GEAC COMPUTER CORPORATION LIMITED FORM 20-F

Geac Computer Corporation Limited is a corporation continued under and governed by the Canada Business Corporations Act. The following is a summary of the amendments made to the Corporation’s constituent documents since incorporation.

Effective October 31, 1997, the Corporation’s common shares were split 2 for 1.

On May 1, 1992, the Corporation amalgamated with Geac European Holdings Corporation, its wholly owned subsidiary. On May 1, 1988, the Corporation amalgamated with Geac Computers International Inc., its wholly owned subsidiary.

Prior to May 1, 1988, the articles of the Corporation were amended, among other things, to subdivide the common shares of the Corporation, create a class of an unlimited number of preference shares and vary the provisions of the preference shares.

By certificate of continuance dated January 7, 1980, the Corporation was continued under the Canada Business Corporations Act, after the authorized capital of the Corporation had been increased by supplementary letters patent issued November 20, 1975.

Geac was incorporated under the laws of Canada by letters patent dated May 11, 1971.

At the Corporation’s Annual and Special Meeting held on September 10, 2003, the Corporation’s shareholders authorized a change of the name of the Corporation to Geac Inc. Under the Canada Business Corporations Act, the name change will become effective upon the filing of amended articles reflecting the change. This filing had not occurred as of the date of this Annual Report.

The registered office of the Corporation is located at 11 Allstate Parkway, Suite 300, Markham, Ontario, L3R 9T8.

Geac is a leading global provider of business-critical software applications and systems. We are organized around two business groups: our Enterprise Application Systems, or EAS group, and our Industry Specific Applications, or ISA group. Our EAS group serves global and medium-sized enterprises by providing software systems that form the backbone of their information technology infrastructures. Our EAS group offers enterprise resource planning, or ERP, systems that consist of integrated business applications for accounting, financial administration and human resources functions, as well as for manufacturing, distribution and supply chain management. Our ISA group provides industry-specific business applications that are used by customers in the restaurant, construction, property management, library and real estate industries, and by government and public safety agencies, to manage their businesses and operations. In addition, we offer a broad range of professional services related to our software such as consulting, implementation and integration services, remote application management and training. We also resell third party software and hardware products for use in conjunction with our software products where appropriate to provide our customers with a more complete solution. Geac is headquartered in Markham, Canada.

The following is a summary description of the significant events that have influenced the general development of Geac’s business over the course of the last three years.

FY 2001 was a year of restructuring for Geac to transform itself into a leaner, more customer-focused organization to meet more effectively the competitive challenges in the global software marketplace. Geac undertook a number of actions to restore profitability and to strengthen its balance sheet, including staff reductions,

premises consolidation and various financing initiatives. At the same time, development, sales and marketing efforts were refocused to more effectively meet the needs of the Corporation’s extensive customer base.

With the aim of maximizing shareholder value, in the second quarter the Corporation retained financial advisors to assist in reviewing strategic alternatives, including the sale of all or parts of the Corporation. After an extensive process involving several interested parties, no formal bid for the Corporation was received, and on March 26, 2001, the Corporation announced the conclusion of the strategic review process with respect to the sale of the entire Corporation.

On December 22, 2000, the Corporation’s US$225 million credit facility with its banking syndicate expired, and the Corporation faced the obligation of repaying an outstanding obligation of US$63.8 million. Thereafter, Geac continued to negotiate with its lenders and entered into a series of standstill agreements, culminating in a repayment agreement executed on April 27, 2001. On August 31, 2001, the Corporation’s short-term bank indebtedness had been reduced to US$1.8 million.

On May 1, 2000, the Corporation acquired the business assets of Management Data Gmbh of Vienna, Austria, together with all of the issued and outstanding shares of thirteen of its world-wide subsidiaries. The total purchase price was $42.3 million. The assets were held as a temporary investment before they were sold as part of the SmartStream Reconciliations systems business on July 13, 2000.

On June 30, 2000, the Corporation purchased certain assets of Praxa Limited’s (Australia and New Zealand) local government software business for approximately $2.1 million. The acquired businesses included, at fair value, $1.0 million of current assets, $3.1 million of acquired software and $2.3 million of current liabilities. The difference between the total purchase price and the net fair value of all identifiable assets and liabilities acquired was $0.3 million and is accounted for as goodwill. During FY 2001, the businesses acquired from Praxa Limited generated approximately $2.1 million in revenue.

On July 13, 2000, the Corporation sold the SmartStream Reconciliations systems business for cash proceeds of $159.2 million. This sale included the assets and shares acquired as part of the Management Data Gmbh businesses (noted in the preceding text). The transaction resulted in a gain of approximately $96.0 million. During FY 2001, the SmartStream Reconciliations systems business generated approximately $2.8 million in revenue, and was unprofitable.

On March 31, 2001, the Corporation completed the sale of its hotel software business for approximately $1.6 million. The net liabilities disposed as part of this sale were $1.4 million, and the transaction resulted in a pre-tax gain of approximately $1.3 million, which was recorded as an unusual item on the statement of operations for FY 2001.

FY 2002 was a pivotal year for Geac. An anticipated decline in revenue was aggravated by a worldwide economic slowdown. We, like many other companies in the software industry, experienced revenue declines in all regions and across all major product lines. Nevertheless, Geac was able to meet its primary objectives for FY 2002. These objectives included strengthening our management team, investing in target product development areas, including new wireless applications, web-based products and web extensions, refocusing and better aligning our development, sales and marketing efforts, expanding our market opportunities and technology through relationships with strategic partners and significantly strengthening our balance sheet.

In May 2001, the Corporation entered into an agreement with a syndicate of underwriters under which the underwriters agreed to buy 10 million special warrants to acquire units consisting of one common share plus one-half of a common share purchase warrant. The special warrants were issued at $2.00 per unit for aggregate gross proceeds of $20.0 million. The net proceeds to Geac after underwriters’ fees and other issue expenses were approximately $17.9 million. On August 1, 2001, the 10 million special warrants were automatically exercised

which resulted in the issuance of 10 million common shares and five million common share purchase warrants. Each common share purchase warrant entitled the holder to purchase one common share of the Corporation for $2.75 at any time until December 30, 2002.

On September 27, 2001, the Corporation also completed the sale, through a public offering on a bought deal basis, of six million common shares at a price of $4.50 per share. The offering raised gross proceeds of $27 million with the net proceeds to Geac after commissions and other issue expenses of approximately $24.8 million.

The outstanding balance under the Corporation’s US$225.0 million credit facility was repaid in full in the second quarter of FY 2002. As a result, as at April 30, 2002, the Corporation had no bank indebtedness outstanding.

The Corporation entered into a 24 month revolving credit facility in the second quarter of FY 2002 in the amount of US$20.0 million. This facility was collateralized by a substantial portion of the Corporation’s assets and bore interest at a variable rate. There was no drawdown under this facility and it was terminated by the Corporation in March 2002.

During the fourth quarter, the Corporation undertook a comprehensive review of its operations with the objective of reducing costs and increasing effectiveness. As a result of this effort, Geac streamlined operations, centralized management of its SmartStream and System21 enterprise applications, refocused development and reduced the size of its workforce.

Geac sold its publishing systems business in August 2001 for $1.5 million in cash. The sale excluded real estate assets. The net liabilities disposed of included accrued divestiture costs and amounted to approximately $3.6 million. The transaction resulted in a gain of approximately $5.1 million which was recorded as an unusual item on the Consolidated Statement of Operations for FY 2002.

Geac achieved several milestones in FY 2003. In view of an expected decline in revenues from our legacy enterprise and certain industry specific applications, we continued to manage our costs in line with revenues. Geac continued to strengthen its balance sheet, and its cash position, excluding restricted cash, increased from $115.4 million at the end of FY 2002 to $128.8 million at the end of FY 2003. In addition, with the acquisition of Extensity, Inc. (“Extensity”) in the fourth quarter and the release of our new Geac System21 Aurora product, which combines next-generation enterprise resource planning functionality with real-time process management capabilities, we made significant progress executing on our strategy to deliver a suite of innovative software solutions through a unified application framework, which measure and manage operational and financial processes to improve its customers’ overall business performance.

During the second and third quarters of FY 2003, all five million common share purchase warrants issued in FY 2002 in connection with the Corporation’s special warrant financing in May 2001 were exercised. As a result of this exercise, share capital in the Corporation increased by $13.8 million and the fair value of the purchase warrants of $1.8 million was reclassified and recognized as part of the issued share capital in the Corporation.

On June 8, 2003, Geac announced that it had determined that the goodwill relating to its Interealty business had been impaired and that, the Corporation would, therefore, record a non-cash $16.8 million goodwill write-down in the fourth quarter of FY 2003 (determined in accordance with Canadian GAAP), as disclosed in the Corporation’s Current Report on Form 6-K dated June 19, 2003, which is incorporated herein by reference.

In FY 2003, Geac completed two acquisitions, the most significant being the acquisition of California-based Extensity, a leading software applications provider of solutions to automate employee-based financial systems. On March 6, 2003, Geac acquired 100% of the common shares of Extensity. The purchase price was approximately $74.0 million, consisting of $63.9 million of cash and the issuance of 932,736 common shares in the capital of the Corporation. This acquisition was a significant step in the execution of Geac’s strategy to expand into the Business Performance Management software market. The Extensity business has been integrated into the Corporation’s Enterprise Server business. This acquisition has been accounted for as a purchase and the results for this business have been reflected in the EAS group from the date of acquisition. A discussion of the impact of this acquisition on the operating results and financial position of Geac is included in the Management Discussion and Analysis section of the 2003 Annual Report of the Corporation.

In addition, effective August 5, 2002, Geac acquired the iSeries unit of EBC Informatique, a French hardware and software solutions provider. The acquired assets included customer contracts, intellectual property rights, trademarks, and property, plant and equipment. The transaction was valued at Euros 2.45 million (approximately $3.76 million). EBC Informatique’s iSeries unit was integrated with Geac’s Anael Solutions division in France. This acquisition has also been accounted for as a purchase and results for this business are also reflected in the EAS group from the date of acquisition.

On June 23, 2003, Geac announced that it had entered into a definitive merger agreement to acquire Comshare, Incorporated (“Comshare”). Comshare, headquartered in Ann Arbor, Michigan, is a leading provider of corporate performance management (“CPM”) software that helps companies implement and execute strategy. Comshare’s CPM software encompasses planning, budgeting, forecasting, financial consolidation, management reporting and analysis. Comshare launched a new version of MPC, its flagship product, in fall 2002, and version 6.0 is currently in beta-testing.

The merger agreement provided that the acquisition would be accomplished by a cash tender offer by Conductor Acquisition Corp. (“Conductor”), a wholly-owned subsidiary of Geac, at US$4.60 per share for all of Comshare’s outstanding common stock. The tender offer commenced on July 1, 2003 and was followed by a cash merger in which the remaining outstanding shares not tendered in the offer were acquired by Conductor for US$4.60 per share. On August 15, 2003, Geac announced it had completed its acquisition of Comshare for a purchase price, excluding acquisition costs, of approximately US$53.7 million. As a result, Comshare is now an indirect wholly owned subsidiary of Geac.

On June 25, 2003, Geac announced that, beginning with the first quarter of FY 2004, it would report its results in US dollars. Geac’s results of operations for the first quarter of FY 2000, stated in US dollars, were announced on September 19, 2004, as disclosed in the Corporation’s Current Report on Form 6-K dated September 29, 2003, which is incorporated herein by reference.

On July 18, 2003, Geac announced that it had appointed Charles S. Jones as President and Chief Executive Officer of the Corporation, and had appointed C. Kent Jespersen as non-executive Chairman of the Board. These appointments followed the resignation of Paul D. Birch from his offices with the Corporation.

On September 9, 2003, Geac and certain of its subsidiaries entered into a Loan, Guaranty and Security Agreement (the “Loan Agreement”) with Wells Fargo Foothill, Inc. (“WF Foothill”), pursuant to which Geac and certain of its subsidiaries obtained a three-year revolving credit facility (the “Facility”) with a US$50,000,000 revolving line of credit and a US$5,000,000 letter of credit sub-facility. The interest rate payable on advances under the Facility is, at Geac’s option, the prime rate plus 0.50% or LIBOR plus 3.00%. The Facility is secured by substantially all of the assets of Geac and certain of its United States and Canadian subsidiaries and guaranteed by certain of its United States, Canadian, United Kingdom and Hungarian subsidiaries. The Facility is available for the working capital needs and other general corporate purposes of Geac and its subsidiaries that are parties to the Loan Agreement.

Geac combines broad experience and industry-specific knowledge to address a full range of customer needs, including application software, computer hardware and peripheral components, implementation, training, consulting, and customer support. We offer products on a broad range of industry standard hardware and platforms. Geac’s acquisitions strategy has enabled the Corporation to add new products, and to expand into new markets and geographic areas.

Effective February 1, 2000, Geac’s approach to segmented reporting was modified concurrently with a change in strategic direction to focus on Enterprise Applications Systems. The two reported segments are:

	•		Enterprise Application Systems (EAS), which include cross-industry enterprise business applications for financial administration and human resources functions, and enterprise resource planning applications for manufacturing, distribution, and supply chain management; and

	•		Industry Specific Applications (ISA), which include industry-specific mission critical business applications for the real estate, construction, property management, restaurant and human resource marketplaces, as well as a wide range of applications for libraries and public safety administration.

In addition to the application software products listed below, we offer a broad range of professional services related to our software such as consulting, implementation and integration services, remote application management and training.

Enterprise Applications Systems in FY 2003 accounted for 76.9% of our total revenues, compared to 74.2% in FY 2002. Our EAS group serves large, often global, enterprises, as well as smaller, middle market companies. Our EAS products include cross-industry business applications for accounting, financial administration and human resources functions, as well as ERP systems for manufacturing, distribution and supply chain management.

Our EAS products are designed to enable our customers to standardize the management of information throughout the enterprise. This facilitates performance comparisons between different sites, offices, countries, product lines, brands, and profit centers. We believe our EAS products help businesses to reduce inventories and working capital and improve productivity and efficiency by providing accurate and flexible reporting, production planning and scheduling systems.

At April 30, 2003, our EAS group had approximately 5,800 customers, including approximately 50% of the Fortune 100 companies. We provide our EAS solutions to customers in a variety of industries, including apparel, textile and furniture manufacturing and retailing, automotive parts manufacturing, financial services, food and beverage processing and retailing, healthcare and local government administration.

Depending on the specific product, our EAS systems run on a number of hardware platforms, including mainframe and mid-range computer and client/server architectures, and use industry-standard databases such as IBM’s DB2, Sybase and Microsoft SQL Server.

Our EAS systems offer simple, consistent user interfaces, flexible reporting options and sophisticated analytical tools, including third party solutions provided by our alliance partners. These reporting and analysis tools enable our customers to analyze information contained within their enterprise management systems as they require. We also design our systems to be easily integrated with our customers’ other business applications, as well as with new, best-of-breed applications as they emerge, enabling our customers to extend the functionality of their Geac enterprise resource planning systems and to maximize the value of their existing information technology investments.

The Web extensions incorporated in our EAS systems support our customers by facilitating communication and transactions with their customers, suppliers and other business partners. Customers can use the e-commerce functionality offered in our EAS systems to reduce costs and attain more effective management control, while at the same time decentralizing business processes. Our EAS systems are Web-enabled to permit anytime-anywhere browser-based access. As a result, users with Web access can access and input data via the Internet using a standard Web browser. This allows business processes to be made faster and more efficient. For example, our customers can use our Web-enabled self-service applications to:

	•		facilitate their sales processes by enabling their customers to check product prices and availability online;

	•		allow their employees to update their own personal data in the customer’s employee benefits system, increasing convenience and relieving human resources managers of administrative tasks; and

	•		empower their employees to procure necessary goods and services when they need them by using e-procurement features available in our EAS systems.

Our E Series and M Series products, formerly known as our Expert and Millennium products, are integrated suites of financial, human resource and procurement applications designed to run on mainframe computers, including the IBM S/390 and e-server zSeries. Large and mid-sized enterprises in more than 35 countries, primarily in North America and Europe, use our E Series and M Series products, which are available in English, French and Spanish language versions. The industries that use our E Series and M Series products most widely include financial services, manufacturing, healthcare and education. Seven of the ten largest companies in the Fortune 500 use our E Series or M Series products.

System21 is a fully integrated suite of financial, manufacturing, customer service and logistics and service management applications based on the mid-range IBM e-server iSeries (formerly known as AS/400) platform. Our System21 products are used by companies worldwide, particularly in the food and beverage, apparel and shoe manufacturing, automotive parts manufacturing and electronics industries.

Our experience working with users of our System21 product in these industries have enabled us to tailor our products to the specific needs of customers and, in many cases, to develop industry-specific versions of our System21 product. For example:

	•		our System21 Drinks system, widely deployed in the beverage industry, incorporates specialized features required by liquor producers and importers that operate across multiple jurisdictions. These include the ability to handle the complex tax and regulatory requirements that apply to bonded warehouses, and to manage excise tax issues that are specific to the beverage industry.

	•		our System21 Style product, a fully integrated distribution and manufacturing solution for the apparel and footwear industries, offers apparel manufacturers and retailers a complete end-to-end solution, with applications that address design, product lifecycle development and definition, sourcing, manufacturing, contract and stock management, customer services, customer relationship management and retail.

SmartStream is a suite of financial, procurement and human resource solutions that can be deployed on a local area network or wide area network or on a Web-based infrastructure using the Windows NT or Unix operating systems and Microsoft SQL and Sybase SQL databases in a two-tiered client-server architecture. Hundreds of companies use SmartStream, ranging from large global enterprises to mid-sized and smaller businesses, primarily in

North America and Europe and, to a lesser extent, in the Asia Pacific region and in South America. The industries in which SmartStream is most widely deployed include banking, insurance and other financial services, manufacturing, retail, healthcare, government and education.

Anael solutions is a fully integrated suite of financial, accounting, human resources, e-commerce and customer relationship management applications, consisting of eleven products and services based on the IBM iSeries platform, as well as Windows NT and Windows 2000. As at April 30, 2003, over 2,000 customers, primarily in France, as well as in 40 other French-speaking countries, use Anael solutions.

Industry specific applications in FY 2003 accounted for 23.1% of our total revenues, compared to 25.8% in FY 2002.

We provide software products and related support, maintenance, development and consulting services to meet the specific management and data processing needs of organizations in selected vertical niche markets, including the real estate, restaurant, construction, property management, public safety and library markets.

Our AEC group provides integrated software suites, including project management, job-costing, bidding and estimating, and financial and accounting solutions to engineers, architects and general and specialty trade contractors in the residential and commercial construction business. The AEC group is one of the largest suppliers of construction application software solutions in North America.

Our Property Management Systems group provides software applications designed to improve productivity in the day-to-day management of residential and commercial buildings. The group’s products, which primarily service the multi-unit residential market, help to monitor traffic and conduct marketing, leasing and rent collection operations. Accounting and financial applications and on-site management tools complete the product offering. New Web-based applications provide easy-to-use and cost effective data collection. Clients include real estate investment trusts, pension funds, insurance companies, property management companies and other real estate investors.

Geac TotalHR provides applications for human resource and payroll management. TotalHR software facilitates the processing of employee information and improves the reliability and usability of that information. TotalHR is a client/server-based application that allows customers to manage and evaluate human resource and payroll needs. It has administration and configuration features that address diverse user-group and departmental security and accessibility requirements.

Our Interealty Corp. subsidiary provides Web-based information systems, services and products to multiple listing services and real estate brokers primarily in North America. Interealty provides real estate professionals with online multiple listing systems, desktop productivity software, agent web-site development and hosting, and customer relationship management systems. Interealty’s new MLXchange product has advanced, Web-enabled features that can automatically page a real estate broker on her mobile phone when the price is reduced on a property she is watching or when a prospect expresses interest in a listing on the realtor’s web-site.

The Restaurant Systems group provides applications to quick-service and table-service restaurants and food service providers designed to improve customer service and to manage production and administrative operations. Applications include point-of-sale, back office reconciliation and inventory control. The group primarily serves franchisers and franchisees of chain restaurant companies. The group’s advanced store management and executive information software systems enable the group’s customers to meet high volume transaction management needs.

Our Public Safety Systems group provides computer-aided dispatch and records management systems for emergency services such as law enforcement agencies, fire departments and ambulance service organizations. The group’s systems assist critical services delivery organizations to improve call response times and to disseminate important information to response personnel.

Our Libraries Systems group provides automation solutions for public, academic and specialty libraries. The group’s products are able to handle records in different formats and character sets, as well as to provide interconnectivity with other information services. For example, our Vubris Smart library application, developed in conjunction with Brussels Vrije Universiteit and Eindhoven Technische Universiteit, enables libraries to implement a Web-based service to provide users with greater flexibility and interconnectivity with the library’s database.

Complementing its own international distribution organization, Geac has a network of value added resellers (VARs) and distributors delivering Geac solutions to other markets, including the Middle East, Eastern Europe, Africa and Asia. These VARs and distributors are selected for their expertise in meeting the needs of local customers in specific vertical markets.

Geac’s principal competitors for new EAS license sales, as well as for the replacement of Geac’s installed systems in the EAS market, are Oracle Corp., Lawson Software, PeopleSoft, Inc./J.D. Edwards & Company, SAP AG, and Intentia. These large, well capitalized firms have significantly more resources at their disposal than Geac has, and therefore can invest more in research and development, sales and marketing and can sustain price reductions for longer periods than Geac is able to do. Because competitors can easily penetrate the software market, large, multinational enterprise resource planning vendors have begun targeting mid-sized businesses as their traditional market of large, multinational businesses becomes increasingly mature. In addition current and potential competitors have established, or may in the future establish, co-operative relationships among themselves or with third parties. We expect that the software industry will continue to consolidate. It is possible that new competitors or alliances among competitors will emerge and rapidly acquire significant market share.

In the market for maintenance and support of EAS products, Geac competes with third party service providers who support other software vendors’ products. Geac also faces internal competition from the in-house IT departments of Geac’s customers, particularly in industries that are under intense pressure to contain costs, such as the automotive parts manufacturing industry. These customers may choose not to purchase Geac’s maintenance services but rather to support Geac’s EAS products themselves.

Competition in the markets served by the ISA group is generally fragmented and each of Geac’s industry-specific product groups faces competition from numerous sources, ranging from large, publicly traded companies that market a broad range of software products to small, privately held software vendors whose businesses are focused on serving a particular vertical market. Geac’s larger ISA competitors often have significantly greater

resources than it does, potentially enabling them to invest more in research and development, sales and marketing and can sustain price reductions for longer periods than Geac is able to do.

Geac expects increased competition in its ISA segment to come from providers of lower-priced shrink-wrapped software, many of which are large, well-capitalized software companies. Many of these providers are increasingly tailoring their offerings to specific vertical markets, such as the construction industry, as part of an effort to compete with vendors of more expensive integrated applications designed specifically for these industries. In addition, as the market for mid-range enterprise application systems becomes increasingly saturated, providers of general purpose integrated enterprise application systems products are also re-packaging their products and targeting specific vertical markets.

Geac is subject to risks of doing business internationally, including fluctuations in currency exchange rates, increases in duty rates, difficulties in obtaining export licenses, difficulties in the enforcement of intellectual property rights and political uncertainties. During FY 2003, Geac derived approximately 3.1% of its total revenue from sales to customers inside Canada, and approximately 49.1% of its total revenue from sales to customers in the U.S. Geac’s most significant international operations are in the United States, the United Kingdom, and France, which are the only countries in which Geac’s revenues constituted more than ten percent of its total world-wide revenues during FY 2003.

Geac has historically reported its results in Canadian dollars. To the extent that Geac made sales denominated in currencies other than Canadian dollars, gains and losses on the conversion of such sales to Canadian dollars contributed to fluctuations in Geac’s business and operating results as reported in Canadian dollars. Beginning with the first quarter of FY 2004, Geac began reporting its results in US dollars. To the extent that Geac makes sales denominated in currencies other than US dollars, gains and losses on the conversion of such sales to US dollars may, in the future, contribute to fluctuations in Geac’s business and operating results as reported in US dollars.

Other risks Geac faces in conducting business internationally include the following: longer payment cycles, difficulties in managing international operations, including constraints associated with local laws regarding employment, problems in collecting accounts receivable, complex international tax compliance requirements, and the adverse effects of tariffs, duties, price controls or other restrictions that impair trade.

Geac, in the normal course of business, is subject to legal proceedings brought against it and its subsidiaries, including several that are not described below. Such proceedings may be the result of disputes over, among other things, contracts, alleged torts, real estate, insurance, employee relations, or intellectual property.

In May 2001, Cels Enterprises, Inc. filed a complaint in the United States District Court for the Central District of California against Geac Computer Corporation Limited and its subsidiary Geac Enterprise Solutions, Inc. (“GES”). GES is the successor to JBA Holdings plc, a company acquired by Geac in 1999 (“JBA”). The complaint alleged that JBA software supplied to Cels by Geac was experimental and did not work. The software product in question, which was part of JBA’s product offering prior to the acquisition, is no longer sold by Geac. Cels claimed damages of US$28.3 million. In August 2003, the jury returned a verdict against GES awarding Cels US$1.8 million in compensatory damages and US$2.3 million in punitive damages, and a judgment was entered. Either party may appeal the judgment. At April 30, 2003, Geac had accrued US$2.0 million in respect of the Cels claim. Geac increased the amount of this reserve to US$4.1 million at July 31, 2003.

As described in greater detail in the Risk Factors section, Extensity, a subsidiary acquired by Geac in March 2003, is subject to a class action suit which alleges that Extensity, certain of its officers and directors (who are no longer employed by Geac), and the underwriters of its initial public offering in January 2000 violated the federal securities laws of the United States. The parties have submitted a settlement proposal and are awaiting court approval of the proposal. Such approval is expected in late 2003 to early 2004. If the proposed settlement is not approved, in view of the fact that Extensity is a corporate defendant, this action may divert the efforts and attention of Geac’s management and, if determined adversely, could have a material impact on Geac’s business, financial position, results of operations and cash flows.

On March 21, 2002, Grace Consulting, Inc. (“Grace”), a provider of software maintenance and consulting services, filed a lawsuit against GES and Geac Computer Corporation Limited claiming antitrust violations and seeking approximately US$75 million in damages. Grace alleged that Geac was attempting to monopolize the market for maintenance services in certain Geac products by filing a copyright infringement suit against Grace and by taking other measures to prevent Grace from providing software maintenance services through the infringement of Geac’s copyrights. Geac believes this lawsuit is based on facts and circumstances substantially similar to Grace’s claims in an earlier lawsuit. In 1995, before its acquisition by Geac, Dun & Bradstreet Software Services, Inc. filed a complaint against Grace claiming copyright infringement. Grace asserted counterclaims against Dun & Bradstreet Software Services, Inc. for copyright misuse, tortious interference with contract, and breach of contract. On September 24, 2002, the United States Circuit Court of Appeals for the Third Circuit issued an opinion in Geac’s copyright infringement suit against Grace, finding that Grace’s maintenance services infringed Geac’s copyrights, reinstating Geac’s claims against Grace for misappropriation of trade secrets, and affirming the dismissal of Grace’s counterclaims for copyright misuse, tortious interference with contractual relations, and breach of contract. Grace sought review by the United States Supreme Court, but such review was denied. Grace has ceased doing business. In light of the Third Circuit’s decision, Geac believes that the claims raised in Grace’s March 2002 antitrust action are without merit because the claims raised in that suit were dependent upon Grace’s maintenance services not infringing Geac’s copyrights. However, there can be no assurance that Geac will be successful in defending against these new claims.

The ultimate outcome of these, and other, matters cannot currently be determined, nor, except as stated above, can the liability that could potentially result from a negative outcome in each case currently be reasonably estimated. In the event of a negative outcome, the liability that Geac may ultimately incur with respect to any of these matters may be in excess of amounts currently accrued with respect to such matters and, as a result, these matters may be material.

The following is a list of the significant subsidiaries of Geac as at April 30, 2003. All the outstanding equity securities of each subsidiary are owned directly or indirectly by Geac, except as noted below:

* Non-voting redeemable preferred shares having an aggregate redemption price of US$50,000 are held by an unrelated third party.

Certain subsidiaries have been omitted from the table above, as each accounts for not more than 10% of our consolidated assets at April 30, 2003 and not more than 10% of our consolidated sales for FY 2003, and all of those omitted in the aggregate account for not more than 20% of our total consolidated assets at April 30, 2003 and total consolidated sales for FY 2003.

In August 2003, Geac, through Conductor Acquisition Corp., an indirect, wholly owned subsidiary organized by Geac under the laws of the State of Michigan for the purpose, acquired all of the outstanding common stock of Comshare, Incorporated, a Michigan corporation.

Geac’s corporate headquarters are located in Markham, Ontario, where Geac has occupied space since 1989. Geac currently has a lease for 25,286 square feet of space at 11 Allstate Parkway, Suite 300, Markham, Ontario, for a term expiring April 30, 2005. In addition to Geac’s headquarters, Geac’s business is conducted most significantly from owned offices and facilities in the United Kingdom in Studley, Warwickshire and leased offices and facilities in the United States in Southborough, Massachusetts and Atlanta, Georgia. Geac and its subsidiaries operate 63 other offices and facilities in 22 countries around the world. These offices and facilities are operated under leases of varying duration, with no lease extending beyond 2016.

In addition, certain Geac subsidiaries own real estate in the United States. Geac Computers, Inc. owns real property in Tampa, Florida and in Nashua, New Hampshire. Interealty Corporation owns property in Decatur, Georgia, which houses a multiple listing book publishing operation.

The Florida, New Hampshire and Georgia properties are free and clear of liens. The Studley, Warwickshire, United Kingdom property is owned by Geac Computer Systems UK Limited and is currently encumbered by a mortgage granted to the Bank of Scotland.

The following management discussion and analysis of results of operations and financial position should be read in conjunction with our audited financial statements and notes for the fiscal years (FY) ended April 30, 2003, 2002 and 2001, included elsewhere in this Annual Report. This discussion contains certain forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. These risks and uncertainties include those discussed in the section entitled “Risk Factors.”

The financial statements included in this Annual Report are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). As a Canadian company subject to the Canada Business Corporations Act and to the reporting requirements of the securities regulatory authorities in Canada, Geac is required to prepare and file in Canada financial statements prepared in accordance with accounting principles generally accepted in Canada, or Canadian GAAP. Canadian GAAP differs in some respects from US GAAP. Geac’s Canadian GAAP financial statements are not included in this Annual Report. The following management discussion and analysis relates to our US GAAP financial statements included in this Annual Report.

Our financial statements, including those included in this Annual Report, have historically been stated in Canadian dollars. Beginning with the first quarter of FY 2004, we will report our results in US dollars.

As used in this discussion and unless the context otherwise requires or unless otherwise indicated, all references to “Geac,” “we,” “our,” or “the Company” refer to Geac Computer Corporation Limited and its consolidated subsidiaries.

Geac is a global enterprise software company for business performance management, providing customers worldwide with the core financial and operational solutions and services to improve their business performance in real time. Our solutions include cross-industry enterprise application systems (EAS) for financial administration and human resources functions, expense management, time capture, and enterprise resource planning applications for manufacturing, distribution, and supply chain management. These cross-industry applications are marketed globally and span a number of product lines. We also provide industry specific applications (ISA) tailored to the real estate, restaurant, property management, and construction marketplaces, and for libraries and public safety agencies. In addition to our families of software products, we are a reseller of computer hardware and software, and we provide a broad range of professional services, including application hosting, consulting, implementation services, and training. Headquartered in Markham, Ontario, Canada, Geac employed approximately 2,500 people around the world on April 30, 2003, compared to approximately 3,000 people on April 30, 2002.

Geac today has a presence in the financial back offices of many of the largest companies in the world. These companies rely on Geac software applications for their financial and operational processing. Our objective is to extend our relationships with these customers and to attract new customers by delivering a suite of software solutions that can be integrated with our enterprise application systems and help our customers improve their business performance.

We achieved several significant milestones in FY 2003. In view of an expected decline in revenues from our legacy enterprise and certain industry specific applications, we continued to manage our costs in line with revenues. We continued to strengthen our balance sheet, and our cash position increased from $115.4 million at the end of FY 2002 to $128.8 million at the end of FY 2003. In addition, with the acquisition of Extensity, Inc. in the fourth quarter and the release of our new Geac System21 Aurora product, we made significant progress executing on our strategy to deliver a suite of innovative software solutions through a unified application framework, which measure and manage operational and financial processes to improve our customers’ overall business performance.

In FY 2003 we completed two acquisitions, the most significant being the acquisition of California based Extensity, a leading provider of solutions to automate employee-based financial systems. The acquisition, valued at US$50.3 million (approximately $74.0 million), was completed on March 6, 2003, and was a significant step in the execution of our strategy to expand into the business performance management market. The Extensity business has been integrated into our Enterprise Server business. In addition, effective August 5, 2002, we acquired the IBM e-Server iSeries software assets, customer agreements, and employee base of EBC Informatique, a French hardware and software solutions provider. The transaction was valued at Euros 2.45 million (approximately $3.76 million). EBC Informatique’s iSeries unit was integrated with our Anael Solutions division in France. These acquisitions have been accounted for as purchases, and results for these two businesses are reflected in the EAS segment from the date of acquisition.

Subsequent to the end of FY 2003, effective August 14, 2003, we acquired Comshare, Incorporated (“Comshare”). Comshare, headquartered in Ann Arbor, Michigan, is a leading provider of corporate performance management (“CPM”) software that helps companies implement and execute strategy. Comshare’s CPM software encompasses planning, budgeting, forecasting, financial consolidation, management reporting and analysis. Comshare launched a new version of MPC, its flagship product, in fall 2002, and version 6.0 is currently in beta-testing. The acquisition was accomplished by way of a cash tender offer for all the outstanding shares of Comshare at a price of US$4.60 per share, followed by a cash merger; and the estimated purchase price, excluding acquisition costs, was approximately US$53.7 million. Along with the acquisition of Extensity, Inc. (“Extensity”), a provider of solutions to automate employee-based financial systems, completed in the fourth quarter of FY 2003, the acquisition of Comshare is a significant step in the execution of our strategy to expand into the business performance management market.

The preparation of our financial statements requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures. Our estimates are based upon historical experience and on other assumptions that are believed to be reasonable under the circumstances. Our ongoing evaluation of these estimates forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of revenues and expenses, in cases where they are not readily ascertainable from other sources. Actual results may differ from these estimates under different assumptions.

In many cases, the accounting treatment of a particular transaction is specifically dictated by US GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. The critical accounting policies discussed below are those that affect our financial statements materially and involve a significant level of judgment by management. Our senior management has reviewed these critical accounting policies and related disclosures with our audit committee. A summary of our significant accounting policies, including the critical accounting policies discussed below, is set forth in note 2 to our consolidated financial statements.

Revenue Recognition. We derive revenues from three sources—software, support and services, and hardware. Support and services includes software maintenance and support, training, system implementation, and consulting. Maintenance and support consists of technical support and software upgrades and enhancements. We resell computer hardware and peripherals primarily as a service to certain customers who look to us to provide a complete product solution. Significant management judgments and estimates are involved in determining the revenue recognized in any accounting period. Material differences in the amount and timing of our revenue for any period could result if different judgments were to be made.

We recognize product revenue when persuasive evidence of an arrangement exists, the product has been delivered, the fee is fixed and determinable, and collection of the resulting receivable is probable. In bundled arrangements, we allocate revenue to each element of the arrangement based upon vendor specific objective evidence (VSOE). We use a purchase order or a signed contract as evidence of an arrangement for licenses of software and sales of hardware and services. Arrangements with our resellers are evidenced by a master agreement governing the relationship.

Software is delivered to customers electronically or on a CD-ROM, tape, or diskette, as appropriate. We assess whether the fee is fixed and determinable based on the payment terms associated with the transaction. Our standard payment terms are generally less than 90 days. In instances where payments are subject to extended payment terms, revenue is deferred until payments become due, which is generally when the payment is received.

We assess collectibility based on a number of factors, including the customer’s past payment history and current credit-worthiness. If we determine that collection of a fee is not reasonably assured, we defer the revenue and recognize it at the time collection becomes reasonably assured, which is generally upon receipt of cash payment.

When licenses are sold together with hardware, consulting, and implementation services, services revenues are recognized based on percentage of completion. Our consulting and implementation service contracts are bid either on a fixed-fee basis or on a time-and-materials basis. For a fixed-fee contract, we recognize revenue using the percentage of completion method. For time-and-materials contracts, we recognize revenue as services are performed.

Maintenance and support revenue is recognized ratably over the term of the maintenance contract. Amounts billed in accordance with customer contracts, but not yet earned, are recorded as deferred revenue.

Valuation of Identifiable Goodwill and Other Intangible Assets. We account for our business acquisitions under the purchase method of accounting. The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. As part of this allocation process, we must identify and attribute values and estimated lives to the intangible assets acquired. While we may employ experts to assist us with these matters, such determinations involve considerable judgment, and often involve the use of significant estimates and assumptions, including those with respect to future cash inflows and outflows, discount rates, and asset lives. These determinations will affect the amount of amortization expense recognized in future periods.

We review the carrying values of all identifiable goodwill and other intangible assets when conditions arise that indicate that any impairment may have occurred. Examples of these conditions include significant underperformance relative to historical or expected future operating results, significant changes in the manner of our use of the acquired assets or our strategy, significant negative industry or economic trends, or significant decline in our share price or market capitalization.

Prior to May 1, 2001, we determined impairment by comparing the undiscounted amount of expected future operating cash flows with the carrying amounts of such assets. Expected future operating cash flows were based upon our best estimate given the facts and circumstances at that time. Impairments in the carrying amount of identifiable intangible assets and goodwill were expensed. Effective May 1, 2001, we adopted Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets.” Under the new standard, goodwill and other intangible assets with an indefinite life are not amortized, but are tested for impairment at least annually, as well as within six months of adopting the new standard. The determination of fair value involves significant management judgment. Impairments in the carrying amounts of identifiable goodwill and other intangible assets with indefinite lives will be expensed. As the valuation of identifiable goodwill and other intangible assets requires significant estimates and judgment about future performance and fair value, our future results could be affected if our current estimates of future performance and fair value change.

Accounting for Income Taxes. We operate in multiple jurisdictions, and our profits are taxed pursuant to the tax laws of these jurisdictions. Our effective tax rate may be affected by the changes in, or interpretations of, tax laws in any given jurisdiction, utilization of net operating losses and tax credit carry forwards, changes in geographical mix of income and expense, and changes in management’s assessment of matters, such as the ability to realize future tax assets. As a result of these considerations, we must estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure, together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in future tax assets and liabilities, which are included in our consolidated balance sheet. We must then assess the likelihood that our future tax assets will be recovered from future taxable income and establish a valuation allowance for any amounts we believe will not be recoverable. Establishing or increasing a valuation allowance increases our income tax expense.

Significant management judgment is required in determining our provision for income taxes, our income tax assets and liabilities, and any valuation allowance recorded against our net income tax assets. We recorded a valuation allowance as at April 30, 2003, due to uncertainties related to our ability to utilize some of our income tax assets before they expire. The valuation allowance was based on our estimates of taxable income by jurisdiction in which we operate and the period over which our income tax assets will be recoverable. In the event that actual

results differ from these estimates or we adjust these estimates in future periods, we may need to amend our valuation allowance, which could materially impact our financial position and results of operations.

Restructuring. Effective January 1, 2003, we adopted SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. We have rationalized certain facilities and have established reserves against outstanding commitments for leased properties that we have vacated. These reserves are based upon our estimate of future events, such as the time required to sublease the property and the amount of sublease income that might be generated from the date we vacate the property and the expiration of the lease. We have also rationalized certain business operations and have established reserves based upon our estimate of the severance and benefit costs associated with these workforce reductions. These estimates are reviewed based on changes in circumstances. Adjustments to the restructuring charge will be made in future periods, if necessary, should different conditions prevail from those anticipated in our original estimate.

Accounts Receivable. We estimate the collectibility of our accounts receivable, and we maintain allowances for estimated losses. Management analyzes accounts receivable, historical bad debts, receivable aging, customer credit-worthiness, and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances might be required.

Legal Contingencies. We are from time to time involved in various claims and legal proceedings. Periodically we review the status of each significant matter and assess our potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgment is involved in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based on the best information available at the time. As additional information becomes available, we reassess the potential liability relating to our pending claims and litigation and may revise our estimates. Such revisions in estimates of potential liabilities could have a material impact on our results of operations and financial position.

Fiscal year ended April 30, 2003 compared to fiscal year ended April 30, 2002

Revenue. Revenue for FY 2003 was $623.7 million, compared to $716.5 million for the preceding year. Software license revenue declined by $8.0 million, or 9.6 percent; support and services revenue declined by $80.1 million, or 13.8 percent; and revenue from the sale of computer hardware declined by $4.7 million, or 9.0 percent. Excluding from FY 2002 results $5.2 million in revenue attributable to the publishing software business, which was sold on August 9, 2001, and excluding from FY 2003 results $3.4 million in revenue attributable to the Extensity business, which was acquired on March 6, 2003, total revenue declined by $91.1 million, or 12.8 percent, from $711.3 million in FY 2002 to $620.2 million in FY 2003. Compared to FY 2002, currency fluctuations—primarily attributable to the British Pound Sterling, the U.S. Dollar, and the Euro against the Canadian Dollar—had the effect of reducing revenues by $19.7 million.

Revenue in the EAS segment in FY 2003 was $479.5 million, compared to $531.3 million in the preceding year. Excluding revenue from the Extensity acquisition, EAS segment revenue declined by $55.2 million, or 10.4 percent, to $476.1 million. EAS software licenses to new and existing customers, in the amount of $62.1 million, declined by $0.6 million from the prior year. A $2.2 million decline in revenue from licenses of client server software systems, primarily our SmartStream and local government systems, was almost entirely offset by a $1.6 million increase in revenue from licenses of our E Series and M Series software systems for mainframe computers. EAS support and services revenue declined by $49.1 million, or 11.5 percent. Of this $49.1 million decline, EAS maintenance revenue — primarily contracted support to customers of our licensed software — declined by $24.4 million, or 8.4 percent. This decline, which was in line with our expectations, was due to attrition in maintenance contract renewals for mainframe ($20.8 million), and client server applications ($9.2 million), which were partially offset by a $5.6 million increase in maintenance contract revenues from our System21 software systems, primarily for mid-range server architectures. Other EAS support and services revenue — primarily professional implementation and training services — declined by $24.7 million, or 18.1 percent. We expect a continuing decline in EAS maintenance revenue. This decline may be offset, to some extent, if we experience an increase in professional services revenue in FY 2004, primarily as a result of the Extensity acquisition. EAS hardware sales revenue declined by $2.0 million, or 5.1 percent, reflecting a $2.8 million decline in hardware sales associated with

client server applications, which was partially offset by a $0.8 million increase in mid-range computer hardware sales.

Revenue in the ISA segment in FY 2003 was $144.2 million, compared to $185.2 million in the preceding year. Excluding $5.2 million in revenue from the publishing software business, which was sold in the first quarter of FY 2002, ISA segment revenue declined by $35.8 million, or 19.9 percent, from $180.0 million in FY 2002 to $144.2 million in FY 2003. Of this $35.8 million decline, $25.3 million is attributable to the Interealty business and reflects the continuing effects of a change in the service and pricing model for the Multiple Listing Service (MLS) application business, as the internet has supplanted more costly virtual private networks, significant price pressure and customer losses in the core MLS application business, and the continuing decline in revenue from the MLS book publishing business, which was expected. Revenue in other ISA businesses declined by $10.5 million, or 10.0 percent, with declines in software systems serving the construction ($6.3 million), restaurants ($2.9 million), and property management ($1.7 million) markets, partially offset by a $0.3 million increase in public safety systems revenue and a $0.1 million increase in library systems revenue.

Cost of Revenues. Cost of revenues was reduced by $59.5 million, or 18.2 percent, from $326.6 million in FY 2002 to $267.1 million in FY 2003; and gross profit margin (gross profit as a percentage of total revenues) increased from 54.4 percent in FY 2002 to 57.2 percent in FY 2003. Cost of software license revenues was reduced by $1.4 million, or 12.2 percent, as lower revenues from resellers of our industry-specific applications have resulted in lower costs of reseller software sales. Costs of support and services, which consist primarily of personnel and related costs, were reduced by $56.1 million, or 20.5 percent; and support and services margins increased from 53.0 percent to 56.6 percent. Hardware costs were reduced by $2.0 million, or 4.9 percent; and hardware margins declined from 19.1 percent to 15.5 percent, primarily as a result of a low margin $3.1 million hardware sale to a single customer in the first quarter of FY 2003.

Operating Expenses. Operating expenses were $267.9 million, compared to $322.1 million last year.

	•		Sales and marketing expenses were reduced by $3.0 million, or 3.2 percent, primarily as a result of restructuring efforts, and sales and marketing expenses as a percentage of revenues increased from 13.0 percent in FY 2002 to 14.5 percent in FY 2003. This increase in the percentage of revenues reflects investments in personnel and related sales and marketing costs intended to drive increased new license revenue in certain businesses in the coming year.

	•		Product development expenses were reduced by $24.5 million, or 26.4 percent, and product development expenses as a percentage of revenues were reduced from 13.0 percent in FY 2002 to 10.9 percent in FY 2003. This reduction reflects the maturity of our mainframe back office financial applications, the completion of major development projects for mid-range and client-server applications, and the consolidation of Extensity application development with existing Geac application development. Product development expenses are projected to increase over the course of the next year.

	•		General and administrative expenses increased by $1.5 million, or 1.7 percent; and general and administrative expenses as a percentage of revenues increased from 12.3 percent in FY 2002 to 14.4 percent in FY 2003. The net $1.5 million increase is attributable to a $2.9 million reduction in the provision for doubtful accounts in FY 2002; an increase of $6.2 million in professional fees; an increase of $1.2 million in insurance costs; a $2.6 million adjustment in the second quarter of FY 2003 to increase the amortization of property, plant, and equipment to more accurately reflect the valuation of acquired assets; and $1.6 million in restructuring costs in excess of the amounts that had been accrued in the fourth quarter of FY 2002, net of a $13.0 million reduction in other general and administrative expenses. As a result of the consolidation of back office finance and accounting operations in North America, which was completed in FY 2003, and in Europe, which is expected to be completed by the end of the first quarter of FY 2004, general and administrative expenses as a percentage of revenues are expected to be reduced over the course of the next fiscal year.

Net Restructuring and Other Unusual Items. Net restructuring and other unusual items were $5.2 million in FY 2003, compared to $45.9 million last year. The $5.2 million in net restructuring and other unusual items in FY 2003 included a $5.0 million provision for the settlement of legal claims, a $3.5 million pre-tax provision for

premises rationalization, and a $2.8 million charge for severance relating to the restructuring of our North American operations. The restructuring of these operations reflects management’s decision to consolidate certain development, sales and marketing, and support and services operations into similar operations acquired in the Extensity acquisition. These charges were partially offset by a net $6.1 million reversal of accrued liabilities and other provisions related to acquisitions and restructuring, which were recorded in prior years and which were no longer required. This $6.1 million reversal includes $3.9 million for severance and premises rationalization related to last year’s restructuring of the business, including $2.4 million related to premises rationalization and $1.5 million for severance costs not required as a result of changes in the original plan and employee attrition during the year. In addition, net restructuring and other unusual items reflects a net release of $2.2 million primarily related to restructuring and acquisition-related provisions on certain FY 2000 acquisitions, which are no longer required for their originally intended purposes.

In FY 2002, the $45.9 million in net restructuring and other unusual items included a $34.8 million pre-tax provision for severance, premises rationalization and other costs related to the restructuring of the business; a $5.1 million write-down of assets; a $5.3 million net provision for the settlement of legal claims, primarily related to our acquisition of JBA Holdings plc; a $4.7 million charge for strategic planning costs; and a $2.9 million charge for unamortized financing costs of a credit facility that, in light of our improved cash position, we terminated in March 2002 to avoid additional costs. These charges were partially offset by a net $6.9 million reversal of excess accrued liabilities and other provisions relating to acquisitions and restructuring, which were recorded in prior years and which were no longer required.

Goodwill Impairment. In connection with the annual review of the carrying value of goodwill, we recorded a $12.5 million goodwill write-down in the fourth quarter of FY 2003 relating to the Interealty business, based on revised future estimates of its likely performance given the deterioration of results compared to budget expectations. This represented the full amount of goodwill on our balance sheet for the Interealty business. This goodwill write-down had the effect of reducing earnings per diluted share by $0.15 for the fourth quarter of FY 2003 and by $0.15 for the full year. No goodwill impairment was recorded in FY 2002.

Amortization of Intangible Assets. Amortization of intangible assets, primarily acquired software, was $1.6 million in FY 2003, compared to $1.7 million in FY 2002.

Interest Income and Expense. Net interest income in FY 2003 was $1.3 million, compared to net interest expense of $1.6 million in FY 2002. This change reflects a $2.9 million reduction in interest expense, which was primarily attributable to the repayment of $39.5 million in bank indebtedness in the first two quarters of FY 2002.

Other Income (Expense). Other expense of $2.6 million in FY 2003 included a $4.2 million loss on foreign exchange, net of $0.9 million in investment income and a $0.7 million gain on the sale of fixed assets. Of the total $4.2 million loss on foreign exchange in FY 2003, $6.2 million was incurred in the fourth quarter and was partially offset by a gain of $2.0 million through the first three quarters of FY 2003. Other income of $0.9 million in FY 2002 was composed of a $0.6 million gain on foreign exchange and a $0.3 million gain on the sale of fixed assets.

Income Taxes. The provision for income taxes was $33.3 million in FY 2003, compared to $30.1 million in FY 2002. Our effective tax rate for FY 2003 was 40 percent. Of the total $33.3 million provision for income taxes recorded in FY 2003, $25.6 million reflects utilization of income tax assets, and $7.7 million represents cash taxes. Of the total $30.1 million provision for income taxes recorded in FY 2002, $9.9 million reflects utilization of income tax assets, and $20.2 million represents cash taxes.

Compared to FY 2002, currency fluctuations — primarily attributable to the British Pound Sterling, the U.S. Dollar, and the Euro against the Canadian Dollar — had the effect of reducing revenues by $19.7 million and reducing net income by $1.6 million, or $0.02 per diluted share.

Fiscal year ended April 30, 2002 compared to fiscal year ended April 30, 2001

Revenue. Revenue for FY 2002 was $716.5 million, compared to $836.4 million for the preceding year. Excluding from both periods revenue attributable to the publishing software business, which was sold on August 9, 2001, and the hotel software business, which was sold on March 31, 2001, total revenue declined by $91.2 million, or 11.4 percent, from $802.5 million in FY 2001 to $711.3 million in FY 2002. Software license revenue declined

by $3.2 million, or 3.7 percent; support and services revenue declined by $66.9 million, or 10.4 percent; and revenue from the sale of computer hardware declined by $21.1 million, or 28.8 percent.

Revenue in the EAS segment was $531.3 million, compared to $596.6 million last year. EAS software licenses to new and existing customers declined by $2.4 million, or 3.7 percent. A $10.6 million decline in JBA software licenses was partially offset by a $4.5 million increase in main frame license revenues and a $3.7 million increase in client server license revenues, primarily attributable to license sales of Geac’s Pathway local government systems in the Asia Pacific region. EAS support and services revenue declined by $51.9 million, or 10.8 percent. Of this $51.9 million decline, EAS maintenance revenue - primarily contracted support to customers of our licensed software - declined by $25.9 million, or 8.1 percent. This decline was expected and is due to attrition in maintenance contract renewals for mainframe ($15.2 million), client server ($6.9 million), and JBA ($3.8 million) applications. Other EAS support and services revenue - primarily professional implementation and training services - declined by $26 million, or 15.9 percent. Reflecting market conditions, EAS hardware sales revenue declined by $11.0 million, or 21.5 percent, with $7.9 million of this decline attributable to hardware sales associated with client server applications.

Revenue in the ISA segment was $185.2 million, compared to $239.7 million in FY 2001. Of this total $54.5 million decline, $17.4 million in revenue is attributable to the publishing software business, which was sold in the first quarter of FY 2002, and $11.1 million is attributable to the hotel software business, which was sold in the fourth quarter of last year. Excluding revenue from the publishing and hotel software businesses, total ISA revenue declined by $25.8 million, or 12.6 percent, from $206.0 million in FY 2001 to $180.0 million in FY 2002. Revenue declines in Interealty ($14.3 million), restaurant systems ($9.2 million), and library systems ($7.4 million), were partially offset by revenue increases in businesses serving public safety agencies ($3.3 million) and the property management industry ($4.2 million). The decline in Interealty revenues reflects significant price pressure in the core multiple listing service application business; the continuing decline in revenue from the MLS book publishing business, which was expected; and the slow adoption of Interealty’s MLXchange product, which integrates listing management, lead capture, and client management technology. Our restaurant software business was adversely affected by the downturn in the hospitality industry in the second half of FY 2002. The decline in library systems revenue reflects discontinuation of a third party data subscription service and delays in the release of Vubis Smart, our next generation Internet-based information management system, which was introduced in April 2002. Partially offsetting revenue declines in other ISA businesses, public safety systems revenue increased by $3.3 million as a result of increased software maintenance revenue and a single large implementation of our graphical interface police computer aided dispatch (CAD) system; and property management systems revenue increased by $4.2 million, reflecting increasing market adoption of our next generation, Internet-based, multi-family real estate management software.

Cost of Revenues. Cost of revenues was reduced by $96.1 million, or 22.7 percent, from $422.7 million in FY 2001 to $326.6 million in FY 2002; and gross profit margin (gross profit as a percentage of total revenues) increased from 49.5 percent in FY 2001 to 54.4 percent in FY 2002. Cost of software license revenues, primarily royalties paid to vendors of third-party software, was reduced by $4.2 million, or 26.8 percent. Costs of support and services, which consist primarily of personnel and related costs, were reduced by $73.1 million, or 21.1 percent; and support and services margins increased from 48.4 percent to 53 percent, primarily as a result of improved utilization rates. Hardware costs were reduced by $18.8 million, or 30.9 percent, in line with hardware revenues.

Operating Expenses. Operating expenses were $322.1 million, compared to $760.4 million last year. Sales and marketing expenses were reduced by $31.4 million, or 25.2 percent; product development expenses were reduced by $24.5 million, or 20.9 percent; and general and administrative expenses were reduced by $14.2 million, or 13.8 percent. These reductions reflect ongoing efforts to keep costs in line with revenues.

Sales and marketing expenses as a percentage of revenues were reduced from 14.8 percent to 13.0 percent; product development expenses were reduced from 14.0 percent to 12.9 percent; and general and administrative expenses increased from 12.3 percent to 12.4 percent. The year over year increase in general and administrative expenses as a percentage of revenues is primarily attributable to increased professional fees, composed of both strategic consulting and legal fees.

Net Restructuring and Other Unusual Items. Net restructuring and other unusual items were $45.9 million in FY 2002, compared to $295.9 million last year, which included a write down of CDN$171.3 million of goodwill

and CDN$81.5 million of acquired software primarily related to the acquisition of JBA. The $45.9 million in net restructuring and other unusual items in FY 2002 included a $34.8 million pre-tax provision for severance, premises rationalization and other costs related to the restructuring of the business; a $5.1 million write down of assets; a $5.3 million net provision for the settlement of legal claims primarily related to the JBA acquisition; a $4.7 million charge for strategic planning costs; and a $2.9 million charge for unamortized financing costs of a credit facility that, in light of our improved cash position, we terminated in March 2002 to avoid additional costs. These charges were partially offset by a net $6.9 million reversal of excess accrued liabilities and other provisions relating to acquisitions and restructuring, which were recorded in prior years and which were no longer required.

Amortization of Goodwill. Effective May 1, 2001, we adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” Under the new standard, goodwill and other intangible assets with an indefinite life are no longer amortized, but are tested for impairment annually. We completed a goodwill impairment review in the first quarter of FY 2002 and again in the fourth quarter of FY 2002 and found no impairment. Accordingly, there were no charges for amortization of goodwill in FY 2002, compared to $58.1 million in FY 2001. Amortization of other intangible assets, primarily acquired software, was $1.7 million in FY 2002, compared to $61.8 million in FY 2001. This reduction reflects the write down of JBA software in the third quarter of FY 2001.

Net Interest Expense. Net interest expense was reduced from $12.6 million in FY 2001 to $1.6 million in FY 2002. This $11.0 million reduction is attributable to the reduction in bank indebtedness, which stood at $39.4 million on April 30, 2001, and which was completely repaid in the second quarter of FY 2002.

Income Taxes. As a result of increased profitability, the provision for income taxes was $30.1 million in FY 2002, compared to a recovery of $32.9 million in FY 2001. Our effective tax rate for FY 2002 was 41.7 percent. Of the total $30.1 million provision for income taxes recorded in FY 2002, $9.9 million reflects utilization of income tax assets, and $20.2 million represents cash taxes.

At April 30, 2003, cash and cash equivalents totaled $128.8 million, compared to $115.4 million at April 30, 2002. Excluding from the total at April 30, 2003, a reduction of $5.5 million from the effect of foreign exchange rates, cash and cash equivalents increased by $18.9 million during FY 2003.

Cash provided by operating activities, including the effects of changes in both non-cash working capital and deferred revenue, was $43.2 million in FY 2003, compared to $82.9 million in FY 2002. Non-cash working capital was reduced by $38.6 million, primarily as a result of a reduction in accounts payables and accrued liabilities. In the corresponding period last year, non-cash working capital increased by $60.0 million, primarily attributable to increases in receivables, prepaid expenses, accounts payable and accrued liabilities.

Net cash outflows from investing activities totaled $34.5 million in FY 2003, compared to $6.2 million in FY 2002, and included $33.7 million for acquisitions, net of cash acquired, and $2.7 million for additions to property, plant, and equipment, offset by an increase of $1.9 million in restricted cash and cash equivalents.

Net cash inflows from financing activities were $10.2 million in FY 2003, including $13.9 million from the exercise of five million purchase warrants at $2.75 per warrant and from the sale of common shares under the common share Company’s Employee Stock Purchase Plan (ESPP), partially offset by $3.7 million used for repayment of long-term debt. Net cash inflows of $5.2 million in FY 2002 included $24.8 million in net proceeds from the sale of six million common shares on September 27, 2001, and $17.9 million in net proceeds from the first quarter sale of 10 million special warrants at a price of $2.00 per special warrant. Each special warrant was exercisable for one common share plus one half of a common share purchase warrant. The special warrants were fully exercised on August 1, 2001. Each full purchase warrant entitled the purchaser to acquire one common share of Geac for $2.75 at any time within 18 months of June 29, 2001, and all five million purchase warrants were exercised in FY 2003. In total, the FY 2002 net issuance of common shares and special warrants generated $43.1 million, which was used to fund working capital requirements and to repay bank indebtedness.

Accounts receivable, other and unbilled receivables at year end totaled $88.0 million, compared to $85.6 million at the end of FY 2002. This net $2.4 million increase includes the effects of a $4.2 million increase due to changes in foreign exchange

Prepaid expenses, which are composed of deposits, prepaid maintenance, insurance, and prepaid royalties, increased by $1.0 million, from $16.0 million at the end of FY 2002 to $17.0 million at the end of FY 2003. This increase is primarily due to $0.8 million in prepaid expenses, which were assumed in the Extensity acquisition, and a $0.5 million increase attributable to changes in foreign exchange rates, net of a $0.3 million reduction in the prepaid expenses of our U.S. based businesses.

Accounts payable and accrued liabilities were $136.2 million at the end of FY 2003, compared to $170.3 million at the end of FY 2002. This $34.1 million reduction includes a $19.6 million reduction in trade payables, a $6.0 million reduction in accrued professional fees and legal costs, a net $5.5 million reduction in accrued restructuring charges, a $2.2 million reduction in tax-related liabilities, and a $1.2 million reduction in compensation related accruals, net of an aggregate $0.4 million increase in other items. The net $5.5 million reduction in accrued restructuring charges includes a reduction of $22.2 million in the balance as of April 30, 2002, and a net release of $3.9 million in prior year restructuring provisions that are no longer required, offset by a $10.2 million increase in restructuring associated with the Extensity acquisition, a $3.7 million provision for premises rationalization, and a $6.8 million charge for severance related to the restructuring of our operations.

Deferred revenue is composed of deferred maintenance and support revenues, which are recognized ratably over the term of the related maintenance agreement — normally one year — and deferred professional services revenue, which is recognized as such services are performed. Deferred revenue declined by $22.2 million, from $198.0 million at the end of FY 2002 to $175.8 million at the end of FY 2003. Excluding a $6.5 million increase in deferred revenue at April 30, 2003, associated with Extensity and a $5.7 million reduction associated with foreign exchange, deferred revenue declined by $23.0 million, which was primarily due to attrition in maintenance and support contracts.

Long-term debt at April 30, 2003, including the current portion, was $9.1 million, compared to $11.9 million at April 30, 2002. Excluding the effect of changes in foreign exchange rates, which had the effect of increasing the April 30, 2003 balance by $0.9 million, long-term debt was reduced by $3.7 million.

Geac does not have derivative financial instruments or any equity interests in unconsolidated companies or any other business arrangements related to the foregoing, which would have a material effect on the assets and liabilities of Geac at April 30, 2003.

As disclosed in note 13 to the audited consolidated financial statements included in this Annual Report, Geac has commitments that, in accordance with US GAAP, are not reflected in its balance sheet. These commitments include operating leases for office equipment and premises, and letters of credit, bank guarantees, and performance bonds that are routinely issued on Geac’s behalf by financial institutions, primarily in connection with premises leases and contracts with public sector customers. Geac does not have any other business arrangements, derivative financial instruments, or any equity interests in unconsolidated companies that would have a material effect on its assets and liabilities at April 30, 2003.

Effective May 1, 2001 Geac adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” This standard eliminates the amortization of goodwill, requires annual impairment testing of goodwill and introduces the

concept of indefinite life intangible assets. Goodwill is required to be tested for impairment between the annual tests if an event occurs or circumstances change such that it is more likely than not that the fair value of a reporting unit has been reduced below its carrying value. Prior to May 1, 2001, goodwill was amortized on a straight-line basis over the estimated periods of benefit not exceeding ten years. The new standard has been applied on a prospective basis.

Effective January 1, 2003, Geac adopted SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which supersedes EITF 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity.” This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF 94-3, a liability for an exit cost as defined in EITF 94-3 was recognized at the date of an entity’s commitment to an exit plan. The provisions of FAS 146 are effective for exit or disposal activities initiated after December 31, 2002.

Effective January 1, 2003, Geac adopted FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees and Indebtedness of Others — an interpretation of FASB 5, 57 and 107 and in rescission of FASB Interpretation No. 34” (FIN 45). This interpretation elaborates on the disclosures to be made by a guarantor. FIN 45 also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation due to the issuance of the guarantee. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The interpretation has been applied on a prospective basis.

Effective May 1, 2003, Geac adopted EITF 01-14, “Income Statement Characterization of Reimbursements Received for ‘Out-of-Pocket’ Expenses Incurred.” This Issue requires that out-of-pocket expenses be characterized as revenue in the income statement. In previous years these reimbursements had been characterized as a reduction of expenses incurred. The Issue has been applied retroactively and comparative figures restated.

Geac has historically developed products through a consultative process with existing and potential customers. Geac expects that continued dialogue will result in incremental enhancements to existing products and the development of new products. Geac intends to support product development through a combination of internal development, strategic partnerships with other software providers, and acquisitions of suitable businesses and product lines.

Consistent with the growth of Geac’s business through acquisitions, Geac’s product development strategy has historically been decentralized, with separate product development centres devoted to each product, in some cases in more than one geographical region. However, Geac intends increasingly to organize its product development efforts by product line rather than operating multiple regional development centres. At April 30, 2003, we had 448 product development personnel and 15 development centres in the metropolitan areas of Atlanta, Nashua, Emeryville, Southborough, Markham, Vancouver, Paris, Studley, Tampa, Houston, Brussels, Hertogenbosch, Villingen, Adelaide and Sydney.

Product development expenses, net of government grants and other amounts recoverable, are expensed as incurred. Research and development costs included in product development were $26.0 million in FY 2003 and $36.0 million in FY 2002.

Geac has relied, and expects to continue to rely, on a combination of copyright, trademark and trade secret laws, confidentiality procedures, and contractual provisions to establish, to maintain, and to protect its proprietary rights. Despite Geac’s efforts to protect its proprietary rights in its intellectual property and that of other companies Geac may acquire, unauthorized parties may attempt to copy aspects of its products or to obtain information it regards as proprietary. Policing unauthorized use of Geac’s technology, if required, may be difficult, time consuming, and costly. Geac’s means of protecting its technology may be inadequate.

Third parties may apply for patent protection for processes that are the same as or similar to Geac’s processes or for products that use the same or similar processes as Geac’s products. Despite Geac’s efforts to protect its proprietary rights, unauthorized parties may attempt to copy aspects of its products or services or to obtain and to use information that Geac regards as proprietary. Third parties may also independently develop similar or superior technology without violating Geac’s proprietary rights. In addition, the laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of Canada and the United States.

Geac believes that trademark protection is an important factor in establishing product recognition. Geac’s inability to protect its trademarks from infringement could result in injury to any goodwill, which may be developed in its trademarks. Moreover, Geac may be unable to use one or more of its trademarks because of successful third-party claims.

For a discussion of the most significant trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on Geac’s net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, see management’s discussion and analysis of results of operations and financial position included in Item 5.A, “Operating Results.”

Not applicable for Geac’s fiscal year ended April 30, 2003, under transition rules adopted by the SEC under the Sarbanes-Oxley Act of 2002.

The following are the directors and executive officers of Geac, their principal occupations and municipalities of residence.

(1)		Member of the Audit Committee

(2)		Member of the Human Resources and Compensation Committee

(3)		Member of the Corporate Governance Committee

During the past five years, each of the directors and officers has held his/her present principal occupation or held his/her present office within the Corporation with the exception of the following:

Thomas I. A. Allen, Q.C. was first elected to the Board of Directors of the Corporation in September 1999. He is the Chairman of the Accounting Standards Oversight Council of Canada and is a member of the Advisory Board of the Office of the Superintendent of Financial Institutions of Canada. Mr. Allen has been a partner at the law firm of Ogilvy Renault since October 1996. Mr. Allen is a director of the following public corporations: Bema Gold Corporation, YM Biosciences Inc., Middlefield Bancorp Limited, Mundoro Mining Inc., and Unisphere Waste Conversion Limited.

Hema Anganu, prior to her appointment as Treasurer in September 1999, was Director, Financial Reporting & Analysis (1998-1999), Controller, Corporate Finance (1996-1998) and Manager, Corporate Finance (1991-1996) of the Corporation.

Donna de Winter has served as Geac’s Vice President and Corporate Controller since August 2003. On October 15, 2003, Geac announced that Ms. de Winter would assume the role of Chief Financial Officer effective as of November 4, 2003. Prior to joining Geac, Ms. de Winter served from November 2000 to July 2003 as Vice President, Finance and Administration at Platform Computing Corporation (“Platform”), an independent developer of software for grid computing. Prior to joining Platform, Ms. de Winter served from February 2000 as Vice President, Finance at Digital Processing Systems Inc. (“DPS”), a public company, until its acquisition by Leitch Technology Corporation in October 2000. DPS was a manufacturer of hardware and software for the creation, manipulation and distribution of broadcast-quality video used by television networks and cable companies. From 1992 to February 2000, Ms. de Winter served as Corporate Controller and then Chief Financial Officer of Polyphalt Inc., a technology company that develops and commercializes novel polymer modified asphalt products and technology.

David Friend has been one of the Corporation’s Directors since October 2001. Mr. Friend is a Partner with Orchid Partners, a venture capital firm. Mr. Friend is also the Chairman of Sonexis, Inc. (“Sonexis”), a telecommunications software and platform provider, a company he founded in June 1999. Prior to founding Sonexis, he was the Chairman and co-founder of FaxNet Corporation (“FaxNet”), a supplier of messaging services to the telecommunications industry, where he served from January 1995 to May 1999. Prior to founding FaxNet, Mr. Friend founded Pilot Software, Inc., a software company based in Cambridge, Massachusetts, where he served from November 1983 to November 1994. Mr. Friend is an active venture investor and serves on the board of

directors of HealthGate Data Corp. (“HealthGate Data”), a provider of e-Health Internet solutions for hospitals and healthcare enterprises.

Arthur Gitajn, prior to his appointment as Chief Financial Officer in November 2001, was Vice President and Corporate Controller of Geac from May 2001 to November 2001 and, prior to that, was Vice President, Finance for North American Verticals from February 1999 to April 2001. Prior to joining the Corporation, he was Director of Financial and Information Technology Services for the City of Alexandria, Virginia.

C. Kent Jespersen was first elected to the Board of Directors of the Corporation in October 2001. Mr. Jespersen has served as the Chairman of the Corporation’s Board of Directors since July 2003. Mr. Jespersen has been the Chairman of La Jolla Resources International Ltd., an international business advisory and investment company, since 1998. From 1994 to 1998, Mr. Jespersen held the positions of President of NOVA Gas International Ltd., President and Chief Executive Officer Elect of NOVA Energy Services, President of NOVA Gas Services Ltd., and Senior Vice President, Corporate Development of NOVA Corporation. Mr. Jespersen currently serves as the Chairman of the board of directors of CCR Technologies Ltd. and is Chairman Emeritus of the Institute of the Americas of La Jolla, California. He also serves as a director of Telesystems International Wireless Inc., Axia NetMedia Corporation, Bow Valley Energy Ltd., and Matrikon, Inc.

Charles S. Jones was first elected to the Board of Directors of the Corporation in September 1997. Mr. Jones served as non-executive Chairman of the Corporation’s Board of Directors from November 2000 until December 2001 and as Executive Chairman of the Corporation’s Board of Directors from December 2001 until July 2003. Mr. Jones was appointed the President and Chief Executive Officer of the Corporation in July 2003. Mr. Jones is also the Chairman and co-founder of First Funding Corporation, an investment firm based in Stamford, Connecticut, where he has worked since 1984. Currently, Mr. Jones serves as a director of Farrel Corporation and a number of diverse companies, from an industrial equipment manufacturer to a computer games designer and publisher.

Joyce Koenig has served as Geac’s Vice President, Strategic Financial Analysis, since joining the Corporation in January 2002. Previously, Ms. Koenig worked at MRO Software, Inc., a U.S. based global software application developer and marketer, as Director, Financial Analysis & Purchasing, from 1996 to 2001.

Pierre MacDonald was first elected to the Board of Directors of the Corporation in September 1999. Since March 1995, Mr. MacDonald has served as Chairman and Chief Executive Officer of MacD Consult Inc., a group of consultants in international finance and marketing. Since May 2000, Mr. MacDonald has served as the Vice-Chairman of the board of directors of the Export Development Corporation, a Crown corporation that operates as a financial institution devoted exclusively to providing trade finance services in support of Canadian exporters and investors in up to 200 countries. Mr. MacDonald began serving as a director of Export Development Corporation in August 1995. He also serves as a director of Aeterna Laboratories Inc., AIM Canada Fund Inc., AIM Global Fund Inc., Slater Steel Inc. and Sodisco-Howden Group Inc.

Michael D. Marvin was appointed to the Board of Directors of the Corporation in August 2001. Mr. Marvin is the founder and Chairman Emeritus of MapInfo Corporation (“MapInfo”), a software technology company specializing in location based solutions and services that help businesses better understand their customers and markets. Mr. Marvin was the Chairman of MapInfo from 1992 until January 2001.

James J. McDevitt has served as Geac’s Vice President and General Manager, Industry Specific Applications since December 2002. From July 2000 until December 2002 Mr. McDevitt served as chief financial officer of Clarus Corporation, a procurement solutions provider. Prior to working at Clarus Corporation, Mr. McDevitt held numerous financial and management positions since August 1997 with Geac Enterprise Solutions.

William G. Nelson was first elected to the Board of Directors of the Corporation in September 1988. He served as Chairman of the Corporation’s Board of Directors from June 1996 to October 2000, and as the Corporation’s President and Chief Executive Officer from September 1996 to April 1999. Mr. Nelson has served as Chief Executive Officer of Clarendon Capital Inc., an investment banking and consulting firm, since June 1995. Mr. Nelson has been the Chairman of the board of directors of Harris Business Group, Inc. since 1990 and the Chairman of the board of directors of Repository Technologies Inc., a computer software company, since 1999. Mr. Nelson is also a director of Manugistics Group, Inc., a provider of intelligent supply chain optimization solutions for

enterprises and evolving e-Business trading networks, HealthGate Data, and Catalyst International Inc., a global provider of software and services for warehouse management. Mr. Nelson is also a partner with Orchid Partners, a venture capital firm.

Bertrand Sciard has been Geac’s Managing Director, Geac Enterprise Solutions, Europe since he joined the Corporation in 1999 in connection with the Corporation’s acquisition of JBA Holdings plc (“JBA”). In October 2003, Mr. Sciard was appointed to the additional office of Senior Vice President of Geac Computer Corporation Limited. Mr. Sciard served as Managing Director at JBA from 1997 to 1999. From 1994 to 1997, Mr. Sciard served as Chief Executive Officer of Presys Instruments, Inc. (“Presys”). Prior to his work at Presys, Mr. Sciard spent 17 years at IBM where he held a variety of senior international positions, most recently Commercial Director.

John L. Sherry, III has served as Geac’s Senior Vice President, Marketing and Strategic Alliances since February 2002. Prior to joining the Corporation, he served in 2001 as Senior Vice President, Marketing and Business Development for ViryaNet, a publicly held software company providing workforce management solutions for field service operations. From 1999 to 2001, Mr. Sherry served as Vice President, Marketing for Excelergy, a venture backed company providing software to the deregulating energy and utilities industries. From 1996 to 1999, he served as Executive Director of Marketing for the Kenan Systems unit of Lucent Technologies.

Robert L. Sillcox was appointed to the Corporation’s Board of Directors in August 2001. Mr. Sillcox is the Chairman of Quant Investment Strategies Inc., an investment firm specializing in providing quantitative investment strategies to institutions. He has held this position since he co-founded the firm in 1998. Mr. Sillcox is currently also a director of the Bank of China (Canada), a Canadian chartered bank, Glenmount International, L.P.I., an industrial technology private equity partnership, and HelpCaster Technologies Inc., a software technology company.

Jeffrey Snider has served as Geac’s Senior Vice President and General Counsel since August 2003. Prior to joining Geac, Mr. Snider was of counsel to Mintz, Levin from 2002 to July 2003. Prior to joining Mintz, Levin, Mr. Snider served as Senior Vice President and General Counsel for Lycos, Inc., an internet company, from 1997 to 2002. From 1989 to 1997 Mr. Snider was with the law firm Hutchins, Wheeler & Dittmar, first as an associate, then as a member.

Craig C. Thorburn has served as Geac’s Senior Vice President, Mergers & Acquisitions, and Corporate Secretary since December 2001. Mr. Thorburn has also been with the Toronto office of Blake, Cassels & Graydon LLP since 1985, where he became a partner in 1993, and where he continues his practice involving mergers and acquisitions, and business and regulatory law. Mr. Thorburn is also a director of Vivendi Universal Exchangeco Inc.

James M. Travers has served as Geac’s Senior Vice President, and President, Geac Enterprise Solutions Americas since August 2002. Before joining Geac, Mr. Travers served from December 2000 to April 2001 as Interim President and Chief Executive Officer of Agillion, Inc., a provider of real-time customer collaboration and content management solutions. From January 1995, until it was acquired by Peregrine Systems in June 2000, Mr. Travers served in several senior management positions, most recently as President and Chief Executive Officer with Harbinger Corporation, a provider of e-commerce solutions.

Timothy J. Wright has served as Geac’s Senior Vice President, Chief Technology Officer and Chief Information Officer since January 2003. Prior to joining Geac, Mr. Wright served for just over three years as Senior Vice President, Chief Technology Officer and Chief Information Officer at Terra Lycos, a major provider of Internet access and content to several million subscribers world-wide. Prior to working at Terra Lycos, Mr. Wright spent seven years at The Learning Company, a major provider of consumer and education software, until it was acquired by Mattel in 1999.

As of August 29, 2003, the directors and executive officers of the Corporation as a group beneficially own, directly or indirectly, or exercise control or direction over approximately 1,954,993 common shares of the Corporation representing approximately 2.3% of the Corporation’s outstanding shares.

The following table sets out information concerning the compensation earned from Geac and any of Geac’s subsidiaries for the fiscal years ended April 30, 2003, 2002 and 2001 by Geac’s Chief Executive Officer as at April 30, 2003 and Geac’s

other four most highly compensated executive Officers in office on April 30, 2003 (collectively, the “Named Executive Officers”). Information concerning the compensation of Mr. Charles S. Jones, who became our President and Chief Executive Officer on July 18, 2003, is set forth below under the headings “Compensation of Directors” and “Employment Agreements.”

Excluded from reference are perquisites and other personal benefits which do not exceed the lesser of $50,000 or 10% of the total of the annual salary and bonus for any of the Named Executive Officers. All currency references in this table are in Canadian dollars unless otherwise indicated. Where compensation was paid other than in Canadian dollars during a fiscal year, the amount has been converted to Canadian dollars at the average exchange rate prevalent during that fiscal year.

The following table sets forth options to purchase or acquire common shares granted during the fiscal year ended April 30, 2003 to each of the Named Executive Officers.

AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

The following table sets out information concerning the exercise of options by the Named Executive Officers during the year ended April 30, 2003 and the value of unexercised options held by the Named Executive Officers as at April 30, 2003.

(1)

The following table sets out the exercise price of the exercisable and unexercisable options held by each of the Named Executive Officers as at April 30, 2003:

(2)

The value of the unexercised options is based on the difference between the exercise price and the closing price of the common shares on the TSX on April 30, 2003 of $5.45.

Charles S. Jones became the President and Chief Executive Officer of Geac in July 2003. From December 2001 through July 2003 he served as the Executive Chairman of the Board. For the year ended April 30, 2002, he was paid a salary and other compensation of $335,981, as well as a bonus of $577,088 that was granted by the Board in January 2003. Mr. Jones was also in that fiscal year granted options to acquire 600,000 common shares at an exercise price of $6.37 per share. These options vested on December 4, 2002 and expire on December 4, 2011. In FY 2003, Mr. Jones received a salary of $423,198 for his services as Executive Chairman of the Board. On October 12, 2003, Mr. Jones was granted a bonus for his services in that capacity during FY 2003 in the amount of US$400,000. Mr. Jones was also granted in October 2003 options to acquire 240,000 Geac common shares at an exercise price of $6.72 per share.

During the fiscal year ended April 30, 2003, each director other than Mr. Jones who is not a salaried employee of Geac or any of its subsidiaries (an “Outside Director”) received an annual retainer of US$20,000 for his services as a Director. The Chairmen of the Audit Committee, the Human Resources and Compensation Committee and the Corporate Governance Committee each receive an additional retainer of US$5,000 per annum. In addition to the annual retainer, each Outside Director receives US$1,000 for each meeting attended in person and an additional US$1,000 fee per trip if such meeting requires travel “out of town.” Each Outside Director receives US$1,000 for each meeting in which he participates via telephone of more than 15 minutes in duration and US$500 for each telephone meeting of less than 15 minutes in duration. Geac reimburses the out-of-pocket expenses incurred by each Director for every meeting attended.

If an Outside Director, at the request of management or of the Board, attends a meeting (other than a Board meeting or a committee meeting) or performs services related to directors’ responsibilities for the overall stewardship of Geac, he will be compensated based on the same rates for attending Board or committee meetings as set out above. If an Outside Director is requested to perform other consulting and professional services, fees for such services shall be paid at a rate mutually agreed to by the director and the Chairman provided that such fees shall not exceed US$50,000 in any fiscal year unless agreed to by the Board of Directors. Outside Directors are also eligible to participate in Geac’s stock option plan. No stock options were granted to Outside Directors during the fiscal year ended April 30, 2003.

Directors who are also officers or employees of Geac were not paid any amount in respect of their services as directors of Geac.

The articles of Geac provide for a board of directors consisting of a minimum of three (3) and a maximum of fifteen (15) directors. The term of office for each director elected at an annual meeting of shareholders is until the next annual meeting of shareholders of Geac or until the director resigns, is removed, or his office is otherwise vacated in accordance with the Canada Business Corporations Act.

For information regarding the period during which each director has served on the board and the members of each committee of the board of directors, see Item 6.A, “Directors and Senior Management” above.

The Board of Directors currently has three committees: Audit, Corporate Governance, and Human Resources and Compensation. All of the members of these Committees are Outside Directors. The responsibility for nominating candidates for election as directors is within the mandate of the Corporate Governance Committee. Geac has not established a separate Nominations Committee.

The Corporate Governance Committee of the Board of Directors ensures that an effective and efficient approach to corporate governance of Geac is developed and implemented. The Corporate Governance Committee assesses the effectiveness of corporate governance and makes recommendations to the full Board of Directors. The Corporate Governance Committee’s mandate includes: reviewing, examining and reporting on corporate governance issues in accordance with TSX requirements; identifying and proposing new nominees to the Board; and ensuring that the Board has implemented an appropriate orientation program for new recruits to the Board to familiarize them with Geac. The current members of the Corporate Governance Committee are Thomas I.A. Allen, Q.C., David Friend, William G. Nelson and Robert L. Sillcox, all of whom are Outside Directors. Mr. Charles Jones, the Executive Chairman of

Geac during fiscal 2003, was a member of the Committee in fiscal 2003. He ceased to be a member of the Committee upon his appointment as President and Chief Executive Officer of Geac in July 2003. During the period that Mr. Jones was a member of the Corporate Governance Committee, he abstained from meetings relating to prospective board nominees. The Corporate Governance Committee held five meetings during the fiscal year ended April 30, 2003.

The Human Resources and Compensation Committee is composed of three members, all of whom are Outside Directors. The Human Resources and Compensation Committee’s mandate includes evaluating the performance of Geac’s executives and making recommendations for approval by the Board with respect to the remuneration of the executive officers of Geac. The members of the Human Resources and Compensation Committee are C. Kent Jespersen, Pierre MacDonald and Michael D. Marvin. The Human Resources and Compensation Committee met a total of five times during fiscal year 2003.

The Audit Committee of the Board of Directors is composed of five members, all of whom are Outside Directors. The Audit Committee assists the Board of Directors in fulfilling its responsibilities for Geac’s accounting and financial reporting practices by reviewing the quarterly and annual consolidated financial statements, reviewing the adequacy of the system of internal controls, reviewing any relevant accounting, financial and securities regulatory matters, reviewing the management of corporate risks and recommending the appointment of external auditors.

The Audit Committee also facilitates communication between the Board of Directors and Geac’s external auditors. The Audit Committee meets quarterly with management and separately, with or without external auditors, as required. The Audit Committee has direct communication with both internal and external auditors. The members of the Audit Committee are Thomas I.A. Allen, Q.C., C. Kent Jespersen, Pierre MacDonald, William G. Nelson and Robert L. Sillcox. The Audit Committee held eight meetings in fiscal year 2003.

Geac entered into an employment agreement with Charles S. Jones as Chairman of the Board of Geac, dated December 4, 2001. Pursuant to the agreement, Mr. Jones received a salary of US$250,000, subject to annual review, plus a bonus determined at the discretion of Geac’s board of directors based upon Geac’s financial performance. The agreement provides that if Geac terminates his employment without cause, Mr. Jones is entitled to vesting of unvested options and to severance payments. On September 9, 2003, the Board of Geac passed a resolution to amend the agreement to provide that, in the event of a change of control, Mr. Jones may resign and is then entitled to severance equal to three times his annual base salary and bonus.

Geac has entered into an employment agreement with Arthur Gitajn confirming the terms of his employment as Chief Financial Officer of Geac and setting forth his remuneration, including salary, annual performance bonus, stock options, benefits, vacation entitlement and car allowance. The agreement with Mr. Gitajn provides for an annual base salary of US$100,000 plus C$150,000, subject to annual review, plus a performance-based bonus which establishes a target base bonus of C$150,000 for each of fiscal year 2003 and fiscal 2004. Mr. Gitajn is also entitled to receive certain payments as compensation for additional taxes he is obliged to pay as a resident of the Province of Ontario compared to the taxes that he would have paid as a resident of the State of Maryland.

The current agreement with Mr. Gitajn will expire on April 30, 2004, unless mutually extended by the parties. Expiration of the agreement is considered “termination for any reason other than cause.” In the event that Mr. Gitajn’s employment is terminated at any time for any reason other than cause, he will be entitled to receive a lump sum cash payment (the “Gitajn Termination Payment”) in the amount equal to 150% of the sum of: (a) at his option, (i) his base salary received or receivable by him in respect of the immediately preceding twelve months in the normal payroll cycle or (ii) his base salary for the calendar month preceding the date of termination multiplied by 12; (b) his annual car allowance; and (c) the annual bonus paid to him in fiscal year 2002. Additionally, Mr. Gitajn will be entitled to payment for unused accrued vacation and certain expenses for eighteen months

together with US$75,000 for relocation expenses. In the event of a change in control and a change affecting Mr. Gitajn’s employment within twelve months of a change in control, Mr. Gitajn may elect to resign from Geac and will be entitled to the Gitajn Termination Payment. In each such case, Mr. Gitajn will also be entitled to benefit continuation for eighteen months.

On October 15, 2003, Geac issued a press release announcing that effective November 4, 2003 Mr. Gitajn would no longer serve as its chief financial officer. In order to ensure a smooth transition of his responsibilities to his successor, Donna de Winter, Mr. Gitajn has agreed to remain available in a consulting role for a period of up to six months.

Geac has entered into an employment agreement with Bertrand Sciard setting forth his remuneration, including salary, annual performance bonus, stock options, benefits, vacation entitlement and car allowance. The agreement with Mr. Sciard provides for an annual salary of 1,520,000 French francs as well as an annual performance-based bonus of 1,000,000 French francs, subject to annual review.

If Mr. Sciard’s employment is terminated by Geac without cause, or in the event of a change in control and a change affecting employment, Mr. Sciard is entitled to a payment equal to eighteen months of his salary plus an amount equivalent to the bonus received in the previous year.

Geac has entered into an employment agreement with John Sherry as Senior Vice President, Marketing & Strategic Alliances setting forth his remuneration, including salary, annual performance bonus, stock options, benefits and vacation entitlement. The agreement with Mr. Sherry provides for an annual salary of US$220,000, subject to annual review. Mr. Sherry is also eligible to participate in Geac’s bonus plan, with a bonus target amount of US$100,000 in fiscal year 2003.

If Mr. Sherry’s employment is terminated by Geac for any reason other than cause, Mr. Sherry is entitled to receive severance in accordance with Geac’s then-current policy, subject to a minimum of six month’s salary and benefit continuation. In the event of a change in control and a change affecting his employment within twelve months of a change in control, Mr. Sherry may elect to resign from Geac and will be entitled to payment of salary and benefits for a period of twelve months.

James Travers has entered into an agreement as President of Geac Americas, Geac Enterprise Solutions, Inc., setting forth his remuneration, including salary, annual performance bonus, stock options, vacation entitlement and car allowance. The agreement with Mr. Travers provides for an annual base salary of US$275,000, subject to annual review, together with an annual bonus of US$250,000 commencing with the fiscal year ending April 30, 2003, subject to achieving certain performance goals.

In the event that Mr. Travers’ employment is terminated at any time for any reason other than cause, he will be entitled to receive a lump sum cash payment (the “Travers Termination Payment”) in an amount equal to, at his option, (i) his base salary received or receivable by him in respect of the immediately preceding twelve months in the normal payroll cycle or (ii) his base salary for the calendar month preceding the date of termination multiplied by twelve. In the event of a change in control and a change affecting Mr. Travers’ employment within twelve months of a change in control, Mr. Travers may elect to resign from Geac and will be entitled to the Travers Termination Payment. In each such case, Mr. Travers will also be entitled to benefit continuation for twelve months.

Geac entered into employment agreements with Paul Birch, former Chief Executive Officer of Geac. An agreement between Mr. Birch and Geac, originally in his capacity as chief operating officer of Geac, provided for a salary of US$50,000 with a target bonus of US$25,000, subject to Geac achieving a specified EBITDA threshold. A separate agreement with Mr. Birch as President of Geac Enterprise Solutions, Inc. provided for a salary of US$300,000 and a target bonus of up to US$225,000, subject to Geac achieving a specified EBITDA threshold.

Mr. Birch was also entitled to receive certain grossed-up payments to compensate him in respect of certain taxes. These agreements were changed when Mr. Birch was appointed President and Chief Executive Officer of Geac to increase his aggregate salary from US$300,000 to US$350,000 per annum.

In the event that Mr. Birch’s employment with Geac Enterprise Solutions, Inc. or with Geac was terminated without cause, he was entitled to receive a lump sum termination payment in an amount equal to his base salary received or receivable in respect of the immediately preceding year, plus either the average of the bonuses paid or payable to him with respect to each of the three preceding years or, if he had been employed for fewer than three years, the average of the bonuses paid during those years. In the event of a change in control and a change affecting employment within twelve months of a change in control, Mr. Birch was permitted to resign and was then entitled to severance equal to the termination payment. In each such case, Mr. Birch was also entitled to benefit continuation for twelve months. On August 6, 2002, Mr. Birch ceased to be president of Geac Enterprise Solutions, Inc., when James M. Travers was appointed to that position. This change in his responsibilities did not result in the payment of any severance benefits under the foregoing agreements.

On July 18, 2003, Mr. Birch resigned as an officer and director of Geac and its subsidiaries. Geac and Mr. Birch entered into letter agreements dated July 17, 2003 and September 24, 2003, pursuant to which Geac agreed that Mr. Birch would be entitled to receive benefits substantially equivalent to those he would have received had his employment been terminated without cause.

Information as to the number of persons employed by Geac at the end of each of its three most recent fiscal years is as follows:

As of April 30, 2003, Geac employed 2,527 people worldwide, including 1,844 in the Enterprise Application Systems group and 683 in the Industry Specific Applications group. Of these employees, 387 were in sales and marketing, 655 were in customer support, 661 were in professional services, 452 were in research and development, 319 were in finance and administration and 53 others were in miscellaneous operations. Of these employees, 1,314 were located outside of North America, primarily in Europe.

As of April 30, 2002, Geac employed 3,030 people worldwide, including 1,886 in the Enterprise Application Systems group and 1,144 in the Industry Specific Applications group. Of these employees, 349 were in sales and marketing, 835 were in customer support, 734 were in professional services, 525 were in research and development, 488 were in finance and administration and 99 others were in miscellaneous operations. Of these employees, 1,529 were located outside of North America, primarily in Europe.

As of April 30, 2001, Geac employed 3,797 people worldwide, including 2,234 in the Enterprise Application Systems group and 1,563 in the Industry Specific Applications group. Of these employees, 448 were in sales and marketing, 1,018 were in customer support, 933 were in professional services, 656 were in research and development, 617 were in finance and administration and 125 others were in miscellaneous operations. Of these employees, 1,958 were located outside of North America, primarily in Europe.

None of Geac’s employees is represented by a labour union (other than by statutory unions or workers’ committees required by law in some European countries.) Geac has not experienced any work stoppages and considers its relations with employees to be good. Geac operates in a rapidly evolving, advanced information technology market in which highly skilled professionals are a scarce resource. Attracting and retaining a highly skilled work force is a continuing challenge for all high technology companies, including Geac.

The following table provides information about the beneficial ownership of Geac’s common shares as of October 15, 2003 by each of Geac’s directors and named executive officers.

Beneficial ownership includes any shares for which a person has sole or shared voting power or investment power and any shares of which the person has the right to acquire beneficial ownership within 60 days after October 15, 2003 through the exercise of any option or otherwise. All shares included in the “Right to acquire” column

represent shares subject to outstanding stock options exercisable within 60 days after October 15, 2003. Except as noted below, Geac believes that the persons named in the table have sole voting and investment power with respect to the shares of common stock set forth opposite their names. The inclusion of shares listed as beneficially owned does not constitute an admission of beneficial ownership. Percentage of beneficial ownership is based on 84,777,930 common shares outstanding as of October 15, 2003. The information as to each person has been furnished by such person.

¹ The information for Mr. Birch is as of August 16, 2003. Mr. Birch resigned as an officer and director of Geac and its subsidiaries on July 18, 2003, and ceased to be an employee of Geac on August 15, 2003.

Geac’s employee stock purchase plan (the “Old ESPP”) became effective in August 2001. Under the Old ESPP, membership was limited to employees resident in Canada and after entering continuous full-time employment with Geac or a subsidiary. The maximum number of common shares issuable under the Old ESPP was 600,000.

Geac’s 2003 Employee Stock Purchase Plan (the “New ESPP”) was approved by Geac’s shareholders in September 2003. Under the New ESPP, employees of Geac resident in Canada and the United States are entitled to participate. The maximum number of common shares issuable under the New ESPP is 2,000,000.

	•		once enrolled in the New ESPP, an employee can make contributions through payroll deductions of an amount equal to a percentage of his or her compensation determined at the commencement of an offering period in increments of one (1%) per cent up to a maximum of ten (10%) per cent;

	•		the purchase price for common shares issued under the New ESPP will be eighty-five (85%) per cent of the lesser of market value of the common shares on the applicable offering commencement date and the market value of the common shares on the offering termination date;

	•		employees’ right to purchase shares under the New ESPP is limited to a maximum of US$25,000 worth of common shares in any calendar year;

	•		offering period commencement and termination dates are to be selected by the committee administering the New ESPP in its discretion, provided that an offering period can be no longer than one year;

	•		Geac may, at its option, purchase shares in the open market through an Administrative Agent for delivery under the New ESPP;

	•		under the New ESPP, neither the payroll deductions nor any rights to receive common shares may be assigned, transferred, pledged or otherwise disposed of except by will or laws of descent and distribution;

	•		prior to an offering termination date, any participant in the New ESPP can withdraw payroll deductions for such offering period and a participant’s withdrawal will not affect his or her eligibility for subsequent offerings (upon termination of a participant’s employment for any reason other than death, payroll deductions not applied to purchases of common shares will be returned to the participant; on death, a participant’s beneficiary will have 90 days to withdraw the deductions or exercise the option to acquire common shares); and

	•		the Board may at any time terminate or amend the New ESPP, provided that, in certain circumstances, the prior consent of the TSX and shareholders of Geac is obtained.

Geac’s Stock Option Plan V was adopted in September 1992 and amended in July 1996, September 1996, October 1997, September 1997 (effective October 1997) and March 1998. The plan is a nonqualified stock option plan. It authorizes the grant of non-statutory options. The securities issued upon exercise of options under the plan are common shares of Geac.

The maximum number of common shares issuable under the plan is 8,245,300 (subject to adjustment for stock splits, stock dividends and other changes in Geac’s capitalization). All options are for the purchase from treasury of new and previously unissued common shares.

The plan does not have a fixed duration. The board of directors has determined that no future options to purchase Geac common shares will be granted under the plan. The rights of existing option holders under the plan will not be affected.

The plan permits the grant of options to Geac’s employees and directors. All employees and directors, except for employees or directors who beneficially own more than 10% of Geac’s voting shares issued and outstanding at such time, are eligible to receive grants of options under the plan. The aggregate number of common shares reserved for issuance to any one person shall not exceed 5% of the outstanding issue (on a non-diluted basis). The number of shares reserved for issuance pursuant to stock options granted to insiders shall not exceed 10% of the outstanding issue. The issuance to insiders, within a one-year period, of a number of shares shall not exceed 10% of the outstanding issue. The issuance to any one insider and such insider’s associates, within a one-year period, of a number of shares shall not exceed 5% of the outstanding issue.

The options may be exercised not earlier than the day on which the board has determined that such options vest and not later than the day five years thereafter, but in no circumstances later than ten years after the date of grant.

Each option shall be exercisable at an option price equal to the closing market price for the common shares on the Toronto Stock Exchange on the business day on which such option is granted or, if no trade takes place on that day, the average of the closing bid and ask prices on that day. To exercise an option, the holder must deliver to us a written notice of exercise accompanied by a cheque payable to Geac for the full amount of the option price.

Geac’s Stock Option Plan VI was adopted in August 1999 and amended in November 2001, December 2002, March 2003 and September 2003. The plan is a nonqualified stock option plan. It authorizes the grant of non-statutory options. The securities issued upon exercise of options under the plan are common shares of Geac. The plan permits the grant of nonqualified options to Geac’s eligible employees as well as to our directors, officers, and eligible consultants, regardless of whether they are our employees.

The maximum number of shares issuable under the plan is 9,200,000 common shares (subject to adjustment for stock splits, stock dividends and other changes in Geac’s capitalization). If an unexercised option for such shares is surrendered in accordance with the terms of the plan or expires or terminates without being exercised in whole or in part, the plan provides that new options may be granted covering the shares not purchased under such surrendered, terminated or expired option.

In addition to the 9,200,000 common shares described above, up to an additional 1,400,000 common shares were available to be issued in a one-time grant to employees of Geac’s subsidiary, Extensity, Inc. in connection with our acquisition of that company, and up to an additional 1,680,000 common shares were available to be issued in a one-time grant to employees of Geac’s subsidiary, Comshare, Incorporated in connection with our acquisition of that company (such numbers of shares, in each case, to be subject to adjustment for stock splits, stock dividends and other changes in Geac’s capitalization). These additional common shares are not counted for purposes of calculating the 9,200,000 common shares otherwise issuable under the plan. If an unexercised option for these additional shares is surrendered in accordance with the terms of the plan or expires or terminates without being exercised in whole or in part, the plan provides that no new options may be granted covering the shares not purchased under such surrendered, terminated or expired option.

The plan does not have a fixed duration. The plan administrator may discontinue the plan at any time. Discontinuation of the plan will not affect the rights of a holder of any stock option outstanding under the plan.

The aggregate number of shares reserved for issue to any one person on the exercise of options shall not exceed 5% of the total number of common shares then outstanding. In addition, the maximum aggregate number of shares reserved for issue at any time upon the exercise of options granted to insiders shall not exceed 10% of the total number of shares then outstanding and the maximum number of shares issuable to insiders pursuant to the plan and any other share compensation arrangement, within a one-year period, shall not exceed 10% of the total number of shares then outstanding. The maximum aggregate number of shares issuable to any one insider and the associates of such insider pursuant to the plan and any other share compensation arrangement, within a one-year period, shall not exceed 5% of the total number of shares outstanding.

The aggregate number of options which may be granted under the plan to eligible directors who are not Geac employees or officers as a group shall not exceed 360,000, provided that, subject to regulatory approval, such number may be increased to a number equal to the product of 40,000 multiplied by the number of eligible directors who are not Geac employees or officers.

Each option granted under the plan expires after a specified period of time which cannot exceed 10 years and usually contains other provisions that may terminate the option at an earlier time. In general, options may not be exercised after they have expired or terminated. Moreover, the plan administrator has the discretion to impose on any option a vesting schedule that determines the number of shares for which the option may be exercised at a particular time. The plan administrator also has the discretion to impose on any option different or additional conditions that must be satisfied before the option may be exercised. After all of the vesting provisions and other conditions for the exercise of the option have been satisfied, the holder of the option may exercise the option all at once or the holder may exercise a portion of the option at different times, as long as the exercise occurs before the expiration or termination of the option.

The exercise price of each option shall be determined by the plan administrator at the time the option is granted, provided that such price shall not be less than the average of the high and low board lot prices of the shares of the Toronto Stock Exchange on the five trading days immediately preceding the date of grant.

As of October 15, 2003, there were 84,777,930 common shares of Geac outstanding. Based on the records of Geac’s transfer agent, Computershare Trust Company, N.A., as at such date there were 66 registered holders of Geac common shares resident in the United States, holding an aggregate of 8,874,327 common shares, or approximately 10.5% of the issued and outstanding Geac common shares.

No person is known by Geac to own beneficially 5% or more of its outstanding common shares, except as follows: at September 30, 2003, CDP Capital beneficially owned 7,106,317 common shares, representing approximately 8.4% of Geac’s issued and outstanding common shares.

Mr. Craig C. Thorburn, Geac’s Senior Vice President, Mergers & Acquisitions, and Corporate Secretary, is a partner of Blake, Cassels & Graydon LLP, a law firm which provides legal services to Geac at the firm’s customary rates. Geac paid Blake, Cassels & Graydon LLP a total of $2,070,000 in fiscal 2003 for legal services.

See Item 17 for a description of the audited consolidated financial statements included in this Annual Report.

Geac intends to invest all available funds to finance the growth of its business and therefore investors cannot expect to receive a dividend on Geac’s Shares in the foreseeable future.

On June 23, 2003, Geac announced that it had entered into a definitive merger agreement to acquire Comshare, Incorporated (“Comshare”), a Michigan-based leading provider of corporate performance management software, as disclosed in the Corporation’s material change report dated as of June 23, 2003, which is incorporated herein by reference. The acquisition was accomplished by a cash tender offer by Conductor Acquisition Corp. (“Conductor”), a wholly-owned subsidiary of Geac, at US$4.60 per share for all of Comshare’s outstanding common stock. The tender offer commenced on July 1, 2003 and was followed by a cash merger in which the

remaining outstanding shares not tendered in the offer were acquired by Conductor for US$4.60 per share. On August 15, 2003, Geac announced it had completed its acquisition of Comshare for a purchase price, excluding acquisition costs, of approximately US$53.7 million. As a result, Comshare is now an indirect wholly owned subsidiary of Geac.

Set forth below are the high and low sale prices for Geac common shares on TSX for each of the last six months, each of the last nine full fiscal quarters and each of the last five full fiscal years:

The closing price of the Company’s Shares on The Toronto Stock Exchange on October 29, 2003 was $7.17.

Geac’s common shares are listed on The Toronto Stock Exchange under ticker symbol GAC.

Geac is a corporation continued under and governed by the Canada Business Corporations Act (the “CBCA”).

Geac was incorporated under the laws of Canada by letters patent dated May 11, 1971. By certificate of continuance dated January 7, 1980, Geac was continued under the Canada Business Corporations Act, after Geac’s authorized capital had been increased by supplementary letters patent issued November 20, 1975. Prior to May 1, 1988, Geac’s articles were amended, among other things, to subdivide the Geac’s common shares, create a class of an unlimited number of preference shares and vary the provisions of the preference shares. On May 1, 1992, the Corporation amalgamated with Geac European Holdings Corporation, its wholly owned subsidiary. On May 1, 1988, Geac amalgamated with Geac Computers International Inc., its wholly owned subsidiary. Effective October 31, 1997, Geac’s common shares were split 2 for 1.

Under the CBCA, a corporation whose securities are publicly traded must have at least three directors, including two who are not officers or employees of the corporation or any of its affiliates, but the actual number of directors is governed by a corporation’s charter. Geac’s charter provides that the number of directors will consist of a minimum of three and a maximum of fifteen. Geac’s bylaws provide that the actual number of directors will be determined from time to time by resolution of the directors. Currently, the number of directors on the Geac board is set at eight.

Under the CBCA generally, 25% of the directors of the corporation and twenty-five percent of the directors present at a meeting must be Canadian residents. If a corporation has less than four directors, at least one must be a Canadian resident. Certain individuals are disqualified by the CBCA from being directors, such as bankrupts or persons under eighteen years of age or of unsound mind.

Under the CBCA, subject to the articles of the corporation, a vacancy among the directors may be filled at a meeting of shareholders or by a quorum of directors except when the vacancy results from an increase in the number or minimum or maximum number of directors or from a failure to elect the appropriate number of directors required by the articles. Geac’s bylaws provided that three directors shall constitute a quorum for the transaction of business. Each director appointed holds office for the unexpired term of his or her predecessor unless his or her office is vacated earlier. Geac’s articles provide that the board of directors may appoint one or more directors for a term expiring not later than the close of the next annual meeting of shareholders provided that the total number of directors so appointed may not exceed one-third of the directors elected at the previous annual meeting of shareholders. Geac’s articles do not provide for a classified or staggered Board of Directions.

Under the CBCA, provided that articles of the corporation do not provide for cumulative voting, shareholders of a corporation may, by ordinary resolution passed at a special meeting, remove any director or directors from office. If holders of a class or series of shares have the exclusive right to elect one or more directors, a director elected by them may only he removed by an ordinary resolution at a meeting of the shareholders of that class or series.

The CBCA requires that a director or officer of a corporation disclose to the corporation, in writing or by requesting to have it entered in the minutes of meetings of directors or of meetings of committees of directors, the nature and extent of any interests in a material contract or material transaction, whether made or proposed, with the corporation if the director or officer (i) is a party to the contract or transaction; (ii) is a director or an officer, or an individual acting in a similar capacity, of a party to the contract or transaction; or (iii) has a material interest in a party to the contract or transaction.

An interested director is prohibited from voting on a resolution to approve the contract or transaction except in certain circumstances, which include the contract or transaction relating primarily to his or her remuneration, a contract or transaction for indemnification or liability insurance of the director, or a contract or transaction with an affiliate of the corporation. If a director or officer has disclosed his or her interest in accordance with the CBCA, the directors approve the contract or transaction and the contract or transaction was reasonable and fair to the corporation when it was approved, the director or officer is not accountable to the corporation or its shareholders for any profit realized from the contract or transaction and the contract or transaction is not invalid. Even if the foregoing conditions are not met, the CBCA provides that a director or officer, acting honestly and in good faith, is not accountable to the corporation or to its shareholders for any profit realized from a contract or transaction for which disclosure is required under the CBCA and the contract or transaction is not invalid by reason only of the interest of the director or officer in the contract or transaction, if:

	•		the contract or transaction is approved or confirmed by a special resolution at a meeting of shareholders;

	•		disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

	•		the contract or transaction as reasonable and fair to the corporation when it was approved or confirmed.

Under the CBCA the directors of Geac may fix the remuneration to be paid to the directors, officers and employees of the Corporation.

	(a)		borrow money upon the credit of the Corporation;

	(b)		issue, reissue, sell or pledge debt obligations of the Corporation;

	(c)		to the extent permitted by the CBCA, give, directly or indirectly, financial assistance to any person by means of a loan, a guarantee to secure the performance of an obligation or otherwise;

	(d)		mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Corporation, owned or subsequently acquired, to secure any obligation of the Corporation; and

	(e)		delegate to one or more directors or officers all or any of the powers conferred by the foregoing provisions to such extent and in such manner as the board shall determine at the time of such delegation.

Under the CBCA, the directors may, by resolution, amend or repeal any by-laws that regulate the business or affairs of Geac. The CBCA requires the directors to submit any such amendment or repeal to Geac’s shareholders at the next meeting of shareholders, and the shareholders may, by ordinary resolution, confirm, reject or amend the amendment or repeal.

The by-laws of Geac provide that at least the number of directors required by the CBCA shall be resident Canadian and at least the number of directors required by the CBCA shall not be officers or employees of the Corporation or its affiliates. The CBCA provides that every director shall be an individual 18 or more years of age, and that no one is of unsound mind and has been so found by a court in Canada or elsewhere or who has the status of a bankrupt shall be a director. There is no provision of the Articles of Incorporation or by-laws of Geac imposing a requirement for retirement or non-retirement of directors under an age limit requirement. The CBCA requires that at least twenty-five per cent (25%) of the directors of Geac be resident Canadians.

The CBCA provides that unless the articles of a corporation otherwise provide, a director of a corporation is not required to hold shares issued by the corporation. There is no provision in the Articles of Incorporation of Geac imposing a requirement that a director hold any shares issued by Geac.

Geac’s authorized capital consists of an unlimited number of common shares without nominal or par value and an unlimited number of preference shares without nominal or par value, issuable in series, of which 84,136,490 common shares and no preference shares are outstanding as of April 30, 2003.

Geac’s common shares entitle their holders to receive notice of and attend all meetings of shareholders, and to vote thereat, except meetings at which only holders of a specified class of shares (other than the common shares) or a specified series of shares are entitled to vote. The holders of common shares are entitled to dividends, if, as, and when declared by the board of directors of Geac. The common shares are entitled upon liquidation, dissolution or winding-up of Geac to receive the remaining assets of the corporation, subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of Geac.

The preference shares may from time to time be issued in one or more series and subject to the sending of articles of amendment in prescribed form and the issuance of a certificate of amendment in respect thereof, the directors may fix from time to time before such issue the number of shares which is to comprise each series and the designation, rights, privileges, restrictions and conditions attaching to each series of preference shares. The preference shares of each series shall, with respect to the payment of dividends and the distribution of assets or return of capital in the event of liquidation, dissolution or winding-up of the corporation, whether voluntary or involuntary, or any other return of capital or distribution of assets of Geac among its shareholders for the purpose of winding up its affairs, rank on a parity with the preference shares of every other series and be entitled to preference over the common shares and over any other shares of Geac ranking junior to the preference shares of any series.

Under the CBCA, if provided in the articles of a corporation, no shares of a class will be issued unless the shares have first been offered to stockholders holding shares of that class, and those stockholders have preemptive rights to acquire the offered shares in proportion to their holdings of the shares of that class, at the price and on the terms that those shares are to be offered to others. Geac’s charter does not provide for preemptive rights.

Under the CBCA, an amendment to a corporation’s articles generally requires shareholder approval by special resolution. A “special resolution” is a resolution passed by at least two-thirds of the votes cast by shareholders who are entitled to vote on the resolution. In addition, if an amendment to the articles of incorporation adversely affects the rights of a particular class or series of shares, that class or series is entitled to vote separately as a class, whether or not that class or series otherwise carries a right to vote.

Under the CBCA, unless the articles or bylaws otherwise provide, the directors may, by resolution, make, amend, or repeal any bylaw that regulates the business or affairs of a corporation. Where the directors make, amend or repeal a bylaw, they are required to submit the bylaw, amendment or repeal to the shareholders at the next shareholders meeting, and the shareholders may, by an “ordinary resolution” confirm, reject or amend the bylaw, amendment or repeal. An “ordinary resolution” is a resolution passed by a majority of the votes cast by shareholders who voted on the resolution. If the directors of a corporation do not submit a bylaw, an amendment or a repeal to the shareholders at the next meeting of shareholders, the bylaw, amendment or repeal will cease to be effective, and no subsequent resolution of the directors to adopt, amend or repeal a bylaw having substantially the same purpose and effect is effective until it is confirmed or confirmed as amended by the shareholders.

Under the CBCA, the holders of a majority of the shares entitled to vote at a meeting, present in person or represented by proxy, constitute a quorum for the transaction of business, irrespective of the number of persons present at the meeting, unless the bylaws provide otherwise. Geac’s bylaws provide that a quorum at any shareholder meeting will be the holders present in person or present by proxy of at least 20% of the outstanding shares entitled to be voted at the meeting.

Under the CBCA, the directors of a corporation must call an annual meeting not later than 18 months after the corporation comes in to existence and thereafter, not later than 15 months after holding the last preceding annual meeting and no later than six months after the end of the corporations’ preceding financial year. Geac’s bylaws provide that the meeting shall be held at such place within Canada as the board may determine.

The CBCA provides that shareholder meetings may be called by the board of directors, and must be called by the board of directors when so requisitioned by holders of not less than 5% of the issued shares of the corporation that carry the right to vote at the meeting sought. A court may also order, in its discretion and in certain circumstances, the calling of a meeting upon the application of a director or shareholder entitled to vote at the meeting. Under Geac’s bylaws, the board of directors has the power to call a special meeting at any time.

Under the CBCA, shareholder action may be taken without a meeting only by a written resolution signed by all shareholders who would be entitled to vote on that action at a meeting.

Under the CBCA, extraordinary corporate actions, such as certain amalgamations, continuances, sales, leases or exchanges of all or substantially all of the property of a corporation other than in the ordinary course of business, and other extraordinary actions such as liquidations or dissolutions are required to be approved by special resolution. For such approvals, each share of the corporation carries the right to vote, whether or not the shares are designated as voting shares in the corporation’s articles. In some cases the special

resolution to approve an extraordinary corporate action must also be approved separately by the holders of a class or series of shares, including a class or series that does not otherwise have the right to vote.

A corporation may also apply to a court for an order approving an arrangement which includes an amalgamation, a transfer of all or substantially all the property of a corporation to another corporation in exchange for property, money or securities of the corporation, or liquidation and dissolution where it is not insolvent and where it is not practicable for the corporation to make such fundamental change under other provisions of the Canada Business Corporations Act. The court may make any interim or final order it thinks fit with respect to the proposed arrangement.

Shareholder approval is not required for an amalgamation between a parent corporation and one or more of its wholly owned subsidiaries or between two or more wholly owned subsidiaries.

Geac and a predecessor to Computershare Trust Company of Canada, as rights agent, entered into an agreement dated March 15, 2000 to implement a shareholder protection rights plan (the “Original Plan”). Geac’s Board of Directors adopted, and Geac’s shareholders on September 10, 2003 approved, the Amended and Restated Shareholder Protection Rights Plan (the “Amended Plan”) thereby reconfirming and amending the Original Plan. The Amended Plan is identical to the Original Plan in all material respects.

One right (a “Right”) was issued on March 15, 2000, the date of implementation of the Original Plan, for each common share that was outstanding on that date or issued subsequently. Under the Amended Plan, the Rights are reconfirmed and Geac reconfirms its authorization to continue the issuance of one new Right for each common share issued. Generally, each Right, except for Rights owned by an acquiring person (as defined in the Amended Plan) will, if certain events occur, constitute the right to purchase from Geac, on payment of the exercise price, that number of common shares of Geac having an aggregate market price equal to twice the exercise price, subject to adjustment in certain circumstances. Prior to the separation time (as defined in the Amended Plan), the exercise price for a Right is equal to three times the market price from time to time. After the separation time, the exercise price is three times the market price at the separation time. The Rights become exercisable after the separation time, which generally occurs ten days after a person acquires beneficial ownership of or announces an intention to acquire 20% or more of the voting securities of Geac unless the board of directors determines that it should be a later date. Until the separation time, the Rights trade together with the existing common shares.

Set forth below is a summary of each material contract, other than contracts entered into in the ordinary course of business, to which Geac and its subsidiaries became a party since May 1, 2001:

On September 9, 2003, Geac and certain of its subsidiaries entered into a Loan, Guaranty and Security Agreement (the “Loan Agreement”) with Wells Fargo Foothill, Inc., pursuant to which Geac and certain of its subsidiaries obtained a three-year revolving credit facility (the “Facility”) which provided for a US$50,000,000 revolving line of credit and a US$5,000,000 letter of credit sub-facility. The interest rate payable on advances under the Facility is, at Geac’s option, the prime rate plus 0.50% or LIBOR plus 3.00%. The Facility is secured by substantially all of the assets of Geac and certain of its United States and Canadian subsidiaries and guaranteed by certain of its United States, Canadian, United Kingdom and Hungarian subsidiaries. The Facility is available for the working capital needs and other general corporate purposes of Geac and its subsidiaries that are parties to the Loan Agreement.

Geac entered into an Agreement and Plan of Merger with Geac Computers, Inc., Cage Acquisition Inc. (“Merger Sub”) and Extensity, Inc. (“Extensity”) dated August 26, 2002, amended and restated as of December 20, 2002, and again amended and restated as of February 4, 2003 (the “Extensity Merger Agreement”). Pursuant to the Extensity Merger Agreement, Merger Sub was merged with and into Extensity. Extensity stockholders were given

the option to elect to receive US$1.75 or 0.627 common share of Geac in exchange for each share of Extensity common stock. Geac paid in the aggregate approximately US$74 million, consisting of US$63.9 million of cash and the issuance of 932,736 common shares of Geac. Effective as of March 6, 2003, Extensity is an indirect, wholly-owned subsidiary of Geac.

Geac entered into an Agreement and Plan of Merger with Conductor Acquisition Corp. (“Merger Sub”) and Comshare, Incorporated (“Comshare”) dated June 22, 2003, as amended on August 13, 2003 (the “Comshare Merger Agreement”). Pursuant to the terms of the Comshare Merger Agreement, Geac conducted a cash tender offer for all of the outstanding shares of Comshare at a price of US$4.60 per share, followed by a merger of Merger Sub with and into Comshare, effective as of August 14, 2003. Geac paid an aggregate of approximately US$53.7 million for all of the outstanding shares of Comshare. Comshare is an indirect, wholly-owned subsidiary of Geac.

On January 12, 1998, Extensity, Inc. entered into a lease with Spieker Properties, L.P. as Landlord for office space at 2200 Powell Street, Emeryville, California 94608 (the "Lease"). The term of the Lease, as later amended, extends through August 31, 2006. Currently, pursuant to the terms of the Lease, Extensity is leasing approximately 61,000 square feet of office space. The current total lease payments are approximately $201,000 per month plus operating expenses, subject to annual increases as set forth in the Lease. On August 14, 2003, Geac acquired Extensity and assumed the Lease.

Geac has entered into employment agreements with various of its key personnel. For a description of the terms of the employment agreements with directors and the Named Executive Officers, see Item 6C. “Board Practices—Employment Agreements,” above.

There are no laws or government decrees or regulations in Canada that restrict the export or import of capital, or affects the remittance of dividends, interest or other payment to a non-resident holder of Common Shares, other than with respect to potential income tax issues arising in connection with such investment. See “Taxation” below.

There is no limitation imposed by Canadian law or by our Articles of Incorporation on the right of a non-resident to hold or vote Common Shares, other than as provided by the Investment Canada Act (Canada) (the “Investment Act”), as amended by an Act to implement the Agreement establishing the World Trade Organization (Canada) (the “WTO Implementation Act”). The following summarizes the principal features of the Investment Act for non-residents who propose to acquire Common Shares.

Under the Investment Act, an investment by an individual, a government or an agency thereof or an entity that is not a “Canadian” (as defined in the Investment Act) (a “non-Canadian”) may be subject to certain notification requirements or review by the Minister responsible for the administration of the Investment Act (the “Minister”). Except as set forth below, an investment in our Common Shares by a non-Canadian would be reviewable under the Investment Act if such investment constitutes a direct acquisition of control of the Company where the value of the assets of the Company, as at the end of the Company’s last completed fiscal year, is at least five million dollars. All direct acquisitions subject to review require that the acquiror file an application in accordance with the Investment Act. Before the acquisition of control may be completed, the Minister must be satisfied that the investment is likely to be of net benefit to Canada.

Under the WTO Implementation Act, an investment made by a WTO Investor (as defined in the Investment Act) (a “WTO Investor”) in our Common Shares would be reviewable under the Investment Act if such investment constitutes an acquisition of direct control of the Company and the value of the assets of the Company, as at the end of our fiscal year preceding the date of the acquisition of control, is at least $223 million (which threshold increases each year by the rate of inflation for consumer prices in Canada).

The Investment Act states that a non-Canadian will acquire direct control or will be deemed to acquire direct control if it acquires a majority of our outstanding Common Shares. An acquisition of less than a majority but more than one-third of the Common Shares will be presumed to be a direct acquisition of control unless it can be

established that, upon the acquisition, we are not in fact controlled by the acquiror through the ownership of Common Shares.

In certain limited circumstances transactions are exempt from the requirements of the Investment Act, including the acquisition of Common Shares by a person in the ordinary course of that person’s business as a trader or dealer in securities.

THIS DISCUSSION IS FOR GENERAL INFORMATION ONLY AND IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY HOLDER OR PROSPECTIVE HOLDER OF COMMON SHARES OF GEAC. HOLDERS OR PROSPECTIVE HOLDERS OF COMMON SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE CONSEQUENCES, IN THEIR PARTICULAR CIRCUMSTANCES, UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE LAWS OF ANY OTHER TAXING JURISDICTION, OF THEIR OWNERSHIP AND DISPOSITION OF COMMON SHARES.

The discussion under this heading is a summary of the principal Canadian federal income tax considerations generally applicable to a holder of common shares of Geac (a “Non-Resident Holder”) who, at all relevant times, for purposes of the Income Tax Act (Canada) (the “Tax Act”) holds the common shares as capital property, deals at arm’s length and is not affiliated with Geac, is not (and has not been at any time when the holder held common shares of Geac) a resident or deemed to be a resident of Canada, does not use or hold common shares of Geac in carrying on business in Canada and is not a foreign affiliate of any person resident in Canada. Special rules which are not discussed below, may apply to a holder who is a non-resident insurer which carries on business in Canada and elsewhere.

Generally speaking, a common share will be considered to be capital property to a Non-Resident Holder provided that the Non-Resident Holder does not hold the common share of Geac in the course of carrying on a business and has not acquired the share as an adventure in the nature of trade. Common shares of Geac held by certain “financial institutions” as defined in section 142.2 of the Tax Act will generally not be capital property to such holders and will be subject to special rules contained in the Tax Act. This summary does not take into account these special rules and Non-Resident Holders to whom these rules may be relevant should consult their own tax advisors.

This summary is based on the current provisions of the Tax Act and the regulations thereunder (the “Regulations”), the current provisions of the Canada-United States Income Tax Convention (the “Convention”) and on an understanding of the administrative positions and assessing practices of the Canada Customs and Revenue Agency (the “CCRA”) publicly available prior to the date of this Annual Report on Form 20-F. This summary takes into account all specific proposals to amend the Tax Act and the Regulations (the “Tax Proposals”) publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date of this Annual Report on Form 20-F. There is no assurance that the Tax Proposals will be enacted in their current form or at all. This summary does not otherwise take into account or anticipate any changes in law or the administrative positions or assessing practices of the CCRA, whether by judicial, governmental or legislative decision or action, nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction.

Each Non-Resident Holder is urged to consult such Non-Resident Holder’s own tax advisor with respect to the Canadian federal income tax consequences applicable to the Non-Resident Holder’s particular circumstances and any other federal, provincial, state, local or foreign tax consequences to it of holding or disposing of common shares of Geac.

Under the Tax Act, dividends on common shares of Geac paid or credited, or deemed to have been paid or credited, to a Non-Resident Holder will be subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividends. This withholding tax rate may be reduced pursuant to the provisions of an applicable tax treaty between Canada and the country of residence of the Non-Resident Holder. Pursuant to the Convention, the rate of withholding tax in respect of dividends paid to a resident of the United States for purposes of the Convention who is the beneficial owner of the common shares of Geac will generally be reduced to 15% of the gross dividend and will be reduced to 5% of the gross dividend if the beneficial owner of the common shares of Geac is a company which owns at least 10% of the voting stock of Geac. Moreover, under the Convention dividends paid to certain religious, scientific, literary, educational or charitable organizations and certain pension organizations that are resident in, and generally exempt from tax, in the United States, are exempt from Canadian non-resident withholding

tax. Provided that certain administrative procedures are observed by such an organization, Geac would not be required to withhold tax from dividends paid or credited to such an organization.

On a disposition of common shares of Geac (generally other than to Geac), a Non-Resident Holder will generally not be subject to tax under the Tax Act in respect of any capital gain realized by such Non-Resident Holder, unless the common shares of Geac constitute “taxable Canadian property” of the Non-Resident Holder for purposes of the Tax Act and the Non-Resident Holder is not entitled to relief under the terms of an applicable tax treaty or convention between Canada and the country of residence of the Non-Resident Holder. As long as the common shares of Geac are listed on a prescribed stock exchange (which currently includes the Toronto Stock Exchange), a common share of Geac will not constitute taxable Canadian property of a Non-Resident Holder unless at any time during the 60 month period immediately preceding the disposition of the common shares, the Non-Resident Holder, persons with whom the Non-Resident Holder does not deal at arm’s length for purposes of the Tax Act or the Non-Resident Holder together with such persons, owns or is considered to own not less than 25% of the issued shares of any class or series of shares of the capital stock of Geac. Non-Resident Holders should consult their own tax advisors as to the effect of the ownership of options to acquire shares of Geac on the determination of percentage ownership for such purpose.

The following is a summary of the material United States federal income tax considerations relating to the ownership and disposition of common shares of Geac to persons who are United States Holders (as defined below). The summary does not contain a complete analysis of all the potential tax considerations relating thereto. This summary is limited to holders who hold the common shares as “capital assets” (in general, assets held for investment) and does not deal with special situations. For example, this summary does not address any of the following:

	•		tax consequences to holders who may be subject to special tax treatment, such as tax-exempt entities, dealers in securities or currencies, banks, other financial institutions, insurance companies, regulated investment companies, or traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

	•		tax consequences to persons holding shares as part of a hedging, integrated, constructive sale or conversion transaction or a straddle or other risk reduction transaction;

	•		tax consequences to holders whose “functional currency” is not the US dollar;

	•		tax consequences to partnerships or similar pass-through entities (if a partnership (including any entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of the common shares, the United States federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership);

	•		tax consequences to holders who have ceased to be United States citizens or to be taxed as resident aliens;

	•		tax consequences to holders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services;

	•		US federal gift tax, estate tax or alternative minimum tax consequences, if any; or

	•		any state, local or non-United States tax consequences.

The discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury regulations promulgated thereunder, and rulings, judicial decisions and

administrative interpretations thereunder, as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in US federal income tax consequences different from those discussed below.

YOU ARE A UNITED STATES HOLDER IF YOU ARE A BENEFICIAL OWNER OF COMMON SHARES AND YOU ARE

	•		a citizen of the United States;

	•		a resident of the United States for US federal income tax purposes;

	•		a corporation or other entity (other than a partnership, estate or trust) created or organized in or under the laws of the United States or any political subdivision of the United States;

	•		an estate the income of which is subject to US federal income taxation regardless of its source; or

	•		a trust if a court within the Unites States is able to exercise primary jurisdiction over its administration and one or more US persons have authority to control all substantial decisions of the trust.

To the extent that the Company has current or accumulated earnings and profits the amount of any gross distribution made to a U.S. Holder in respect of common shares of the Company will be treated as a dividend includible in gross income in an amount equal to the U.S. dollar value of such dividend on the date of receipt (based on the exchange rate on such date) without reduction for any Canadian income tax withheld from such distributions. Distributions in excess of our current and accumulated earnings and profits will reduce a U.S. Holder’s basis for the common stock until the basis is zero; any additional distributions in excess of our current and accumulated earnings and profits will be short-term or long-term capital gain, depending upon whether the U.S. Holder’s holding period for the common stock exceeds one year. Because the Company is not a United States corporation, dividends paid on the common shares of the Company will generally not be eligible for the dividends received deduction provided to corporations.

Canadian tax withheld from any distribution may be credited, subject to certain limitations, against the U.S. Holder’s federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s federal taxable income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below).

If we pay a dividend in Canadian currency that is not converted by the recipient into U.S. dollars on the date of receipt, the recipient U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain, to the extent that there are no expenses associated with the transaction that meet the requirement for deductibility as a trade or business expense or as an expense for the production of income.

Under current temporary Treasury Regulations, dividends paid, and the proceeds of a sale of Company’s common shares, in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to a 28-percent U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed IRS Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. Significant and complex limitations apply to the availability of the foreign tax credit. Accordingly, U.S. Holders of common shares of the Company should consult their own tax advisors regarding their individual circumstances.

A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholders tax basis in the common shares of the Company. Preferential tax rates apply to long-term capital gains and loss if the common shares are a capital asset in the hands of a U.S. Holder who is an individual. The long-term capital holding period is in excess of one year. U.S. Holders who are individuals may carry over net capital loss to be deducted in later tax years until such net capital loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

Eligibility of U.S. Holders Who Are Individuals for the Reduced Federal 15-Percent Rate on Dividends

As a result of the Jobs and Growth Tax Relief Reconciliation Act of 2003 U.S. Holders who are individuals will pay tax at a 15-percent rate on eligible common stock dividends received from January 1, 2003, through December 31, 2008. Eligible dividends are dividends received during the tax year from (i) a domestic corporation, or (ii) a qualified foreign corporation (incorporated in a U.S. possession; stock traded on a U.S. exchange; or eligible for benefits under a comprehensive income tax treaty). Dividends paid by foreign corporations that are (i) a foreign investment company (FIC), (ii) a passive foreign investment company (PFIC), or (iii) a foreign personal holding company (FPHC) (as defined below) do not qualify for the reduced 15-percent rate. Also, beginning in 2009 the reduced 15-percent rate on dividends for individuals expires and those dividends will be taxed again at a marginal tax rate (35 percent). Because the Company is eligible for benefits under a comprehensive income tax treaty (that is, the Convention), and because the Company does not expect to be either a FIC, PFIC or FPHC, the Company believes that any dividends it pays will be treated as eligible common stock dividends.

Unfavorable U.S. tax rules apply to U.S. shareholders of a “passive foreign investment company” (“PFIC”), a “foreign personal holding company” (“FPHC”), and a “controlled foreign corporation” (“CFC”).

Passive Foreign Investment Company. A non-U.S. corporation, such as the Company, generally will be treated as a passive foreign investment company (“PFIC”) if, after applying certain look-through rules, either (i) 75 percent or more of its gross income is passive income or (ii) 50 percent or more of the average value of its assets is attributable to assets that produce or are held to produce passive income. Passive income for this purpose generally includes dividends, interest, rents, royalties and gains from securities and commodities transactions. For every subsidiary corporation of which the Company owns at least 25 percent, by value, of the shares, the Company must treat a proportionate amount of assets and income of the subsidiary as held or received directly by the Company.

We do not believe that we are presently a PFIC. There can be no assurance, however, that we will not become a PFIC. If we were to be treated as a PFIC, U.S. Holders may be required, in certain circumstances, to pay an interest charge together with tax calculated at maximum rates on certain “excess distributions,” including any gain on the sale of common shares. In order to avoid these tax consequences, a U.S. Holder of common shares in the Company (i) may be permitted to make a ‘qualified electing fund’ election, in which case, in lieu of such treatment, such U.S. Holder would be required to include in its taxable income certain undistributed amounts of our income or (ii) may elect to mark-to-market the common shares and recognize ordinary

income (or possible ordinary loss) each year with respect to such marking-to-market and on the sale or other disposition of the common shares. Neither we nor our advisors have the duty to or will undertake to inform U.S. Holders whether or not we are a PFIC. U.S. Holders should consult their own tax advisors concerning our status as a PFIC. We do not currently intend to make available the information necessary for a U.S. Holder to make a ‘qualified electing fund’ election in the event we are determined to be a PFIC.

Foreign Personal Holding Company. A non-U.S. corporation, such as the Company, may be classified as a foreign personal holding company (a “FPHC”) for federal income tax purposes if both of the following tests are satisfied: (i) at any time during the taxable year five or fewer individuals who are United States citizens or residents own or are deemed to own (under certain attribution rules) more than 50 percent of its stock (measured by vote or value) and (ii) at least 60 percent (50 percent for years after to the year in which it becomes a FPHC) of its gross income (regardless of source), as specifically adjusted, ‘is foreign personal holding company income,’ which includes dividends, interest, rents, royalties and gain from the sale of stock or securities.

Based on an analysis of our shareholder base, it is our belief that were are not a FPHC. However, no assurance can be given that we will not become a FPHC as a result of changes of ownership and the nature of our income. If we were to be classified as a FPHC each U.S. Holder would be required to include in income as a taxable constructive dividend its pro rata share of our undistributed foreign personal holding company income. Neither we nor our advisors have the duty to or will undertake to inform U.S. holders whether or not we are a FPHC. U.S. Holders should consult their own tax advisors concerning our status as a FPHC.

Controlled Foreign Corporation. If more than 50 percent of our ordinary shares (measured by vote or value) is owned, directly or indirectly, by U.S. shareholders each of whom owns or is deemed to own under certain attribution rules at least 10 percent of the total combined voting power of all classes of our stock (“10-Percent U.S. Shareholders”), we would be treated as a CFC under Subpart F of the Code.

We do not believe that we are currently a CFC; however, no assurance can be given that we will not become a CFC as a result of future changes in our ownership. If we were to be treated as a CFC, each 10-Percent U.S. Shareholder would be required to include in its taxable income as a constructive dividend its pro rata share of certain of our undistributed income, and all or a portion of the gain from the sale or exchange of the ordinary shares may be treated under Section 1248 of the Code as dividend income. Neither we nor our advisors have the duty to or will undertake to inform U.S. holders of changes in circumstances that would cause us to become a CFC. U.S. Holders should consult their own tax advisors concerning our status as a CFC.

Any documents referred to in this Annual Report may be inspected at the corporate office of the Company, 11 Allstate Parkway, Suite 300, Markham, Ontario, Canada L3R 9T8, upon appointment during normal business hours.

Financial instruments included in our consolidated balance sheets consist of cash and cash equivalents, accounts receivable, unbilled receivables, bank indebtedness, accounts payable and accrued liabilities and long-term debt. We treat financial instruments in accordance with the following principles:

	•		Fair values of financial assets and liabilities — the fair values of accounts receivable, unbilled receivables, bank indebtedness, accounts payable and accrued liabilities are equivalent to their carrying value because of the short-term maturity of those instruments. There is currently no significant difference between the carrying value and the fair value of long-term debt. We are not a party to any significant derivative instruments.

	•		Credit risk — we are subject to risk associated with both billed land unbilled receivables and cash and cash equivalents. Receivables are with customers in many diverse industries and are subject to normal industry credit risks. We place our temporary excess cash in high quality short-term financial instruments issued or guaranteed by major financial institutions in the countries in which we operate or in similar low risk instruments.

	•		Interest rate risk — we are subject to relatively small interest rate risk on existing long term indebtedness. We will be subject to interest rate risk on our senior secured credit facility. The senior secured credit facility will bear interest at a variable rate based on a margin over the prime rate or LIBOR, as the case may be.

	•		Foreign exchange risk — we are subject to foreign exchange risk because most of our business is transacted in currencies other than Canadian dollars. Accordingly, most of our balance sheet amounts, including financial instruments as defined above, are denominated in foreign currencies. If, for each of the foreign currencies in which we do business, the average exchange rate for FY 2003 appreciated or depreciated by 10 percent, the estimated impact on our net income for FY 2003 would be approximately $8.5 million.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

	(a)		Geac’s Chief Executive Officer, Chief Financial Officer, and other members of Geac’s senior management team have evaluated the effectiveness of Geac’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on such evaluation, Geac’s Chief Executive Officer and Geac’s Chief Financial Officer have concluded that Geac’s disclosure controls and procedures, as of the end of the period covered by this report, were adequate and effective to provide reasonable assurance that information required to be disclosed by Geac, including Geac’s consolidated subsidiaries, in reports that Geac files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

			The effectiveness of a system of disclosure controls and procedures is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of internal controls, and fraud. Due to such inherent limitations, there can be no assurance that any system of disclosure controls and procedures will be successful in preventing all errors or fraud, or in making all material information known in a timely manner to the appropriate levels of management.

	(b)		Not applicable for Geac’s fiscal year ended April 30, 2003, under transition rules adopted by the SEC under the Sarbanes-Oxley Act of 2002.

	(c)		Not applicable for Geac’s fiscal year ended April 30, 2003, under transition rules adopted by the SEC under the Sarbanes-Oxley Act of 2002.

	(d)		Not applicable for Geac’s fiscal year ended April 30, 2003, under transition rules adopted by the SEC under the Sarbanes-Oxley Act of 2002.

Not applicable for Geac’s fiscal year ended April 30, 2003, under transition rules adopted by the SEC under the Sarbanes-Oxley Act of 2002.

The following financial statements, which appear at pages F-1 through F-41 of this Annual Report, are incorporated herein by reference:

To the Board of Directors and Shareholders of Geac Computer Corporation Limited

We have audited the consolidated balance sheets of Geac Computer Corporation Limited as at April 30, 2003 and 2002 and the consolidated statements of operations, shareholders’ equity (deficiency) and cash flows for each of the years in the three-year period ended April 30, 2003. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at April 30, 2003 and 2002 and the results of its operations and its cash flows for each of the years in the three-year period ended April 30, 2003 in accordance with accounting principles generally accepted in the United States of America.

As we discussed in note 2 to the consolidated financial statements, the Company changed its method of accounting for goodwill and intangible assets effective May 1, 2001.


	As at April 30,

	2003		2002
	$		$
Assets
Current assets
Cash and cash equivalents		128,755		115,449
Restricted cash and cash equivalents (note 2)		—		4,769
Accounts receivable and other (note 3)		78,080		77,969
Unbilled receivables		9,893		7,607
Future income taxes (note 19)		23,277		20,508
Inventory (note 4)		1,128		2,119
Prepaid expenses		17,056		16,016

		258,189		244,437
Restricted cash and cash equivalents (note 2)		3,433		451
Future income taxes (note 19)		32,982		58,073
Property, plant and equipment (note 5)		36,768		47,679
Intangible assets (note 6)		16,013		424
Goodwill (note 7)		104,667		97,324

		452,052		448,388

Liabilities
Current liabilities
Accounts payable and accrued liabilities (note 8)		136,152		170,309
Income taxes payable		44,602		44,596
Current portion of long-term debt (note 11)		1,050		1,987
Deferred revenue		171,929		187,301

		353,733		404,193
Deferred revenue		3,857		10,679
Long-term debt (note 11)		7,980		9,954

		365,570		424,826

Redeemable preferred shares; unlimited shares authorized; issued and outstanding: 25,000 (2002 - nil); aggregate liquidation value: $75 (note 12)		78		—

The accompanying notes are an integral part of these consolidated financial statements.

Geac Computer Corporation Limited
Consolidated Balance Sheets ...continued


	As at April 30,

	2003			2002
	$			$
Shareholders’ Equity
Share capital
Preference shares; no par value; unlimited shares authorized; none issued or outstanding		—			—
Common shares; no par value; unlimited shares authorized
Issued and outstanding 84,136,490 (2002 - 78,144,608) shares		171,090			154,524
Additional paid-in capital		2,978			3,788
Purchase warrants		—			1,750
Deferred stock-based compensation		(696	)		(1,294	)
Employee loans to acquire shares		(375	)		(375	)
Accumulated other comprehensive loss		(11,041	)		(5,194	)
Deficit		(75,552	)		(129,637	)

		86,404			23,562

		452,052			448,388

Commitments and contingencies (note 13)

The accompanying notes are an integral part of these consolidated financial statements.


	Years ended April 30,

	2003			2002			2001
	$			$			$
Revenues
Software		75,702			83,718			91,392
Support and services		500,697			580,860			670,577
Hardware		47,268			51,956			74,402

Total revenues		623,667			716,534			836,371

Cost of revenues
Software		10,032			11,429			15,687
Support and services		217,112			273,180			346,234
Hardware		39,961			42,022			60,794

Total cost of revenues		267,105			326,631			422,715

Gross profit		356,562			389,903			413,656

Operating expenses
Sales and marketing		90,199			93,173			124,616
Product development (note 9)		68,256			92,792			117,309
General and administrative		90,065			88,534			102,699
Net restructuring and other unusual items (note 18)		5,164			45,861			295,943
Goodwill impairment (note 7)		12,556			—			—
Amortization of goodwill		—			—			58,129
Amortization of intangible assets		1,633			1,738			61,752

		267,873			322,098			760,448

Income (loss) from operations		88,689			67,805			(346,792	)

Interest income		2,037			1,900			1,666
Interest expense		(740	)		(3,521	)		(14,310	)
Gain on disposal of business		—			5,073			97,300
Other income (expense), net		(2,553	)		933			(5,581	)

		(1,256	)		4,385			79,075

Income (loss) from operations before income taxes		87,433			72,190			(267,717	)
Income taxes (note 19)		33,348			30,126			(32,925	)

Net income (loss)		54,085			42,064			(234,792	)

The accompanying notes are an integral part of these consolidated financial statements.

Geac Computer Corporation Limited
Consolidated Statements of Operations ...continued


	Years ended April 30,

	2003			2002			2001
	$			$			$
Net income (loss)		54,085			42,064			(234,792	)
Other comprehensive income (loss)
Foreign exchange translation adjustment		(5,847	)		(5,021	)		1,346

Comprehensive income (loss)		48,238			37,043			(233,446	)

Basic net income (loss) per share		0.67			0.58			(3.78	)

Diluted net income (loss) per share		0.66			0.56			(3.78	)

Weighted average number of common shares outstanding (‘000s) (note 16)
Basic		80,152			73,130			62,068
Diluted		81,695			75,784			62,068

The accompanying notes are an integral part of these consolidated financial statements.

Geac Computer Corporation Limited
Consolidated Statements of Shareholders’ Equity (Deficiency)
For the years ended April 30, 2003, 2002 and 2001


	Share capital

																			Employee			Accumulated						Total
							Additional									Deferred			loans to			other			Retained			shareholders’
							paid-in			Special			Purchase			stock-based			acquire			comprehensive			earnings			equity
	Shares			Amount			capital			warrants			warrants			compensation			shares			income (loss)			(deficit)			(deficiency)
	(’000s)			$			$			$			$			$			$			$			$			$
Balance — April 30, 2000		62,143			113,060			3,267			—			—			(2,799	)		(2,912	)		(1,519	)		66,278			175,375
Expiry of options vested		—			18			(18	)		—			—			—			—			—			—			—
Stock option compensation costs		—			—			(179	)		—			—			1,894			—			—			—			1,715
Issued for cash		114			464			—			—			—			—			—			—			—			464
Purchased through normal course issuer bid and subsequently cancelled		(226	)		(411	)		—			—			—			—			—			—			(650	)		(1,061	)
Net loss		—			—			—			—			—			—			—			—			(234,792	)		(234,792	)
Write-off of employee loan		—			—			—			—			—			—			2,537			—			(2,537	)		—
Foreign exchange translation adjustment		—			—			—			—			—			—			—			1,346			—			1,346

Balance — April 30, 2001		62,031			113,131			3,070			—			—			(905	)		(375	)		(173	)		(171,701	)		(56,953	)
Expiry of options vested		—			86			(86	)		—			—			—			—			—			—			—
Stock option compensation costs		—			—			804			—			—			(389	)		—			—			—			415
Issued for cash (note 14)		6,114			25,172			—			17,885			—			—			—			—			—			43,057
Exercise of special warrants (note 14)		10,000			16,135			—			(17,885	)		1,750			—			—			—			—			—
Net income		—			—			—			—			—			—			—			—			42,064			42,064
Foreign exchange translation adjustment		—			—			—			—			—			—			—			(5,021	)		—			(5,021	)

Balance — April 30, 2002		78,145			154,524			3,788			—			1,750			(1,294	)		(375	)		(5,194	)		(129,637	)		23,562
Expiry of options vested		—			869			(869	)		—			—			—			—			—			—			—
Stock option compensation costs		—			—			(178	)		—			—			598			—			—			—			420
Issued for cash (note 14)		58			197			—			—			—			—			—			—			—			197
Exercise of purchase warrants (note 14)		5,000			15,500			—			—			(1,750	)		—			—			—			—			13,750
Issued in exchange for shares of acquired company (note 14)		933			—			—			—			—			—			—			—			—			—
Option value resulting from acquisition (note 14)		—			—			240			—			—			—			—			—			—			240
Net income		—			—			—			—			—			—			—			—			54,085			49,856
Accrued dividends on redeemable preferred shares		—			—			(3	)		—			—			—			—			—			—			(3	)
Foreign exchange translation adjustment		—			—			—			—			—			—			—			(5,847	)		—			(5,847	)

Balance — April 30, 2003		84,136			171,090			2,978			—			—			(696	)		(375	)		(11,041	)		(75,552	)		82,175

The accompanying notes are an integral part of these consolidated financial statements.

Geac Computer Corporation Limited
Consolidated Statements of Cash Flows
For the years ended April 30, 2003, 2002 and 2001


		Years ended April 30,

		2003			2002			2001
		$			$			$
Cash provided by (used in)
Operating activities
Net income (loss)			54,085			42,064			(234,792	)
Adjusted for items not involving cash:
	Amortization of goodwill and intangible assets		1,633			1,738			119,881
	Amortization of property, plant and equipment		15,904			18,058			20,466
	Goodwill impairment		12,556			—			—
	Writedown of intangible assets		—			—			252,831
	Writedown of other assets		—			2,668			—
	Writedown of property, plant and equipment		—			5,065			3,634
	Future income tax expense (recovery)		25,648			9,955			(50,447	)
	Reversal of accrued liabilities and other provisions		(7,750	)		(6,911	)		—
	Gain on divestiture of operations		—			(5,256	)		(97,300	)
	Other		(327	)		462			2,258
Change in non-cash working capital excluding deferred revenue
	Accounts receivable and other and unbilled receivables		6,656			28,108			76,794
	Inventory		1,212			2,417			5,430
	Prepaid expenses		603			1,198			(904	)
	Accounts payable and accrued liabilities		(46,248	)		22,743			(57,514	)
	Income taxes payable		(825	)		5,555			21,140
Change in deferred revenue			(19,984	)		(44,991	)		(64,052	)

			43,163			82,873			(2,575	)

Investing activities
Acquisitions less cash acquired (note 21)			(33,660	)		—			(45,009	)
Proceeds from divestiture of operations less cash divested (note 22)			—			1,626			158,580
Net additions to property, plant and equipment			(2,651	)		(5,529	)		(3,827	)
Additions to other assets			—			(3,130	)		—
Change in restricted cash and cash equivalents			1,787			815			(5,804	)

			(34,524	)		(6,218	)		103,940

Financing activities
Issue (repurchase) of common shares and special warrants			13,947			43,057			(596	)
Decrease in bank indebtedness			—			(39,489	)		(101,584	)
(Repayment) issuance of long-term debt			(3,759	)		1,651			(5,603	)

			10,188			5,219			(107,783	)

Effect of exchange rate changes on cash and cash equivalents			(5,521	)		(102	)		(625	)

Cash and cash equivalents
Net increase (decrease) in cash and cash equivalents			13,306			81,772			(7,043	)
Cash and cash equivalents — Beginning of year			115,449			33,677			40,720

Cash and cash equivalents — End of year			128,755			115,449			33,677

Supplemental cash flow disclosure
Interest paid			704			2,990			8,775
Income taxes paid			8,949			10,916			(594	)

The accompanying notes are an integral part of these consolidated financial statements.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

Geac Computer Corporation Limited (Geac or the Company) is a global enterprise software company for business performance management, providing customers worldwide with the core financial and operational solutions and services to improve their business performance in real time. Geac’s solutions include cross-industry enterprise application systems (EAS) for financial administration and human resources functions, expense management, and time capture, and enterprise resource planning applications for manufacturing, distribution, and supply chain management. These cross-industry applications are marketed globally and span a number of product lines. Geac also provides industry-specific applications (ISA) tailored to the real estate, restaurant, property management, and construction marketplaces, and for libraries, and public safety agencies. Geac is also a reseller of computer hardware and software, and provides a broad range of professional services, including application hosting, consulting, implementation services, and training. Geac’s most significant international operations are in the United States, the United Kingdom, and France.

Effective May 1, 2001, the Company adopted Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets.” This standard eliminates the amortization of goodwill, requires annual impairment testing of goodwill and introduces the concept of indefinite life intangible assets. Goodwill is required to be tested for impairment between the annual tests if an event occurs or circumstances change such that it is more likely than not that the fair value of a reporting unit has been reduced below its carrying value. Prior to May 1, 2001, goodwill was amortized on a straight-line basis over the estimated periods of benefit not exceeding ten years. The new standard has been applied on a prospective basis (note 7).

Effective January 1, 2003, the Company adopted SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which supersedes EITF 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity.” This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF 94-3, a liability for an exit cost as defined in EITF 94-3 was recognized at the date of an entity’s commitment to an exit plan. The provisions of SFAS 146 are effective for exit or disposal activities initiated after December 31, 2002.

Effective January 1, 2003, the Company adopted FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees and Indebtedness of Others — an interpretation of FASB 5, 57 and 107 and rescission of FASB Interpretation No. 34” (FIN 45). This interpretation elaborates on the disclosures to be made by a guarantor that it has issued. FIN 45 also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation due to the issuance of the guarantee. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The interpretation has been applied on a prospective basis.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and are presented in Canadian dollars.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including future income tax assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

These consolidated financial statements comprise the financial statements of Geac Computer Corporation Limited and its subsidiary companies, which are wholly owned by Geac. Intercompany transactions have been eliminated.

Cash and cash equivalents are composed of non-restricted cash and short-term, highly liquid investments with an original maturity of 90 days or less.

Cash and cash equivalents are considered restricted when they are subject to contingent rights of a third party customer, vendor, or government agency. As at April 30, 2003, the majority of restricted cash and cash equivalents is related to letters of credit issued for the benefit of lessors of office space. These letters of credit are collateralized by cash in the amount of $2,462 (US$1,717). As at April 30, 2002, the restricted cash and cash equivalents of $3,191 were mainly related to performance bonds for customer contracts, and $1,809 of bank guarantees and letters of credit for office space and vendor obligations, all of which were collateralized by cash.

Work-in-progress and finished goods inventory are stated at the lower of cost on a first-in, first-out basis and net realizable value.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

Property, plant and equipment are recorded at cost less accumulated amortization and are amortized over the estimated useful lives of the related assets as follows:

The Company reviews, on an ongoing basis, the carrying values of its property, plant and equipment. If it is determined that the carrying value of property, plant and equipment is not recoverable and exceeds its fair value, a write-down to fair value is charged to income in the period that such a determination is made.

Goodwill represents the excess of the cost of an acquired enterprise over the net of the amounts assigned to assets acquired and liabilities assumed.

Goodwill and intangible assets are accounted for in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.”

In accordance with SFAS No. 142, effective May 1, 2001, goodwill and indefinite life intangible assets are not subject to amortization. Instead, goodwill and indefinite life intangible assets are tested annually for impairment.

The Company reviews the carrying value of amortizable intangible assets for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value of the asset.

Intangible assets, which consist of acquired software, customer relationships and agreements, and trademarks, are recorded at cost less accumulated amortization. Intangible assets are amortized on a straight-line basis over the estimated useful lives of the related assets as follows:

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

Income taxes are accounted for under the liability method, whereby future income tax assets and liabilities are recognized for temporary differences between the tax and accounting bases of assets and liabilities, as well as for the benefit of losses available to be carried forward to future years for income tax purposes. Future income tax assets are recognized only to the extent that, in the opinion of management, it is more likely than not that the future income tax assets will be realized. Future income tax assets and liabilities are measured using income tax rates applicable to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Future income tax assets and liabilities are adjusted for the effects of changes in income tax laws and rates in the period in which the change occurs.

Investment tax credits arising from research and development are deducted from the related costs and, accordingly, are included in the determination of income in the same year as the related costs.

Revenue from the sale of software licenses is recognized when persuasive evidence of an arrangement exists, delivery of the product has occurred, the fee is fixed or determinable, and collectibility is probable. Arrangements for which the fees are not fixed or determinable are recognized in the period they become known and due.

For software contracts sold through indirect channels, revenue is recognized when, based on the shipping terms, delivery of the software products to the resellers is deemed to occur, provided that all fees are fixed or determinable, evidence of an arrangement exists and collectibility is reasonably assured. Contract terms do not provide resellers with product rotation rights or rights of return.

For contracts involving significant implementation or customization essential to the functionality of the Company’s products, the license and service revenues are recognized over the period of the engagement, using the percentage-of-completion method. Progress is measured using milestones or costs incurred. Revenue is classified in the consolidated financial statements as either license revenue or professional services revenue based upon the Company’s estimates of fair value for each of the elements. A provision for estimated contract losses is recognized in the period the loss becomes probable and can be reasonably estimated.

Revenue from professional services, such as consulting fees or training fees, is recognized as the services are performed. Maintenance and support revenues are recognized ratably over the term of the related maintenance agreement, which is normally one year.

The timing of revenue recognition may differ from contract payment schedules, resulting in revenues that have been earned but not yet billed. These amounts are included in unbilled receivables. Customer advances in excess of revenue earned and recognized are recorded as deferred revenue.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

The Company has established vendor-specific objective evidence (VSOE) of fair value of its products and services for purposes of accounting for multiple-element arrangements and believes that the evidence gathered complies with the requirements of Statement of Position 97-2. VSOE is established for each of the elements in the arrangements based on the following:

•

Customers are generally required to renew their maintenance and technical support contracts annually and pay separately for such renewal. The Company considers the renewal rates, which are included as a term of the arrangements, to represent VSOE of fair value for the maintenance and technical support element in the arrangement.

•

The Company has an established history of selling consulting and professional services separately. The Company charges standard hourly rates for consulting services, which are based on the nature of the services and the experience of the professionals who are performing the services. The Company considers these rates to represent VSOE of fair value for consulting services.

•

The Company occasionally sells computer hardware, such as IBM e-server i-Series (formerly AS/400) servers, for use in conjunction with software systems, where appropriate, to provide a more complete solution to customers. The VSOE of fair value for this element of the arrangement is based on the price established by our suppliers and is consistent with the price actually paid by the Company to the suppliers, at a modest markup.

For the sale of software licenses bundled with a one-year service and maintenance contract, the Company generally invoices 100% of the fee at the inception of the license contract, with terms of 30 days. For maintenance renewals, 100% of the annual fee is charged at the inception of the maintenance contract, with terms of 30 days. Consulting contracts are generally billed based on time and materials, throughout the term of the assignment, with terms of 30 days.

Research and development costs are expensed as incurred. Research and development costs are reduced by the amount of related government grants and other amounts recoverable.

The Company accounts for software development costs in accordance with the provisions of SFAS No. 86, “Accounting for Costs of Computer Software to be Sold, Leased or Otherwise Marketed.” The Company capitalizes computer software development costs that are incurred after the establishment of technological feasibility, which the Company has defined as a completion of a working model ready for release to customers. The Company has not capitalized any software development costs to date, as costs that would qualify have been insignificant and have been expensed as incurred.

Advertising costs are expensed as incurred. Advertising expenses incurred in fiscal 2003 were $3,621 (2002 — $4,994; 2001 — $6,221).

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

Transactions denominated in currencies other than the functional currency are translated into the functional currency as follows: monetary assets and liabilities are translated at the exchange rate in effect at the consolidated balance sheet dates, and revenues and expenses are translated at the average exchange rate for the year. Non-monetary assets and liabilities are translated at historical rates. Gains and losses arising from such translation are reflected in the consolidated statements of operations. For foreign subsidiaries with functional currencies other than the Canadian dollar, all assets and liabilities are translated at the year-end exchange rates and all revenue and expenses items are translated at the average rate for the period, with exchange differences arising on translation accumulated in other comprehensive income (loss).

SFAS No. 123, “Accounting for Stock-Based Compensation,” requires that an enterprise recognize or, at its option, disclose the impact of the fair value of stock options and other forms of stock compensation granted to employees on the determination of net income. The Company has elected to measure compensation cost as permitted by Accounting Principles Board (APB) Opinion No. 25, based on the difference, if any, on the date of the grant, between the fair value of the Company’s shares and the exercise price (referred to as the “intrinsic value method”). Deferred stock-based compensation is amortized and expensed over the vesting period of the individual award on a straight-line basis.

The Company has modified certain stock options by reducing the exercise price and extending the life of the options. Under FIN 44, “Accounting for Certain Transactions Involving Stock Compensation,” a reduction in the exercise price results in accounting for the modified options using variable plan accounting, whereby compensation cost is estimated and recorded each period from the modification date to the date of exercise or expiry, and the extension of the life of the options results in a new measurement date.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)


	Had compensation cost for option grants to employees been determined as if the fair value method required by SFAS No. 123 had been applied, the Company’s net income (loss) would have been as follows:


	The weighted average fair values of stock options granted, including any modifications, which are considered new grants, in 2003, 2002 and 2001 were $3.17, $4.78 and $8.68, respectively. The fair values of options or awards granted under the stock ownership plan were estimated using the Black-Scholes options pricing model with the following assumptions:

The Black-Scholes model was developed to estimate the fair value of traded options and awards, which have no vesting restrictions, and are fully transferable. In addition, the Black-Scholes model requires the input of highly subjective assumptions including the expected stock price volatility and expected time until exercise. Because the Company’s employee stock options and stock awards have characteristics significantly different from those of traded options and awards, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, existing models, including the Black-Scholes model, do not necessarily provide a reliable single measure of the fair value of its employee stock options and stock awards.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

		New accounting pronouncements not yet adopted

		In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligation,” which is effective for fiscal years beginning on or after June 15, 2002. This standard requires that the fair value of a liability for an asset retirement obligation be recognized in the year in which the obligation is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset and amortized to expense over the asset’s useful life. The adoption of this new standard will not have a material impact in the Company’s financial statements.

		In January 2003, the FASB issued FIN 46, “Consolidation of Variable Interest Entities, an interpretation of ARB 51,” which is effective in the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. The primary objectives of FIN 46 are to provide guidance on the identification of entities for which control is achieved through means other than through voting rights (“variable interest entities” or “VIEs”), how to determine which business enterprise should consolidate the VIE, and when, the Company does not expect the adoption of this Interpretation to have a material impact on the Company’s financial statements.

		In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” which is effective for financial instruments entered into or modified after May 31, 2003, and otherwise effective at the beginning of the first interim period beginning after June 15, 2003. SFAS No. 150 improves the accounting for certain financial instruments that, under previous guidance, issuers could account for as equity. SFAS No. 150 requires that those instruments be classified as liabilities in statements of financial position. Upon adoption of this Statement, the Company’s redeemable preferred shares will be classified as a liability.

		Comparative figures

		Certain of the prior years’ figures have been reclassified to conform to the current year’s financial statement presentation.

3		Accounts receivable and other

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

Additions of intangible assets in fiscal 2003 resulted from the acquisitions of Extensity, Inc. (“Extensity”) and the assets of EBC Informatique (note 21).


	Estimated amortization expense for each of the next five years, beginning with the year ending April 30, 2004, is as follows:

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)


	In connection with the annual review of the carrying value of goodwill, a goodwill writedown of $12,556 was recorded in the fourth quarter of fiscal 2003 relating to the Interealty business, based on revised future estimates of its likely performance. This represented the full amount of goodwill on the Company’s balance sheet for the Interealty business.

	The changes in the carrying amount of goodwill are as follows:


	The goodwill has not been allocated to segments as it is not included in the determination of segment assets reviewed by the chief operating decision maker.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)


	The following table reflects the results adjusted as though the adoption of SFAS No. 142 had occurred as at the beginning of fiscal 2001:

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

		Research and development costs included in product development are $25,964 in fiscal 2003, $35,997 in fiscal 2002 and $74,157 in fiscal 2001.

10		Credit facility

		The Company entered into a 24-month revolving credit facility in the second quarter of fiscal 2002 in the amount of US$20,000. Borrowings under this facility were collateralized by a substantial portion of the Company’s assets and bore interest at a variable rate with a minimum of 9.75%. There was no drawdown under this credit facility, and it was terminated by the Company in March 2002.

11		Long-term debt

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)


	The capital repayments required on the Company’s total long-term obligations as at April 30, 2003 are as follows:

12		Redeemable preferred shares

		In connection with the acquisition of Extensity, Cage Acquisition Inc. (Cage), a subsidiary of Geac, issued 25,000 shares of non-voting, redeemable preferred stock for US$2.00 per share to a third party on December 11, 2002. The holders of redeemable preferred stock are entitled to receive a fixed dividend of 12% per year, being paid semi-annually on May 15 and December 15. The dividends are cumulative and payable in arrears. The preferred dividend payments have been accrued from the issue date to April 30, 2003 and charged as a reduction to additional paid-in capital within shareholders’ equity.

		The preferred shares are redeemable after the 60-month anniversary of the issue date, either at the option of the Company by paying in cash US$2.02 plus all accrued but unpaid dividends thereon for each share of preferred stock up to and including the date fixed for redemption, or at the option of the holder of preferred stock, at a cash redemption price of US$2.00 plus all accrued but unpaid dividends thereon for each share of preferred stock.

		In the event of (i) any liquidation, dissolution or winding up of Cage, (ii) the sale, lease, assignment, transfer, conveyance or disposal of all or substantially all of the assets of Cage, or (iii) acquisition, merger or reorganization of Cage by another entity in which neither Cage nor Geac has at least a majority of the voting power of the successor entity, the preferred stockholders are entitled to receive US$2.00 for each share of preferred stock they held, plus all accrued but unpaid dividends.

		The merger agreement provided for the acquisition of Extensity by Geac through the merger of Cage into Extensity. The preferred shares of Cage were converted in the merger into preferred shares of Extensity having equivalent rights and privileges, and remain outstanding in the hands of the third party after the merger.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

13		Commitments and contingencies

		The Company has operating leases on rental equipment for varying terms up to a maximum of five years, leases on vehicles for varying terms up to a maximum of 4 years, and has entered into leases for the rental of premises for varying terms up to a maximum of 12 years. Aggregate lease payments in each of the next five years, beginning with the year ending April 30, 2004, are as follows:


	The operating lease expense incurred in fiscal 2003 was $24,374 (2002 — $29,423; 2001 — $28,804).

	The Company has capital leases on assets (notes 5 and 11) for varying terms up to a maximum of 8 years. Aggregate lease payments on assets held under capital leases in each of the next five years, beginning with the year ending April 30, 2004, are as follows:


	As at April 30, 2003, letters of credit and bank guarantees are outstanding for approximately $3,923 (2002 — $2,432; 2001 — $2,611). The Company is potentially liable for approximately $179 (2002 — $3,128; 2001 — $3,134) of performance bonds, which are routinely issued on its behalf by financial institutions in connection with outstanding contracts with various public sector customers.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

		Customer indemnification

		From time to time, the Company agrees to indemnify its customers against liability if the Company’s products infringe a third party’s intellectual property rights. As of April 30, 2003, the Company was not subject to any pending litigation alleging that the Company’s products infringe the intellectual property rights of any third parties.

		Litigation

		Geac, in the normal course of business, is subject to legal proceedings brought against it and its subsidiaries, including several that are not described below. Such proceedings may be the result of disputes over, among other things, contracts, alleged torts, real estate, insurance, employee relations, or intellectual property.

		In May 2001, Cels Enterprises, Inc., filed a complaint in the United States District Court for the Central District of California against Geac Computer Corporation Limited and its subsidiary Geac Enterprise Solutions, Inc. (GES). GES is the successor to JBA Holdings plc, a company acquired by GEAC in 1999 (JBA). The complaint alleged that JBA software supplied to Cels by Geac was experimental and did not work. The software product in question, which was part of JBA’s product offering prior to the acquisition, is no longer sold by Geac. Cels claimed damages of US$28.3 million. In August 2003, the jury returned a verdict against GES awarding Cels US$1.8 million in compensatory damages and US$2.3 million in punitive damages, and a judgment was entered. Either party may appeal the judgment. At April 30, 2003, Geac had accrued US$2.0 million in respect of the Cels claim. Geac increased the amount of this reserve to US$4.1 million at July 31, 2003.

		Extensity, a subsidiary acquired by Geac in March 2003, is subject to a class action suit which alleges that Extensity, certain of its officers and directors (who are no longer employed by Geac), and the underwriters of its initial public offering in January 2000 violated the federal securities laws of the United States. The parties have submitted a settlement proposal and are awaiting court approval of the proposal. Such approval is expected in late 2003 to early 2004. If the proposed settlement is not approved, in view of the fact that Extensity is a corporate defendant, this action may divert the efforts and attention of Geac’s management and, if determined adversely, could have a material impact on Geac’s, business, financial position, results of operations and cash flows.

		On March 21, 2002, Grace Consulting, Inc. (“Grace”), a provider of software maintenance and consulting services, filed a lawsuit against GES and Geac Computer Corporation Limited claiming antitrust violations and seeking approximately US$75 million in damages. Grace alleged that Geac was attempting to monopolize the market for maintenance services in certain Geac products by filing a copyright infringement suit against Grace and by taking other measures to prevent Grace from providing software maintenance services through the infringement of Geac’s copyrights. Geac believes this lawsuit is based on facts and circumstances substantially similar to Grace’s claims in an earlier lawsuit. In 1995, before its acquisition by Geac, Dun & Bradstreet Software Services, Inc. filed a complaint against Grace claiming copyright infringement. Grace asserted counterclaims against Dun & Bradstreet Software Services, Inc. for copyright misuse, tortious interference with contract, and breach of contract. On September 24, 2002, the United States Circuit Court of Appeals for the Third Circuit issued an opinion in Geac’s copyright infringement suit against Grace, finding that Grace’s maintenance services infringed Geac’s copyrights, reinstating Geac’s claims against Grace for misappropriation of trade secrets, and affirming the dismissal of Grace’s counterclaims for copyright misuse, tortious interference with contractual relations, and breach of contract. Grace sought review by the United States Supreme Court, but such review was denied. Grace has ceased doing business. In light of the Third Circuit’s decision, Geac believes that the claims raised in Grace’s March 2002 antitrust action are without merit because the claims raised in that suit were dependent upon Grace’s maintenance services not infringing Geac’s copyrights. However, there can be no assurance that Geac will be successful in defending against these new claims.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

		The Company is authorized to issue an unlimited number of common shares, with no par value, and an unlimited number of preference shares, with no par value, issuable in series.

		In March 2003, the Company acquired Extensity. Under the terms of the merger agreement, Extensity shareholders were able to elect to receive, for each share of Extensity common stock, 0.627 of a Geac common share or US$1.75 in cash. In connection with this transaction, the Company issued 932,736 common shares at a value of $4.13 per share, which is determined based on an average market price of Geac during three days prior to the closing of the acquisition. The issued share capital of $3,852 was offset by the issuance costs incurred in the transaction. In accordance with the terms of the merger agreement, the Company assumed all of the Extensity’s outstanding options on the closing date of March 6, 2003. The fair value of $240 of the assumed options was recognized as part of the share capital of the Company.

		In May 2001, the Company entered into an agreement with a syndicate of underwriters led by CIBC World Markets Inc. under which the underwriters agreed to buy 10 million units via special warrants. Each unit consisted of one common share plus one half of a common share purchase warrant, and the units were issued at $2.00 per unit, for aggregate proceeds of $20,000. The net proceeds after underwriters’ fees and other issue expenses were $17,885. On August 1, 2001, the 10 million special warrants were exercised, which resulted in the issuance of 10 million common shares and 5 million common share purchase warrants and an increase in share capital in the amount of $16,135. The purchase warrants were recorded at their fair value of $1,750. Each full common share purchase warrant entitled the purchaser to acquire a common share of the Company for $2.75 at any time up to 18 months from the close of the offering on June 29, 2001. During the second and third quarters of fiscal 2003, all 5 million purchase warrants were exercised. As a result of this exercise, share capital increased by $13,750 and the fair value of purchase warrants of $1,750 was reclassified and recognized as part of the issued share capital.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

		The Company also completed another equity financing on September 27, 2001. The sale of 6 million common shares at $4.50 per share raised gross proceeds of $27,000. The net proceeds after commissions and other issue expenses were $24,775.

		Stock ownership plan

		An Employee Stock Ownership Plan (ESOP), under which employees could make quarterly purchases of shares of the Company at a 10% discount from the lower of the weighted average market price of the shares during the fiscal quarter or the average market closing price during the last five business days in the quarter, has been in existence since 1984. After 28,387 shares were issued under the ESOP, on July 31, 2001, the Company replaced the ESOP with an amended and restated Employee Stock Purchase Plan (ESPP) with similar terms effective August 1, 2001. The maximum number of shares available for issuance to plan members under the ESPP is 600,000, which excludes the number of shares issued under the ESOP. During fiscal 2003, 39,646 (2002 — 65,295) shares were issued to employees at a weighted average price of $3.57 (2002 — $3.49) per share. The aggregate number of shares available to be issued under the ESPP as at April 30, 2003 is 523,446 (2002 — 563,092). The Company’s share capital account was credited for $141 (2002 — $228) for cash received from employees for purchases of shares under the ESOP.

		Stock option plan

		Options have been granted to employees, directors, and executive officers to purchase common shares at or above the prevailing market price at the time of the grant under the Company’s two stock option plans (the “Option Plans”). Options under the Option Plans usually vest over three to four years and expire ten years from the date granted. Options are no longer granted under Geac’s Stock Plan V. Geac’s Stock Plan VI, as amended through April 30, 2003, provided for the issuance of up to 9.2 million common shares upon exercise of options granted or to be granted under the plan. The plan also provided that options for up to an additional 1.4 million shares could be granted to employees or officers of Geac’s newly acquired subsidiary, Extensity, provided that such options were granted on or before April 7, 2003. In connection with the Extensity acquisition, 175,768 options were issued to replace outstanding options of Extensity and 958,320 additional options were granted on March 25, 2003, to employees and officers of Extensity, which vest over three years and expire in ten years after the date of grant. As at April 30, 2003, the total number of common shares still available to be issued under Stock Option Plan VI was 1,977,097 (2002 — 1,584,597).

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

An analysis of the stock options outstanding under the Option Plans and other arrangements is as follows:

		The Company’s share capital account was credited with $56 (2002 — $169; 2001 - - $91) for cash received from employees upon the exercise of stock options.

		During fiscal 2002, the Company extended the contractual life of 96,750 options. During fiscal 2001, 1,701 options were repriced from a weighted average price of $27.24 to $9.32 and the Company extended the contractual life of 576 options. In fiscal 2003, the Company did not extend the contractual life of any options.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

The per share weighted average exercise price and fair value of stock options or awards granted in fiscal 2003, at the date of grant, are as follows:

		In-the-money options are defined as the options with an exercise price less than the market price of the stock on the grant date of the options. At-the-money options are defined as the options with an exercise price the same as the market price of the stock on the grant date of the options. Out-of-the-money options are defined as the options with an exercise price more than the market price of the stock on the grant date of the options.

		Shareholder protection rights plan

		Pursuant to the Company’s Shareholder Protection Rights Plan (the Plan), on March 15, 2000, the board of directors of the Company authorized the issuance of one right (a Right) for each common share that was outstanding on that date or issued subsequently. Generally, each Right, except for Rights owned by an acquiring person (as defined in the Plan) will, if certain events occur, constitute the right to purchase from the Company, on payment of the exercise price, that number of common shares of the Company having an aggregate market price equal to twice the exercise price, subject to adjustment in certain circumstances. Prior to the separation time (as defined in the Plan), the exercise price for a Right is equal to three times the market price from time to time. After the separation time, the exercise price is three times the market price at the separation time. The Rights become exercisable after the separation time, which generally occurs ten days after a person acquires beneficial ownership of or announces an intention to acquire 20% or more of the voting securities of the Company unless the board of directors determines that it should be a later date. Until the separation time, the Rights trade together with the existing common shares. Unless extended, the Plan will expire on the date of the annual meeting of the Company in 2006, subject to earlier termination in certain circumstances. The board of directors may, in certain circumstances, redeem outstanding Rights at a redemption price of $0.001 per Right.

15		Financial instruments

		Financial instruments included in the consolidated balance sheets consist of cash and cash equivalents, accounts receivable, unbilled receivables, accounts payable and accrued liabilities, and long-term debt.

	a)		Fair values of financial assets and liabilities

			The fair values of accounts receivable, unbilled receivables, and accounts payable and accrued liabilities approximate their carrying values because of the short-term maturity of those instruments. As at April 30, 2003, there is no significant difference between the carrying value and the fair value of long-term debt. The Company is not a party to any significant derivative instruments.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

	b)		Credit risk

			The Company is subject to credit risk for billed and unbilled receivables and cash and cash equivalents. Receivables are from customers in many diverse industries and are subject to normal industry credit risks. The Company places its temporary excess cash in high-quality, short-term financial instruments issued or guaranteed by major financial institutions in the countries in which it operates or in similar low-risk instruments.

	c)		Interest rate risk

			The Company is subject to interest rate risk on its floating rate long-term debt. The annual increase or decrease in interest expense for each one percentage change in interest rates on the floating rate debt as at April 30, 2003, is $36 (2002 — $54).

	d)		Foreign exchange risk

			The Company is subject to foreign exchange risk because most of its business is transacted in currencies other than Canadian dollars. Accordingly, most of its financial instruments are denominated in foreign currencies. The amount of the net risk fluctuates in the normal course of business, as transactions in various jurisdictions are concluded.

16		Weighted average number of common shares outstanding

		The following table summarizes the reconciliation of the basic weighted average number of shares outstanding and the diluted weighted average number of shares outstanding used in the diluted net earnings (loss) (EPS) per share calculations:

The diluted net loss per share for the year ended April 30, 2001 was the same as the basic net loss per share, since the dilutive effect of stock options was not included in the calculation, otherwise the effect would be anti-dilutive. Accordingly, the diluted EPS for fiscal 2001 was calculated using 62,068 shares.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

17		Segmented information

		The Company reports segmented information according to SFAS No. 131, “Segment Disclosures.” This standard requires segmentation based on the way management organizes segments for monitoring performance.

		The Company operates the following business segments, which have been segregated based on product offerings, reflecting the way that management organizes the segments within the business for making operating decisions and assessing performance.

		Enterprise Applications Systems (EAS) offer software solutions, which include cross-industry enterprise business applications for financial administration and human resource functions, and enterprise resource planning applications for manufacturing, distribution, and supply chain management.

		Industry-Specific Applications (ISA) products include applications for the real estate, construction, banking, hospitality, and publishing marketplaces, as well as a range of applications for libraries and public safety administration.

		Accounting policies for the operating segments are the same as those described in note 2. There are no significant inter-segment revenues. Segment assets consist of working capital items, excluding cash and cash equivalents. Cash and cash equivalents are considered to be corporate assets. Property, plant and equipment are typically shared by operating segments and those assets are managed by geographic region, rather than through the operating segments.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

Reconciliation of segment contribution to income from operations before income taxes

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

Revenues in the above tables are based on the location of the sales organization, which reflects the location of the customers to which sales are made. Revenues are derived from the licensing of software and the provision of related support and consulting services.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

18		Net restructuring and other unusual items

		In fiscal 2003, the Company recorded $5,164 of net restructuring and other unusual items, which is composed of gross charges of $11,251, net of credits of $6,087, as discussed below:

	•		A charge of $2,807 for severance relating to the restructuring of the Company’s business in North America. This charge relates to 162 employees terminated in the fourth quarter. These employees are primarily from the support and services, development and sales and marketing areas. As at April 30, 2003, $764 of this amount had been paid to 77 employees, leaving a balance of $2,043 related to 85 employees, to be paid over the next fiscal year. Further severance charges of approximately $1,000 are expected to be incurred in fiscal 2004 related to additional actions under this restructuring.

	•		A net release of $471 relating to the fiscal 2002 restructuring charge. This release comprises a net reduction in severance accruals of $1,490 as a result of changes to the restructuring plan and attrition of employees prior to their planned termination, a reduction in premises rationalization of $2,447 for changes to the restructuring plan, offset by an increase in premises rationalization accruals of $3,466 for changes in estimated recoveries, and settlements related to actions in the fiscal 2002 restructuring. The original fiscal 2002 restructuring charge included severance of $16,758 related to 643 employees, primarily from the support and services and general and administrative areas. As at April 30, 2003, $13,037 of this amount had been paid to 552 employees, leaving a balance of $2,231 to be paid over the next fiscal year related to 69 employees. Of the premises rationalization charge, $5,613 was paid by April 30, 2003, and the balance of $9,683 will be recognized from May 1, 2003, through the end of contractual lease obligations.

	•		A charge of $4,978 for legal claims.

	•		A credit of $2,150 primarily for the elimination of deferred revenue from a fiscal 2000 acquisition based on revised estimates of the acquired obligations. In addition to the adjustments affecting income, acquisition-related accruals were reduced by $1,081 with a corresponding reduction of goodwill of the related acquisition based on management’s determination that such accruals were no longer needed for their originally intended purpose.

In fiscal 2002, the Company recorded $45,861 of net restructuring and other unusual items which is comprised of the following:

	•		A charge of $34,814 for severance, premises rationalization, and other costs related to restructuring of the Company’s business worldwide was recorded. This charge includes $16,758 for severance costs related to 643 employees terminated in the fourth quarter and planned to be terminated over the course of the next fiscal year. These employees are primarily from the support and services, and general and administrative areas. As at April 30, 2002, $1,588 of this amount had been paid to 100 employees leaving a balance of $15,170 related to 543 employees, to be incurred over the next fiscal year. Of the $17,743 recorded for premises rationalization, $1,015 was paid by April 30, 2002.

	•		During the year, the Company reversed a total of $10,878 of accrued liabilities and other excess provisions relating to prior year’s acquisition-related accruals. The decision was based on management’s determination that such provisions were no longer needed for their originally intended purpose. Of the total reversal, $6,911 related to accrual estimates on certain 2000 acquisitions for which the majority of

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

			goodwill and intangible assets were written down in 2001, and therefore the reversal was recorded as a credit to income. The remaining balance of $3,967, which also represents acquisition accruals, was written off as an adjustment to goodwill related to that specific acquisition.

	•		Asset writedown totalling $5,065.

	•		A net charge of $5,321 for the settlement of legal claims primarily related to the acquisition of JBA.

	•		A net charge of $4,647 for strategic planning costs.

	•		A charge of $2,925 for unamortized financing cost of a credit facility that was terminated in March 2002.

In fiscal 2001, the Company recorded $295,943 of net unusual items in respect of the following:

	•		A writedown of $171,317 of goodwill and $81,514 of intangible assets.

	•		During 2001, the Company took steps to improve future profitability through a comprehensive restructuring program, resulting in a $31,737 provision. Staff reductions, achieved through a combination of layoffs and attrition accounted for $21,337, infrastructure cutbacks that included premises rationalization amounted to $6,598, a writedown of property, plant and equipment amounted to $3,634 and $168 was recorded for other cost reduction measures. On an ongoing basis during the year, businesses were sized to improve operating profits and cash flows.

	•		A $11,375 provision for the settlement of legal claims, the majority of which relate to contract disputes primarily related to the acquisition of JBA.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

Activity related to the Company’s restructuring plans, integration actions, and Y2K transition costs, including provisions recorded prior to fiscal 2001, were as follows:

Fiscal 2003 provision additions include $8,585 for premises restructuring related to the Extensity acquisition. As at April 30, 2003, $141 had been charged against this provision, and the remaining $8,444 will be recognized through to the end of the contractual lease obligation of the premises. Fiscal 2003 provision additions also include $1,568 for workforce reductions related to 32 employees of Extensity in the general and administrative, support and services, and sales and marketing areas. As at April 30, 2003, $808 had been paid to 30 employees, leaving a balance of $760 to be paid over the next fiscal year.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

19		Income taxes

		The provision for (recovery of) income taxes reflects an effective income tax rate that differs from the combined basic Canadian federal and provincial income tax rate for the reasons in the table below.

		Total amount of income taxes paid in excess of recoveries is $8,949 (2002 - $10,916; 2001 — recoveries of $594).

		Income tax expense (recovery)

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

The following table shows the income tax effects of temporary differences that gave rise to future income tax assets as at April 30, 2003, 2002 and 2001.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

		Substantially all of the Company’s activities are carried out through operating subsidiaries in a number of countries. The income tax effect of operations depends on the income tax legislation in each country and operating results of each subsidiary and the parent Company.

		The Company has non-capital losses of approximately $191,958 (2002 — $235,700; 2001 — $207,600), which are available for carry-forward against taxable income in future years and which expire as shown in the table below. Certain non-capital losses may be subject to restrictions on their availability.

		The Company has capital losses of approximately $188,260 (2002 — $182,000; 2001 — $9,100), which are available for carry-forward against taxable capital gains in future years and which expire as shown in the table below.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

		In assessing the realizability of future tax assets, management considers whether it is more likely than not that some portion or all of the future income tax assets will not be realized. Management evaluates a variety of factors, including the Company’s earnings history, the number of years the Company’s non-capital losses can be carried forward, and projected future taxable income. As indicated in the table above, management has provided for a valuation allowance for a portion of the non-capital loss carry-forwards in certain jurisdictions where it is unlikely that the entities will generate sufficient taxable income in the carry-forward years to utilize the losses and for all of the capital losses. For the balance of future income tax assets, although realization is not assured, management believes it is more likely than not that the future income tax assets will be realized.

20		Related party transactions

		An employee loan of $375 to acquire shares at April 30, 2003 and 2002 represents a loan due from a former officer of the Company. The loan is partially collateralized by 215,815 common shares of the Company, which had a market value of $1,176 as at April 30, 2003. The loan is repayable three years following termination of the officer’s employment, which occurred in October 2000, and bears interest at the prime rate from the date of termination of his employment. The carrying value of the loan was written down to the market value of the underlying shares of the Company in fiscal 2001, and an estimated settlement cost of $2,518 was recorded.

		The Company acquired legal services from a law firm of which the Company’s Senior Vice President, Mergers and Acquisitions and Corporate Secretary is a partner, in the amount of $2,070 in fiscal 2003 (2002 — $1,686; 2001 — $24).

21		Acquisitions

		During the year ended April 30, 2003, the total net cash purchase price of the businesses acquired by the Company was $33,660, related to the businesses as described below. In fiscal 2003, the Company acquired the shares of Extensity and certain assets of EBC Informatique. Acquisitions were accounted for by the purchase method, with the results of operations of each business included in the consolidated financial statements from the respective dates of acquisition.

		Effective August 5, 2002, the Company acquired certain assets of EBC Informatique, a French hardware and software solutions provider. These assets included customer contracts, intellectual property rights, trademarks, and property, plant and equipment. The cash purchase price was $3,763. The acquired net assets included, at fair value, $49 of property, plant and equipment; $3,709 of acquired intangible assets, all of which have a useful life of five years, including $2,953 of customer agreements, $662 of acquired software; $94 of trademarks; $319 of current liabilities; $878 of net future income tax liabilities; and $1,276 of other liabilities. The difference between the purchase price and the net fair value of all identified assets and liabilities acquired was $2,478 and is accounted for as goodwill.

		On March 6, 2003, the Company acquired 100% of the common shares of Extensity, a provider of solutions to automate employee-based financial systems, headquartered in California. The purchase price was $74,032, consisting of $63,876 of cash, 932,736 of common shares with a value of $3,852 less issuance costs of $3,852, $240 of fair value of the assumed outstanding stock options of Extensity, and $6,064 of transaction costs. The acquired net assets included, at fair value, $43,895 of cash; $5,852 of other current assets; $1,884 of property, plant and equipment; $13,680 of acquired intangible assets, which have a weighted-average useful life of

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

		approximately four years, including $11,327 of acquired software (four year weighted average useful life); $1,324 of customer agreements (three year weighted average useful life); $1,029 of trademark (four year weighted average useful life); $18,698 of current liabilities; and $4,529 of other liabilities. The Company recorded $7,591 of future income tax assets as a component of the transaction. The difference between the purchase price and the net fair value of all identifiable assets and liabilities acquired was $24,357 and is accounted for as goodwill. Goodwill is not assigned to an operating segment and is not deductible for income tax purposes.

		The following table presents pro forma financial information as though the acquisition of Extensity had occurred as at May 1, 2001.

		There were no acquisitions during the year ended April 30, 2002.

		During the year ended April 30, 2001, the total purchase price of the businesses acquired by the Company was $45,009, the majority of which related to the businesses shown in the table below. The Company acquired the business assets of Management Data GmbH of Vienna, Austria, together with all of the issued and outstanding shares of 13 worldwide subsidiaries of Management Data GmbH. It also acquired certain of the assets of Praxa Limited’s local government software business in Australia and New Zealand. Acquisitions were accounted for by the purchase method with the results of operations of each business included in the consolidated financial statements from the respective dates of acquisition.

		The total purchase price of Management Data GmbH of Vienna, Austria was $42,270. The assets were held as a temporary investment before they were sold as part of the sale of the Smartstream Reconciliation Systems business on July 13, 2000 (note 22).

		The total purchase price of the Praxa Limited local government software business was $2,060. The acquired businesses included, at fair value, $961 of current assets; $63 of property, plant and equipment; $3,046 of acquired software; and $2,308 of current liabilities. The difference between the total purchase price and the net fair value of all identifiable assets and liabilities acquired was $298 and was accounted for as goodwill.

Geac Computer Corporation Limited
Notes to Consolidated Financial Statements

(in thousands of Canadian dollars, except share and per share data and as otherwise noted)

22		Divestiture of operations

		There was no divestiture of operations in fiscal 2003.

		The total sales proceeds from divestitures in fiscal 2002 were $1,626, the majority of which related to the sale of the publishing systems business in August 2001 for $1,500. The sale excluded real estate assets. The net liabilities disposed of in the sale included accrued divestiture costs and amounted to $3,573. The transaction resulted in a gain of $5,073, which was recorded on the consolidated statements of operations.

		On March 31, 2001, the Company completed the sale of its hotel software operations for $1,577. The net assets disposed of included accrued divestiture costs and working capital adjustments and amounted to $228. The transaction resulted in a gain of $1,349.

		On July 13, 2000, the Smartstream Reconciliation Systems business was sold for cash proceeds of $159,224. This included the assets and shares acquired as part of the Management Data GmbH businesses (note 21). The transactions resulted in a gain of $95,951.

23		Subsequent event

		On June 23, 2003, the Company announced that it had entered into a definitive merger agreement to acquire Comshare, Incorporated (Comshare), a provider of corporate performance management software, based in Michigan, for US$52 million in cash, by way of a cash tender offer, to be followed by a cash merger. Under the terms of the definitive agreement, Comshare shareholders would receive US$4.60 in cash for each share of Comshare common stock held. The acquisition was completed in August 2003.

Geac hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

EX-4.4 3 b48257gcexv4w4.txt EX-4.4 LOAN, GUARANTY AND SECURITY AGREEMENT Exhibit 4.4 ================================================================================ LOAN, GUARANTY AND SECURITY AGREEMENT BY AND AMONG GEAC COMPUTER CORPORATION LIMITED AND EACH OF ITS SUBSIDIARIES THAT ARE SIGNING AS BORROWERS HEREUNDER AS BORROWERS, EACH OF ITS SUBSIDIARIES THAT ARE SIGNING AS GUARANTORS HEREUNDER AS GUARANTORS, THE LENDERS THAT ARE SIGNATORIES HERETO AS THE LENDERS, AND WELLS FARGO FOOTHILL, INC. AS THE ARRANGER, COLLATERAL AGENT AND ADMINISTRATIVE AGENT DATED AS OF SEPTEMBER 9, 2003 ================================================================================ Table of Contents

i Table of Contents (continued)

ii Table of Contents (continued)

iii Table of Contents (continued)

iv EXHIBITS Exhibit A-1 Form of Assignment and Acceptance Exhibit B-1 Form of Borrowing Base Certificate Exhibit C-1 Form of Compliance Certificate Exhibit D-1 Designated Account Bank Exhibit L-1 Form of LIBOR Notice Exhibit 3.1(c)(i) Form of Canadian Security Agreement Exhibit 3.1(c)(ii)(1) Form of US Stock Pledge Agreement Exhibit 3.1(c)(ii)(2) Form of Canadian Stock Pledge Agreement Exhibit 3.1(c)(ii)(3) Form of NSULC Stock Pledge Agreement Exhibit 3.1(c)(ii)(4) Form of UK Stock Pledge Agreement Exhibit 3.1(c)(ii)(5) Form of Hungarian Stock Pledge Agreement Exhibit 3.1(c)(iii)(1) Form of US Copyright Security Agreement Exhibit 3.1(c)(iii)(2) Form of Canadian Copyright Security Agreement Exhibit 3.1(c)(iv) Form of Patent Security Agreement Exhibit 3.1(c)(v)(1) Form of US Trademark Security Agreement Exhibit 3.1(c)(v)(2) Form of Canadian Trademark Security Agreement Exhibit 3.1(c)(vi)(1) Form of M and T Control Agreement Exhibit 3.1(c)(vi)(2) Form of SunTrust Bank Control Agreement Exhibit 3.1(c)(vi)(3) Form of CIBC Control Agreement Exhibit 3.1(c)(vi)(4) Form of BofA (non-Designated Account) Control Agreement Exhibit 3.1(c)(vi)(5) Form of Designated Account Bank Control Agreement Exhibit 3.1(c)(vi)(6) Form of Banc of America Securities LLC Control Agreement Exhibit 3.1(c)(vi)(7) Form of BofA (Pledging Unit) Control Agreement Exhibit 3.1(c)(vii) Form of Intercompany Subordination Agreement Exhibit 3.1(d)(1) Form of Collateral Access Agreement (Atlanta, GA) Exhibit 3.1(d)(2) Form of Collateral Access Agreement (Southborough, MA) Exhibit 3.1(d)(3) Form of Collateral Access Agreement (Vienna, VA) Exhibit 3.1(d)(4) Form of Collateral Access Agreement (Markham, Ontario) Exhibit 3.1(e) Form of Closing Date Compliance Certificate Exhibit 3.1(o)(1) Form of Opinion (Foley Hoag LLP) Exhibit 3.1(o)(2) Form of Opinion (McKenna Long & Aldridge LLP) Exhibit 3.1(o)(3) Form of Opinion (Bryan Cave LLP) Exhibit 3.1(o)(4) Form of Opinion (Moye Giles LLP) Exhibit 3.1(o)(5) Form of Opinion (Blake Cassels & Graydon LLP) Exhibit 3.1(o)(6) Form of Opinion (Stewart McKelvey Stirling Scales) Exhibit 3.1(o)(7) Forms of Opinions (Koves Clifford Chance) Exhibit 3.1(o)(8) Form of Opinion (Clyde & Co.) Exhibit 6.2 Collateral Reporting Exhibit 17.10 Amended NDA

v SCHEDULES Schedule A-1 Agent's Account Schedule C-1 Commitments Schedule D-1 Designated Account Schedule P-1 Permitted Liens Schedule 2.7 Controlled Account Banks Schedule 5.5 Locations of Inventory, Equipment and Books Schedule 5.7 UK Guarantors and Geac Hungary Information Schedule 5.8(b) Capitalization of Loan Parties Schedule 5.8(c) Capitalization of Loan Parties' Subsidiaries Schedule 5.8(e) Dormant Subsidiaries Schedule 5.8(f) Organizational Chart as of Closing Date Schedule 5.9 Due Authorization; No Conflict Schedule 5.10(a) Litigation Schedule 5.10(c) Commercial Tort Claims Schedule 5.14 Environmental Condition Schedule 5.16 Intellectual Property Schedule 5.17 Leases Schedule 5.18 Controlled Accounts and DDAs Schedule 5.21 Payment of Taxes Schedule 5.23 Consents Schedule 7.1 Permitted Indebtedness Schedule 7.3 Borrowers' Legal Entity Reduction and Rationalization Plan Schedule 7.6 Guarantees Schedule 7.13 Permitted Investments

vi LOAN, GUARANTY AND SECURITY AGREEMENT THIS LOAN, GUARANTY AND SECURITY AGREEMENT (this "Agreement") is entered into as of September 9, 2003 by and among, on the one hand, the lenders identified on the signature pages hereof (such lenders, together with their respective successors and assigns, collectively the "Lenders" and each a "Lender"), WELLS FARGO FOOTHILL, INC., as the arranger, collateral agent and administrative agent for the Lenders ("Agent"), and, on the other hand: A. Borrowers: GEAC COMPUTER CORPORATION LIMITED, a Canadian corporation ("GCCL" or the "Parent"), GEAC COMPUTERS, INC., a Missouri corporation ("GCI"), GEAC ENTERPRISE SOLUTIONS, INC., a Georgia corporation ("GESI"), NEWS HOLDINGS CORP., a Delaware corporation ("News"), INTEREALTY CORP., a Colorado corporation, ("Interealty"), GEAC (DELAWARE) PARTNERSHIP, a Delaware partnership ("US Partnership"), REMANCO INTERNATIONAL, INC., a Delaware corporation ("Remanco"), EXTENSITY, INC., a Delaware corporation ("Extensity"), and GEAC HUNGARY ASSET MANAGEMENT COMPANY LIMITED BY SHARES, a company limited by shares organized under the laws of the Republic of Hungary ("Geac Hungary" and collectively with the Parent, GCI, GESI, News, Interealty, US Partnership, Remanco and Extensity, the "Borrowers" and each a "Borrower"); B. Canadian Guarantors: GEAC CANADA LIMITED, a Canadian corporation ("GCL") and 2019856 ONTARIO INC., an Ontario corporation ("2019856"), Geac (Canada) Services Limited, a Canadian corporation ("GCSL"), 915873 Ontario Ltd., an Ontario corporation ("915873"), and 877025 Alberta Ltd., an Alberta corporation ("877025" and collectively with GCL, 2019856, GCSL and 915873, the "Canadian Guarantors" and each a "Canadian Guarantor"); C. UK Guarantors: GEAC (UK) HOLDINGS LIMITED, a UK company ("Geac Holdings"), GEAC SOFTWARE SOLUTIONS LIMITED, a UK company ("GSSL"), GEAC COMPUTER SYSTEMS (UK) LIMITED, a UK company ("GCS"), REMANCO SYSTEMS LIMITED, a UK company ("Remanco Limited"), TEKSERV COMPUTER SERVICES LIMITED, a UK company ("Tekserv"), GEAC ENTERPRISE SOLUTIONS HOLDINGS LIMITED, a UK company ("GES Holdings"), GEAC ENTERPRISE SOLUTIONS LIMITED, a UK company ("GES"), GEAC ENTERPRISE SOLUTIONS DEVELOPMENT LIMITED, a UK company ("GES Development"), MAI UNITED KINGDOM LIMITED, a UK company ("MAI"), and GEAC UK LIMITED, a UK company ("Geac UK", and collectively with Geac Holdings, GSSL, GCS, Remanco Limited, Tekserv, GES Holdings, GES, GES Development, and MAI, the "UK Guarantors" and each a "UK Guarantor"); D. Other Guarantors: GEAC ULC, a Nova Scotia unlimited liability company ("NSULC"), and GEAC USA LLC, a Delaware limited liability company ("US LLC", and collectively with NSULC, the "Other Guarantors"). The parties agree as follows: 1. DEFINITIONS AND CONSTRUCTION. 1.1. Definitions. As used in this Agreement, the following terms shall have the following definitions: "Account Debtor" means any Person who is or who may become obligated under, with respect to, or on account of, an Account, Chattel Paper, or a General Intangible. "Accounts" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to "accounts" (as such term is defined from time to time in the Code), and any and all supporting obligations in respect thereof. "Additional Documents" has the meaning set forth in Section 4.4. "Administrative Borrower" has the meaning set forth in Section 17.9. "Advances" has the meaning set forth in Section 2.1(a). "Affiliate" means, as applied to any Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of Stock, by contract, or otherwise; provided, however, that, for purposes of Section 7.15 hereof: (a) any Person which owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed to control such Person; (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person; and (c) each partnership or joint venture in which a Person is a partner or joint venturer shall be deemed to be an Affiliate of such Person. "Agent" means Foothill, solely in its capacity as administrative agent and collateral agent for the Lenders hereunder, and any successor thereto. "Agent Advances" has the meaning set forth in Section 2.3(e)(i). "Agent's Account" means the account identified on Schedule A-1. "Agent's Liens" means the Liens granted by Loan Parties to Agent for the benefit of the Lender Group and any other holder of Obligations under this Agreement or the other Loan Documents. "Agent-Related Persons" means Agent, together with its Affiliates, officers, directors, employees, and agents. "Agreement" has the meaning set forth in the preamble hereto. "Amended NDA" has the meaning set forth in Section 17.10. 2 "Applicable Prepayment Premium" means, as of any date of determination, an amount equal to 0.0833 of 1 percent (0.0833%) of, in the case of a termination of this Agreement pursuant to Section 3.6(x), the Maximum Revolver Amount or, in the case of a partial permanent reduction of the Maximum Revolver Amount pursuant to Section 3.6(y), the portion of the Maximum Revolver Amount so reduced, in each case for each full or partial month remaining until the Maturity Date. "Assignee" has the meaning set forth in Section 14.1. "Assignment and Acceptance" means an Assignment and Acceptance in the form of Exhibit A-1. "Authorized Person" means any officer or other employee of the Parent, Administrative Borrower or another Loan Party. "Availability" means, as of any date of determination, if such date is a Business Day, and determined at the close of business on the immediately preceding Business Day, if such date of determination is not a Business Day, the amount that Borrowers are entitled to borrow as Advances under Section 2.1, after giving effect to all Revolver Usage as of such Date on the Loan Account, and all sublimits and Availability Reserves applicable hereunder. "Availability Reserves" means such reserves as Agent from time to time implements in respect of Permitted Tax Liens in accordance with Section 2.1(b) and the definition of "Permitted Tax Liens". "Bankruptcy Code" means the United States Bankruptcy Code, as in effect from time to time. "Base LIBO Rate" means the rate per annum, determined by Agent in accordance with its customary procedures, and utilizing such electronic or other quotation sources as it considers appropriate (rounded upwards, if necessary, to the next 1/16%), on the basis of the rates at which Dollar deposits are offered to major banks in the London interbank market on or about 2:00 p.m. (Boston, Massachusetts time) 2 Business Days prior to the commencement of the applicable Interest Period, for a term and in amounts comparable to the Interest Period and amount of the LIBO Rate Loan requested by the Administrative Borrower in accordance with this Agreement, which determination shall be conclusive in the absence of manifest error. "Base Rate" means, the rate of interest announced within Wells Fargo at its principal office in San Francisco as its "prime rate", with the understanding that the "prime rate" is one of Wells Fargo's base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publication or publications as Wells Fargo may designate. "Base Rate Loan" means each portion of an Advance that bears interest at a rate determined by reference to the Base Rate. "Base Rate Margin" means 0.50%. 3 "Benefit Plan" means a "defined benefit plan" (as defined in Section 3(5) of ERISA) for which any Borrower or any Subsidiary or ERISA Affiliate of any Borrower has been an "employer" (as defined in Section 3(5) of ERISA) within the past six years. "Board of Directors" means , as of the context requires, the board of directors (or comparable managers) of Parent or any other Borrower or Loan Party, and in each instance including any committee(s) thereof duly authorized to act on behalf thereof. "BofA" means Bank of America, N.A. "BofA Controlled DDAs" means the DDAs maintained by GCI or Interealty, as applicable, at BofA and numbered 350119021518, 005045181798, 350119032549, 350119037217, and 350119038777 and any replacement accounts thereof. "Books" means all of a Person's now owned or hereafter acquired books and records (including all of its Records indicating, summarizing, or evidencing its assets (including the Collateral) or liabilities, all of such Person's Records relating to its business operations or financial condition, and all of its goods or General Intangibles related to such information). "Borrower" and "Borrowers" have the respective meanings set forth in the preamble to this Agreement. "Borrowing" means a borrowing hereunder consisting of Advances made on the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by Agent in the case of an Agent Advance. "Borrowing Base" has the meaning set forth in Section 2.1(a). "Borrowing Base Certificate" means a certificate substantially in the form of Exhibit B-1 (as such form may be revised from time to time by mutual agreement of Agent and Parent) delivered to Agent by the chief executive officer or a Financial Officer of Parent on its behalf. "Business Day" means any day that is not a Saturday, Sunday, or other day on which national banks are authorized or required to close, except that, if a determination of a Business Day shall relate to a LIBO Rate Loan, the term "Business Day" also shall exclude any day on which banks are closed for dealings in Dollar deposits in the London interbank market. "Business Plan" means the set of Projections of Borrowers, in the case of the Business Plan delivered on the Closing Date pursuant to Section 3.1(u), for the 3 year period following the Closing Date (on a fiscal year by fiscal year basis, and for the fiscal year ending April 30, 2004, on a fiscal quarter by fiscal quarter basis), or, in the case of subsequent Projections delivered pursuant to Section 6.3, for the periods described in Section 6.3, in each case in substantially the form of the Business Plan delivered on the Closing Date pursuant to Section 3.1(u), together with any amendment, modification or revision thereto approved in writing by Agent in its Permitted Discretion. "Canada-US Tax Treaty" means the Tax Convention between Canada and the United States (1980), as amended. 4 "Canadian Copyright Security Agreement" has the meaning set forth in the definition of "Copyright Security Agreements". "Canadian Guarantor" and "Canadian Guarantors" have the respective meanings set forth in the preamble to this Agreement. "Canadian Security Agreement" means the security agreement executed and delivered by GCCL, the Canadian Guarantors, NSULC and the Agent in substantially the form of Exhibit 3.1(c)(i). "Canadian Trademark Security Agreement" has the meaning set forth in the definition of "Trademark Security Agreements". "Capital Expenditures" means, with respect to any Person for any period, the sum of (a) the aggregate of all expenditures by such Person and its Subsidiaries during such period that in accordance with GAAP are or should be included in "property, plant and equipment" or in a similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or financed, and (b) to the extent not covered by clause (a), the aggregate of all expenditures by such Person and its Subsidiaries during such period to acquire by purchase or otherwise the fixed assets of any other Person; provided that "Capital Expenditures" shall not include expenditures made by such Person for the purchase of replacement equipment purchased with the proceeds of the sale of obsolete or worn-out equipment in the ordinary course of business, or for the replacement or restoration of Collateral paid from the related insurance or other proceeds received by such Person or its Affiliates for the loss, destruction or taking by condemnation or eminent domain of such Collateral. "Capital Lease" means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP. "Capitalized Lease Obligation" means any Indebtedness represented by obligations under a Capital Lease. "Cash Equivalents" means (a) marketable direct obligations issued or unconditionally guaranteed by the United States, Canada or the United Kingdom or issued by any agency thereof and backed by the full faith and credit of the United States, Canada or the United Kingdom, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued by any state, province or equivalent political subdivision of the United States, Canada or the United Kingdom or any political subdivision or public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from either S&P, Moody's or Dominion Bond Rating Service, as the case may be, (c) commercial paper and bankers' acceptances maturing no more than 270 days from the date of acquisition thereof and, at the time of acquisition, having a rating of A-1, P-1 or R-1 (middle), or better, from S&P, Moody's or Dominion Bond Rating Service, as the case may be, (d) certificates of deposit or bankers' acceptances maturing not more than 1 year after the date of issue, issued by commercial banking institutions (whether domestic or foreign), and money market or demand deposit accounts maintained at commercial banking institutions (whether domestic or foreign), each of which is organized under the laws of a country that is a 5 member of the Organization for Economic Cooperation and Development or a political subdivision of any such country and has a combined capital and surplus and undivided profits of not less than $250,000,000, (e) repurchase agreements having maturities of not more than 90 days from the date of acquisition which are entered into with major money center banks included in the commercial banking institutions described in clause (d) above and which are secured by readily marketable direct obligations of the government of the United States, Canada or the United Kingdom or any agency thereof, (f) money market accounts maintained with mutual funds having assets in excess of $250,000,000, (g) tax exempt securities rated A or better by Moody's or A+ or better by S&P or the equivalent or better by Dominion Bond Rating Service, and (h) foreign currency investments of credit quality substantially similar to the investments described above by any Subsidiary made in the ordinary course of business and reasonably related to the business needs of such Subsidiary. "Cash Management Activation Event" means the occurrence of either of the following: (i) the Borrowers fail to maintain Liquidity of at least $10,000,000 at any point in time, of which at least $5,000,000 must be in the form of Availability, or (ii) the occurrence of an Event of Default. "Change of Control" means (a) any "person" or "group" (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 35%, or more, of the Stock of GCCL having the right to vote for the election of members of the Board of Directors of GCCL, (b) GCCL ceases to own and control, directly or indirectly, 100% of the outstanding capital Stock of GCI, Geac Holdings, or GCL, (c) a majority of the members of the Board of Directors of GCCL do not constitute Continuing Directors of GCCL, or (d) except (i) as set forth in Schedules 5.8(b), (c) or (f), (ii) as a result of issuances of de minimis numbers of shares of Stock to directors, officers or other persons solely as and to the extent required by applicable law, or (iii) as otherwise permitted by the Loan Documents, any Borrower ceases to own and control, directly or indirectly, 100% of the outstanding capital Stock of each of its Subsidiaries that are Loan Parties as of the Closing Date. "Chattel Paper" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to "chattel paper", including, without limitation, "tangible chattel paper" and "electronic chattel paper", as such terms are defined from time to time in the Code, and any and all supporting obligations in respect thereof. "CHC" means Comshare Holdings Company, a UK company and wholly-owned subsidiary of Comshare. "CIBC" means Canadian Imperial Bank of Commerce. "CIBC Disbursement Accounts" means the DDAs maintained by Parent or GCL, as applicable, at CIBC and numbered 8642 04 20719, 8642 37 57110, 8642 11 59216 and 8642 04 21812 and any replacement accounts thereof. 6 "CIBC Special Accounts" means the DDAs maintained by Parent or GCL, as applicable, at CIBC and numbered 8642 04-20719, 8642 11 59216 and 8642 04 21812 and any replacement accounts thereof. "CIL" means Comshare International Limited, a UK company and wholly-owned subsidiary of CHC. "CL" means Comshare Limited, a UK company and wholly-owned subsidiary of CHC. "Closing Date" means the date on which this Agreement and all other Loan Documents shall have been executed and all conditions precedent set forth in Section 3.1 shall have been satisfied or waived by the Agent. The Closing Date may or may not be the date of the making of the initial Advance (or other extension of credit) hereunder. "Closing Date Compliance Certificate" means a certificate substantially in the form of Exhibit 3.1(e). "Code" means the Uniform Commercial Code, as in effect from time to time in the Commonwealth of Massachusetts. "Collateral" means all of each Borrower's (other than GCCL's and Geac Hungary's) and the US LLC's now owned or hereafter acquired right, title, and interest in and to each of the following: (a) Accounts, (b) Chattel Paper, whether tangible or electronic, (c) DDAs, (d) Documents, (e) General Intangibles (including, without limitation, payment intangibles and software), (f) Goods (including, without limitation, Inventory and Equipment), (g) Instruments, (h) Investment Property, (i) Letter of Credit Rights, (j) Books, (k) the Commercial Tort Claims set forth on Schedule 5.10(c), (l) Negotiable Collateral, 7 (m) money or other assets of any Borrower (other than GCCL and Geac Hungary) or the US LLC that now or hereafter come into the possession, custody, or control of any member of the Lender Group, and (n) any and all proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing, and any and all Accounts, Books, General Intangibles, (Goods, including, without limitation, Equipment and Inventory), Investment Property, Negotiable Collateral, money, DDAs, or other tangible or intangible property resulting from the sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or interest therein, and the proceeds thereof. Notwithstanding any provision to the contrary herein or in any other Loan Document (including the Canadian Security Agreement), in no event shall the "Collateral" or any other collateral securing the Obligations under the Loan Documents include (i) any Real Property (including the right and interest of any Loan Party under any lease of any Real Property) or (ii) any Stock or other equity interests of any Subsidiary of Parent that is not a Loan Party. "Collateral Access Agreement" means a landlord waiver, in form and substance reasonably satisfactory to Agent, executed by any lessor of any real property of which a Borrower or Canadian Guarantor is Lessee and at which any Collateral is located (it being agreed that a landlord waiver on terms substantially equivalent to the terms provided in Exhibits 3.1(d)(1), (2), (3) and (4) shall be deemed satisfactory to the Agent). "Collections" means all cash, checks, credit card slips or receipts, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds) of the applicable Loan Party. "Commercial Tort Claim" means any now existing or hereafter arising "commercial tort claim", as such term is defined from time to time in the Code. "Commitment" means, with respect to each Lender, its Revolver Commitment or its Total Commitment, as the context requires, and, with respect to all Lenders, their Revolver Commitments or their Total Commitments, as the context requires, in each case as such Dollar amounts are set forth beside such Lender's name under the applicable heading on Schedule C-1 or on the signature page of the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder in accordance with the provisions of Section 14.1. "Compliance Certificate" means a certificate substantially in the form of Exhibit C-1 delivered to Agent by the chief executive officer or a Financial Officer of Parent on its behalf. "Comshare" means Comshare, Incorporated, a Michigan corporation. "Comshare US" means Comshare (U.S.), Inc., a Michigan corporation and wholly-owned subsidiary of Comshare. "Continuing Director" means (a) any member of GCCL's Board of Directors who was a director (or comparable manager) of GCCL on the Closing Date, and (b) any individual who becomes a member of GCCL's Board of Directors after the Closing Date if such individual was 8 appointed or nominated for election to GCCL's Board of Directors by a majority of the Continuing Directors, but excluding any such individual originally proposed for election in opposition applicable to GCCL's Board of Directors in office at the Closing Date in an actual or threatened election contest relating to the election of the directors (or comparable managers) of GCCL (as such terms are used in Rule 14a-11 under the Exchange Act) and whose initial assumption of office resulted from such contest or the settlement thereof. "Control Agreement" means an agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by the applicable Loan Party, Agent, and the applicable securities intermediary or bank, which agreement is sufficient to give Agent "control" over the subject Securities Account, DDA or Investment Property as provided in the Code. "Controlled Account" shall mean each DDA or Securities Account that is maintained by any Borrower or Canadian Guarantor and is subject to a Control Agreement. "Controlled Account Bank" has the meaning set forth in Section 2.7(a). "Conversion Date" has the meaning set forth in Section 16.11(f). "Copyright Security Agreements" means the copyright security agreements executed and delivered by certain of the Borrowers and Canadian Guarantors and Agent (a) with respect to United States copyrights, substantially in the form of Exhibit 3.1(c)(iii)(1) hereto (the "US Copyright Security Agreement") and (b) with respect to Canadian copyrights, substantially in the form of Exhibit 3.1(c)(iii)(2) hereto (the "Canadian Copyright Security Agreement"). "Daily Balance" means, with respect to each day during the term of this Agreement, the amount of an Obligation owed at the end of such day. "DDA" means any checking or other "deposit account" (as such term is defined from time to time in the Code) maintained by a Person. "Default" means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default. "Defaulting Lender" means any Lender that fails to make any Advance (or other extension of credit) that it is required to make hereunder on the date that it is required to do so hereunder. "Defaulting Lender Rate" means (a) the Base Rate for the first 3 days from and after the date the relevant payment is due, and (b) thereafter, at the interest rate then applicable to Advances that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto). "Designated Account" means the certain DDA of the Administrative Borrower identified on Schedule D-1 or otherwise notified by the Administrative Borrower to the Agent in accordance with Section 12. "Designated Account Bank" has the meaning specified in Exhibit D-1. 9 "Designated Account Control Agreement" shall mean the Control Agreement in place with respect to the Designated Account. "Disbursement Account" shall mean each DDA maintained by a Borrower or Canadian Guarantor and designated on Schedule 5.18 as a "Disbursement Account". "Disbursement Letter" means an instructional letter executed and delivered by the Administrative Borrower to Agent regarding the extensions of credit, if any to be made on the Closing Date, the form and substance of which is reasonably satisfactory to Agent. "Document" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to any "document" as such term is defined in the Code, and any and all supporting obligations in respect thereof. "Dollars" or "$" means United States dollars. "Dormant Subsidiaries" means, collectively, the following Subsidiaries: 915874 Ontario Ltd., an Ontario corporation, Geac Computers (Puerto Rico) Inc., a Puerto Rico corporation, Property Channel Inc., a Virginia corporation, Geac Library Systems, Inc. (Delaware), a Delaware corporation, Geac Software Services Holdings Limited, a UK company, Geac Software Services Medium Systems Limited, a UK company, Mainpac Limited, a UK company, Computer Library Services International Limited, a UK company, JBA Investments Limited, a UK company, JBA (Northern) Limited, a UK company, JBA (Wessex) Limited, a UK company, Nexus Solutions Limited, a UK company, JBA Property Management Limited, a UK company, Generator Systems (UK) Limited, a UK company, JBA (UK) Limited, a UK company, Inform Solutions Limited, a UK company, JBA Employee Benefit Trustee Company Limited, a UK company, JBA (Information Processing Services) Limited, a UK company, Olympix Software Limited, a UK company, Phoenix Business Systems Recovery Limited, a UK company, and Extensity Europe Limited, a UK company. "EBITDA" means, with respect to any fiscal period, for any entity, the consolidated net income (or loss) for such entity and its Subsidiaries, minus (without duplication) extraordinary, unusual or non-recurring gains (other than a gain that is a reversal of an earlier extraordinary, unusual or non-recurring cash loss) plus interest expense, income taxes, and depreciation and amortization for such period, as determined in accordance with GAAP, and subject to the adjustments set forth at Section 7.18(a). "Eligible Recurring Maintenance Revenue" means (a) with respect to any US Borrowing Base Company, the total regular amount of revenue recognized by such US Borrowing Base Company in accordance with GAAP and past practice in a fiscal month for maintenance and support of such US Borrowing Base Company's customers in the ordinary course of business for customers that are party to a duly executed and effective maintenance agreement with such US Borrowing Base Company and (b) with respect to two or more of the US Borrowing Base Companies, the aggregate amount of Eligible Recurring Maintenance Revenue attributable to such US Borrowing Base Companies. For purposes of clarity, none of the revenues of Extensity or any other Borrower that is not a US Borrowing Base Company will be included in Eligible Recurring Maintenance Revenue until the Agent consents in writing to such inclusion. 10 "Eligible Transferee" means: (1) if no Event of Default (other than an Event of Default under Section 8.2) has occurred and is continuing, a Person that is entitled to obtain the benefits of reduced Withholding Taxes under the Canada-US Tax Treaty with respect to interest paid from a resident of Canada to a resident of the United States, and the Hungary-US Tax Treaty with respect to interest paid from a resident of Hungary to a resident of the United States, and that is (a) a commercial bank organized under the laws of the United States, or any state thereof, and having total assets in excess of $250,000,000, (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development or a political subdivision of any such country and which has total assets in excess of $250,000,000, provided that such bank is acting through a separately-incorporated subsidiary corporation organized under the laws of the United States or any state thereof, (c) a finance company, insurance company, or other financial institution or fund that is engaged in making, purchasing, or otherwise investing in commercial loans in the ordinary course of its business and having (together with its Affiliates) total assets in excess of $250,000,000 and that is organized under the laws of the United States or any state thereof, (d) any Affiliate (other than individuals) of a Lender that was party hereto as of the Closing Date and that is organized under the laws of the United States or any state thereof, and (e) any other Person approved by Agent and the Administrative Borrower that is organized under the laws of the United States or any state thereof; and (2) during the continuation of an Event of Default (other than an Event of Default under Section 8.2), any Person approved by the Agent. "Environmental Actions" means any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other communication from any Governmental Authority or any third party, involving violations of Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of any Loan Party or any predecessor in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by any Loan Party or any predecessor in interest. "Environmental Law" means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on Loan Parties, relating to the environment, employee health and safety, or Hazardous Materials, including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC Section 1251 et seq.; the Toxic Substances Control Act, 15 USC, Section 2601 et seq.; the Clean Air Act, 42 USC Section 7401 et seq.; the Safe Drinking Water Act, 42 USC Section 3803 et seq.; the Oil Pollution Act of 1990, 33 USC Section 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC Section 11001 et seq.; the Hazardous Material Transportation Act, 49 USC Section 1801 et seq.; and the Occupational Safety and Health Act, 29 USC Section 651 et seq. (to the extent it regulates occupational exposure to Hazardous Materials); any state and local or foreign counterparts or equivalents, in each case as amended from time to time. 11 "Environmental Liabilities and Costs" means all liabilities, monetary obligations, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand by any Governmental Authority or any third party, and which relate to any Environmental Action. "Environmental Lien" means any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs. "Equipment" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to "equipment" (as such term is defined from time to time in the Code), fixtures and vehicles (including motor vehicles), including all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto. "ERISA Affiliate" means (a) any Person subject to ERISA whose employees are treated as employed by the same employer as the employees of a Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of a Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which a Borrower is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a party to an arrangement with a Borrower and whose employees are aggregated with the employees of a Borrower under IRC Section 414(o). "Event of Default" has the meaning set forth in Section 8. "Exchange Act" means the Securities Exchange Act of 1934, as in effect from time to time. "Excluded Taxes" has the meaning set forth in Section 16.11. "Fee Letter" means that certain fee letter, dated as of even date herewith, between the Administrative Borrower and Agent, in form and substance satisfactory to Agent. "FEIN" means Federal Employer Identification Number. "Final Payment Date" has the meaning set forth in Section 3A.6. "Financial Officer" means the chief financial officer (or other principal financial officer), principal accounting officer, treasurer or controller of a Person. "Foothill" means Wells Fargo Foothill, Inc. "Funding Date" means the date on which a Borrowing occurs. 12 "Funding Losses" has the meaning set forth in Section 2.13(b)(ii). "GAAP" means generally accepted accounting principles as in effect from time to time in Canada, consistently applied, or, after an election by the Parent and its Subsidiaries described in the next sentence, means generally accepted accounting principles as in effect from time to time in the United States ("US GAAP"), consistently applied. Notwithstanding any provision to the contrary in the Loan Documents, the Parent and its Subsidiaries may elect at any time during the term of this Agreement to report under US GAAP for all purposes under the Loan Documents, and, in the event of such an election, the Agent and the Parent will work cooperatively and reasonably to determine and make the necessary adjustments to the financial covenants and other provisions of the Loan Documents impacted by such change, and will revise this Agreement accordingly. In the event the Parent and Agent cannot agree on such changes, the provisions of this Agreement will remain effective (notwithstanding any change by the Parent and its Subsidiaries to US GAAP), and all covenant calculations and other impacted provisions of this Agreement will be measured (and the Borrowers will submit reports) in the same manner as at the Closing Date, except that the annual Canadian GAAP financial statements under Section 6.3 will be unaudited. "Geac Hungary Advances" has the meaning specified in Section 6.20. "General Intangibles" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to "general intangibles" (as such term is defined from time to time in the Code), and any and all supporting obligations in respect thereof, including but not limited to payment intangibles, contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill , patents, trade names, trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, rights to payment and other rights under any royalty or licensing agreements, infringement claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, insurance premium rebates, tax refunds, and tax refund claims, and any and all supporting obligations in respect thereof, and any other personal property other than goods, Accounts, Investment Property, and Negotiable Collateral. "Goods" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to "goods", as that term is defined from time to time in the Code, including, without limitation, any and all Inventory and Equipment. "Governing Documents" means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person. "Governmental Authority" means any federal, provincial, state, local, or other governmental or administrative body, instrumentality, department, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body. "Gross Margin" has the meaning set forth in Section 2.1(b). "Guarantors" means collectively, the Canadian Guarantors, UK Guarantors and the Other Guarantors. 13 "Guaranty" has the meaning set forth in Section 3A.1. "Hazardous Materials" means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as "hazardous substances", "hazardous materials", "hazardous wastes", "toxic substances", or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million. "Hedge Agreement" means any and all transactions, agreements, or documents now existing or hereafter entered into by the Parent or any of its Subsidiaries, which provide for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging the Parent's or its Subsidiaries' exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations or commodity prices. "Hungarian Stock Pledge Agreement" has the meaning set forth in the definition of "Stock Pledge Agreements". "Hungary-US Tax Treaty" means the Convention Between the Government of the Hungarian People's Republic and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (1979), as amended. "Indebtedness" means (a) all obligations for borrowed money, (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other similar obligations in respect of letters of credit, bankers acceptances, or other similar financial products, (c) all obligations under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of Parent or its Subsidiaries that are Loan Parties, irrespective of whether such obligation or liability is assumed, (e) all obligations for the deferred purchase price of assets (other than trade debt incurred in the ordinary course of business and repayable in accordance with customary trade practices), (f) all obligations owing under Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any monetary obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (f) above. For the avoidance of doubt, customary indemnities in connection with the sale of assets or businesses or pursuant to contractual obligations entered into in the ordinary course of business shall not be included in Indebtedness. For purposes of calculating Indebtedness under Hedge Agreements, obligations under any Hedge Agreement owing at any time shall be the aggregate amount (after giving effect to any netting agreements) that would be required to be paid by the Loan Parties if such Hedge Agreement were terminated at such time. 14 "Indemnified Liabilities" has the meaning set forth in Section 11.3. "Indemnified Person" has the meaning set forth in Section 11.3. "Insolvency Proceeding" means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal insolvency law (or other bankruptcy or insolvency law of any other jurisdiction, including but not limited to those of or within Canada or the UK), assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief. "Instruments" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to "instruments", including, without limitation, any "promissory notes", as such terms are defined from time to time in the Code, and any and all supporting obligations in respect thereof. "Intangible Assets" means, with respect to any Person, that portion of the book value of all of such Person's assets that would be treated as intangibles under GAAP. "Intercompany Subordination Agreement" means a subordination agreement executed and delivered by the Loan Parties and Agent substantially in the form of Exhibit 3.1(c)(vii). "Interest Expense" means, for any period, the aggregate of the interest expense of Parent and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Interest Period" means, with respect to each LIBO Rate Loan, a period commencing on the date of the making of such LIBO Rate Loan and ending 1, 2, 3 or 6 months (or such longer period that Agent makes generally available to its customers) thereafter; provided, however, that (a) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next succeeding Business Day, (b) interest shall accrue at the applicable rate based upon the LIBO Rate from and including the first day of each Interest Period to, but excluding, the day on which such Interest Period expires, (c) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (d) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2, 3 or 6 months after the date on which the Interest Period began, as applicable, and (e) Borrowers (or the Administrative Borrower on behalf thereof) may not elect an Interest Period which will end after the Maturity Date. "Inventory" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to inventory, including goods held for sale or lease or to be furnished under a contract of service, goods that are leased by a Person as lessor, goods that are furnished by a Person under a contract of service, and raw materials, work in process, or materials used or consumed in a Person's business. 15 "Investment" means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, or capital contributions (excluding (a) commission, travel, moving and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide Accounts arising in the ordinary course of business consistent with past practices), purchases or other acquisitions for consideration of Indebtedness or Stock, and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. "Investment Property" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to "investment property", as such term is defined from time to time in the Code, and any and all supporting obligations in respect thereof. "IP Subsidiary" means a Subsidiary of Parent to be formed under the law of such jurisdiction as Parent shall choose, which will execute a joinder agreement and such other agreements deemed necessary by the Agent in its Permitted Discretion to cause such IP Subsidiary to become a Guarantor hereunder and to grant to the Agent a first priority Lien on all assets from time to time owned or held by such IP Subsidiary on terms (including terms with respect to Agent's ability to exercise remedies, including foreclosure and transfer of ownership) substantially equivalent to the provisions of this Agreement and the other Loan Documents with respect to the Borrowers and the Canadian Guarantors (but excluding any obligation to deliver (i) if unavailable under the law of such jurisdiction, a Control Agreement or (ii) a Collateral Access Agreement), each of the foregoing conditions to be confirmed (if requested by Agent) by legal opinions reasonably acceptable to the Agent. "IRC" means the Internal Revenue Code of 1986, as in effect from time to time. "Issuing Lender" means Wells Fargo or any Lender that, at the request of the Administrative Borrower and with the consent of Agent (such consent not to be unreasonably withheld), agrees, in such Person's sole discretion, to become an Issuing Lender for the purpose of issuing L/Cs or L/C Undertakings pursuant to Section 2.12. "Judgment Currency" has the meaning set forth in Section 16.11(f). "L/C" has the meaning set forth in Section 2.12(a). "L/C Disbursement" means a payment made by the Issuing Lender pursuant to a Letter of Credit. "L/C Undertaking" has the meaning set forth in Section 2.12(a). "Legal Entity Reduction and Rationalization Plan" has the meaning set forth in Section 7.3. "Lender" and "Lenders" have the respective meanings set forth in the preamble to this Agreement, and shall include any other Person made a party to this Agreement in accordance with the provisions of Section 14.1. 16 "Lender Group" means, individually and collectively, each of the Lenders (including the Issuing Lender) and Agent. "Lender Group Expenses" means all (a) costs or expenses (including taxes, and insurance premiums) required to be paid by a Loan Party under any of the Loan Documents that are paid or incurred by the Lender Group, (b) fees or charges paid or incurred by Agent in connection with the Lender Group's transactions with the Loan Parties, including, fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches (including tax lien, litigation, and UCC searches and including searches with the patent and trademark office, the copyright office, or the department of motor vehicles), filing, recording, publication, appraisal (including periodic Collateral appraisals or business valuations to the extent of the fees and charges (and up to the amount of any limitation) contained in this Agreement, (c) costs and expenses incurred by Agent in the disbursement of funds to or for the account of Borrowers (by wire transfer or otherwise), (d) charges paid or incurred by Agent resulting from the dishonor of checks, (e) reasonable costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (f) audit fees and expenses of Agent related to audit examinations of the Books to the extent of the fees and charges (and up to the amount of any limitation) contained in this Agreement, (g) reasonable costs and expenses of third party claims or any other suit paid or incurred by the Lender Group in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or the Lender Group's relationship with any Borrower or any guarantor of the Obligations, (h) Agent's and (subject to Section 11.3) each Lender's reasonable fees and expenses (including attorneys fees) incurred in advising, structuring, drafting, reviewing, administering (with respect to "administering" the Loan Documents, out-of-pocket expenses only), or amending the Loan Documents, and (i) Agent's reasonable fees and expenses (including attorneys fees) incurred in terminating, enforcing (including attorneys fees and expenses incurred in connection with a "workout," a "restructuring," or an Insolvency Proceeding concerning any Borrower or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in taking any Remedial Action concerning the Collateral. Notwithstanding any provision to the contrary in this Agreement, the Loan Parties shall have no obligation to pay or reimburse the Agent or any Lender for any costs or expenses they may incur in connection with any assignment, participation or a syndication of any Commitments or Obligations hereunder. "Lender-Related Person" means, with respect to any Lender, such Lender, together with such Lender's Affiliates, and the officers, directors, employees, and agents of such Lender. "Letter of Credit" means an L/C or an L/C Undertaking, as the context requires. "Letter of Credit Fee" has the meaning set forth in Section 2.6(b). "Letter of Credit Rights" means all of a Person's now owned or hereafter acquired right, title, and interest with respect to "letter-of-credit rights", as that term is defined from time to time in the Code, and any and all supporting obligations in respect thereof. 17 "Letter of Credit Usage" means, as of any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit. "LIBOR Deadline" has the meaning set forth in Section 2.13(b)(i). "LIBOR Notice" means a written notice in the form of Exhibit L-1. "LIBOR Option" has the meaning set forth in Section 2.13(a). "LIBO Rate" means, for each Interest Period for each LIBO Rate Loan, the rate per annum determined by Agent (rounded upwards, if necessary, to the next 1/16%) by dividing (a) the Base LIBO Rate for such Interest Period, by (b) 100% minus the Reserve Percentage. The LIBO Rate shall be adjusted on and as of the effective day of any change in the Reserve Percentage. "LIBO Rate Loan" means each portion of an Advance that bears interest at a rate determined by reference to the LIBO Rate. "LIBO Rate Margin" means 3.00%. "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 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, or from a lease, consignment, or bailment for security purposes and also including reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Real Property. "Liquidity" means, as of any date of determination, if such date is a Business Day, and determined at the close of business on the immediately preceding Business Day, if such date of determination is not a Business Day, the sum of Availability and Qualified Cash Equivalents. "Loan Account" has the meaning set forth in Section 2.10. "Loan Documents" means this Agreement, the Canadian Security Agreement, the Stock Pledge Agreements, the Copyright Security Agreements, the Patent Security Agreements, the Trademark Security Agreements, the Control Agreements, the Intercompany Subordination Agreement, the Fee Letter, the Letters of Credit, the Disbursement Letter, the Due Diligence Letters, the Perfection Certificates, the Collateral Access Agreements, any certificates (including without limitation, the Borrowing Base Certificates and the Compliance Certificates) from time to time delivered by a Loan Party pursuant to this Agreement or any other Loan Document, any note or notes executed by a Loan Party in connection with this Agreement and payable to a member of the Lender Group, and any other agreement entered into, now or in the future, by any Loan Party and the Lender Group in connection with this Agreement (excluding Hedge Agreements). 18 "Loan Parties" means, collectively, the Borrowers, Canadian Guarantors, UK Guarantors and Other Guarantors, with each being a "Loan Party". "M and T" means Manufacturers and Traders Trust Company. "Material Adverse Change" means (a) a material adverse change in the business, operations, results of operations, assets, liabilities or condition (financial or otherwise) of Borrowers (other than GCCL and Geac Hungary) taken as a whole, (b) a material impairment of the Lender Group's ability to enforce the Obligations or realize upon any Collateral, or (c) a material impairment of the enforceability or priority of the Agent's Liens as a result of an action or failure to act on the part of any Borrower. "Material Software Products" has the meaning set forth in Section 5.16. "Maturity Date" has the meaning set forth in Section 3.4. "Maximum Revolver Amount" means $50,000,000, as such amount may be reduced from time to time pursuant to Section 3.6. "Negotiable Collateral" means all of a Person's now owned and hereafter acquired right title and interest with respect to letters of credit, letters of credit rights, Instruments, Documents, Goods covered by Documents, Chattel Paper and all supporting obligations of the foregoing. "Obligations" means all loans, Advances, debts, principal, interest (including any interest that, but for the provisions of the Bankruptcy Code (or other bankruptcy or insolvency law of any other jurisdiction, including but not limited to those of or within Canada or the UK), would have accrued), contingent reimbursement obligations with respect to outstanding Letters of Credit, premiums, liabilities (including all amounts charged to Borrowers' Loan Account pursuant hereto), obligations, fees (including the fees provided for in the Fee Letter), charges, costs, Lender Group Expenses (including any fees or expenses that, but for the provisions of the Bankruptcy Code (or other bankruptcy or insolvency law of any other jurisdiction, including but not limited to those of or within Canada or the UK), would have accrued), lease payments, guaranties, covenants, and duties of any kind and description owing by Loan Parties to the Lender Group pursuant to or evidenced by the Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all Lender Group Expenses that Loan Parties are required to pay or reimburse by the Loan Documents, by law, or otherwise. Any reference in this Agreement or in the Loan Documents to the Obligations shall include all amendments, changes, extensions, modifications, renewals replacements, substitutions, and supplements, thereto and thereof, as applicable, both prior and subsequent to any Insolvency Proceeding. "Originating Lender" has the meaning set forth in Section 14.1(e). "Other Guarantors" has the meaning set forth in the preamble to this Agreement. "Overadvance" has the meaning set forth in Section 2.5. 19 "PPSA" means the Personal Property Security Act, as in effect from time to time in the Province of Ontario, the Province of British Columbia or the Province of Nova Scotia, as applicable. "Parent" has the meaning set forth in the preamble to this Agreement. "Participant" has the meaning set forth in Section 14.1(e). "Patent Security Agreement" means the patent security agreement executed and delivered by GESI and Agent in substantially the form of Exhibit 3.1(c)(iv) hereto. "Perfection Certificate" means the Representations and Warranties forms submitted by the Administrative Borrower to Agent with respect to each Borrower (other than Geac Hungary), Canadian Guarantor and Other Guarantor, together with such Loan Party's completed responses to the inquiries set forth therein. "Permitted Acquisition" means: (a) for acquisitions up to $5,000,000 in aggregate purchase price (as defined in clause (z) of this definition below) per fiscal year of Parent, an acquisition (whether by merger, consolidation, stock purchase, asset purchase or otherwise) of all or part of the stock (or other securities), assets or business of a Person engaged in substantially the same general line of business as that in which the Loan Parties are engaged, provided that: (i) immediately prior to and immediately after giving effect to any such transaction, there is no Cash Management Activation Event, Default or Event of Default, and (ii) immediately prior to and immediately after giving effect to any such acquisition, the Borrowers have Liquidity of at least $10,000,000, of which no more than $5,000,000 will be in the form of Qualified Cash Equivalents; and (b) for all acquisitions not included within clause (a), above, an acquisition (whether by merger, consolidation, stock purchase, asset purchase or otherwise) of all or part of the stock (or other securities), assets or business of a Person engaged in substantially the same general line of business as that in which the Loan Parties are engaged, consummated by or through Parent or any of its Subsidiaries (including any newly formed Subsidiary of Parent (a "Newco")), provided that: (i) immediately prior to and immediately after giving effect to any such acquisition, there is no Cash Management Activation Event, Default or Event of Default; (ii) Parent provides the Agent with prior notice (which notice shall not be less than 15 days prior to the closing date) of such acquisition and copies of all financial information delivered to the Board of Directors of Parent or any other Borrower regarding such acquisition; (iii) if any Loan Party (including, as applicable, the target company (or any of its Subsidiaries) or any Newco or other Subsidiary of Parent by or through which such acquisition is consummated, in each case that will become a Loan Party as provided in clause (x) of this definition below) will acquire or assume in such acquisition any 20 Indebtedness that is not otherwise permitted under Section 7.1 or the other provisions of this Agreement or the other Loan Documents, prior to or at the time of such acquisition, such Loan Party and all holders of any such Indebtedness enter into a subordination and intercreditor agreement acceptable in form and substance satisfactory to the Agent in its Permitted Discretion with respect to such Indebtedness; (iv) prior to consummating any such acquisition, Borrowers provide Agent with written evidence satisfactory to the Agent in its Permitted Discretion that, after giving effect to such acquisition, the Borrowers shall, on a pro-forma basis, (i) have Liquidity for the period of six (6) consecutive months following the closing of such acquisition of at least $10,000,000, of which no more than $5,000,000 will be in the form of Qualified Cash Equivalents, (ii) maintain compliance with all representations, warranties and covenants set forth in this Agreement, including all financial covenants for the period of twelve (12) consecutive months following the closing of such acquisition, the information submitted pursuant to this clause (ii) to include pro forma financial statements and financial covenant compliance calculations satisfactory to the Agent in its Permitted Discretion; and (v) in the event that Parent elects (as provided in clause (x) below) that, as applicable, the target company (or any Subsidiary thereof) or any Newco or other Subsidiary of Parent by or through which such acquisition is consummated will become a Loan Party, then, in addition to the requirements set forth in (b)(i) through (b)(iv) above, (A) if such target company (or Subsidiary), Newco or other Subsidiary is an entity organized under US state law or Canadian (including Canadian provincial) law, such entity shall become a Loan Party upon the satisfaction of each of the following conditions: (1) Borrowers deliver to Agent a fully executed joinder agreement (in form and substance satisfactory to Agent in its Permitted Discretion) relating to this Agreement pursuant to which such entity becomes (x) if it is organized under US state law, a Borrower hereunder or (y) if it is organized under Canadian law, a Canadian Guarantor hereunder, (2) such entity executes the Intercompany Subordination Agreement and such other Loan Documents as have been executed hereunder by (x) if it is organized under US state law, Borrowers or (y) if it is organized under Canadian law, Canadian Guarantors, and (3) (x) Agent is able to obtain from Parent and/or its Subsidiaries a pledge of 100% of the ownership interests of such entity owned by Parent and/or its Subsidiaries, as applicable, and (y) such entity shall have granted to Agent, and Agent shall have perfected, a security interest in and to substantially all of such entity's personal property, in each case on terms substantially equivalent to those provided in the Loan Documents with respect to Borrowers or the Canadian Guarantors, as applicable, and 21 (B) if such target company (or Subsidiary), Newco or other Subsidiary is an entity organized under UK law, such entity shall become a Loan Party upon the satisfaction of each of the following conditions: (1) (x) Borrowers deliver to Agent a fully executed joinder agreement (in form and substance satisfactory to Agent in its Permitted Discretion) relating to this Agreement pursuant to which such entity becomes a UK Guarantor hereunder, and (y) such entity executes the Intercompany Subordination Agreement and such other Loan Document agreements as have been executed hereunder by UK Guarantors; and (2) Agent is able to obtain from Parent and/or its Subsidiaries a pledge of 100% of the ownership interests of such entity owned by Parent and/or its Subsidiaries, as applicable, on terms substantially equivalent to those provided in the Loan Documents with respect to Borrowers or UK Guarantors, as applicable. The following provisions shall apply with respect to a "Permitted Acquisition" as defined above. (x) Notwithstanding any provision to the contrary in the Loan Documents, Parent shall be entitled to elect, in its sole discretion, whether any target company (including any of its Subsidiaries), Newco or other Subsidiary of Parent (that is not already a Loan Party) by or through which any Permitted Acquisition is consummated shall or shall not become a Loan Party upon the consummation of such Permitted Acquisition, and shall deliver written notice of its election to Agent not later than 15 days prior to the closing date of such Permitted Acquisition. (y) Notwithstanding the provisions set forth in this definition, Agent shall, in its Permitted Discretion, consider and determine whether to except any Permitted Acquisition otherwise subject to the provisions of clause (b) above from the requirements set forth in subclause (b)(iv) above and in Section 7.18(c) regarding the institution of the Fixed Charge Coverage Ratio (as defined in that Section). (z) As used in this definition, the term "purchase price" means the full value of all consideration of every kind and nature paid by the acquiror to the seller(s), whether in the form of cash or cash equivalents, issuance of Stock, incurrence or assumption of Indebtedness or otherwise (but excluding in any event any transaction expenses, costs and fees incurred or paid by the acquiror in connection with the acquisition, whether or not consisting of expenses, costs, fees and disbursements of attorneys, consultants, investment bankers and other financial advisors, brokers and finders, accountants or other advisors), minus all cash or cash equivalents of the target company (or any Newco or other Subsidiary by or through which such Permitted Acquisition is consummated) that are acquired in such Permitted Acquisition. "Permitted Discretion" means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment. "Permitted Dispositions" means (a) sales or other dispositions by the Parent or its Subsidiaries that are Loan Parties of Equipment that is substantially worn, damaged, obsolete, or 22 no longer useful in the ordinary course of business, (b) sales or other dispositions by the Parent or its Subsidiaries that are Loan Parties of Inventory or other property sold or disposed of in the ordinary course of business, (c) the use or transfer of money or Cash Equivalents by the Parent or its Subsidiaries that are Loan Parties in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents, (d) the licensing by the Parent or its Subsidiaries that are Loan Parties of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business, (e) Special Permitted Dispositions, (f) sales or other dispositions of any assets (including the Stock or ownership interests of any Subsidiary) by any Borrower to any other Borrower or by any Guarantor to any other Guarantor or any Borrower, in each instance upon reasonable notice to the Agent and subject to Agent's having taken all such actions deemed necessary by Agent in its Permitted Discretion to maintain perfection of Agent's Liens (if any) in the assets sold or transferred pursuant to this clause (f), (g) sales or other transfers of intellectual property assets (and other assets directly related thereto) to the IP Subsidiary in connection with a Permitted IP Transfer, (h) Permitted Liens (to the extent constituting dispositions), (i) subleases of Real Property that do not interfere with the sublessor's business, (j) to the extent constituting dispositions, issuances and sales by Parent of its stock or other securities, issuances by any Loan Party of its stock or other securities to any other Loan Party and issuances by any Loan Party of de minimis numbers of shares of its capital stock to any director, officer or other person solely as and to the extent required by applicable law, and (k) dispositions of portions of any business acquired in any Permitted Acquisition, so long as (x) such portions have an aggregate value not in excess of twenty-five percent (25%) of the aggregate purchase price paid by the Loan Parties for such Permitted Acquisition and (y) any such disposition occurs within one (1) year after the closing of such Permitted Acquisition. "Permitted Investments" means (a) investments in Cash Equivalents, (b) investments in negotiable instruments for collection, (c) advances made in connection with purchases or sales of goods or services in the ordinary course of business, (d) investments by any Loan Party in any other Loan Party, provided that, if any such investment under this clause (d) is in the form of Indebtedness such investment shall be subject to the terms and conditions of the Intercompany Subordination Agreement to the extent covered thereby, (e) investments by any Loan Party in any non-Loan Party Affiliate of such Loan Party, provided that the aggregate amount of all such investments under this clause (e) in the form of capital contributions made from and after the Closing Date (including amounts advanced by any Loan Party pursuant to any "letters of support" referenced in Section 7.6) or in the form of outstanding Indebtedness for borrowed money (exclusive of accrued interest thereon) shall not exceed $50,000,000 at any time, (f) guarantees of Indebtedness permitted under this Agreement, (g) Permitted Acquisitions and other acquisitions of any stock or assets of a Person not prohibited under this Agreement, (h) the Loan Parties' ownership of the capital stock or other ownership interests of their respective Subsidiaries, (i) loans to officers and employees of a Loan Party not exceeding $500,000 in aggregate principal amount outstanding at any time and not prohibited by applicable law, (j) investments in publicly traded securities in an aggregate amount not exceeding $5,000,000 at any time, provided, that such investments will not be made with Proceeds of Advances, and (k) Investments set forth on Schedule 7.13. "Permitted IP Transfers" means a transfer by a Loan Party to the IP Subsidiary of trademarks, trade names, copyrights, patents, patent rights, licenses and other intellectual property rights acquired by a Loan Party, provided, that Agent receives notice of any such 23 transfer, and no such transfer is consummated until Agent confirms in writing that it has taken all actions deemed necessary by Agent in its Permitted Discretion to perfect a first priority Lien on any assets transferred to the IP Subsidiary. "Permitted Liens" means (a) Liens held by Agent for the benefit of Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are not yet delinquent, or (ii) are the subject of Permitted Protests and otherwise qualify as Permitted Tax Liens, (c) Liens set forth on Schedule P-1, (d) the interests of lessors and lessees under operating leases and leases of Real Property (including with respect to any lease security deposit by or with any Loan Party), (e) purchase money Liens or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as such Lien attaches only to the asset purchased or acquired and the proceeds thereof, (f) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, and similar liens incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not more than sixty (60) days delinquent or (ii) are the subject of Permitted Protests, (g) Permitted Tax Liens, (h) pledges and deposits under workers' compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance arrangements; (i) pledges and deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases (other than capital leases), surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (j) reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, zoning restrictions, leases, licenses, and other title exception, encumbrances and restrictions on the use of Real Property which do not, in the aggregate, materially interfere with the ordinary conduct of the business of any Loan Party; (k) Liens consisting of bankers' liens and rights of setoff, in each and every case, arising by operation of law; (l) Liens on property or assets acquired in a Permitted Acquisition or other acquisition not prohibited under Section 7.14, provided that such Liens under this clause (l) (i) to the extent they secure any Indebtedness, secure permitted Indebtedness under this Agreement, (ii) were not created in contemplation of such acquisition and (iii) shall not apply to any other property or assets of any Loan Party, and (m) the rights of licensees under licenses of intellectual property granted by a Loan Party and the rights of licensors under licenses of intellectual property licensed to a Loan Party, in each case under licenses entered into in the ordinary course of business. "Permitted Protest" means the right of any Loan Party or any of its Subsidiaries, to protest any Lien (other than any such Lien that secures the Obligations), taxes (other than taxes that are the subject of a United States, Canadian or UK tax lien that is not a Permitted Tax Lien), or rental payment, provided that (a) a reserve with respect to such obligation is established on the books in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by the applicable Loan Party, in good faith, (c) Agent is reasonably satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or (solely with respect to any Lien that is not a Permitted Tax Lien or a Lien described in clause (f) of the definition of "Permitted Liens") priority of any of the Agent's Liens and (d) the applicable Loan Party or Subsidiary, as the case may be, has paid all taxes and other amounts necessary to ensure that the applicable Governmental Authority has no presently enforceable right to take collection action in respect of taxes or other amounts that are the subject of the protest. 24 "Permitted Purchase Money Indebtedness" means, as of any date of determination, (i) Purchase Money Indebtedness (other than Purchase Money Indebtedness incurred after the Closing Date in connection with a Permitted Acquisition) in an aggregate amount outstanding at any one time not in excess of $10,000,000 and (ii) Purchase Money Indebtedness incurred or assumed after the Closing Date in connection with Permitted Acquisitions in an aggregate amount outstanding at any one time not in excess of $10,000,000. In no event shall Permitted Purchase Money Indebtedness include Indebtedness incurred for the purpose of financing all or any part of the acquisition cost of any Inventory. "Permitted Restricted Payments" means any of the following: (a) so-called issuer bid stock repurchases by GCCL in accordance with the regulations of the Toronto Stock Exchange in an aggregate amount not to exceed $5,000,000 per fiscal year; (b) additional issuer bid stock repurchases by GCCL of up to the number of shares of capital stock of GCCL as were issued in any Permitted Acquisition, provided that all such purchases with respect to such Permitted Acquisition are made during the one hundred eighty (180) day period immediately following closing of such Permitted Acquisition; (c) repurchases by GCCL of restricted stock of GCCL from terminated employees in an aggregate amount not to exceed $2,000,000 per fiscal year and; (d) repurchases of shares of GCCL's capital stock issued under any GCCL employee stock purchase plan (whether now or hereafter existing) in an aggregate amount not to exceed $2,000,000 per fiscal year, provided, that the payments referred in the foregoing clauses (a), (b), (c) and (d) shall not constitute Permitted Restricted Payments during the pendency of any Default or Event of Default, and provided, further, for the purposes of clause (a), that the Borrowers and the Canadian Guarantors together have $20,000,000 of Liquidity before payment and for 30 days thereafter and for the purposes of clauses (b), (c) and (d), that the Borrowers and the Canadian Guarantors together have $10,000,000 of Liquidity before payment and for 30 days thereafter, and provided, further, that if as a result of any change in GAAP, Parent is required to expense payments contemplated by clause (d) in the determination of the consolidated net income of Parent and its Subsidiaries, the per fiscal year Dollar limit and the Liquidity requirement expressed above shall cease to apply to such payments; (e) payments by Loan Parties in respect of guaranty fees in respect of the transaction contemplated by the Loan Documents in an aggregate amount not to exceed one percent (1%) of the Maximum Revolver Amount (or, if higher, the amount that a commercial bank would reasonably charge for provision of equivalent guaranties) during any fiscal year (in each instance subject to the terms of the Intercompany Subordination Agreement); (f) dividends payable solely in the Parent's Stock; and (g) any Restricted Payment by any Loan Party to any other Loan Party, so long as no Default or Event of Default exists immediately prior thereto or would exist immediately after giving effect thereto. "Permitted Tax Liens" means (i) Liens for unpaid taxes in an aggregate amount of up to $500,000, regardless of whether such Liens are the subject of a Permitted Protest (provided that the Agent in its Permitted Discretion may institute Availability Reserves in connection with such Liens), (ii) Liens for unpaid taxes in an aggregate amount greater than $500,000 but less than $1,500,000, provided that (y) such Liens are the subject of a Permitted Protest and do not remain of record for more than twelve (12) months, and (z) the Agent may in its Permitted Discretion maintain Availability Reserves in accordance with Section 2.1(b) during the pending of the Permitted Protest in an amount it deems necessary or appropriate in its Permitted Discretion, such amount not to exceed the amount of the tax Lien (inclusive of penalties and interest to the 25 extent secured by such Lien), (iii) Liens for unpaid taxes (regardless of amount) that are junior to the Agent's Liens so long as such Liens are subject of a Permitted Protest, and (iv) any Lien for unpaid Taxes that is a Permitted Lien by virtue of clause (b)(i) of the definition thereof. "Person" means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof. "Projections" means the forecasted consolidated balance sheets, profit and loss statements, and cash flow statements of Parent and its Subsidiaries, all prepared on a consistent basis with Parent's historical consolidated financial statements, together with supporting details as reasonably requested by Agent and a statement of the principal underlying assumptions. "Pro Rata Share" means: (a) with respect to a Lender's obligation to make Advances and receive payments of principal, interest, fees, costs, and expenses with respect thereto, (x) prior to the Revolver Commitment being reduced to zero, the percentage obtained by dividing (i) such Lender's Revolver Commitment, by (ii) the aggregate Revolver Commitments of all Lenders, and (y) from and after the time that the Revolver Commitment has been terminated or reduced to zero, the percentage obtained by dividing (I) the aggregate outstanding principal amount of such Lender's Advances by (II) the aggregate outstanding principal amount of all Advances, and (b) with respect to a Lender's obligation to participate in Letters of Credit, to reimburse the Issuing Lender, and right to receive payments of fees with respect thereto, (x) prior to the Revolver Commitment being reduced to zero, the percentage obtained by dividing (i) such Lender's Revolver Commitment, by (ii) the aggregate Revolver Commitments of all Lenders, and (y) from and after the time that the Revolver Commitment has been terminated or reduced to zero, the percentage obtained by dividing (I) the aggregate outstanding principal amount of such Lender's Advances by (II) the aggregate outstanding principal amount of all Advances. "Purchase Money Indebtedness" means Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred at the time of, or within 120 days after, the acquisition of any fixed assets including real or personal property (including "soft-costs") for the purpose of financing all or any part of the acquisition cost thereof. "Qualified Cash Equivalents" means, as of any date of determination, cash or Cash Equivalents consisting of United States Dollars (or the Dollar value of Canadian Dollars based on the average exchange rate of Canadian dollars to Dollars quoted in the Wall Street Journal for the 5 Business Days immediately preceding such date of determination) on deposit in a Controlled Account that is subject to a Control Agreement reasonably acceptable to Agent. "Real Property" means any fee, leasehold or other estate or interest in real property now or hereafter owned or leased hereafter acquired by any Loan Party and the improvements thereto. 26 "Record" means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form. "Remedial Action" means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (d) conduct any other actions authorized by 42 USC Section 9601. "Report" has the meaning set forth in Section 16.17. "Required Lenders" means, at any time, Lenders whose Pro Rata Shares aggregate 51% of the Total Commitments, or if the Commitments have been terminated irrevocably, 51% of the Obligations then outstanding. "Reserve Percentage" means, on any day, for any Lender, the maximum percentage prescribed by the Board of Governors of the Federal Reserve System (or any successor Governmental Authority) for determining the reserve requirements (including any basic, supplemental, marginal, or emergency reserves) that are in effect on such date with respect to eurocurrency funding (currently referred to as "eurocurrency liabilities") of that Lender, but so long as such Lender is not required or directed under applicable regulations to maintain such reserves, the Reserve Percentage shall be zero. "Restricted Payment" means (i) any cash dividend or other cash distribution or payment, direct or indirect, on or on account of any shares of any class of stock of any Loan Party now or hereafter outstanding; (ii) any dividend or other distribution in respect of, or redemption, purchase or other acquisition, direct or indirect, of any shares of any class of stock of any Loan Party now or hereafter outstanding or of any warrants, options or rights to purchase any such stock (including, without limitation, the repurchase of any such stock, warrant, option or right or any refund of the purchase price thereof in connection with the exercise by the holder thereof of any right of rescission or similar remedies with respect thereto); and (iii) any payment of any management or consulting fee or other similar fees or expenses (including any reimbursement thereof) pursuant to any management, consulting or other similar services agreement to any of the shareholders or other equity holders of any Loan Party, or to any Subsidiary or Affiliate of any Loan Party, but excluding in any event (x) any such payment to any Loan Party, (y) any payment of salary, bonuses or other customary employee compensation under any employment agreement to Persons who are also shareholders of Parent and (z) ordinary course compensation paid to directors (or persons exercising comparable responsibilities) of Parent or any other Loan Party for their service as a director (or similar service). "Revolver Commitment" means, with respect to each Lender, its Revolver Commitment, and, with respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts (a) are set forth beside such Lender's name under the applicable heading on Schedule C-1 or on the signature page of the Assignment and Acceptance pursuant to which such Lender 27 became a Lender hereunder in accordance with the provisions of Section 14.1 and (b) may be reduced from time to time pursuant to Section 3.6. "Revolver Usage" means, as of any date of determination, the sum of (a) the then extant amount of outstanding Advances, plus (b) the then extant amount of the Letter of Credit Usage. "Risk Participation Liability" means, as to each Letter of Credit, all reimbursement obligations of Borrowers to the Issuing Lender with respect to an L/C Undertaking, consisting of (a) the amount available to be drawn or which may become available to be drawn, (b) all amounts that have been paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed by Borrowers, whether by the making of an Advance or otherwise, and (c) all accrued and unpaid interest, fees, and expenses payable with respect thereto. "SEC" means the United States Securities and Exchange Commission and any successor thereto. "Secretary" means the secretary, clerk or person exercising comparable responsibility and authority on behalf of any Loan Party. "Securities Account" means a "securities account" as such term is defined from time to time in the Code. "Settlement" has the meaning set forth in Section 2.3(f)(i). "Settlement Date" has the meaning set forth in Section 2.3(f)(i). "Solvent" means, with respect to any Person or group of Persons on a consolidated basis, as the case may be, on a particular date, that such Person is not insolvent (as such term is defined in the Uniform Fraudulent Transfer Act). "Special Permitted Disposition" means (i) a disposition (whether by merger, consolidation, stock sale, asset sale, joint venture, license arrangement or otherwise) of all or part of the stock (or other securities), assets or business of a non-Loan Party consummated at a time when there is no Default or Event of Default existing under this Agreement, and (ii) a disposition (whether by merger, consolidation, stock sale, asset sale, joint venture, license arrangement or otherwise) of all or part of the capital stock (or other securities), assets or business of a Loan Party, provided that the Borrowers provide the Agent with written evidence satisfactory to the Agent in its Permitted Discretion that, after giving effect to such disposition, the Borrowers shall, on a pro-forma basis, (y) have Liquidity immediately after consummation of such disposition of at least $10,000,000, of which no more than $5,000,000 will be in the form of Qualified Cash Equivalents, and (z) maintain compliance with all representations, warranties and covenants set forth in this Agreement including all financial covenants for the twelve (12) month period following consummation of such disposition, the information submitted pursuant to this clause (ii) to include financial statements and covenant compliance calculations satisfactory to the Agent in its Permitted Discretion, and provided, further, that in no event will the Borrowers dispose of Loan Parties under this clause (ii) having aggregate trailing twelve (12) month Eligible Recurring Maintenance Revenues (measured in each case for the period of twelve (12) 28 consecutive months ended most recently prior to the relevant disposition) in excess of $30,000,000 during the term of this Agreement. "Specified Entities" means collectively, US Partnership, US LLC and NSULC. "Stock" means all shares, options, warrants, equity interests, equity participations, or other equity equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting, including common stock, preferred stock, or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act). "Stock Pledge Agreements" means the stock or other ownership interest pledge agreements, security deposit agreements or share charges, as the case may be under applicable law, substantially in the forms of (a) with respect to any US issuer, Exhibit 3.1(c)(ii)(1) hereto (the "US Stock Pledge Agreement"), (b) with respect to any Canadian issuer (other than NSULC), Exhibit 3.1(c)(ii)(2) hereto, (c) with respect to NSULC as issuer, Exhibit 3.1(c)(ii)(3) hereto, (d) with respect to any UK issuer, Exhibit 3.1(c)(ii)(4) hereto, (e) and with respect to Geac Hungary as an issuer, Exhibit 3.1(c)(ii)(5) (the "Hungarian Stock Pledge Agreement"), each executed and delivered by each Loan Party that owns Stock or any other ownership interest of a Subsidiary of GCCL that is a Loan Party. "Subsidiary" of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the shares of Stock having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity. "Swing Lender" means Foothill or any other Lender that, at the request of an Administrative Borrower and with the consent of Agent (not to be unreasonably withheld) agrees, in such Lender's sole discretion, to become the Swing Lender hereunder. "Swing Loan" has the meaning set forth in Section 2.3(d)(i). "Total Commitment" means, with respect to each Lender, its Total Commitment, and, with respect to all Lenders, their Total Commitments, in each case as such Dollar amounts are set forth beside such Lender's name under the applicable heading on Schedule C-1 attached hereto or on the signature page of the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder in accordance with the provisions of Section 14.1. "Trademark Security Agreements" means the trademark security agreements executed and delivered by certain of the Borrowers and Canadian Guarantors and Agent (a) with respect to United States trademarks, substantially in the form of Exhibit 3.1(c)(v)(1) hereto (the "US Trademark Security Agreement") and (b) with respect to Canadian trademarks, each in the form of Exhibit 3.1(c)(v)(2) hereto (the "Canadian Trademark Security Agreement"). "UK Guarantors" has the meaning set forth in the preamble to this Agreement. "UK Law" means, as the context may require, the law of England or Wales. 29 "Underlying Issuer" means a third Person which is the beneficiary of an L/C Undertaking and which has issued a letter of credit at the request of the Issuing Lender for the benefit of Borrowers. "Underlying Letter of Credit" means a letter of credit that has been issued by an Underlying Issuer. "Unused Line Fee" has the meaning set forth in Section 2.11(a). "US Borrowing Base Companies" means collectively (i) GCI, Interealty, Remanco and GESI and (ii) with Agent's prior written consent upon Parent's request, Extensity and/or any other Borrower (other than GCCL and Geac Hungary). "US Copyright Security Agreement" has the meaning set forth in the definition of "Copyright Security Agreements". "US LLC Loans" has the meaning set forth in Section 7.1(h). "US Stock Pledge Agreement" has the meaning set forth in the definition of "Stock Pledge Agreements". "US Trademark Security Agreement" has the meaning set forth in the definition of "Trademark Security Agreements". "Voidable Transfer" has the meaning set forth in Section 17.7. "Wells Fargo" means Wells Fargo Bank, National Association, a national banking association. "Withholding Taxes" has the meaning set forth in Section 16.11 1.2. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. When used herein, the term "financial statements" shall include the notes and schedules, if any, thereto. Whenever the term "Borrowers" or the term "Parent" is used in respect of a financial covenant or a related definition, it shall be understood to mean Parent and its Subsidiaries on a consolidated basis unless the context clearly requires otherwise. 1.3. Code. Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth from time to time in the Code unless otherwise defined herein. 1.4. Construction. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term "including" is not limiting, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or." The words "hereof", "herein", "hereby", "hereunder", and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the 30 case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in the other Loan Documents to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person's successors and assigns. Any requirement of a writing contained herein or in the other Loan Documents shall be satisfied by the transmission of a Record. 1.5. Schedules and Exhibits. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference. 2. LOAN AND TERMS OF PAYMENT. 2.1. Revolver Advances. (a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender with a Revolver Commitment agrees (severally, not jointly or jointly and severally) to make advances ("Advances") to Borrowers in an amount at any one time outstanding not to exceed such Lender's Pro Rata Share of an amount equal to the lesser of (i) the Maximum Revolver Amount less the Letter of Credit Usage, or (ii) the Borrowing Base less the Letter of Credit Usage. For purposes of this Agreement, "Borrowing Base," as of any date of determination, shall mean an amount equal to the result of: (1) 50.0% of the US Borrowing Base Companies' Eligible Recurring Maintenance Revenue for the period of three (3) consecutive fiscal months ending most recently prior to such date of determination, multiplied by four, minus (2) the aggregate amount of Availability Reserves, if any, established by Agent under Section 2.1(b). (b) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right, without declaring an Event of Default, to (i) reduce its Eligible Recurring Maintenance Revenue advance rate provided for in clause (a)(1) above in accordance with the "Gross Margin Reduction Formula" set forth below or (ii) to establish Availability Reserves against the Borrowing Base as provided in the definition of "Permitted Tax Liens". As used herein, (i) the term "Gross Margin" means (A) GESI's Gross Profit (defined as GESI's Eligible Recurring Maintenance Revenue minus "customer support expenses" attributable to GESI (excluding overhead), as reported on the Parent's consolidating internal profit and loss statement) divided by (B) GESI's Eligible Recurring Maintenance Revenue and (ii) the "Gross Margin Reduction Formula" means a reduction in the advance rate percentage set forth in Section 2.1(a)(1) above equal to the percentage (rounded to the nearest tenth of a percent) that the Gross Margin falls below 65.0%. For purposes of clarity, if the Gross 31 Margin were 60.5% (4.5% below 65.0%), then the advance rate in Section 2.1(a)(1) above would be reduced to 45.5%. (c) The Lenders with Revolver Commitments shall have no obligation to make additional Advances or issue or arrange the issuance of Letters of Credit hereunder to the extent such additional Advances or Letter of Credit Usage would cause the Revolver Usage to exceed the lesser of the Maximum Revolver Amount and the Borrowing Base. (d) Amounts borrowed pursuant to this Section may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. 2.2. Eligible Recurring Maintenance Revenue Adjustments. If the calculation of the Borrowing Base in the Borrowing Base Certificates delivered to Agent for the months of April and May of any year is no longer correct as the result of adjustments made in connection with the preparation of Parent's audited financial statements for the fiscal year ended such April, within 5 Business Days of delivering such financial statements, the Administrative Borrower shall deliver revised Borrowing Base Certificates for such months of April and May. 2.3. Borrowing Procedures and Settlements. (a) Procedure for Borrowing. Each Borrowing shall be made by an irrevocable written request by an Authorized Person delivered to Agent, which notice must be received by Agent no later than 11:00 a.m. (Boston, Massachusetts time) on the Business Day (or, in the case of LIBO Rate Loans, three (3) Business Days prior to the date) that is the requested Funding Date, in the case of a request for an Advance specifying (i) the amount of such Borrowing, and (ii) the requested Funding Date, which shall be a Business Day; provided, however, that in the case of a request for a Swing Loan in an amount of $5,000,000, or less, such notice will be timely received if it is received by Agent no later than 11:00 a.m. (Boston, Massachusetts time) on the Business Day that is the requested Funding Date. At Agent's election, in lieu of delivering the above-described written request, any Authorized Person may give Agent telephonic notice of such request by the required time, with such telephonic notice to be confirmed in writing within 24 hours of the giving of such notice. (b) Swing Line Election. If a requested Borrowing is for an Advance that is to be a Base Rate Loan, the Administrative Borrower may request Swing Lender to make a Swing Loan pursuant to the terms of Section 2.3(d) in the amount of the requested Borrowing. If the Administrative Borrower does not make such a request or does not meet the requirements of Section 2.3(d) with respect to such a request, the terms of Section 2.3(c) shall apply to such requested Borrowing. (c) Making of Advances. (i) In the event that the terms of this Section 2.3(c) apply to a requested Borrowing as described in Section 2.3(b), then promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m. (Boston, Massachusetts time) on the Business Day (or, in the case of LIBO Rate Loans, three Business Days prior to the date) that is the Funding Date 32 applicable thereto, by telecopy, telephone, or other similar form of transmission, of the requested Borrowing. Each Lender shall make the amount of such Lender's Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent's Account, not later than 3:00 p.m. (Boston, Massachusetts time) on the Funding Date applicable thereto. After Agent's receipt of the proceeds of such Advances, upon satisfaction of the applicable conditions precedent set forth in Section 3 hereof, Agent shall make the proceeds thereof available to the Administrative Borrower by no later than 3:00 p.m. (Boston, Massachusetts time) on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Agent to the Administrative Borrower's Designated Account; provided, however, that, subject to the provisions of Section 2.3(i), Agent shall not request any Lender to make, and no Lender shall have the obligation to make, any Advance if Agent shall have actual knowledge that (1) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the Availability on such Funding Date. (ii) Unless Agent receives notice from a Lender on or prior to the Closing Date or, with respect to any Borrowing after the Closing Date, at least 1 Business Day prior to the date of such Borrowing, that such Lender will not make available as and when required hereunder to Agent for the account of Borrowers the amount of that Lender's Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent in immediately available funds on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrowers on such date a corresponding amount. If and to the extent any Lender shall not have made its full amount available to Agent in immediately available funds and Agent in such circumstances has made available to Borrowers such amount, that Lender shall on the Business Day following such Funding Date make such amount available to Agent, together with interest at the Defaulting Lender Rate for each day during such period. A notice submitted by Agent to any Lender with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is so made available, such payment to Agent shall constitute such Lender's Advance on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify the Administrative Borrower of such failure to fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent's account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Advances composing such Borrowing. The failure of any Lender to make any Advance on any Funding Date shall not relieve any other Lender of any obligation hereunder to make an Advance on such Funding Date, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on any Funding Date. (iii) Agent shall not be obligated to transfer to a Defaulting Lender any payments made by Borrowers to Agent for the Defaulting Lender's benefit, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such payments to each other non-Defaulting Lender member of the Lender Group ratably in accordance 33 with their Commitments (but only to the extent that such Defaulting Lender's Advance was funded by the other members of the Lender Group) or, if so directed by the Administrative Borrower and if no Default or Event of Default had occurred and is continuing (and to the extent such Defaulting Lender's Advance was not funded by the Lender Group), retain same to be re-advanced to Borrowers as if such Defaulting Lender had made Advances to Borrowers. Subject to the foregoing, Agent may hold and, in its Permitted Discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by it for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with respect to the Loan Documents, such Defaulting Lender shall be deemed not to be a "Lender" and such Lender's Commitment shall be deemed to be zero. This Section shall remain effective with respect to such Lender until (x) the Obligations under this Agreement shall have been declared or shall have become immediately due and payable, (y) the non-Defaulting Lenders, Agent, and the Administrative Borrower shall have waived such Defaulting Lender's default in writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays to Agent all amounts owing by Defaulting Lender in respect thereof. The operation of this Section shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by Borrowers of their duties and obligations hereunder to Agent or to the Lenders other than such Defaulting Lender. Any such failure to fund by any Defaulting Lender shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Administrative Borrower at its option, upon written notice to Agent, to arrange for a substitute Lender to assume the Commitment of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent. In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver a completed form of Assignment and Acceptance Agreement in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being repaid its share of the outstanding Obligations (including an assumption of its Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind whatsoever; provided further, however, that any such assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Groups' or Borrowers' rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund. (d) Making of Swing Loans. (i) If, with the consent of Swing Lender, as a Lender, the Administrative Borrower shall elect to have the terms of this Section 2.3(d) apply to a requested Borrowing as described in Section 2.3(b), Swing Lender as a Lender shall make such Advance in the amount of such Borrowing (any such Advance made solely by Swing Lender as a Lender pursuant to this Section 2.3(d) being referred to as a "Swing Loan" and such Advances being referred to collectively as "Swing Loans") available to Borrowers by no later than 3:00 p.m. (Boston, Massachusetts time) on the Funding Date applicable thereto by transferring immediately available funds to Administrative 34 Borrower's Designated Account. Each Swing Loan is an Advance hereunder and shall be subject to all the terms and conditions applicable to other Advances, except that no such Swing Loan shall be eligible for the LIBOR Option and, subject to clause (f) below regarding settlement, all payments on any Swing Loan shall be payable to Swing Lender as a Lender solely for its own account (and for the account of the holder of any participation interest with respect to such Swing Loan). Subject to the provisions of Section 2.3(i), Agent shall not request Swing Lender as a Lender to make, and Swing Lender as a Lender shall not make, any Swing Loan if Agent has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (ii) the requested Borrowing would exceed the Availability on such Funding Date. Swing Lender as a Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making, in its sole discretion, any Swing Loan. (ii) The Swing Loans shall be secured by the Agent's Liens, shall constitute Advances and Obligations hereunder, and shall bear interest at the rate applicable from time to time to Advances that are Base Rate Loans. (e) Agent Advances. (i) Agent hereby is authorized by Borrowers and the Lenders, from time to time in Agent's sole discretion, (1) after the occurrence and during the continuance of a Default or an Event of Default, or (2) at any time that any of the other applicable conditions precedent set forth in Section 3 have not been satisfied, to make Advances to Borrowers on behalf of the Lenders that Agent, in its Permitted Discretion deems necessary or desirable (A) to preserve or protect the Collateral, or any portion thereof, (B) to enhance the likelihood of repayment of the Obligations, or (C) to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement, including Lender Group Expenses and the costs, fees, and expenses described in Section 10 (any of the Advances described in this Section 2.3(e) shall be referred to as "Agent Advances"). Each Agent Advance is an Advance hereunder and shall be subject to all the terms and conditions applicable to other Advances, except that no such Agent Advance shall be eligible for the LIBOR Option and, subject to clause (f) below regarding settlement, all payments thereon shall be payable to Agent solely for its own account (and for the account of the holder of any participation interest with respect to such Agent Advance). (ii) The Agent Advances shall be repayable on demand and secured by the Agent's Liens granted to Agent under the Loan Documents, shall constitute Advances and Obligations hereunder, and shall bear interest at the rate applicable from time to time to Advances that are Base Rate Loans. (f) Settlement. It is agreed that each Lender's funded portion of the Advances is intended by the Lenders to equal, at all times, such Lender's Pro Rata Share of the outstanding Advances. Such agreement notwithstanding, Agent, Swing Lender, and the other Lenders agree (which agreement shall not be for the benefit of or enforceable by Borrowers) that 35 in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among them as to the Advances, the Swing Loans, and the Agent Advances shall take place on a periodic basis in accordance with the following provisions: (i) Agent shall request settlement ("Settlement") with the Lenders on a weekly basis, or on a more frequent basis if so determined by Agent, (1) on behalf of Swing Lender, with respect to each outstanding Swing Loan, (2) for itself, with respect to each Agent Advance, and (3) with respect to Collections received from Borrowers, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 5:00 p.m. (Boston, Massachusetts time) on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the "Settlement Date"). Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Advances, Swing Loans, and Agent Advances for the period since the prior Settlement Date. Subject to the terms and conditions contained herein (including Section 2.3(c)(iii)): (y) if a Lender's balance of the Advances, Swing Loans, and Agent Advances exceeds such Lender's Pro Rata Share of the Advances, Swing Loans, and Agent Advances as of a Settlement Date, then Agent shall, by no later than 3:00 p.m. (Boston, Massachusetts time) on the Settlement Date, transfer in immediately available funds to the account of such Lender as such Lender may designate, an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances, Swing Loans, and Agent Advances, and (z) if a Lender's balance of the Advances, Swing Loans, and Agent Advances is less than such Lender's Pro Rata Share of the Advances, Swing Loans, and Agent Advances as of a Settlement Date, such Lender shall no later than 3:00 p.m. (Boston, Massachusetts time) on the Settlement Date transfer in immediately available funds to the Agent's Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances, Swing Loans, and Agent Advances. Such amounts made available to Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable Swing Loan or Agent Advance and, together with the portion of such Swing Loan or Agent Advance representing Swing Lender's or Agent's Pro Rata Share thereof, shall constitute Advances of such Lenders. If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate. (ii) In determining whether a Lender's balance of the Advances, Swing Loans, and Agent Advances is less than, equal to, or greater than such Lender's Pro Rata Share of the Advances, Swing Loans, and Agent Advances as of a Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received in good funds by Agent with respect to principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral. To the extent that a net amount is owed to any such Lender after such application, such net amount shall be distributed by Agent to that Lender as part of such next Settlement. 36 (iii) Between Settlement Dates, Agent, to the extent no Agent Advances or Swing Loans are outstanding, may pay over to Swing Lender any payments received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Advances, for application to Swing Lender's Pro Rata Share of the Advances. If, as of any Settlement Date, Collections received from Borrowers since the then immediately preceding Settlement Date have been applied to Swing Lender's Pro Rata Share of the Advances other than to Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the Lenders, to be applied to the outstanding Advances of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Advances. During the period between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect to Agent Advances, and each Lender (subject to the effect of letter agreements between Agent and individual Lenders) with respect to the Advances other than Swing Loans and Agent Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Swing Lender, Agent, or the Lenders, as applicable (it being understood that the foregoing shall not increase or alter the Borrowers' obligations under the provisions of this Agreement in respect of the payment of interest.). (g) Notation. Agent shall record on its books the principal amount of the Advances owing to each Lender, including the Swing Loans owing to Swing Lender, and Agent Advances owing to Agent, and the interests therein of each Lender, from time to time. In addition, each Lender is authorized, at such Lender's option, to note the date and amount of each payment or prepayment of principal of such Lender's Advances in its books and records, including computer records, such books and records constituting conclusive evidence, absent manifest or demonstrable error, of the accuracy of the information contained therein. (h) Lenders' Failure to Perform. All Advances (other than Swing Loans and Agent Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Advance (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder. (i) Optional Overadvances. Any contrary provision of this Agreement notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as applicable, and Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Advances (including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would be created, so long as (i) after giving effect to such Advances (including a Swing Loan), the sum of then extant amount of outstanding Advances, plus the then extant amount of the Letter of Credit Usage does not exceed the Borrowing Base by more than $5,000,000, (ii) after giving effect to such Advances (including a Swing Loan) the outstanding Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount, and 37 (iii) at the time of the making of any such Advance (including any Swing Loan), Agent does not believe, in good faith, that the Overadvance created by such Advance will be outstanding for more than 90 days. The foregoing provisions, in no way obligate the Agent or the Lenders to make any such optional Overadvances to the Borrowers, are for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit Borrowers in any way. The Advances and Swing Loans, as applicable, that are made pursuant to this Section 2.3(i) shall be subject to the same terms and conditions as any other Advance or Swing Loan, as applicable, except that they shall not be eligible for the LIBOR Option and the rate of interest applicable thereto shall be the rate applicable to Advances that are Base Rate Loans under Section 2.6(c) hereof without regard to the presence or absence of a Default or Event of Default. (x) In the event Agent obtains actual knowledge that the Revolver Usage exceeds the amounts permitted by the preceding paragraph, regardless of the amount of, or reason for, such excess, Agent shall notify Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value), and the Lenders with Revolver Commitments thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with Borrowers and intended to reduce, within a reasonable time, the outstanding principal amount of the Advances to Borrowers to an amount permitted by the preceding paragraph. In the event Agent or any Lender disagrees over the terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders. (y) Each Lender with a Revolver Commitment shall be obligated to settle with Agent as provided in Section 2.3(f) for the amount of such Lender's Pro Rata Share of any unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as permitted under this Section 2.3(i), and any Overadvances resulting from the charging to the Loan Account of interest, fees, or Lender Group Expenses. 2.4. Payments. (a) Payments by Borrowers. (i) Except as otherwise expressly provided herein, all payments by Borrowers shall be made to Agent's Account for the account of the Lender Group and shall be made in immediately available funds, no later than 2:00 p.m. (Boston, Massachusetts time) on the date specified herein. Any payment received by Agent later than 2:00 p.m. (Boston, Massachusetts time), shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day. (ii) Unless Agent receives notice from the Administrative Borrower prior to the date on which any payment is due to the Lenders that Borrowers will not make such payment in full as and when required, Agent may assume that Borrowers have 38 made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent Borrowers do not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid. (b) Apportionment and Application of Payments. (i) Except as otherwise provided with respect to Defaulting Lenders and except as otherwise provided in the Loan Documents (including letter agreements between Agent and individual Lenders), aggregate principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and payments of fees and expenses (other than fees or expenses that are for Agent's separate account, after giving effect to any letter agreements between Agent and individual Lenders) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates. All payments shall be remitted to Agent and all such payments (other than payments received while no Event of Default has occurred and is continuing and which relate to the payment of principal or interest of specific Obligations or which relate to the payment of specific fees or other specific Obligations), and all proceeds of Accounts or other Collateral received by Agent, shall be applied as follows: (A) first, to pay any Lender Group Expenses then due to Agent under the Loan Documents, until paid in full, (B) second, to pay any Lender Group Expenses then due to the Lenders under the Loan Documents, on a ratable basis, until paid in full, (C) third, to pay any fees then due to Agent (for its separate account, after giving effect to any letter agreements between Agent and the individual Lenders) under the Loan Documents until paid in full, (D) fourth, to pay any fees then due to any or all of the Lenders (after giving effect to any letter agreements between Agent and individual Lenders) under the Loan Documents, on a ratable basis, until paid in full, (E) fifth, to pay interest due in respect of all Agent Advances, until paid in full, (F) sixth, ratably to pay interest due in respect of the Advances (other than Agent Advances) and the Swing Loans, until paid in full, (G) seventh, to pay the principal of all Agent Advances until paid in full, 39 (H) eighth, to pay the principal of all Swing Loans until paid in full, (I) ninth, so long as no Event of Default has occurred and is continuing, to pay the principal of all Advances until paid in full, (J) tenth, if an Event of Default has occurred and is continuing, to Agent, to be held by Agent, for the ratable benefit of Issuing Lender and those Lenders having a Revolver Commitment, as cash collateral in an amount up to 102% of the then extant Letter of Credit Usage until paid in full, (K) eleventh, if the Agent has accelerated and made demand for repayment of the Obligations, to pay any other Obligations until paid in full, and (L) twelfth, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law. (ii) Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3. (iii) In each instance, so long as no Event of Default has occurred and is continuing, Section 2.4(b) shall not be deemed to apply to any payment by Borrowers specified by Borrowers to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement. (iv) Without limiting in any way the joint and several liability of Borrowers and the Guarantors hereunder, notwithstanding any provision in this Agreement or the other Loan Documents to the contrary, (x) any amounts received by the Lender Group from a Controlled Account of any Borrower (other than GCCL) or US LLC, whether upon the exercise of control as contemplated by Section 2.7, the exercise of the Lender Group's rights and remedies under the Loan Documents upon an Event of Default or otherwise, shall first reduce the Obligations of such Person and (y) any amounts received by the Lender Group from a Controlled Account of any Canadian Guarantor, NSULC or GCCL, whether upon the exercise of control as contemplated by Section 2.7, the exercise of the Lender Group's rights and remedies under the Loan Documents under an Event of Default or otherwise, shall first reduce the Obligations of such Person. Each Loan Party by execution of this Agreement agrees that such Loan Party is and shall be jointly and severally liable for the full amount of the Obligations as provided in Section 2.15 and in the Guaranty. (v) For purposes of the foregoing, "paid in full" means payment of all amounts owing under the Loan Documents in respect of the relevant Obligations according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not the same would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding. 40 (vi) In the event of a direct conflict between the priority provisions of this Section 2.4 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that such priority provisions in such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.4 shall control and govern. 2.5. Overadvances. If, at any time or for any reason, the amount of the outstanding Advances, Revolver Usage or Letter of Credit Usage owed by Borrowers to the Lender Group is greater than either the Dollar or percentage limitations applicable thereto set forth in Sections 2.1 or 2.12 (an "Overadvance"), Borrowers immediately shall pay to Agent, in cash, the amount of such excess, which amount shall be used by Agent to reduce such Obligations in accordance with the priorities set forth in Section 2.4(b). In addition, Borrowers hereby promise to pay the Obligations (including principal, interest, fees, costs, and expenses) in Dollars in full to the Lender Group as and when due and payable under the terms of this Agreement and the other Loan Documents. 2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations. (a) Interest Rates. Except as provided in clause (c) below, all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof as provided in Sections 2.6(d) and (g) shall bear interest on the Daily Balance thereof as follows: (i) if the relevant Obligation is an Advance that is a LIBO Rate Loan, at a per annum rate equal to the LIBO Rate plus the LIBO Rate Margin, and (ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin. (b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of the Lenders with a Revolver Commitment, subject to any letter agreement between Agent and individual Lenders), a Letter of Credit fee (the "Letter of Credit Fee") (in addition to the charges, commissions, fees, and costs set forth in Section 2.12(e)) which shall accrue at a rate equal to 2% per annum times the Daily Balance of the undrawn amount of all outstanding Letters of Credit. (c) Default Rate. At the election of Agent or the Required Lenders, upon the occurrence and during the continuation of an Event of Default: (i) all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof at a per annum rate equal to two percent (2%) above the per annum rate otherwise applicable hereunder, and (ii) the Letter of Credit fee provided for above shall be increased by two percent (2%) above the per annum rate otherwise applicable hereunder. (d) Payment. Except as otherwise expressly provided in this Agreement and the Fee Letter and subject to the provisions of Section 2.6(g), interest, the Letter of Credit Fee, and all other fees payable hereunder shall be due and payable, in arrears, on the first Business Day of each month at any time that relevant Obligations or Commitments are outstanding. Borrowers hereby authorize Agent, from time to time, without prior notice to Borrowers, to 41 charge such interest and fees, all Lender Group Expenses, the charges, commissions, fees, and costs provided for in Section 2.12(e), the fees and costs provided for in Section 2.11, and all other payments, in each of the foregoing cases as and when due and payable under any Loan Document (including as provided in Section 2.6(g)) to the Loan Account, which amounts thereafter (unless otherwise paid by Borrowers) shall constitute Advances hereunder and shall accrue interest at the rate then applicable to Advances hereunder. Any interest not paid when due shall be compounded by being charged to Borrowers' Loan Account and shall thereafter constitute Advances hereunder and shall accrue interest at the rate then applicable to Advances that are Base Rate Loans hereunder. (e) Computation. All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year for the actual number of days elapsed. In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate. For the purposes of disclosure pursuant to the Interest Act Canada, the annual rates of interest or fees to which the rates of interest or fees provided in any of the Loan Documents (and stated herein or therein, as applicable, to be computed on the basis of a period of time less than a calendar year) are equivalent to the rates so determined multiplied by the actual number of days in the applicable calendar year and divided by such other period of time. (f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrowers and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall be liable only for the payment of such maximum as allowed by law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess. (g) Special Provisions Concerning Certain Payments. Notwithstanding anything to the contrary in this Agreement, and so long as no Cash Management Activation Event has occurred and is continuing, (i) within 5 Business Days following Agent's delivery to the Administrative Borrower of each monthly Loan Account statement described in Section 2.10, Borrowers shall pay to Agent (A) the Unused Line Fee then due and owing as set forth in such monthly statement, (B) the accrued and unpaid interest then due and owing as set forth in such monthly statement, and (C) all of the audit and valuation fees and expenses described in Section 2.11(c)(i) then due and owing as set forth in such monthly statement; (ii) within 5 Business Days following Agent's delivery to the Administrative Borrower of each monthly spreadsheet setting forth in reasonable detail a 42 calculation of the float charge amounts owing to Agent under Section 2.8 (which spreadsheet Agent shall deliver within 7 Business Days of its receipt of all of Borrowers' bank statements required to be delivered hereunder for the relevant month), Borrowers shall pay to Agent all of the float charges then owing and as set forth in such monthly spreadsheet; (iii) within 5 Business Days following Agent's delivery to the Administrative Borrower of the monthly statement setting forth in reasonable detail (A) the Lender Group Expenses in respect of Underlying Letters of Credit described in Section 2.12(e), (B) amounts owing under Section 2.12(f), and (C) the Letter of Credit Fee (which monthly statement Agent shall deliver between the 15th and 20th day of each month), Borrowers shall pay to Agent all amounts then owing in respect of the items described in the foregoing clauses (A), (B) and (C) and as set forth in such monthly statement; (iv) within 5 Business Days following Agent's delivery to the Administrative Borrower of any invoice from a third party for fees, charges or expenses constituting Lender Group Expenses (including Lender Group Expenses incurred under Section 2.11(c)(ii)) incurred by Agent in connection with the Lender Group's transactions with the Loan Parties, Borrowers shall pay to Agent the entire amount then owing and set forth on such invoice; and (v) within 5 Business Days of Agent's delivery to the Administrative Borrower of any statement setting forth in reasonable detail amounts owing by Borrowers to the Lender Group in respect of an indemnification obligation under this Agreement, Borrowers shall pay to Agent all amounts then owing in respect of such indemnification obligation and as set forth in such statement. If Borrowers do not pay any of the above amounts within the applicable period set forth above, Agent shall charge any such unpaid amounts to the Loan Account as provided in Section 2.6(d). The provisions of this Section 2.6(g) shall not apply to Lender Group Expenses (including legal fees) set forth on the Disbursement Letter and required to be paid by Borrowers on the Closing Date as provided by Section 3.1(v). 2.7. Controlled Accounts. (a) Except as otherwise provided in Section 7.17 with respect to Securities Accounts, (i) Borrowers (other than Geac Hungary) and Canadian Guarantors (to the extent Borrowers or Canada Guarantors maintain any DDA(s) or Securities Account(s)) shall establish and maintain (A) Controlled Accounts at one or more of the banks set forth on Schedule 2.7, as amended from time to time pursuant to Section 2.7(c) below (each a "Controlled Account Bank") and (B) Control Agreements with the Controlled Account Banks with respect to the Controlled Accounts, and (ii) except with respect to the CIBC Special Accounts, during the term of this Agreement, Borrowers (other than Geac Hungary) and Canadian Guarantors shall promptly deposit all cash and Cash Equivalents, checks and other items of payment held or received by the Borrowers (other than Geac Hungary) and Canadian Guarantors into one of the Controlled Accounts. 43 (b) Subject to Section 2.7(c) with respect to the Designated Account Control Agreement, each such Control Agreement shall provide, among other things, that (i) upon notice from Agent to the relevant Controlled Account Bank that a Cash Management Activation Event has occurred (or words of similar import), the Controlled Account Bank will (x) comply with instructions of Agent directing the disposition of funds in the Controlled Accounts without further consent by Borrowers or Canadian Guarantors, and (y) terminate all sweep or zero balance arrangements, if any, in place at the time of receipt of such notice by the Controlled Account Bank as between the Controlled Accounts and any other bank account maintained by a Loan Party at such Controlled Account Bank, (ii) the Controlled Account Bank has no rights of setoff or recoupment or any other claim against the applicable Controlled Account, other than for payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned checks or other items of payment and other similar amounts, and (iii) with respect to Controlled Accounts that are DDAs, upon notice from Agent to the relevant Controlled Account Bank to the effect that a Cash Management Activation Event has occurred (or words of similar import), without further consent from Borrowers or Canadian Guarantors, the Controlled Account Bank immediately will forward, by daily sweep, all amounts in the applicable Controlled Account to the Agent's Account (or in the case of Controlled Accounts maintained by Parent and GCL at CIBC (or a replacement Controlled Account Bank as permitted by this Section 2.7), to account number 350119021518 maintained at BofA or such other Controlled Account of GCI as Parent shall notify to Agent) for application to the Obligations in accordance with Section 2.4(b). The right of the Agent under the foregoing clauses (i) and (iii) above to issue instructions with respect to, and to sweep to the Agent's Account amounts on deposit in the Controlled Accounts, shall remain effective at all times during the pendency of a Cash Management Activation Event and (except with respect to the Designated Account) for a period of forty-five (45) days following that date on which the Cash Management Activation Event has been cured by the Borrowers (the period from the commencement of the Cash Management Activation Event to the end of such 45 day period, a "Cash Management Period"). On or before the first Business Day after the last day of a Cash Management Period, Agent shall (x) by written notice to each Controlled Account Bank (other than to BofA with respect to the BofA Controlled DDAs and the Designated Account if BofA is the Designated Account Bank) effective as of such Business Day, withdraw the notice described in the foregoing clauses (i) and (iii) and return control of all Controlled Accounts (other than the BofA Controlled DDAs and the Designated Account if BofA is the Designated Account Bank) to the applicable Borrowers and Canadian Guarantors (subject to Agent's right to exercise such control upon any future Cash Management Activation Event in accordance with the Control Agreements and this Section 2.7) and (y) by written notice to BofA effective as of such Business Day, instruct BofA to forward (on a daily basis) all amounts in the BofA Controlled DDAs to the Designated Account or such other Controlled Account of any Borrower(s) or Canadian Guarantor(s) as Parent shall notify to Agent. Notwithstanding any other use of the term "control" above or in clause (c) below, at all times, Agent shall have "control" of each Controlled Account within the meaning of Section 9-104 of the Code. (c) Unless an Event of Default shall have occurred and be continuing, Agent shall not deliver to the Designated Account Bank under the Designated Account Control Agreement any notice described in clauses (b)(i) and (b)(iii) of this Section 2.7. If Agent has delivered the foregoing notice(s) to the Designated Account Bank, upon Borrowers' curing of the applicable Event(s) of Default, (i) for so long as the Designated Account Bank is BofA, Agent 44 shall immediately send a notice to BofA to cause the then effective Designated Account Control Agreement to be terminated and shall issue all instructions and take all other actions to give the Administrative Borrower immediate control over all funds in such account until the then effective Designated Account Control Agreement is terminated and (ii) if the Designated Account Bank is a bank other than BofA, Agent shall issue all instructions and take all other actions to give the Administrative Borrower immediate control over all funds in the Designated Account; in each case subject to Agent's right to exercise such control upon any future Event of Default in accordance with the Designated Account Control Agreement and this Section 2.7(c). Notwithstanding the foregoing, it shall be a condition to any such termination of the then effective Designated Account Control Agreement that the Agent and the Administrative Borrower shall have entered into a Control Agreement consistent with this Section 2.7 with such Designated Account Bank as the Administrative Borrower may select in accordance with Section 2.9. In the event that the Agent funds Advances into the Designated Account during the existence of an Event of Default and after having given the Designated Account Bank the notice described in clause (b)(i) of this Section 2.7 (but not the notice described in clause (b)(iii) of this Section 2.7), Agent shall (without limiting its rights and remedies under the Loan Documents) use its commercially reasonable efforts to direct the funds in the Designated Account in accordance with the instructions of the Administrative Borrower. (d) Before the occurrence of a Cash Management Activation Event and at any other time that amounts in the Controlled Accounts are not being swept (whether directly or indirectly) into the Agent's Account, the Loan Parties shall cause all available funds in all Disbursement Accounts (except for the CIBC Disbursement Accounts) to be swept (or "zero-balanced") daily into a Controlled Account. (e) At no time shall Borrowers permit the balance of any DDA designated as an "Imprest Account" on Schedule 2.7 exceed $5,000. (f) So long as no Default or Event of Default has occurred and is continuing, Parent may amend Schedule 2.7 or Schedule 5.18 to add, replace or eliminate a Controlled Account Bank, Controlled Account, Securities Account or Disbursement Account, provided, however, that (i) any prospective Controlled Account Bank shall be reasonably satisfactory to Agent and Agent shall have consented in writing in advance to the opening of such Controlled Account with the prospective Controlled Account Bank, which consent shall not be unreasonably withheld, and (ii) prior to the time of the opening of any such Controlled Account, Borrowers and such prospective Controlled Account Bank shall have executed and delivered to Agent a Control Agreement, on terms consistent with this Section 2.7, with respect to such Controlled Account. For avoidance of doubt, Agent and the Lenders acknowledge and agree that the Controlled Account Banks listed on Schedule 2.7 as of the Closing Date, and the Control Agreements entered into as of the Closing Date with such Controlled Account Banks and listed in Section 3.1(c)(vi) and the Controlled Accounts and Disbursement Accounts listed on Schedule 5.18 as of the Closing Date, are each satisfactory to Agent. (g) All Collateral held in the Controlled Accounts shall secure payment of the Obligations and Borrowers and Guarantors hereby grant to Agent a Lien on each Controlled Account and all cash, checks and similar items of payment, and other property therein. 45 (h) If the average aggregate monthly amount of payments from Persons other than Parent and its Subsidiaries deposited into the CIBC Special Accounts over the most recently ended three consecutive calendar month period is greater than $250,000, Parent and GCL shall deliver to Agent a Control Agreement with respect to such accounts in such form as is satisfactory to Agent in its Permitted Discretion. 2.8. Crediting Payments; Float Charge. The receipt of any payment item by Agent (whether from transfers to Agent by the Controlled Account Banks pursuant to the Control Agreements or otherwise) shall not be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to the Agent's Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into the Agent's Account on a Business Day on or before 2:00 p.m. (Boston, Massachusetts time). If any payment item is received into the Agent's Account on a non-Business Day or after 2:00 p.m. (Boston, Massachusetts time) on a Business Day, it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day. From and after the Closing Date, Agent shall be entitled to charge for 1 Business Day of `clearance' or `float' at the rate applicable to Base Rate Loans under Section 2.6 on all Collections (other than (x) tax refunds and insurance proceeds, and (y) payments received from Parent or any of its Subsidiaries, such tax refunds, insurance proceeds and payments received from Parent or any of its Subsidiaries to be identified as such by Administrative Borrower) that are received by the US Borrowing Base Companies, regardless of whether forwarded by the Controlled Account Banks to Agent. This across-the-board 1 Business Day clearance or float charge on all such Collections is acknowledged by the parties to constitute an integral aspect of the pricing of the financing of this transaction and shall apply irrespective of whether or not there are outstanding monetary Obligations; the effect of such clearance or float charge being the equivalent of charging 1 Business Day of interest on such Collections. The parties acknowledge and agree that the economic benefit of the foregoing provisions of this Section 2.8 shall be for the exclusive benefit of Agent. 2.9. Designated Account. Agent is authorized to make the Advances, and Issuing Lender is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person, or without instructions if pursuant to Section 2.12(a). The Administrative Borrower agrees to establish and maintain the applicable Designated Account with the applicable Designated Account Bank for the purpose of receiving the proceeds of the Advances requested by Borrowers and made by Agent or the Lenders hereunder. So long as no Default or Event of Default has occurred and is continuing, the Administrative Borrower may add or replace the Designated Account Bank or the Designated Account on 15 days prior written notice to Agent; provided, however, that (i) such prospective Designated Account Bank shall be reasonably satisfactory to Agent and Agent shall have consented in writing in advance to the opening of such Designated Account with the prospective Designated Account Bank, and (ii) prior to the time of the opening of such new Designated Account, Administrative Borrower, Agent and the prospective Designated Account Bank shall have executed and delivered to Agent a Control Agreement with respect to the Designated Account on terms consistent with Section 2.7. Unless otherwise agreed by Agent 46 and Administrative Borrower, any Advance, Agent Advance, or Swing Loan requested by either the Borrowers or the Administrative Borrower and made by Agent or the Lenders hereunder shall be made to the Designated Account. 2.10. Maintenance of Loan Account; Statements of Obligations. Agent shall maintain an account on its books in the name of Borrowers (the "Loan Account") on which Borrowers will be charged, in accordance with Section 2.6, with all Advances (including Agent Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for Borrowers' account, with the Letters of Credit issued by Issuing Lender for Borrowers' account, and with all other payment Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses in each case to the extent paid (in accordance with Section 2.6) by or on behalf of the Borrowers with proceeds of Advances. In accordance with Section 2.8, the Loan Account will be credited with all payments received by Agent from Borrowers or for Borrowers' account, including all amounts received in the Agent's Account from any Controlled Account Bank. Agent shall render to the Administrative Borrower monthly statements delivered on the first Business Day of each month for the immediately preceding month regarding the Loan Account, including principal, interest, fees, and including an itemization of all charges and expenses constituting Lender Group Expenses owing, and such statements shall be conclusively presumed (absent manifest or demonstrable error) to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless, within 30 days after receipt thereof by the Administrative Borrower, the Administrative Borrower shall deliver to Agent written objection thereto describing the error or errors contained in any such statements. 2.11. Fees. Borrowers shall pay to Agent the following fees and charges, which fees and charges shall be non-refundable when paid (irrespective of whether this Agreement is terminated thereafter) and shall be apportioned by Agent among the Lenders in accordance with the terms of letter agreements between Agent and individual Lenders: (a) Unused Line Fee. Subject to the provisions of Section 2.6(g), on the first Business Day of each month during the term of this Agreement, an unused line fee (the "Unused Line Fee") in an amount equal to 0.50% per annum times the result of (a) the Maximum Revolver Amount (as it may be reduced from time to time in accordance with Section 3.6), less (b) the sum of (i) the average Daily Balance of Advances that were outstanding during the immediately preceding month, plus (ii) the average Daily Balance of the Letter of Credit Usage during the immediately preceding month, (b) Fee Letter. As and when due and payable under the terms of the Fee Letter, Borrowers shall pay to Agent the fees set forth in the Fee Letter, and (c) Audit, Appraisal, and Valuation Charges. Subject to the provisions of Section 4.8 for the separate account of Agent, audit, appraisal, and valuation fees and charges as follows: (i) a fee of $850 per day, per auditor, plus out-of-pocket expenses, for each financial audit of a Loan Party performed by personnel employed by Agent, and (ii) the actual charges paid or incurred by Agent if it elects to employ the services of one or more third Persons to perform financial audits of Loan Parties, to appraise the Collateral, or any portion thereof, or to assess a Loan Party's business valuation. 47 2.12. Letters of Credit. (a) Subject to the terms and conditions of this Agreement, the Issuing Lender agrees to issue letters of credit for the account of Borrowers (each, an "L/C") or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, an "L/C Undertaking") with respect to letters of credit issued by an Underlying Issuer (as of the Closing Date, the prospective Underlying Issuer is to be Wells Fargo) for the account of Borrowers. To request the issuance of an L/C or an L/C Undertaking (or the amendment, renewal, or extension of an outstanding L/C or L/C Undertaking), the Administrative Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Lender) to the Issuing Lender and Agent (reasonably in advance of the requested date of issuance, amendment, renewal, or extension) a notice requesting the issuance of an L/C or L/C Undertaking, or identifying the L/C or L/C Undertaking to be amended, renewed, or extended, the date of issuance, amendment, renewal, or extension, the date on which such L/C or L/C Undertaking is to expire, the amount of such L/C or L/C Undertaking, the name and address of the beneficiary thereof (or of the Underlying Letter of Credit, as applicable), and such other information as shall be necessary to prepare, amend, renew, or extend such L/C or L/C Undertaking. If requested by the Issuing Lender, Administrative Borrower also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the requested Letter of Credit: (i) the Letter of Credit Usage would exceed $5,000,000, or (ii) the Letter of Credit Usage would exceed the Borrowing Base less the then extant amount of outstanding Advances, or (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the then extant amount of outstanding Advances. Borrowers and the Lender Group acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. Issuing Lender or Agent shall promptly notify Administrative Borrower of any drawing under a Letter of Credit. If the Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers shall upon demand reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.6. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers' obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that 48 Lenders have made payments pursuant to Section 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interests may appear. (b) Promptly following receipt of a notice of an L/C Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if Borrowers had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Lender or the Lenders with Revolver Commitments, the Issuing Lender shall be deemed to have granted to each Lender with a Revolver Commitment, and each Lender with a Revolver Commitment shall be deemed to have purchased, a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrowers on the date due as provided in clause (a) of this Section, or of any reimbursement payment required to be refunded to Borrowers for any reason. Each Lender with a Revolver Commitment acknowledges and agrees that its obligation to deliver to Agent, for the account of the Issuing Lender, an amount equal to its respective Pro Rata Share pursuant to this Section 2.12(b) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to Agent the amount of such Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, Agent (for the account of the Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (c) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the gross negligence or willful misconduct of the Issuing Lender or any other member of the Lender Group. Each Borrower agrees to be bound by the Underlying Issuer's regulations and reasonable interpretations of any Underlying Letter of Credit or by Issuing Lender's interpretations of any L/C issued by Issuing Lender to or for such Borrower's account, and each Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrowers' instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Each Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrowers against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group's indemnification of any Underlying Issuer; provided, however, 49 that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the gross negligence or willful misconduct of the Underlying Issuer, Issuing Lender or any other member of the Lender Group. (d) Each Borrower hereby authorizes and directs any Underlying Issuer to deliver to the Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender's instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (e) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and shall be reimbursable by Borrowers to Agent for the account of the Issuing Lender. The issuance charge imposed by the Underlying Issuer will be 0.825% per annum times the face amount of each Underlying Letter of Credit. The Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals. All other charges, commissions, fees and costs charged by the Underlying Issuer will be paid by the Borrowers at the rates from time to time in effect and generally charged to the Underlying Issuer's customers. (f) If by reason of (i) any change in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by the Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto), in the cases of the foregoing clauses (i) and (ii), occurring on or after the date which is one hundred eighty (180) days prior to the Closing Date: (i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued hereunder, or (ii) there shall be imposed on the Underlying Issuer or the Lender Group any other condition regarding any Underlying Letter of Credit or any Letter of Credit issued pursuant hereto; and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any time within a reasonable period (not to exceed ninety (90) days) after the Agent has actual knowledge that the additional cost has been incurred or the amount received is reduced, notify the Administrative Borrower, and Borrowers shall pay such amounts as Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder. The determination by Agent of any amount due pursuant to this Section, as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto. 50 2.13. LIBOR Option. (a) Interest and Interest Payment Dates. In lieu of having interest charged at the rate based upon the Base Rate, Borrowers shall have the option (the "LIBOR Option") to have interest on all or a portion of the Advances be charged at a rate of interest based upon the LIBO Rate. Interest on LIBO Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto, (ii) the occurrence of an Event of Default in consequence of which the Required Lenders or Agent on behalf thereof elect to accelerate the maturity of all or any portion of the Obligations, or (iii) termination of this Agreement pursuant to the terms hereof. On the last day of each applicable Interest Period, unless the Administrative Borrower properly has exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBO Rate Loan automatically shall convert to (and remain outstanding as an Advance with interest thereon payable at) the rate of interest then applicable to Base Rate Loans of the same type hereunder. At any time that an Event of Default has occurred and is continuing, Borrowers no longer shall have the option to request that Advances bear interest at the LIBO Rate and Agent shall have the right to convert the interest rate on all outstanding LIBO Rate Loans to the rate then applicable to Base Rate Loans hereunder. (b) LIBOR Election. (i) The Administrative Borrower may, at any time and from time to time, so long as no Event of Default has occurred and is continuing, elect to exercise the LIBOR Option by notifying Agent prior to 2:00 p.m. (Boston, Massachusetts time) at least 3 Business Days prior to the commencement of the proposed Interest Period (the "LIBOR Deadline"). Notice of the Administrative Borrower's election of the LIBOR Option for a permitted portion of the Advances and an Interest Period pursuant to this Section shall be made by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic notice received by Agent before the LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (Boston, Massachusetts time) on the same day). Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy thereof to each of the Lenders having a Revolver Commitment. (ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In connection with each LIBO Rate Loan, each Borrower shall indemnify, defend, and hold Agent and the Lenders harmless against any loss, cost, or expense (exclusive of any loss of LIBO Rate Margin) incurred by Agent (other than those arising by reason of illegality or unavailability) or any Lender as a result of (a) the payment of any principal of any LIBO Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any LIBO Rate Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure to borrow, convert, continue or prepay any LIBO Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, and expenses, collectively, "Funding Losses"). Funding Losses shall, with respect to Agent or any Lender, be deemed to equal the amount determined by Agent or such Lender to be the excess, if any, of (i) the amount of interest (exclusive of LIBO Rate Margin) that would have accrued on the principal amount of such LIBO Rate Loan had such event not 51 occurred, at the LIBO Rate that would have been applicable thereto, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period therefor), minus (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which Agent or such Lender would be offered were it to be offered, at the commencement of such period, for Dollar deposits of a comparable amount and period in the London interbank market. A certificate of Agent or a Lender delivered to Administrative Borrower setting forth any amount or amounts that Agent or such Lender is entitled to receive pursuant to this Section shall be conclusive absent manifest or demonstrable error. (iii) Borrowers shall have not more than seven (7) LIBO Rate Loans in effect at any given time. Borrowers only may exercise the LIBOR Option for LIBO Rate Loans of at least $1,000,000 and integral multiples of $500,000 in excess thereof. (c) Prepayments. Borrowers may prepay LIBO Rate Loans at any time; provided, however, that in the event that LIBO Rate Loans are prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any automatic prepayment through the required application by Agent of proceeds of Collections in accordance with Section 2.4(b) or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with clause (b)(ii) above. (d) Special Provisions Applicable to LIBO Rate. (i) The LIBO Rate may be adjusted by Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining any eurodollar deposits or increased costs due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, including changes in tax laws (except changes of general applicability in laws relating to corporate income, capital, franchise or "doing business" taxes) and changes in the reserve requirements imposed by the Board of Governors of the Federal Reserve System (or any successor), excluding the Reserve Percentage, which additional or increased costs would increase the cost of funding loans bearing interest at the LIBO Rate. In any such event, the affected Lender shall give the Administrative Borrower and Agent notice of such a determination and adjustment and Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, the Administrative Borrower may, by notice to such affected Lender (y) require such Lender to furnish to the Administrative Borrower a statement setting forth the basis for adjusting such LIBO Rate and the method for determining the amount of such adjustment, or (z) repay the LIBO Rate Loans with respect to which such adjustment is made (together with any amounts due under clause (b)(ii) above). (ii) In the event that any change in market conditions or any law, regulation, treaty, or directive, or any change therein or in the interpretation of application thereof, shall at any time after the date hereof, in the reasonable opinion of 52 any Lender, make it unlawful or impractical for such Lender to fund or maintain LIBO Rate Loans with any particular Interest Period or to continue such funding or maintaining, or to determine or charge interest rates at the LIBO Rate for LIBO Rate Loans with such Interest Period, such Lender shall give notice of such changed circumstances to Agent and Administrative Borrower and Agent promptly shall transmit the notice to each other Lender and (y) in the case of any LIBO Rate Loans with such Interest Period of such Lender that are outstanding, the date specified in such Lender's notice shall be deemed to be the last day of the Interest Period of such LIBO Rate Loans, and interest upon such LIBO Rate Loans of such Lender thereafter shall accrue interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR Option for LIBO Rate Loans with such Interest Period until such Lender determines that it would no longer be unlawful or impractical to do so. (e) No Requirement of Matched Funding. Anything to the contrary contained herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBO Rate. The provisions of this Section shall apply as if each Lender or its Participants had match funded any Obligation as to which interest is accruing at the LIBO Rate by acquiring eurodollar deposits for each Interest Period in the amount of the LIBO Rate Loans. 2.14. Capital Requirements. If, after the date hereof, any Lender determines that (i) the adoption of or change in any law, rule, regulation or guideline regarding capital requirements for banks or bank holding companies, or any change in the interpretation or application thereof by any Governmental Authority charged with the administration thereof, or (ii) compliance by such Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force of law), in the cases of the foregoing clauses (i) and (ii) occurring, effective or adopted on or after the date which is one hundred eighty (180) days prior to the Closing Date, will have the effect of reducing the return on such Lender's or such holding company's capital as a consequence of such Lender's Commitments hereunder to a level below that which such Lender or such holding company could have achieved but for such adoption, change, or compliance (taking into consideration such Lender's or such holding company's then existing policies with respect to capital adequacy and assuming the full utilization of such entity's capital) by any amount deemed by such Lender to be material, then such Lender may notify the Administrative Borrower and Agent thereof. Following receipt of such notice, Borrowers agree to pay such Lender on demand the amount of such reduction of return of capital as and when such reduction is determined (Agent to notify Administrative Borrower within ninety (90) days of making such determination), payable within 90 days after presentation by such Lender of a statement in the amount and setting forth in reasonable detail such Lender's calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest or demonstrable error). In determining such amount, such Lender may use any reasonable averaging and attribution methods. 53 2.15. Joint and Several Liability of Borrowers. (a) Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Agent and the Lenders under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations. (b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including, without limitation, any Obligations arising under this Section 2.15), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Person composing Borrowers without preferences or distinction among them. (c) If and to the extent that any of the Borrowers shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Persons composing Borrowers will make such payment with respect to, or perform, such Obligation. (d) The Obligations of each Person composing Borrowers under the provisions of this Section 2.15 constitute the absolute and unconditional, full recourse Obligations of each Person composing Borrowers, enforceable against each such Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or any other circumstances whatsoever. (e) Except as otherwise expressly provided in this Agreement, each Person composing Borrowers hereby waives notice of acceptance of its joint and several liability, notice of any Advances or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement). Each Person composing Borrowers hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any default by any Person composing Borrowers in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Person composing Borrowers. Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Agent or Lender with respect to the failure by any Person composing Borrowers to comply with any of its respective Obligations, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or 54 to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this Section 2.15 afford grounds for terminating, discharging or relieving any Person composing Borrowers, in whole or in part, from any of its Obligations under this Section 2.15, it being the intention of each Person composing Borrowers that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of such Person composing Borrowers under this Section 2.15 shall not be discharged except by performance and then only to the extent of such performance. The Obligations of each Person composing Borrowers under this Section 2.15 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Person composing Borrowers or any Agent or Lender. The joint and several liability of the Persons composing Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, constitution or place of formation of any of the Persons composing Borrowers or any Agent or Lender. (f) Each Person composing Borrowers represents and warrants to Agent and Lenders that such Borrower is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Person composing Borrowers further represents and warrants to Agent and Lenders that such Borrower has read and understands the terms and conditions of the Loan Documents. Each Person composing Borrowers hereby covenants that such Borrower will continue to keep informed of Borrowers' financial condition, the financial condition of other guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations. (g) The provisions of this Section 2.15 are made for the benefit of the Agent, the Lenders and their respective successors and assigns, and may be enforced by it or them from time to time against any or all of the Persons composing Borrowers as often as occasion therefor may arise and without requirement on the part of any such Agent, Lender, successor or assign first to marshal any of its or their claims or to exercise any of its or their rights against any of the other Persons composing Borrowers or to exhaust any remedies available to it or them against any of the other Persons composing Borrowers or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy. The provisions of this Section 2.15 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by any Agent or Lender upon the insolvency, bankruptcy or reorganization of any of the Persons composing Borrowers, or otherwise, the provisions of this Section 2.15 will forthwith be reinstated in effect, as though such payment had not been made. (h) Each of the Persons composing Borrowers hereby agrees that, if an Event of Default shall have occurred and be continuing, it will not enforce any of its rights of contribution or subrogation against the other Persons composing Borrowers with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to the Agent or the Lenders with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations (other than continuing indemnity or similar obligations) have been paid in full in cash. Any claim which any Borrower may have against any other Borrower with respect to any payments to any Agent or Lender hereunder or under any 55 other Loan Documents are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made by such Borrower to any other Borrower therefor. (i) Each of the Persons composing Loan Parties hereby agrees that, after the occurrence and during the continuance of any Event of Default, the payment of any amounts due with respect to the indebtedness owing by any Borrower to any other Loan Party is hereby subordinated to the prior payment in full in cash of the Obligations. Each Borrower hereby agrees that after the occurrence and during the continuance of any Event of Default, such Borrower will not demand, sue for or otherwise attempt to collect any indebtedness of any other Borrower owing to such Borrower until the Obligations shall have been paid in full in cash. If, notwithstanding the foregoing sentence, such Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee for the Lender Group, and such Borrower shall deliver any such amounts to Agent for application to the Obligations in accordance with Section 2.4(b). 3. CONDITIONS; TERM OF AGREEMENT. 3.1. Conditions Precedent to the Initial Extension of Credit. The obligation of the Lender Group (or any member thereof) to make the initial Advance (or otherwise to extend any credit provided for hereunder), is subject to the fulfillment, to the satisfaction of Agent, of each of the conditions precedent set forth below: (a) the Closing Date shall occur on or before September 16, 2003; (b) Agent shall have filed all financing statements required by Agent, duly executed by the applicable Borrowers, and Agent shall have received confirmation (satisfactory to Agent in its Permitted Discretion) of the filing of all such financing statements; (c) Agent shall have received each of the following documents, duly executed, and each such document shall be in full force and effect: (i) the Canadian Security Agreement, (ii) the Stock Pledge Agreements (other than the Hungarian Stock Pledge Agreement), together with all certificates representing the shares of Stock pledged thereunder, as well as Stock powers with respect thereto endorsed in blank, (iii) the Copyright Security Agreements, (iv) the Patent Security Agreement, (v) the Trademark Security Agreements, 56 (vi) the Control Agreements substantially in the form of Exhibits 3.1(c)(vi)(1), (2), (3), (4), (5), (6) and (7), respectively, with respect to accounts maintained with the following banks: (1) M and T; (2) SunTrust Bank; (3) CIBC; (4) BofA (other than with respect to the Designated Account); (5) Designated Account Bank; (6) Banc of America Securities LLC; and (7) Bank of America, N.A. (Pledging Unit), (vii) the Intercompany Subordination Agreement to be signed by all Loan Parties, (viii) the Fee Letter, (ix) the Disbursement Letter, and (x) the Perfection Certificate of each Loan Party other than the UK Guarantors and Geac Hungary; (d) Agent shall have received Collateral Access Agreements substantially in the forms of Exhibits 3.1(d)(1), (2), (3) and (4), respectively, with respect to (i) 66 Perimeter Center East, Atlanta, Georgia, (ii) 120 Turnpike Road, Southborough, MA, (iii) 1951 Kidwell Drive, Vienna, Virginia and (iv) 11 Allstate Parkway, Markham, Ontario; (e) Agent shall have received a Closing Date Compliance Certificate dated as of the Closing Date; (f) Agent shall have received a certificate from the Secretary of each Borrower attesting to the resolutions of such Borrower's Board of Directors authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents to which such Borrower is a party and authorizing officers of such Borrower or GCCL to execute the same; (g) Agent shall have received copies of each Borrower's Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary of such Borrower; (h) Agent shall have received a certificate of status with respect to each Borrower, dated within 10 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Borrower, which certificate shall indicate that such Borrower is in good standing as a corporation or other applicable organization in such jurisdiction (or the equivalent thereof under applicable law, if issued in such jurisdiction); (i) Agent shall have received certificates of status with respect to each Borrower, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdiction of each such Borrower's chief executive office or principal place of business (if different than the jurisdiction of organization of such Borrower), which certificates shall indicate that such Borrower is in good standing as a corporation or other applicable organization in such jurisdictions; 57 (j) Agent shall have received a certificate from the Secretary of each Guarantor or other Loan Party attesting to the resolutions of such Guarantor's or other Loan Party's Board of Directors authorizing its execution, delivery, and performance of the Loan Documents to which such Guarantor or other Loan Party is a party and authorizing officers of such Guarantor or other Loan Party to execute the same; (k) Agent shall have received copies of each Guarantor's and other Loan Party's Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary of such Guarantor or other Loan Party; (l) Agent shall have received a certificate of status with respect to each Guarantor, dated within 10 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Guarantor, which certificate shall attest to such Guarantor's corporate or other applicable organizational existence and to the extent such jurisdiction certifies as to good standing, such Guarantor's good standing as a corporation or other applicable organization in such jurisdiction; (m) Agent shall have received certificates of status with respect to each Canadian Guarantor and Other Guarantor, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Guarantor) in which its failure to be duly qualified or licensed would constitute a Material Adverse Change, which certificates shall attest, in the case of each Canadian Guarantor and NSULC, to such Person's registration as a corporation or other applicable organization in such jurisdiction, and, in the case of US LLC, its good standing as a limited liability company in such jurisdiction; (n) Agent shall have received the certificate(s) of insurance, together with a form of lender's loss payee endorsement (and the accompanying correspondence thereto previously provided to Agent) with respect to property coverage, as are required by Section 6.8; (o) Agent shall have received opinions of the Loan Parties' US (including appropriate local counsel opinions from the states of Georgia, Missouri and Colorado), Canadian (other than Nova Scotia), Nova Scotia and Hungarian counsel, and Agent's UK counsel, in the forms of Exhibits 3.1(o)(1), (2), (3), (4), (5), (6), (7), (8), respectively; (p) Agent shall have received the Hungarian Stock Pledge Agreement duly executed by each of Geac Hungary, 2019856 and GCL; (q) Borrowers shall have Liquidity of not less than $10,000,000 after giving effect to the initial extensions of credit hereunder, of which not more than $5,000,000 may be in the form of Qualified Cash Equivalents; (r) Agent shall have completed its business, legal, and collateral due diligence, including a collateral audit and review of Loan Parties' books and records and verification of Loan Parties' representations and warranties to the Lender Group, the results of which shall be satisfactory to Agent; 58 (s) Agent shall have received completed reference checks with respect to Loan Parties' senior management, the results of which are satisfactory to Agent in its sole discretion; (t) Agent shall have received an appraisal of certain Borrowers' Eligible Recurring Maintenance Revenue, the results of which shall be satisfactory to Agent, in its sole discretion; (u) Agent shall have received the initial Business Plan; (v) Borrowers shall have paid all Lender Group Expenses incurred through the Closing Date in connection with the transactions evidenced by this Agreement; (w) Agent shall have received copies of the executed written consents (to the extent required under the underlying contracts) of (i) IBM United Kingdom Financial Services Limited to GES's entering into and performing under this Agreement and (ii) Bank of Scotland to GCS's entering into and performing under this Agreement, each in form and substance reasonably satisfactory to Agent. (x) Agent shall have received the executed written consent of GCCL and GCL to US Partnership's entering into and performing under the Loan Agreement, in form and substance reasonably satisfactory to Agent. (y) Agent shall have received evidence satisfactory in Agent's Permitted Discretion that Borrowers have received all consents, licenses, approvals or evidence of other actions required by any Person, including any Governmental Authority, in connection with the execution and delivery by Borrowers of this Agreement or any other Loan Document or with the consummation of the transactions contemplated hereby and thereby; and (z) all other documents and legal matters in connection with the transactions contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in form and substance satisfactory to Agent. 3.2. Conditions Subsequent to the Initial Extension of Credit. The obligation of the Lender Group (or any member thereof) to continue to make Advances (or otherwise extend credit hereunder) is subject to the fulfillment, on or before the date applicable thereto, of each of the conditions subsequent set forth below (the failure by Borrowers to so perform or cause to be performed constituting an Event of Default): (a) Reserved. 3.3. Conditions Precedent to all Extensions of Credit. The obligation of the Lender Group (or any member thereof) to make any Advance (or to extend any other credit hereunder) shall be subject to the following conditions precedent: (a) the representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such 59 representations and warranties relate solely to an earlier date), provided that the representations set forth in Section 5.12 shall be true in all respects; (b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof; (c) no injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the extending of such credit shall have been issued and remain in force by any Governmental Authority against any Loan Party, Agent, any Lender, or any of their Affiliates; and (d) no Material Adverse Change shall have occurred since April 30, 2003. Notwithstanding the foregoing, Borrowers shall not be deemed to have made the representations and warranties contained in this Agreement or the other Loan Documents upon Agent's charging any amounts to the Loan Account as Advances pursuant to Section 2.6(d); provided, that if Borrowers fail to pay to Agent when due amounts owing under Section 2.6(g) and Agent charges Borrowers' Loan Account in accordance with Section 2.6(g), Borrowers shall be deemed to have made the representations and warranties contained in this Agreement and the other Loan Documents as contemplated by clause (a) above upon Agent's charging such amounts to the Loan Account as Advances. 3.4. Term. This Agreement shall become effective upon the execution and delivery hereof by the Loan Parties, Agent, and the Lenders and, subject to Section 9, shall continue in full force and effect for a term ending on September 9, 2006 (the "Maturity Date"). 3.5. Effect of Termination. On the date of termination of this Agreement, all Obligations (including contingent reimbursement obligations of Borrowers with respect to any outstanding Letters of Credit) immediately shall become due and payable without notice or demand (including either (i) providing cash collateral to be held by Agent for the benefit of those Lenders with a Revolver Commitment in an amount equal to 102% of the then extant Letter of Credit Usage (such cash collateral, together with any other cash collateral for Letters of Credit from time to time delivered to Agent by Borrowers to Agent under this Agreement, to be maintained by Agent in an interest-bearing account), or (ii) causing the original Letters of Credit to be returned to the Issuing Lender). No termination of this Agreement, however, shall relieve or discharge Borrowers of their duties, Obligations, or covenants hereunder and the Agent's Liens shall remain in effect until all Obligations have been fully and finally discharged and the Lender Group's obligations to provide additional credit hereunder have been terminated. When this Agreement has been terminated and all of the Obligations (other than indemnity or similar obligations that by their terms survive any termination of this Agreement) have been fully and finally discharged and the Lender Group's obligations to provide additional credit under the Loan Documents have been terminated irrevocably, Agent will, at Borrowers' sole expense, promptly execute and deliver any UCC termination statements, lien releases, releases of intellectual property security interests, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, the Agent's Liens and all notices of security interests and liens previously filed by Agent with respect to the Obligations. 60 3.6. Early Termination or Reduction in Maximum Revolver Amount by Borrowers. Borrowers have the option, at any time upon at least 30 days prior written notice by the Administrative Borrower to Agent, to (x) terminate this Agreement by paying to Agent, for the benefit of the Lender Group, in cash, on the date set forth as the date of termination of this Agreement in such notice, the Obligations (including either (i) providing cash collateral to be held by Agent for the benefit of those Lenders with a Revolver Commitment in an amount equal to 102% of the then extant Letter of Credit Usage (such cash collateral, together with any other cash collateral for Letters of Credit from time to time delivered to Agent by Borrowers under this Agreement to be maintained by Agent in an interest bearing account), or (ii) causing the original Letters of Credit to be returned to the Issuing Lender), in full, together with the Applicable Prepayment Premium (to be allocated by Agent based upon letter agreements between Agent and individual Lenders, and without duplication of any Applicable Prepayment Premium paid in respect of any prior reduction pursuant to clause (y) below) or (y) permanently reduce the Maximum Revolver Amount in $1,000,000 increments to a Maximum Revolver Amount of not less than $15,000,000, by paying to the Agent, for the benefit of the Lender Group, in cash, the Applicable Prepayment Premium on the reduced portion of the Maximum Revolver Amount so reduced (to be allocated by the Agent based upon letter agreements between Agent and individual Lenders), and without duplication of any Applicable Prepayment Premium paid in respect of any prior reduction pursuant to this clause (y). In the event of the termination of this Agreement and repayment of the Obligations at any time prior to the Maturity Date for any other reason, including (a) termination upon the election of the Required Lenders to terminate after the occurrence of an Event of Default (other than financial covenant default), (b) foreclosure and sale of Collateral, (c) sale of the Collateral in any Insolvency Proceeding, or (d) restructure, reorganization or compromise of the Obligations by the confirmation of a plan of reorganization, or any other plan of compromise, restructure, or arrangement in any Insolvency Proceeding, then, in view of the impracticability and extreme difficulty of ascertaining the actual amount of damages to the Lender Group or profits lost by the Lender Group as a result of such early termination, and by mutual agreement of the parties as to a reasonable estimation and calculation of the lost profits or damages of the Lender Group, Borrowers shall pay the Applicable Prepayment Premium to Agent (to be allocated based upon letter agreements between Agent and individual Lenders), measured as of the date of such termination. Notwithstanding the foregoing, the Applicable Prepayment Premium will not be charged to the Borrower in connection with a voluntary repayment (i.e., not a repayment from proceeds realized by the Agent upon exercise of its remedies hereunder) or a refinancing of the Obligations by Borrowers during the pendency of a financial covenant default under Section 7.18. 3A. GUARANTY PROVISIONS 3A.1. Guaranty. The Guarantors hereby jointly and severally, absolutely, unconditionally and irrevocably: (a) guarantee the full and punctual payment when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all Obligations of the Borrowers now or hereafter existing, whether for principal, interest (including interest accruing at the then applicable rate provided in the Loan Agreement after the occurrence of any Default set forth in the Loan Agreement, whether or not a claim for post-filing or post-petition interest is allowed under applicable law following the institution of a proceeding under 61 bankruptcy, insolvency or similar laws), fees, expenses or otherwise (including all such amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 USC. ss.362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 USC ss.502(b) and ss.506(b) or under similar provisions of applicable bankruptcy or insolvency laws of other relevant jurisdictions); and (b) indemnify and hold harmless the Agent and each member of the Lender Group and any other holder of Obligations for any and all costs and expenses (including reasonable attorneys' fees and expenses) incurred by the Agent in enforcing any rights under this guaranty (the "Guaranty"); provided, however, each Guarantor shall only be liable under this Guaranty for the maximum amount of such liability that can be hereby incurred without rendering this Guaranty, as it relates to each Guarantor, voidable under applicable law relating to bankruptcy, insolvency or creditors' rights generally, and not for any greater amount. This Guaranty constitutes a guaranty of payment when due and not of collection, and each of the Guarantors specifically agrees that it shall not be necessary or required that the Agent exercise any right, assert any claim or demand or enforce any remedy whatsoever against any Loan Party or any other Person before or as a condition to the obligations of any of the Guarantors hereunder. 3A.2. Reinstatement, etc. The Guarantors hereby agree that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Obligations is invalidated, declared to be fraudulent or preferential, set aside, rescinded or must otherwise be restored by the Agent, including upon the occurrence of any Default or Event of Default or otherwise, all as though such payment had not been made. 3A.3. Guaranty Absolute, etc. This Guaranty shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full force and effect until the Final Payment Date. The Guarantors guarantee that the Obligations will be paid strictly in accordance with the terms of each Loan Document under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Agent with respect thereto. The liability of the Guarantors under this Guaranty shall be absolute, unconditional and irrevocable irrespective of: (a) any lack of validity, legality or enforceability of any other Loan Document; (b) the failure of the Agent: (i) to assert any claim or demand or to enforce any right or remedy against any Loan Party or any other Person (including any other guarantor) under the provisions of any Loan Document or otherwise; or (ii) to exercise any right or remedy against any other guarantor (including any of the Guarantors) of any Obligations; 62 (c) any change in the time, manner or place of payment of, or in any other term of, all or any part of the Obligations, or any other extension, compromise or renewal of any Obligation; (d) any reduction, limitation, impairment or termination of any Obligations for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Guarantors hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, any Obligations or otherwise; (e) any amendment to, rescission, waiver, or other modification of, or any consent to or departure from, any of the terms of any Loan Document; (f) any addition, exchange or release of any collateral or of the Guarantors of the Obligations, or any surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition to, or consent to or departure from, any other guaranty held by the Agent securing any of the Obligations; or (g) any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, any loan party, any surety or any guarantor. 3A.4. Setoff. The Guarantors hereby irrevocably authorize the Lenders, without the requirement that any notice be given to any of the Guarantors (such notice being expressly waived by the Guarantors), upon the occurrence and during the continuance of any Event of Default, to set-off and appropriate and apply to the payment of the Obligations (whether or not then due, and whether or not the Agent has made any demand for payment of the Obligations), any and all balances, claims, credits, deposits (general or special, time or demand, provisional or final), accounts or money of the Guarantors then or thereafter maintained with the Agent and apply the same as set forth herein. The Agent agrees to notify the Guarantors after any such setoff and application made by the Agent; provided, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Agent under this Section are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which the Agent may have. 3A.5. Waiver, etc. The Guarantors hereby waive promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guaranty and any requirement that the Agent protect, secure, perfect or insure any Lien, or any property subject thereto, or exhaust any right or take any action against any loan party or any other Person (including any other guarantor) or entity or any collateral securing the Obligations, as the case may be. 3A.6. Postponement of Subrogation, etc. The Guarantors agree that, if an Event of Default shall have occurred and be continuing, they will not exercise any rights which they may acquire by way of rights of subrogation under any Loan Document to which any of them are a party, nor shall the Guarantors seek or be entitled to seek any contribution or reimbursement from any Loan Party, in respect of any payment made under any Loan Document or otherwise, 63 until following the date on which the Obligations (other than continuing indemnity and similar obligations which by their terms survive termination of this Agreement) shall have been finally indefeasibly and fully paid and performed and the Commitments shall have been terminated (the "Final Payment Date"). Any amount paid to any Guarantor on account of any such subrogation rights prior to the Final Payment Date shall be held in trust for the benefit of the Agent and shall immediately be paid and turned over to the Agent in the exact form received by such Guarantor (duly endorsed in favor of the Agent, if required), to be credited and applied against the Obligations, whether matured or unmatured. In furtherance of the foregoing, at all times prior to the Final Payment Date, the Guarantors shall refrain from taking any action or commencing any proceeding against any Loan Party (or its successors or assigns, whether in connection with a bankruptcy proceeding or otherwise) to recover any amounts in respect of payments made under this Guaranty to the Agent. 4. CREATION OF SECURITY INTEREST. 4.1. Grant of Security Interest. (a) Each Borrower (excluding GCCL and Geac Hungary from all uses of such term in this Section 4) and the US LLC hereby assigns (except with respect to Collateral consisting of intellectual property), pledges, hypothecates, charges, delivers, transfers and grants to Agent, for the benefit of the Lender Group, a continuing security interest in all of its right, title, and interest in all currently existing and hereafter acquired or arising Collateral in order to secure prompt repayment of any and all of the Obligations in accordance with the terms and conditions of the Loan Documents and in order to secure prompt performance by each Borrower and the US LLC of each of their covenants and duties under the Loan Documents. The Agent's Liens in and to the Collateral shall attach to all Collateral without further act on the part of Agent or the Borrowers or the US LLC. Anything contained in this Agreement or any other Loan Document to the contrary notwithstanding, except for Permitted Dispositions, neither the Borrowers nor the US LLC have any authority, express or implied, to dispose of any item or portion of the Collateral. (b) The Borrowers and the US LLC will remain liable under the contracts and agreements included in the Collateral to the extent set forth therein, and will perform all of their duties and obligations under such contracts and agreements to the same extent as if this Loan, Guaranty and Security Agreement had not been executed. The exercise by the Agent or any member of the Lender Group of any rights hereunder will not release any of the Borrowers or the US LLC from any of their duties or obligations under any such contracts or agreements included in the Collateral. Neither the Agent nor any member of the Lender Group will have any obligation or liability under any contracts or agreements included in the Collateral by reason of this Agreement, nor will either the Agent or any member of the Lender Group be obligated to perform any of the obligations or duties of the Borrowers or the US LLC thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. 4.2. Control of Collateral. Except with respect to the Disbursement Accounts, Securities Accounts as permitted in Section 7.17, and any amounts held in any thereof, if from time to time any Collateral, including any proceeds or supporting obligations, consists of property or rights in which the perfection or priority of Agent's security interest is dependent 64 upon or enhanced by Agent's gaining control of such Collateral, the applicable Borrower or US LLC shall promptly notify Agent and, at Agent's request, promptly deliver the appropriate Control Agreements (in each case consistent with the requirements of Section 2.7) or take such actions as may be reasonably necessary to give Agent control over such Collateral as provided in the Code. 4.3. Negotiable Collateral. If from time to time any Collateral, including any proceeds, is evidenced by or consists of letters of credit, Instruments, Documents, Goods covered by Documents, Investment Property or Chattel Paper, and if perfection or priority of Agent's security interest in such Collateral is dependent on or enhanced by possession, the applicable Borrower or the US LLC, promptly upon the request of Agent, shall endorse and deliver physical possession of such Collateral to Agent. 4.4. Collection of Accounts, General Intangibles, and Negotiable Collateral. At any time after the occurrence and during the continuation of an Event of Default, Agent or Agent's designee may (a) notify Account Debtors of any Borrower or the US LLC that the Accounts, Chattel Paper, or General Intangibles have been assigned to Agent or that Agent has a security interest therein, or (b) collect the Accounts, Chattel Paper, or General Intangibles directly and charge the collection costs and expenses to the Loan Account as Lender Group Expenses as provided in Section 2.6(d). Each Borrower and the US LLC shall promptly deliver any Collections that it receives to Agent or a Controlled Account Bank in their original form as received by the applicable Borrower or the US LLC and, pending such delivery, shall hold such Collections in trust for the Lender Group, as the Lender Group's trustee. 4.5. Delivery of Additional Documentation Required. At any time upon the request of Agent, the Borrowers and the US LLC shall execute and deliver to Agent, any and all financing statements (including, without limitation, any amendments thereto and any "in lieu" continuation statements), security agreements, pledges, assignments, endorsements of certificates of title, and all other documents (the "Additional Documents") that Agent may request in its Permitted Discretion, each in form and substance satisfactory to Agent, to perfect and continue perfected or to better perfect the Agent's Liens in the Collateral (whether now owned or hereafter arising or acquired), and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents; provided that, notwithstanding any provision of the Loan Documents to the contrary, neither the Borrowers and US LLC nor any other Loan Party shall be required to effect or execute, deliver or (if applicable) file (i) any bailee acknowledgements, (ii) any Collateral Access Agreements except as contemplated by Section 3.1(d) or Section 6.9, (iii) any intellectual property registrations, applications, security filings or documentation related thereto except as contemplated by the last sentence of this Section 4.5, or (iv) any Control Agreements with respect to the Disbursement Accounts Securities Accounts as permitted in Section 7.17. To the maximum extent permitted by applicable law, each Borrower and the US LLC authorizes Agent (in the event any Borrower or the US LLC fails to do so upon request of Agent referred to in the preceding sentence) to execute any such Additional Documents in the applicable Borrower's or the US LLC's name and authorizes Agent to file such executed Additional Documents in any appropriate filing office. Without limiting the foregoing, the Borrowers and the US LLC shall (a) give the Agent prompt written notice of any Commercial Tort Claim of the Borrowers or the US LLC not specifically identified herein and any Letter of Credit Right of any Borrower or the US LLC and the Borrowers and the US LLC shall grant to 65 the Agent, for the benefit of the Lender Group and any other holder of Obligations, a security interest in any such Commercial Tort Claim or Letter of Credit Right and the proceeds thereof, and (b) at the times and in the manner set forth in Sections 6.17 and 6.19 of this Agreement, (i) provide Agent with a report of new patent, copyright and trademark registrations and applications therefor by the Borrowers or the US LLC during the prior period, (ii) cause to be prepared, executed, and delivered to Agent supplemental schedules to the applicable Loan Documents to identify such patent, copyright and trademark registrations and applications therefor as being subject to the security interests created thereunder, and (iii) execute and deliver to Agent at Agent's request supplemental Patent, Trademark or Copyright Security Agreements with respect to such patent, trademark or copyright registrations and applications therefor for filing with the appropriate filing offices in the United States and Canada. 4.6. Power of Attorney. Each Borrower and the US LLC hereby irrevocably makes, constitutes, and appoints Agent (and any of Agent's officers, employees, or agents designated by Agent) as such Borrower's and the US LLC's true and lawful attorney, with power to (a) if such Borrower or the US LLC refuses to, or fails timely to execute and deliver any of the documents described in Section 4.4, sign the name of such Borrower or the US LLC on any of the documents described in Section 4.4, (b) at any time after an Event of Default has occurred and is continuing, (i) sign such Borrower's or the US LLC's name on any invoice or bill of lading relating to the Collateral, drafts against Account Debtors, or notices to Account Debtors, (ii) send requests for verification of Accounts, (iii) endorse such Borrower's or US LLC's name on any Collection item that may come into the Lender Group's possession, (iv) make, settle, and adjust all claims under such Borrower's or the US LLC's policies of insurance and make all determinations and decisions with respect to such policies of insurance, (v) settle and adjust disputes and claims respecting the Accounts, Chattel Paper, or General Intangibles directly with Account Debtors, for amounts and upon terms that Agent determines to be reasonable, and Agent may cause to be executed and delivered any documents and releases that in connection therewith Agent determines to be necessary, and (vi) cause copies of any Books in the possession of any Person (or if copies are not available, the originals of such Books) to be delivered to Agent. The appointment of Agent as each Borrower's and the US LLC's attorney, and each and every one of its rights and powers, being coupled with an interest, is irrevocable until all of the Obligations (other than continuing indemnity and similar obligations) have been fully and finally repaid and performed and the Lender Group's obligations to extend credit hereunder are terminated. 4.7. Control Agreements. No Control Agreement in respect of any Securities Accounts shall be modified by Borrowers or the US LLC without the prior written consent of Agent (not to be unreasonably withheld). Upon the occurrence and during the continuance of an Event of Default, Agent may notify any securities intermediary to liquidate the applicable Securities Account or any related Investment Property maintained or held thereby and remit the proceeds thereof to the Agent's Account for application to the Obligations in accordance with Section 2.4(b). 4.8. Right to Inspect; Inventories, Appraisals and Audits. Agent and each Lender (through any of their respective officers, employees, or agents) shall have the right, from time to time hereafter, upon reasonable prior notice (except during the pendency of an Event of Default, during which no prior notice is required), and during normal business hours, to inspect the Books and to check, test, and appraise the Collateral in order to verify any Borrower's or the US LLC's 66 financial condition or the amount, quality, value, condition of, or any other matter relating to, the Collateral. Without limiting the generality of the foregoing: (a) Agent may from time to time, upon reasonable prior notice (except during the pendency of an Event of Default, during which no prior notice is required), and during normal business hours, conduct commercial finance audits (in each event, at the Borrowers' expense) of Borrowers' or the US LLC's Books, provided that so long as no Event of Default has occurred and is continuing, the Borrowers shall not be obligated to pay the fees and expenses of more than four financial audits during any period of twelve (12) consecutive months. (b) At Borrowers' expense, Agent may conduct, or cause to be conducted, upon reasonable prior notice (except during the pendency of an Event of Default, during which no prior notice is required), and during normal business hours, appraisals of the Borrowers' or the US LLC's business including the Eligible Recurring Maintenance Revenue component thereof, provided that so long as no Event of Default has occurred and is continuing, the Borrowers shall not be obligated to pay the fees and expenses of more than one such appraisal during any period of twelve (12) consecutive months. 4.9. Validity, etc. (a) This Loan, Guaranty and Security Agreement creates a valid security interest in the Collateral securing the payment of the Obligations. The Borrowers and the US LLC have filed or caused to be filed all statements in the appropriate offices therefor and have taken all of the actions necessary to create perfected first-priority security interests in any Collateral in which a security interest may be perfected by the filing of a financing statement under the Code (subject only to Permitted Liens). (b) The Stock Pledge Agreements collectively provide Agent, for its benefit and the benefit of the Lenders, first priority perfected security interests in and to all of the Stock of all of the Loan Parties other than the Stock of GCCL, the preferred stock of Extensity, de minimis numbers of shares of Stock issued to directors, officers or other persons solely as and to the extent required by applicable law, and (after the Closing Date) other Stock of the Loan Parties not owned by any Loan Party or any of its Subsidiaries as permitted by this Agreement. 4.10. Continuing Security Interest. This Agreement shall create a continuing security interest in the Collateral and shall: (a) remain in full force and effect until the date on which the Obligations (other than continuing indemnity and similar obligations) shall have been finally, indefeasibly and fully paid and performed and the commitments shall have been terminated, (b) be binding upon the Borrowers and the US LLC, their successors, transferees and assigns, and (c) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Agent and each other member of the Lender Group and any other holder of Obligations. 67 5. REPRESENTATIONS AND WARRANTIES. In order to induce the Lender Group to enter into this Agreement, the Parent, on behalf of itself and each of the other Loan Parties, and each of the other Loan Parties, only with respect to itself, make the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects, as of the date hereof, and shall be true, correct, and complete, in all material respects, as of the Closing Date, and at and as of the date of the making of each Advance (or other extension of credit) made thereafter, as though made on and as of the date of such Advance (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement: 5.1. No Encumbrances. Each Borrower and the US LLC has good and indefeasible title to, or valid leasehold interests in, or other rights to use, or otherwise validly owns all of its property composing the Collateral and its Real Property, free and clear of Liens except for Permitted Liens. 5.2. Accounts. The Eligible Recurring Maintenance Revenue consists of revenue recognized in accordance with GAAP and generated in the ordinary course of the US Borrowing Base Companies' business. 5.3. Reserved. 5.4. Equipment. All of each Borrower's Equipment that is material to the conduct of its business is used or held for use in the Borrowers' business and is fit for such purposes, ordinary wear and tear excepted. 5.5. Location of Inventory, Equipment and Books. Except as set forth on Schedule 5.5, no material portion of the Borrowers' (other than Geac Hungary's) Inventory, Equipment or Books is stored with a bailee, warehouseman, or similar party. The Borrowers' (other than Geac Hungary's) material Inventory and Equipment, if any, and Books, are located only at the locations identified on Schedule 5.5. 5.6. Reserved. 5.7. Legal Status. Each Loan Party represents and warrants that, as of the Closing Date, (a) each Loan Party's exact legal name is that indicated on the applicable Perfection Certificate (if any) and on the signature page hereof or, in the case of the UK Guarantors and Geac Hungary, as set forth on Schedule 5.7 hereof; (b) each Loan Party is an organization of the type, and is organized in the jurisdiction, set forth in the applicable Perfection Certificate (if any) or in the case of the UK Guarantors and Geac Hungary, as set forth on Schedule 5.7; (c) the applicable Perfection Certificate or Schedule 5.7 accurately sets forth such Loan Party's organizational identification number as relevant to the perfection of the Agent's Lien or accurately states that such Loan Party has none; (d) the applicable Perfection Certificate or Schedule 5.7 accurately sets forth such Loan Party's place of business or, if more than one, its chief executive office, as well as such Loan Party's mailing address, if different; and (e) all other information set forth on the Perfection Certificate (if any) pertaining to such Loan Party is accurate and complete in all material respects as of the date thereof and as of the Closing Date. 68 5.8. Due Organization and Qualification; Subsidiaries. (a) Each Loan Party is duly organized and existing and, where applicable, in good standing under the laws of the jurisdiction of its organization and, where applicable, qualified to do business in any jurisdiction where the failure to be so qualified reasonably could be expected to have a material adverse effect on such Loan Party. (b) Set forth on Schedule 5.8(b), is a complete and accurate description of the issued and outstanding capital Stock of each Loan Party (other than GCCL), by class, as of the Closing Date. Other than as described on Schedule 5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of each Loan Party's (other than GCCL's) capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Other than as described on Schedule 5.8(b), as of the Closing Date, no Loan Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8(c), is a complete and accurate list of each Loan Party's direct and indirect Subsidiaries (other than the Loan Parties), as of the Closing Date, showing, as of the Closing Date: (i) the respective jurisdictions of such Subsidiaries' organization and (ii) the percentage of the outstanding shares of capital stock owned directly or indirectly by the applicable Loan Party. All of the outstanding capital stock of each Subsidiary of Parent that is a Loan Party has been validly issued and is fully paid and non-assessable. (d) Reserved. (e) Except as set forth on Schedule 5.8(e), as of the Closing Date, the aggregate value of the assets and the aggregate value of the liabilities of the Dormant Subsidiaries do not, respectively, exceed $1,000,000. Except as set forth on Schedule 5.8(e), as of the Closing Date, the Dormant Subsidiaries do not conduct any business activities or operations or report any revenue. The Dormant Subsidiaries have filed all necessary tax returns and paid all required taxes except where the failure to so file or pay could not reasonably be expected to result in a Material Adverse Change or to have a material adverse effect on the Loan Parties taken as a whole. (f) As of the Closing Date, the organization chart attached hereto as Schedule 5.8(f) is an accurate depiction of the organizational structure of GCCL and each of its Subsidiaries. 5.9. Due Authorization; No Conflict. (a) As to each Loan Party, the execution, delivery, and performance by such Loan Party of this Agreement and the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party. (b) Except as set forth on Schedule 5.9, as to each Loan Party, the execution, delivery, and performance by such Loan Party of this Agreement and the Loan Documents to which it is a party does not and will not (i) violate any provision of federal, state, provincial, 69 territorial or local law or regulation applicable to such Loan Party, the Governing Documents of such Loan Party, or any order, judgment, or decree of any court or other Governmental Authority binding on such Loan Party, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation of such Loan Party, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of such Loan Party, other than Permitted Liens, or (iv) other than as has been obtained on or prior to the Closing Date, require any approval of such Loan Party's shareholders or any approval or consent of any Person under any material contractual obligation of such Loan Party. (c) Except as set forth on Schedule 5.9, other than the filing of financing statements under the Code or under applicable foreign statutes, the filing of particulars of registered charges with Companies' House in the UK, intellectual property security filings, and other security filings similar to any of the foregoing, and other than post-Closing filings and disclosures required under any applicable securities laws, the execution, delivery, and performance by each Loan Party of this Agreement and the Loan Documents to which such Loan Party is a party does not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority other than has been obtained or made. (d) As to each Loan Party, this Agreement and the other Loan Documents to which such Loan Party is a party, and all other documents contemplated hereby and thereby, when executed and delivered by such Loan Party will be the legally valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws relating to or limiting creditors' rights generally, and by general principles of equity. (e) The Agent's Liens are validly created, perfected, to the extent such Liens can be perfected by filing financing statements under the Code or other applicable foreign statutes (except, in the case of Collateral described in Section 6.17 and 6.19, with respect to Collateral consisting of intellectual property rights which require additional filings, to the extent such intellectual property rights have arisen since the effective date of the last update submitted by the Borrowers pursuant to Section 6.17), and first priority Liens, subject only to Permitted Liens. 5.9A Special Representations Concerning GEAC Hungary. (a) Geac Hungary is a company limited by shares duly organized and existing under the laws of Hungary. (b) Geac Hungary has no indebtedness or creditors (for borrowed money or otherwise) other than (in each case) in the ordinary course of business carried out in a manner consistent with the covenants set forth in Section 6.20. 70 (c) There are no Liens (other than Permitted Liens) on any of Geac Hungary's property or assets, or any part thereof, or any agreements or undertakings by Geac Hungary to grant any such Liens. (d) All of the shares representing 100% of the registered capital of Geac Hungary have been pledged to Agent pursuant to the Hungarian Stock Pledge Agreement relating to Geac Hungary under Sections 270-271 of the Civil Code of the Republic of Hungary, and, to the extent registered, printed and available for physical delivery under applicable Hungarian law, certificates evidencing same have been delivered to the Agent in accordance with the Hungarian Stock Pledge Agreement. 5.10. Litigation. (a) As of the Closing Date, other than those matters disclosed on Schedule 5.10(a) and immaterial matters where the amount in controversy is less than $250,000, there are no actions, suits, or proceedings pending or, to the best knowledge of the Loan Parties, threatened against any Loan Party. Schedule 5.10(a) includes, as applicable, for each matter set forth thereon as of the Closing Date (i) the name, docket number and jurisdiction for such matter, (ii) the status of such proceeding, and (iii) any reasonably possible insurance coverage of the Loan Parties with respect thereto (it being understood that the determination of such coverage is not within the Loan Parties' control), the insurance carrier, the policy number and the deductible amount associated with such insurance policy. (b) There are no actions, suits or proceedings pending or, to the best knowledge of the Loan Parties, threatened against any of the Loan Parties or their Subsidiaries, that question the validity or enforceability of this Agreement or any other Loan Document or any action taken by any of the Loan Parties in connection therewith. Other than matters disclosed on Schedule 5.10(a) and other than matters as to which there is not a reasonable possibility of a determination adverse to one or more Loan Parties, there are no actions, suits or proceedings pending or, to the best knowledge of the Loan Parties, threatened against any of the Loan Parties or their Subsidiaries that if adversely determined could reasonably be expected to have a material adverse effect on the US Borrowing Base Companies taken as a whole or the Loan Parties taken as a whole. (c) Schedule 5.10(c) lists all of the Borrowers' Commercial Tort Claims existing as of the date hereof. 5.11. No Material Adverse Change. All consolidated financial statements (excluding any Business Plan or Projections) relating to the Loan Parties and their Subsidiaries that have been delivered by any Loan Party to the Lender Group (either on or before the Closing Date or pursuant to Section 6.3) have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties' and their Subsidiaries' consolidated financial condition as of the date thereof and consolidated results of operations for the period then ended. There has not been a Material Adverse Change since April 30, 2003. 71 5.12. Fraudulent Transfer. (a) Each of (i) the US Borrowing Base Companies and (ii) the Loan Parties, in both instances taken together as a group on a consolidated basis, are Solvent. (b) No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to "hinder, delay, or defraud either present or future creditors" of any Loan Party, as such phrase is commonly interpreted in commercial transactions of the type contemplated by the Loan Documents. 5.13. Employee Benefits. As of the Closing Date, none of the Loan Parties, any of their Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any Benefit Plan subject to ERISA. 5.14. Environmental Condition. Except as set forth on Schedule 5.14, (a) to the Loan Parties' knowledge, none of the Loan Parties' properties or assets has ever been used by the Loan Parties or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such production, storage, handling, treatment, release or transport was in violation, in any material respect, of applicable Environmental Law, (b) to the Loan Parties' knowledge, none of the Loan Parties' properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) none of the Loan Parties have received notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by the Loan Parties, and (d) none of the Loan Parties have received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal, territorial, provincial or state governmental agency concerning any action or omission by any Loan Party resulting in the releasing or disposing of Hazardous Materials into the environment. 5.15. Brokerage Fees. The Loan Parties have not utilized the services of any broker or finder in connection with obtaining financing from the Lender Group under this Agreement and no brokerage commission or finders fee is payable by any Loan Party in connection herewith. 5.16. Intellectual Property. Each of the Loan Parties owns, or holds valid licenses in or other rights to use, all patents, trademarks, trade names, and copyrights that are necessary to the conduct of its business as currently conducted in all material respects. Attached hereto as Schedule 5.16 is a true, correct and complete listing, as of the date of this Agreement, of all patents, patent applications, trademark registrations and applications therefor, and copyright registrations and applications therefor as to which any Loan Party is the owner, or is an exclusive licensee and has recorded its license with any Governmental Authority, and which are material to its business as currently conducted. The copyright registrations and applications of Borrowers, Canadian Guarantors and/or the IP Subsidiary in the United States Copyright Office (including, as of the date hereof, such registrations and applications set forth on Schedule 5.16) constitute (but are not limited to) registrations or applications for copyrights owned by Borrowers, Canadian Guarantors and/or the IP Subsidiary in Material Software Products (it being understood that such copyright registrations and applications may, but need not, cover the current versions of 72 any Material Software Products). The term "Material Software Products" shall mean software products (in the form generally marketed to the Loan Parties' customers) owned by Borrowers, Canadian Guarantors and/or the IP Subsidiary that, in the aggregate, generate (i) at any time of determination from and after the Closing Date to the date that is six months after the Closing Date, at least sixty percent (60%) of the Eligible Recurring Maintenance Revenue of the US Borrowing Base Companies for the period of twelve (12) consecutive months ended most recently prior to such time, and (ii) at any time of determination from and after the date that is six months after the Closing Date, at least sixty-five percent (65%) of the Eligible Recurring Maintenance Revenue of the US Borrowing Base Companies for the period of twelve (12) consecutive months ended most recently prior to such time. 5.17. Leases. Each Borrower enjoys peaceful and undisturbed possession under all leases material to the business of such Borrower and to which such Borrower is a party or under which such Borrower is operating. All of such leases are valid and subsisting and, except as set forth on Schedule 5.17, no material default by any Borrower exists under any of them. 5.18. Controlled Accounts and DDAs. Set forth on Schedule 5.18 are all of the Controlled Accounts and other DDAs, if any, of each Borrower (other than Geac Hungary), each Canadian Guarantor and each Other Guarantor, in each case as of the Closing Date, including, with respect to each depositary (i) the name and address of that depositary, and (ii) the account numbers of the accounts maintained with such depositary. 5.19. Compliance with Laws. The Loan Parties are each in material compliance with the requirements of all applicable domestic and foreign laws (including where applicable, the provisions of the Fair Labor Standards Act), and governmental rules and regulations, the non-compliance with any of which could reasonably be expected to have a materially adverse effect the value of the Collateral. 5.20. Indebtedness. Set forth on Schedule 7.1 is a true and complete list of all Indebtedness of each Loan Party outstanding immediately prior to the Closing Date that is to remain outstanding after the Closing Date and that does not otherwise constitute Permitted Indebtedness (by reason of the provisions of Section 7.1 other than Section 7.1(b)). Such Schedule accurately reflects the aggregate principal amount of such Indebtedness. 5.21. Payment of Taxes. Except as set forth on Schedule 5.21, as of the Closing Date, all federal, state, local or provincial (or in each instance, Canadian or UK law equivalents) income tax returns of the Borrower, the Canadian Guarantors or the UK Guarantors due before the Closing Date have been filed, and all amounts due thereunder have been paid. Except where the failure to do so could not reasonably be expected to have a Material Adverse Change, (a) all tax and information returns required to be filed by each of the Loan Parties have been timely filed, (b) all taxes upon the Loan Parties or their respective properties, assets, income and franchises (including real property taxes and payroll taxes) but not subject of a Permitted Protest have been paid when due (giving effect to any applicable extensions), (c) all taxes required to be withheld or collected by any Loan Party have been remitted to the relevant Governmental Authority when due (giving effect to any applicable extensions), and (d) adequate reserves have been established on the books of the Loan Parties in accordance with GAAP for all taxes not yet due. 73 5.22. Complete Disclosure. All factual information (taken as a whole) furnished by or on behalf of the Loan Parties in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents, but excluding any Business Plans, Projections and pro forma financial information) for purposes of or in connection with this Agreement, the other Loan Documents or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of the Loan Parties in writing to Agent or any Lender will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided, provided that, with respect to any such information originating from third parties, the Loan Parties represent only that all such information is or will be true, complete and accurate in every material respect, to the best of the Loan Parties' knowledge. On the Closing Date, the Business Plan delivered pursuant to Section 3.1(u) represents, and as of the date on which any other Business Plan, Projections or pro forma financial information is delivered to Agent, such additional Business Plans, Projections or pro forma financial information represent Borrowers' good faith best estimate of their future performance for the periods covered thereby. 5.23. Consents. All consents required in connection with the execution and performance of this Agreement under any material contracts to which any of the Loan Parties is a party have been obtained and are in effect. 5.24. Best Interests. It is in the best interests of the Guarantors to execute this Agreement inasmuch as the Guarantors will, as a result of the provisions of this Agreement which make proceeds of the Advances available for working capital and other financing needs of the Guarantors, derive substantial direct and indirect benefits from the Advances made from time to time to the Borrowers by the Agent and the Lenders pursuant to this Agreement, and the Guarantors agree that the Agent and the Lenders are relying on this representation in agreeing to make Advances to the Borrowers. 6. AFFIRMATIVE COVENANTS. Parent, on behalf of itself and each of the other Loan Parties, and each of the other Loan Parties, only with respect to itself, covenants and agrees that, so long as any credit hereunder shall be available and until full and final payment of the Obligations (excluding any continuing indemnity or similar obligations that survive the termination of the Loan Documents), the Loan Parties shall and shall cause each of their respective Subsidiaries that are Loan Parties to do all of the following: 6.1. Accounting System. Maintain a system of accounting that enables the Loan Parties to produce financial statements in accordance with GAAP and maintain records pertaining to the Collateral that contain information as from time to time reasonably may be requested by Agent. 6.2. Collateral Reporting. Cause the Administrative Borrower to deliver to Agent (and if so requested by Agent, with copies for each Lender), with the documents set forth on Exhibit 6.2 within the applicable time periods set forth therein. 74 6.3. Financial Statements, Reports, Certificates. (i) Deliver to Agent, with copies to each Lender: (a) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters and within 90 days after the end of the fourth fiscal quarter of each of Parent's fiscal years (commencing with the fiscal quarter ending October 31, 2003), (i) consolidated and consolidating balance sheets, consolidated and consolidating income statements, and a consolidated statement of cash flows covering Parent's and its Subsidiaries' operations during such period, and (ii) a Compliance Certificate signed by a Financial Officer of Parent on its behalf (A) demonstrating, in reasonable detail, compliance at the end of such period with the applicable financial covenants contained in Sections 7.18(a) and (c), (B) except with respect to the representation in Section 5.2 of this Agreement, notifying Agent of any representations and warranties contained in this Agreement or the Loan Documents that are not true and correct in all material respects as of the date of such certificate (to the extent any Loan Party has knowledge thereof) and explaining in reasonable detail the extent to which such representations and warranties are not true and correct (it being understood that no such representation shall be deemed to be made, and no failure of any such representation or warranty to be so true and correct as of such date shall constitute a Default or Event of Default, solely by virtue of this clause (B)), (C) certifying that: (1) the consolidated financial statements delivered therewith have been prepared in accordance with GAAP (except for the lack of footnotes and being subject to year-end audit adjustments) and fairly present in all material respects the consolidated financial condition of Parent and its Subsidiaries, (2) the Eligible Recurring Maintenance Revenue consists of revenue recognized in accordance with GAAP and generated in the ordinary course of the US Borrowing Base Companies' business except as set forth in reasonable detail in such Compliance Certificate, (3) there does not exist any condition or event that constitutes a Default or Event of Default (or, to the extent of any non-compliance, describing such non-compliance as to which Parent may have knowledge and what action the Loan Parties have taken, are taking, or propose to take with respect thereto), 75 (b) as soon as available, but in any event within 90 days after the end of each of Parent's fiscal years (commencing with the fiscal year ended April 30, 2004), (i) consolidated financial statements of Parent and its Subsidiaries for each such fiscal year, audited by PricewaterhouseCoopers or other independent certified public or chartered accountants of recognized national standing and certified, without any qualifications, by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a consolidated balance sheet, consolidated income statement, and consolidated statement of cash flows and, if prepared, such accountants' letter to management), (ii) a certificate of such accountants addressed to Agent and the Lenders stating that, in the course of conducting their audit, such accountants did not become aware of the existence of any Default or Event of Default under Section 7.18, which certificate may be limited or omitted if and to the extent required by such accountants under applicable accounting rules or guidelines, and (iii) a Compliance Certificate demonstrating, in reasonable detail, compliance at the end of the immediately preceding fiscal year with the Capital Expenditures covenant contained in Section 7.18(b), (c) as soon as available, but in any event within 30 days after the start of each of Parent's fiscal years, copies of Borrowers' updated Business Plan for the forthcoming 2 years, fiscal year by fiscal year, and for the forthcoming fiscal year, fiscal quarter by fiscal quarter, but in any event not for any fiscal period beginning after the Maturity Date, certified by the chief executive officer, a Financial Officer or the Vice President, strategic planning and analysis, of Parent as being such officer's good faith best estimate of the consolidated financial performance of Parent and its Subsidiaries during the period covered thereby, (d) promptly after filed or distributed by any Loan Party, (i) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports, proxy statements, registration statements and other reports filed with the SEC, (ii) annual information forms, material change reports and press releases filed with the Ontario Securities Commission or any successor thereof, and (iii) any other information that is provided by Parent to its shareholders generally. (e) Reserved, (f) promptly after a Borrower has knowledge of any event or condition that constitutes a Default or an Event of Default, notice thereof and a statement of the curative action that Borrowers propose to take with respect thereto, and 76 (g) upon the request of Agent, any other report reasonably requested relating to the financial condition of the Loan Parties. Notwithstanding the foregoing or any other provisions of the Loan Documents, the Loan Parties shall have no obligation to deliver or otherwise disclose to Agent or any Lender any information the delivery or disclosure of which is prohibited by the terms of any confidentiality, non-disclosure or similar agreement by which any Loan Party is bound. In addition to the financial statements referred to above, Borrowers agree that no Borrower or any Subsidiary of a Borrower will have a fiscal year different from that of GCCL. The Borrowers agree that their independent certified public or chartered accountants are authorized to communicate with Agent and to release to Agent whatever financial information concerning Borrowers that Agent reasonably may request. Without limiting Section 17.10 and the confidentiality agreements contemplated thereby, each Borrower waives the right to assert a confidential relationship, if any, it may have with any accounting firm or service bureau in connection with any information requested by Agent pursuant to or in accordance with this Agreement, and agrees that Agent, with reasonable prior notice to Parent and with a representative of Parent present in person or by telephone (so long as Parent makes such representative reasonably available), may contact directly any such accounting firm or service bureau in order to obtain such information. 6.4. Specified Entities. Each of the Specified Entities will comply with the terms of its formation documents and by-laws in all material respects. 6.5. Return. Account for returns of inventory and customer credits and record the effects thereof on the general ledger on the same basis and in accordance with the usual customary practices of the applicable Borrower, as they exist at the time of the execution and delivery of this Agreement. 6.6. Maintenance of Properties. Maintain and preserve all of their properties which are necessary or useful in the proper conduct to their business in good working order and condition, ordinary wear and tear excepted, and comply at all times with the provisions of all leases to which it is a party as lessee, so as to prevent any loss or forfeiture thereof or thereunder, except as set forth on Schedule 5.17 or where the failure to so maintain, preserve or comply could not reasonably be expected to have a material adverse effect on the US Borrowing Base Companies taken as a whole or the Loan Parties taken as a whole. 6.7. Taxes. (a) Cause all assessments and taxes, whether real, personal, or otherwise, and including F.I.C.A., F.U.T.A., state disability and local, state, provincial and federal income taxes, due or payable by, or imposed, levied, or assessed against any Loan Party or any Loan Party's properties, assets, income or franchises to be paid or remitted in full, before delinquency, or before the expiration of any extension period, except to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest or where non-payment would not have a material adverse effect on the US Borrowing Base Companies taken as a whole or the Loan Parties taken as a whole. Each Loan Party will, upon Agent's reasonable request, furnish 77 Agent with proof satisfactory to Agent indicating that the applicable Loan Party has made such payments or remittance. (b) Promptly after Agent's reasonable request, deliver copies of all material correspondence, written findings or results, and any other material written materials delivered by the United States Internal Revenue Service (the "IRS") to Parent or any of its Subsidiaries relating to the ongoing tax audit of Parent being conducted by the IRS as of the date hereof. 6.8. Insurance. (a) At each Loan Party's expense, maintain insurance respecting their property and assets wherever located, covering loss or damage by fire, theft, explosion, and all other hazards and risks in such amounts, if any, as ordinarily are insured against by other Persons engaged in the same or similar businesses. The Loan Parties also shall maintain business interruption, public liability, and product liability insurance, as well as insurance against larceny, embezzlement, and criminal misappropriation in such amounts, if any, as ordinarily are insured against by other Persons engaged in the same or similar businesses. Promptly after becoming available from Borrower's insurers, the Borrowers (other than Geac Hungary) and the Canadian Guarantors shall deliver to Agent a lender's loss payable endorsement satisfactory to Agent in its Permitted Discretion naming Agent as loss payee or additional insured, as appropriate, and as its interests may appear, with respect to each such policy (excluding any larceny, embezzlement, criminal misappropriation or other crime policy). Promptly following the renewal of such policies, Borrowers shall deliver to Agent a certificate (or memorandum) of insurance evidencing continuing coverage of the Borrowers (other than Geac Hungary) and the Canadian Guarantors under such policies. Each policy of insurance or endorsement shall contain a clause requiring the insurer to give not less than seven (7) days prior written notice to Agent in the event of cancellation of the policy for any reason whatsoever (other than expiration of the policy). (b) The Parent shall give Agent prompt notice of any loss in excess of $1,500,000 suffered by any Borrower or Canadian Guarantor or, after the occurrence and during the continuance of an Event of Default, of any loss suffered by any Borrower or Canadian Guarantor, covered by such insurance. After the occurrence and during the continuance of an Event of Default, Agent shall have the exclusive right to adjust any losses suffered by any Borrower or Canadian Guarantor payable under any such insurance policies, without any liability to Borrowers whatsoever in respect of such adjustments. Any monies received by any Loan Party or, unless an Event of Default shall have occurred and be continuing, Agent or any Lender as payment for any loss suffered by any Borrower (other than Geac Hungary) or Canadian Guarantor under any insurance policy mentioned above (other than liability insurance policies) or as payment of any award or compensation for condemnation or taking by eminent domain, shall be paid into one or more Controlled Accounts. Notwithstanding any other provision of this Section 6.8, and regardless of whether a Default or Event of Default shall have occurred, the Loan Parties shall not adjust any loss suffered by any Borrower (other than Geac Hungary) or Canadian Guarantor in excess of $5,000,000 without Agent's written consent (which shall not be unreasonably withheld). 78 (c) Loan Parties shall not take out separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 6.8, unless Agent is included thereon as a loss payee or additional insured in accordance with clause (a) above. Parent promptly shall notify Agent whenever such separate insurance is taken out, specifying the insurer thereunder and the coverage amounts under the policies evidencing the same, and copies of such policies promptly shall be provided to Agent upon Agent's reasonable request. 6.9. Location of Inventory, Equipment and Books. Borrowers (other than Geac Hungary) shall keep their material Inventory and Equipment, and their Books only at the locations identified on Schedule 5.5; provided, however, that Parent may amend Schedule 5.5 so long as such amendment occurs by written notice to Agent not less than 15 days prior to the date on which the Inventory, Equipment or Books are moved to such new location, so long as such new location is within the continental United States or Canada and so long as prior to such move the applicable Borrower provides to Agent a Collateral Access Agreement, if such new location is a new United States or Canadian headquarters location for Parent or any of its United States or Canadian Subsidiaries. 6.10. Compliance with Laws. Comply with the requirements of all applicable domestic and foreign laws, rules, regulations, and orders of any Governmental Authority, including the Fair Labor Standards Act, ERISA and the Americans With Disabilities Act, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, would not result in and reasonably could not be expected to result in a Material Adverse Change. 6.11. Leases. Pay when due all rents and other amounts payable under any leases to which any Loan Party is a party or by which any Loan Party's properties and assets are bound, unless such payments are the subject of a Permitted Protest or the failure to make such payments could not reasonably be expected to have a material adverse effect on the US Borrowing Base Companies taken as a whole or the Loan Parties taken as a whole. 6.12. Brokerage Commissions. Pay any and all brokerage commission or finders fees incurred in connection with or as a result of the Loan Parties' obtaining financing from the Lender Group under this Agreement. The Loan Parties agree and acknowledge that payment of all such brokerage commissions or finders fees shall be the sole responsibility of Borrowers, and each Borrower agrees to indemnify, defend, and hold Agent and the Lender Group harmless from and against any claim of any broker or finder arising out of the Loan Parties' obtaining financing from the Lender Group under this Agreement. 6.13. Existence. Except as expressly permitted hereby at all times preserve and keep in full force and effect each Loan Party's valid existence and good standing in accordance with the standard in Section 5.8(a) and any rights and franchises material to the Loan Parties' businesses. 6.14. Environmental. Keep any property either owned or operated by any Loan Party free of any Environmental Liens or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens, (b) comply, in all material respects, with Environmental Laws and provide to Agent documentation of such compliance which Agent reasonably requests, (c) promptly notify Agent of any release of a Hazardous 79 Material of any reportable quantity from or onto property owned or operated by any Loan Party and take any Remedial Actions required to abate said release or otherwise to come into compliance with applicable Environmental Law, and (d) promptly provide Agent with written notice within 10 days of the receipt of any of the following: (i) notice that a material Environmental Lien has been filed against any of the real or personal property of any Loan Party, (ii) commencement of any material Environmental Action or notice that an Environmental Action will be filed against any Loan Party, and (iii) notice of a violation, citation, or other administrative order which reasonably could be expected to result in a Material Adverse Change or have a material adverse effect on the Loan Parties taken as a whole. 6.15. Investment Proceeds, Etc. During the pendency of any Event of Default, the proceeds of any Investment from any source in any Borrower (other than Geac Hungary) or any Canadian Guarantor and any other funds received by any Borrower (other than Geac Hungary) or any Canadian Guarantor other than from ordinary course business operations (including, without limitation, tax refunds, damage awards, or insurance or condemnation proceeds) shall be deposited directly into a Controlled Account. 6.16. Notice to Agent. (a) The Loan Parties shall provide Agent with written notice promptly upon the occurrence of any of the following events, which written notice shall state with reasonable particularity the facts and circumstances of the event for which such notice is being given: (i) Any change in the Authorized Persons who are the chief executive officer, or Financial Officers of Parent; (ii) Any cessation by any Loan Party of its making payment to its creditors generally as its debts become due; (iii) Any material adverse change in the business, operations, or financial affairs of any of the Loan Parties; (iv) Any intention on the part of any Loan Party to discharge its present independent accountants or any withdrawal or resignation by such independent accountants from their acting in such capacity; (v) Any litigation of which any Loan Party is aware which, if determined adversely to any Loan Party, might have a material adverse effect on the financial condition of the US Borrowing Base Companies taken as a whole or the Loan Parties taken as a whole; (vi) The occurrence of a Cash Management Activation Event; and (vii) The suspension of any substantial portion of any Loan Party's business, excluding those contemplated by the Legal Entity Reduction and Rationalization Plan. 80 (b) Parent shall provide Agent, promptly after received by Borrowers, with a copy of any management letter or similar communications from any accountant of the Borrowers. 6.17. Disclosure Updates; Intellectual Property. (a) Promptly and in no event later than 5 Business Days after obtaining knowledge thereof, notify Agent and (if practicable) correct any defect or error that may be caused by any Loan Party in the execution, acknowledgement, filing, or recordation of any Loan Document. (b) No less frequently than once during every period of six (6) consecutive months following the Closing Date and, in the case of a Permitted Acquisition, as soon as practicable following such acquisition, the Parent will deliver to the Agent an update of Schedule 5.16, certified by an Authorized Person on behalf of the Parent as being true, complete and correct in all material respects, as of a date which is not more than one month prior to the date of such certificate, and setting forth all trademarks, trade names, copyrights, patents, patent rights and licenses in each case which have been registered with any Governmental Authority in the United States or Canada, or for which application for registration has been made with any such Governmental Authority, by any Borrower (other than Geac Hungary), any Canadian Guarantor or the IP Subsidiary since (i) the Closing Date, in the case of the first such update to Schedule 5.16 and (ii) the date of the most recent update to Schedule 5.16 in all other instances. The Borrowers hereby authorize and instruct the Agent to cause each such updated Schedule 5.16 to be attached to and become part of this Agreement, and acknowledge that each such updated Schedule 5.16 shall be a Loan Document. (c) If any Borrower (other than Geac Hungary) or any Canadian Guarantor becomes the owner of any trademarks, trade names, copyrights, patents, patent rights or licenses in each case which have been registered with any Governmental Authority in the United States or Canada or for which application for registration has been made with any such Governmental Authority and such Person is not party to a Copyright, Patent or Trademark Security Agreement, as applicable, such Person shall execute and deliver to Agent a Copyright, Patent or Trademark Security Agreement, as applicable, within 5 Business Days after the delivery of the next update of Schedule 5.16 required under Section 6.17(b). 6.18. Pledge of IP Subsidiary. As soon as practicable prior to any Permitted IP Transfer, Parent will and will cause its Subsidiaries (if applicable) to, execute such agreements and deliver such instruments as deemed necessary by Agent in its Permitted Discretion to pledge and grant to the Agent a first priority Lien on one hundred percent (100%) of the equity interests in the IP Subsidiary, and will deliver, in connection therewith, such legal opinions (including opinions under applicable law) as are deemed necessary by Agent in its Permitted Discretion. 6.19. Special Provisions Concerning Certain Intellectual Property. Borrowers, Canadian Guarantors and the IP Subsidiary, as applicable, shall file with the United States Copyright Office applications for registration of copyrights owned by Borrowers, Canadian Guarantors and/or the IP Subsidiary in Material Software Products (it being understood that such 81 copyright registrations and applications may, but need not, cover the current versions of any Material Software Products). 6.20. Special Provisions Regarding Geac Hungary. Geac Hungary will not engage in any business other than intragroup financing activities consistent with its status as a "taxable person acting abroad" pursuant to the provisions of Section 4(28) of Act LXXXI of 1996 on Corporate and Dividend Tax. Geac Hungary will use all funds contributed, lent or otherwise paid or delivered to it by any Loan Party (excluding payments of interest, premium and fees on Geac Hungary Advances (as defined below), and excluding any such funds to be used to satisfy Geac Hungary's ordinary course operating expenses and obligations) solely to fund loans or capital contributions to Parent or any of its Subsidiaries (together "Geac Hungary Advances") within ten (10) Business Days of receipt of such funds by Geac Hungary, or to make Restricted Payments to any shareholder of Geac Hungary that is a Loan Party within thirty (30) days of receipt of such funds by Geac Hungary. 7. NEGATIVE COVENANTS. Parent, on behalf of itself and each of the other Loan Parties, and each of the Loan Parties, only with respect to itself, covenants and agrees that, so long as any credit hereunder shall be available and until full and final payment of the Obligations (excluding any continuing or similar obligations that survive the termination of the Loan Documents), the Loan Parties will not and will not permit any of their respective Subsidiaries that are Loan Parties to do any of the following: 7.1. Indebtedness. Create, incur, assume, permit, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except the following (collectively, "Permitted Indebtedness"): (a) Indebtedness evidenced by this Agreement and the other Loan Documents, together with Indebtedness owed to Underlying Issuers with respect to Underlying Letters of Credit; (b) Indebtedness set forth on Schedule 7.1; (c) Permitted Purchase Money Indebtedness; (d) refinancings, renewals, or extensions of Indebtedness permitted under clauses (b), (c) and (f) of this Section 7.1 (and continuance or renewal of any Permitted Liens associated therewith) so long as: (i) such refinancings, renewals, or extensions do not result in an increase in the principal amount of or (except as reasonably consistent with then-prevailing interest rates in the market for such type of Indebtedness) interest rate on the Indebtedness so refinanced, renewed, or extended or add one or more of the Borrowers as liable with respect thereto if such additional Borrowers were not liable with respect to the original Indebtedness, (ii) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions, that, taken as a whole, are materially more burdensome or restrictive to the applicable Borrower, and (iii) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the 82 refinancing, renewal, or extension Indebtedness must be include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness; (e) unsecured Indebtedness owed to other Loan Parties, provided that all such Indebtedness is at all times subject to the Intercompany Subordination Agreement; (f) up to $10,000,000 of unsecured Indebtedness arising in connection with a Permitted Acquisition, provided that any such Indebtedness is at all time subject to an intercreditor agreement acceptable to the Agent in its Permitted Discretion; (g) unsecured Indebtedness owed to non-Loan Party Affiliates in an aggregate principal amount not exceeding $50,000,000 at any time; (h) unsecured intercompany Indebtedness owed by any or all of the US Borrowing Base Companies or any other Subsidiary organized in the United States that is a Loan Party, to the US LLC at any time in an aggregate principal amount up to the aggregate principal amount of outstanding Advances at such time (collectively, the "US LLC Loans"); (i) up to $5,000,000 in aggregate principal amount of unsecured Indebtedness at any one time outstanding; and (j) unsecured Indebtedness relating to Permitted Investments; (k) Indebtedness in respect of guarantees permitted under Section 7.6; (l) Indebtedness in respect of Hedge Agreements permitted by the terms of this Agreement; and (m) Indebtedness incurred or assumed in connection with, and permitted by the definition of, a "Permitted Acquisition". 7.2. Liens. Create, incur, assume, or permit to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens (including Liens that are replacements of Permitted Liens to the extent that the original Indebtedness, if any, relating thereto is refinanced, renewed, or extended under Section 7.1(d) and so long as the replacement Liens only encumber those assets that secured the refinanced, renewed, or extended Indebtedness). 7.3. Restrictions on Fundamental Changes. Except with respect to certain Dormant Subsidiaries in accordance with the terms of the "Legal Entity Reduction and Rationalization Plan", a copy of which is attached hereto as Schedule 7.3 (the "Legal Entity Reduction and Rationalization Plan") (it being understood that none of the Loan Parties or any of their Subsidiaries shall have any obligation to take or complete any of the actions described in the Legal Entity Reduction and Rationalization Plan): (a) Enter into any merger, consolidation, or reorganization, provided, that Borrowers may be merged with and into or consolidated with other Borrowers, and Guarantors 83 may be merged with and into or consolidated with other Guarantors or Borrowers, in each instance upon reasonable notice to Agent and subject to Agent's having taken all actions deemed necessary by Agent in its Permitted Discretion to maintain perfection of Agent's Liens (if any) in the assets of the Loan Party which is not the surviving corporation in any such merger or consolidation. (b) Enter into any recapitalization, reclassify its Stock or otherwise change any Loan Party's type of organization, jurisdiction of organization or other legal or corporate structure, except in each instance upon reasonable notice to Agent and subject to Agent's having taken all actions deemed necessary by Agent in its Permitted Discretion to maintain perfection of Agent's Liens (if any) in the stock or assets of the relevant Loan Party or Loan Parties; provided, that no transaction shall be effected under this Section 7.3(b) which would result in (i) a United States domiciled Loan Party no longer being domiciled in the United States, or (ii) a Canadian domiciled Loan Party no longer being domiciled in Canada or the United States or (iii) a UK domiciled Loan Party no longer being domiciled in the UK, Canada or the United States. (c) Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), other than with the consent of Agent, such consent not to be unreasonably withheld. 7.4. Disposal of Assets. Except in accordance with the Legal Entity Reduction and Rationalization Plan, and other than Permitted Dispositions, convey, sell, lease, license, assign, transfer, or otherwise dispose of any of the assets of any Loan Party or any of its Subsidiaries that are Loan Parties. 7.5. Change of Name or Address. Change any Loan Party's name or organizational identification number or relocate any Loan Party's chief executive office to a new location, except (i) upon fifteen days' prior written notice to the Agent providing all relevant details to enable the Agent to maintain the uninterrupted perfection of the Agent's Liens, if any, (ii) the currently pending change of name of Geac Hungary to "Geac Hungary Asset Management Company Limited by Shares" (and Geac Hungary shall deliver documents evidencing such name change as reasonably requested by Agent) and (iii) the change of Parent's name to "Geac Inc." to be submitted to the vote of Parent's stockholders at Parent's annual meeting of stockholders to be held on or about September 10, 2003 (and Parent shall deliver to Agent the certificate of the applicable Canadian Governmental Authority evidencing such name change promptly upon its receipt thereof). 7.6. Guarantee. Guarantee or otherwise become in any way liable with respect to the obligations of any third Person except (i) up to an aggregate outstanding amount at any time of $20,000,000 of obligations of Loan Parties under or with respect to surety bonds, performance bonds and similar obligations, (ii) up to an aggregate outstanding amount at any time of $20,000,000 of guaranties by Loan Parties of obligations of non-Loan Parties (inclusive of any such guaranties listed on Schedule 7.6), (iii) by endorsement of instruments or items of payment for deposit to the account of a Borrower or which are transmitted or turned over to Agent, (iv) guaranties of obligations to the extent constituting Permitted Indebtedness, including the Guaranty, (v) guaranties by Loan Parties of the obligations of other Loan Parties, (vi) guaranties set forth on Schedule 7.6 and any replacements thereof in amounts not exceeding such guaranties, (vii) obligations in respect of the Letter of Credit, (viii) customary indemnities in 84 connection with sales or other dispositions by the Loan Parties (otherwise permitted under this Agreement) of assets or businesses or pursuant to contracts entered into by any Loan Party in the ordinary course of business and (ix) customary indemnities of officers and/or directors (and/or comparable managers) in connection with their services as such. For purposes of clarity, the obligations of Parent in respect of the so-called "letters of support" shall not constitute guaranties, but any amounts advanced by the Parent pursuant to such letters of support will be included for purposes of calculating compliance with the $50,000,000 limitation on advances to non-Loan Parties set forth in the definition of "Permitted Investments". 7.7. Nature of Business. Engage in any business other than the software business and businesses reasonably related thereto. 7.8. Prepayments and Amendments. (a) Except when no Event of Default shall have occurred and be continuing and except in connection with a refinancing permitted by Section 7.1(d), prepay, redeem, defease, purchase, or otherwise acquire, before the stated maturity date thereof, any Indebtedness of any Loan Party, other than the Obligations in accordance with this Agreement, and (b) Except in connection with a refinancing permitted by Section 7.1(d), directly or indirectly, amend, modify, alter, increase, or change in any manner materially adverse to the interests of the Agent and Lenders any of the terms or conditions of any agreement, instrument, document, indenture, or other writing evidencing or concerning Indebtedness permitted under Sections 7.1(b). 7.9. Change of Control. Cause, permit, or suffer, directly or indirectly, any Change of Control. 7.10. Reserved. 7.11. Distributions. Except for Permitted Restricted Payments, do or permit any other Loan Party to do, directly or indirectly, any of the following: (i) declare, order, pay, accept or make any Restricted Payment or (ii) set aside any sum or property therefor. 7.12. Accounting Methods. Modify or change its method of accounting (other than as may be required to conform to, or may be permitted by, GAAP or as otherwise contemplated by the definition of GAAP). 7.13. Investments. Except for Permitted Investments, directly or indirectly, make or acquire any Investment, or incur any liabilities (including contingent obligations) for or in connection with any Investment; provided, however, that the Borrowers (other than Geac Hungary) and the Canadian Guarantors shall not have Permitted Investments (other than in the Disbursement Accounts, the Securities Accounts as permitted under Section 7.17, the Designated Account or Controlled Accounts) in DDAs or Securities Accounts outstanding at any one time unless Borrowers or the Canadian Guarantors, as applicable, and the applicable securities intermediary or bank have entered into a Control Agreement or similar arrangement governing such Permitted Investments, as Agent shall determine in its Permitted Discretion, to perfect (and further establish) the Agent's Liens or liens in such Permitted Investments. 85 7.14. Acquisitions. Other than Permitted Acquisitions, and other than in connection with the Legal Entity Reduction and Rationalization Plan, directly or indirectly make any acquisition of all or a substantial part of the assets, stock or business of any Person. 7.15. Transactions with Affiliates. Other than in connection with the Legal Entity Reduction and Rationalization Plan, or as otherwise expressly permitted by the terms of this Agreement, directly or indirectly enter into or permit to exist any transaction with any non-Loan Party Affiliate except for transactions that are in the ordinary course of a Loan Party's business, upon fair and reasonable terms, and that are no less favorable to Borrowers than would be obtained in an arm's length transaction with a non-Affiliate and, in the case of any director or comparable manager of any Loan Party, except compensation and other arrangements between such Loan Party and such director or comparable manager which are customary for similarly sized companies. 7.16. Use of Proceeds. Use the proceeds of the Advances for any purpose other than (a) to pay transactional fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and the transactions contemplated hereby and thereby, and (b) consistent with the terms and conditions hereof, for its lawful and permitted purposes. 7.17. Securities Accounts. No Borrower (other than Geac Hungary), Canadian Guarantor or Other Guarantor shall establish or maintain any Securities Account with a balance in excess of $1,000,000 unless Agent shall have received a Control Agreement in respect of such Securities Account. Borrowers (other than Geac Hungary), Canadian Guarantors and Other Guarantors will not at any time maintain more than three (3) Securities Accounts which are not subject to a Control Agreement. No Borrower (other than Geac Hungary), Canadian Guarantor or Other Guarantor shall transfer assets out of any Securities Account except to another Securities Account in compliance with Section 7.17 or to a Controlled Account; provided, however, that, so long as no Event of Default has occurred and is continuing or would result therefrom, the Borrowers, Canadian Guarantors and Other Guarantors may use and expend such assets (and the proceeds thereof) and/or transfer them to any Disbursement Account to the extent not prohibited by this Agreement. 7.18. Financial Covenants. (a) Consolidated EBITDA. (i) Minimum EBITDA. (A) Permit EBITDA of Parent, measured on a trailing twelve (12) consecutive month basis as of the last day of each fiscal quarter of Parent set forth in the following table, and subject to the adjustments set forth below, to be less than the amount set forth in the following table opposite such date: 86
FISCAL QUARTER ENDING MINIMUM EBITDA - -------------------- -------------- October 31, 2003 $43,500,000 January 31, 2004 $44,306,000 April 30, 2004 $54,293,000 July 31, 2004 $59,098,000
(B) Commencing with the fiscal quarter ending October 31, 2004, permit EBITDA of Parent, measured on a trailing twelve (12) consecutive month period ending on the last day of each fiscal quarter of Parent, to be less than $55,000,000. (ii) EBITDA Adjustments. (A) For the period from the first fiscal quarter ending after the Closing Date through the Maturity Date, up to an aggregate of $10,000,000 of cash losses (whether or not extraordinary, unusual or non-recurring) of Parent and its Subsidiaries shall be added back to EBITDA of Parent; (B) Without duplication of any other additions in the calculation of EBITDA as provided in the definition thereof, all non-cash write-downs, losses and charges (including impairment of goodwill, write-downs of intangibles, and amortization of stock-based compensation) of Parent and its Subsidiaries shall be added back in the calculation of EBITDA of Parent; and; (C) For all reporting periods ending after the consummation of a Permitted Acquisition through the Maturity Date, EBITDA shall be further adjusted as follows: if the EBITDA of any target company (or its Parent Subsidiary successor) in a Permitted Acquisition is negative for the first six full months following the consummation of such acquisition, such negative EBITDA shall be excluded from the calculation of the EBITDA of Parent for such six (6) month period, provided that excluded amounts under this clause (C) in respect of target companies (or their Parent Subsidiary successors) that are or become Loan Parties in accordance with the definition of "Permitted Acquisition" shall not exceed $25,000,000 in the aggregate during any period of twelve (12) consecutive months. (b) Consolidated Capital Expenditures. Permit Parent and its Subsidiaries to make Capital Expenditures in any fiscal year of Parent in an aggregate amount in excess of $8,000,000. (c) Consolidated Fixed Charge Coverage Ratio. After the consummation of a Permitted Acquisition, if any, consummated after the Closing Date (excluding a Permitted Acquisition described in clause (a) of the definition thereof), permit the Fixed Charge Coverage 87 Ratio, measured on a trailing twelve (12) month basis as of the last day of each fiscal quarter ending after the closing of the Permitted Acquisition, to be less than 1.25:1.00. As used in this Section 7.18(c), the following terms shall have the following definitions: "Fixed Charges" means, with respect to Parent and its Subsidiaries for any period, the sum, without duplication, of (a) Interest Expense and (b) principal payments required to be paid during such period by Parent and its Subsidiaries in respect of any Indebtedness, and "Fixed Charge Coverage Ratio" means, with respect to Parent and its Subsidiaries for any period, the ratio of (i) EBITDA (as adjusted in accordance with Section 7.18(a)) of Parent for such period, minus Capital Expenditures made (to the extent not already incurred in a prior period) or incurred during such period by Parent and its Subsidiaries, minus all current expense for federal, state, local or provincial (or in each instance, Canadian, UK Law, or any other taxing authority equivalents) income taxes for such period, to (ii) Fixed Charges for such period. 8. EVENTS OF DEFAULT. Any one or more of the following events shall constitute an event of default (each, an "Event of Default") under this Agreement: 8.1. If Borrowers fail to pay when due and payable or when declared due and payable, all or any portion of the Obligations (whether of principal, interest (including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts), fees and charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts constituting Obligations) and such failure continues for a period of more than five (5) days; 8.2. (a) If any Loan Party fails to perform, keep, or observe in any material respect (or, if qualified by a materiality standard, in any respect) any term, provision, condition, covenant, or agreement contained (i) in Section 6.1 (Accounting System), Section 6.2 (Collateral Reporting) other than with respect to the delivery of Borrowing Base Certificates, as to which Section 8.2(b) shall apply, Section 6.3 (Financial Statements, Reports, Certificates), Section 6.5 (Returns), Section 6.6 (Maintenance of Properties), Sections 6.7 (Taxes), Section 6.8 (Insurance), Section 6.9 (Location of Inventory and Equipment), Section 6.10 (Compliance with Laws), Section 6.11 (Leases), Section 6.12 (Brokerage Commissions), Section 6.13 (Existence) other than as to maintenance of existence, Section 6.14 (Environmental), Section 6.17 (Disclosure Updates) of this Agreement and such failure continues for a period of fifteen (15) Business Days, or (ii) elsewhere in this Agreement or in any of the other Loan Documents; (b) Borrowers fail to deliver a Borrowing Base Certificate as required by Section 6.2 (i) within forty-five days after the end of each January, April, May, July or October during the term of this Agreement, or (ii) within thirty days after the end of every other month during the term of this Agreement, and, in the case of clause (ii) only, such failure continues for a period of five (5) Business Days; 8.3. If any material portion of any Loan Party's assets is attached, seized, subjected to a writ or distress warrant, levied upon, or comes into the possession of any third Person and such 88 attachment, seizure, writ, warrant, levy or possession is not released, vacated or returned to such Loan Party within thirty (30) days; 8.4. If an Insolvency Proceeding is commenced by any Loan Party; 8.5. If an Insolvency Proceeding is commenced against any Loan Party and any of the following events occur: (a) the applicable Loan Party consents to the institution of the Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 45 calendar days of the date of the filing thereof; provided, however, that, during the pendency of such period, Agent (including any successor agent) and each other member of the Lender Group shall be relieved of their obligation to extend credit hereunder, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, any Loan Party, or (e) an order for relief shall have been entered therein; 8.6. Except as permitted by Section 7.3, if one or more Loan Parties with aggregate revenues in the preceding twelve (12) months of $5,000,000 or more is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs for more than fifteen (15) days, and such event or circumstance could reasonably be expected to have a material adverse effect on such Loan Parties the financial condition of the US Borrowing Base Companies taken as a whole or the Loan Parties taken as a whole; 8.7. If a notice of Lien (other than in connection with a Permitted Lien), levy, or assessment is filed of record with respect to any Loan Party's assets by the United States, Canada or UK, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, or if any taxes or debts owing at any time hereafter to any one or more of such entities becomes a Lien (other than a Permitted Lien), whether choate or otherwise, upon any Loan Party's assets and the same is not paid on the payment date thereof, and such notice of Lien (other than in connection with a Permitted Lien, levy or assessment could reasonably be expected to have a material adverse effect on the related Loan Party; 8.8. If a judgment or other claim becomes a Lien (other than a Permitted Lien) upon any material portion of any of the Loan Parties' properties or assets; 8.9. If a Borrower shall fail to make any payment of principal or interest in respect of any Indebtedness in excess of $5,000,000 (excluding Indebtedness evidenced by the Loan Documents), when and as the same shall become due and payable (after any applicable grace period), or any other event or condition shall occur and continue (after any applicable grace period), if the effect of such failure to make payment or other event or condition is to accelerate or to permit the acceleration of the maturity of such Indebtedness; 8.10. If any Loan Party makes any payment on account of Indebtedness that has been contractually subordinated in right of payment to the payment of the Obligations, except to the extent such payment is permitted by the terms of the subordination provisions applicable to such Indebtedness; 89 8.11. Any warranty or representation made to the Lender Group by any Loan Party, or on behalf of any Loan Party by any officer, employee, agent, or director of any Loan Party in this Agreement or any other Loan Document or any certificate or other document delivered in connection herewith or therewith shall prove to have been incorrect in any respect (to the extent the underlying warranty or representation is qualified by a materiality standard) or in any material respect in all other cases, when made or deemed made; 8.12. If the obligation of any Guarantor under its Guaranty set forth herein is limited or terminated by operation of law or by such Guarantor thereunder; 8.13. If this Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien on or security interest in the Collateral (or any other collateral) that is covered hereby or thereby; or 8.14. Any provision of any Loan Document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Loan Party, or a proceeding shall be commenced by any Loan Party, or by any Governmental Authority having jurisdiction over any Loan Party, seeking to establish the invalidity or unenforceability thereof, or any Loan Party shall deny that any Loan Party has any liability or obligation purported to be created under any Loan Document. 9. THE LENDER GROUP'S RIGHTS AND REMEDIES. 9.1. Rights and Remedies. Upon the occurrence, and during the continuation, of an Event of Default, the Required Lenders (at their election but without notice of their election and without demand) may authorize and instruct Agent to exercise any of the rights and remedies of a secured party under the Code and any other rights and remedies provided for in this Agreement or any other Loan Document or otherwise available to it at law or in equity on behalf of the Lender Group (and Agent, acting upon the instructions of the Required Lenders, shall do the same on behalf of the Lender Group), such rights and remedies to include, without limitation, the following, all of which are authorized by the Loan Parties: (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable; (b) Cease advancing money or extending credit to or for the benefit of Borrowers under this Agreement, under any of the Loan Documents, or under any other agreement between Borrowers and the Lender Group; (c) Terminate this Agreement and any of the other Loan Documents, by notice to the Administrative Borrower as to any future liability or obligation of the Lender Group, but without affecting any of the Agent's Liens in the Collateral and without affecting the Obligations; (d) Notify Account Debtors and other Persons obligated on the Collateral (and notify the Administrative Borrower of the exercise of this remedy) to make payment or otherwise render performance to or for Agent, and, to the extent permitted under the Code, enforce the 90 obligations of Account Debtors and other Persons obligated on the Collateral and exercise the rights of Borrowers with respect to such obligations and any property that may secure such obligations; (e) Take any proceeds of the Collateral by notice to the Administrative Borrower; (f) Settle or adjust disputes and claims directly with Account Debtors for amounts and upon terms which Agent considers advisable (and notify the Administrative Borrower of the exercise of this remedy), and in such cases, Agent will credit the Loan Account with only the net amounts received by Agent in payment of such disputed Accounts after deducting all Lender Group Expenses incurred or expended in connection therewith; (g) Without notice to or demand upon any Loan Party, make such payments and do such acts as Agent considers necessary or reasonable to protect its security interests in the Collateral. Each Borrower agrees to assemble the Collateral if Agent so requires, and to make the Collateral available to Agent at a place that Agent may designate which is reasonably convenient to both parties. Each Borrower authorizes Agent to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any Lien that in Agent's determination appears to conflict with the Agent's Liens and to pay all expenses incurred in connection therewith and to charge Borrowers' Loan Account therefor. With respect to any of Borrowers' owned or leased premises, each Borrower hereby grants Agent a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of the Lender Group's rights or remedies provided herein, at law, in equity, or otherwise; (h) Without prior notice to any Loan Party (such notice being expressly waived), and without constituting a retention of any collateral in satisfaction of an obligation (within the meaning of the Code or similar provisions of applicable foreign statutes), set off and apply to the Obligations any and all (i) balances and deposits of any Borrower or Canadian Guarantor or Other Guarantor held by the Lender Group (including any amounts received in the Controlled Accounts), or (ii) Indebtedness at any time owing to or for the credit or the account of any Borrower held by the Lender Group, and, after exercising such remedy, notify Administrative Borrower of same; (i) Hold, as cash collateral, any and all balances and deposits of any Borrower or Canadian Guarantor or Other Guarantor held by the Lender Group, and any amounts received in the Controlled Accounts, to secure the full and final repayment of all of the Obligations; (j) Instruct each Controlled Account Bank and any other depositary with whom a DDA subject to a Control Agreement is maintained, to pay any and all balances and deposits in the applicable Controlled Account or other DDA to the Agent's Account, and apply such amounts in reduction of the Obligations in accordance with Section 2.4(b); (k) Instruct any securities intermediary to liquidate the applicable Securities Account or any related Investment Property maintained or held thereby and remit the proceeds 91 thereof to the Agent's Account, and apply such amounts in reduction of the Obligations in accordance with Section 2.4(b); (l) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral. Each Loan Party hereby grants to Agent, to the extent permitted by applicable law, a license or other right to use, without charge, such Loan Party's labels, patents, copyrights, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, to the extent permitted by applicable law and contracts, such Loan Party's rights under all licenses and all franchise agreements shall inure to the Lender Group's benefit; (m) Sell, or cause to be sold, the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrowers' premises) as are commercially reasonable. It is not necessary that the Collateral be present at any such sale; (n) Agent shall give notice of the disposition of the Collateral as follows: (i) Agent shall give the Administrative Borrower (for the benefit of the applicable Borrower) a notice in writing of the time and place of public sale, or, if the sale is a private sale or some other disposition other than a public sale is to be made of the Collateral, the time on or after which the private sale or other disposition is to be made; and (ii) The notice shall be personally delivered or mailed, postage prepaid, to the Administrative Borrower as provided in Section 12, at least 15 days before the earliest time of disposition set forth in the notice; no notice needs to be given prior to the disposition of any portion of the Collateral that is perishable or threatens to decline speedily in value or that is of a type customarily sold on a recognized market; (o) Agent, on behalf of the Lender Group, may credit bid and purchase at any public sale; (p) Agent may seek the appointment of a receiver or keeper to take possession of all or any portion of the Collateral or to operate same and, to the maximum extent permitted by law, may seek the appointment of such a receiver without the requirement of prior notice or a hearing; (q) The Lender Group shall have all other rights and remedies available to it at law or in equity pursuant to any other Loan Documents; and (r) Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrowers. Any excess will be returned, without interest and subject to the rights of third Persons promptly, by Agent to Administrative Borrower (for the benefit of the applicable Loan Parties). 92 9.2. Remedies Cumulative. The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative and may be exercised simultaneously. The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it. 10. TAXES AND EXPENSES. Upon the occurrence and during the continuance of an Event of Default, if any Loan Party fails to pay any monies (whether taxes, assessments, insurance premiums, or, in the case of leased properties or assets, rents or other amounts payable under such leases) due to third Persons, or fails to make any deposits or furnish any required proof of payment or deposit, all as required under the terms of this Agreement, then, Agent, in its sole discretion and without prior notice to any Loan Party, may: (a) make payment of the same or any part thereof or (b) in the case of the failure to comply with Section 6.8 hereof, obtain and maintain insurance policies of the type described in Section 6.8 and take any action with respect to such policies as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender Group Expenses (and Administrative Borrower will receive prompt notice of same) and any such payments shall not constitute an agreement by the Lender Group to make similar payments in the future or a waiver by the Lender Group of any Event of Default under this Agreement. Agent need not inquire as to, or contest the validity of, any such expense, tax, or Lien and the receipt of the usual official notice for the payment thereof shall be conclusive evidence that the same was validly due and owing. 11. WAIVERS; INDEMNIFICATION. 11.1. Demand; Protest; etc. Except as otherwise expressly provided in this Agreement or the other Loan Documents, each Loan Party waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which each such Borrower may in any way be liable. 11.2. The Lender Group's Liability for Collateral. Each Loan Party hereby agrees that: (a) so long as the Lender Group complies with its obligations, if any, under the Code, Agent shall not in any way or manner be liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Loan Parties. 11.3. Indemnification. Each Loan Party shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons with respect to each Lender, and each of their respective officers, directors, employees, agents, and attorneys-in-fact (each, an "Indemnified Person") harmless (to the fullest extent permitted by law) from and against any and 93 all claims, demands, suits, actions, investigations, proceedings, and damages, and all reasonable attorneys fees and disbursements and other costs and expenses actually incurred in connection therewith (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution, delivery, enforcement, performance, or administration of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby, and (b) with respect to any investigation by a Governmental Authority or any litigation or proceeding (whether involving a Governmental Authority or otherwise) related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto (all the foregoing, collectively, the "Indemnified Liabilities"). The foregoing to the contrary notwithstanding, (a) Loan Parties shall have no obligation to any Indemnified Person under this Section 11.3 with respect to any Indemnified Liability that (i) arises as between or among Lenders or Agent only, (ii) results from any successful claim, suit or action by any Loan Party against Agent or any Lender, or (iii) a court of competent jurisdiction finally determines to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnified Person, and (b) Loan Parties are, and will remain liable solely for the Agent's (and, solely during the continuance of any Event of Default, any Lender's) costs related to the negotiation, execution, delivery and administration (with respect to "administration" of the Loan Documents, out-of-pocket costs only) of the Loan Documents or any amendment or waiver with respect thereto. This provision shall survive the termination of this Agreement and the repayment of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which the Loan Parties were required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by the Loan Parties with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON. 12. NOTICES. Unless otherwise provided in this Agreement, all notices or demands by Loan Parties or Agent to the other relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as the Administrative Borrower or Agent, as applicable, may designate to each other in accordance herewith), or telefacsimile to Borrowers in care of the Administrative Borrower or to Agent, or to any Loan Party as the case may be, at its address set forth below: 94 If to Administrative Borrower or any other Loan Party: ___________________________ ___________________________ ___________________________ Attn:______________________ Fax No.:___________________ With copies to: FOLEY HOAG LLP 155 Seaport Boulevard Boston, MA 02210-2600 Attn: Peter M. Rosenblum, Esq. and Malcolm G. Henderson, Esq. Fax No.: 617-832-7000 If to Agent or to Lender Group: WELLS FARGO FOOTHILL, INC. One Boston Place, 18th Floor Boston, MA 02108 Attn: Business Finance Manager Fax No.: (617) 722-9485 with copies to: CHOATE, HALL & STEWART Exchange Place 53 State Street Boston, MA 02109 Attn: Peter M. Palladino, P.C. Fax No.: (617) 248-4000 Agent and Loan Parties may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party. All notices or demands sent in accordance with this Section 12, other than notices by Agent in connection with enforcement rights against the Collateral under the provisions of the Code, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail. Each Loan Party acknowledges and agrees that notices sent by the Lender Group in connection with the exercise of enforcement rights against Collateral under the provisions of the Code shall be deemed sent when deposited in the mail or personally delivered, or, where permitted by law, transmitted by telefacsimile or any other method set forth above. 13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. (a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR 95 THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SUFFOLK, COMMONWEALTH OF MASSACHUSETTS, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. LOAN PARTIES AND THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b). LOAN PARTIES AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. LOAN PARTIES AND THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS. 14.1. Assignments and Participations. (a) Subject to the provisions of Section 17.10, any Lender may, with the written consent of Agent (provided that no written consent of Agent shall be required in connection with any assignment and delegation by a Lender to an Eligible Transferee), and, if no Event of Default has occurred and is continuing, the Administrative Borrower (such consent not to be unreasonably withheld), assign and delegate to one or more Eligible Transferees (each an "Assignee") all, or any ratable part of all, of the Obligations, the Commitments and the other rights and obligations of such Lender hereunder and under the other Loan Documents, in a minimum amount of $5,000,000; provided, however, that Borrowers and Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee, (ii) such Lender and its Assignee have delivered to Administrative Borrower and Agent an Assignment and Acceptance 96 in form and substance satisfactory to Agent, and (iii) the assignor Lender or Assignee has paid to Agent for Agent's separate account a processing fee in the amount of $5,000. Anything contained herein to the contrary notwithstanding, (i) the consent of Agent and/or Administrative Borrower shall not be required (and payment of any fees shall not be required) if such assignment is made by a Lender to an Affiliate of such Lender or in connection with any merger, consolidation, sale, transfer, or other disposition of all or any substantial portion of the business or loan portfolio of such Lender and (ii) if no Event of Default has occurred and is continuing, Administrative Borrower can withhold its consent in its sole discretion to any proposed assignment to Cerberus Partners or any of its Affiliates, including Ableco Finance, LLC. Notwithstanding any other provisions of this Agreement to the contrary, except with respect to assignments or participations effected during the pendency of an Event of Default, no assignment or participation under this Section 14.1(a) shall increase the interest charges or other costs (including, as of the effective date of any assignment, under Section 2.12 or Section 2.14) to the Loan Parties under this Agreement. (b) From and after the date that Agent notifies the assignor Lender (with a copy to the Administrative Borrower) that it has received an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to Section 11.3 hereof) and be released from its obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto), and such assignment shall effect a novation between Borrowers and the Assignee. (c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (1) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (2) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance or observance by Borrowers of any of their obligations under this Agreement or any other Loan Document furnished pursuant hereto, (3) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (4) such Assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement, (5) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement as are delegated to Agent, by the terms hereof, together with such powers as are 97 reasonably incidental thereto, and (6) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender. (d) Immediately upon each Assignee's making its processing fee payment under the Assignment and Acceptance and receipt and acknowledgment by Agent of such fully executed Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto. (e) Subject to the provisions of Section 17.10, any Lender may at any time, with the written consent of Agent and prompt notice to the Administrative Borrower, sell to one or more commercial banks, financial institutions, or other Persons not Affiliates of such Lender (a "Participant") participating interests in its Obligations, the Commitment, and the other rights and interests of that Lender (the "Originating Lender") hereunder and under the other Loan Documents (provided that no written consent of Agent shall be required in connection with any sale of any such participating interests by a Lender to an Eligible Transferee); provided, however, that (i) the Originating Lender shall remain a "Lender" for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a "Lender" hereunder or under the other Loan Documents and the Originating Lender's obligations under this Agreement shall remain unchanged; (ii) the Originating Lender shall remain solely responsible for the performance of such obligations; (iii) Borrowers, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender's rights and obligations under this Agreement and the other Loan Documents; (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or a material portion of the Collateral or guaranties (except to the extent expressly permitted hereby or by any of the other Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender, or (E) change the amount or due dates of scheduled principal repayments or prepayments or premiums; and (v) all amounts payable by Borrowers hereunder shall be determined as if such Lender had not sold such participation; except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agent, Borrowers, the Collections, the Collateral, or 98 otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves. (f) Subject to the provisions of Section 17.10, in connection with any such assignment or participation or proposed assignment or participation, a Lender may disclose all documents and information which it now or hereafter may have relating to Borrowers or Borrowers' business to a proposed assignee which first executes and delivers to Parent a non-disclosure agreement substantially in the form of the Amended NDA referred to in Section 17.10. (g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or US Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law. 14.2. Successors. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that the Loan Parties may not assign this Agreement or any rights or duties hereunder without the Lenders' prior written consent and any prohibited assignment shall be absolutely void ab initio. Unless expressly otherwise provided herein, no consent to assignment by the Lenders shall release any Borrower or other Loan Party from its Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 14.1 hereof and, except as expressly required pursuant to Section 14.1 hereof, no consent or approval by any Loan Party is required in connection with any such assignment. 15. AMENDMENTS; WAIVERS. 15.1. Amendments and Waivers. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by Borrowers or any other Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Administrative Borrower (on behalf of all Borrowers) and the other applicable Loan Parties and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders affected thereby and the Administrative Borrower (on behalf of all Borrowers) and acknowledged by Agent, do any of the following: (a) increase or extend any Commitment of any Lender, (b) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document, 99 (c) reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document, (d) change the percentage of the Commitments that is required to take any action hereunder, (e) amend this Section or any provision of the Agreement providing for consent or other action by all Lenders, (f) release Collateral other than as permitted by Section 16.12, (g) change the definition of "Required Lenders", (h) contractually subordinate any of the Agent's Liens, (i) release any Borrower or Guarantor from any obligation for the payment of money, or (j) change the definitions of Borrowing Base, Maximum Revolver Amount, or change Section 2.1(b), or (k) amend any of the provisions of Section 16; and, provided further, however, that no amendment, waiver or consent shall, unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as applicable, affect the rights or duties of Agent, Issuing Lender, or Swing Lender, as applicable, under this Agreement or any other Loan Document. The foregoing notwithstanding, any amendment, modification, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of Borrowers, shall not require consent by or the agreement of Borrowers. 15.2. Replacement of Holdout Lender. (a) If any action to be taken by the Lender Group or Agent hereunder requires the unanimous consent, authorization, or agreement of all Lenders, and a Lender ("Holdout Lender") fails to give its consent, authorization, or agreement, then Agent or the Administrative Borrower, each with the consent of the other (such consent not to be unreasonably withheld), and subject to the right of first refusal of the Lenders referred to in the last sentence of this Section 15.2(a), upon at least five (5) Business Days prior irrevocable notice to the Holdout Lender, may permanently replace the Holdout Lender, subject to and in the manner set forth in Section 14.1, with one or more substitute Lenders (each, a "Replacement Lender"), and the Holdout Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given. The Agent and Lenders shall have the first right to designate a Replacement Lender and, in the event the Agent and Lenders elect not to 100 designate a Replacement Lender, the Administrative Borrower shall have the right to designate a Replacement Lender. (b) Prior to the effective date of such replacement, the Holdout Lender and each Replacement Lender shall execute and deliver an Assignment and Acceptance Agreement, subject only to the Holdout Lender being repaid its share of the outstanding Obligations (including an assumption of its Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment and Acceptance Agreement prior to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and delivered such Assignment and Acceptance Agreement. The replacement of any Holdout Lender shall be made in accordance with the terms of Section 14.1. Until such time as the Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to make the Holdout Lender's Pro Rata Share of Advances and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk Participation Liability of such Letter of Credit. 15.3. No Waivers; Cumulative Remedies. No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document nor any delay by Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Agent or any Lender on any occasion shall affect or diminish Agent's and each Lender's rights thereafter to require strict performance by Borrowers of any provision of this Agreement. Agent's and each Lender's rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have. 16. AGENT; THE LENDER GROUP. 16.1. Appointment and Authorization of Agent. Each Lender hereby designates and appoints Foothill as its representative under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Agent agrees to act as such on the express conditions contained in this Section 16. Except as otherwise expressly provided in this Section 16, the provisions of this Section 16 are solely for the benefit of Agent and the Lenders. Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent; it being expressly understood and agreed that the use of the word "Agent" is for convenience only, that Foothill is merely the representative of the Lenders, and only has the contractual duties set forth herein. Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to 101 exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect: (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, the Collections, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders as provided in the Loan Documents, (d) exclusively receive, apply, and distribute the Collections as provided in the Loan Documents, (e) open and maintain such bank accounts and cash management accounts as Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes with respect to the Collateral and the Collections, (f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to the Loan Parties, the Obligations, the Collateral, the Collections, or otherwise related to any of same as provided in the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents. 16.2. Delegation of Duties. Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects as long as such selection was made without gross negligence or willful misconduct. 16.3. Liability of Agent. None of the Agent-Related Persons shall (i) be liable to any of the Lenders for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by any Borrower or Affiliate of any Borrower, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Borrower or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the Books or properties of the Borrowers or their Affiliates. 16.4. Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrowers or 102 counsel to any Lender), independent accountants and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable. If Agent so requests, it shall first be indemnified to its reasonable satisfaction by Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders. 16.5. Notice of Default or Event of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders, and except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or Administrative Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a "notice of default." Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge. If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to its Participants, if any. Subject to Section 16.4, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 9; provided, however, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable. 16.6. Credit Decision. Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of the Loan Parties or their Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender. Each Lender represents to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of Borrowers and any other Person (other than the Lender Group) party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of Borrowers and any other Person (other than the Lender Group) party to a Loan Document. Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender with any credit or other 103 information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of Borrowers and any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons. 16.7. Costs and Expenses; Indemnification. Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, reasonable attorneys fees and expenses, costs of collection by outside collection agencies and auctioneer fees and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise. Agent is authorized and directed by the Lenders to deduct and retain sufficient amounts from Collections received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders. In the event Agent is not reimbursed for such costs and expenses from Collections received by Agent, each Lender hereby agrees that it is and shall be obligated to pay to or reimburse Agent for the amount of such Lender's Pro Rata Share thereof. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so), according to their Pro Rata Shares, from and against any and all Indemnified Liabilities; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person's gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make an Advance or other extension of credit hereunder. Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender's ratable share of any costs or out-of-pocket expenses (including attorneys fees and expenses) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent. 16.8. Agent in Individual Capacity. Foothill and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Borrowers and their Subsidiaries and Affiliates and any other Person (other than the Lender Group) party to any Loan Documents as though Foothill were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge that, pursuant to such activities, Foothill or its Affiliates may receive information regarding Borrowers or their Affiliates and any other Person (other than the Lender Group) party to any Loan Documents that is subject to confidentiality obligations in favor of Borrowers or such Affiliates or other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to 104 provide such information to them. The terms "Lender" and "Lenders" include Foothill in its individual capacity. 16.9. Successor Agent. Agent may resign as Agent upon at least 30 days notice to the Lenders and Administrative Borrower. If Agent resigns under this Agreement, the Required Lenders, with the consent of Administrative Borrower (not to be unreasonably withheld), shall appoint a successor Agent for the Lenders. If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders, with the consent of Administrative Borrower (not to be unreasonably withheld), a successor Agent. If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders. In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term "Agent" shall mean such successor Agent and the retiring Agent's appointment, powers, and duties as Agent shall be terminated. After any retiring Agent's resignation hereunder as Agent, the provisions of this Section 16 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor Agent has accepted appointment as Agent by the date which is 45 days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders with the consent of the Administrative Borrower (except during the pendency of an Event of Default, during which no such consent is required), not to be unreasonably withheld, appoint a successor Agent as provided for above. 16.10. Lender in Individual Capacity. Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with Borrowers and their Subsidiaries and Affiliates and any other Person (other than the Lender Group) party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding Borrowers or their Affiliates and any other Person (other than the Lender Group) party to any Loan Documents that is subject to confidentiality obligations in favor of Borrowers or such Affiliates or other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender not shall be under any obligation to provide such information to them. With respect to the Swing Loans and Agent Advances, Swing Lender shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the sub-agent of the Agent. 16.11. Withholding Taxes. (a) All payments made by Loan Parties hereunder or under any other Loan Document will be made in US dollars, without setoff, counterclaim, or other defense. All such payments will be made free and clear of, and without deduction or withholding for, or on account 105 of any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature and any interest, penalties, or similar liabilities with respect thereto ("Withholding Taxes"), now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein, unless the deduction or withholding of Withholding Taxes is required by law or by the administrative practice of any taxation authority, in which case Section 16.11(b) shall apply; provided that the term "Withholding Taxes" shall not include tax imposed upon or measured by the net taxable income, taxable income, net income, profit, net worth or capital of the Agent or any Lender and payable solely by the Agent or such Lender, as applicable, or its Affiliates (together, "Excluded Taxes"). The Lenders will provide to the Loan Parties and the Agent such documentation as may reasonably be required in order to reduce or eliminate the amount of Withholding Taxes imposed by Canada. If the Lender fails to provide a certificate or other document that, if provided, would reduce or eliminate Withholding Taxes, then the Loan Parties or Agent may withhold from any interest payment to such Lender the amounts required by law to be withheld. Notwithstanding the foregoing provisions of this paragraph (a), if a Lender shall unreasonably have failed to provide such certificate or other document as would allow for the reduction or elimination of Withholding Tax, the Loan Parties shall not be required to make any payments of additional amounts pursuant to subparagraph 16.11(b) in excess of the amounts that would have been payable if the appropriate Lender or the Agent had provided such certificate or other document. (b) If any such deduction or withholding of Withholding Taxes is so required, the Loan Parties shall: (i) pay such additional amounts as may be necessary in order that the net amount of payments in respect of items subject to the deduction or withholding of Withholding Taxes received by the Agent and each Lender, after such deduction or withholding of Withholding Taxes (including deduction or withholding in respect of additional amounts), shall equal the amount that the Agent and each Lender would have received if no such deduction or withholding of Withholding Taxes had been required; (ii) make such deduction or withholding of Withholding Taxes; and (iii) pay the full amount of Withholding Taxes deducted or withheld to the relevant taxation authority in accordance with applicable law, and forthwith shall furnish the Agent and each Lender with written proof that such payment has been made. (c) In the event that (i) Canada or any political subdivision thereof imposes a tax on the gross amount of interest payable from a resident of Canada to a resident of the United States, (ii) such tax is applicable to interest payable under this Agreement, and (iii) such tax is payable by a Lender (the "Substitute Tax"), then (upon receiving from the Lenders or Agent a statement showing the computation of such Substitute Tax in reasonable detail) the Loan Parties shall forthwith pay to the Lender or Agent such additional amounts as may be necessary in order that the net amount of payments in respect of items subject to the Substitute Tax shall equal the amount that the Agent and each Lender would have received if such Substitute Tax had not been imposed. It shall not be necessary that the Lender or Agent shall have paid the Substitute Tax in order to receive a payment from the Loan Parties under this paragraph (c). 106 (d) If any Loan Party fails to pay to the relevant taxation authority when due any Withholding Taxes that it was required to deduct or withhold under this Section 16.11 in respect of any payment to the Agent or any Lender or fails to furnish the Agent or any Lender with the proof of payment referred to above, or if any Loan Party fails to pay to the Agent or any Lender any Substitute Tax that such Loan Party was required to pay under this Section 16.11 in respect of any payment to the Agent or any Lender, the Loan Parties jointly and severally shall forthwith on demand indemnify the Agent and such Lender for any Withholding Taxes and Substitute Tax, as applicable (including any interest and penalties), and for any losses and expenses in connection therewith, that may become payable by the Agent or such Lender, as applicable, as a result of such failure. (e) This paragraph (e) shall apply only to Withholding Taxes imposed by the United States. Each Lender and Agent agrees to use its best efforts to provide or obtain any certificate or other document (such as Internal Revenue Service Form W-8BEN), or take such other reasonable actions as may be necessary to reduce or eliminate any Withholding Taxes, additional payments or indemnification obligations under this Section 16.11. If any Lender is entitled to a reduction in the applicable Withholding Tax, the Loan Parties or Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable Withholding Tax after taking into account such reduction, subject to Section 16.11(b). If the Lender fails to provide a certificate or other document that, if provided, would reduce or eliminate Withholding Taxes, then the Loan Parties or Agent may withhold from any interest payment to such Lender the amounts required by law to be withheld. Notwithstanding the foregoing provisions of this paragraph (e), if a Lender shall unreasonably have failed to provide such certificate or other document as would allow for the reduction or elimination of Withholding Tax, the Loan Parties shall not be required to make any payments of additional amounts pursuant to subparagraph 16.11(b) in excess of the amounts that would have been payable if the appropriate Lender or the Agent had provided such certificate or other document. (f) The Loan Parties' obligations under this Section 16.11 shall survive the termination of this Agreement and the other Loan Documents and the payment of all other amounts payable under this Agreement and the other Loan Documents. 16.12. Collateral Matters. (a) The Lenders hereby irrevocably authorize Agent, at its option and in its sole discretion, and the Agent shall, as contemplated by Section 3.5 and Section 17.12 of this Agreement, release any Lien on any Collateral or other Collateral for the Obligations, (i) upon the termination of the Commitments and payment and satisfaction in full by Borrowers of all Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if the Administrative Borrower certifies to Agent that the sale or disposition is permitted under Section 7.4 of this Agreement or the other Loan Documents (and Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property in which no Borrower owned any interest at the time the security interest was granted or at any time thereafter, or (iv) constituting property leased to a Borrower under a lease that has expired or is terminated in a transaction permitted under this Agreement. Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all 107 of the Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or the Administrative Borrower at any time, the Lenders will confirm in writing Agent's authority to release any such Liens on particular types or items of Collateral pursuant to this Section 16.12; provided, however, that (1) Agent shall not be required to execute any document necessary to evidence such release on terms that, in Agent's reasonable opinion, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of Borrowers in respect of) all interests retained by Borrowers, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral. (b) Agent shall have no obligation whatsoever to any of the Lenders to assure that the Collateral exists or is owned by Borrowers or is cared for, protected, or insured or has been encumbered, or that the Agent's Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent's own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender as to any of the foregoing, except as otherwise provided herein. 16.13. Restrictions on Actions by Lenders; Sharing of Payments. (a) Each of the Lenders agrees that it shall not, without the express consent of Agent, and that it shall, to the extent it is lawfully entitled to do so and provided that an Event of Default shall have occurred and be continuing, upon the request of Agent, set off against the Obligations, any amounts owing by such Lender to Borrowers or any deposit accounts of Borrowers now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so by Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral the purpose of which is, or could be, to give such Lender any preference or priority against the other Lenders with respect to the Collateral. (b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations arising under, or relating to, this Agreement or the other Loan Documents, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender's ratable portion of all such distributions by Agent, such Lender promptly shall (1) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (2) purchase, 108 without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, however, that if all or part of such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment. 16.14. Agency for Perfection. Agent hereby appoints each other Lender as its agent (and each Lender hereby accepts such appointment) for the purpose of perfecting the Agent's Liens in assets which, in accordance with Article 9 of the Code or similar provisions of applicable foreign statutes can be perfected only by possession. Should any Lender obtain possession of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's request therefor shall deliver such Collateral to Agent or in accordance with Agent's instructions. 16.15. Payments by Agent to the Lenders. All payments to be made by Agent to the Lenders shall be made by bank wire transfer or internal transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent. Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, or interest of the Obligations. 16.16. Concerning the Collateral and Related Loan Documents. Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents relating to the Collateral, for the benefit of the Lender Group. Each member of the Lender Group agrees that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders. 16.17. Field Audits and Examination Reports; Disclaimers by Lenders; Other Reports and Information. By becoming a party to this Agreement, each Lender: (a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report (each a "Report" and collectively, "Reports") prepared by Agent, and Agent shall so furnish each Lender with such Reports, (b) expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report, (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any audit or examination will inspect only specific information regarding Borrowers and will rely significantly upon the Books, as well as on representations of Borrowers' personnel, and 109 (d) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a loan or loans of Borrowers; and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender. In addition to the foregoing: (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by Borrowers to Agent that has not been contemporaneously provided by Borrowers to such Lender, and, upon receipt of such request, Agent shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from Borrowers, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender's notice to Agent, whereupon Agent promptly shall request of the Administrative Borrower the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from Administrative Borrower, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to Administrative Borrower a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender. 16.18. Several Obligations; No Liability. Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments. Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender. Except as provided in Section 16.7, no member of the Lender Group shall have any liability for the acts or any other member of the Lender Group. No Lender shall be responsible to any Borrower, Loan Party or any other Person for any failure by any other Lender to fulfill its obligations to make credit available hereunder, nor to advance for it or on its behalf in connection with its Commitment, nor to take any other action on its behalf hereunder or in connection with the financing contemplated herein. 16.19. Legal Representation of Agent. In connection with the negotiation, drafting, and execution of this Agreement and the other Loan Documents, or in connection with future legal representation relating to loan administration, amendments, modifications, waivers, or enforcement of remedies, Choate, Hall & Stewart ("Choate") only has represented and only shall 110 represent Foothill in its capacity as Agent and as a Lender. Each other Lender hereby acknowledges that Choate does not represent it in connection with any such matters. 17. GENERAL PROVISIONS. 17.1. Effectiveness. This Agreement shall be binding and deemed effective when executed by the Loan Parties, the Agent, and each Lender whose signature is provided for on the signature pages hereof. 17.2. Section Headings. Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement. 17.3. Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group or the Loan Parties, 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. 17.4. Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 17.5. Amendments in Writing. This Agreement only can be amended by a writing in accordance with Section 15.1. 17.6. Counterparts; Telefacsimile Execution. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis, except as otherwise specifically provided therein or therefor. 17.7. Revival and Reinstatement of Obligations. If the incurrence or payment of the Obligations by any Loan Party or the transfer to the Lender Group of any property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors' rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a "Voidable Transfer"), and if the Lender Group is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender Group is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of the Lender Group related thereto, the liability of the Loan Parties 111 automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made. 17.8. Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof. 17.9. Administrative Borrower; Payments by Borrowers. Each Borrower hereby irrevocably appoints GCI as the borrowing agent and attorney-in-fact for all Borrowers (the "Administrative Borrower") which appointment shall remain in full force and effect unless and until Agent shall have received prior written notice signed by the Borrower that such appointment has been revoked and that another Borrower has been appointed the Administrative Borrower, provided that GCCL, Geac Hungary and the US Partnership are each also authorized to make borrowings directly from Agent and Lenders hereunder. Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide Agent with all notices with respect to Advances and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and (ii) to take such action as the Administrative Borrower deems appropriate on such Borrower's behalf to obtain Advances and Letters of Credit and provide the proceeds or other benefits thereof to the Borrowers in its sole discretion, and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. As between the Borrowers and the other Loan Parties (and without limiting the joint and several liability of the Borrowers and the rights and remedies of the Agent and the Lenders under the Loan Documents), all Advances received by any Borrower, and all interest thereon, shall be repaid in accordance with the terms of this Agreement by such Borrower, and all fees, Lender Group Expenses and other costs, expenses and amounts payable hereunder by any Borrower to the Lender Group shall be paid by the Administrative Borrower. It is understood that the handling of the Loan Account and Collateral of Borrowers in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that Lender Group shall not incur liability to any Borrower as a result hereof. Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group. To induce the Lender Group to do so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and hold each member of the Lender Group harmless against any and all liability, expense, loss or claim of damage or injury, made against the Lender Group by any Borrower or by any third party whosoever, arising from or incurred by reason of (a) the handling of the Loan Account and Collateral of Borrowers as herein provided, (b) the Lender Group's relying on any instructions of the Administrative Borrower, or (c) any other action taken by the Lender Group hereunder or under the other Loan Documents, except that Borrowers will have no liability to the relevant Agent-Related Person or Lender-Related Person under this Section 17.9 with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case may be. 112 17.10. Confidentiality. Parent and Foothill acknowledge and agree that they have entered into an amended and restated non-disclosure agreement dated as of the date hereof (the "Amended NDA") (a copy of which is attached hereto as Exhibit 17.10), which agreement is incorporated herein by reference. Each Agent and each Lender, by becoming a party hereto (whether by assignment, substitution or otherwise), and each Participant, by virtue of purchasing its participation hereunder, shall automatically be bound by, and agrees to comply in all respects with, the terms of the Amended NDA. Contemporaneously with it becoming a party hereto or purchasing its participation hereunder, as the case may be, each Agent, each Lender and each Participant shall execute a counterpart to the Amended NDA as contemplated thereby; provided that a failure by any Agent, Lender or Participant to so execute the amended NDA shall not relieve it of its obligations thereunder and under this Section 17.10. 17.11. Conversion of Judgment Currency, etc. If, for the purposes of obtaining or enforcing judgment against any Loan Party in any court in any jurisdiction, it becomes necessary to convert into the currency of the jurisdiction giving such judgment (the "Judgment Currency") an amount due hereunder in Dollars , then the date on which the rate of exchange for conversion is selected by that court is referred to herein as the "Conversion Date". If there is a change in the rate of exchange between the Judgment Currency and the Dollar between the Conversion Date and the actual receipt by the Agent and Lenders of the amount due hereunder or under such judgment, each Loan Party shall, notwithstanding such judgment, pay all such additional amounts as may be necessary to ensure that the amount received by the Agent and the Lenders in the Judgment Currency, when converted at the rate of exchange prevailing on the date of receipt, will equal the amount due in Dollars. Each Loan Party's liability hereunder constitutes a separate and independent liability which shall not merge with any judgment or any partial payment or enforcement of payment of sums due under this Agreement. The term "rate of exchange", as used in this Section, includes any premiums or costs payable with the currency conversion then being effected. 17.12. Release of Liens upon Sale of Collateral. Agent shall promptly release any Agent's Lien on any Collateral or other collateral for the Obligations (i) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if the sale or disposition is permitted under Section 7.4 of this Agreement or the other Loan Documents (and Agent may in its Permitted Discretion rely conclusively on any certificate to such effect from Administrative Borrower, without further inquiry), or (ii) constituting property leased to a Borrower under a lease that has expired or is terminated in a transaction permitted under this Agreement. Notwithstanding the generality of the foregoing, at the request of Administrative Borrower, Agent shall, at Borrowers' sole expense, promptly execute and deliver any UCC termination statements, PPSA financing change statements, lien releases, releases of intellectual property security interests, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent's Liens and all notices of security interests and liens previously filed with respect to the collateral described in clauses (i) and (ii) of this Section 17.12. 113 17.13. Comshare Entities. (a) Upon the satisfaction of each of the following conditions, Comshare and Comshare US shall each become and be deemed to be a "Borrower" and a "Loan Party" under this Agreement and the other Loan Documents: (i) Parent shall have elected, in its sole discretion, "Borrower" and "Loan Party" status for Comshare and Comshare US and shall have notified Agent of same. (ii) Comshare and Comshare US shall have (1) executed and delivered to Agent a fully executed joinder agreement (in form and substance satisfactory to Agent in its Permitted Discretion) relating to this Agreement pursuant to which Comshare and Comshare US shall become Borrowers hereunder, (2) delivered to Agent updated Schedules to this Agreement and, as applicable, each of the other Loan Documents, and the information set forth on such Schedules shall be satisfactory to Agent in its Permitted Discretion, (3) executed and delivered the Intercompany Subordination Agreement and (4) executed and delivered such other documents as are deemed advisable by Agent in its Permitted Discretion, including such Loan Documents as have been executed hereunder by the Borrowers; and (iii) Agent shall have obtained and perfected a security interest in substantially all of the personal property of Comshare and Comshare US and a pledge of 100% of the ownership interest in Comshare and Comshare US, in each case on terms substantially equivalent to those provided in the Loan Documents with respect to Borrowers. (b) Upon the satisfaction of each of the following conditions, CHC, CIL and/or CL shall each become and be deemed to be a "UK Guarantor" and a "Loan Party" under this Agreement and the other Loan Documents: (i) Parent shall have elected, in its sole discretion, "UK Guarantor" and "Loan Party" status for CHC, CIL and/or CL and shall have notified Agent of the same; (ii) CHC, CIL and/or CL (as applicable) shall have (1) executed and delivered to Agent a fully executed joinder agreement (in form and substance satisfactory to Agent in its Permitted Discretion) relating to this Agreement pursuant to which CHC, CIL and/or CL (as applicable) shall become a UK Guarantor hereunder, (2) delivered to Agent updated Schedules to this Agreement and, as applicable, the other Loan Documents, and the information set forth on such Schedules shall be satisfactory to Agent in its Permitted Discretion, (3) executed and delivered the Intercompany Subordination Agreement, and (4) executed and delivered such other Loan Documents deemed advisable by Agent in its Permitted Discretion as have been executed hereunder by UK Guarantors; and (iii) Agent shall have obtained from Parent and/or its Subsidiaries a pledge of 100% of the ownership interests in CHC, CIL and/or CL (as applicable) on 114 terms substantially equivalent to those provided in the Loan Documents with respect to UK Guarantors. 17.14. Force Majeure If a Force Majeure Event affecting a party to this Agreement precludes that party (the "precluded party") partially or wholly from complying with its obligations under this Agreement or any of the other Loan Documents then: (a) as soon as reasonably practicable after a Force Majeure Event arises, the Administrative Borrower (if the precluded party is a Loan Party) or the Agent (if the precluded party is the Agent or another member of the Lender Group) must notify the Agent or Administrative Borrower, respectively, of the Force Majeure Event; (b) the precluded party will not be held responsible for any delay or failure in performance of any of such party's obligations under this Agreement or any of the other Loan Documents (including, with respect to the Loan Parties, a delay or failure that is or results in a Default or Event of Default); (c) to the extent and for the period that a precluded party is precluded from performing its obligations under this Agreement or any of the other Loan Documents by the Force Majeure Event, those obligations shall be suspended, and (d) upon the termination of a Force Majeure Event, such precluded party's obligation to perform any such obligations that were tolled during the pendency of such Force Majeure Event shall be immediately reinstated. Notwithstanding the foregoing, during the existence of a Force Majeure Event, interest will continue to accrue on all outstanding Obligations in accordance with Section 2.6. For purposes of this Section 17.14, a "Force Majeure Event" means an act of God, a military operation, an act of terrorism, an act of any person engaged in subversive activity or sabotage, a fire, a flood, an explosion, a power outage or other catastrophe, an epidemic or quarantine restriction, an insurrection or civil disorder, involuntary strike or other labor stoppage other than by employees of a precluded party. 17.15. Foothill's Legal Status. Foothill represents and warrants to the Loan Parties that, as of the Closing Date, it is a corporation organized under the laws of the State of California and maintains its principal place of business in Santa Monica, California. [The remainder of this page is intentionally left blank.] 115 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written. BORROWERS: GEAC COMPUTER CORPORATION LIMITED By: /s/ Hema Anganu -------------------------------- Hema Anganu Treasurer GEAC COMPUTERS, INC. By: /s/ Hema Anganu -------------------------------- Hema Anganu Authorized Signatory GEAC ENTERPRISE SOLUTIONS, INC. By: /s/ Hema Anganu -------------------------------- Hema Anganu Authorized Signatory NEWS HOLDINGS CORP. By: /s/ Hema Anganu -------------------------------- Hema Anganu Authorized Signatory INTEREALTY CORP. By: /s/ Hema Anganu -------------------------------- Hema Anganu Authorized Signatory GEAC (DELAWARE) PARTNERSHIP By: Geac Computer Corporation Limited, a general partner By: /s/ Hema Anganu ----------------------------------- Hema Anganu Treasurer REMANCO INTERNATIONAL, INC. By: /s/ Hema Anganu ----------------------------------- Hema Anganu Authorized Signatory EXTENSITY, INC. By: /s/ Hema Anganu ----------------------------------- Hema Anganu Authorized Signatory GEAC HUNGARY ASSET MANAGEMENT COMPANY LIMITED BY SHARES By: /s/ Laszlo Urban ----------------------------------- Name: Laszlo Urban Title: Director CANADIAN GUARANTORS: GEAC CANADA LIMITED By: /s/ Hema Anganu ----------------------------------- Hema Anganu Treasurer 2019856 ONTARIO INC. By: /s/ Hema Anganu -------------------------------- Name: Hema Anganu Title: Director OTHER GUARANTORS: GEAC ULC By: /s/ Hema Anganu -------------------------------- Name: Hema Anganu Title: Director GEAC USA LLC By: /s/ James M. Riley -------------------------------- Name: James M. Riley Title: Director UK GUARANTORS: GEAC (UK) HOLDINGS LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR GEAC SOFTWARE SOLUTIONS LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR GEAC COMPUTER SYSTEMS (UK) LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR REMANCO SYSTEMS LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR TEKSERV COMPUTER SERVICES LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR GEAC ENTERPRISE SOLUTIONS HOLDINGS LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR GEAC ENTERPRISE SOLUTIONS LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR GEAC ENTERPRISE SOLUTIONS DEVELOPMENT LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR MAI UNITED KINGDOM LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR GEAC UK LIMITED By: /s/ Paul Wheeler -------------------------------- Name: PAUL WHEELER Title: DIRECTOR AGENT AND LENDERS: WELLS FARGO FOOTHILL, INC., as Agent and as a Lender By: /s/ Brent E. Shay -------------------------------- Brent E. Shay Vice President ADDITIONAL CANADIAN GUARANTORS: GEAC (CANADA) SERVICES LIMITED By: /s/ Hema Anganu -------------------------------- Hema Anganu Treasurer 915873 ONTARIO LTD. By: /s/ Hema Anganu -------------------------------- Hema Anganu Treasurer 877025 ALBERTA LTD. By: /s/ Hema Anganu -------------------------------- Hema Anganu Treasurer EX-4.5 4 b48257gcexv4w5.txt EX-4.5 FIRST AMENDMENT AGREEMENT Exhibit 4.5 FIRST AMENDMENT AGREEMENT THIS FIRST AMENDMENT AGREEMENT (this "First Amendment") is entered into as of September 30, 2003 by and among, on the one hand, the lenders identified on the signature pages hereof (such lenders, together with their respective successors and assigns, collectively the "Lenders" and each a "Lender"), Wells Fargo Foothill, Inc., as the arranger, collateral agent and administrative agent for the Lenders (in such capacity, "Agent"), and, on the other hand, Geac Computers, Inc., a Missouri corporation (the "Administrative Borrower" or "GCI"), on behalf of itself and each of its Affiliates designated as Borrowers on Exhibit A hereto (GCI and such Affiliates collectively, the "Borrowers"), each of the Administrative Borrower's Affiliates designated as Canadian Guarantors on Exhibit A hereto (collectively, the "Canadian Guarantors"), each of the Administrative Borrower's Affiliates designated as UK Guarantors on Exhibit A hereto (collectively, the "UK Guarantors") and each of Administrative Borrower's Affiliates designated as Other Guarantors on Exhibit A hereto (collectively, the "Other Guarantors", and collectively with the Borrowers, the Canadian Guarantors and the UK Guarantors, the "Loan Parties"). RECITALS The Loan Parties, the Lenders and the Agent have entered into the Loan, Guaranty and Security Agreement dated as of September 9, 2003 (as amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") pursuant to which the Lenders and the Agent have agreed to make certain revolving credit advances and to provide certain other financial accommodations to the Borrowers. Borrowers have appointed GCI as Administrative Borrower under the Loan Agreement. Pursuant to Section 15.1 of the Loan Agreement, the Administrative Borrower may execute amendments and waivers on behalf of all of the Borrowers. The Loan Parties have requested certain amendments to and waivers under the Loan Agreement. The Agent and the Lenders are willing to grant the waivers set forth in Section 2 below and to amend the Loan Agreement, in each case on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties signatory hereto agree as follows. 1. Amendments to the Loan Agreement. (a) Section 1.1 of the Loan Agreement is hereby amended as follows: (i) The following new definition is inserted in appropriate alphabetical order: "First Amendment" means the First Amendment Agreement dated as of September 30, 2003 by and among the Administrative Borrower (on behalf of the Borrowers), the Guarantors, Lenders and Agent. (ii) The definition of the term "BofA Controlled DDAs" is amended by inserting the number "350119037209" after the number "350229037217,". (iii) The definition of the term "Loan Documents" is amended by inserting the words "the First Amendment," after the words "means this Agreement,". (b) The Loan Agreement is hereby amended by deleting Schedule 5.18 thereto in its entirety and inserting in lieu thereof the Schedule 5.18 attached hereto. 2. Waivers. (a) Subject to Section 2(b) below, the Agent and the Lenders hereby waive the following (collectively, the "Identified Events of Default"): (i) any Default or Event of Default arising under Section 2.7(a) or Section 8.2 of the Loan Agreement solely to the extent resulting from the Borrowers' failure to comply with the requirement to promptly deposit all cash and Cash Equivalents, checks and other items of payment held or received by the Borrowers into a Controlled Account by reason of GCI's depositing amounts into account number 350119037209 maintained by GCI at BofA (the "New Account") during the period between the Closing Date and Agent's receipt of the duly executed BofA Blocked Account Amendment (as defined below); and (ii) any Default or Event of Default arising under Sections 5.18, 8.2 or 8.11 of the Loan Agreement or under the Perfection Certificate delivered by GCI to the Agent at the Closing, in each case solely to the extent resulting from the Borrowers' failure to set forth the New Account on the Schedule 5.18 delivered to the Agent on the Closing Date or in such Perfection Certificate. (b) The waivers set forth in Section 2(a) hereof are subject to the condition that within 5 Business Days from the date hereof, the Agent shall have received a duly executed amendment (the "BofA Blocked Account Amendment") to the Control Agreement executed and delivered at the Closing with respect to the BofA Controlled DDAs (the "BofA Blocked Account Agreement") in form and substance reasonably satisfactory to the Agent that makes the New Account subject to such Control Agreement in substantially the manner that the other BofA Controlled DDAs are subject thereto. (c) The Loan Parties acknowledge and agree that the foregoing provisions of this Section 2 relate solely to the Identified Events of Default specified in Section 2(a) hereof and shall in no way be deemed or construed as a waiver by the Agent and the Lenders of any other Default or Event of Default under the Loan Agreement or any other Loan Document, known or unknown, now existing or occurring subsequent to the date of this First Amendment. The Agent and the Lenders expressly reserve the full extent of their rights under the Loan Agreement, the other Loan Documents and applicable law in respect of any Default or Event of Default existing on the date hereof and not specified herein as an Identified Event of Default. 3. Conditions Precedent to First Amendment. The satisfaction of each of the following, unless waived or deferred by the Agent, in its sole discretion, shall constitute conditions precedent to the effectiveness of this First Amendment and each and every provision hereof: 2 (a) The Agent shall have received this First Amendment duly executed by each of the parties hereto; (b) The representations and warranties in this First Amendment, the Loan Agreement (as amended hereby) and the other Loan Documents shall be true and correct in all respects on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date); (c) Except for the Identified Events of Default, no Event of Default shall have occurred and be continuing on the date hereof, nor shall any Default or Event of Default result from the consummation of the transactions contemplated herein; and (d) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall have been issued and remain in force by any court or other governmental authority against the Loan Parties or the Agent. 4. Representations and Warranties. Each Loan Party party hereto hereby represents and warrants to the Agent that (a) the execution, delivery, and performance of this First Amendment and the Loan Agreement are within such Loan Party's corporate or other organizational powers, have been duly authorized by all necessary corporate or other organizational action, and are not in contravention of any law, rule, or regulation, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental authority, or of the terms of its charter, bylaws or other constitutional documents, or of any contract or undertaking to which it is a party or by which any of its properties may be bound or affected; (b) this First Amendment and the Loan Agreement constitute the Loan Parties' legal, valid, and binding obligation, enforceable against the Loan Parties in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws relating to or limiting creditors' rights generally; (c) this First Amendment has been duly executed and delivered by such Loan Party; and (d) except for the Identified Events of Default, no Default or Event of Default has occurred or is continuing. 5. Effect on Loan Documents. The Loan Agreement (as amended hereby) and the other Loan Documents (including the BofA Blocked Account Agreement, as amended by the BofA Blocked Account Amendment) shall be and remain in full force and effect in accordance with their terms and hereby are ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this First Amendment shall not operate as a waiver or an amendment of any right, power, or remedy of the Agent or the Lenders under the Loan Agreement or any other Loan Document, as in effect prior to the date hereof. 6. No Novation; Entire Agreement. This First Amendment evidences solely the amendment and waiver of the terms and provisions of the Loan Parties' obligations under the Loan Agreement and is not a novation or discharge thereof. There are no other understandings, express or implied, among the Agent, the Lenders and the Loan Parties regarding the subject matter hereof. 3 7. Choice of Law. The validity of this First Amendment, its construction, interpretation and enforcement, and the rights of the parties hereunder, shall be determined under, governed by, and construed in accordance with the laws of The Commonwealth of Massachusetts without regard to conflicts of laws principles. 8. Counterparts; Telefacsimile Execution. This First Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this First Amendment by telefacsimile shall be as effective as delivery of a manually executed counterpart of this First Amendment. Any party delivering an executed counterpart of this First Amendment by telefacsimile also shall deliver a manually executed counterpart of this First Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this First Amendment. 9. Definitions and Construction. (a) Capitalized terms used but not otherwise defined herein shall have the respective meanings given to such terms in the Loan Agreement, as amended hereby. (b) This First Amendment is a Loan Document. This First Amendment and the Loan Agreement shall be construed collectively and in the event that any term, provision or condition of any of such documents is inconsistent with or contradictory to any term, provision or condition of any other such document, the terms, provisions and conditions of this First Amendment shall supersede and control the terms, provisions and conditions of the Loan Agreement. Upon and after the effectiveness of this First Amendment, each reference in the Loan Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like import referring to the Loan Agreement, and each reference in the other Loan Documents to "the Loan Agreement", "thereunder", "therein", "thereof" or words of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as modified and amended hereby. [Signature pages follow.] 4 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment Agreement to be executed as of the date first above written. ADMINISTRATIVE BORROWER: GEAC COMPUTERS, INC., AS ADMINISTRATIVE BORROWER By: /s/ Hema Anganu ------------------------------ Hema Anganu Authorized Signatory CANADIAN GUARANTORS: GEAC CANADA LIMITED By: /s/ Hema Anganu ------------------------------ Hema Anganu Treasurer 2019856 ONTARIO INC. By: /s/ Hema Anganu ------------------------------ Hema Anganu Treasurer GEAC (CANADA) SERVICES LIMITED By: /s/ Hema Anganu ------------------------------ Hema Anganu Treasurer Signature Page 915873 ONTARIO LTD. By: /s/ Hema Anganu ------------------------------ Hema Anganu Treasurer 877025 ALBERTA LTD. By: /s/ Hema Anganu ------------------------------ Hema Anganu Treasurer Signature Page UK GUARANTORS: GEAC (UK) HOLDINGS LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director GEAC SOFTWARE SOLUTIONS LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director GEAC COMPUTER SYSTEMS (UK) LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director REMANCO SYSTEMS LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director TEKSERV COMPUTER SERVICES LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director Signature Page GEAC ENTERPRISE SOLUTIONS HOLDINGS LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director GEAC ENTERPRISE SOLUTIONS LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director GEAC ENTERPRISE SOLUTIONS DEVELOPMENT LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director MAI UNITED KINGDOM LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director GEAC UK LIMITED By: /s/ Paul Wheeler ------------------------------ Paul Wheeler Director Signature Page OTHER GUARANTORS: GEAC ULC By: /s/ Hema Anganu ------------------------------ Hema Anganu President GEAC USA LLC By: /s/ James M. Riley ------------------------------ Name: James M. Riley Title: Director AGENT AND LENDERS: WELLS FARGO FOOTHILL, INC., as Agent and as a Lender By: /s/ David Sanchez ------------------------------ David Sanchez Vice President Signature Page EXHIBIT A BORROWERS: Geac Computer Corporation Limited, a Canadian corporation Geac Enterprise Solutions, Inc., a Georgia corporation News Holdings Corp., a Delaware corporation Interealty Corp., a Colorado corporation, Geac (Delaware) Partnership, a Delaware partnership Remanco International, Inc., a Delaware corporation Extensity, Inc., a Delaware corporation Geac Hungary Asset Management Company Limited By Shares, a company limited by shares organized under the laws of the Republic of Hungary CANADIAN GUARANTORS: Geac Canada Limited, a Canadian corporation 2019856 Ontario Inc., an Ontario corporation Geac (Canada) Services Limited, a Canadian corporation 915873 Ontario Ltd., an Ontario corporation 877025 Alberta Ltd., an Alberta corporation UK GUARANTORS: Geac (UK) Holdings Limited, a UK company Geac Software Solutions Limited, a UK company Geac Computer Systems (UK) Limited, a UK company Remanco Systems Limited, a UK company Tekserv Computer Services Limited, a UK company Geac Enterprise Solutions Holdings Limited, a UK company Geac Enterprise Solutions Limited, a UK company Geac Enterprise Solutions Development Limited, a UK company MAI United Kingdom Limited, a UK company Geac UK Limited, a UK company OTHER GUARANTORS: Geac ULC, a Nova Scotia unlimited liability company Geac USA LLC, a Delaware limited liability company EX-4.12 5 b48257gcexv4w12.txt EX-4.12 EMERYVILLE LEASE EXHIBIT 4.12 WATERGATE OFFICE LEASE 1. PARTIES: BASIC LEASE PROVISIONS; DEFINED TERMS 1.1 Parties. This Watergate Office Lease ("Lease") is entered into in the City of Emeryville, County of Alameda, State of California, between Spieker Properties, L.P., a California limited partnership ("Landlord"), and Extensity, Inc., a Delaware corporation ("Tenant"). 1.2 Basic Lease Provisions. The following Basic Lease Provisions constitute an integral part of this Lease, and each reference in this Lease to the Basic Lease Provisions shall mean the provisions set forth in this Paragraph 1.2. Section references in this Paragraph 1.2 are to the section in which the particular Basic Lease Provision is first discussed. In the event of any conflict between the Basic Lease Provisions and the remainder of the Lease, the latter shall control. Lease Date: 1-12-98 Address of Landlord: 2200 Powell Street Suite 325 Emeryville, CA 94608 Address of Tenant: 2200 Powell Street Suite 455 Emeryville, CA 94608 Section 2: Premises: Suite 455 Building: Tower II 2200 Powell Street Emeryville, CA 94608 Premises Rentable Area: 3,403 square feet Premises Useable Area: 2,934 square feet Building Rentable Area: 215,550 square feet Tenant Parking: 6 permits Parking Charge: $44.00 per permit Section 3: Term: 17 months Commencement Date: January 15, 1998 Expiration Date: June 15, 1999 Section 4: Base Rent: Stepped as follows: 1/15/98-1/30/98 $4,338.91 per month 2/01/98-2/01/99 $7,656.75 per month 2/01/99-5/31/99 $7,963.02 per month 6/01/99-6/15/99 $3,981.45 per month Security Deposit: $7,963.02 Base Year: 1998 Tenant's Share: 1.58 percent 1.3 Defined Terms. Words and phrases which are capitalized in this Lease (other than words which are capitalized solely to denote the beginning of sentences) are defined terms. The definitions of such words and phrases are set forth in Section 17 of this Lease. 1 2. PREMISES: COMMON AREAS: TENANT PARKING 2.1 Demise of Premises. On and subject to the terms. covenants and conditions set forth in this Lease Landlord demises the Premises to Tenant and Tenant rents and hires the Premises from Landlord. The usable and rentable area of the Premises, and the rentable area of the Building, for all purposes under this Lease, are stipulated to be as specified in the Basic Lease Provisions. Landlord shall not be liable to Tenant, nor shall Tenant have any claim against Landlord or defense to the enforcement of this Lease, if it is determined that the actual rentable or usable area of the Premises or the rentable area of the Building differs from that specified in the Basic Lease Provisions. 2.2 Condition of Premises. Except as otherwise expressly provided in a Scope of Work executed by Landlord and Tenant concurrently with their execution of this Lease. Tenant shall accept the Premises in an "as is" condition on the date the Term commences and Landlord shall have no obligation to improve, alter, remodel or otherwise modify the Premises prior to Tenant's occupancy. Landlord shall construct or install in the Premises only the improvements specified in the Scope of Work. The Scope of Work, if any, will be attached as Exhibit B to this Lease, and Landlord shall use reasonable diligence to cause the Substantial Completion of Landlord's Work pursuant to the Scope of Work in a timely manner. 2.3 Common Areas. During the Term. Tenant shall have the nonexclusive right to use of the Common Areas for their intended and usual purpose. However, the manner in which the Common Areas are maintained shall be at the sole reasonable discretion of Landlord and use thereof shall be subject to the Rules and Regulations. Landlord reserves the right to make alterations. additions or deletions to, or to change the location of elements of the Common Areas. Building or Office Complex, and to use the roof, exterior walls and the area above and beneath the Premises, together with the right to install, use, maintain and replace equipment, machinery, pipes, conduits and wiring through the Premises. which serve other parts of the Building or Office Complex, in a manner and in locations which do not unreasonably interfere with Tenant's use of or access to the Premises. 2.4 Tenant Parking. Tenant shall have the right to obtain the number of parking permits designated as Tenant Parking in the Basic Lease Provisions, and each such permit shall authorize Tenant or its employees to park one passenger automobile in the Parking Facilities. Issuance of such parking permits shall be subject to Tenant's payment of the Parking Charge for each permit specified in the Basic Lease Provisions. which Parking Charge shall be payable on the first day of each calendar month during the Term and may be increased by Landlord at any time, and from time to time, during the Term upon not less than thirty (30) days prior written notice to Tenant. Tenant and its employees shall at all times observe such terms and conditions and charges as may be established by Landlord from time to time concerning the operation and use of the Parking Facilities. Tenant's employees shall not be entitled to park in areas located in the Parking Facilities designated by Landlord for reserved parking or for use by visitors to the Office Complex. 3. TERM 3.1 Period. The Term shall be for the period specified in the Basic Lease Provisions. The Term shall commence on the Commencement Date and shall end on the Expiration Date, as such dates are determined under Paragraph 3.2 below, unless sooner terminated pursuant to any provision of this Lease. 3.2 Term Commencement. The anticipated Commencement Date and the corresponding Expiration Date are specified in the Basic Lease Provisions. However, the actual Commencement Date shall be the earlier of (a) the date Tenant first occupies any part of the Premises, or (b) the date of Substantial Completion of the Landlord's Work or (c) the date established by Landlord in 2 the event of a delay by Tenant, as provided in Paragraph 3.3(iii) below: and the Expiration Date shall be adjusted so that the period between the actual Commencement Date and the Expiration Date is equal to the Term specified in the Basic Lease Provisions. If the actual Commencement Date and the Expiration Date differ from those inserted in the Base Lease Provisions as of the Lease Date, then promptly after the Commencement Date Landlord and Tenant shall execute a written acknowledgment of the Commencement Date and the Expiration Date, and attach it as Exhibit C to this Lease. 3.3 Delayed Occupancy. (i) Landlord shall use reasonable diligence to substantially complete any Landlord's Work on or before the Commencement Date specified in the Basic Lease Provisions. However, this Lease shall not be void or voidable, nor shall Landlord or its agents or contractors have any liability to Tenant, by reason of Landlord's failure co substantially complete Landlord's Work by the Commencement Date specified in the Basic Lease Provisions, or by reason of Landlord's failure to deliver possession of the Premises due to any other cause beyond Landlord's reasonable control, and postponement of Tenant's rental obligation prior to delivery of possession of the Premises shall be Tenant's exclusive remedy and in sole satisfaction or all claims Tenant might otherwise have by reason of Landlord's failure to deliver the Premises by the Commencement Date specified in the Basic Lease Provisions. (ii) Time is of the essence in connection with the delivery to Landlord of each and every drawing, plan, specification, schedule or other item required to be given by Tenant to Landlord or to be approved by Tenant pursuant to the schedule in and provisions of the Scope of Work. Accordingly, notwithstanding any contrary provision of this Lease, if Landlord is delayed in the Substantial Completion of Landlords Work as a result of (a) Tenant's failure to approve plans, specifications, changes, cost estimates and other items within the time limits specified therefor in the Work Letter, or (b) any change by Tenant in said plans, specifications, or other items after the expiration of such time limits, or (c) any default by Tenant relating to its obligations hereunder or under the Scope of Work, then, in any or all such instances and without limitation as to any other right or remedy available to Landlord. Landlord may under clause (c) of Paragraph 3.2 determine in its sole reasonable discretion that the actual Commencement Date is the date that Substantial Completion of Landlord's Work would have occurred but for such delay. 3.4 Holding Over. Tenant shall not be entitled to remain in possession of the Premises after the Expiration Date or after earlier termination of this Lease, except with Landlord's prior written consent. Any such confidence of possession with Landlord's consent shall constitute a month- to-month tenancy on all of the terms and conditions of this Lease, except that the Base Rent shall be 150% of the Base Rent in effect as of the Expiration Date or the earlier termination date. Any such continuance in possession without Landlord's consent (or after such consent has been withdrawn upon thirty (30) days' notice to Tenant) shall constitute an unlawful detention of the Premises; and Tenant shall indemnify, defend and hold Landlord harmless from all claims, losses or liability resulting from Landlord's inability to timely deliver possession of the Premises to any succeeding tenant. 4. BASE RENT; SECURITY DEPOSIT: OPERATING COSTS: TAXES 4.1 Base Rent. Tenant shall pay to Landlord as monthly Base Rent for the Premises, in advance, without deduction, setoff, prior notice or demand, the sum specified in the Basic Lease Provisions. The first month's Base Rent shall be paid upon Tenant's execution of this Lease, and the Base Rent for each calendar month thereafter during the Term shall be paid on the first day of each such calendar month. If the Commencement Date occurs on a day other than the first day of a calendar month, the Base Rent payable for the first calendar month of the Term shall be 3 prorated on the basis which the number of days of the Term in the first month bears to the total number of days in such month: and, in such case. Tenant shall pay such prorated Base Rent to Landlord on the Commencement Date, and the first month's Base Rent paid upon execution of this Lease shall be credited against the Base Rent for the second calendar month. If the Term ends on a day other than the last day of a calendar month, the Base Rent payable for the last calendar month of the Term shall be prorated on the basis which the number of days of the Term in the last calendar month bears to the total number of days in such month. 4.2 Security Deposit. (i) Upon Tenant's execution of this Lease, Tenant shall deposit with Landlord the sum specified as the Security Deposit in the Basic Lease Provisions. which shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants, and conditions of this Lease, it being expressly understood and agreed that the Security Deposit is not an advance deposit for rent or a measure of Landlord's damages in case of Tenant's default. If at any time Tenant's Base Rent is increased, the Security Deposit shall also be increased by the same percentage as the increase in Base Rent and Tenant shall, within ten (10) days after receipt of notice of such increase in Base Rent deposit cash with Landlord in an amount sufficient to effect such adjustment. (ii) The Security Deposit may be retained used or applied by Landlord to remedy any default by Tenant, to repair damage caused by Tenant to any part of the Premises or the Building, and to clean the Premises upon expiration or earlier termination of this Lease, as well as to reimburse Landlord for any amount which Landlord may spend by reason of Tenant's default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's default. If any portion of the Security Deposit is so used or applied. Tenant shall, within ten (10) days after written demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to the full amount required hereunder, and Tenant's failure to do so shall be a material breach of this Lease. Landlord shall not be required to keen the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on, or any other compensation for, Landlord's retention of the Security Deposit. Tenant may not elect to apply any portion of the Security Deposit toward payment of Base Rent or any other amounts payable by Tenant under this Lease, although Landlord may elect to do so in the event Tenant is in default or is insolvent. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall be returned to Tenant at Tenant's last known address (or, at Landlord's option, to the last assignee of Tenant's interest hereunder) within thirty (30) days after the Term has ended and Tenant has vacated the Premises. 4.3 Operating Costs. Tenant shall pay to Landlord Tenant's Share of the Increased Operating Costs as follows: (i) Landlord shall submit to Tenant, before January 1 of each Subsequent Year, or as soon thereafter as Landlord has sufficient data, a reasonably detailed statement showing the estimated Increased Operating Costs for such Subsequent Year, which determination shall be made by Landlord based upon experience with actual costs and projections. At the first monthly Base Rent payment date following the submittal of such statement and at each succeeding monthly rent payment date thereafter during the Subsequent Year, Tenant shall pay to Landlord an amount equal to one-twelfth (1/12th) of the Increased Operating Costs. If Landlord does not submit said statement to Tenant prior to January 1 of any Subsequent Year, Tenant shall continue to pay Tenant's Share of the Increased Operating Costs at the then existing rate until such statement is submitted and thereafter, at the monthly Base Rent payment date next following the submittal of such statement Tenant shall pay Tenant's Share of the Increased Operating Costs based on the rate set forth in such statement plus, if the new rate is greater than 4 the old rate, the difference accrued from January 1 of such Subsequent Year. Landlord may revise such estimated Increased Operating Costs at the end of any calendar quarter. (ii) On or before March 31 of the second and each succeeding Subsequent Year or as soon thereafter as Landlord has sufficient data. Landlord shall submit to Tenant a reasonably detailed statement showing the actual Building Operating Costs paid or incurred by Landlord during the previous calendar year. If Tenant's Share of the actual Increased Operating Costs is less than the amount of Tenant's Share of the estimated Increased Operating Costs for the previous Subsequent Year theretofore paid by Tenant, Landlord shall credit such difference against the next Increased Operating Costs payments coming due. If Tenant's Share of the actual Increased Operating Costs is more than the amount of Tenant's Share of the estimated Increased Operating Costs for such previous Subsequent Year theretofore paid by Tenant. Tenant shall pay to Landlord the full amount or such difference at the monthly Base Rent payment date next following the submittal of such statement to Tenant. (iii) If the Expiration Date or the date of earlier termination of this Lease is other than December 31, the Operating Costs for both the Base Year and the last Subsequent Year shall be prorated based on what the number of days in the Term in the last subsequent Year bears to 365; and any amounts owed or to be credited pursuant to Paragraph 4.3.2 shall be paid at the time in the last Subsequent Year or in the calendar year immediately following the last Subsequent Year, that such amount is calculated pursuant to paragraph 4.3(ii). 4.4 Taxes Payable By Tenant. Tenant shall pay before delinquency any and all taxes levied or assessed and which become payable by Tenant for directly or indirectly by Landlord during the Term (excluding, however state and federal personal or corporate income taxes measured by the income of Landlord from all sources, capital stock taxes and estate and inheritance taxes), whether or not now customary or within the contemplation of the parties hereto, which are based upon, measured by or otherwise calculated with respect to; (a) the gross or net rental income of Landlord under this Lease, including, without limitation, any gross receipts tax levied by any taxing authority, or any other gross income tax or excise tax levied by any taxing authority with respect to the receipt of the rental payable hereunder; (b) the value of Tenant's equipment, furniture, fixtures or other personal property located in the Premises: (c) the possession, lease, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; (d) the value of any leasehold improvements, alterations or additions made in or to the Premises regardless of whether title to such improvements, alterations or additions shall be in Tenant or Landlord; or (e) this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises. 4.5 Late Charges and Interest. All amounts payable under this Lease shall be paid in lawful money of the United States of America. Any amount of Base Rent, Tenant's Share of Increased Operating Costs, Parking Charges or any other amount payable under this Lease which is not paid within ten (10) days after it is due shall be subject to a late charge of 5% of the amount unpaid. Any amount due of Landlord that is not paid when due shall bear interest at the Overdue Rate, except that no interest shall accrue for the month in which a late charge is assessed. Tenant's failure to perform any monetary obligations under this Lease shall have the same consequences as Tenant's failure to pay Base Rent. 5. USES 5.1 Authorized. Tenant shall use the Premises solely for general office purposes and for' no other purpose. Tenant shall not use or permit or suffer the Premises or any part thereof to be used for any purpose other than the purpose expressly authorized herein. 5 5.2 Suitability. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the Premises, the Building or the Office Complex, or with respect to the suitability of same for the conduct of Tenant's business except, as expressly provided in this Lease. Tenant's acceptance of the possession of the Premises shall conclusively establish that the foregoing were at such time in satisfactory condition. 5.3 Insurance. Tenant shall not do or suffer anything to be done in or about the Premises, nor shall Tenant bring or allow anything to be brought into the Premises, which will in any way increase the rate of any fire insurance or other insurance upon the Building or its contents, cause a cancellation of said insurance or otherwise affect said insurance in any manner. 5.4 Laws. Tenant shall not do or suffer anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may be subsequently enacted or promulgated. Tenant shall, at its sole cost and expense, promptly comply with each and all of said governmental measures and also with the requirements of any board of fire underwriters or other similar body now or hereafter constituted to deal with the condition. use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant's alterations, additions or improvements. Without limiting the generality of the foregoing, Tenant will maintain throughout the Term a copy of the most current list of chemicals known to the State of California to cause cancer or reproductive toxicity, as published by the State Health and Welfare Agency in accordance with the Safe Drinking Water and Toxic Enforcement Act of 1986 ("Proportion 65") Tenant will monitor the chemicals Tenant maintains on the Premises and will comply with both the warning requirements and the discharge prohibitions of Proposition 65 for all chemicals on the Premises that appear on such list. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures or requirements shall be conclusive of that fact as between Landlord and Tenant. 5.5 Nuisance. Tenant shall not place or permit to be placed on any floor a load exceeding the floor load which such floor was designed to carry. Tenant also shall not do or suffer anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Building or injure or annoy said tenants or occupants, nor shall Tenant use or suffer the Premises to be used for any unlawful purposes. In no event shall Tenant cause or permit any nuisance in or about the Premises, and no loudspeakers or similar devices shall be used without the prior written approval of Landlord, which approval may be withheld in Landlord's sole discretion. Tenant shall not commit or suffer to be committed any waste in or upon the Premises. The provisions of this paragraph are for the benefit of Landlord only and shall not be constructed to be for the benefit of any tenant or occupant of the Building. 5.6 Rules and Regulations. Tenant shall comply with the Rules and Regulations for the Building, together with all modifications and additions thereto adopted by Landlord from time to time. If there is any conflict between the Rules and Regulations and the provisions of this Lease, the Provisions of this Lease shall prevail. Landlord shall not be responsible to Tenant for the nonperformance of any of the Rules and Regulations by any other tenant or occupants of the Building. 6. SERVICES AND UTILITIES 6.1 Basic Services by Landlord. Provided Tenant is not in default under this Lease, and subject to the provisions elsewhere in this Lease and to the Rules and Regulations of the Building, Landlord shall furnish the premises with : (a) water, sewage and electricity suitable in Landlord's judgment for the intended use of the Premises and for the operation of a reasonable number, based on customary use for general office purposes of desktop office machines and ordinary copying 6 machines: (b) heat and air conditioning between 5:00 a.m. and 5:00 p.m. on days other than Saturdays, Sundays and generally recognized holidays, in an amount reasonably required in Landlord's judgment for the comfortable occupation of the Premises: (c) elevator service, which shall mean service by non-attended automatic elevators or elevators with attendants, either or both, at the option of Landlord: and (d) daily Janitorial service (five nights per week) similar to that which is provided in comparable office buildings in the Oakland/Emeryville area. Landlord shall maintain the Common Areas in a clean and orderly manner and in a good state of repair. 6.2 Additional Heating and Air Conditioning. Landlord shall use reasonable efforts to provide additional or after-hours heating or air conditioning at Tenant's request, provided Tenant pays to Landlord the cost of such services as determined solely by Landlord based upon Landlord's reasonable estimates of the costs of such additional services, plus a reasonable charge (not to exceed 10% of the cost of such services) for Landlord's overhead expense. Tenant shall keep all draperies closed when necessary because of the sun's positions and at all times cooperate fully with Landlord and abide by all the regulations and requirements which Landlord may prescribe from time to time for the proper functioning and protection of the heating, ventilating and air conditioning systems. Whenever heat-generating machines or equipment or lighting used in the Premises by Tenants affect the temperature otherwise maintained by the air conditioning system. Landlord shall have the right to install any machinery and equipment Landlord deems necessary to restore the temperature balance in any affected part of the Building, including but not limited to modifications to the Building's air conditioning system or installation of supplementary air conditioning units. Tenant shall pay the cost thereof including installation and any additional costs of operation and maintenance occasioned thereby, to Landlord upon demand. 6.3 Special Apparatus. Tenant shall not except with Landlord's prior written consent which consent may be withheld in Landlord's sole discretion either : (a) use any apparatus or device in the Premises which will increase the amount of cooling, ventilation, electricity or water supplied to the Premises beyond that usually supplied for general office use; or (b) connect with electric current or water pipes any device or apparatus for the purpose of using electrical current or water , except as such connections now exist or as may be provided for the Scope of Work. If Landlord consents to the use and/or connection of any apparatus or device described in clauses (a) and (b) above, Landlord may install meters and similar monitoring devices to measure the amount of utilities consumed by such apparatus or devices and Tenant shall pay for the cost of all work and materials required for the installation, maintenance and use of such meters and monitoring devices. If Landlord elects not to install a special meter or monitoring device. Landlord shall determine the amount of additional utilities and resources consumed by such apparatus of device based upon Landlord's reasonable estimates and best judgment, and such determination, made in good faith by Landlord, shall be conclusive on Tenant. Tenant shall pay to Landlord promptly upon demand the cost of any excess use of utilities and resources based on the rates charged by the local public utility company or other supplier furnishing same, plus any additional expense incurred by Landlord in keeping account of the foregoing and administering same. 6.4 Interruption In Service. Landlord shall use reasonable efforts to remedy any interruption in the furnishing of services and utilities. However, Landlord shall not be in default under this Lease or liable for any damages directly or indirectly arising from, nor shall the rent be abated by reason of, any failure to provide or any reduction in any of the above services or utilities if such failure or reduction is caused by the making of repairs or improvements to the Premises or the Building, the installation of equipment acts of God or the elements, labor disturbances of any character, or any other events or conditions whatsoever beyond the reasonable control of Landlord, or rationing or restrictions on the use of said services and utilities due to energy shortages or other causes, whether or not any of the above result from acts or omissions of Landlord. Furthermore, Landlord shall be entitled to cooperate voluntarily in a reasonable manner with the efforts of national state or local governmental bodies or utilities suppliers in reducing energy or other resources consumption. The failure of Landlord to provide the utilities 7 and services specified in this Section 6 shall not constitute a constructive or other eviction of Tenant. 6.5 Tenant's Other Utilities. Tenant shall pay prior to delinquency for all telephone and all other materials and services not expressly required to be provided by Landlord, which may be furnished to or used in, on or about the Premises during the Term. 7. TENANT'S ALTERATIONS: PROTECTION AGAINST LIENS 7.1 Landlord's Consent Required. Tenant shall not make or permit to be made any alterations, additions or improvements to the Premises or any part thereof, without first obtaining Landlord's written consent. When applying for such consent Tenant shall if required by Landlord, furnish complete plans and specifications for such alterations, additions or improvements. All alterations, additions or improvements to the Premises shall be performed by Contractors selected and supervised be Landlord for Tenant's account and at Tenant's sole cost and expense. Within ten (10) days after receipt of a written statement from Landlord. Tenant shall reimburse Landlord for all cost arising in connection with Landlord's review of plans and specifications and supervision of contractors. Landlord shall have the right to require that any contractor performing alterations, improvements or additions to the Premises shall, prior to commencement of any work, provide Landlord with a performance bond and labor and materials payment bond in the amount of the contract price for the work naming Landlord and Tenant and any other persons designated by Landlord as co-obligees. All alterations, additions, fixtures and improvements, including without limitation all improvements made pursuant to a Scope of work, whether temporary or permanent in character, made in or upon the premises either by Landlord or Tenant shall at once belong to Landlord and become part of the Premises and shall remain on the Premises without compensation of any kind to Tenant, unless Landlord requires their removal under Paragraph 7.2 below. Tenant shall carry insurance as required by Section 10 covering any improvement, alterations or additions to the Premises made or paid for by Tenant it being understood and agreed that none of such alterations, additions or improvements shall be insured by Landlord nor shall Landlord be required under any provision of this Lease to repair, reconstruct or reinstall any such alterations, additions or improvements. Movable furniture and equipment which are removable without material damage to the building or the Premises shall remain the property of Tenant. 7.2 Removal of Tenant's Alterations. Notwithstanding any contrary provision in this Lease, Tenant shall upon Landlord's written request made prior to or within thirty (30 ) days following the Expiration Date or the earlier termination of this lease, promptly remove any alterations, additions or improvements designated by Landlord to be removed and repair any damage to the Premises resulting form such removal. Landlord may in connection with any such removal which might in Landlord's judgment involve damage to the Premises, require that such removal be performed by a bonded contractor or other person for whom a bond satisfactory to Landlord has been furnished covering the cost of repairing the anticipated damages. 7.3 Protection against Liens. Tenant shall keep the Premises the Building and the Common Areas free from any liens arising out of work performed materials furnished, or obligations incurred by Tenant and shall indemnify, hold harmless and defend Landlord from any liens and encumbrances arising out of any work performed or materials furnished by or at the direction of Tenant. In the event that Tenant shall not, within twenty (20) days following imposition of any such lien, cause such lien to be released of record by payment or posting of a proper bond , Landlord shall have, in addition to all other remedies provided in this Lease and by law, the right, but no obligation to cause the same to be released by such means as Landlord shall deem proper, including payment of the claim giving rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection therewith, including attorneys' fees and costs, shall be payable by Tenant upon demand with interest at the Overdue Rate from the date 8 such sums are paid or expenses incurred by Landlord. Landlord shall have the right at all times to post and keep posted on the Premises any notices permitted or required by law, or which Landlord shall deem proper, for the protaction of Landlord and the Premises, and any other party having an interest therein, from mechanics' and materialmen's liens, and Tenant shall give to Landlord at least ten (10) business days' prior written notice of the date of commencement of any work relating to alterations, additions or improvements in or to the Premises. 8. MAINTENANCE AND REPAIRS 8.1 Landlord's Obligations. Subject to Section 15 and 16, Landlord shall maintain in good order, condition and repair the structural portions of the Building including the exterior walls, underflooring and roof, the basic heating, ventilating, air conditioning, plumbing, electrical, and fire detection and security systems, and all other portions the of Premises not the obligation of Tenant or any other tenant in the Building. However, if any such maintenance or repair becomes necessary in whole or in part because of wrongful acts or omissions by Tenant or Tenant's employees, agents, invitees or customers, or because of a breaking and entering, Tenant shall pay the entire cost thereof upon demand. Landlord shall not be liable to Tenant, and rent shall not be abated, for any failure by Landlord to maintain and repair areas which are being used in connection with construction of improvements, or for any failure to make any rapairs or perform any maintenance unless such failure shall continue for an unreasonable time after written notice of the need therefor is given to Landlord by Tenant. Landlord shall also not be liable under any circumstances for loss of profits or for injury to or interference with Tenants's business arising from or in connection with the making of or the Failure of Landlord to make any repairs, maintenance, alterations or improvements in or to any portion of the Building or the Common Areas or in or to fixtures, appurtenances and equipment therein. 8.2 Tenant's Obligations (i) Tenant shall maintain the Premises in good order, condition and repair including the interior surfaces of the ceilings, walls and floors, all doors, interior windows, and all plumbing pipes, valves and fixtures, electrical wiring, panels, switches, and all other fixtures and equipment installed for the use of the Premises by Tenant. Tenant expressly waives the benefit of any statute, ordinance or judicial decision now or hereafter in effect which would otherwise afford Tenant the right to make repairs at Landlord's expense or to terminate this Lease because of Landlord's failure to keep the Premises in good order, condition and repair. (ii) Upon the Expiration Date or the earlier termination of this Lease Tenant shall surrender the Premises in the same condition as received, except for ordinary wear and tear and damage by fire, earthquake, acts of God or the elements, not caused by the wrongful omission of Tenant or Tenant's agents, and shall promptly remove or cause to be removed, at Tenant's expense, from the Premises and the Building any signs, notices and displays placed by Tenant. (iii) Tenant shall repair any damage to the Premises or the Building caused by or in connection with the removal of any articles of personal property, business or trade fixtures, machinery, equipment, cabinetwork, furniture, movable partitions or permanent improvements or additions, including without limitation, repairing the floor and patching and painting the walls where required by Landlord to Landlord's reasonable satisfaction, but excluding any damage caused by reasonable use. Tenant shall indemnify Landlord against any loss or liability resulting from delay by Tenant in so surrendering the Premises, including without limitation, any claims made by any succeeding tenant founded on such delay. 9 (iv) Tenant shall do all acts required to comply with all applicable laws, ordinances, regulations and rules of any public authority relating to Tenant's use and occupancy of the Premises. (v) If Tenant fails to maintain the Premises in good order, condition and repair, or to comply with applicable laws, ordinances, regulations or rules, Landlord shall give Tenant notice to do such acts as are reasonably required to satisfy its obligations under this paragraph. If Tenant fails to promptly commence such work and diligently prosecute it to completion, Landlord shall have the right, but no obligation, to do such acts and expend such funds as are reasonably required to perform such work. Any amount so expended by Landlord shall be paid by Tenant promptly after demand with interest at the Overdue Rate from the date of such work. Landlord shall have no liability to Tenant for any damage, inconvenience or interference with the use of the Premises by Tenant as a result of performing any such work. 9. INDEMNITY AND EXEMPTIONS OF LANDLORD 9.1 Indemnity. Tenant shall indemnify, hold harmless, and defend Landlord against any and all claims of liability for any death or injury to any person or damage to any property whatsoever occurring in, on or about the Premises or any part thereof, or occurring in, on or about any of the Common Areas when such injury or damage is caused in whole or in part by the act, negligence, fault or omission of any duty with respect to the same by Tenant, its agents, contractors, employees, invitees or customers. Tenants shall further indemnify, hold harmless and defend Landlord from and against any and all claims, actions and liabilities arising from (a) any breach or default in the performance of any obligation on Tenant's part to be performed under this Lease, or (b) arising from any act or negligence of Tenant, or any of its agents, contractors, invitees or employees, or (c) any Environmental Damages arising from the presence of Hazardous Materials upon, within or about the Premises due to any act or omission of Tenant or any of its agents, contractors, invitees or employees, or (d) violation of any Environmental Requirements pertaining to the Premises or the activities therein, and (e) from and against all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim, action or liability, and any proceeding brought thereon. In case any action or proceeding be brought against Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord: provided, however, that Tenant shall not be liable for damage to property or death or injury to person(s) occasioned by the active negligence or intentional misconduct of Landlord or its agents or employees unless covered by insurance Tenant is required to provide. 9.2 Exemption of Landlord From Liability. Tenant hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises from any cause other than the active negligence or intentional misconduct of Landlord and its agents or employees. Without limiting the generality of the foregoing, Landlord shall not be liable for injury or damage which may be sustained by the person, goods, wares, merchandise or property of Tenant, its employees, invitees or customers, or any other person in or about the Premises cause by or resulting from fire, steam, electricity, gas, water or rain, which may leak or flow from or into any part of the Premises, or from the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, appliances, plumbing, heating, air conditioning or lighting fixtures of the same, whether the damage or injury results from conditions arising upon the Premises or upon other portions of the Building or from other sources. Landlord shall not be liable for any damages arising from any act or omission of any other tenant or occupant of the Building. 10 10. INSURANCE 10.1 Tenant's Insurance. (i) At all times during the Term Tenant shall maintain in effect policies of casualty insurance covering (a) all alterations, additions or improvements in, on or to the Premises as may be made or paid for by Tenant (other than building standard improvements), and (b) all trade fixtures, merchandise and other personal property from time to time in, on or upon the Premises, in an amount not less than their actual replacement cost, providing protection against any peril included within the classification "Fire and Extended Coverage" together with insurance against sprinkler damage, vandalism and malicious mischief, including cost of debris removal and demolition. Replacement cost for purposes hereof shall be determined by mutual agreement, or failing such agreement by an accredited appraiser selected by Landlord, with the cost of such appraisal to be borne by Tenant. The proceeds of such insurance shall be used for the repair or replacement of the property so insured. Upon termination of this Lease following a casualty as set forth in Section 16, the proceeds under clause (a) above shall be paid to Landlord, and the proceeds under clause (b) above shall be paid to Tenant. (ii) At all times during the Term Tenant shall maintain in effect workers' compensation insurance and comprehensive public liability and property damage insurance adequate to protect Landlord against liability for injury to or death of any person or loss or injury to any property in connection with the activities of Tenant in, on or about the Premises of with the use, operation or condition of the Premises. Such insurance at all times shall afford combined single limit coverage in an amount of not less than Two Million Dollars ($2,000.000). The limits of such insurance shall not limit the liability of Tenant under this Lease. All public liability and property damage policies shall contain a provision that Landlord, although, named as an insured, shall nevertheless be entitled to recovery under said policies for any loss occasioned to it, its servants, agents or employees by reason of Tenant's negligence. (iii) All insurance required to be carried by Tenant hereunder shall be issued by responsible insurance companies acceptable to Landlord and any Mortgagee. All policies of insurance provided for in this Lease shall be issued by insurance companies licensed to do business in the State of California, with general policy holder's rating of not less than "A" and a financial rating of not less than "Class X" as rated in the most current available "Best's insurance Reports." Each policy shall name Landlord and at Landlord's request any Mortgagee as an additional insured, as their respective interests may appear, and a duplicate original of all policies or certificates evidencing the existence and amounts of such insurance shall be delivered to Landlord by Tenant at least ten (10) days prior to Tenant's occupancy of the Premises. All policies of insurance delivered to Landlord must contain a provision that the company writing said policy will give Landlord thirty (30) days' written notice in advance of any cancellation or lapse of or any change in such insurance. All public liability, property damage and other casualty insurance policies shall be written as primary policies, not contributing with, and not in excess of coverage which Landlord may carry. Tenant shall furnish Landlord with renewals or "binders" of any such policy at least thirty (30) days prior to the expiration thereof. If Tenant does not procure and maintain such insurance, Landlord may (but shall not be required to) obtain such insurance on Tenant's behalf and charge Tenant the premiums therefor which shall be payable upon demand, and no such action by Landlord shall constitute a waiver of Tenant's default hereunder. Tenant may carry such insurance under a blanket policy, provided such blanket policy expressly affords the coverage required by this Lease by a Landlord's protective liability endorsement or otherwise. 11 (iv) Every three (3) years during the Term or whenever Tenant materially improves or alters the Premises, Tenant shall increase the policy limits for the insurance to be carried by Tenant under this Section 10 to such amounts as landlord reasonably determines are appropriate. 10.2 Landlord's Insurance. At all times during the Term Landlord shall maintain in effect a policy or policies of insurance covering the Building in an amount not less than ninety percent (90%) of full replacement cost (exclusive of the cost of excavations, foundations, footings and all tenant improvements constructed at the request or cost of Tenant, but inclusive of the cost of building standard tenant improvements) from time to time during the Term, providing protection against any peril generally included in the classification "Fire and Extended Coverage" together with insurance against sprinkler damage vandalism and malicious mischief. Landlord's obligation to carry the insurance provided for herein may be brought within the coverage of any blanket policy or policies of insurance carried and maintained by Landlord. In addition to the coverage required by this paragraph. Landlord shall be entitled to procure (and include the premiums therefor in Operating Costs) such other types of insurance and in such amounts as Landlord may deem to be necessary or appropriate. 10.3 Subrogation Waiver. Landlord and Tenant each hereby waive any and all rights of recovery against the other or against the officers, partners, employees, agents and representatives of the other, on account of loss or damage of such waiving party or its property, or the property of others under its control, to the extent that such loss or damage is insured against under any fire and extended coverage insurance policy which either may have in force at the time of such loss or damage. Tenant shall, upon obtaining the polices or insurance required under this Lease, give notice to its insurance carrier(s) that the foregoing mutual waiver of subrogation is contained in this Lease. The waivers set forth herein shall be required and effective only to the extent such waivers are available from each party's insurer without additional premium; if an extra charge is incurred to obtain such waiver, it shall be paid by the party in whose favor the waiver runs within fifteen (15) days after written notice from the other party, and, if not so paid such other party's waiver under this paragraph shall be neither required nor effective. 11. ASSIGNMENT AND SUBLETTING 11.1 Landlord's Consent Required. Tenant shall not sell, assign, mortgage, pledge, hypothecate, encumber or otherwise transfer this Lease or any interest therein, and shall not sublet the Premises or any part thereof, or suffer or permit the Premises or any part thereof to be occupied by any other person (the agents, employees, and invitees of Tenant excepted), without the prior [ILLEGIBLE] of Landlord in each instances and any attempt to do so without such consent shall be voidable and, at Landlord's election, shall constitute a noncurable default under this Lease. No interest of Tenant in this Lease or the Premises shall be assignable by operation of law. Subject to the terms and conditions contained in this section, Landlord shall not unreasonably withhold its consent to voluntary assignment of this Lease or a subletting of the Premises. 11.2 Tenant's Application. If Tenant desires at any time to assign this Lease or to sublet the Premises or any portion thereof, Tenant shall submit to Landlord at least thirty (30) days prior to the proposed effective date of the assignment or sublease, in writing: (a) a notice of intent to assign or sublease, setting forth the proposed effective date thereof; (b) the name of the proposed assignee or subtenant; (c) the nature of the proposed assignee's or subtenant's business to be carried on in the Premises; (d) the terms and provisions of the proposed assignment or sublease: and (e) such financial information as Landlord may request concerning the proposed assignee or subtenant, including recent financial statements and bank references. 12 11.3 Required Provisions. All assignment or sublease agreements shall (a) contain such terms as are described in Tenant's notice under Paragraph 11.2 above or as otherwise agreed by Landlord. (b) prohibit further assignments or subleases except with Landlord's written consent, (c) impose the same obligations and condition on the assignee or sublessee as are imposed on Tenant by this Lease (except as to rent and term or as otherwise agreed by Landlord), (d) be expressly subject and subordinate to each and every provision of this Lease, (e) have a term that expires on or before the Expiration Date. and (f) provide that Tenant and/or the assignee or sublessee shall pay Landlord the amount of any additional costs or expenses incurred by Landlord for repairs, maintanance or otherwise as a result of any change in the nature of occupancy caused by the assignment or sublease. 11.4 Bonus Rent. Landlord shall be entitled to receive all Bonus Rent payable in connection with any assignment or sublease. Within fifteen (15) days after written request by Landlord. Tenant shall provide and certify to Landlord all financial information required for the calculation of Bonus Rent. 11.5 Fees for Review. If Landlord retains the services of an attorney to review any aspect of the proposed assignment or sublease transaction. Tenant shall pay to Landlord all attorneys fees reasonably incurred by Landlord in connection therewith. Tenant shall pay such attorneys fees to Landlord within thirty (30) days after written request therefor. 11.6 No Release of Tenant. No consent of Landlord to any assignment or subletting by Tenant shall relieve Tenant of the obligations to be performed by Tenant under this Lease whether accruing before or after such assignment or subletting, and notwithstanding any subsequent modification extension or renewal of this Lease made with or without Tenant's consent. The consent by Landlord to any transfer or subletting shall not relieve Tenant from the obligation to obtain Landlord's express prior written consent to any other transfer or subleasing. The acceptance by Landlord of payment from any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any transfer or sublease, or to be a release of Tenant from any obligation under this Lease. If this Lease is assigned, or if the Premises or any part thereof are sublet or occupied by any person other than Tenant, Landlord may after default by Tenant, collect the rent from any such assignee, transferee, subtenant or occupant and apply the net amount collected to the rent reserved herein, and no such action by Landlord shall be deemed a consent to such assignment, transfer, sublease or occupancy. 11.7 Assumption of Obligations. Each assignee of Tenant shall assume all obligations of Tenant under this Lease and shall be and remain liable jointly and severally with Tenant for the payment of the rent and the performance of all the terms, covenants, conditions and agreements herein contained on Tenants' part to be performed for the Term. No assignment shall be binding on Landlord unless the assignee or Tenant delivers to Landlord a counterpart of the assignment instrument in recordable form which contains a covenant of assumption by the transferee satisfactory in substance and form to Landlord, consistent with the requirements of this section. The failure or refusal of any assignee to execute such instrument of assumption shall not release or discharge the assignee from its liability to Landlord hereunder. Landlord shall have no obligation whatsoever to perform any duty to or respond to any request from any sublessee, it being the obligation of Tenant to administer the terms of its subleases. 11.8 Deemed Transfers. If Tenant is a privately held corporation, or is an unincorporated association or partnership, the transfer, assignment or hypothecation of any stock or interest in such corporation, association or partnership in the aggregate from the Lease Date in excess of fifty percent (50%) shall be deemed an assignment or transfer within the meaning of this section. However, nothing in this section shall prohibit Tenant from assigning this Lease or subletting the Premises or any part thereof to any corporation which controls Tenant is controlled by Tenant or is under common control with Tenant provided Tenant gives Landlord at Least thirty (30) days 13 prior written notice of such subletting or assignment and such subletting or assignment shall not release or discharge Tenant from any liability under this Lease. 11.9 Landlord's Option to Recapture. Landlord reserves the option, to be exercised by giving notice to Tenant within fifteen (15) days after receipt of Tenant's notice of intent to assign or sublease (it being agreed that no revocation or withdrawal by Tenant of such notice of intent to assign or sublease shall affect Landlord's option) to recapture the portion of the Premises described in Tenant's notice for the remainder of the Term and to terminate this Lease with respect to such recaptured Premises. The effective date of such recapture and termination shall be as specified in Landlord's notice of exercise of its recapture option, but shall not be less than thirty (30) days nor more than sixty (60) days after the delivery of such notice. The option to recapture reserved to Landlord hereunder shall also arise in the event Tenant shall, voluntarily or involuntarily, sell, assign, mortgage, pledge, encumber or otherwise transfer this Lease or any interest herein, or sublet the Premises or any portion thereof, or suffer or permit the Premises to be occupied by any third person (the agents, employees, invitees and customers of Tenant excepted), without first obtaining the written consent of Landlord; and in such event the recapture option shall apply to the entire Premises and be exercisable by Landlord at any time after the occurrence of the event for which Landlord's consent was required but not obtained by Tenant. If this Lease is terminated pursuant to Landlord's recapture option with respect to only a portion of the Premises, the Base Rent required under this Lease and Tenant's Share shall be adjusted proportionately based on the rentable square footage retained by Tenant and the rentable square footage of the Premises leased by Tenant immediately prior to such recapture and cancellation and Landlord and Tenant shall thereupon execute an amendment of this Lease in accordance therewith. If Landlord so recaptures a portion of the Premises it shall construct and erect as its sole cost such partitions as may be required to sever the space retained by Tenant from the space recaptured by Landlord; provided however that Tenant shall bear the cost of painting covering or otherwise decoration the surfaces of such partitions which face the remaining Premises. Landlord may, without limitation, lease the recaptured portion of the Premises to the proposed subtenant or assignee, on the same or different terms as were proposed by Tenant, without liability to Tenant. 12. SUBORDINATION AND ATTORNMENT 12.1 Subordination. Upon the written request of Landlord or any Mortgagee, Tenant will in writing subordinate its rights under this Lease to the lien of any mortgage or deed of trust now or hereafter in force against the Premises, the Building or the underlying land and to all advances made or hereafter to be made upon the security thereof, and to all extensions, modifications and renewals thereunder. Tenant shall also, upon Landlord's request, subordinate its rights hereunder to any ground or underlying lease which may now exist or hereafter be executed affecting the Building and/or the underlying land. Tenant shall have the right to condition its subordination upon the execution and delivery of an attornment and nondisturbance agreement as described in Paragraph 12.2, between the Mortgagee or the lessor under any such ground or underlying lease and Tenant. Tenant shall not subordinate its rights hereunder to any lien other than that of a first mortgage or first deed of trust except with the prior written consent of the Mortgagee holding such first mortgage or deed of trust. 12.2 Attornment. Upon the written request of the Landlord or any Mortgagee or any lessor under a ground or underlying leases, Tenant shall attorn to any such Mortgagee or lessor, provided such Mortgagee or lessor agrees that if Tenant is not in default under this Lease, Tenant's possession of the Premises in accordance with the terms of this Lease shall not be disturbed. Such agreement shall provide among other things, (a) that this Lease shall remain in full force and effect, (b) that Tenant pay rant to said Mortgagee or lessor from the date of said attornment. (c) that said Mortgagee or lessor shall not be responsible to Tenant under this Lease except for obligations accruing subsequent to the date of such attornment, and (d) that Tenant in 14 the event of foreclosure or a deed in lieu thereof or a termination of the ground or underlying lease, will enter into a new lease with the Mortgagee, lessor or other person having or acquiring title on the same terms and conditions as this Lease and for the balance of the Term. 12.3 Nonmaterial Amendments. If any lender should require any modification of this Lease as a condition of loans secured by a lien on the Premises, the Building or the land underlying the Building, or if any such modification is required as a condition to a ground or underlying lease, Tenant will approve and execute any such modifications, promptly after request by Landlord provided no such modification shall relate to the rent payable hereunder, the length of the Term or otherwise materially change the rights or obligations of Landlord or Tenant. 13. DEFAULT BY TENANT 13.1 Acts Constituting Default. In addition to the events specified as a default elsewhere in this Lease, the failure of Tenant to perform each covenant made under this Lease, or any abandonment of the Premises by Tenant, shall constitute a default hereunder. However, Landlord shall not commence any action to terminate Tenant's right of possession as a consequence of a default until any period of grace with respect thereto has elapsed; provided, that any such period of grace shall be in lieu of and not in addition to the period during which Tenant may cure such default following the delivery of notice pursuant to California Code of Civil Procedure Section 1161. (i) Subject to the limitation expressed in Paragraph 13.1.3. Tenant shall have a period of three (3) days from the date of written notice from Landlord within which to cure any default in the payment of any monetary obligations of Tenant under this Lease. (ii) Tenant shall have a period of fifteen (15) days from the date of written notice from Landlord within which to cure any other default under this Lease which is capable of being cured: provided, however, that with respect to any default which cannot reasonably be cured within fifteen (15) days, the default shall not be deemed to be uncured if Tenant commences to cure within five (5) days from Landlord's notice and thereafter prosecutes diligently and continuously to completion all acts required to cure the default. (iii) There shall be no period of grace with respect to any default by Tenant which is not capable of being cured. Landlord and Tenant stipulate that the following defaults are not capable of being cured by Tenant: (a) any default which is specified in this Lease as being incurable; (b) any unauthorized sale, assignment, mortgage, pledge, hypothecation, encumbrance or other transfer of this Lease or any interest herein, or any unauthorized subletting of all or any portion of the Premises; (c) the commission of waste by Tenant; (d) the failure of Tenant to pay rent or any other monetary obligation of Tenant hereunder on the due date thereof where such failure occurs on more than three (3) consecutive occasions or more than six (6) occasions during any twelve (12) month period; and (e) any other default which is recognized under California law as being incurable. 13.2 Landlord's Remedies. If Tenant fails to cure a default, or in the event of a default which is not capable of being cured by Tenant, Landlord shall have the following rights and remedies in addition to any other rights and remedies available to Landlord at law or in equity: (i) Landlord shall have all rights and remedies provided by California Civil Code Section 1951.2 (or any successor statute), including nut not limited to recovery of the worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of rental loss for the same period that Tenant proves could be reasonably avoided, as computed pursuant to subsection (b) of said Section 1951.2; 15 (ii) Landlord shall have rights and remedies provided by California Civil Code Section 1951.4 ( or any successor statute), which allows landlord to continue this Lease in effect and to enforce all of its rights and remedies under this Lease, including the right to recover rent as it becomes due, for so long as Landlord does not terminate Tenant's right to possession. Acts of maintenance or preservation, efforts to relet the Premises, or the appointment of receiver upon the Landlord's initiative to protect its interest under this Lease shall not constitute a termination of Tenant's right to possession; and (iii) Landlord shall have the right but not the obligation to make any payment or perform any act on Tenant's part as may be required to cure Tenant's default, without waiving its rights based upon such default by Tenant and without releasing Tenant from any of its obligations. All sums so paid and all costs incurred by Landlord together with interest thereon at the Overdue Rate from the date of such payment or the incurrence of such cost by Landlord, whichever occurs first, shall be paid to Landlord on demand. 14. DEFAULT BY LANDLORD 14.1 Existence of Default. Landlord shall not be deemed to be in default in the performance of any obligation under this Lease unless and until it has failed to perform such obligation within thirty (30) days after receipt of written notice by Tenant to Landlord specifying such failure: provided, however, that if the nature of Landlord's default is such that more than thirty (30) days are required for its cure, then Landlord shall not be deemed to be in default if it commences such cure within the thirty (30) day period and thereafter diligently prosecutes such cure to completion. 14.2 Mortgagee's Right To Cure. Tenant shall give any Mortgagee a copy, by registered mail, of any notice of default served upon Landlord, provided that Tenant previously has been notified in writing (by way of Notice of Assignment of Rents and Leases, or otherwise), of the address of such Mortgagee. If landlord fails to cure such default within the time provided in this Lease, any such Mortgagee shall have an additional forty-five (45) days within which to cure such default by Landlord, or if such default cannot be cured within that time, then such additional time as may be necessary if within that forty-five (45) day period the Mortgagee has commenced and is pursuing the remedies necessary to cure such default (including but not limited to commencement of foreclosure proceedings, if necessary to effect such cure), in which event this Lease shall not be terminated while such remedies are being so pursued. 14.3 Judgment Against Landlord. If Tenant recovers any judgement against Landlord for a default by Landlord under this Lease, the judgement shall be satisfied only out of the interest of Landlord in the Building and neither Landlord nor any of its partners, officers, employees or agents shall be personally liable for any such default or for any deficiency. 15. CONDEMNATION 15.1 Termination Due To Taking. If all or any part of the Premises are the subject of a Taking, either Landlord or Tenant may, by written notice given to the other within thirty (30) days of receipt of notice of such Taking, elect to terminate this Lease as of the date possession is transferred pursuant to the Taking, provided however, that before tenant may terminate this Lease for a Taking, such Taking must be of such an extent and nature as to substantially impede Tenant's use of the Premises. If any part of the Building other than the Premises shall be the subject of a Taking, Landlord may elect to terminate this Lease. If there is a Taking of all or a part of the Parking Facilities and the parking rights granted to Tenant under Paragraph 2.4 are substantially reduced thereby, Landlord shall have the right to provided replacement parking to compensate for such reduction within other parking areas serving the Office Complex. If such replacement parking is not provided, then for a period of thirty (30) days after Landlord notifies 16 Tenant that such replacement parking cannot be provided. Tenant shall have the right to terminate this Lease, effective at a time specified by Tenant not to exceed thirty (30) days from the date of the notice. 15.2 No Termination Due To Taking. If a partial Taking of the Premises does not result in a termination of this Lease, Base Rent, Tenant's Share of Increased Operating Costs and Tenant's parking rights shall be reduced in proportion to what the area of the Premises taken bears to the area of the Premises immediately prior to the Taking. No temporary taking of the Premises or any part of the Building shall terminate this Lease, except at Landlord's election, or give Tenant any right to any abatement of Base Rent or Increased Operating Costs, except that Base Rent and Operating Costs shall be reduced in accordance with the preceding sentence during that portion of any temporary Taking of the Premises lasting more than thirty (30) days. Each party hereto waives the provisions of California Code of Civil Procedure Section 1265.130 (or any successor statute) allowing either party to file a petition to terminate this Lease for a partial Taking. 15.3 Award For Taking. No award for any partial or entire Taking shall be apportioned, and Tenant hereby assigns to Landlord any and all rights of Tenant to any portion of the award for a Taking. However, nothing contained herein shall be deemed to give Landlord any interest in or to require Tenant to assign to Landlord any award made to Tenant for taking of personal property belonging to Tenant. 16. DAMAGE AND DESTRUCTION 16.1 Partial Damage - Insured. If the Premises or the Building are damaged by a risk covered under fire and extended coverage insurance insuring Landlord, then Landlord shall restore such damage provided insurance proceeds are available to Landlord to pay ninety percent (90%) or more of the cost of restoration, and provided such restoration by Landlord can be completed within eight (8) months after the commencement of work in the opinion of a licensed architect or engineer appointed by Landlord. In such event this Lease shall continue in full force and effect, except that Tenant shall, so long as the damage is not due to the act or omission of Tenant, be entitled to an equitable reduction of Base Rent and Tenant's Share of Excess Building Operating Costs while such restoration takes place, such reduction to be based upon the extent to which the damage or restoration efforts materially interfere with Tenant's use of the Premises. 16.2 Partial Damage - Uninsured. If the Premises or the Building are damaged by a risk not covered by such insurance or if the insurance proceeds available to Landlord are less than eighty percent (80%) of the cost of restoration, or if the restoration cannot be completed within eight (8) months after the commencement of work in the opinion of the licensed architect or engineer appointed by Landlord, then Landlord shall have the option either to (a) repair or restore such damage, this Lease continuing in full force and effect, with the Base Rent and Tenant's Share of Excess Building Operating Costs to be equitably reduced as provided in Paragraph 16.1, or (b) give notice to Tenant at any time within ninety (90) days after such damage terminating this Lease as of a date to be specified in such notice, which date shall be not less than thirty (30) nor more than sixty (60) days after the giving of such notice. If such notice is given, this Lease shall expire and any interest of Tenant in the Premises shall terminate on the date specified in such notice. The Base Rent and Tenant's Share of Excess Building Operating Costs during the period prior to the termination shall be reduced as provided in Paragraph 16.1 and paid up through the date of termination. 16.3 Total Destruction. If the Premises are totally destroyed or in Landlord's judgment the Premises cannot be restored as required herein under applicable laws and regulations, notwithstanding the availability of insurance proceeds, this Lease shall be terminated effective as of the date of the damage. 17 16.4 Landlord's Obligations. Any restoration by Landlord pursuant to Paragraphs 16.1 or 16.2 shall be commenced as soon as reasonably possible after the date of damage and prosecuted diligently to completion at the earliest possible date. Landlord shall not be required to carry insurance of any kind on Tenant's property and shall not be required to repair any injury or damage thereto by fire or other causes, or to make any restoration or replacement of any paneling, decorations, partitions, ceilings, floor covering, office fixtures or any other improvements or property installed in the Premises by or at the direct or indirect expense of Tenant (other than building standard tenant improvements), and Tenant shall be required to restore or replace same in the event of damage. Tenant shall have no claim against Landlord for any loss suffered by reason of any such damage, destruction, repair or restoration. Notwithstanding anything to the contrary contained in this section, Landlord shall have no obligation to repair, reconstruct or restore the Premises with respect to damage or destruction as described in this section occurring during the last twelve (12) months of the Term. 16.5 Waiver by Tenant. Tenant shall have no right to terminate this Lease as a result of any statutory provisions now or hereafter in effect pertaining to the damage and destruction of the Premises or the Building, except as expressly provided herein, and Tenant expressly waives the provisions of California Civil Code Sections 1932(2) and 1933(4) with respect to any damage or destruction of the Premises. 17. DEFINITIONS 17.1 "Base Rent" means the monthly rent payable pursuant to Paragraph 4.1 and as specified in the Basic Lease Provisions. 17.2 "Base Year" means the calendar year specified in the Basic Lease Provisions. 17.3 "Basic Lease Provisions" means the provisions contained in Paragraph 1.2 of this Lease. 17.4 "Bonus Rent" means the excess of (a) all consideration received by Tenant from an assignment of this Lease or a sublease of all or any portion of the Premises over (b) the Base Rent, Increased Operating Costs and other charges payable by Tenant to Landlord under this Lease (prorated, in the case of a sublease of less than all of the Premises, to reflect obligations allocable to only the portion of the Premises so sublet). In determining the total consideration under the foregoing clause (a), Tenant shall be entitled to exclude therefrom reasonable leasing commissions paid by Tenant to any unaffiliated third party, payments attributable to the amortization of the cost of improvements Tenant must make to the Premises at its cost to ready same for the assignee or sublessee, and other reasonable, out-of-pocket costs paid by Tenant which are directly related to Tenant's obtaining the assignment or sublease. 17.5 "Building" means the highrise office building described in the Basic Lease Provisions, the parcels of land on which such office building is situated, all other improvements situated on the land, and all rights end easements appurtenant thereto. Except where the context requires otherwise, references to the "Building" shall include the Common Areas and the Parking Facilities serving the Building and other buildings in the Office Complex. 17.6 "Commencement Date" means the date determined pursuant to Paragraph 3.2 of this Lease for the commencement of the Term. 17.7 "Common Areas" means areas within the Building (including common corridors and hallways, stairwells, elevators, restrooms, lobbies and other public areas) and within the Office Complex which are available for nonexclusive use by Tenant and other tenants of the Building or the Office Complex. 18 17.8 "Environmental Damages" means all claims, judgments, damages, losses; penalties, fines, liabilities, strict costs and expenses of defense of any claim and of any settlement or judgment, including without limitation reasonable attorneys' fees and consultants' fees, any of which are incurred at any time as a result of the existence of "Hazardous Material" upon, about, beneach the Premises or migrating or threatening to migrate to or from the Premises, or the existence of a violation of "Environmental Requirements" pertaining to the Premises, including, without limitation: (a) damages for personal injury, or injury to property or natural resources occurring upon or off of the Premises, foreseeable or unforeseeable, including, without limitation, lost profits, consequential damages, interest and penalties including but not limited to claims brought by or on behalf of employees of Tenant, with respect to which Tenant waives any immunity to which it may be entitled under any industrial or worker's compensation laws; (b) diminution in the value of the Premises, and damages for the loss of or restriction on the use of or adverse impact on the marketing of rentable or usable space or of any amenity of the Premises: (c) fees incurred for the services of attorneys, consultant, contractors, experts, laboratories and all other costs incurred in connection with the investigation or remediation of such "Hazardous Materials" or violation of "Environmental Requirements" including, but not limited to, the preparation of any feasibility studies or reports or the performance of any cleanup, remedial, removal, containment, restoration or monitoring work required by any federal, state or local governmental agency or political subdivision, or reasonably necessary to make full economic use of the Premises or any other property or otherwise expended in connection with such conditions, and including without limitation any attorneys' fees, costs and expenses incurred in enforcing this agreement or collecting any sums due hereunder; and (d) liability to any third person or governmental agency to indemnify such person or agency for costs expended in connection with the items referenced in subparagraph(c) herein. 17.9 "Environmental Requirements" means all applicable present and future statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises and similar items, of all governmental agencies, departments, commissions, boards, bureaus, or instrumentalities of the United States, states and political subdivisions thereof and all applicable judicial and administrative and regulatory decrees, judgments and orders relating to the protection of human health or the environment, including, without limitation: (a) all requirements, including but not limited to, those pertaining to reporting, licensing, permitting, investigation and remediation of emissions, discharges, releases or threatened releases of "Hazardous Materials," chemical substances, pollutants, contaminants or hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of chemical substances, pollutants, contaminants or hazardous or toxic substances, materials, or wastes, whether solid, liquid or gaseous in nature; and (b) all requirements pertaining to the protection of the health and safety of employees or the public. 17.10 "Expiration Date" means the scheduled date on which the Term will expire as determined pursuant to Paragraph 3.2 of this Lease. 17.11 "Hazardous Materials" means any chemical substance (a) the presence of which requires investigation or remediation under any federal, state or local statute, regulation, ordinance, order, action or policy; or (b) which is or becomes defined as a "hazardous waste" or "hazardous substance" under any federal, state or local statute, regulation or ordinance or amendments thereto; or (c) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, the State of California or any political subdivision thereof: or (d) the presence of which on the Premises causes or threatens to cause a nuisance upon the Premises or to adjacent properties or poses or threatens to pose a hazard to the Premises or the health or safety of persons on or 19 about the Premises; or (e) without limitation, which contains gasoline, diesel fuel or other petroleum hydrocarbons; or (f) which contains polychlorinated bipheynols(PCBs), asbestos or urea formaldehyde foam insulation. 17.12 "Increased Operating Costs" means the amount by which the Operating Costs during any Subsequent Year exceed the Operating Costs for the Base Year. 17.13 "Landlord's Work" means the work, if any, to be performed by Landlord to ready the Premises for Tenant's occupancy, as specified in the Scope of Work. 17.14 "Lease Date" means the date specified in the Basic Lease Provisions, which shall be the effective date of execution of this Lease by Landlord and Tenant unless otherwise provided in this Lease. 17.15 "Mortgagee" means the holder of any mortgage or deed of trust secured by the Building or the Premises or any portion thereof. 17.16 "Office Complex" means the development comprised of the three office buildings commonly known as Watergate Towers I, II and III, addressed, respectively, as 1900 Powell Street, 2200 Powell Street and 2000 Powell Street, respectively, Emeryville, California. 17.17 "Operating Costs" means all actual costs of ownership, operation, maintenance, repair and management of the Building, including the Building's share of all such costs of the Parking Facilities and the common Areas which are shared with other buildings in the Office Complex to be based on Landlord's reasonable allocation among the buildings. If during the Base Year or any subsequent Year the Building is less than ninety-five percent (95%) occupied, those Operating Costs which vary based on the level of occupancy shall be adjusted upward to reflect, in Landlord's reasonable judgment, the Operating Costs that would apply during such year if the Building were at least ninety-five percent (95%) occupied. 17.17.1 Operating Cost shall include: (a) salaries, and other compensation, including payroll taxes, vacation, holiday and other paid absences, and welfare, retirement and other fringe benefits, paid to employees, independent contractors or agents of Landlord engaged in the operation, repair, management or maintenance of the Building, including (i) elevator operators, (ii) window cleaners, miscellaneous repair personnel, janitors, cleaning personnel and porters, (iii) security personnel and caretakers, and (iv) engineers, mechanics, electricians and plumbers; (b) repairs and maintenance of the Building and the costs of supplies, tools, materials and equipment for such repairs and maintenance that are under generally accepted accounting principles not capitalized; (c) premiums and other charges incurred by Landlord for insurance on the Building and for Landlord's employees, including (i) fire and extended coverage insurance, and earthquake, windstorm flood, and explosion insurance, (ii) public liability and property damages insurance, (iii) workers' compensation insurance, (iv) boiler and machinery insurance, sprinkler leakage, water damage and related liability insurance, and burglary, fidelity and pilferage insurance on equipment and materials, (v) health, accident and group life insurance, (vi) all such insurance as Landlord is required to carry under Section 10 of this Lease, and (vii) such other insurance as is customarily carried by operators of comparable first-class office buildings in the San Francisco Bay Area: 20 (d) costs incurred for inspection and servicing, including all outside maintenance contracts necessary for the maintenance of the Building, such as janitorial and window cleaning, rubbish removal, exterminating, water treatment, elevator, electrical, plumbing and mechanical equipment, and the cost of materials, tools supplies and equipment used for inspection and servicing of the Building; (e) cost incurred for electricity, water, gas, fuel and other utilities; (f) payroll taxes, federal taxes, state and local unemployment taxes, and social security taxes paid for the employees of Landlord engaged in the operation, maintenance and repair of the Building; (g) sales, use and excise taxes on goods and services purchased by Landlord for use in the Building; (h) license, permit and inspection fees; (i) accounting and legal fees; (j) customary management fees not to exceed five percent (5%) of the gross revenues of the Building; (k) the annual amortization over its useful life, with a reasonable salvage value on a straightline basis, of the costs of any capital improvements made by Landlord and required by any changes in applicable laws, rules and regulations of any governmental authority enacted after the Building was completed; (l) the annual amortization over its useful life, with a reasonable salvage value on a straightline basis, of the costs of any equipment or capital improvements made by Landlord after the Building was completed as a labor-saving measure or to accomplish other savings in operating, repairing, managing or maintaining the Building, but only to the extent of the savings; (m) the annual amortization, over its useful life on a straight line basis, of the cost of any exterior window draperies provided by Landlord and the carpeting in the Common Areas; (n) any costs for substituting work, labor, materials or services in place of any of the above items, or for any additional work, labor, materials, services or improvements to comply with any governmental laws, rules regulations or other requirements applicable to the Building enacted after the Building was completed which are considered operating expenses under Generally Accepted Accounting Principles; (o) other costs reasonably necessary to maintain, operate, repair and manage the Building in a first-class manner and condition; (p) all real property taxes on the Building, the land on which the Building is situated, and the various estates in the Building and a proportion of the real property taxes on the land and improvements comprising the Parking Facilities and the Common Areas shared with other buildings in the Office Complex, based on Landlord's reasonable allocation among the buildings using such facilities and areas; (q) all personal property taxes levied on property used in the operation of the Building; 21 (r) all taxes of every kind and nature whatsoever levied or assessed in lieu of or in substitution for existing or additional real or personal property taxes on the Building, land or personal property other than taxes covered by paragraph 4.5, including, but not limited to, any charge, levy, excise or assessment upon Landlord's business of leasing the Premises or other portions of the Building or the Parking Facilities; and (s) the cost to Landlord contesting the amount, validity or applicability of any of the foregoing items. 17.17.2 Operating Costs shall exclude: (a) leasing commissions, costs, disbursements and other expenses incurred for leasing, renovating or improving space for tenants; (b) the cost of electricity or other services sold to tenants for which Landlord is to be reimbursed as a charge over the rent payable under the leases with such tenants; (c) costs incurred because Landlord or another tenants violated the terms of any lease of the Building; (d) interest on debt or amortization payments on mortgages or deeds of trust or any other debt for borrowed money, except as herein expressly permitted; (e) items and services for which Tenant reimburses Landlord or pays third parties or that Landlord provides selectively to one or more tenants of the Building other than Tenant without reimbursement; (f) advertising and promotional expenses; (g) repairs or other work needed because of fire or other casualty insured against by Landlord; (h) costs incurred in operating the Parking Facilities except to the extent the cost of operating the Parking Facilities exceeds the revenues generated from operation thereof; (i) nonrecurring costs incurred to remedy structural defects in the original construction materials or insulation; and (j) costs incurred by Landlord for alterations that are considered capital improvements under generally accepted accounting principles except to the extent the same are expressly permitted under Paragraph 17.17.1. 17.18 "Overdue Rate" means the lesser of: (a) eighteen percent (18%) per annum; or (b) the maximum rate permitted under applicable usury law. 17.19 "Parking Charge" means the monthly amount to be paid by Tenant for each parking permit issued to Tenant pursuant to paragraph 2.4, which amount is specified in the Basic Lease Provisions and subject to increase. 17.20 "Parking Facilities" means the parking lot(s) and parking structure(s) located within or adjacent to the Office Complex and designated by Landlord as serving the Building. 22 17.21 "Premises" means the portion of the Building demised by this Lease, as designated by suite number in the Basic Lease Provisions and shown on Exhibit A to this Lease. 17.22 "Rules and Regulations" means the rules and regulations regulating the use of the Premises, the Common Areas, Parking Facilities and other portions of the Building promulgated by Landlord from time to time as provided in paragraph 5.6 of this Lease. 17.23 "Security Deposit" means the amount specified in the Basic Lease Provisions, which is to be held by Landlord to secure Tenant's performance of its obligations under this Lease as provided in paragraph 4.2. 17.24 "Scope of Work" means the Scope of Work Agreement if any, executed by Landlord and Tenant concurrently with their execution of the Lease, which will be attached as Exhibit B to this Lease and will establish the full extent of Landlord's Work in readying the Premises for Tenant's occupancy hereunder. 17.25 "Subsequent Year" means any calendar year during the Term after the Base Year. 17.26 "Substantial Completion" means (a) completion, as determined in the event of a dispute by Landlord's architect in accordance with AIA standards, of Landlord's Work except for such items as constitute a minor defect or deficiency which can be completed or corrected after occupancy without causing any material interference with Tenant's use of the Premises, and (b) the issuance of a certificate of occupancy by the City of Emeryville or such other governmental authorization as may be required for occupancy of the Premises. 17.27 "Taking" means the taking of property or any interest therein for public or quasi public use by exercise of the power of eminent domain or otherwise, or a taking in the nature of inverse condemnation, with or without litigation, or a transfer of property or any interest therein pursuant to an agreement entered into under threat of exercise of the power of eminent domain. 17.28 "Tenant Parking" means the number of permits to park passenger automobiles in the Parking Facilities which are to be issued to Tenant pursuant to paragraph 2.4, and as specified in the Basic Lease Provisions. 17.29 "Tenant's Share" means the ratio that the rentable square footage of the Premises bears to the total rentable square footage of the Building. If the rentable square footage of the Premises and/or the total rentable square footage of the Building changes, Tenant's Share shall be appropriately adjusted so that it at all times reflects the proportion which the rentable square footage of the Premises bears to the total rentable square footage of the Building. 17.30 "Term" means the term of this Lease, including any permitted extensions or renewals thereof. 18. MISCELLANEOUS PROVISIONS 18.1 Estoppel Certificates. Within ten (10) days following any written request Landlord may make from time to time, Tenant without any charge therefor, shall execute, acknowledge and deliver a statement certifying: (a) the Commencement Date of this Lease; (b) the fact that this Lease is unmodified and in full force and effect (or, if there have been modifications hereto, that this Lease is in full force and effect, as modified, and stating the date and nature of such modifications); (c) the date to which the rent and other sums payable under this Lease have been paid; (d) the fact that there are no current defaults under this Lease by either Landlord or Tenant except as specified in the statement; and (e) such other matters as may be reasonably requested by Landlord. Landlord and Tenant intend that any statement delivered pursuant to this 23 paragraph may be relied upon by a mortgagee, beneficiary, purchaser or prospective purchaser of the Building or any interest therein. Tenant's failure to deliver any such statement within said ten (10) day period shall constitute a material default, and Tenant shall indemnify and hold Landlord harmless form and against any and all liability, loss, cost, damage and expense which Landlord may sustain or incur as a result of or in connection with Tenant's failure or delay in delivering such statement. If Landlord elects to sell the Building or to obtain loans secured by a lien on the Building, Tenant, promptly after demand, shall provide to any such purchaser or lender financial statements of Tenant reasonably required by the purchaser or lender. The financial statements so provided shall be kept confidential as to any parties other than the purchaser or lender. 18.2 Surrender of Premises. A voluntary or other surrender of this Lease by Tenant or the mutual cancellation of this Lease shall not work a merger and shall, at the option of Landlord, terminate all or any existing subleases or subtenancies, or may, at the option of Landlord, operate as an assignment to it of any or all such subleases or subtenancies. 18.3 Light and Air. No diminution of light, air or view by any structure which may hereafter be erected (whether or not by Landlord) shall entitle Tenant to any reduction of rent under this Lease, result in any liability of Landlord to Tenant, or in any other way affect this Lease. 18.4 Waiver. If either Landlord or Tenant waives the performance of any term, covenant or condition contained in this Lease, such waiver shall not be deemed to be a waiver of the term, covenant or condition itself or a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein. Furthermore, the acceptance of rent by Landlord shall not constitute a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, regardless of Landlord's knowledge of such preceding breach at the time Landlord accepts such rent. Failure by Landlord to enforce any of the terms, covenants or conditions of this Lease for any length of time shall not be deemed to waive or to decrease the right of Landlord to insist thereafter upon strict performance by Tenant. Waiver by Landlord of any term, covenant or condition contained in this Lease may only be made by a written document signed by Landlord. 18.5 Attorneys' Fees. In the event that any action or proceeding (including arbitration) is brought to enforce or interpret any term, covenant or condition of this Lease on the part of Landlord or Tenant, the prevailing party in such action or proceeding (whether after trial or appeal) shall be entitled to recover from the party not prevailing its expenses therein, including reasonable attorneys' fees and all allowable costs. If Landlord is made a party to any action or proceeding commenced by a third party due to any actual or alleged act or omission of Tenant or Tenant's agents, employees, contractors, invitees or subtenants, Tenant shall indemnify and hold Landlord harmless from all costs incurred in such action or proceeding, including reasonable attorneys' fees. If Tenant requests Landlord's consent to, approval of or signature on any instrument or agreement which would alter or affect Landlord's legal rights and duties, Tenant shall reimburse Landlord upon demand for Landlord's reasonable attorneys' fees incurred in connection with the review and evaluation of the requested action. 18.6 Notices. Any notice required or permitted under this Lease shall be in writing and shall be delivered either personally or by depositing same in the United States Mail, postage prepaid, registered or certified, return receipt requested, addressed to the intended recipient at such party's address set forth in the Basic Lease Provisions or at such other address as such party has theretofore specified by written notice delivered in accordance with this paragraph. Any notice delivered by mail in the manner specified in this paragraph shall be deemed delivered on the earlier of the third day following deposit hereof in the United States Mail or on the delivery date shown on the return receipt prepared in connection therewith; and any such notice specifying a default by Tenant shall be deemed sufficient for all purposes under California Code of Civil 24 Procedure Section 1161 and 1162, notwithstanding the fact that such notice is not personally served on Tenant or that such notice does not demand possession of the Premises as an alternative to Tenant's curing of such default. 18.7 Merger. Notwithstanding the acquisition (if same should occur) by the same party of the title and interests of both Landlord and Tenant under this Lease, there shall never be a merger of the estates of Landlord and Tenant under this Lease, but instead the separate estates, rights, duties and obligations of Landlord and Tenant, as existing hereunder, shall remain unextinguished and continue, separately, in full force and effect until this Lease expires or otherwise terminates in accordance with the express provisions herein contained. 18.8 Substituted Premises. [Deleted] 18.9 Headings. Words used in neuter gender include the feminine and masculine, where applicable. If there is more than one Tenant, the obligations imposed under this Lease upon Tenant shall be joint and several. The headings and titles to the sections and paragraphs of this Lease are used for convenience only and shall have no effect upon the construction or interpretation of this Lease. 18.10 Time And Applicable Law. Time is of the essence of this Lease and all of its provisions. This Lease shall in all respects be governed by and interpreted in accordance with the laws of the States of California. 18.11 Successors And Assigns. Each conveyance by Landlord or its successors in interest of Landlord's interest in the Building or the Premises prior to the expiration or termination of this Lease shall be subject to this Lease and shall relieve the grantor of all further liability or obligations as Landlord, except for such liability or obligations accruing prior to the date of such conveyance. If any Security Deposit has been given to Landlord, Landlord shall deliver such Security Deposit to Landlord's successor in interest and thereupon be released of all further liability with regard thereto without the requirement of any notice thereof to Tenant. Tenant agrees to attorn to Landlord's successors in interest, whether such interest is acquired by sale, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Subject to the foregoing and to the provisions of Section 16, the terms, covenants and conditions contained herein shall be binding upon and inure to the benefit of the heirs, successors, executors, administrators and assigns of the parties hereto. 18.12 Entry by Landlord. Landlord and its authorized representative shall have the right to enter the Premises: (a) to inspect the Premises; (b) to supply any service provided to Tenant hereunder; (c) to show the Premises to prospective brokers; agents, purchasers, lenders or tenants; (d) to post notices of non-responsibility, (e) to alter, improve or repair the Premises and any other portion of the Building; and (f) to erect scaffolding and other necessary structures, where required by the work to be performed, all without reduction or abatement of rent. Tenant hereby waives any claim for damages for any injury to or interference with Tenant's business or quiet enjoyment of the Premises or any other loss occasioned by such entry. Landlord shall at all times have a key to unlock all doors in and about the Premises, excluding Tenant's vaults and safes, and Landlord shall have the right to use any means which Landlord deems proper to open said doors in an 25 emergency, and any such entry to the Premises shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into the Premises or a detainer of the Premises or an eviction of Tenant from any portion of the Premises. 18.13 Entire Agreement. This Lease, together with its exhibits, contains all the agreements of the parties hereto and supersedes any previous negotiations. There have been no representations made by the Landlord or understandings made between the parties other than those set forth in this Lease and its exhibits. This Lease may not be modified except by a written instrument duly executed by the parties hereto. 18.14 Severability. If any provision of this Lease or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Lease and the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 18.15 Signs. Tenant shall not place or permit to be placed in or upon the Premises where visible from outside the Premises or any part of the Building, any signs, notices, drapes, shuttars, blinds or window coatings, or displays of any type without the prior written consent of Landlord. Landlord shall consent to the location at the cost of Tenant, of a building standard sign on or near the entrance of the Premises and shall include Tenant in the Building directories located in the Building. Landlord reserves the right in Landlord's sole discretion to place and Locate on the roof and exterior of the Building and in any area of the Building not leased to Tenant, such signs, notices, displays and similar items as Landlord deems appropriate in the proper operation of the Building. 18.16 Execution By Landlord. The submission of this document for examination and negotiation does not constitute an offer to lease, or a reservation of, or option for, the Premises. This document becomes effective and binding only upon execution and delivery hereof by Tenant and by Landlord. No act or omission of any employee or agent of Landlord or of Landlord's broker shall alter, change or modify any of the provisions hereof. 18.17 Brokers. Tenant shall hold Landlord harmless from all damages (including attorneys fees and costs) resulting from any claims that may be asserted against Landlord by any broker, finder, or other person with whom Tenant has or purportedly has dealt, except the leasing agent for the Building duly appointed by Landlord. 18.18 Name Of Building. Tenant shall not use the name of the Building for any purpose other than the address of the business to be conducted by Tenant in the Premises. Tenant shall not use any picture of the Building in its advertising, stationery or in any other manner so as to imply that the entire Building is leased by Tenant. Landlord expressly reserves the right at any time to change the name or street address of the Building without in any manner being liable to Tenant therefor. 18.19 Nonrecordability Of Lease. Tenant agrees that in no event shall this Lease or a memorandum hereof be recorded without Landlord's express prior written consent, which consent Landlord may withhold in its sole discretion. 18.20 Construction. All provisions hereof, whether covenants or conditions, shall be deemed to be both covenants and conditions. The definitions contained in this Lease shall be used to interpret the Lease. All rights and remedies of Landlord and Tenant shall, except as otherwise expressly provided, be cumulative and non-exclusive of any other remedy at law or in equity. 18.21 Inability To Perform. This Lease and the obligations of Tenant hereunder shall not be affected or impaired because Landlord is unable to fulfill any of its obligations hereunder or is 26 delayed in doing so, if such inability or delay is caused by reason of force majeure, strike, labor troubles, acts of God, acts of government, unavailability of materials or labor, or any other cause beyond the control of Landlord. 18.22 Authority. If Tenant is a corporation, each individual executing this Lease on behalf of Tenant represents and warrants that Tenant is qualified to do business in California and that he is duly authorized to execute and deliver this Lease on behalf of Tenant and shall deliver appropriate certification to that effect if requested. If Tenant is a partnership, joint venture, or other unincorporated association, each individual executing this Lease on behalf of Tenant represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of Tenant and that this Lease is binding on Tenant. Furthermore, Tenant agrees that the execution of any written consent hereunder, or any written modification or termination of this Lease, by any general partner of Tenant or any other authorized agent of Tenant, shall be binding on Tenant. 18.23 Quiet Enjoyment. So long as Tenant is not in default under this Lease, Tenant shall have quiet enjoyment of the Premises for the Term, subject to all the terms and conditions of this Lease and all liens and encumbrances prior to this Lease. 19. CONTINGENCY: The effectiveness of this Lease is specifically conditioned on the full execution of the Termination Agreement between Sybase as Tenant and Spieker Properties, L.P. as Landlord for reduced premises equaling 3,403 rentable square feet and 2,934 useable square feet. If said Termination Agreement is not fully executed and commenced, this Lease shall be of no further force or effect and without recourse to either party. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and the year first above written. LANDLORD SPIEKER PROPERTIES, L.P., A CALIFORNIA LIMITED PARTNERSHIP By: Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ [ILLEGIBLE] ------------------------------- Its: SENIOR VICE PRESIDENT Date: 3/3/98 TENANT EXTENSITY, INC. A DELAWARE CORPORATION By: /s/ S. Sasson ------------------------------- Its: PRESIDENT Date: 1-12-98 27 EXHIBIT A [FLOOR PLAN GRAPHIC] Tower II 2200 Powell Street Emeryville, CA 94608 Floor 4 Exhibit B Scope of Work 1. Scope of Work to that certain Lease between Spieker Properties, L.P., a California limited partnership ("Landlord"), and Extensity, Inc., a Delaware corporation ("Tenant"), dated 1-12-98, 1997. 2. The Premises will be delivered "as is" in their current condition, however Landlord at Landlord's sole cost and expense shall cause to have the following work completed utilizing Building Standard materials: 1. Provide new carpet and paint in the area as depicted in Exhibit B-1. 2. Construct one office and wing wall near reception area. 3. Construct demising wall as depicted and construct encased opening to Suite 400. 3. Tenant, at Tenant's sole cost and expense, shall be responsible for the cost of telephone and computer installation, including wiring. "LANDLORD" SPIEKER PROPERTIES, L.P. A CALIFORNIA LIMITED PARTNERSHIP By: Spieker Properties, Inc. a Maryland Corporation Its: General Partner BY /s/ [ILLEGIBLE] Date: 3/3/98 ----------------------------- John Winther Senior Vice President "TENANT" EXTENSITY, INC. A DELAWARE CORPORATION By: /s/ S. Sasson Date: 2-24-98 --------------------------- Its: President & CEO Print Name: Sharam Sasson EXHIBIT B-1 [FLOOR PLAN GRAPHIC] Tower II 2200 Powell Street Emeryville, CA 94608 Floor 4 AMENDMENT NUMBER ONE Between: Spieker Properties, L.P., a California Limited Partnership As Landlord And: Extensity, Inc., a California Corporation As Tenant Covering the Premises known as: 2200 Powell Street, Suite 400 Emeryville, California 94608 This AMENDMENT NUMBER ONE amends that certain Lease between Landlord and Tenant dated January 12, 1998 ("Lease") for premises on the fourth (4th) floor of Watergate Tower II, commonly known and described as Suite 400, 2200 Powell Street, Emeryville, CA ("Premises"). Landlord and Tenant hereby mutually acknowledge and agree that Tenant shall expand their premises as follows: 1. PREMISES Tenant shall lease an additional 3,072 rentable square feet of space located in Watergate Tower II, more commonly known as 2200 Powell Street, at the Watergate Office Tower Complex in Emeryville, California, as outlined in red on the attached Exhibit "A" ("Expansion Premises"). The total Premises shall now be 6,475 rentable square feet. 2. TERM The Term for the Expansion Premises shall commence on June 1, 1998 and expire on June 15, 1999. 3. BASE RENT Effective June 1, 1998, the Base Rent for the Expansion Premises will be stepped as follows: 6/01/98 - 1/31/99 $6,881.28 per month 2/01/99 - 5/31/99 $7,188.48 per month 6/01/99 - 6/15/99 $3,833.86 per month The new combined monthly total shall be as follows: 6/01/98 - 1/31/99 $14,538.03 per month 2/01/99 - 5/31/99 $15,151.50 per month 6/01/99 - 6/15/99 $ 7,815.31 per month 4. TENANT'S PROPORTIONATE SHARE For purposes of calculating tax and operating expense increases, Tenant's proportionate share for the Expansion Premises shall be 1.34%. The total proportionate share for the combined Premises shall now be 2.83%. 5. BASE YEAR Tenant shall be responsible for paying its proportionate share of tax and operating expense increases which occur over the Base Year 1998. 6. CONDITION OF PREMISES Occupancy of the Premises by Tenant shall conclusively determine that Tenant accepts the Premises in "as-is" condition, other than the following improvements: 1. Stretch and clean carpet. 2. Touch up paint where necessary. 3. Demolish demising wall and existing wall. 7. SECURITY DEPOSIT Tenant's Security Deposit Lease shall be increased by $7,188.48 to equal $15,151.50. 8. MISCELLANEOUS Capitalized words and phrases used in this Amendment and not specifically defined herein shall have the meanings given them in the Lease. In case of conflict between the Lease and this Amendment, the latter shall control. The Lease remains in full force and effect, and is unmodified except as provided in this Amendment; and Landlord and Tenant hereby ratify and approve the Lease. IN WITNESS WHEREOF, the parties hereto have signed and sealed this Amendment this 28th day of APRIL 1998. "LANDLORD" SPIEKER PROPERTIES, L.P. A CALIFORNIA LIMITED PARTNERSHIP By: Spieker Properties, Inc. a Maryland Corporation Its: General Partner BY /s/ [ILLEGIBLE] Date: 5/29/98 --------------------------- "TENANT" EXTENSITY, INC. A CALIFORNIA CORPORATION By: /s/ S. Sasson Date: 4-27-98 ------------- Its: PRESIDENT Print Name: SHARAM SASSON EXHIBIT A [FLOOR PLAN GRAPHIC] Tower II 2200 Powell Street Emeryville, CA 94608 Floor 4 AMENDMENT NUMBER TWO Between: Spieker Properties, L.P., a California Limited Partnership As Landlord And: Extensity, Inc., a Delaware Corporation As Tenant Covering the Premises known as: 2200 Powell Street, Suite 400 Emeryville, California 94608 This AMENDMENT NUMBER TWO amends that certain Lease between Landlord and Tenant dated January 12, 1998, and later amended in Amendment One, dated April 28,1998, ("Lease") for premises located on the fourth (4th) floor of the building known as Watergate Tower II, at 2200 Powell Street, Emeryville, California ("Building"). Landlord and Tenant hereby mutually acknowledge and agree that effective October 26,1998, Tenant shall expand the premises to include an additional 4,850 rentable square feet, commonly known as Suite 450. 1. PREMISES Effective October 26, 1998, the Premises shall include an additional 4,850 rentable square feet, for a total of 11,325 rentable square feet, (excluding Fetzer Vineyards sublease space), as shown in Exhibit "A". 2. TERM The Term for Suite 450, consisting of 4,850 rentable square feet shall commence on October 26, 1998, and expire on June 15, 1999. 3. BASE RENT The Base Rent shall include normal full services and shall be as follows: SUITE 450: 10/26/98 - 6/15/99: $10,815.50 per month 4. TENANT'S PROPORTIONATE SHARE For purposes of calculating tax and operating expense increases, effective October 26, 1998, Tenant's proportionate share of the building for Suite 450 (4,850 rentable square feet) shall be 2.12%. 5. BASE YEAR Tenant shall be responsible for paying its proportionate share of tax and operating expense increases which occur over the Base Year 1999. 7. TENANT IMPROVEMENTS Tenant agrees to accept the Premises in "as-is" condition. 8. SECURITY DEPOSIT Tenant shall pay to Landlord a Security deposit in the amount of $10,815.50 9. MISCELLANEOUS Capitalized words and phrases used in this Amendment and not specifically defined herein shall have the meanings given them in the Lease. In case of conflict between the Lease and this Amendment, the latter shall control. The Lease remains in full force and effect, and is unmodified except as provided in this Amendment; and Landlord and Tenant hereby ratify and approve the Lease. IN WITNESS WHEREOF, the parties hereto have signed and sealed this Amendment this 19TH day of OCTOBER 1998. "LANDLORD" SPIEKER PROPERTIES, L.P. A CALIFORNIA LIMITED PARTNERSHIP By: Spieker Properties, Inc. a Maryland Corporation Its: General Partner BY /s/ [ILLEGIBLE] Date: 10/19/98 ------------------ "TENANT" EXTENSITY, INC. A DELAWARE CORPORATION By: /s/ S. Sasson Date: 10/19/98 ----------------- Its: PRESIDENT & CEO Print Name: SHARAM SASSON EXHIBIT "A" (FLOOR PLAN GRAPHIC) ADDRESS : WATERGATE TOWER II 2200 POWELL STREET EMERYVILLE, CA 94608 FLOOR : 4th FLOOR AMENDMENT NUMBER THREE Between: Spieker Properties, L.P., a California Limited Partnership As Landlord And: Extensity, Inc., a Delaware Corporation As Tenant Covering the Premises known as: 2200 Powell Street, Suite 400 Emeryville, California 94608 This AMENDMENT NUMBER THREE amends that certain Lease between Landlord and Tenant dated January 12, 1998, and later amended in Amendment One, dated April 28,1998, and Amendment Number Two dated October 12, 1998 (the "Lease") for premises located on the fourth (4th) floor of the building known as Watergate Tower II, at 2200 Powell Street, Emeryville, California ("Building"). Effective July 16,1999, the Lease shall include Suites 400,410, 450 and 455, consisting of 19,839 rentable square feet (the "Premises"), and for purposes of this Amendment shall be referred to as Suite 400. Effective July 16, 1999, the Lease Term shall be extended by four (4) years, to June 30, 2003. 1. PREMISES Suite 400, consisting of 19,839 rentable square feet, and as shown in red on the attached Exhibit "A". 2. TERM The term of the Lease shall commence June 16, 1999, and shall expire on June 30, 2003. 3. BASE RENT The Base Rent shall include normal full services and shall be as follows: 6/16/99-6/30/99: $42,671.83 per month 7/1/99-6/30/00: $39,678.00 per month 7/1/00-6/30/01: $47,216.82 per month 7/1/01-6/30/02: $49,399.11 per month 7/1/02-6/30/03: $50,986.23 per month

4. TENANT'S PROPORTIONATE SHARE Effective June 16, 1999, Tenant's proportionate share of the building for the purposes of calculated operating expense and tax increases shall be 8.66%. 5. BASE YEAR Tenant shall be responsible for paying its proportionate share of tax and operating expense increases which occur over the Base Year 1999. 6. FIRST RIGHT TO NEGOTIATE FOR ADDITIONAL SPACE GRANT OF RIGHT. During the Term of this Lease and provided Tenant is not in default under this Lease, Tenant shall have the right to negotiate (the "Negotiation Right") to lease an additional 8,210 rentable square feet of office space on the Third (3rd ) Floor in the Building (the "Spieker Space") as such space becomes available. This Negotiation Right shall arise and may be exercised only in accordance with the terms of this section. NOTICE OF SPACE REQUIREMENT. As Tenant requires additional space, Tenant shall notify Landlord in writing of its additional space requirements, (the "Requirement Notice"). Tenant's Negotiation Right shall become operative upon Landlord's receipt of Tenant's Requirement Notice; provided, however, that such Negotiation Right shall be subject to any preexisting options, rights of refusal or rights to negotiate contained in leases with other tenants. For purposes hereof, a right of refusal or right to negotiate in another lease shall be deemed to preexist Tenant's Negotiation Right where the same became operative prior to the date Tenant delivered its Requirement Notice to Landlord, (even though such other lease may have been executed after the execution of this Lease). Tenant shall immediately notify Landlord in writing of the cessation of any requirement for additional space as set forth in a previously delivered Requirement Notice; and such subsequent notice shall serve to terminate any previous Requirement Notice and Tenant's Negotiation Right. EXERCISE OF NEGOTIATION RIGHT. Where Tenant's Negotiation Right is operative and not subject to any preexisting options, rights of refusal or rights to negotiate in other leases, the following procedure shall apply: (a) At such time the Spieker Space is available for lease, Landlord shall give Tenant notice thereof and shall specify in such notice the rent and other basic terms on which Landlord is willing to lease the Spieker Space to Tenant (the "Offer Notice"), provided that: (b) Tenant shall have a period of ten (10) days after receipt of the Offer Notice within which to notify Landlord to writing of Tenant's exercise of the Negotiation Right. Should Tenant fail to so notify Landlord in writing within said ten (10) day period, Tenant's Negotiation Right shall lapse and Landlord shall be free to deal with the Spieker Space described in the Offer Notice without regard thereto. 7. TENANT IMPROVEMENTS Landlord shall, at Landlord's sole cost and expense, provide the following Tenant Improvements within the Premises: 1. Conduct an audit of the existing Heating, Air Conditioning and Ventilation system on the fourth (4th) Floor. (A copy of which shall be provided to Tenant) Landlord agrees to have the Premises mechanically engineered if necessary, to correct any existing deficiencies or otherwise make any necessary repairs 2. Sand and tape seams on the existing de-mountable partitions 3. Paint all existing painted surfaces 4. Paint the top track of the existing de-mountable partitions 5. Remove existing 6" base, and re-install building standard 4" base in a color selected by Tenant 6. Provide and install building standard carpet throughout the Premises in a color selected by Tenant 7. Provide and install soundproofing in two conference rooms and four private offices, to be selected by Tenant. 8. Remove 3/4 height wall at existing entrance to Suite 450 9. Remove a portion of the demising wall at the west end of Suite 450 10. Remove glass entry doors to Suite 450 at corridor, and replace with a single building standard door 11. Remove one partition wall between two interior offices. Additionally, Landlord shall provide to Tenant a Tenant Improvement Allowance of $1.50 per rentable square foot, to be utilized by Tenant at Tenant's discretion. 8. SECURITY DEPOSIT By January 15, 1999, Tenant shall pay to Landlord a security deposit in the amount of $25,217.61 9. MISCELLANEOUS Capitalized words and phrases used in this Amendment and not specifically defined herein shall have the meanings given them in the Lease. In case of conflict between the Lease and this Amendment, the latter shall control. The Lease remains in full force and effect, and is unmodified except as provided in this Amendment; and Landlord and Tenant hereby ratify and approve the Lease. IN WITNESS WHEREOF, the parties hereto have signed and sealed this Amendment this 19TH day of OCTOBER 1998. "LANDLORD" SPIEKER PROPERTIES, L.P. A CALIFORNIA LIMITED PARTNERSHIP By: Spieker Properties, Inc. a Maryland Corporation Its: General Partner BY /s/ [ILLEGIBLE] Date: 10/19/98 --------------- "TENANT" EXTENSITY, INC. A DELAWARE CORPORATION BY /s/ S.Sasson Date: 10/19/98 ------------ Its: PRESIDENT & CEO Print Name: SHARAM SASSON Watergate Office Towers 2200 Powell Street Emeryville, CA 94608 4th Floor [FLOOR PLAN GRAPHIC] EXHIBIT "A" EXPANSION AGREEMENT AMENDMENT NUMBER FOUR TO THAT LEASE DATED JANUARY 12, 1998, BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC., A DELAWARE CORPORATION, AS TENANT (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE, CALIFORNIA. Effective July 20, 1999, the above described Lease will be amended as follows to provide for Tenant's expansion premises: 1. PREMISES. Approximately 1,773 square feet of rentable area (which includes a portion of the building common area) located on the 10th floor of the building known as Suite 1025. The premises as expanded herein are approximately as shown outlined in red on the attached floor plan (Exhibit A - Suite 1025). 2. OCCUPANCY DENSITY. 12 people 3. RENT. Base Rent for the premises shall be as follows: 8/1/99 - 8/31/99: Four thousand one hundred eighty-four and twenty-eight l00ths ($4,184.28) Thereafter the rent shall continue on a month-to-month basis. 4. TERM. The term shall commence on August 1, 1999, and continue on a month-to-month basis. Either party shall have the right to terminate this lease upon at least thirty (30) days prior written notice to the other party. 5. TENANT'S PROPORTIONATE SHARE. .77% 6. BASE YEAR. The Base Year for Tenant's proportionate share of Operating Costs shall be the Calendar Year 1999. All other terms and conditions of the Lease shall remain in full force and effect and shall apply to the expansion premises as well as to the original premises. Dated: 7/28/99 IN WITNESS WHEREOF, the parties hereto have executed this Expansion Agreement the day and year first above written. LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership By Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ [ILLEGIBLE] --------------------------------- Its: SENIOR VICE PRESIDENT TENANT: EXTENSITY, INC., A DELWARE CORPORATION By: /s/ Kenneth Hahn ------------------------------------- Its: VP FINANCE EXPANSION AGREEMENT AMENDMENT NUMBER FIVE TO THAT LEASE DATED JANUARY 12, 1998, BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC., A DELAWARE CORPORATION, AS TENANT (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE, CALIFORNIA. Effective September 15, 1999, the above described Lease will be amended as follows to provide for Tenant's expansion premises: 1. PREMISES. Approximately 1,262 square feet of rentable area (which includes a portion of the building common area) located on the 3rd floor of the building known as Suite 375. The premises as expanded herein are approximately as shown outlined in red on the attached floor plan (Exhibit A - Suite 375). 2. OCCUPANCY DENSITY. 8 people 3. RENT. Base Rent for the premises shall be as follows: 9/15/99-6/30/00: Two thousand seven hundred eighty-nine and 02/100ths ($2,789.02) Plus in each case operating expenses pursuant to Paragraph 4.3 of the lease over the Calendar Year 1999. 7/1/00-6/30/01: Three thousand one hundred seventeen and 14/100ths ($3,117.14) Plus in each case operating expenses pursuant to Paragraph 4.3 of the lease over the Calendar Year 1999. 7/1/01-6/30/02: Three thousand two hundred thirty and 72/100ths ($3,230.72) Plus in each case operating expenses pursuant to Paragraph 4.3 of the lease over the Calendar Year 1999. 7/1/02-6/30/03: Three thousand four hundred thirty-two and 64/100ths ($3,432.64) Plus in each case operating expenses pursuant to Paragraph 4.3 of the lease over the Calendar Year 1999. 4. TERM. The term shall commence on September 15, 1999, and shall expire on June 30, 2003. 5. TENANT'S PROPORTIONATE SHARE. Tenant's proportionate share for the Expansion Premises pursuant to this Amendment Five is .55%. Tenant's proportionate share for the entire Premises, consisting of the 4th Floor premises, and Suite 375 shall be 9.21%. 6. BASE YEAR. The Base Year for Tenant's proportionate share of Operating Costs shall be the Calendar Year 1999. 7. TENANT IMPROVEMENTS. Tenant agrees to accept the premises as so expanded in "as-is" condition, and Landlord shall have no obligation to provide any improvement to the premises. If Tenant leases from Landlord the space on the north side of the 3rd Floor, and consisting of approximately 8,022 rentable square feet (the "Data Plus space") as shown outlined in blue on the attached Exhibit "A", Landlord agrees to provide new building standard paint and building standard carpet in the Expansion Premises at the same time Landlord makes improvements (if any) to the Data Plus Space. 8. EFFECTIVE DATE. The Effective Date of this Amendment Five is contingent upon the relocation of the existing tenant in Suite 375 to new premises. This relocation is anticipated to occur on or near September 14, 1999. The Landlord shall not be held liable for any delay in the delivery of the Expansion Premises to Tenant, however, Landlord shall make all commercially reasonable efforts to ensure the Effective Date of this Agreement. 9. DEFINITIONS. As of the Effective Date, the Expansion Premises as defined in this Amendment Five shall be deemed to be part of the Premises as defined in the Lease. All other terms and conditions of the Lease shall remain in full force. Dated: AUGUST 26, 1999 IN WITNESS WHEREOF, the parties hereto have executed this Expansion Agreement the day and year first above written. LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership By: Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ [ILLEGIBLE] ------------------------------------ Its: SENIOR VICE PRESIDENT TENANT: EXTENSITY, INC., A DELWARE CORPORATION By: /s/ Kenneth Hahn --------------------------------------- Its: VP FINANCE EXHIBIT A [FLOOR PLAN GRAPHIC] ADDRESS : WATERGATE TOWER II 2200 POWELL STREET EMERYVILLE, CA 94608 FLOOR : 3rd FLOOR EXPANSION AGREEMENT AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999, TO THAT LEASE DATED JANUARY 12, 1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO DATED OCTOBER 12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, AND THAT AMENDMENT NUMBER FIVE DATED AUGUST 26, 1999, BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC, A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE CALIFORNIA. Effective as of the date of this Amendment, the above-described Lease will be amended as follows: 1. EXPANSION PREMISES. Approximately 1,550 square feet of rentable area (which includes a portion of the building common area) located on the 3rd floor of the building, which represents a portion of the Suite commonly known as Suite 325. The term "Premises" as used in the Lease is amended to mean the original Premises as expanded herein and are as approximately as shown outlined in red on the attached Exhibit "A". 2. OCCUPANCY DENSITY. 10 people (1/150) 3. TERM. The Term shall commence May 10, 1999 and expire June 30, 2003. 4. RENT. Base Rent for the Premises shall be as follows: 5/10/99 - 6/30/00: $3,394.50 per month 7/1/00 - 6/30/01: $3,720.00 per month 7/1/01 - 6/30/02: $3,859.50 per month 7/1/02 - 6/30/03: $4,092.00 per month plus in each case any increases in Operating Expenses per Paragraph 4.3 of the Lease over the Calendar Year 1999. 5. TENANT'S PROPORTIONATE SHARE. Tenant's porportionate share of operating expenses for the Expansion Premises shall be .68%. Tenant's Base Year shall be the Calendar Year 1999. 6. TENANT IMPROVEMENTS. Tenant agrees to accept the Premises as so expanded in "as is" condition except that Landlord agrees to provide one temporary demising wall at the west end of the expanded Premises. 7. TENANT'S MUST-TAKE OBLIGATION. Effective as of December 1, 1999 (the "Delivery Date"), Tenant shall be required to lease from Landlord and Landlord shall be required to lease to Tenant those certain premises located on the 3rd Floor of the Building representing the remaining portion of the suite commonly known as Suite 325, consisting of approximately 6,660 rentable square feet (the "Must-Take Space"), as shown on the attached Exhibit "A" outlined in green, as follows: (a) The commencement date of the Term with respect to the Must-Take Space shall be referred to as the "Must-Take Commencement Date." The Term with respect to the Must-Take Space shall end concurrently with the expiration of the Term of the Lease as to the original Premises. (b) The Basic Rent payable for the Must-Take Space shall be as follows: 12/1/99 - 6/30/00: $13,786.20 per month 7/1/00 - 6/30/01: $15,784.20 per month 7/1/01 - 6/30/02: $16,383.60 per month 7/1/02 - 6/30/03: $17,582.40 per month plus in each case any increase in operating expenses per Paragraph 4.3 of the Lease over the Calendar Year 1999. (c) The Must-Take Space shall be leased to Tenant "as is" and in its then existing condition and state of improvement and Landlord shall have no obligation to make any improvements, repairs or alterations thereof; provided, however, (i) such space shall be delivered to Tenant broom clean and in a usable condition, (ii) Landlord shall construct five(5) private offices with building standard finishes along the west wall of the Must-Take Space, and provide for sufficient power requirements (two electrical duplexes) and sufficient phone/data locations (two phone/data drops [exclusive of Tenant's cabling]), in each office and (iii) remove the temporary demising wall originally constructed between the Expansion Premises and the Must-Take Space. Said work shall constitute permanent improvements to the Must-Take Space which become Landlord's property upon installation pursuant to the Lease. (d) Landlord shall have no liability to Tenant for any damages resulting from any delay in delivering possession of the Must-Take Space to Tenant, if said delay is caused by the holding over of a tenant in the space in which Landlord intends to move, provided, however, Landlord, at its expense, shall take all action reasonably necessary, including required legal proceedings, to secure possession of the Must-Take Space prior to the Must-Take Commencement Date. (e) Effective upon the Must-Take Commencement Date, Tenant's proportionate share of operating expenses for the Must-Take Space shall be 2.9%. The Base Year shall be the Calendar Year 1999. As of the Must-Take Commencement Date, the Must-Take Space shall be deemed to be part of the Premises, and except as specifically set forth herein, shall be leased to Tenant upon the same terms and conditions in the lease. 8. SECURITY DEPOSIT. Landlord acknowledges that it is currently holding Tenant's security deposit in the amount of $51,184.24. All other terms and conditions of the Lease shall remain in full force and effect and shall apply to the expansion premises as well as to the original premises. Dated: SEPT. 20, 1999 IN WITNESS WHEREOF, the parties hereto have executed this Expansion Agreement the day and year first above written. Landlord: SPIEKER PROPERTIES, L.P., a California limited partnership By: Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ [ILLEGIBLE] ------------------------------------- Its: SENIOR VICE PRESIDENT TENANT: EXTENSITY, INC. a Delaware corporation By: /s/ Kenneth Hahn ------------------------------ Its: VP FINANCE EXHIBIT A [FLOOR PLAN GRAPHIC] Tower II 2200 Powell Street Emeryville, CA 94608 Floor 3 EXPANSION AGREEMENT AMENDMENT NUMBER SEVEN DATED DECEMBER 2, 1999, TO THAT LEASE DATED JANUARY 12, 1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE DATED AUGUST 26, 1999 AND THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 20, 1999, BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC. A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE, CALIFORNIA. Effective as of the date of this Amendment, the Lease will be amended as follows to provide for Tenant's expansion and for the extension of the lease term for the original premises: 1. EXPANSION PREMISES. Approximately 9,260 square feet of rentable area (which includes a portion of the building common area) located on the 3rd floor of the building known as 2200 Powell Street, Suite 350, containing 7,910 rentable square feet and Suite 385, containing 1,350 rentable square feet. The term "Premises" as used in the Lease is amended to mean the original Premises as expanded herein and are as approximately as shown outlined in red on the attached Exhibit "A". 2. OCCUPANCY DENSITY. 62 people (Suite 350=53 people; Suite 385=9 people) 3. RENT. Base Rent for the Premises as expanded herein shall be as follows: Suite 350 Delivery Date-6/30/01 $20,170.50 per month 7/01/01-6/30/02 $20,961.50 per month 7/01/02-6/30/03 $21,752.50 per month 7/01/03-6/30/04 $22,543.50 per month Suite 385 Delivery Date-6/30/01 $3,442.50 per month 7/01/01-6/30/02 $3,577.50 per month 7/01/02-6/30/03 $3,712.50 per month 7/01/03-6/30/04 $3,847.50 per month 5. SECURITY DEPOSIT. The Security Deposit under the Lease shall be increased by $26,391.00 for a total Security Deposit of $77,575.24. 6. TENANT'S PROPORTIONATE SHARE. Tenant's proportionate share for suite 350 shall be 3.66% and .62% for suite 385. Tenant's Base Year for Suite 350 and Suite 385 shall be the Calendar Year 1999. 7. TENANT IMPROVEMENTS. As per a mutually agreed upon plan prepared by Landlord's architect dated 8/11/99 and attached hereto as Exhibit B. 8. TERM. The term and rental obligation shall commence on the date that Landlord is able to deliver each of the Expansion Premises to Tenant, which shall be the date which is one day after the Expansion Premises have been vacated by the prior tenant, (the "Delivery Date"). 9. EXTENSION. Landlord and Tenant hereby agree that the Term of the Lease for the original Premises, which Premises consists of approximately 29,311 square feet of rentable area, (19,839 on the 4th floor, Suite 375 containing 1,262 rentable square feet and Suite 325 containing 8,210 rentable square feet), but specifically excluding Suite 1025 containing 1,773 rentable square feet and leased on a month to month basis pursuant to Amendment Number Four, is hereby renewed and extended for an additional term of approximately twelve (12) months, to commence upon the 1st day of July, 2003, and to end on the last day of June, 2004, subject to all of the provisions of the covenants and agreements contained in the Lease. The Base Rent for the original Premises during the extended term shall be as follows: 7/01/03 - 6/30/04 $80,312.14 per month All other terms and conditions of the Lease shall remain in full force and effect and shall apply to the Expansion Premises as well as to the original premises. Dated: DECEMBER 18, 1999 IN WITNESS WHEREOF, the parties hereto have executed this Expansion Agreement as of the day and year first above written. LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership By: Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ [ILLEGIBLE] ------------------------------------ Its: SENIOR VICE PRESIDENT TENANT: EXTENSITY, INC. a Delaware corporation By: /s/ Kenneth Hahn --------------------------------- EXHIBIT A (FLOOR PLAN GRAPHIC) ADDRESS : WATERGATE TOWER II 2200 POWELL STREET EMERYVILLE, CA 94608 FLOOR : 3rd FLOOR 6/22/99 [ILLEGIBLE] EXHIBIT B [ILLEGIBLE] SPACE PLAN (FLOOR PLAN GRAPHIC) [ILLEGIBLE] AMENDMENT NUMBER EIGHT AMENDMENT NUMBER EIGHT DATED TO THAT LEASE DATED JANUARY 18, 1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO DATED OCTOBER 12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE DATED AUGUST 26, 1999, THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999 AND THAT AMENDMENT NUMBER SEVEN DATED DECEMBER 2, 1999, BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC, A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE CALIFORNIA.THIS Effective as of the Delivery Date, the Lease will be amended as follows to provide for Tenant's Expansion Premises: 1. EXPANSION PREMISES. Approximately 2,280 square feet of rentable area (which includes a portion of the building common area) located on the ground floor of the building known as Suite 110 approximately as shown outlined in red on the attached floor plan. (Exhibit A) The term "Premises" as used in the Lease is amended to mean the original Premises plus the Expansion Premises. The Premises as expanded herein shall consist of approximately 40,851 rentable square feet. 2. TERM COMMENCEMENT DATE. The Term for the Expansion Premises shall commence upon the date which Landlord is able to deliver the Expansion Premises ("Delivery Date") The Delivery Date is estimated to be March 1, 2000 for the portion of the Building currently known as Suite 110 (1,036 rentable square feet) and March 6, 2000 for the portion of the Building currently known as Suite 120 (1,244 rentable square feet). Tenant hereby acknowledges that Davis Murray and Jack: Runnion are currently in possession of the Expansion Premises and understands that Landlord's delivery of the Expansion Premises as provided herein is subject to Davis Murray and Jack Runnion surrendering the Expansion Premises to Landlord in a timely manner in accordance with the leases between Spieker Properties and Davis Murray & Jack Runnion. 3. SECURITY DEPOSIT. The Security Deposit under the Lease shall be increased by $46,424.76 for a total Security Deposit of $124,000.00. 4. TENANT'S PROPORTIONATE SHARE. Tenant's Proportionate Share for the Expansion Premises shall be 1.05%. Tenant's Proportionate Share for the Premises as expanded herein shall be 18.21%. Tenant's Base Year shall remain the calendar year 1999. 5. TENANT IMPROVEMENTS. Tenant agrees to accept the Expansion Premises "as is" condition. 8. BASE RENT. The Base Rent for the Premises as expanded herein shall be as follows: 3/01/00-6/30/01: Six thousand eight hundred forty and 00/100 dollars ($6,840.00) per month plus operating expenses per Paragraph 4.3 of the Lease. Operating Expenses through December 31, 2000 are estimated to be $0 per month. 7/01/01-6/30/02: Seven thousand one hundred thirteen and 60/100ths dollars ($7,113.60) per month plus operating expenses per Paragraph 4.3 of the Lease. 7/01/02-6/30/03: Seven thousand three hundred ninety eight and 14/100ths dollars ($7,398.14) per month plus operating expenses per Paragraph 4.3 of the Lease. 7/01/03-6/30/04: Seven thousand six hundred ninety four and 07/100ths dollars ($7,694.07) per month plus operating expenses per Paragraph 4.3 of the Lease. The Base Rent schedule as follows details the original Premises plus the Expansion Premises (hereinafter the "Premises") and assumes Tenant's occupancy on or about May 15, 2000 of Suites 350 and 385 in accordance with Amendment Seven of the Lease: 3/01/00-4/31/00: Sixty six thousand four hundred eighty seven and 72/100 dollars ($66,487.72) per month plus operating expenses per Paragraph 4.3 of the Lease. Operating Expenses through December 31, 2000 are estimated to be $0 per month. 5/01/00-6/30/00: Ninety thousand one hundred and 72/100ths dollars ($90,100.72) per month plus operating expenses per Paragraph 4.3 of the Lease. 7/01/00-6/30/01: One hundred thousand two hundred ninety one and 16/100ths dollars ($100,291.16) per month plus operating expenses per Paragraph 4.3 of the Lease. 7/01/01-6/30/02: One hundred four thousand five hundred twenty five and 53/100ths dollars ($104,525.53) per month plus operating expenses per Paragraph 4.3 of the Lease. 7/01/02-6/30/03: One hundred eight thousand nine hundred fifty six and 41/100ths dollars ($108,956.41) per month plus operating expenses per Paragraph 4.3 of the Lease. 7/01/03-6/30/04: One hundred fourteen thousand three hundred ninety seven and 21/100ths dollars ($114,397.21) per month plus operating expenses per Paragraph 4.3 of the Lease. 10. OCCUPANCY DENSITY. The Occupancy Density for the Premises as expanded herein shall be 204 (5 per 1,000 rentable square feet). 11. PARKING DENSITY. The Parking Density for the Premises as expanded herein shall be 105 (3 per 1,000 usable square feet) unreserved parking spaces. All other terms and conditions of the Lease shall remain in full force and effect and shall apply to the Expansion Premises as well as to the original premises. Dated: 3/17/00 IN WITNESS WHEREOF, the parties hereto have executed this Amendment Number Three as of the day and year first above written. LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership By: Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ John R. Winther Date: 3/17/00 ----------------------------- John R. Winther Its: Senior Vice President TENANT: EXTENSITY INC., a Delaware corporation By: /s/ Kenneth Hahn Date: 2/25/00 --------------------- Kenneth Hahn Its: Chief Financial Officer [FLOOR PLAN GRAPHIC] EXHIBIT "A" AMENDMENT NUMBER NINE AMENDMENT NUMBER NINE TO THAT LEASE DATED JANUARY 18, 1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO DATED OCTOBER 12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE DATED AUGUST 26, 1999, THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999, THAT AMENDMENT NUMBER SEVEN DATED DECEMBER 2, 1999, AND THAT AMENDMENT NUMBER EIGHT DATED MARCH 17, 2000 BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC, A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE CALIFORNIA. Effective April 15, 2000, the above described Lease will be amended as follows to provide for Tenant's Expansion Premises: 1. PREMISES. Approximately 396 square feet of rentable area (which includes a portion of the building common area) located on the 1st floor of the building known as Suite 102. The premises as expanded herein are approximately as shown outlined in red on the attached floor plan (Exhibit A - Suite 102). 2. OCCUPANCY DENSITY. 6 people 3. RENT. Base Rent for the premises shall be as follows: 4/15/00-5/14/00: One thousand five hundred eighty-four dollars ($1,584.00) Thereafter the rent shall continue on a month-to-month basis. 4. TERM. The term shall commence on April 15, 2000 and continue on a month-to-month basis. Either party shall have the right to terminate this lease upon at least thirty (30) days prior written notice to the other party. 5. TENANT'S PROPORTIONATE SHARE. 0.02%. The Base Year for Tenant's proportionate share of Operating Costs shall be the Calendar Year 1999. All other terms and conditions of the Lease shall remain in full force and effect and shall apply to the expansion premises as well as to the original premises. Dated: 4/14/00 IN WITNESS WHEREOF, the parties hereto have executed this Expansion Agreement the day and year first above written. LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership By: Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ John R. Winther -------------------------- John R. Winther Its: Senior Vice President TENANT: EXTENSITY, INC., A DELWARE CORPORATION By: /s/ Kenneth Hahn ---------------------- Kenneth Hahn Its: Chief Financial Officer EXHIBIT A - PREMISES 2200 POWELL ST. SUITE 102 [FLOOR PLAN GRAPHIC] ADDRESS: WATERGATE TOWER II 2200 POWELL STREET EMERYVILLE, CA 94608 FLOOR: 1st FLOOR AMENDMENT NUMBER TEN AMENDMENT NUMBER TEN DATED MAY 30, 2000 TO THAT LEASE DATED JANUARY 18, 1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO DATED OCTOBER 12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE DATED AUGUST 26, 1999, THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999, THAT AMENDMENT NUMBER SEVEN DATED DECEMBER 2, 1999, THAT AMENDMENT NUMBER EIGHT DATED MARCH 17, 2000 AND THAT AMENDMENT NUMBER NINE DATED APRIL 14, 2000 BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC, A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE CALIFORNIA. Effective as of the Delivery Date, the Lease will be amended as follows to provide for Tenant's Expansion Premises and an extension of the Term as set forth below: 1.EXPANSION PREMISES. The Expansion Premises shall consist of suites detailed on the following chart including their respective rentable square footage, Commencement Date, Starting Base Rent on a per monthly per square foot basis and their respective Prorata Shares:
- ----------------------------------------------------------------------------------------- Estimated Starting Scheduled Rentable Delivery Base Rent Prorata Expiration Suite Square Feet Date per Sq.Ft. Share Date - ----------------------------------------------------------------------------------------- 395 1,093 June 1,2000 $3.66 0.51% August 31, 2006 - ----------------------------------------------------------------------------------------- 655 2,037 August 1, $3.66 0.94% August 31, 2000 2006 - ----------------------------------------------------------------------------------------- 610 1,871 November 1, $3.66 0.87% August 31, 2000 2006 - ----------------------------------------------------------------------------------------- 690 1,353 July 1,2001 $3.81 0.63% August 31, 2006 - ----------------------------------------------------------------------------------------- 620,650 and 4,202 September $3.97 1.94% August 31, 660 1,2001 2006 - ----------------------------------------------------------------------------------------- Total 10,556 4.89% - -----------------------------------------------------------------------------------------
The Expansion Premises are approximately as shown outlined in red on the attached floor plan. (Exhibit A) The term "Premises" as used in the Lease is amended to mean the original Premises plus the Expansion Premises. The Premises as expanded herein shall consist of approximately 51,407 rentable square feet. 2. TERM COMMENCEMENT PATE. The Term for the Expansion Premises shall commence upon the date which Landlord is able to deliver the Expansion Premises ("Estimated Delivery Date") The Estimated Delivery Date is detailed in Paragraph 1 for each of the suites. Tenant hereby acknowledges that each of the suites referenced in Paragraph 1 of this Amendment is currently occupied and Tenant understands that Landlord's delivery of the Expansion Premises as provided herein is subject to each of the existing tenants surrendering the Expansion Premises to Landlord in a timely manner in accordance with their respective leases. 3.BASE RENT. The Base Rent for the Expansion Premises as shall be as follows:
- ------------------------------------------------------------------------------------ Suites Suite Suite 620,650 Suite 395 Suite 655 610 690 & 660 Date (1,093) (2,037) (1,871) (1,353) (4,202) TOTAL - ------------------------------------------------------------------------------------ 6/1/00 - $4,000.38 $ 4,000.38 6/30/00 - ------------------------------------------------------------------------------------ 7/1/00 - $4,000.38 7,455.42 $11,455.80 10/31/00 (8/1/00-10/31/00) - ------------------------------------------------------------------------------------ 11/1/00 $4,000.38 7,455.42 6,847.86 $18,303.66 - -6/30/01 - ------------------------------------------------------------------------------------ 7/1/01 - $4,160.40 7,753.64 6,847.86 5,154.93 $23,458.59 8/31/01 - ------------------------------------------------------------------------------------ 9/1/01- $4,160.40 7,753.64 7,121.77 5,154.93 16,681.94 $40,872.68 6/30/02 - ------------------------------------------------------------------------------------ 7/1/02 - $4,326.82 8,063.79 7,406.64 5,361.13 17,349.22 $42,507.59 6/30/03 - ------------------------------------------------------------------------------------ 7/1/03 - $4,499.89 8,386.34 7,702.91 5,575.58 18,043.19 $44,207.97 6/30/04 - ------------------------------------------------------------------------------------ 7/1/04 - $4,679.89 8,721.79 8,011.03 5,798.60 18,764.92 $45,976.23 6/30/05 - ------------------------------------------------------------------------------------ 7/1/05 - $4,867.09 9,070.66 8331.47 6,030.54 19,515.52 $47,815.28 8/31/06 - ------------------------------------------------------------------------------------
4. SECURITY DEPOSIT / LETTER OF CREDIT A. DELIVERY OF LETTER OF CREDIT. In addition to the existing cash security deposit of $124,000.00 held by Landlord throughout the term of the this Lease, Tenant shall on execution of this Lease Amendment, deliver to Landlord and cause to be in effect during the Lease Term an unconditional, irrevocable letter of credit ("LOC") in the amount of $900,000.00 ("LOC AMOUNT") for an initial term extending thirty (30) days beyond the expiration date of this Lease or any extension thereto. The LOC shall be in a form acceptable to Landlord and shall be issued by an LOC bank selected by Tenant and acceptable to Landlord. The text of the LOC shall expressly state that the LOC shall survive the termination of this Lease. An LOC bank is a bank that accepts deposits, maintains accounts, has a local office that will negotiate a letter of credit, and the deposits of which are insured by the Federal Deposit Insurance Corporation. Tenant shall pay all expenses, points, or fees incurred by Tenant in obtaining the LOC. The LOC shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Project, the Building and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the LOC and/or the LOC Security Deposit (as defined below) to the transferee or mortgagee, and in the event of such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the LOC and/or the LOC Security Deposit. B. LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. Landlord shall hold the LOC as security for the performance of Tenant's obligations under this Lease. If, after notice and failure to cure within any applicable period provided in this Lease, Tenant defaults on any provision of this Lease, Landlord may, without prejudice to any other remedy it has, draw on that portion of the LOC necessary to (a) pay Rent or other sum in default; (b) pay or reimburse Landlord for any amount that Landlord may spend or become obligated to spend in exercising Landlord's rights under Paragraph 13.2 of the Lease (Landlord's Remedies); and/or (c) compensate Landlord for any expense, loss, or damage that Landlord may suffer because of Tenant's default. If Tenant fails to renew or replace the LOC at least thirty (30) days before its expiration, Landlord may, without prejudice to any other remedy it has, draw on the entire amount of the LOC. C. LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on by Landlord but not applied by Landlord shall be held by Landlord as a security deposit (the "LOC SECURITY DEPOSIT") in accordance with Paragraph 4 of this Lease. D. RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If Landlord draws on any poration of the LOC and/or applies all or any portion of such draw, Tenant shall, within five (5) business days after demand by Landlord, either (a) deposit cash with Landlord in an amount that, when added to the amount remaining under the LOC and the amount of any LOC Security Deposit, shall equal the LOC Amount then required under this Paragraph 3; or (b) reinstate the LOC to the full LOC Amount. 5. TENANT'S PROPORTIONATE SHARE. Tenant's Proportionate Share for the Expansion Premises shall be as outlined in Paragraph 1 for each of the respective suites and increased as of the Delivery Date. Tenant's Base Year shall remain the calendar year 1999. 6. TENANT IMPROVEMENTS. Tenant agrees to accept the Expansion Premises "as is" condition with no further obligation from Landlord to improve the Expansion Premises. 7. TERM EXTENSION. The Term of the Lease for the original Premises is hereby extended by twenty-six (26) months with a scheduled expiration date of August 31, 2006. The monthly Base Rent schedule for the original Premises during the extended term is as follows: 7/1/04 - 6/30/05 - $118,973.10 per month 7/1/05 - 8/31/06 - $123,732.02 per month. 8. RIGHT OF FIRST OFFER. Landlord and Tenant acknowledge that the tenant currently occupying suite 675 ("Medtronic") has an option to renew their lease by providing Landlord with notice of intent to renew as of August 4, 2000. In the event that Medtronic does not exercise their option to renew, Tenant shall have the right to lease suite 675 at a starting rental rate of $3.81 per rentable square foot as of February 1, 2001 on all the same terms and conditions as pertain to the Expansion Premises in this Amendment Number Ten. Tenant's right of first offer is conditioned upon Tenant providing written notice to Landlord no later than August 1, 2000 of Tenant's desire to lease suite 675. 9. OCCUPANCY AND PARKING DENSITY. The Occupancy Density for the Premises as expanded herein shall be 266 people (5 per 1,000 rentable square feet). The Parking Density for the Premises as expanded herein shall be 136 unreserved parking spaces (3 per 1,000 usable square feet). All other terms and conditions of the Lease shall remain in full force and effect and shall apply to the Expansion Premises as well as to the original premises. Dated: 6/19/00 IN WITNESS WHEREOF, the parties hereto have executed this Amendment Number Ten as of the day and year first above written. LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership By: Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ John R. Winther Date: 6/19/00 ------------------------------- John R. Winther Its: Senior Vice President TENANT: EXTENSITY INC., a Delaware corporation By: /s/ Kenneth Hahn Date: 30 MAY 2000 ------------------------- Kenneth Hahn Its: Chief Financial Officer EXHIBIT A [FLOOR PLAN GRAPHIC] ADDRESS: WATERGATE TOWER II 2200 POWELL STREET EMERYVILLE, CA 94608 FLOOR: 6th FLOOR Tower II 2200 Powell Street Emeryville, CA 94608 Floor 6 EXHIBIT A-2 [FLOOR PLAN GRAPHIC] Tower II 2200 Powell Street Emeryville, CA 94608 Floor 3 AMENDMENT NUMBER ELEVEN AMENDMENT NUMBER ELEVEN DATED DECEMBER 12, 2000 TO THAT LEASE DATED JANUARY 18, 1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO DATED OCTOBER 12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE DATED AUGUST 26, 1999, THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999, THAT AMENDMENT NUMBER SEVEN DATED DECEMBER 2, 1999, THAT AMENDMENT NUMBER EIGHT DATED MARCH 17, 2000 THAT AMENDMENT NUMBER NINE DATED APRIL 14, 2000 AND THAT AMENDMENT NUMBER TEN DATED MAY 30, 2000 BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC, A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE CALIFORNIA. Effective as of the Delivery Date, the Lease will be amended as follows to provide for Tenant's Expansion Premises as set forth below: 1. EXPANSION PREMISES. The Expansion Premises shall consist of suites detailed on the following chart including their respective rentable square footage, Commencement Date, starting Base Rent on a per monthly per square foot basis and their respective Prorata Share:
- ---------------------------------------------------------------------------------------- Estimated Starting Scheduled Rentable Delivery Base Rent Prorata Expiration Suite Square Feet Date per Sq.Ft. Share Date - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- 600 7,634 January 1, $4.15 3.33% August 31, 2001 2006 - ---------------------------------------------------------------------------------------- 675 1,733 February 1, $3.81 0.76% August 31, 2001 2006 - ---------------------------------------------------------------------------------------- Total 9,367 4.09% - ----------------------------------------------------------------------------------------
The Expansion Premises are approximately as shown outlined in red on the attached floor plan (Exhibit A). The term "Premises" as used in the Lease is amended to mean the original Premises plus the Expansion Premises. The Premises as expanded herein shall consist of approximately 60,774 rentable square feet. 2. TERM COMMENCEMENT DATE. The Term for the Expansion Premises shall commence upon the date which Landlord is able to deliver the Expansion Premises ("Estimated Delivery Date") The Estimated Delivery Date is detailed in Paragraph 1 for each Suite. Tenant hereby acknowledges that each of the suites referenced in Paragraph 1 of this Amendment are currently occupied and Tenant understands that Landlord's delivery of the Expansion Premises as provided herein is subject to each of the existing tenants surrendering the Expansion Premises to Landlord in a timely manner in accordance with their respective leases. 3. BASE RENT. The Base Rent for the Expansion Premises as shall be as follows:
- --------------------------------------------------------------- SUITE 600 SUITE 675 --------- --------- DATE (7,634 RSF) (1,733 RSF) TOTAL - --------------------------------------------------------------- 1/1/01 - 1/31/01 $31,681.10 $31,681.10 - --------------------------------------------------------------- 2/1/01 - 6/30/02 $32,948.34 $6,602.73 $39,551.07 - --------------------------------------------------------------- 7/1/02 - 6/30/03 $34,266.28 $6,866.84 $41,133.12 - --------------------------------------------------------------- 7/1/03 - 6/30/04 $35,636.93 $7,141.51 $42,778.44 - --------------------------------------------------------------- 7/1/04 - 6/30/05 $37,062.41 $7,427.17 $44,489.58 - --------------------------------------------------------------- 7/1/05 - 8/31/06 $38,544.90 $7,724.26 $46,269.16 - ---------------------------------------------------------------
For reference only, the Base Rent schedule for the Premises as expanded herein shall be determined by referring to Paragraph 8 of Amendment 8, Paragraph 3 of Amendment 10 and Paragraph 3 of this Amendment Number 11. 4. SECURITY DEPOSIT / LETTER OF CREDIT A. DELIVERY OF LETTER OF CREDIT. Landlord and Tenant hereby acknowledge that Landlord is currently holding a cash security deposit in the amount of $124,000.00 to be held by Landlord throughout the term of this Lease. Landlord is also in possession of an unconditional, irrevocable letter of credit ("LOC") in the amount of $900,000.00. Upon execution of this Amendment Number Eleven, Tenant agrees to increase the LOC Amount in accordance with the following schedule under all the same terms and conditions as the existing LOC as defined in Paragraph 4 of Amendment Number Ten of this Lease.
- ------------------------------------------------ TOTAL DATE OF INCREASE LOC AMOUNT - ------------------------------------------------ 1/1/01 $1,425,000 - ------------------------------------------------ 1/1/02 $1,665,000 - ------------------------------------------------ 1/1/03 $1,735,000 - ------------------------------------------------ 1/1/04 $1,815,000 - ------------------------------------------------ 1/1/05 $1,885,000 - ------------------------------------------------ 1/1/06 $1,960,000 - ------------------------------------------------
5. TENANT'S PROPORTIONATE SHARE. Tenant's Proportionate Share for the Expansion Premises shall be as outlined in Paragraph 1 for each of the respective suites and increased as of the Delivery Date. Tenant's Base Year shall remain the calendar year 1999. 6. TENANT IMPROVEMENTS. Tenant agrees to accept the Expansion Premises in an "as is" condition with no further obligation from Landlord to improve the Expansion Premises. 7. OCCUPANCY AND PARKING DENSITY. The Occupancy Density for the Premises as expanded herein shall be 304 people (5 per 1,000 rentable square feet). The Parking Density for the Premises as expanded herein shall be 157 unreserved parking spaces (3 per 1,000 usable square feet). 8. CONTINGENCY. Landlord and Tenant hereby acknowledge that the effectiveness of this Lease Amendment with respect to Suite 600 is conditioned upon Landlord receiving a fully executed Lease termination Agreement from WREIT, the current tenant of 2200 Powell, Suite 600. All other terms and conditions of the Lease shall remain in full force and effect and shall apply to the Expansion Premises as well as to the original Premises. Dated: 12/12/00 IN WITNESS WHEREOF, the parties hereto have executed this Amendment Number Ten as of the day and year first above written. LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership By: Spieker Properties, Inc., a Maryland corporation, its general partner By: /s/ John R. Winther Date: 12/12/00 ------------------------- John R. Winther Its: Senior Vice President TENANT: EXTENSITY INC., a Delaware corporation By: /s/ Kenneth Hahn Date: 11/27/00 ------------------ Kenneth Hahn Its: Chief Financial Officer EXHIBIT A EXPANSION PREMISES [FLOOR PLAN GRAPHIC] ADDRESS: WATERGATE TOWER II 2200 POWELL STREET EMERYVILLE, CA 94608 FLOOR: 6th FLOOR EX-4.17 6 b48257gcexv4w17.txt EX-4.17 EMPLOYMENT AGREEMENT Exhibit 4.17 May 30, 2003 Mr. Arthur Gitajn 69 Woodycrest Avenue Toronto, Ontario M4J 3A8 Dear Arthur: This letter will confirm the terms of your employment as Chief Financial Officer ("CFO") of Geac Computer Corporation Limited ("Geac") effective immediately. You shall serve faithfully to the best of your ability and shall throughout the term of your assignment devote your full working time and attention to the business and affairs of Geac and shall use your best efforts to maintain and advance that business. REPORTING OBLIGATION You will report to the President and Chief Executive Officer of Geac. DIRECTORSHIP FOR A NON-COMPETING COMPANY You may seek appointment to and serve as a Director on the Board of a corporation or other entity that does not compete with Geac or any of its affiliates. Any such appointment or election shall be subject to the prior approval of the President and Chief Executive Officer of Geac, who shall have the discretion to determine whether such corporation or entity competes with Geac or any of its affiliates. In addition, you agree that, if at any time after you become a Director of such corporation or other entity, the President and Chief Executive Officer of Geac determines and provides written notice to you that, due to changes in the nature of the business of Geac or its affiliates or due to changes in the nature of the business of such corporation or other entity or its affiliates, the business of such other corporation or entity competes with Geac or any of its affiliates, you will resign such directorship forthwith. DETAILS OF YOUR REMUNERATION 1. BASE SALARY: Annual base salary of US$100,000 plus Cdn.$150,000 per annum, subject to annual review. These amounts will be paid in semi-monthly instalments subject to all proper withholding taxes and any deductions attributable to your required or elective contributions to the benefits provided by Geac, including the benefits referred to in paragraph 3 below. 2 2. BONUS: Your bonus will be determined as described in Schedule "A". If your last date of active employment with Geac occurs after April 30, 2004, you will receive your FY2004 bonus in accordance with the terms of the FY2004 executive bonus plan. If your last date of active employment with Geac occurs before April 30, 2004, you will receive a pro rata portion of your FY2004 target bonus based on the number of months employed with Geac in FY2004, which bonus shall be paid on the first payroll date following your last date of active employment. (For purposes of this provision, if your last date of active employment with Geac falls on or later than the 15th day of a month, then full credit will be given for the last month of employment; if your last date of active employment falls on or earlier than the 14th day of a month, then no credit will be given for the last month of employment.) 3. GROUP BENEFITS: You will be entitled to receive and participate in all of Geac's standard employee benefit plans. All such benefits will be provided to you by a provider or providers in the United States as well as in Canada. 4. VACATION: During each fiscal year of your employment with Geac you will be entitled to 4 weeks paid vacation to be taken at mutually agreeable times. 5. TAX PLANNING FEES: Geac shall pay (or, at your option, reimburse you) for reasonable fees up to Cdn.$5,000 per year incurred by you in connection with your annual tax planning and preparation fees for the calendar years 2003 and 2004 and thereafter upon approval by the President and Chief Executive Officer. 6. AUTOMOBILE: During the period of your employment, Geac shall pay you a car allowance of Cdn.$640 per month. TAX EQUALIZATION To hold you harmless for additional taxes you are obliged to pay as a Canadian resident of Ontario compared to the taxes you would have paid as a U.S. resident of the State of Maryland, on the first payroll date after the end of each calendar year Geac shall pay to you an amount such that the net amount after Canadian tax withholding will equal 7.2% of your gross calendar year compensation in excess of Cdn.$80,000, and Geac will remit the appropriate tax withholding to the Canadian tax authorities for the equalization payment. In the event your employment is terminated or you resign your employment with Geac (unless such termination is for Cause, in 3 which case no payment shall be owing), this payment will be made on the first payroll date following your last date of employment based on your gross compensation in excess of Cdn.$80,000 to your last date of employment, and Geac will remit the appropriate tax withholding to the Canadian tax authorities for the equalization payment. (If your last date of employment occurs before the payment of your FY 2003 bonus in July 2003, you will receive an additional tax equalization payment such that the net amount after Canadian tax withholding will equal 7.2% of your FY 2003 bonus payment, and this additional tax equalization payment will be made at the same time as your FY 2003 bonus payment.) In addition, on the first payroll date following the entering into of this Agreement Geac shall remit the appropriate tax withholding to Canadian taxing authorities for the net Cdn.$30,994 paid to you on April 23, 2003 to compensate you for your additional 2002 income tax liability as a Canadian resident of Ontario compared to the tax you would have paid as a U.S. resident of the State of Maryland; and your gross annual compensation for 2003 will include the gross amount necessary to yield the net Cdn.$30,994 paid to you on April 23, 2003. In the event that the statutory tax rates for the relevant jurisdictions change, the parties agree to work in good faith to adjust the tax equalization formula accordingly. EXECUTIVE DEVELOPMENT MANAGEMENT PROGRAM You will be eligible to participate in Geac's Executive Development Management Program and, as such, will be offered the opportunity to participate in the advanced senior management training courses offered through Kellogg School of Business or an equivalent institution. STOCK OPTIONS The options to acquire common shares of Geac granted to you prior to the date hereof shall continue. You shall be considered by the Board along with other senior executives for the grant of additional options to acquire common shares of Geac pursuant to Geac's then existing option plan. The options previously granted to you and any options which may be granted to you in future are herein referred to as the "Options". VOLUNTARY RESIGNATION If you wish to resign your employment with Geac voluntarily you shall provide Geac with at least three months prior written notice (the "Notice Period"), which shall set out a proposed date of resignation. Geac may elect to require you to remain in its employment for all or part of the Notice Period, or may require that you resign immediately. During this Notice Period you shall fully cooperate with the Company in devising and carrying out an effective transition plan. Upon the date of your resignation, Geac shall pay you all unpaid salary and shall pay any unpaid bonus to that date provided that the conditions for payment of the bonus have been met. Upon the date of your resignation the vesting of Options shall cease and you will have no entitlement to pay or benefits beyond the date of resignation. This paragraph shall be subject to, and shall not apply in the case of, resignation following a Change in Control. 4 TERMINATION FOR CAUSE If you are guilty of any conduct constituting just Cause (as hereinafter defined) for dismissal, Geac may terminate your employment by providing you with written notice of termination and your employment and your rights under this Agreement shall terminate on the day the notice is delivered to you. Upon termination for Cause you shall be paid all unpaid salary owing to you, the vesting of Options shall cease immediately and the Options shall terminate forthwith. You will have no entitlement to pay or benefits beyond the date of termination. As used in this Agreement, the term "Cause" shall mean (a) your material failure to substantially perform your duties with Geac (other than any such failure resulting from your incapacity due to physical or mental illness) that continues for more than 30 days after a written demand for substantial performance is delivered to you by the Chairman of the Audit Committee of Geac, which demand specifically identifies the manner in which Geac believes that you have not substantially performed your duties, (b) the wilful engaging by you in conduct which is materially injurious to Geac or any of its affiliates, monetarily or otherwise, (c) your conviction of any crime, other than routine traffic violations or (d) your engaging in any business which materially competes with any material business of Geac or any of its affiliates. TERMINATION FOR ANY REASON OTHER THAN CAUSE This Agreement has a term that will end on April 30, 2004, unless mutually extended by the parties before it expires. In the event that this Agreement does expire, the expiry will be considered to be a "Termination for Any Reason Other than Cause" for the purposes of this Agreement. Geac shall have the right to terminate your employment at any time for any reason other than Cause. You shall be entitled to receive on the date of your termination as CFO (the "Last Date of Employment") a lump sum cash payment (the "Termination Payment") in an amount equal to 150% of the sum of: (a) at your option, (i) your base salary received or receivable by you in respect of the immediately preceding twelve months in the normal payroll cycle or (ii) your base salary for the calendar month preceding the date of termination multiplied by 12; (b) your annual car allowance; and (c) the annual bonus paid to you in fiscal year 2002 (as per the fiscal year 2002 proxy circular). Additionally, you will receive a lump sum payment of U.S. $75,000 for relocation expenses. Should your employment with Geac as its CFO be ended, you have agreed that you will remain as a consultant to Geac at your current salary (but with no entitlement to a bonus, vacation or benefits beyond those set forth below in this section) for a period of up to six months from the Last Date of Employment. Upon the mutual agreement of you and the President and Chief Executive Officer of Geac, you may not be required generally to be in the office, but in any event you shall be reasonably available to respond to questions and to attend meetings in the office from time to time. 5 Either party may terminate the above-referenced consulting period upon providing the other party with 30 days' written notice of termination. Upon the ending of this consulting period, you agree that you will not be entitled to any further compensation from Geac for the termination of your employment as a consultant and you also agree to execute a full and final release document in favour of Geac, in a form acceptable to Geac. On the first payroll date following your Last Date of Employment, you will receive a lump sum payment consisting of any outstanding company related expenses and unused accrued vacation leave and for expenses expected to be incurred over the next 18 months for cell phone charges (US$2,700), professional dues (US$1,100), and continuing education (Cdn.$5,100). Subject to the agreement of the carrier or carriers, Geac will also maintain all of your medical, dental, disability, and life insurance benefits for a period of 18 months from your Last Date of Employment. In the event that one or more carriers does not agree to such an extension of coverage, Geac agrees to pay you an amount equal to the cost of your obtaining substantially equivalent benefit coverage if you, in fact, obtain such benefit coverage at your own expense. The vesting of Options shall cease on your Last Date of Employment, and you shall have the right to exercise Options vested prior to that date for a period of 183 days from the Last Date of Employment (provided that in no event shall the period during which you may exercise Options exceed the Option Period of ten years). All payments made under this section shall be made to you by a U.S. subsidiary of Geac by direct deposit to an account in the United States designated by you. Canadian dollar amounts will be converted to U.S. dollars at Geac's prevailing expense report currency conversion rate. Geac agrees to convert U.S. dollars back to Canadian dollars at the same rate for a period of thirty days following payment. CHANGE IN CONTROL AND CHANGE AFFECTING YOUR EMPLOYMENT 1. In the event of a Change in Control and a Change Affecting Your Employment within 12 months of a Change in Control, you may elect to resign from Geac within 120 days of the Change in Control and Change Affecting Your Employment. In the event of your resignation, you will be provided with the following: (a) On the effective date of your resignation, Geac will pay you the Termination Payment, calculated as though such effective date was the effective date of the termination of employment by Geac for a reason other than Cause; and (b) Subject to the agreement of the carrier or carriers, Geac will also maintain all of your medical, dental and life insurance benefits for a period of 18 months from your last date of employment. In the event that one or more carriers does not agree to such an extension of coverage, Geac agrees to pay you an amount equal to the cost of your obtaining substantially equivalent benefit coverage if you, in fact, obtain such benefit coverage at your own expense. In such event, you will also be paid, credited or reimbursed, as the case may be, for all unpaid salary (including credit for any vacation earned but not taken), expenses, benefits and 6 other amounts payable to you or earned by you up to the date of resignation. Also, in such event, all unvested Options previously granted shall become fully vested and you shall have the right to exercise those Options for a period of 12 months from the date of resignation (provided that in no event shall the period during which you may exercise Options exceed the Option Period of ten years). 2. In no case will you be entitled to both a payment for Termination for Any Reason Other Than Cause and for a resignation in the event of a Change in Control and Change Affecting Your Employment. For the purposes of this Letter Agreement, "Change in Control" and "Change Affecting Your Employment" are defined as set out in Schedule "B". PROPERTY OF GEAC All equipment, material, written correspondence, memoranda, communication, reports, or other documents pertaining to the business of Geac or its affiliates used or produced by you in connection with your employment, or in your possession or under your control, shall at all times remain the property of Geac and its affiliates. You shall return all property of Geac and its affiliates in your possession or under your control in good condition within one week of a request by Geac, or within one week of the termination of your employment. Notwithstanding the foregoing, you shall be entitled to keep the laptop computer provided to you by Geac; provided, however, that a condition of this entitlement shall be that you shall make such computer available to the Geac Information Technology department prior to the termination of your employment, together with all information relating to password protection, so as to enable the department to remove all computer software and information owned by, licensed to or relating to Geac and its businesses, other than the computer's operating system software. NON-DISCLOSURE You agree to be bound by the terms of the General Confidentiality Agreement attached hereto as Schedule "C". RESIGNATION AS OFFICER AND DIRECTOR You covenant and agree that, upon any notice of your resignation from Geac or termination of your employment being given, you shall forthwith tender your resignation from all offices and directorships then held by you at Geac or any of its subsidiaries and affiliates, such resignation to be effective immediately, or at such other date as may be mutually agreed to by you and Geac, and you shall not be entitled to receive any severance payment or compensation for loss of office or otherwise by reason of the resignation, other than what has been provided elsewhere in this Agreement. If you fail to resign as set out above, you will be deemed to have resigned from all offices and directorships, and Geac is hereby authorized by you to appoint any person in your name and on your behalf to sign any documents or do any things necessary or required to give effect to such resignation. Subject to limits imposed by law and the terms and conditions from time to time of Geac's governing statute, by-laws and any directors' and officers' insurance 7 policies, you will continue to be entitled after the time of any such resignation (and in respect of periods prior to any such resignation) to the benefit of Geac's policies relating to insurance and indemnification for senior officers. CHOICE OF LAW This Agreement shall be deemed to have been made in and shall be construed in accordance with the laws of the province of Ontario, Canada. SUBMISSION TO ARBITRATION It is hereby agreed that any dispute or controversy in connection with this Agreement, including its interpretation, will be conclusively settled by submission to arbitration (the "Arbitration") in accordance with the rules of arbitration of the Arbitration Act (Ontario) as amended from time to time. The Arbitration will be conducted before a single arbitrator mutually agreeable to the parties (the "Arbitrator"). Each party will be responsible for its own legal costs incurred at the Arbitration. The cost of the Arbitrator will be shared subject to Geac's agreement to reimburse you for your share of the Arbitrator's costs in the event you are largely successful at the Arbitration. NOTICES Any notice required or permitted hereunder shall be deemed to be delivered on the date of actual delivery, if delivered personally, or on the date four days after mailing, if delivered by registered mail. In the case of postal disruption, delivery shall be made by way of personal delivery. LEGAL COSTS Geac shall pay (or, at your option, shall reimburse you) for the reasonable legal fees and disbursements incurred by you in connection with the drafting and negotiation of this Agreement. ENTIRE AGREEMENT This Agreement contains the entire agreement between you and Geac and its affiliates with respect to the subject matter hereof. Any and all other oral or written representations, agreements, arrangements or understandings between you and Geac and its affiliates are hereby terminated. Any and all employment rights you may have with or against Geac or any of its affiliates are contained in this Agreement. 8 We trust that the above will be acceptable to you and we ask that you indicate your acceptance of this offer by signing the enclosed copy of this letter and returning it to my attention by June 5, 2003. This offer becomes null and void should the signed acceptance not be returned to me by that time. Arthur, we look forward to your continued participation on the Geac team. Sincerely, Geac Computer Corporation Limited By: /s/ Paul D. Birch ---------------------------------------------------- Paul D. Birch, President and Chief Executive Officer ACCEPTED: /s/ Arthur Gitajn June 3, 2003 - -------------------------------------- -------------------------- ARTHUR GITAJN Date SCHEDULE "A" BONUS - - Fiscal Year 2003: as set forth in the Geac Fiscal 2003 Executive Bonus Plan, which establishes a targeted base bonus for you of C$150,000. In the event your last day of employment occurs before the payment of the FY 2003 bonus in July 2003, Geac waives the requirement that you be employed by Geac at the time the bonus is paid. - - Fiscal Year 2004: as set forth in the Geac Fiscal 2004 Executive Bonus Plan, in such form as may be approved by the Board of Directors of Geac, with a targeted base bonus for you of C$150,000. 10 SCHEDULE "B" "Change in Control" means the occurrence of one or more of the following events: 1. The sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Geac's assets considered on a consolidated basis to any person or company or combination of persons or companies; 2. The adoption of a plan relating to the liquidation or dissolution of Geac; 3. The acquisition by any person or company or combination of persons or companies acting jointly or in concert of a direct or indirect interest in more than 50 percent of the ownership of Geac or the voting power of the voting shares of Geac by way of a purchase, merger or consolidation or otherwise (other than a creation of a holding company that does not involve a change in the beneficial ownership of Geac as a result of such transaction); 4. The amalgamation, merger or consolidation of Geac with or into another corporation or the amalgamation or merger of another corporation into Geac with the effect that immediately after such transaction the shareholders of Geac immediately prior to such transaction hold less than 50 percent of the total voting power of all securities generally entitled to vote in the election of directors, managers or trustees of the person surviving such amalgamation, merger or consolidation; or 5. During any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of Geac shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by Geac's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period or who, themselves, were approved during such period by the requisite two-thirds vote specified above. "Change Affecting Your Employment" means any of the following circumstances which are not accepted by you during the 90-day period immediately following the date on which you become aware of such circumstances: 1. Any change to your employment conditions with Geac which would significantly reduce the nature or status of your responsibilities; 2. A reduction by Geac in your annual compensation as of the date of the Change in Control; 3. The failure by Geac to continue in effect for your benefit any perquisites or participation in any employee benefit plan to which other employees of Geac are entitled, to the same extent to which any other employees enjoy such benefits; 11 4. Any other change which would constitute "constructive dismissal" under applicable law; or 5. Any change in the location of the principal office of Geac which causes you to substantially increase your travel time or relocate. 12 SCHEDULE "C" Agreement Respecting Confidentiality, Exclusivity and Non-Solicitation 1. CONFIDENTIAL INFORMATION "Confidential Information" means information disclosed to me or acquired by me as a result of my employment with Geac Computer Corporation Limited ("Geac") and includes but is not limited to information relating to Geac and its affiliates' products or developments of new or improved products, marketing strategy, sales or business plans, the names and information about Geac and its affiliates' past, present and prospective customers (to whom Geac or an affiliate has made a proposal during the course of my employment) and clients, trade secrets and any other information which is not in the public domain and which information can be reasonably deemed confidential information whether or not such information is explicitly identified as being confidential. "Confidential Information" shall not include: (a) Information that was known by me at the time it was disclosed to me by Geac or an affiliate or was acquired by me; or (b) Information that is or becomes publicly known or otherwise enters the public domain through no wrongful act of mine; or (c) Information that is received by me from a third party which has no obligation to maintain it in confidence; or (d) Information that is developed independently by me without use of any Confidential Information. 2. USE AND DISCLOSURE While employed by Geac and following the termination of my employment, I shall not, directly or indirectly, in any way use or disclose to any person any Confidential Information. I agree and acknowledge that Confidential Information of Geac and its affiliates is the exclusive property of Geac and its affiliates and I shall hold all such Confidential Information in trust for Geac and its affiliates. I confirm and acknowledge my fiduciary duty to use my best efforts to protect Confidential Information; not to misuse such information; and to protect such Confidential Information from any misuse, misappropriation, harm, or interference by others in any manner whatsoever. 3. GEAC AND AFFILIATES' PROPERTY Upon ceasing employment with Geac, I will immediately turn over to Geac and its affiliates all property then in my possession or under my control belonging to Geac or its affiliates, or any past, present or prospective customer, client, supplier or business partner of Geac or an affiliate. 13 4. EXCLUSIVITY AND DEDICATION During the period of my employment with Geac: (a) I shall devote my entire working time during the regular business hours assigned to my position with attention to such duties as may be assigned to me by Geac. During such time I shall faithfully and diligently serve and endeavour to further the interests of Geac and its affiliates; (b) I agree that I shall not engage in or become connected with: i) any other business during my regular business hours at Geac; or ii) any business which is in competition with Geac or any of its affiliates at any time. 5. CONFLICTS My employment with Geac does not now and shall not in the future conflict with any obligations or interests that I have with any other person, business, organization or former employer. I agree to notify Geac in writing immediately upon having any knowledge to the contrary of any conflict or potential conflict. 6. NON-SOLICITATION OF CUSTOMERS I agree that during the term of this Agreement and for a period of 1 year immediately following the termination of my employment with Geac, I shall not, on my own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise, directly or indirectly, solicit, contact, call upon, communicate or attempt to communicate with any customer or prospective customer of Geac or any of its affiliates or any representative of any customer or prospective customer of Geac of any of its affiliates, with a view to the sale or provision of any deliverable or service competitive with any deliverable or service sold or provided or under development by Geac or any of its affiliates during the 1 year immediately preceding the termination of my employment. 7. NON-SOLICITATION OF EMPLOYEES I agree that while I am employed by Geac, and for a period of 1 year following the termination of my employment with Geac, I shall not directly or indirectly solicit, induce or attempt to induce any employee of Geac or any of its affiliates into leaving his employment with Geac or an affiliate, nor shall I directly or indirectly participate in any organization's recruitment or hiring of employees of Geac or any of its affiliates. 14 8. TERM This Agreement shall become effective when signed and shall terminate upon the termination of my employment with Geac, except that paragraphs 1, 2, 3, 6 and 7 shall survive such termination. 9. SEVERABILITY I acknowledge that each paragraph of this Agreement is separate from each other paragraph of this Agreement and if any one paragraph is found to be invalid, it shall not invalidate the remainder of this Agreement. 10. JURISDICTION This Agreement shall be interpreted in accordance with the laws of the jurisdiction in which it is signed. 11. INDEPENDENT LEGAL ADVICE I acknowledge I have read and understood this Agreement and have had the opportunity to obtain independent legal advice prior to the execution of this Agreement. In the event that I did not obtain such advice, I shall not use the absence of such advice in an attempt to obviate, alter, sever or otherwise terminate this Agreement or any part thereof. 12. ENTIRE AGREEMENT This Agreement shall supersede any previous confidentiality agreement or similar understanding which I may have had with Geac or any of its affiliates. Any amendments to this Agreement must be made in writing and signed by both Geac and me. DATED at 11 Allstate, Markham, Ontario, Canada, this 3rd day of June, 2003. "Arthur Gitajn" "Tricia Little" - --------------------------- ----------------------------- Arthur Gitajn Witness Arthur Gitajn Tricia Little - --------------------------- ----------------------------- (Print) (Print) EX-4.25 7 b48257gcexv4w25.txt EX-4.25 EMPLOYMENT AGREEMENT Exhibit 4.25 (GEAC LOGO) GEAC COMPUTER CORPORATION LIMITED 11 Allstate Parkway, Suite 300 Markham, Ontario L3R 9T8 Tel: 905.475.0525 July 2, 2003 Ms. Donna de Winter Dear Donna: This letter confirms your employment as Vice President, Financial Affairs of Geac Computer Corporation Limited ("GEAC") effective August 5, 2003. You shall serve Geac faithfully to the best of your ability and shall throughout the term of your employment devote your full working time and attention to the business and affairs of Geac and shall use your best efforts to maintain and advance that business. REPORTING OBLIGATION As Vice President, Financial Affairs, you will report to the President and Chief Executive Officer of Geac, or as directed by the Board of Directors. It is understood and agreed that time is of the essence in the delivery of corporate information to the President and Chief Executive Officer. DETAILS OF YOUR REMUNERATION 1. BASE SALARY: You will be paid a base salary of $250,000 per annum, subject to annual review. This will be paid in semi-monthly installments subject to all proper withholding taxes and any deductions attributable to your required or elective contributions to the benefits provided by Geac, including the benefits referred to in Section 3 of this letter. All references to dollar amounts herein are in Canadian dollars, unless otherwise indicated. 2. BONUS: Your bonus will be in an amount consistent with other Geac executives holding similar positions, responsibilities and scope. The bonus formula will allow for all or part of the calculation to be based on target objectives. 2 3. GROUP BENEFITS: You will be entitled to receive and participate in all of Geac's standard employee benefit plans. All such benefits will be provided to you by Geac's Canadian providers. 4. VACATION: During each year of your employment with Geac you will be entitled to 4 weeks paid vacation to be taken at mutually agreeable times. STOCK OPTIONS Subject to approval of Geac's Board of Directors, you will be granted options (the "Options") to acquire 75,000 common shares of Geac at an exercise price per share determined by the Board. These Options will be granted subject to Geac's Stock Option Plan VI. The Options shall vest in four equal instalments commencing on the first anniversary of the date of grant and ending on the fourth anniversary of the date of grant. The Options shall have a term of ten years from the date of grant. The granting of additional Options, if any, shall be at the discretion of the Board of Directors. VOLUNTARY RESIGNATION If you wish to resign voluntarily, you shall provide Geac with at least 30 days' prior written notice, which shall set out a proposed date of resignation. Geac may elect to require you to remain in its employment for all or part of the notice period, or may require that you resign immediately. Upon the date of your resignation, Geac shall pay you all unpaid salary and shall pay any unpaid bonus provided that the conditions for payment of the bonus have been met. Upon the date of your resignation the vesting of Options shall cease and you will have no entitlement to pay or benefits beyond the date of resignation. This paragraph shall be subject to, and shall not apply in the case of resignation following a Change in Control described in the paragraphs hereafter set forth concerning a Change in Control. TERMINATION FOR CAUSE If you are guilty of any conduct constituting just Cause (as hereinafter defined) for dismissal, Geac may terminate your employment by providing you with written notice of termination and your employment and your rights under this Agreement shall terminate on the day the notice is delivered to you. Upon termination for Cause you shall be paid all unpaid salary owing to you, the vesting of Options shall cease. You will have no entitlement to pay or benefits beyond the date of termination. As used in this Agreement, the term "CAUSE" shall mean (a) your material failure substantially to perform your duties with Geac (other than any such failure resulting from your incapacity due to physical or mental illness) that continues for more than 30 days after a written demand for substantial performance is delivered to you by the Chief Executive Officer of Geac, which 3 demand specifically identifies the manner in which Geac believes that you have not substantially performed your duties, (b) the willful engaging by you in conduct which is materially injurious to Geac or any of its affiliates, monetarily or otherwise, (c) your conviction of any crime, other than routine traffic violations or (d) your engaging in any business which materially competes with any material business of Geac or any of its affiliates. TERMINATION FOR ANY REASON OTHER THAN CAUSE Geac shall have the right to terminate your employment at any time for any reason other than Cause. You shall be entitled to receive on the date of termination a lump sum cash payment (the "TERMINATION PAYMENT") in an amount equal to (a) your base salary received or receivable by you in respect of the immediately preceding year plus (b) either (i) the average of the bonuses paid or payable to you with respect to each of the three preceding years or (ii) if you have been employed by Geac for fewer than three years at the time of your termination, the average of the bonuses paid or payable to you with respect to each of the years in which you have worked for Geac. Subject to the agreement of the carrier or carriers, Geac will also maintain all of your benefits of employment, except for your short- and long-term disability benefits, for a period of 12 months from the date of termination. You will be paid, credited or reimbursed, as the case may be, for all unpaid salary (including credit for any vacation earned but not taken), all unpaid bonuses, all accrued bonuses (such bonuses to be determined on a proportionate basis having regard to the proportion of the fiscal year which has elapsed), expenses, benefits and other amounts payable to you or earned by you up to the termination date. All payments and amounts will be subject to statutory and other required deductions and withholdings. The vesting of Options shall cease on the date of termination and you shall have the right to exercise Options vested prior to that date for a period of 30 days from the date of termination (provided that in no event shall the period during which you may exercise Options exceed the Option Period of ten years). It is agreed that the payments and benefits described in this paragraph are in full and final satisfaction of any and all claims associated with the termination of your employment under the Employment Standards Act, 2000, any other relevant statute or at common law. CHANGE IN CONTROL AND CHANGE AFFECTING YOUR EMPLOYMENT 1. In the event of a Change in Control and a Change Affecting Your Employment within 12 months of a Change in Control, you may elect to resign from Geac within 120 days of the Change in Control and Change Affecting Your Employment. In the event of your resignation, you will be provided with the following: (a) On the effective date of your resignation, Geac will pay you the Termination Payment, calculated as though such effective date was the effective date of the termination of your employment by Geac for a reason other than Cause; and (b) Subject to the agreement of the carrier or carriers, Geac will maintain all benefits of employment for a period of 12 months from the date of termination. 4 2. In such event, you will also be paid, credited or reimbursed, as the case may be, for all unpaid salary (including credit for any vacation earned but not taken), all unpaid bonuses, all accrued bonuses (such bonuses to be determined on a proportionate basis having regard to the proportion of the fiscal year which has elapsed), expenses, benefits and other amounts payable to you or earned by you up to the date of resignation. Also, in such event, all unvested Stock Options previously granted shall become fully vested and you shall have the right to exercise those Options for a period of 30 days from the date of resignation (provided that in no event shall the period during which you may exercise Options exceed the Option Period of ten years). 3. In no case will you be entitled to both a payment for termination for any reason other than cause and for a termination in the event of a Change in Control and Change Affecting Your Employment. For the purposes of this Letter Agreement, "Change in Control" and "Change Affecting Your Employment" are defined as set out in Schedule "A". PROPERTY OF GEAC All equipment, material, written correspondence, memoranda, communication, reports, or other documents pertaining to the business of Geac or its affiliates used or produced by you in connection with your employment, or in your possession or under your control, shall at all times remain the property of Geac and its affiliates. You shall return all property of Geac and its affiliates in your possession or under your control in good condition within one week of a request by Geac, or within one week of the termination of your employment. NON-DISCLOSURE You agree to be bound by the terms of the Agreement Respecting Confidentiality, Exclusivity and Non-Solicitation attached hereto as Schedule "B". RESIGNATION AS OFFICER AND DIRECTOR You covenant and agree that, upon any notice of your resignation from Geac or termination of your employment being given, you shall forthwith tender your resignation from all offices and directorships then held by you at Geac or any of its subsidiaries and affiliates, such resignation to be effective immediately, or at such other date as may be mutually agreed to by you and Geac, and you shall not be entitled to receive any severance payment or compensation for loss of office or otherwise by reason of the resignation, other than what has been provided elsewhere in this Agreement. If you fail to resign as set out above, you will be deemed to have resigned from all offices and directorships, and Geac is hereby authorized by you to appoint any person in your name and on your behalf to sign any documents or do any things necessary or required to give effect to such resignation. 5 CHOICE OF LAW This Agreement shall be deemed to have been made in and shall be construed in accordance with the laws of the Province of Ontario, Canada. SUBMISSION TO ARBITRATION It is hereby agreed that any dispute or controversy in connection with this Agreement, including its interpretation, will be conclusively settled by submission to arbitration (the "ARBITRATION") in accordance with the Arbitrations Act (Ontario), as amended from time to time. The Arbitration will be conducted before a single arbitrator mutually agreeable to the parties (the "ARBITRATOR"). Each party will be responsible for their own legal costs incurred at the Arbitration. The cost of the Arbitrator will be shared subject to Geac's agreement to reimburse you for your share of the Arbitrator's costs in the event you are largely successful at the Arbitration. NOTICES Any notice required or permitted hereunder shall be deemed to be delivered on the date of actual delivery, if delivered personally, or on the date four days after mailing, if delivered by registered mail. In the case of postal disruption, delivery shall be made by way of personal delivery. LEGAL COSTS Geac shall pay, or at your option, shall reimburse you for, the reasonable legal fees up to $2,500 (including taxes and disbursements) incurred by you in connection with the drafting and negotiation of this Agreement. ENTIRE AGREEMENT This Agreement contains the entire agreement between us with respect to the subject matter hereof. Any and all other oral or written representations, agreements, arrangements or understandings between us are hereby terminated. * * * * * We trust that the above will be acceptable to you and we ask that you indicate your acceptance of this offer by signing the enclosed copy of this letter and returning it to my attention by July 4, 2003. This offer becomes null and void should the signed acceptance not be received by that date. 6 Donna, we look forward to welcoming you to the Geac team. Sincerely, GEAC COMPUTER CORPORATION LIMITED By: "Charles S. Jones" --------------------------- Charles S. Jones Chairman ACCEPTED: "Donna de Winter" July 2/03 - ------------------------------ -------------------- Donna de Winter Date SCHEDULE "A" "CHANGE IN CONTROL" means the occurrence of one or more of the following events: 1. The sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Geac's assets considered on a consolidated basis to any person or company or combination of persons or companies; 2. The adoption of a plan relating to the liquidation or dissolution of Geac; 3. The acquisition by any person or company or combination of persons or companies acting jointly or in concert of a direct or indirect interest in more than 50 percent of the ownership of Geac or the voting power of the voting shares of Geac by way of a purchase, merger or consolidation or otherwise (other than a creation of a holding company that does not involve a change in the beneficial ownership of Geac as a result of such transaction); 4. The amalgamation, merger or consolidation of Geac with or into another corporation or the amalgamation or merger of another corporation into Geac with the effect that immediately after such transaction the shareholders of Geac immediately prior to such transaction hold less than 50 percent of the total voting power of all securities generally entitled to vote in the election of directors, managers or trustees of the person surviving such amalgamation, merger or consolidation; or 5. During any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of Geac shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by Geac's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period or who, themselves, were approved during such period by the requisite two-thirds vote specified above. "CHANGE AFFECTING YOUR EMPLOYMENT" means any of the following circumstances which are not accepted by you during the 90-day period immediately following the date on which you become aware of such circumstances: 1. Any change to your employment conditions with Geac which would significantly reduce the nature or status of your responsibilities; 2. A reduction by Geac in your annual compensation as of the date of the Change in Control; 2 3. The failure by Geac to continue in effect for your benefit any perquisites or participation in any employee benefit plan to which other employees of Geac are entitled, to the same extent to which any other employees enjoy such benefits; 4. Any other change which would constitute "constructive dismissal" under applicable law; or 5. Any change in the location of the principal office of Geac which causes you to substantially increase your travel time or relocate. SCHEDULE "B" AGREEMENT RESPECTING CONFIDENTIALITY, EXCLUSIVITY AND NON-SOLICITATION 1. Confidential Information "CONFIDENTIAL INFORMATION" means information disclosed to me or acquired by me as a result of my employment with Geac Computer Corporation Limited ("GEAC") and includes but is not limited to information relating to Geac and its affiliates' products or developments of new or improved products, marketing strategy, sales or business plans, the names and information about Geac and its affiliates' past, present and prospective customers (to whom Geac or an affiliate has made a proposal during the course of my employment) and clients, trade secrets and any other information which is not in the public domain and which information can be reasonably deemed confidential information whether or not such information is explicitly identified as being confidential. "Confidential Information" shall not include: (a) Information that was known by me at the time it was disclosed to me by Geac or an affiliate or was acquired by me; or (b) Information that is or becomes publicly known or otherwise enters the public domain through no wrongful act of mine; or (c) Information that is received by me from a third party which has no obligation to maintain it in confidence; or (d) Information that is developed independently by me without use of any Confidential Information. 2. Use and Disclosure While employed by Geac and following the termination of my employment, I shall not, directly or indirectly, in any way use or disclose to any person any Confidential Information. I agree and acknowledge that Confidential Information of Geac and its affiliates is the exclusive property of Geac and its affiliates and I shall hold all such Confidential Information in trust for Geac and its affiliates. I confirm and acknowledge my fiduciary duty to use my best efforts to protect all Confidential Information; not to misuse such information; and to protect such Confidential Information from any misuse, misappropriation, harm, or interference by others in any manner whatsoever. 3. Geac and Affiliates' Property Upon ceasing employment with Geac, I will immediately turn over to Geac all property then in my possession or under my control belonging to Geac or its affiliates, or any past, present or prospective customer, client, supplier or business partner of Geac or an affiliate. 2 4. Exclusivity and Dedication During the period of my employment with Geac: (a) I shall devote my entire working time during the regular business hours assigned to my position with attention to such duties as may be assigned to me by Geac. During such time I shall faithfully and diligently serve and endeavour to further the interests of Geac and its affiliates; (b) I agree that I shall not engage in or become connected with: i) any other business during my regular business hours at Geac; or ii) any business which is in competition with Geac or any of its affiliates at any time. 5. Conflicts My employment with Geac does not now and shall not in the future conflict with any obligations or interests that I have with any other person, business, organization or former employer. I agree to notify Geac in writing immediately upon having any knowledge to the contrary of any conflict or potential conflict. 6. Non-Solicitation of Customers I agree that during the term of this Agreement and for a period of 1 year immediately following the termination of my employment with Geac, I shall not, on my own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise, directly or indirectly, solicit, contact, call upon, communicate or attempt to communicate with any customer or prospective customer of Geac or any of its affiliates or any representative of any customer or prospective customer of Geac or any of its affiliates, with a view to the sale or provision of any deliverable or service competitive or potentially competitive with any deliverable or service sold or provided or under development by Geac or any of its affiliates at any time during the 1 year immediately preceding the effective date of the termination of my employment; provided, however, that nothing herein shall prevent me from soliciting, contacting, calling upon or communicating with any customer or prospective customer of Geac or any of its affiliates that is a pre-existing customer of any new employer of mine. 7. Non-Solicitation of Employees I agree that while I am employed by Geac, and for a period of 1 year following the termination of my employment with Geac, I shall not directly or indirectly, solicit, induce or attempt to induce any employee of Geac or any of its affiliates into leaving the Company's employment, nor shall I directly or indirectly participate in any organization's recruitment or hiring of employees of Geac or any of its affiliates; provided, however, that nothing herein shall prevent me from soliciting for employment the person who is my executive assistant immediately prior to the termination of my employment with Geac. 3 8. Term This Agreement shall become effective when signed and shall terminate upon the termination of my employment with Geac, except that paragraphs 1, 2, 3, 6 and 7 shall survive such termination. 9. Severability I acknowledge that each paragraph of this Agreement is separate from each other paragraph of this Agreement and if any one paragraph is found to be invalid, it shall not invalidate the remainder of this Agreement. 10. Jurisdiction This Agreement shall be interpreted in accordance with the laws of the jurisdiction in which it is signed. 11. Independent Legal Advice I acknowledge I have read and understood this Agreement and have had the opportunity to obtain independent legal advice prior to the execution of this Agreement. In the event that I did not obtain such advice, I shall not use the absence of such advice in an attempt to obviate, alter, sever or otherwise terminate this Agreement or any part thereof. 12. Entire Agreement This Agreement shall supersede any previous confidentiality agreement or similar understanding which I may have had with Geac or any of its affiliates. Any amendments to this Agreement must be made in writing and signed by both Geac and me. DATED at Markham, this fifth day of August, 2003. "Donna de Winter" "Carol Casselman" - ------------------------------ --------------------------- Donna de Winter (Witness) Carol Casselman --------------------------- (Print) EX-4.26 8 b48257gcexv4w26.txt EX-4.26 EMPLOYMENT AGREEMENT Exhibit 4.26 July 11, 2003 Mr. Jeffrey M. Snider 56 Park Avenue Newton, Massachusetts 02458 Dear Jeffrey: This letter will confirm the terms of your employment by Geac Computers, Inc. ("GEC") and your work as Senior Vice President and General Counsel of Geac Computer Corporation Limited ("Geac") effective August 4, 2003. You shall serve faithfully to the best of your ability and shall throughout the term of your assignment devote your full working time and attention to the business and affairs of GEC and Geac and shall use your best efforts to maintain and advance that business. It is understood that you are not being offered employment for a definite period of time and that either you or GEC may terminate the employment relationship at any time and for any reason without prior notice and, except in the circumstances and to the extent expressly set forth below, without additional compensation to you. REPORTING OBLIGATION As Senior Vice President and General Counsel you will be based in the Southborough, Massachusetts office of GEC and report to the Chief Executive of Geac. DETAILS OF YOUR REMUNERATION 1. BASE SALARY: Annual base salary of US$250,000 per annum, subject to annual review. This will be paid in semi-monthly installments subject to all proper withholding taxes and any deductions attributable to your required or elective contributions to the benefits provided by GEC, including the benefits referred to in Section 3 of this letter. 2. BONUS: You will be eligible in each year for a bonus of up to US$150,000 determined in accordance with the parameters set forth on Schedule "A". 3. GROUP BENEFITS: You will be entitled to receive and participate in all of Geac's U.S. standard employee benefit plans. All such benefits will be provided to you by a provider or providers in the United States. 2 4. VACATION: During each year of your employment with GEC you will be entitled to 4 weeks paid vacation to be taken at mutually agreeable times. STOCK OPTIONS You will be granted options ("Options") to purchase three hundred thousand (300,000) common shares of Geac with an exercise price that will be set on August 4, 2003. These Options are granted subject to Geac's Stock Option Plan VI (the "Plan"). Upon receipt of regulatory approval, Geac may transfer all or some of the Options out of the Plan and list the common shares underlying such transferred Options. In such event, transferred Options will continue to be governed by the terms of the Plan. The options shall have an "Option Period" for purposes of the Plan of ten years from the date of grant. Options will vest equally over a four year period, commencing August 3, 2004. VOLUNTARY RESIGNATION If you wish to resign voluntarily you shall provide GEC and Geac with at least 30 days prior written notice, which shall set out a proposed date of resignation. GEC may elect to require you to remain in its employment for all or part of the notice period, or may require that you resign immediately. Upon the date of your resignation, GEC shall pay you all unpaid salary and shall pay any unpaid bonus provided that the conditions for payment of the bonus have been met. Upon the date of your resignation the vesting of Options shall cease and you will have no entitlement to pay or benefits beyond the date of resignation. You shall have the right to exercise Options vested prior to that date for a period of 30 days from the date of resignation (provided that in no event shall the period during which you may exercise Options exceed the Option Period of ten years). This paragraph shall be subject to, and shall not apply in the case of resignation following a Change in Control described in the paragraphs hereafter set forth concerning a Change in Control. TERMINATION FOR CAUSE If you have engaged in any conduct constituting Just Cause (as hereinafter defined) for dismissal, GEC may terminate your employment by providing you with written notice of termination and your employment and your rights under this Agreement shall terminate on the day the notice is delivered to you. Upon termination for Just Cause you shall be paid all unpaid salary owing to you, the vesting of Options shall cease and the Options shall terminate forthwith. You will have no entitlement to pay or benefits beyond the date of termination. As used in this Agreement, the term "Just Cause" shall mean (a) your material failure to substantially perform your duties with GEC or Geac (other than any such failure resulting from your incapacity due to physical or mental illness) that continues for more than 30 days after a written demand for substantial performance is delivered to you by the Chief Executive Officer of GEC or Geac, which demand specifically identifies the manner in which GEC or Geac believes that you have not substantially performed your duties, (b) the willful engaging by you in conduct which is materially injurious to GEC, Geac or any of their respective affiliates, monetarily or otherwise, (c) your conviction of any crime, other than routine traffic violations and other minor 3 misdemeanors, or (d) your engaging in any business which materially competes with any material business of GEC, Geac or any of their respective affiliates. In light of your role as the chief legal officer within the company and the person, therefore, who would otherwise mediate any dispute in connection with a notice made pursuant to this section, you shall have the right to appeal any such notice directly to the Corporate Governance Committee of the Board of Directors (or such successor committee) within ten (10) business days of your receipt thereof. TERMINATION FOR ANY REASON OTHER THAN JUST CAUSE GEC shall have the right to terminate your employment at any time for any reason other than Just Cause. You shall be entitled to receive on the date of such termination a lump sum cash payment (the "Termination Payment") in an amount equal, at your option, to (i) your base salary received or receivable by you in respect of the immediately preceding year in the normal payroll cycle or (ii) your base salary for the calendar month preceding the date of termination multiplied by 12. Subject to the agreement of the carrier or carriers, GEC will also maintain all of your benefits of employment for a period of 12 months from the date of termination. In the event that one or more carriers does not agree to such an extension of coverage, GEC agrees to pay you an amount equal to the cost of your obtaining substantially equivalent benefit coverage. You will be paid, credited or reimbursed, as the case may be, for all unpaid salary (including credit for any vacation earned but not taken), expenses, benefits and other amounts payable to you or earned by you up to the termination date. The vesting of Options shall cease on the date of termination and you shall have the right to exercise Options vested prior to that date for a period of 30 days from the date of termination (provided that in no event shall the period during which you may exercise Options exceed the Option Period of ten years). CHANGE IN CONTROL AND CHANGE AFFECTING YOUR EMPLOYMENT 1. In the event that there shall occur both a Change of Control and a Change Affecting Your Employment within 12 months of a Change in Control, you may elect to resign from GEC within 120 days of the Change in Control and Change Affecting Your Employment. In the event of your resignation, you will be provided with the following: (a) On the effective date of your resignation, GEC will pay you the Termination Payment, calculated as though such effective date was the effective date of the termination of your employment by GEC for a reason other than Just Cause; and (b) Subject to the agreement of the carrier or carriers, GEC will maintain all benefits of employment for a period of 12 months from the date of termination. In the event that one or more carriers does not agree to such an extension of coverage, GEC agrees to pay you an amount equal to the cost of your obtaining substantially equivalent benefit coverage. (c) In such event, you will also be paid, credited or reimbursed, as the case may be, for all unpaid salary (including credit for any vacation earned but not taken), expenses, benefits and other amounts payable to you or earned by you up to the date of resignation. Also, in such event, all unvested Stock Options previously granted shall become fully vested and you shall have the right to exercise those Options for a period of 12 months from the date 4 of resignation (provided that in no event shall the period during which you may exercise Options exceed the Option Period of ten years). 2. In no case will you be entitled to both a payment for termination for any reason other than cause and for a termination in the event of a Change in Control and Change Affecting Your Employment. For the purposes of this Letter Agreement, "Change in Control" and "Change Affecting Your Employment" are defined as set out in Schedule "B". PROPERTY OF GEC, GEAC AND THEIR AFFILIATES All equipment, material, written correspondence, memoranda, communication, reports, or other documents pertaining to the business of GEC, Geac or any of their respective affiliates used or produced by you in connection with your employment, or in your possession or under your control, shall at all times remain the property of GEC, Geac and their respective affiliates. You shall return all property of GEC, Geac and such affiliates in your possession or under your control in good condition within one week of a request by GEC or Geac, or within one week of the termination of your employment. NON-DISCLOSURE You agree to be bound by the terms of the General Confidentiality Agreement attached hereto as Schedule "C". RESIGNATION AS OFFICER AND DIRECTOR You covenant and agree that, upon any notice of your resignation from GEC or termination of your employment being given, you shall forthwith tender your resignation from all offices and directorships then held by you at GEC, Geac or any of their respective subsidiaries and affiliates, such resignation to be effective immediately, or at such other date as may be mutually agreed to by you and GEC, and you shall not be entitled to receive any severance payment or compensation for loss of office or otherwise by reason of the resignation, other than what has been provided elsewhere in this Agreement. If you fail to resign as set out above, you will be deemed to have resigned from all offices and directorships, and GEC and Geac are each hereby authorized by you to appoint any person in your name and on your behalf to sign any documents or do any things necessary or required to give effect to such resignation. CHOICE OF LAW This Agreement shall be deemed to have been made in and shall be construed in accordance with the laws of the Commonwealth of Massachusetts, U.S.A. 5 SUBMISSION TO ARBITRATION It is hereby agreed that any dispute or controversy in connection with this Agreement, including its interpretation, will be conclusively settled by submission to arbitration (the "Arbitration") in accordance with the employment rules of arbitration of American Arbitration Association as amended from time to time. The Arbitration will be conducted before a single arbitrator mutually agreeable to the parties (the "Arbitrator") and shall take place in Suffolk County, Massachusetts. Each party will be responsible for its own legal costs incurred at the Arbitration. The cost of the Arbitrator will be borne by the party commencing the Arbitration, subject to reimbursement by the other party of one-half the cost of the Arbitrator if the party commencing the Arbitration succeeds on all claims brought. The Arbitrator shall not have authority to award exemplary, punitive, multiple or similar damages. Notwithstanding any other provision hereof, GEC, Geac and any of their respective affiliates shall have the right to seek injunctive or other appropriate equitable relief from a court of competent jurisdiction at any time in aid of the Arbitration or to protect and enforce any of its rights. NOTICES Any notice required or permitted hereunder shall be deemed to be delivered on the date of actual delivery, if delivered personally, or on the date four days after mailing, if delivered by registered mail. In the case of postal disruption, delivery shall be made by way of personal delivery. ENTIRE AGREEMENT This Agreement contains the entire agreement between us with respect to the subject matter hereof. Any and all other oral or written representations, agreements, arrangements or understandings between us are hereby terminated. * * * * * We trust that the above terms are acceptable to you and we ask that you indicate your acceptance of these terms by signing the enclosed copy of this letter and returning it to my attention by July 18, 2003. This offer becomes null and void should the signed acceptance not be returned to me by that time. 6 Jeffrey, we look forward to welcoming you to the Geac team. Sincerely, Geac Computers, Inc. By: "Paul D. Birch" ---------------------------- Paul D. Birch, President Geac Computer Corporation Limited By: "Paul D. Birch" ---------------------------- Paul D. Birch, President and Chief Executive Officer ACCEPTED: "Jeffrey M. Snider" 7.11.03 ---------------------------- ---------------------------- Jeffrey M. Snider Date 7 Schedule "A" Bonus Parameters Your eligibility in each year to earn a bonus shall be based on your success in the following: 1. Effecting proper cost controls on litigation expenses, including fees paid to outside legal counsel; 2. Implementing a policy governing the relationship with outside legal counsel; 3. Creating, establishing and implementing contracts compliance controls; 4. Assessing and correcting when necessary company practices with respect to the purchasing of goods and services, the employment of outside consultants, and the negotiation and execution of confidentiality undertakings and material commercial and strategic contracts; 5. Negotiating and documenting mergers, acquisitions, divestitures, financings, employee benefit plans and other material arrangements, as presented; 6. Developing an internal legal services plan to be approved by the Chief Executive, including staffing, performance and evaluation standards; and 7. Creating, for the Chief Executive and Board approval, and if so approved, then establishing and implementing corporate governance standards and practices to enforce a proper and ethical business culture. It is a condition in any fiscal year of your receiving any bonus that Geac achieve at least 90% of budgeted EBIT for that year. For this purpose, EBIT shall be calculated as follows. With respect to Geac and its subsidiaries for any fiscal period, an amount equal to: (a) Consolidated Net Income for such period plus; (b) To the extent deducted in the calculation of Consolidated Net Income and without duplication; (i) income tax expense for such period (ii) Consolidated Total Interest Income/Expense for such period, (iii) The aggregate amount of one time non-recurring expenses and/or charges or gains in the disposition of businesses taken by Geac and its subsidiaries in the fiscal year for which the calculation is made, all of the above relating to the restructuring of the business. 8 Schedule "B" "Change in Control" means the occurrence of one or more of the following events: 1. The sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Geac's assets considered on a consolidated basis to any person or company or combination of persons or companies; 2. The adoption of a plan relating to the liquidation or dissolution of Geac; 3. The acquisition by any person or company or combination of persons or companies acting jointly or in concert of a direct or indirect interest in more than 50 percent of the ownership of Geac or the voting power of the voting shares of Geac by way of a purchase, merger or consolidation or otherwise (other than a creation of a holding company that does not involve a change in the beneficial ownership of Geac as a result of such transaction); 4. The amalgamation, merger or consolidation of Geac with or into another corporation or the amalgamation or merger of another corporation into Geac with the effect that immediately after such transaction the shareholders of Geac immediately prior to such transaction hold less than 50 percent of the total voting power of all securities generally entitled to vote in the election of directors, managers or trustees of the person surviving such amalgamation, merger or consolidation; or 5. During any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors of Geac shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by Geac's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period or who, themselves, were approved during such period by the requisite two-thirds vote specified above. "Change Affecting Your Employment" means any of the following circumstances that are not accepted by you during the 90-day period immediately following the date on which you become aware of such circumstances: 1. Any change to your employment conditions with GEC which would significantly reduce the nature or status of your responsibilities; 2. A reduction by GEC in your annual compensation as of the date of the Change in Control; 3. The failure by GEC to continue in effect for your benefit any perquisites or participation in any employee benefit plan to which other employees of GEC are entitled, to the same extent to which any other employees enjoy such benefits; 4. Any other change which would constitute "constructive dismissal" under applicable law; or 9 5. Any change in the location of the principal office of GEC, which is located in Southborough, MA, which causes you to substantially increase your travel time or relocate. 10 Schedule "C" Agreement Respecting Confidentiality, Exclusivity and Non-Solicitation 1. Confidential Information "Confidential Information" means information disclosed to me or acquired by me as a result of my employment with Geac Computers, Inc. ("GEC") or my work with Geac Computer Corporation Limited ("Geac") or their respective affiliates and includes but is not limited to information relating to GEC, Geac and such affiliates' products or developments of new or improved products, marketing strategy, sales or business plans, the names and information about GEC, Geac and such affiliates' past, present and prospective customers (to whom GEC, Geac or an affiliate has made a proposal during the course of my employment) and clients, trade secrets and any other information which is not in the public domain and which information can be reasonably deemed confidential information whether or not such information is explicitly identified as being confidential. "Confidential Information" shall not include: (a) Information that was known by me at the time it was disclosed to me by GEC, Geac or an affiliate of either; or (b) Information that is or becomes publicly known or otherwise enters the public domain through no wrongful act of mine; or (c) Information that is received by me from a third party which has no obligation to maintain it in confidence; or (d) Information that is developed independently by me without use of any Confidential Information. 2. Use and Disclosure While employed by GEC and for a period of five (5) years following the termination of my employment (the "Confidentiality Period"), I shall not, directly or indirectly, in any way use or disclose to any person any Confidential Information, except where authorized or required to do so for the performance of my employment; provided that for any such Confidential Information constituting a trade secret, the Confidentiality Period shall extend for so long as the particular Confidential Information remains a trade secret under applicable law. I agree and acknowledge that Confidential Information of GEC, Geac and their respective affiliates is the exclusive property of GEC, Geac and such affiliates and I shall hold all such Confidential Information in trust for GEC, Geac and such affiliates. I confirm and acknowledge my fiduciary duty to use my best efforts to protect Confidential Information; not to misuse such information; and to protect such Confidential Information from any misuse, misappropriation, harm, or interference by others in any manner whatsoever. 3. Geac Property I agree that all other discoveries, developments, inventions, ideas, concepts, research and other information, processes, products, methods and improvements or parts thereof (including, without 11 limitation, all computer programs, algorithms, subroutines, software, source codes, object codes, flow charts, schematics, designs, specifications, drawings, web page designs, graphic designs, product plans or definitions, research data or results and media design) written, conceived, developed, reduced to practice or otherwise made by me, alone or jointly with others and in any way (a) relating to the present or proposed products, programs or services of GEC, Geac or their respective affiliates or (b) relating to tasks assigned to me during the course of my employment or (c) derived from the Confidential Information obtained by me in the course of my employment, whether or not patentable or subject to copyright protection or other forms of proprietary protection, and whether or not reduced to tangible form, memorialized or reduced to practice, during the period of my employment with GEC or my work with Geac, or during the twelve month period next succeeding the termination of my employment with GEC, whether or not made during my regular working hours, and whether or not made on the premises of GEC, Geac or any affiliate of either of them, and whether or not disclosed by me to GEC, Geac or their respective affiliates (hereinafter collectively referred to as "Developments") shall be the sole property of Geac. I agree that all of the Developments, including, without limitation, all parts thereof, and any memorialization thereof by electronic or manual storage, transcription, or recording, and any display, performance or modification thereof or derivative work based thereon, is work made for hire under the copyright laws of the United States especially ordered and commissioned by Geac. Geac shall be deemed the sole author, creator and inventor, as the case may be, of the Developments. I agree to, and hereby do, assign, to Geac all my right, title and interest throughout the world in all Developments and to anything tangible which contains, represents, evidences, records, performs, displays, embodies or constitutes any such Development. I hereby assign and, to the extent any such assignment cannot be made at present, I hereby agree to assign to Geac all copyrights, patents, trademarks and other proprietary rights I may have in any such Development, together with the right to file for or own wholly without restriction United States and foreign copyrights, patents, trademarks and other proprietary rights with respect thereto. I agree to waive, and hereby waive, all moral rights which I may have in or to any Developments and, to the extent that such rights may not be waived, I agree not to assert such rights against Geac or its licensees. I specifically agree and acknowledge that the foregoing assignment covers all results, outputs and products of my work for GEC, Geac or any of their respective affiliates prior to the date hereof, whether as an employee or as a consultant, and all related copyrights, patents, trademarks or other proprietary rights, and that all such results, output and products shall be Developments hereunder and the sole property of Geac. Any reference to "proprietary protection" or "proprietary rights" in this Agreement shall mean all forms and types of proprietary protection or proprietary rights, as the case may be, however denominated. I am subject to no contractual or other restriction or obligation that will in any way limit my activities on behalf of GEC, Geac or any of their respective affiliates. I hereby represent and warrant to GEC and Geac that I have no continuing obligations to any previous employer (a) 12 with respect to any Development or (b) which require me not to disclose information to GEC or Geac which in any way relates to the present business of GEC or Geac or any of their respective affiliates. I further represent and warrant that I do not claim rights in, or otherwise exclude from this Agreement, any Development, except the following (the "Excluded Material"): NONE (If none, please write "None".) If during the period of my employment with GEC or my work with Geac or during the twelve month period next succeeding the termination of my employment with GEC, I incorporate into any Developments any Excluded Material or any other proprietary information owned by me or in which I have an interest, I hereby grant, and to the extent any such grant cannot be made at the present, I agree to grant to each of GEC and Geac a non-exclusive, royalty-free, irrevocable, perpetual, transferable worldwide license, with the right to sublicense, to make, use, refrain from using, sell, offer for sale, import, modify, delete, add to, reproduce, create derivative works based upon, distribute, perform, display or exploit in any way, such Excluded Material and such other proprietary information, in whole or in part, by any means, now known or later developed, in all languages, as part of or in connection with any such Developments. I shall make and maintain adequate and current written records of all Confidential Information and Developments which by virtue of this Agreement are the sole property of Geac and shall disclose same promptly, fully and in writing to Geac's Board of Directors or its duly authorized officer, irrespective of whether such Confidential Information and Developments are conceived, developed or made after the termination of my employment with GEC and my work with Geac. If requested to do so by GEC or Geac, I agree to sign a Termination Certificate in which I confirm that I have complied with the requirements of this Agreement and that I am aware that certain restrictions imposed upon me by this Agreement continue after termination of my employment. I understand, however, that my obligations under this Agreement will continue even if I do not sign a Termination Certificate. During and after the term of my employment by GEC and my work with Geac, I shall execute, acknowledge, seal and deliver all documents, including, without limitation, all instruments of assignment, patent and copyright applications and supporting documentation, and perform all acts, which GEC or Geac may request to secure its rights hereunder and to carry out the intent of this Agreement. In furtherance of my undertaking in the immediately preceding sentence, I specifically agree to assist Geac, at Geac's expense, in every proper way to obtain for its sole benefit, in any and all countries, patents, copyrights, trademarks or other forms of proprietary protection for all Developments which by virtue of this Agreement are the sole property of Geac and for publications pertaining to any of them. In no circumstances shall I be entitled to any further compensation for any action taken under this Section. Upon ceasing employment with GEC or my work with Geac I will immediately turn over to GEC, Geac and their respective affiliates all property then in my possession or under my control 13 belonging to GEC, Geac or such affiliates, or any past, present or prospective customer, client, supplier or business partner of GEC, Geac or an affiliate. 4. Exclusivity and Dedication During the period of my employment with GEC and my work with Geac: (a) I shall devote my entire working time during the regular business hours assigned to my position with attention to such duties as may be assigned to me by GEC or Geac. During such time I shall faithfully and diligently serve and endeavour to further the interests of GEC, Geac and their respective affiliates; (b) I agree that I shall not engage in or become connected with: (i) any other business during my regular business hours at GEC or Geac; or (ii) any business which is in competition with GEC, Geac or any of their respective affiliates at any time. (c) Geac acknowledges and agrees that I may serve on and I understand that these provisions will also apply in the event that I desire to serve on the board of directors of an outside organization. In addition, I understand that I must comply with the provisions of Geac's Business Conduct Policy. 5. Conflicts My employment with GEC and my work with Geac does not now and shall not in the future conflict with any obligations or interests that I have with any other person, business, organization or former employer. I agree to notify GEC and Geac in writing immediately upon having any knowledge to the contrary of any conflict or potential conflict. 6. Non-Solicitation of Customers I agree that during the term of this Agreement and for a period of 1 year immediately following the termination of my employment with GEC and my work with Geac, I shall not, on my own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise, directly or indirectly, solicit, contact, call upon, communicate or attempt to communicate with any customer or prospective customer of GEC, Geac or any of their respective affiliates or any representative of any customer or prospective customer of GEC, Geac or any of their respective affiliates, with a view to the sale or provision of any deliverable or service competitive or potentially competitive with any deliverable or service sold or provided or under development by GEC, Geac or any of their respective affiliates during the 1 year immediately preceding the effective date of the termination of my employment. 14 7. Non-Solicitation of Employees I agree that while I am employed by GEC and during my work with Geac, and for a period of 1 year following the termination of my employment with GEC and my work with Geac, I shall not directly or indirectly, solicit, induce or attempt to induce any employee of GEC, Geac or any of their respective affiliates into leaving the employment of GEC, Geac or any such affiliate, nor shall I directly or indirectly participate in any organization's recruitment or hiring of employees of GEC, Geac or any of their respective affiliates. 8. Term This Agreement shall become effective when signed and shall terminate upon the termination of my employment with GEC, except that paragraphs 1, 2, 3, 6 and 7 and this paragraph 8 shall survive such termination. 9. Severability I acknowledge that each paragraph of this Agreement is separate from each other paragraph of this Agreement and if any one paragraph is found to be invalid, it shall not invalidate the remainder of this Agreement. Any paragraph found to be unenforceable shall be construed to be reformed to extend as far as is enforceable. 10. Jurisdiction This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of The Commonwealth of Massachusetts without regard to its principles of conflicts of laws. 11. Independent Legal Advice I acknowledge I have read and understood this Agreement and have had the opportunity to obtain independent legal advice prior to the execution of this Agreement. In the event that I did not obtain such advice, I shall not use the absence of such advice in an attempt to obviate, alter, sever or otherwise terminate this Agreement or any part thereof. 15 12. Entire Agreement This Agreement shall supersede any previous confidentiality agreement or similar understanding which I may have had with GEC, Geac or any of their respective affiliates. Any amendments to this Agreement must be made in writing and signed by all of GEC, Geac and me. DATED at Southborough , this 11 day of July , 2003. ------------------ -------- ---------- "Jeffrey M. Snider" "Charles S. Jones" - ------------------------------ ------------------------------ Jeffrey M. Snider Witness Jeffrey M. Snider Charles S. Jones - ------------------------------ ------------------------------ (Print) (Print) EX-8.1 9 b48257gcexv8w1.txt EX-8.1 SUBSIDIARIES . . . Exhibit 8.1 SUBSIDIARIES OF GEAC COMPUTER CORPORATION LIMITED
COMPANY JURISDICTION Geac Computer Corporation Limited Canada Geac Canada Limited Canada Geac (Delaware) Partnership Delaware Geac ULC Nova Scotia Geac USA L.L.C. Delaware 2019856 Ontario Inc. Ontario Progiciels JBA Quebec Inc. Quebec 915873 Ontario Ltd. Ontario 915874 Ontario Ltd. Ontario Geac (Canada) Services Limited Ontario 877025 Alberta Ltd. Alberta Geac Computers Hong Kong Limited Hong Kong GEAC Hungary Asset Management Company Limited Hungary Geac International Finance Corporation Ireland Geac Computers, Inc. Missouri Geac Enterprise Solutions, Inc. Georgia News Holdings Corp. Delaware Interealty Corp. Colorado PropertyChannel, Inc. Virginia Remanco International, Inc. Delaware Geac Library Systems, Inc. Delaware Extensity, Inc. Delaware

COMPANY JURISDICTION Extensity Europe Limited UK Comshare, Incorporated Michigan Comshare (U.S.), Inc. Michigan Comshare Limited Canada Comshare Holdings Company UK Comshare Limited UK Comshare International Limited UK Geac (UK) Holdings Limited UK & Wales Geac Software Solutions Limited UK & Wales Geac Computer Systems (UK) Limited UK Geac Software Services Holdings Limited UK Geac Software Services Medium Systems Limited UK MAI United Kingdom Limited UK Remanco Systems Limited UK Mainpac Limited UK Computer Library Services International Limited UK Geac UK Limited UK Tekserv Computer Services Limited UK Geac Enterprise Solutions Holdings Limited UK Geac Enterprise Solutions Limited UK JBA Investments Limited UK JBA (Northern) Limited UK JBA (Wesex) Limited UK Geac Enterprise Solutions s.r.o. Czech Republic
- 2 -
COMPANY JURISDICTION Nexus Solutions Limited UK JBA Property Management Limited UK ACN 002 474 893 Pty Ltd Australia ACN 007 234 609 Pty Ltd Australia ACN 004 842 611 Pty Ltd Australia ACN 006 036 728 Pty Ltd Australia JBA sp. Z.o.o. Poland JBA Software Products Lanka (Private) Limited Sri Lanka Geac Enterprise Solutions Deutschlang Gmbh Germany Geac Enterprise Solutions Austria Gmbh Austria Geac Enterprise Solutions Development Limited UK Generator Systems (UK) Limited UK JBA Software Products (Ireland) Limited Ireland JBA (UK) Limited UK JBA International Philippines, Inc. Philippines Inform Solutions Limited UK JBA Employee Benefit Trustee Company Limited UK JBA (Information Processing Services) Limited UK Olympix Software Limited UK Phoenix Business Systems Recovery Limited UK Geac Enterprise Solutions (Ireland) Limited Ireland JBA Asia (N) Sdn Bhd Malaysia JBA International Software Pte. Ltd. Singapore
- 3 -
COMPANY JURISDICTION Geac Nordic A/S Denmark Geac Computers S.L. Spain Geac Italia S.r.L. Italy Geac Computers Brasil Ltda Brazil Geac Computers (Puerto Rico) Inc. Puerto Rico Geac Holdings ApS Denmark Geac Enterprise Solutions A/S Denmark Kiloware ApS Denmark Geac France SA France C.I.A.G. France Geac Benelux B.V. Netherlands S.A. Geac N.V. Belgium Runtime Holdings B.V. Netherlands Runtime B.V. Netherlands JBA Italia S.R.L. Italy Geac spol s.r.o. Czech Republic Geac Computers Japan KK Japan Geac Computers Philippines Inc. Philippines Geac Computers (Singapore) Pte Ltd Singapore Geac Computers (M) Sdn. Bhd. Malaysia Geac Computers NZ Limited New Zealand Management Data Polska Sp. z.o.o. Poland Management Data Praha spol s.r.o. Czech Republic Geac Computers Pty Ltd Australia
- 4 -
COMPANY JURISDICTION Computer Library Services International (Australia) Pty Limited Australia Cybergraphic Systems GmbH Germany Geac Computers (Mexico) S.A. de C.V. Mexico Geac Computers (Thailand) Limited Thailand
- 5 - EX-12.1 10 b48257gcexv12w1.txt EX-12.1 CERTIFICATION OF CEO Exhibit 12.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Geac Computer Corporation Limited ("Geac") on Form 20-F for the fiscal year ended April 30, 2003 as filed with the Securities and Exchange Commission on the date hereof, I, Charles S. Jones, President and Chief Executive Officer of Geac, certify, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, that: 1. I have reviewed this annual report on Form 20-F of Geac; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [omitted pursuant to the transition rules specified in SEC Release No. 33-8238]; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 31, 2003 /s/ Charles S. Jones - -------------------------------- Charles S. Jones President and Chief Executive Officer -2- EX-12.2 11 b48257gcexv12w2.txt EX-12.2 CERTIFICATION OF CFO Exhibit 12.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Geac Computer Corporation Limited ("Geac") on Form 20-F for the fiscal year ended April 30, 2003 as filed with the Securities and Exchange Commission on the date hereof, I, Arthur Gitajn, Chief Financial Officer of Geac, certify, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, that: 1. I have reviewed this annual report on Form 20-F of Geac; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [omitted pursuant to the transition rules specified in SEC Release No. 33-8238]; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 31, 2003 /s/ Arthur Gitajn - -------------------------------- Arthur Gitajn Chief Financial Officer EX-13.1 12 b48257gcexv13w1.txt EX-13.1 CERTIFICATION PURSUANT TO SECTION 906 Exhibit 13.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 20-F of Geac Computer Corporation Limited ("Geac") for the fiscal year ended April 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned President and Chief Executive Officer and Chief Financial Officer of Geac, certifies, to the best knowledge and belief of the signatory, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Geac. /s/ Charles S. Jones /s/ Arthur Gitajn - ------------------------------------- ------------------------------------ Charles S. Jones Arthur Gitajn President and Chief Executive Officer Chief Financial Officer Date: October 31, 2003 Date: October 31, 2003 -----END PRIVACY-ENHANCED MESSAGE-----


PART I
	Item 1. Identity of Directors, Senior Management and Advisers
	Item 2. Offer Statistics and Expected Timetable
	Item 3. Key Information
Item 4. Information on the Company
	Item 5. Operating and Financial Review and Prospects
	Item 6. Directors, Senior Management and Employees
OPTIONS OF NAMED EXECUTIVE OFFICERS
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
	Item 7. Major Shareholders and Related Party Transactions
	Item 8. Financial Information
	Item 9. The Offer and Listing
	Item 10. Additional Information
	Item 11. Quantitative and Qualitative Disclosures About Market Risk
	Item 12. Description of Securities Other than Equity Securities
PART II
	Item 13. Defaults, Dividend Arrearages and Delinquencies
	Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
	Item 15. Controls and Procedures
	Item 16A. Audit committee financial expert
	Item 16B. Code of Ethics
	Item 16C. Principal Accountant Fees and Services
	Item 16D. Exemption from the listing standards for audit committees
PART III
	Item 17. Financial Statements
	Item 18. Financial Statements
	Item 19. Exhibits
SIGNATURES
EXHIBIT INDEX
Ex-4.4 Loan, Guaranty and Security Agreement
Ex-4.5 First Amendment Agreement
Ex-4.12 Emeryville Lease
Ex-4.17 Employment Agreement
Ex-4.25 Employment Agreement
Ex-4.26 Employment Agreement
Ex-8.1 Subsidiaries
Ex-12.1 Certification of CEO
Ex-12.2 Certification of CFO
Ex-13.1 Certification pursuant to Section 906


	Fiscal year ended April 30,

(in thousands of Canadian dollars, except share and per share data)	2003			2002			2001			2000			1999

Revenues (1) (2)	$	623,667		$	716,534		$	834,844		$	964,073		$	759,538
Income (loss) from continuing operations before goodwill impairment, net restructuring and other unusual items and income taxes (1) (2) (3)		105,570			113,393			(81,489	)		67,541			178,693
Goodwill impairment		(16,785	)		—			—			—			—
Net restructuring and other unusual items		(5,164	)		(26,736	)		(312,238	)		—			(268,854	)
Income taxes (1)		33,348			34,110			(42,450	)		22,799			25,392
Net income (loss) from continuing operations (1) (3)		50,273			52,547			(351,277	)		44,742			(115,553	)
Net (loss) income from discontinued operations, net of taxes (1)		—			—			(449	)		4,311			3,986
Gain on disposal of discontinued operations, net of taxes		—			—			95,951			—			—
Net income (loss) (3)		50,273			52,547			(255,775	)		49,053			(111,567	)
Basic net income (loss) per share (3) (4)		0.63			0.72			(4.12	)		0.79			(1.80	)
Diluted net income (loss) per share (3) (4)		0.62			0.69			(4.12	)		0.78			(1.80	)
Common shares outstanding		84,136			78,145			62,031			62,143			61,537

Cash and cash equivalents (2)		128,755			115,449			36,210			40,951			226,893
Current assets (2)		258,552			244,835			211,752			304,499			362,731
Total assets (2)		475,885			478,329			463,365			915,718			607,237
Current liabilities (2)		353,733			404,193			469,624			653,710			407,635
Total liabilities (2)		365,648			424,826			499,344			698,842			442,873
Shareholders’ equity (deficiency) (3)		110,237			53,503			(35,979	)		216,876			164,364

Cash provided by operating activities (2) (5) (6) (7)		101,749			67,843			14,339			171,379			200,420
Cash used in investing activities (2) (6) (7)		(34,524	)		(6,218	)		(4,989	)		(302,248	)		(118,502	)
Cash provided by (used in) financing activities (2) (6)		10,188			5,219			(107,783	)		34,649			(47,869	)


		Exchange Rates

		High		Low		Average
		(United States dollars)
FISCAL YEAR ENDED APRIL 30, 1999			0.6983		0.6343		0.6633
FISCAL YEAR ENDED APRIL 30, 2000			0.6973		0.6609		0.6801
FISCAL YEAR ENDED APRIL 30, 2001			0.6830		0.6334		0.6611
FISCAL YEAR ENDED APRIL 30, 2002			0.6623		0.6199		0.6381
FISCAL YEAR ENDED APRIL 30, 2003			0.6976		0.6273		0.6502
Month Ended:
	April 30, 2003		0.6976		0.6736		0.6857
	May 31, 2003		0.7437		0.7031		0.7224
	June 30, 2003		0.7495		0.7268		0.7395
	July 31, 2003		0.7483		0.7084		0.7240
	August 31, 2003		0.7228		0.7093		0.7165
	September 30, 2003		0.7423		0.7206		0.7336

	n		the timing of significant orders, delivery and implementation of Geac’s products;

	n		the gain or loss of any significant customer;

	n		the number, timing and significance of new product announcements and releases by Geac or its competitors;

	n		Geac’s ability to acquire or to develop (independently or through strategic relationships with third parties), to introduce and to market new and enhanced versions of its products on a timely basis;

	n		possible delays in the shipment of new products and purchasing delays of current products as Geac’s customers anticipate new product releases;

	n		order cancellations and shipment rescheduling or delays;

	n		patterns of capital spending and changes in budgeting cycles by Geac’s customers;

	n		market acceptance of new and enhanced versions of Geac’s products;

	n		changes in the pricing and the mix of products and services Geac sells;

	n		seasonal variations in Geac’s sales cycle (such as lower sales levels typically experienced by its European operations during summer months);

	n		the level of product and price competition;

	n		changes in operating expenses;

	n		exchange rate fluctuations;

	n		the timing of any acquisitions and related costs;

	n		changes in personnel and related costs; and

	n		legal proceedings which may arise in the normal course of Geac’s business or otherwise.


o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934


x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the fiscal year ended April 30, 2003


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to


Title of each class		Name of each exchange on which registered

(1)		Comparative figures restated to reflect discontinued operations.

(2)		Certain figures for FY 2002 were restated to conform with the current year presentation.

(3)		Comparative figures for FY 2002 were restated in accordance with Canadian Institute of Chartered Accountants Handbook (“CICA”) Section 1650, “Foreign Currency Translation.” The prior years’ figures for FY 1999 – 2001 were not restated.

(4)		EPS figures for FY 2000 – 2003 were calculated in accordance with revised recommendations in CICA Section 3500, “Earnings per Share.” The prior year’s figure for FY 1999 was not restated accordingly.

(5)		Before changes in non-cash working capital and deferred revenue.

(6)		Cashflows for FY 1999 – 2003 were prepared in accordance with the amended CICA Section 1540, “Statement of Cash Flows.”

(7)		Cashflows for FY 2000 and 2001 were restated to segregate cashflows from discontinued operations.


		JURISDICTION OF INCORPORATION/
NAME		ORGANIZATION

Geac Canada Limited		Canada
Extensity, Inc.*		Delaware, USA
Geac Computers, Inc.		Missouri, USA
Geac Enterprise Solutions, Inc. (formerly Geac Computer Systems, Inc.		Georgia, USA
Interealty Corp. (formerly Interealty.com Inc.)		Colorado, USA
Extensity Europe Limited		United Kingdom
Geac Software Solutions Limited (formerly Geac Computers (2) Limited		United Kingdom
Geac Computer Systems (UK) Limited		United Kingdom
MAI United Kingdom Limited		United Kingdom
Geac Enterprise Solutions Limited (formerly JBA International Limited )		United Kingdom
Geac Enterprise Solutions Development Limited (formerly JBA Software Products Limited)		United Kingdom
Geac Enterprise Solutions A/S (formerly Geac Style Research & Development A/S)		Denmark
Geac France		France
Geac Enterprise Solutions Deutschland GmbH		Germany
Geac Hungary Asset Management Company Limited		Hungary
Geac Italia S.r.L.		Italy
Geac Computers S.L.		Spain
Geac Computers Pty Ltd.		Australia
Geac Computers (M) Sdn. Bhd.		Malaysia
Geac Computers NZ Limited		New Zealand
Geac Computers Philippines Inc.		Philippines
Geac Computers (Singapore) Pte Ltd		Singapore


Name and		First Year	Present
Municipality of Residence	Date of Birth	as a Director	Principal Occupation

Thomas I.A. Allen, Q.C. ^{(1) (3)}	April 8, 1940	1999	Senior Partner
Toronto, Ontario			Ogilvy Renault, law firm

David Friend	February 6, 1948	2001	Partner
Boston, Massachusetts			Orchid Partners, venture capital firm

C. Kent Jespersen ^{(1) (2)}	January 5, 1946	2001	Chairman
Calgary, Alberta			La Jolla Resources International Ltd., business advisory and investment company

Charles S. Jones	March 5, 1948	1997	President and Chief Executive
Bedford Hills, New York			Officer of Geac

Pierre MacDonald ^{(1) (2)}	June 19, 1936	1999	Chairman and Chief Executive Officer
Verdun, Quebec			MacD Consult Inc., consulting firm

Michael D. Marvin ⁽²⁾	December 4, 1945	2001	Chairman Emeritus
Menards, New York			MapInfo Corporation, software technology company

William G. Nelson ^{(1) (3)}	May 26, 1934	1988	Chairman
Bala Cynwyd, Pennsylvania			Harris Business Group, Inc., software technology company

Robert L. Sillcox ^{(1) (3)}	September 15, 1931	2001	Chairman
King City, Ontario			Quant Investment Strategies Inc., investment firm


Name and Municipality of
Residence	Date of Birth	Office currently held

Hema Anganu	February 26, 1961	Treasurer
Toronto, Ontario

Donna de Winter(1)	February 25, 1964	Vice President and Corporate Controller
Richmond Hill, Ontario

Arthur Gitajn(1)	July 22, 1952	Chief Financial Officer
Toronto, Ontario

Charles S. Jones	March 5, 1948	President and Chief Executive Officer
Bedford Hills, New York


(1)		Effective November 4, 2003, Ms. de Winter will succeed Mr. Gitajn as Chief Financial Officer.

NOTES:

(1)		Mr. Birch joined Geac on September 12, 2000 as a member of the Board of Directors. On May 30, 2001, Mr. Birch was appointed Chief Operating Officer and Chief Financial Officer. On December 5, 2001, Mr. Birch was appointed President and Chief Executive Officer. The options set forth above do not include 40,000 options granted to Mr. Birch on September 25, 2000, in connection with his appointment as a director of Geac and prior to his appointment as an officer of Geac. On July 18, 2003, Mr. Birch resigned as an officer and director of Geac and its subsidiaries.

(2)		This amount represents gross-up payments to compensate for certain taxes and payments for car allowance.

(3)		This amount represents payments for car allowance and pension payments.

(4)		This amount represents payments for accrued vacation.


	Exercisable Options at				Unexercisable Options at
	April 30, 2003				April 30, 2003

Name	Number		Exercise Price		Number		Exercise Price

Paul D. Birch		30,000	$	9.32		10,000	$	9.32
		250,000	$	2.80		750,000	$	2.80
Arthur Gitajn		17,500	$	3.25		17,500	$	3.25
		20,000	$	40.00	nil		nil
		25,000	$	7.50		75,000	$	7.50
Bertrand Sciard		90,000	$	32.92		30,000	$	32.92
		101,250	$	8.61		33,750	$	8.61
		11,250	$	28.58		3,750	$	28.58
		31,250	$	7.50		93,750	$	7.50
John L. Sherry, III		37,500	$	4.75		112,500	$	4.75
James M. Travers	nil		nil			600,000	$	4.36


	Number of shares beneficially owned
							Percent
	Outstanding		Right to		Total		beneficially
Name	shares		acquire		number		owned

Charles S. Jones		47,240		646,000		693,240		0.8	%
Paul D. Birch¹		425,000		500,000		925,000		1.1	%
Arthur Gitajn		8,010		71,250		79,260		0.1	%
Bertrand Sciard		—		267,500		267,500		0.3	%
John L. Sherry, III		—		—		—		*
James M. Travers		—		200,000		200,000		0.2	%
Thomas I.A. Allen, Q.C.		2,000		100,000		102,000		0.1	%
David Friend		10,000		30,000		40,000		*
C. Kent Jespersen		10,080		30,000		40,080		*
Pierre MacDonald		1,950		100,000		101,950		0.1	%
Michael D. Marvin		65,000		30,000		95,000		0.1	%
William G. Nelson		1,800,000		484,000		2,284,000		2.7	%
Robert L. Sillcox		5,000		30,000		35,000		*

NOTE:

(1)		In accordance with Geac’s stock option plan, the exercise price is calculated as not less than the arithmetic average of the high and low board lot prices of the common shares on the Toronto Stock Exchange (“TSX”) on the five trading days immediately preceding the date of grant.


Period		High		Low

LAST SIX MONTHS
	October 2003 (through October 29, 2003)		7.34		6.10
	September 2003		6.73		5.18
	August 2003		5.38		4.45
	July 2003		5.55		4.85
	June 2003		5.86		4.78
	May 2003		5.60		5.05
	April 2003		5.65		4.75

FISCAL YEAR ENDED APRIL 30, 2004
	First Quarter		5.86		4.78

FISCAL YEAR ENDED APRIL 30, 2003			5.65		2.60
	Fourth Quarter		5.65		3.80
	Third Quarter		4.65		3.92
	Second Quarter		4.72		2.60
	First Quarter		4.80		3.55

FISCAL YEAR ENDED APRIL 30, 2002			8.55		1.56
	Fourth Quarter		7.89		3.99
	Third Quarter		8.55		4.60
	Second Quarter		5.24		2.75
	First Quarter		2.95		1.56

FISCAL YEAR ENDED APRIL 30, 2001			21.20		1.53
FISCAL YEAR ENDED APRIL 30, 2000			38.00		16.80
FISCAL YEAR ENDED APRIL 30, 1999			57.50		19.45


Report of independent accountants			F-2
Consolidated Balance Sheets at April 30, 2003 and 2002			F-3
Consolidated Statement of Operations for fiscal years ended April 30, 2003, 2002 and 2001			F-5
Consolidated Statements of Shareholders’ Equity for fiscal years ended April 30, 2003, 2002 and 2001			F-7
Consolidated Statements of Cash Flows for fiscal years ended April 30, 2003, 2002 and 2001			F-8
Notes to Consolidated Statements			F-9


Exhibit		Description

1.1		Restated Certificate and Articles of Incorporation of Geac, incorporated herein by reference to Exhibit 3.1 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

1.2		Bylaws of Geac, incorporated herein by reference to Exhibit 3.2 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

2.1		Amended and Restated Geac Shareholder Protection Rights Agreement, incorporated herein by reference to Exhibit 4.5 of Geac’s Registration Statement on Form S-8 (file no. 333-109670), filed with the Securities and Exchange Commission on October 14, 2003.

4.1		Amended and Restated Agreement and Plan of Merger by and among Geac Computer Corporation Limited, Geac Computers, Inc., Cage Acquisition Corp. and Extensity, Inc., incorporated herein by reference to Annex A of Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.2		Agreement and Plan of Merger dated June 22, 2003 among Comshare, Incorporated, Geac Computer Corporation Limited and Conductor Acquisition Corp., incorporated herein by reference to Exhibit 99(d)(3) of Geac’s Schedule TO filed with the Securities and Exchange Commission on July 1, 2003.

4.3		First Amendment to Agreement and Plan of Merger, dated as of August 13, 2003, by and among Comshare, Incorporated, Geac Computer Corporation Limited and Conductor Acquisition Corp., incorporated herein by reference to Exhibit 99(d)(8) of Geac’s Schedule TO/A filed with the Securities and Exchange Commission on August 14, 2003.

4.4		Loan, Guaranty and Security Agreement dated September 9, 2003 by and among Geac Computer Corporation Limited, certain of its subsidiaries, certain lenders named therein and Wells Fargo Foothill, Inc.

4.5		First Amendment Agreement dated September 30, 2003 by and among certain lenders, Wells Fargo Foothill Inc., Geac Computers, Inc. and certain of its affiliates.

4.6		Lease dated February 28, 1989 between Guarsel Partnership and Geac Canada Limited for property at 11 Allstate Parkway, Markham, Ontario, L3R 9T8, incorporated herein by reference to Exhibit 10.7 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.7		Lease Amending Agreement dated September 15, 1989 between Guarsel Partnership and Geac Canada Limited, incorporated herein by reference to Exhibit 10.8 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.8		Lease Amending Agreement dated November 1, 1990 between The Prudential Assurance Company Limited, Geac Canada Limited and Geac, incorporated herein by reference to Exhibit 10.9 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.9		Letter Agreement Amending Lease dated April 14, 1993 between Prudential Paramet Real Estate Services Limited and Geac Canada Limited, incorporated herein by reference to Exhibit 10.10 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.10		Extension Agreement dated May 20, 1993 between the Prudential Assurance Company Limited and Geac Canada Limited, incorporated herein by reference to Exhibit 10.11 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.11		Letter Agreement dated August 17, 2001 between GWL Realty Advisors Inc., on behalf of the landlord, and Geac Canada Limited, incorporated herein by reference to Exhibit 10.12 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.12		Watergate Office Lease dated January 12, 1998, as amended, by and between Spieker Properties, L.P. and Extensity, Inc.

4.13		Employment Agreement dated December 4, 2001 between Geac and Charles S. Jones, incorporated herein by reference to Exhibit 10.13 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.14		Employment Agreement dated July 9, 2001 between Geac and Paul D. Birch, incorporated herein by reference to Exhibit 10.14 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.


4.15		Employment Agreement dated July 9, 2001 between Geac and Paul D. Birch, incorporated herein by reference to Exhibit 10.15 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.16		Amendment to Employment Agreement dated July 10, 2001 between Geac and Paul D. Birch, incorporated herein by reference to Exhibit 10.16 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.17		Employment Agreement dated May 30, 2003 between Geac and Arthur Gitajn.

4.18		Employment Agreement dated October 25, 2002 between Geac Computers, Inc. and Jim McDevitt, incorporated herein by reference to Exhibit 10.19 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.19		Employment Agreement dated November 25, 2002 between Geac, Geac Computers, Inc. and Timothy Wright, incorporated herein by reference to Exhibit 10.20 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.20		Option and Change in Control Agreement dated September 6, 2000 between Geac and Bertrand Sciard, incorporated herein by reference to Exhibit 10.21 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.21		Employment Contract dated January 1, 2000 between Geac and Bertrand Sciard, incorporated herein by reference to Exhibit 10.22 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.22		Employment Agreement dated February 19, 2002 between Geac and John L. Sherry, III, incorporated herein by reference to Exhibit 10.23 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.23		Option and change in control agreement dated September 29, 2000 between Geac and Hema Anganu, incorporated herein by reference to Exhibit 10.24 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.24		Employment Agreement dated June 20, 2002 between Geac, Geac Enterprise Solutions, Inc. and James M. Travers, incorporated herein by reference to Exhibit 10.25 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.25		Employment Agreement dated July 2, 2003 between Geac and Donna de Winter.

4.26		Employment Agreement dated July 11, 2003 between Geac, Geac Computers, Inc. and Jeffrey Snider.

4.27		Geac Stock Option Plan V, incorporated herein by reference to Exhibit 10.3 to Geac’s Registration Statement on Form F-4 (file no. 333-103019), filed with the Securities and Exchange Commission on February 6, 2003.

4.28		Geac Stock Option Plan VI, as amended, incorporated herein by reference to Exhibit 4.3 to Geac’s Registration Statement on Form S-8 (file no. 333-109670), filed with the Securities and Exchange Commission on October 14, 2003.

4.29		2003 Employee Stock Purchase Plan, incorporated herein by reference to Exhibit 4.4 to Geac’s Registration Statement on Form S-8 (file no. 333-109670), filed with the Securities and Exchange Commission on October 14, 2003.

8.1		List of subsidiaries of Geac.

12.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Geac’s Chief Executive Officer.

12.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Geac’s Chief Financial Officer.

13.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Geac’s Chief Executive Officer and Chief Financial Officer.


Approved by the Board of Directors


/s/ C. Kent Jespersen		/s/ Robert L. Sillcox

C. Kent Jespersen		Robert L. Sillcox
Chairman		Chair of the Audit Committee



Buildings		40 years straight-line
Computers, processing and office equipment, and machinery		3 to 5 years straight-line
Automobiles		4 years straight-line
Leasehold improvements Assets under capital leases		straight-line over the lease term straight-line over the useful lives of the
		assets, as indicated above



Acquired software		1 to 5 years
Customers relationships and agreement		3 to 5 years
Trademarks and name		4 years


	April 30,

	2003			2002
	$			$
Trade accounts receivable		86,962			83,096
Allowance for doubtful accounts		(8,907	)		(8,431	)
Other receivables		25			3,304

		78,080			77,969


	April 30, 2003

			Accumulated
	Cost		amortization		Net
	$		$		$
Land		2,932		—		2,932
Buildings		14,079		3,536		10,543
Computers, processing and office equipment, and machinery		111,937		99,332		12,605
Automobiles		1,172		901		271
Leasehold improvements		17,840		13,527		4,313
Assets under capital leases (i)		8,902		2,798		6,104

		156,862		120,094		36,768


	April 30, 2002

			Accumulated
	Cost		amortization		Net
	$		$		$
Land		3,175		—		3,175
Buildings		15,186		3,186		12,000
Computers, processing and office equipment, and machinery		113,752		93,427		20,325
Automobiles		1,878		1,563		315
Leasehold improvements		18,667		12,357		6,310
Assets under capital leases (i)		13,227		7,673		5,554

		165,885		118,206		47,679


	$
Balance as at April 30, 2001		102,591
Goodwill sold as part of the sale of publishing systems business		(3,607	)
Goodwill adjustment related to pre-acquisition liabilities		(3,967	)
Foreign exchange impact		2,307

Balance as at April 30, 2002		97,324
Goodwill from EBC Informatique acquisition (note 21)		2,478
Goodwill from Extensity acquisition (note 21)		24,357
Goodwill impairment		(12,556	)
Goodwill adjustment related to pre-acquisition liabilities (note 18)		(1,081	)
Foreign exchange impact		(5,855	)

Balance as at April 30, 2003		104,667


	The interest expense on long-term debt and interest paid are as follows:


	$

2004		1,050
2005		526
2006		526
2007		4,159
2008		692
2009 and subsequent		2,077

		9,030


	$
2004		23,094
2005		19,337
2006		13,228
2007		4,209
2008		2,240
2009 and subsequent		4,282

		66,390


			Options outstanding						Options exercisable

					Weighted						Weighted
			Number		average		Weighted		Number		average		Weighted
Range of			outstanding		remaining		average		outstanding		remaining		average
exercise			as at		contractual		exercise		as at		contractual		exercise
prices			April 30,		life		price		April 30,		life		price
$			2003		(years)		$		2002		(years)		$
		0.38 - 3.52		1,509,768		8.0		2.82		518,142		7.6		2.85
		4.24 - 4.83		2,543,320		9.5		4.56		98,750		8.8		4.78
		6.37 - 9.32		2,609,250		6.6		8.18		2,063,750		6.3		8.10
10.15 - 29.25				367,000		3.3		20.60		355,250		3.2		20.50
32.92 - 41.25				185,000		3.6		35.11		152,500		3.5		35.52

	0.38 - 41.25			7,214,338		7.7		7.10		3,188,392		6.1		9.83


	Exercise price		Fair value
Stock option	$		$
In-the-money options		2.61		2.20
At-the-money options		4.69		3.41
Out-of-the-money options		4.34		3.04


		Year ended April 30, 2003

		EAS		ISA		Total
		$		$		$
Revenues
	Software		62,132		13,570		75,702
	Support and services		379,321		121,376		500,697
	Hardware		38,060		9,208		47,268

Total revenues			479,513		144,154		623,667
Segment contribution			107,357		11,227		118,584
Segment assets			72,505		21,220		93,725


		Year ended April 30, 2002

		EAS		ISA		Total
		$		$		$
Revenues
	Software		62,758		20,960		83,718
	Support and services		428,468		152,392		580,860
	Hardware		40,104		11,852		51,956

Total revenues			531,330		185,204		716,534
Segment contribution			105,667		14,063		119,730
Segment assets			75,260		18,221		93,481


		Year ended April 30, 2001

			EAS		ISA			Total
			$		$			$
Revenues
	Software			65,145		26,247			91,392
	Support and services			480,374		190,203			670,577
	Hardware			51,120		23,282			74,402

Total revenues				596,639		239,732			836,371
Segment contribution				88,559		(2,952	)		85,607
Segment assets				68,903		50,509			119,412