Exhibit 10.3
$3,584,028.00 Houston, Texas August 14, 2002
Peregrine/Bridge Transfer Corporation (hereinafter called "Maker"), a
Delaware corporation, For Value Received, promises and agrees to pay on or
before March 31, 2005 (the "Maturity Date") unto the order of Neon Systems,
Inc., a Delaware corporation, (hereinafter called "Payee"), at its offices at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, in lawful money of
the United States of America the principal sum of THREE MILLION, FIVE HUNDRED
EIGHTY-FOUR THOUSAND, TWENTY-EIGHT AND NO/100 DOLLARS ($3,584,028.00), together
with interest thereon from and after the date hereof until maturity at the rate
of zero percent (0.00%) per annum. All past due principal and interest shall
bear interest until paid at a rate which is four percent (4%) per annum in
excess of the prematurity rate specified in the immediately preceding sentence
(but in no event to exceed the maximum rate of nonusurious interest allowed by
applicable law) and shall be payable from time to time on demand.
THIS NOTE IS GIVEN in consideration of the covenants, promises, rights,
obligations and other good and valuable consideration set forth in that certain
Termination and Support Agreement dated August 14, 2002. This Note is also
secured by the terms of that certain Security Agreement between Maker and Payee
dated August 14, 2002.
IF DEFAULT is made in the payment of any installment of interest
hereof, as and when the same is or becomes due, or if default occurs under any
instrument securing the payment hereof or executed in connection herewith, the
owner and holder of this note may, without notice or demand (both of which are
expressly waived by Maker), declare all sums owing hereon at once due and
payable. If default is made in the payment of this note at maturity (regardless
of how its maturity may be brought about), and the same is placed in the hands
of an attorney for collection, or suit is filed hereon, or proceedings are had
in bankruptcy, probate, receivership or other judicial proceedings for the
establishment or collection of any amount called for hereunder, or any amount
payable or to be payable hereunder is collected through any such proceedings,
Maker agrees and is also to pay to the owner and holder of this note a
reasonable amount as attorney's or collection fees.
MAKER, co-makers, sureties, endorsers and guarantors, and each of them,
expressly waive demand and presentment for payment, notice of nonpayment,
protest, notice of protest, notice of dishonor, notice of intent to accelerate
the maturity hereof, notice of the acceleration of the maturity hereof, bringing
of suit and diligence in taking any action to collect amounts called for
hereunder and in the handling of securities at any time existing in connection
herewith; and are and shall be jointly, severally, directly and primarily liable
for the payment of all sums owing and to be owing hereon, regardless of and
without any notice, diligence, act or omission as or with respect to the
collection of any amount called for hereunder or in connection with any right,
lien, interest or property at any and all times had or existing as security for
any amount called for hereunder.
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IT IS the intention of Maker and Payee to conform strictly to
applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including the laws of the State of Texas
and the laws of the United States of America), then, in that event,
notwithstanding anything to the contrary herein or in any agreement entered into
in connection with or as security for this note, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under applicable
law that is taken, reserved, contracted for, charged or received under this note
or under any of the other aforesaid agreements or otherwise in connection with
this note shall under no circumstances exceed the maximum amount of interest
allowed by applicable law, and any excess shall be cancelled automatically and,
if theretofore paid, shall be credited on the note by the holder hereof (or, to
the extent that this note shall have been or would thereby be paid in full,
refunded to the Maker); and (ii) in the event that maturity of this note is
accelerated by reason of an election by the holder hereof resulting from any
default hereunder or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the maximum amount allowed by applicable law, and excess interest, if
any, provided for in this note or otherwise shall be cancelled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be credited on this note (or, to the extent that this note shall have been or
would thereby be paid in full, refunded to the Maker).
MAKER HEREBY EXPRESSLY AGREES that the payment of all amounts owing by
Maker to Payee under or in connection with this note (whether principal,
interest or other amounts) is and shall at all times, except as otherwise
provided in the Subordination Agreement, the Termination Agreement, or the
Security Agreement, be senior in right of payment to any and all other
indebtedness of Maker to any and all other creditors other than ▇▇▇▇▇, whether
outstanding on the date hereof or hereafter incurred (the "Subordinated Debt").
Maker further covenants and agrees to cause any and all such Subordinated Debt
to be expressly subordinate in right of payment to the prior payment in full of
cash of all amounts owing by Maker to Payee under or in connection with this
note (whether principal, interest or other amounts) on terms and conditions
pursuant to documentation, all in form and substance satisfactory to Payee.
Peregrine/Bridge Transfer Corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Date:_____________________________________
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