall be governed by and construed and enforced in accordance
with the laws ofthe State of Delaware or the
laws of the United States as construed by the United States District Court for
the District of Delaware, without giving effect to any choice of law or
conflict of law provision which would cause the application of the laws of any
jurisdiction other than as set forth in this section 13.1.

 

13.2         No
Exclusive or Limitation of Rights

 

Nothing in this Clause 13 excludes or limits any right
which the Lender or the borrower may have (whether under the law of any country,
on international convention or otherwise) with regard to the bringing of
proceedings, the service of process, the recognition or enforcement of a
judgment or any similar or related matter in any jurisdiction.

 

14.           NOTICES

 

14.1         Each communication to be under
this Deed shall be made in writing and may be made by letter sent by
international overnight courier or facsimile transmission.

 

14.2         Any communication to be made or delivered by one party to the other
shall be made or delivered to that other party at its address set out at the
beginning of this Deed or to such other address as may from time to time be
notified in writing by one party to the other in accordance with this clause.

 

14.3         Any communication made or
delivered for any purpose of this Deed shall be deemed made or delivered when
dispatched: (a) in the case of a facsimile transmission, upon printed
confirmation of complete transmission by telecopy; or (b) in the case of a
letter sent by international overnight courier in an envelope addressed to the
relevant address, upon personal delivery thereof.

 

15.           THIRD
PARTIES

 

Except in respect of the obligations of the Lender in
Clause 8, a person who is not a party to this Deed shall have no right under
the Contracts  (Rights of Third Parties)
Act 1999 to enforce any term of this Deed.

 

10

 

16.           EXECUTION

 

The parties agree and intend this Deed should be executed in
counterparts.

 

AS WITNESS the hands of the duly authorised
representatives of the parties the day and year first above written.

 

 

	
  EXECUTED as a DEED by

  	
  )

  	
   

  	
   

  
	
  PEREGRINE SYSTEMS, INC.

  	
  )

  	
   

  	
   

  	
   

  
	
  in the presence of:

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Ken Sexton

  	
   

  
	
  /s/ Hillary M.Wilson

  	
   

  	
   

  	
  By:

  	
  Ken Sexton

  
	
  Hillary M. Wilson

  	
   

  	
   

  	
  Its:

  	
  Chief Financial Officer

  
	
  3575 Poe St.

  	
   

  	
   

  	
   

  
	
  San Diego, CA 92106

  	
   

  	
   

  	
   

  
	
  Attorney

  	
   

  	
   

  	
   

  
	
  /s/ Hillary M. Wilson

  	
   

  	
   

  	
  /s/ Gary Greenfield

  	
   

  
	
  Hillary M. Wilson

  	
   

  	
   

  	
  By:

  	
  Gary Greenfield

  
	
  3575 Poe St.

  	
   

  	
   

  	
  Its:

  	
  Chief Executive Officer

  
	
  San Diego, CA 92106

  	
   

  	
   

  	
   

  
	
  Attorney

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED
  as a DEED by

  	
  )

  	
   

  	
   

  
	
  PEREGRINE
  SYSTEMS OPERATIONS

  	
  )

  	
   

  	
  /s/ Geoffroy Boonen

  	
   

  
	
  LIMITED
  in the presence of:

  	
  )

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Karima Ez- Agili

  	
   

  	
   

  	
   

  	
  /s/ John Kennedy

  	
   

  
	
  KARIMA EZ- AGILI

  6 BERESFORD AVENUE

  	
   

  	
   

  	
   

  	
  Director/Secretary

  
	
  EAST TWICKEN HAM

  	
   

  	
   

  	
   

  	
   

  
	
  TWI 2PY

  	
   

  	
   

  	
   

  	
   

  
	
  Solicitor

  	
   

  	
   

  	
   

  	
   

  
									

 

11

 

16.           EXECUTION

 

The parties agree and intend this Deed should be executed in
counterparts.

 

AS WITNESS the hands of the duly authorised
representatives of the parties the day and year first above written. .

 

 

	
  EXECUTED as a DEED by

  	
  )

  	
   

  	
   

  
	
  PEREGRINE SYSTEMS, INC.

  	
  )

  	
   

  	
   

  	
   

  
	
  in the presence of:

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Ken Sexton

  	
   

  
	
  /s/ Hillary M.Wilson

  	
   

  	
   

  	
  By:

  	
  Ken Sexton

  
	
  Hillary M. Wilson

  	
   

  	
   

  	
   

  	
   

  
	
  Pereqrine House

  	
   

  	
   

  	
  Its:

  	
  Chief Financial Officer

  
	
  26-28 Paradise Rd.

  	
   

  	
   

  	
   

  
	
  Richmond 
  TW91SE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Hillary M. Wilson

  	
   

  	
   

  	
   

  	
   

  
	
  Hillary M. Wilson

  	
   

  	
   

  	
  /s/ Gary G. Greenfield

  	
   

  
	
  Peregrine House

  	
   

  	
   

  	
  By:

  	
  Gary G. Greenfiled

  
	
  26-28 Paradise Rd

  	
   

  	
   

  	
   

  	
   

  
	
  Richmond 
  TW91SE

  	
   

  	
   

  	
  Its:

  	
  Chief Executive Officer

  
	
  EXECUTED
  as a DEED by

  	
  )

  	
   

  	
   

  
	
  PEREGRINE
  SYSTEMS OPERATIONS

  	
  )

  	
   

  	
  /s/ Geoffroy Boonen

  	
   

  
	
  LIMITED
  in the presence of:

  	
  )

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  	
   

  	
  /s/ John Kennedy

  	
   

  
	
  c/o Peregrine
  Systems

  	
   

  	
   

  	
  Director/Secretary

  
	
  Peregrine House

  	
   

  	
   

  	
   

  
	
  26-28 Paradise
  Road.

  	
   

  	
   

  	
   

  
	
  Richmond

  	
   

  	
   

  	
   

  
	
  Surrey TW91SE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Liam Scott

  	
   

  	
   

  	
   

  	
   

  
	
  LIAM SCOTT

  	
   

  	
   

  	
   

  	
   

  
	
  UNIT 3094

  	
   

  	
   

  	
   

  	
   

  
	
  N.R.P. CITYWEST

  	
   

  	
   

  	
   

  	
   

  
	
  D.24

  	
   

  	
   

  	
   

  	
   

  
										

 

12Exhibit
10.48

 

AMENDED
SETTLEMENT AGREEMENT

 

This Amended Settlement
Agreement (the “Agreement”) is entered into as of October 14, 2003, by and
between Peregrine Systems, Inc., a Delaware corporation (“Peregrine”); the
Post-Emergence Equity Committee (as defined in the Plan), on behalf of itself
and all Holders of Old PSI Common Interests as of the Effective Date (the
“Equity Class”); and David Levy, Leighton Powell, David Schenkel, John Virden,
Conrad Willemse, Bill Holman, Bob Benesko, Michael Slavich, Richard Maheu and
Mark Rollins (collectively the “Loran Group”) and Heywood Waga (“Waga”, and
together with the Loan Group, the “Lead Plaintiffs”) in their capacity as
co-lead plaintiffs in the Securities Action (defined below) and on behalf of
themselves and all other persons and entities who purchased or otherwise
acquired the securities of Peregrine from July 22,1999 through May 3,2002,
inclusive but excluding all Defendants named in the Securities Action; all
officers and directors of Peregrine; members of their families; Peregrine and
any of its parents, subsidiaries, officers, directors or affiliates; any entity
in which any excluded person has a controlling interest directly or indirectly;
and each of their respective legal representatives, heirs, successors and
assigns (the “Securities Class”), with reference to the following recitals of
fact:

 

A.                                   Peregrine
is a manufacturer and distributor of enterprise software. Peregrine Remedy,
Inc. (“Remedy”) is a wholly-owned subsidiary of Peregrine and until November of
2002 (when all or substantially all of its assets were sold), was engaged in
the manufacture and distribution of enterprise software.

 

B.                                     On
or about May 6, 2002, an action (as modified, consolidated and amended from
time to time, the “Securities Action”) was commenced against Peregrine and
other individuals and entities as Case No. 02-CV-0870J (RBB) before the United
States District Court, Southern District of California (the “District Court”).
Subsequently, various other lawsuits alleging federal securities law violations
against Peregrine and/or other individuals and entities have been consolidated
into the Securities Action.

 

 

C.                                     On
September 22, 2002, Peregrine and Remedy (collectively, the “Debtors”)
commenced cases under Chapter 11 of Title 11 of the United States Code,
subsequently ordered jointly administered (collectively, the “Bankruptcy Case”)
before the United States Bankruptcy Court, District of Delaware (the
“Bankruptcy Court”).

 

D.                                    By
order entered on October 15, 2002 (the “Bar Date Order”), the Bankruptcy
Court set December 23, 2002 as the bar date (the “Bar Date”) for the
filing of proofs of claim against the Debtors, all as more fully set forth in
the Bar Date Order.

 

E.                                      On
December 19, 2002, the Loran Group filed two (2) proofs of claim (assigned
Claim Nos. 713 and 722) against the Debtors, purportedly on behalf of
themselves and the Securities Class (the “Original Loran Group Securities Class
Proofs of Claim”), subsequently amended by proofs of claim (assigned Claim Nos.
1130 and 1131) filed against the Debtors on or about May 29, 2003 (the
“Original Loran Group Securities Class Proofs of Claim and amended proofs of
claim hereinafter referred to as the “Loran Group Securities Class Proofs of
Claim”).

 

F.                                      On
December 23, 2002, Heywood Waga (“Waga”) filed two (2) proofs of claim
(assigned Claim Nos. 867 and 935) (collectively, the “Waga Proof of Claim”),
one against each of the Debtors.

 

G.                                     In
addition to the Loran Group Securities Class Proofs of Claim and the Waga Proof
of Claim, certain other proofs of claim (collectively, the “Other Securities
Proofs of Claim”) were filed against one or both of the Debtors on or before
the Bar Date which assert, or may assert claims based upon the violation of
securities laws arising out of the issuance, purchase, acquisition or sale of
securities of Peregrine:

 

H.                                    On
or before the Bar Date, certain individuals (individually, a “Class 9  Indemnification Claimant” and,
collectively, the “Class 9 Indemnification Claimants”) filed proofs of claim
asserting a claim or claims against the Debtors for reimbursement, contribution
or indemnity falling within the scope of Bankruptcy Code § 510(b) and
properly classified within Class 9 of the Plan (individually, a “Class 9
Indemnification Claim” and collectively, the “Class 9 Indemnification Claims”).

 

2

 

I.                                         There
are no other proofs of claim or interest asserted, or deemed asserted against
the Debtors within Class 9 of the Plan except the Old PSI Common Interests and
the Proofs of Claim identified in Recitals E through H, above.

 

J.                                        By
order (the “Lead Plaintiff Order”) entered by the District Court on or about
January 30, 2003, the Loran Group was designated Lead Plaintiff with
respect to claims alleged in the Securities Action arising from violations of
Section 10(b) and Section 20(a) of the Securities Exchange Act of
1934 (the “Section 10 Claims”).

 

K.                                    Pursuant
to the Lead Plaintiff Order, Waga was designated Lead Plaintiff with respect to
claims alleged in the Securities Action arising from violations of
Section 11 of the Securities Act of 1933 (the “Section 11 Claims”).

 

L.                                      On
March 17, 2003, the Loran Group and Waga, as lead plaintiffs, filed in the
District Court that certain Consolidated Complaint for Violations of the
Federal Securities Laws (the “Consolidated Complaint”) on behalf of a class and
sub-classes of persons asserting Section 10 Claims and Section 11
Claims during the Class Period.

 

M.                                 By
order (the “Confirmation Order”) entered by the Bankruptcy Court on or about
July 18, 2003, the Bankruptcy Court approved confirmation of that certain
Fourth Amended Plan of Reorganization of Peregrine Systems, Inc. and Peregrine
Remedy, Inc. as Modified, Dated July 14, 2003 (the “Plan”). The Effective
Date of the Plan occurred on August 7, 2003.

 

N.                                    Under
the Plan, the following consideration is to be distributed on a Pro Rata basis
to the Holders of Allowed Class 9 Claims/Interest (the “Class 9
Consideration”): (1) between thirty-three percent (33%) and thirty-seven
percent (37%) of the New PSI Common Stock, the exact percentage to be
determined in accordance with the formula set forth in Section V.B.10 of
the Plan (said portion of the New PSI Common Stock hereinafter referred to as
the “Class 9 New PSI Common Stock”); and (2) the Litigation Proceeds determined
in accordance with Section VII.I. of the Plan.

 

P.                                      Peregrine,
the Post-Emergence Equity Committee, on behalf of the Equity Class and the Lead
Plaintiffs, on behalf of the Securities Class, wishing to fully and finally
resolve

 

3

 

disputes regarding the
allocation of the Class 9  Consideration
between themselves, wishing to settle and fix the distributive rights of the
Equity Class, on the one hand, and the Securities Class on the other hand,
under the Plan and wishing to provide for an exchange of a portion of the
distributive rights of the Equity Class, on the one hand, and the Securities
Class, on the other hand, entered into that certain Settlement and Assignment
Agreement, as modified from time to time (the last such modification being
attached as Exhibit “A” to the Preliminary Order (defined below) and
hereinafter referred to as the “Provisional Agreement”), and filed a motion
(the “Motion”) seeking approval of their settlement agreement.

 

Q.                                    Messrs.
Ariko, Moores, Savoy, Noell and Van den Berg (collectively, the “Objecting
Parties”) have filed various objections to the Motion. Pursuant to that certain
preliminary order (the “Preliminary Order”) entered by the Court on
October 3, 2003, the objections of the Objecting Parties to the Motion
were provisionally overruled, except as set forth in the Preliminary Order.

 

R.                                     The
Parties believe that some or all of the Objecting Parties have or will withdraw
their objections to the granting of the Motion (except as to the issue (the
“Privilege Issue”) identified in Paragraph (b)(ii) of the Preliminary Order)
provided 225,000 shares of New PSI Common Stock (and no other portion of the
Class 9 Consideration) are set aside for exclusive distribution to all of the
Holders of Class 9 Indemnification Claims in full and final settlement of such
claims.

 

S.                                      Based
upon the foregoing understanding, the Parties are prepared to enter into this
Agreement, subject to all of the terms and conditions set forth below.

 

T.                                     All
capitalized terms not otherwise defined herein shall have the same meaning as
set forth either in the Plan or in the Consolidated Complaint.

 

NOW, WHEREFORE,
Peregrine; the Post-Emergence Equity Committee, on behalf of the Equity Class;
and the Lead Plaintiffs, on behalf of the Securities Class (individually a
“Party” and, collectively, the “Parties”), for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, agree as follows:

 

4

 

1.                                      Incorporation of Recitals

 

The foregoing Recitals are incorporated herein by reference and are
hereby made an integral part of this Agreement.

 

2.                                      Allocation of Class 9
Consideration Between Equity Class, Securities Class and Class 9
Indemnification Claims; Management and Control of Litigation Claims; Provision
for Further Distribution of Class 9 Consideration to Members of Each Class;
Other Settlement Provisions

 

Subject to all of the terms and conditions of this Agreement including,
without limitation, entry of the Final Order and the other conditions set forth
in Section 3, below:

 

(a)                                  Two hundred and twenty-five thousand
(225,000) shares of the Class 9 New PSI Common Stock (said 225,000 shares hereinafter
referred to as the “Class 9 Indemnification Stock”) shall be set aside and
allocated exclusively for distribution to the Holders of Class 9
Indemnification Claims. Distributions to the Holders of Class 9 Indemnification
Claims shall be made exclusively from the Class 9 Indemnification Stock in full
and final settlement of all of the Class 9 Indemnification Claims and the
Holders of such Class 9 Indemnification Claims shall not be entitled to a
distribution of any other portion of the Class 9 Consideration. The allocation
and distribution of the Class 9 Indemnification Stock to individual Holders of
Class 9 Indemnification Claims shall be subject to a stipulation by and between
all Holders of Class 9 Indemnification Claims or further Order of the Bankruptcy
Court, upon notice to all of the other Parties and to all individuals and
entities who have timely filed Class 9 Indemnification Claims. Pending such
stipulation or further order(s) of the Bankruptcy Court, the Class 9
Indemnification Stock shall be held by Peregrine in trust for the Holders of
Class 9 Indemnification Claims. (The requirement that the Court approve the
provisions of this Section 2(a) of the Agreement and provide that said
provisions be binding upon all of the Class 9 Indemnification Claimants is
hereinafter referred to as the “Settlement Condition”).

 

5

 

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

 

(c)                                  After setting aside the Class 9
Indemnification Stock, fifteen percent (15%) of the balance of the Class 9 PSI
New Common Stock shall be allocated to the Securities Class and distributed to
the Successor Litigation Trustee (defined below) for the sole and exclusive
benefit of the Securities Class. Further, the Successor Litigation Trustee
shall hold any and all Litigation Proceeds (including, without limitation, any
unused portion of the $3.2 million advanced to the Litigation Trust pursuant to
Article VII I. of the Plan), in trust for the sole and exclusive benefit
of the Securities Class. The Successor Litigation Trustee may only distribute
the Class 9 New PSI Common Stock allocated to the Securities Class pursuant to,
and consistent with order(s) of the District Court (or any successor court
having jurisdiction over the Securities Action). The portion of the Class 9 New
PSI Common Stock held by the Successor Litigation Trustee herein shall, pending
distribution to the members of the Securities Class in accordance with the
provisions hereof, be held subject to the terms and conditions of the Amended
Litigation Trust Agreement (defined below) (which shall provide, among other
things, that the Successor Litigation Trustee may only vote, sell, distribute
or otherwise transfer said Class 9 New PSI Common Stock in accordance with
written instructions given by or on behalf of the Lead Plaintiffs and/or any
order of the District Court (or any successor court having jurisdiction over
the Securities Action)).

 

(d)                                 The Parties acknowledge that individuals or
entities may be members of the Equity Class and/or the Securities Class and
that their entitlement to receive distributions under the Plan, pursuant to the
Securities Action or otherwise as a member of the Equity Class shall not in any
way affect or impair their rights to receive distributions as a member of the
Securities Class, and vice versa.

 

(e)                                  The Post-Emergence Equity Committee shall
remove Joseph Meyers as Litigation Trustee and appoint an individual or
individuals nominated by the Loran Group as the

 

6

 

successor
Litigation Trustee (the “Successor Litigation Trustee”) pursuant to Sections
7.3 and 7.4 of the Litigation Trust Agreement. The identity of the Successor
Litigation Trustee shall be disclosed in a pleading to be filed by the Loran
Group with the Bankruptcy Court no later than five (5) days prior to the final
hearing on the Motion (the “Final Hearing”) and the appointment of the
Successor Litigation Trustee shall be subject to the reasonable consent and
approval of Waga. Further, the Post-Emergence Equity Committee shall assign to the
Lead Plaintiffs, or their nominee, all of its rights, responsibilities,
obligations, privileges and remedies under the Litigation Trust Agreement, and
shall be released from any further obligations or responsibilities under the
Litigation Trust Agreement, which obligations and responsibilities shall be
assumed by the Lead Plaintiffs, or their nominee. Peregrine and the Successor
Litigation Trustee shall enter into an amended Litigation Trust Agreement (the
“Amended Litigation Trust Agreement”), conforming it to all of the terms and
conditions of this Agreement, which Amended Litigation Trust Agreement shall be
filed with the Bankruptcy Court at least five (5) days prior to the Final
Hearing,

 

(f)                                    Peregrine will use reasonable best efforts to
fully cooperate in good faith with the Lead Plaintiffs and the Successor
Litigation Trustee in the prosecution of the Litigation Claims. Promptly upon
entry of the Final Order (defined below), Peregrine shall (a) provide to Lead
Plaintiffs and the Successor Litigation Trustee all documents reasonably
requested by them including, but not limited to, those previously provided to
the Securities and Exchange Commission and Department of Justice, (b) make
employee witnesses available to the Successor Litigation Trustee and the Lead
Plaintiffs for interviews and/or deposition, (c) take reasonably necessary
steps to ensure the preservation of evidence, including electronic records,
e-mail and computer hard drives, and (d) deem the Successor Litigation Trustee
to be the successor in interest to the attorney-client and work-product
privileges formerly held by the Debtors with respect to the Litigation Claims,
and Peregrine agrees to share everything that is within the attorney-client and
work-product privileges with the Successor Litigation Trustee, and because the
Successor Litigation Trustee shall be a successor to the Debtors’
attorney-client and work-

 

7

 

product
privileges, such a sharing will not be deemed a waiver of the attorney-client
and work-product privileges.

 

3.                                      Conditions Precedent

 

The obligations of the Parties pursuant to Section 2 of this
Agreement shall be subject to the entry by the Bankruptcy Court of a final
order in the form, or substantially in the form attached hereto as Exhibit “A”
approving this Agreement and, specifically, approving Section 2(a) hereof
and making such determination binding upon all actual or potential Holders of
Class 9  Indemnification Claims,
in form and substance reasonably satisfactory to the Parties. Unless the
foregoing condition is satisfied or waived by all of the Parties in writing,
this Agreement shall be of no force and effect and the Parties shall continue
to be bound by the terms and conditions of the Provisional Agreement.

 

4.                                      Covenants

 

(a)                                  All of the Parties agree to use their
reasonable best efforts to obtain entry of the Final Order on or before the
deadline contemplated by this Agreement.

 

(b)                                 Subject to entry of the Final Order, the
Parties each covenant and agree to take such actions, and to execute such
documents are may be reasonably necessary to carry out the purpose and intent
of this Agreement, including, without limitation, any formal assignment
documents or notices reasonably necessary to carry out the purpose and intent
of Section 2 of this Agreement.

 

5.                                      Notices

 

(a)                                  Unless otherwise provided in this Agreement,
all notices or demands to any party relating to this Agreement shall be in
writing and shall be personally delivered or sent by registered or certified
mail (postage prepaid, return receipt requested), overnight courier, or
facsimile at its address as set forth below:

 

8

 

	
  To the Post-Emergence
  Equity Committee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lawrence C. Gottlieb,
  Esq.

  	
   

  	
   

  
	
  Kronish Lieb Weiner
  & Hellman LLP

  	
   

  	
   

  
	
  1114 Avenue of the
  Americans

  	
   

  	
   

  
	
  New York, NY 10036

  	
   

  	
   

  
	
  Telephone: 

  	
  (212) 479-6140

  	
   

  	
   

  
	
  Facsimile:

  	
  (212) 479-6275

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To Peregrine:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Irell & Manella, LP

  	
   

  	
   

  
	
  1800 Avenue of the
  Stars, #900

  	
   

  	
   

  
	
  Los Angeles, CS
  90067-1574

  	
   

  	
   

  
	
  Attn: Ken Heitz, Esq.

  	
   

  	
   

  
	
  Telephone:

  	
  310-277-1010

  	
   

  	
   

  
	
  Facsimile:

  	
  310-203-7199

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Jeremy V. Richards,
  Esq.

  	
   

  	
   

  
	
  Pachulski, Stang,
  Ziehl, Young, Jones & Weintraub PC

  	
   

  	
   

  
	
  10100 Santa Monica
  Blvd., #1100

  	
   

  	
   

  
	
  Los Angeles, CA 90067

  	
   

  	
   

  
	
  Telephone: 

  	
  310-277-6910

  	
   

  	
   

  
	
  Facsimile:

  	
  310-201-0760

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To the Loran Group:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Solomon B. Cera, Esq.

  	
   

  	
   

  
	
  Gold Bennett Cera &
  Sidener LLP

  	
   

  	
   

  
	
  595 Market Street,
  Suite 2300

  	
   

  	
   

  
	
  San Francisco, CA
  94105-2835

  	
   

  	
   

  
	
  Telephone:

  	
  415-777-2230

  	
   

  	
   

  
	
  Facsimile:

  	
  415-777-5189

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To Waga:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Jeffrey Abraham, Esq.

  	
   

  	
   

  
	
  Abraham &
  Associates

  	
   

  	
   

  
	
  One Penn Plaza, Suite
  1910

  	
   

  	
   

  
	
  New York, New York
  10119

  	
   

  	
   

  
	
  Telephone: 

  	
  (212) 714-2444

  	
   

  	
   

  
	
  Facsimile:

  	
  (212) 279-3655

  	
   

  	
   

  
						

 

9

 

6.                                      Payment of Expenses.

 

In the event any action shall be required to interpret, implement,
modify, or enforce the terms and provisions of this Agreement, or any documents
or instruments implementing this Agreement, any such action may only be brought
before the Bankruptcy Court or the District Court where the Securities Action
is pending.

 

7.                                      Governing Law.

 

This Agreement shall be construed and interpreted in accordance with
and shall be governed by the laws of the State of California, without regard to
the conflict of laws principles thereof.

 

8.                                      Complete Agreement of
Parties.

 

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

 

9.                                      Execution In Counterparts;
Facsimile Execution.

 

This Agreement may be executed in any number of counterparts each of
which, when so executed and delivered, shall be deemed an original, and all of
which together shall constitute but one and the same agreement. Delivery of an
executed counterpart of this Agreement by facsimile shall be equally as
effective as delivery of a manually executed counterpart. Any party hereto
delivering an executed counterpart of this Agreement by facsimile shall also
deliver a manually executed counterpart, but the failure to so deliver a
manually executed counterpart shall not affect the validity, enforceability or
binding effect hereof.

 

10.                               No  Admission
of Liability

 

Nothing herein shall be deemed, or construed to be an admission of
liability by Peregrine or the Debtors to any third parties including, without
limitation, the Holders of any Class 9

 

10

 

Subordinated
Claims/Interests and this Agreement may not be used as evidence of any such
liability either in the Bankruptcy Case or in any other proceeding. Nothing
herein shall be deemed an agreement or admission as to the validity,
enforceability or allowability of any individual Class 9  Claim or Class 9 Interest. Further,
nothing herein shall be deemed an admission that the Debtors have any liability
with respect to any Class 9 Indemnification Claim. 

 

11.                               Headings.

 

All headings contained herein are for convenience purposes only, and
shall not be considered when interpreting this Agreement.

 

	
  Dated:              ,
  2003

  	
   

  
	
   

  	
   

  
	
   

  	
  POST-EMERGENCE
  EQUITY COMMITTEE

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:
  

  	
  Chair
  Person and Authorized Representative

  
	
   

  	
   

  	
   

  
	
   

  	
  LORAN
  GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  By:

  	
  Solomon
  Cera, Esq.

  
	
   

  	
   

  	
  Counsel
  for the Loran Group

  
	
   

  	
   

  
	
   

  	
  PEREGRINE
  SYSTEMS, INC., 

  
	
   

  	
  A
  Delaware Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HEYWOOD
  WAGA

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Jeffrey
  Abraham, Esq.

  
	
   

  	
   

  	
  Counsel
  for Heywood Waga

  

 

11

 

Approved
as to form and content:

 

	
  Kronish
  Lieb Weiner & Hellman LLP

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Lawrence
  C. Gottlieb, Esq.

  	
   

  
	
   

  	
  Attorneys
  for Post-Emergence Equity Committee

  	
   

  
	
   

  	
   

  
	
  Gold
  Bennett Cera & Sidener, LLP

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Solomon
  B. Cera, Esq.

  	
   

  
	
   

  	
  Attorneys
  for the Securities Class / Co-Lead Plaintiff

  	
   

  
	
   

  	
   

  
	
  Irell
  & Manella LLP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Ken
  Heitz, Esq.

  	
   

  
	
   

  	
  Attorneys
  for Peregrine Systems, Inc.

  	
   

  
	
   

  	
   

  
	
  Pachulski,
  Stang, Ziehl, Young, Jones & Weintraub P.C.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Jeremy
  V. Richards

  	
   

  
	
   

  	
  Attorneys
  for Peregrine Systems, Inc.

  	
   

  
	
   

  	
   

  
	
  ABRAHAM
  & ASSOCIATES

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Jeffrey
  Abraham

  	
   

  
	
   

  	
  Attorneys
  for Heywood Waga

  	
   

  
											

 

12

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