EXHIBIT 10.5
AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT
---------------------------------------------
(WITH BORROWING BASE)
---------------------
("AGREEMENT")
THIS AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT WITH LETTER OF
CREDIT SUBLIMIT as amended, modified and supplemented from time to time, (the
"Agreement") dated as of March 31, 1997 (the "Effective Date"), is by and
between PERVASIVE SOFTWARE INC. ("Borrower"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association (the "Bank") and is effective as of
the Effective Date.
PRELIMINARY STATEMENT
---------------------
The Bank and Borrower have entered into an Agreement dated as of
September 18, 1996 (the "Credit Agreement"). The Bank and the Borrower have
agreed to amend and restate and replace the Credit Agreement to the extent set
forth herein, in order to among other things, renew and extend a $2,000,000.00
revolving line of credit to Borrower.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the Bank and the Borrower hereby agree to
amend, restate and replace the Credit Agreement to read and be as follows:
1. THE LOANS.
---------
REVOLVING CREDIT NOTE 1.1.A Subject to the terms and conditions hereof, Bank
agrees to make loans ("Revolving Loan" or "Revolving Loans") to Borrower from
-------------- ---------------
time to time before the Termination Date, not to exceed at any one time
outstanding the lesser of the Borrowing Base or $2,000,000.00 (the
"Commitment"). Borrower has the right to borrow, repay and reborrow. The Loans
----------
may only be used for financing timing differences in cash flow. Chapter 15 of
the Texas Credit Code will not apply to this Agreement, the Revolving Note or
any Revolving Loan. Revolving Loans shall take the form of advances under the
Revolving Note (as hereinafter defined) (each and all advances hereinafter
referred to as "Revolving Loan" or "Revolving Loans"), or issuances of standby
-------------- ---------------
letters of credit ("Standby L/Cs") by Bank. Standby L/Cs issued by Bank
------------
hereunder are hereafter referred to as "Letter of Credit" ("L/C"). The
---------------- ---
Revolving Loans will be evidenced by, and will bear interest and be payable as
provided in, the promissory note of Borrower dated the Effective Date (together
with any and all renewals, extensions, modifications and replacements thereof
and substitutions therefor, the "Revolving Note"). "Termination Date" means the
-------------- ----------------
earlier of: (a) March 31, 1998; or (b) the date specified by Bank pursuant to
Section 6.1 hereof.
-----------
ADVANCE TERM NOTE 1.1.B Bank agrees to extend an advance converting to a term
loan in the amount of $2,000,000.00 (the "Term Loan") to Borrower to be
---------
evidenced by a promissory note in the original principal amount of $2,000,000.00
dated on or before March 31, 1997 and maturing December 31, 1999 (together with
any and all renewals, extensions, modifications and replacements thereof and
substitutions therefor, the "Term Note"). The purpose of the Term Note is to
---------
finance 80% of the costs associated with purchasing new equipment (from January
1, 1997 to December 31, 1997) and 50% of the costs associated with purchasing
used equipment (from January 1, 1997 to December 31, 1997).
LETTERS OF CREDIT 1.1.C.
(i) Subject to the approval of the Bank, Letters of Credit may be issued from
time to time on and after the Effective Date, but not including the
Termination Date for the account of any of the Borrowers and in favor of
such Person or Persons as may be designated by any Borrower. Each Letter
of Credit shall have an expiration date of no later than the Termination
Date in the case of Standby L/C's;
(ii) As a condition precedent to the issuance of any Letter of Credit, Bank
shall have received an application ("Application" or "Applications")
----------- ------------
substantially in the form of, in the case of Standby L/C's, Exhibit A
---------
attached hereto, duly completed and executed by the Borrower in Proper
Form not less than two (2) Business Day(s) prior to the date on which the
Letter of Credit is to be issued;
(iii) The Commitment shall be reduced by an amount equal to the sum of: (a) the
face amount of all outstanding Letters of Credit; and (b) the amount of
any unreimbursed drawings or other amounts owing to the Bank under or in
respect of any Letter of Credit or Application (items (a) and (b) are
hereinafter collectively referred to as the "L/C Obligations") such that,
---------------
on any date, the sum of (x) all Loans outstanding on such date and (y)
all L/C Obligations on such date does not exceed the Commitment;
(iv) The total aggregate amount of "L/C Obligations" shall never exceed
$100,000.00;
(v) The issuance of each Letter of Credit shall be subject to the following
conditions precedent: (a) no Event of Default has occurred and is
continuing; and (b) each request by Borrower for the issuance of a Letter
of Credit shall be deemed to be a representation to that effect and to
the further effect that the representations and warranties contained in
Section 3 of the Agreement are true and correct as of the date of such
request as if made on and as of such date; and (c) Bank receives an
Application in Proper Form and any and all other such agreements and
documents reasonably required by the Bank in connection with such Letter
of Credit;
(vi) Each and all of any of the Borrower's liabilities and obligations under
or in connection with any Letter of Credit is secured by the Collateral
securing the Note and the Bank is entitled to all rights, powers,
benefits, privileges and remedies granted under any provision of the
Security Documents and all other Loan Documents or by law or in equity;
(vii) In consideration for the issuance of each Letter of Credit, the Borrower
agrees to pay to the Bank a letter of credit issuance fee ("Fee") in
respect of such Letter of Credit in an amount equal to the greater of:
(a) in the case of Standby L/C's one and one-half percent (1 1/2%) per
annum on the face amount of such Letter of Credit; and (b) the minimum
fee for such Letter of Credit established by the Bank from time to time
and in effect as of the date on which such Letter of Credit is to be
issued. The Fee shall be paid to the Bank at its main offices to the
attention of the Manager, Documentary Services Division in advance of
issuance of the Letter of Credit;
(viii) Bank may, but is not required to do so, make advances under the Note
without notice to any Borrower to make payment on any Letter of Credit;
and
Page 1 of 9
Credit Agreement (With Borrowing Base) March 31, 1997
Pervasive Software Inc.
(ix) Letters of Credit shall be for business purposes.
1.1.D. Bank has issued a L/C (not under the Commitment, "Stand-alone L/C") in
the amount of $126,000.00, issued October 3, 1996 with an expiry date of
November 30, 1999, No. I-465222, with Colina West Limited as the beneficiary.
LOANS AND NOTES 1.1.E. "Loans" or "Loans" shall refer to each and all Revolving
----- -----
Loans and the Term Loan. "Note" or "Notes" shall refer to each and both of the
---- -----
Revolving Note and the Term Note.
BORROWING BASE 1.2 The Borrowing Base will be the amount shown as the
--------------
BORROWING BASE on the most recent Borrowing Base Report, subject to verification
by Bank and calculated using the eligibility criteria, borrowing base factors,
deduction for letter of credit drawings and dollar ceilings for various
components specified in the attached Exhibit B, incorporated herein by
---------
reference.
REQUIRED PAYMENT 1.3 If the unpaid amount of the Revolving Loan at any time
exceeds the Borrowing Base then in effect, Borrower must make a payment on the
Note in an amount sufficient to reduce the unpaid principal balance of the Note
to an amount no greater than the Borrowing Base. Such payment shall be
accompanied by any prepayment charge required by the Note and shall be due
concurrently with the Borrowing Base Report.
COMMITMENT FEE 1.4 Borrower will pay a commitment fee (computed on the basis
of the actual number of days elapsed in a year comprised of 360 days of 1/8% per
annum on the daily average difference between the Commitment and the principal
balance of the Revolving Note, from the date hereof to the Termination Date.
The Commitment fee is due and payable quarterly, on the last day of each third
month after the Effective Date, in arrears. If Borrower elects to delay
advancing under the Term Note until the end of the Advance period, an upfront
commitment fee of $8,500 will be charged at the execution of this Agreement. If
the Borrower elects to utilize the Term Note as equipment purchases are made
during the advance period the following fees will be accessed: 1) no fee will
be charged as long as the outstanding balance under the Term Loan is
$1,250,000.00 at September 30, 1997, 2) a fee of $5,175 will be charged if the
outstanding balance as of September 30, 1997 is $500,000, 3) a fee of $3,500
will be charged if the outstanding balance as of September 30, 1997 is $750,000,
and 4) a fee of $1,850 will be charged if the outstanding balance as of
September 30, 1997 is $1,000,000. If the minimum advance amount of $500,000 is
not met by September 30, 1997, a fee of $8,500 will be accessed. These fees
will be due and payable on September 30, 1997.
PAST DUE AMOUNTS 1.5 Each past due amount due to Bank in connection with the
Loan Documents will bear interest from its due date until paid at the Highest
Lawful Rate unless the applicable Loan Document provides otherwise.
2. CONDITIONS PRECEDENT.
--------------------
ALL LOANS 2.1 Bank is not obligated to make any Loan or to issue any Letter of
Credit unless: (a) Bank has received the following, duly executed and in Proper
Form: (1) a Request for Revolving Loan, substantially in the form of Exhibit C,
---------
not later than one (1) Business Day before the date (which shall also be a
Business Day) of the proposed Revolving Loan; provided however, Bank may accept
and act upon verbal advance requests received from a Borrower's representative
reasonably believed by Bank to be authorized to make such requests; (2) a
Borrowing Base Report within the time required by this Agreement; (3) for the
issuance of any Letter of Credit, a duly executed Application in Proper Form by
Borrowers within the time set forth in Section 1.1.C.(ii); and (4) such other
------------------
documents as Bank reasonably may require; (b) no Event of Default exists; and
(c) the making of the Loan is not prohibited by, or subjects Bank to any penalty
or onerous condition under any Legal Requirement.
FIRST LOAN 2.2 In addition to the matters described in the preceding section,
Bank will not be obligated to make the first Loan unless (i) Bank has received
all of the Loan Documents specified on Annex I in Proper Form; and (ii) Borrower
-------
shall have provided all notices to Account debtors provided for in Section 3.11.
3. REPRESENTATIONS AND WARRANTIES. To induce Bank to enter into this Agreement
------------------------------
and to make the Loans, Borrower represents and warrants as of the Effective Date
and the date of each request for a Loan that each of the following statements is
and shall remain true and correct throughout the term of this Agreement:
ORGANIZATION AND STATUS 3.1 Borrower and each Subsidiary of Borrower is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; has all power and authority to conduct its
business as presently conducted, and is duly qualified to do business and in
good standing in each jurisdiction in which the nature of the business conducted
by it makes such qualification desirable. Borrower has no Subsidiary other than
those listed on Annex II and each Subsidiary is owned by Borrower in the
--------
percentage set forth on Annex II. If Borrower is subject to the Texas Revised
--------
Partnership Act ("TRPA"), Borrower agrees that Bank is not required to comply
----
with Section 3.05(d) of TRPA and agrees that Bank may proceed directly against
one or more partners or their property without first seeking satisfaction from
partnership property.
FINANCIAL STATEMENTS 3.2 All financial statements delivered to Bank are
complete and correct and fairly present, in accordance with generally accepted
accounting principles, consistently applied ("GAAP"), the financial condition
----
and the results of operations of Borrower and each Subsidiary of Borrower as at
the dates and for the periods indicated. No material adverse change has
occurred in the assets, liabilities, financial condition, business or affairs of
Borrower or any Subsidiary of Borrower since the dates of such financial
statements. To the extent that financial information provided by Borrower or a
Subsidiary of Borrower consists of pro-forma or projected data for future
periods, Bank acknowledges that such data shall be based on good faith estimates
and assumptions which may vary from actual results actually achieved for such
periods. Neither Borrower nor any Subsidiary of Borrower is subject to any
instrument or agreement materially and adversely affecting its financial
condition, business or affairs.
ENFORCEABILITY 3.3 The Loan Documents are legal, valid and binding obligations
of the Parties enforceable in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency and other similar laws affecting
creditors' rights generally. The execution, delivery and performance of the
Loan Documents have all been duly authorized by all necessary action; are within
the power and authority of the Parties; do not and will not violate any Legal
Requirement, the Organizational Documents of the Parties or any agreement or
instrument binding or affecting the Parties or any of their respective Property.
COMPLIANCE 3.4 Borrower and each Subsidiary of Borrower has filed all
applicable tax returns and paid all taxes shown thereon to be due, except those
for which extensions have been obtained and those which are being contested in
good faith and for which adequate
Page 2 of 9
Credit Agreement (With Borrowing Base) March 31, 1997
Pervasive Software Inc.
reserves have been established. Borrower and each Subsidiary of Borrower is in
compliance with all applicable Legal Requirements and manages and operates (and
will continue to manage and operate) its business in accordance with good
industry practices. Neither Borrower nor any Subsidiary of Borrower is in
default in the payment of any other indebtedness or under any agreement to which
it is a party. The Parties have obtained all consents of and registered with all
Governmental Authorities or other Persons required to execute, deliver and
perform the Loan Documents.
LITIGATION 3.5 Except as previously disclosed to Bank in writing, there is no
litigation or administrative proceeding pending or, to the knowledge of
Borrower, threatened against, nor any outstanding judgment, order or decree
affecting Borrower or any Subsidiary of Borrower before or by any Governmental
Authority.
TITLE AND RIGHTS 3.6 Borrower and each Subsidiary of Borrower has good and
marketable title to its Property, free and clear of any Lien except for Liens
permitted by this Agreement and the other Loan Documents. Except as otherwise
expressly stated in the Loan Documents or permitted by this Agreement, the Liens
of the Loan Documents will constitute valid and perfected first and prior Liens
on the Property described therein, subject to no other Liens whatsoever.
Borrower and each Subsidiary of Borrower possesses all permits, licenses,
patents, trademarks and copyrights required to conduct its business. All
easements, rights-of-way and other rights necessary to maintain and operate
Borrower's Property have been obtained and are in full force and effect.
REGULATION U; BUSINESS PURPOSE 3.7 None of the proceeds of any Loan will be
used to purchase or carry, directly or indirectly, any margin stock or for any
other purpose which would make this credit a "purpose credit" within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System. All
Loans will be used for business, commercial, investment or other similar purpose
and not primarily for personal, family, or household use or primarily for
agricultural purposes as such terms are used in Chapter One of the Texas Credit
Code.
ENVIRONMENT 3.8 Borrower and each Subsidiary of Borrower have complied with
applicable Legal Requirements in each instance in which any of them have
generated, handled, used, stored or disposed of any hazardous or toxic waste or
substance, on or off its premises (whether or not owned by any of them).
Neither Borrower nor any Subsidiary of Borrower has any material contingent
liability for non-compliance with environmental or hazardous waste laws.
Neither Borrower nor any Subsidiary of Borrower has received any notice that it
or any of its Property or operations does not comply with, or that any
Governmental Authority is investigating its compliance with, any environmental
or hazardous waste laws.
INVESTMENT COMPANY ACT/PUBLIC UTILITY HOLDING COMPANY ACT 3.9 Neither Borrower
nor any Subsidiary of Borrower is an "investment company" within the meaning of
the Investment Company Act of 1940 or a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
STATEMENTS BY OTHERS 3.10 All statements made by or on behalf of Borrower, any
Subsidiary of Borrower or any other of the Parties by any officer, or other
person authorized by Borrower or acting on Borrower's behalf with Borrower's
knowledge, in connection with any Loan Document constitute the joint and several
representations and warranties of Borrower hereunder.
NOTICE OF ACCOUNT DEBTORS 3.11 Except as expressly disclosed to and agreed
with Bank in writing, Borrower has sent to each Account Debtor written
instructions in the form previously delivered and approved by Bank to remit all
payments and remittances in respect to the Accounts directly to the Lockbox (or
shall have done so as a condition precedent to Bank's obligations hereunder as
provided in Section 2.2).
4A. AFFIRMATIVE COVENANTS -- BORROWER AND SUBSIDIARIES. Borrower agrees to do,
--------------------------------------------------
and if necessary cause to be done, and cause its Subsidiaries to do, each of the
following:
CORPORATE FUNDAMENTALS 4.1 (a) Pay when due all taxes and governmental charges
of every kind upon it or against its income, profits or Property, unless and
only to the extent that the same shall be contested in good faith and adequate
reserves have been established therefor; (b) Renew and keep in full force and
effect all of its licenses, permits and franchises; (c) Do all things necessary
to preserve its corporate existence and its qualifications and rights in all
jurisdictions where such qualification is necessary or desirable; (d) Comply
with all applicable Legal Requirements; and (e) Protect, maintain and keep in
good repair its Property and make all replacements and additions to its Property
as may be reasonably necessary to conduct its business properly and efficiently.
INSURANCE 4.2 Maintain insurance with such reputable financially sound
insurers, on such of its Property and personnel, in such amounts and against
such risks as is customary with similar Persons or as may be reasonably required
by Bank, and furnish Bank satisfactory evidence thereof promptly upon request.
These insurance provisions are cumulative of the insurance provisions of the
other Loan Documents. Bank must be named as a beneficiary, loss payee or
additional insured of such insurance as its interest may appear and Borrower
must provide Bank with copies of the policies of insurance and a certificate of
the insurer that the insurance required by this section may not be canceled,
reduced or affected in any manner without 30 days' prior written notice to Bank.
Provided, however, that in the case of any inventory Collateral that is
maintained at a location permitted under the Loan Documents which is not owned
or leased premises of Borrower, Borrower shall not be required to insure such
inventory.
MATTERS REQUIRING NOTICE 4.3 Notify Bank immediately, upon acquiring knowledge
of (a) the institution or threatened institution of any lawsuit or
administrative proceeding which, if adversely determined, might materially
adversely affect Borrower; (b) any material adverse change in the assets,
liabilities, financial condition, business or affairs of Borrower; (c) any Event
of Default; or (d) any reportable event or any prohibited transaction involving
potentially material adverse effect in connection with any employee benefit
plan.
INSPECTION 4.4 Permit Bank and its affiliates to inspect and photograph its
Property, to examine and copy its files, books and records, and to discuss its
affairs with its officers and accountants, at such times and intervals and to
such extent as Bank reasonably requests.
ASSURANCES 4.5 Promptly execute and deliver any and all further agreements,
documents, instruments, and other writings that Bank may request to cure any
defect in the execution and delivery of any Loan Document or more fully to
describe particular aspects of the agreements set forth or intended to be set
forth in the Loan Documents.
Page 3 of 9
Credit Agreement (With Borrowing Base) March 31, 1997
Pervasive Software Inc.
CERTAIN CHANGES 4.6 Notify Bank at least 30 days prior to the date that any of
the Parties changes its name or the location of its chief executive office or
principal place of business or the place where it keeps its books and records or
the location of any of the Collateral.
EXHIBIT D 4.7 Comply with each of the other affirmative covenants set forth in
Exhibit D.
---------
4A. AFFIRMATIVE COVENANTS. Borrower agrees to do, and if necessary cause to be
---------------------
done, each of the following:
FINANCIAL INFORMATION/BORROWING BASE REPORT 4A.1 Furnish to Bank in Proper
Form (i) the financial statements prepared in conformity with GAAP on
consolidated and consolidating bases and the other information described in, and
within the times required by, Exhibit D, Reporting Requirements, Financial
---------
Covenants and Compliance Certificate attached hereto and incorporated herein by
reference; (ii) the Borrowing Base Report substantially in the form of, and
within the time required by, Exhibit B along with the other information required
---------
by Exhibit B to be submitted; (iii) within the time required by Exhibit D,
--------- ---------
Exhibit D signed and certified by the controller, director of finance, president
---------
or chief financial officer of Borrower; (iv) promptly after such request is
submitted to the appropriate Governmental Authority, any request for waiver of
funding standards or extension of amortization periods with respect to any
employee benefit plan; (v) copies of special audits, studies, reports and
analyses prepared for the management of Borrower by outside parties and (vi)
such other information relating to the financial condition and affairs of the
Borrower and guarantors and their Subsidiaries as Bank may request from time to
time in its reasonable discretion.
LOCKBOX PROCESSING AGREEMENT/COLLECTION ACCOUNT 4A.2 A. (i) Execute and
deliver to Bank a Lockbox Processing Agreement in Proper Form, provided however
that should there be a conflict between the terms of this Agreement and the
Lockbox Processing Agreement or the Terms and Conditions of the Collection
Account, the terms of this Agreement shall govern. (ii) Establish a deposit
account styled Pervasive Software Inc. Borrowing Base Accounts Receivable
("Collection Account") with Texas Commerce Bank National Association at
Borrower's sole expense into which all revenues (excluding interest income on
permitted portfolio investments), money checks and income, howsoever evidenced,
received by Borrower will be deposited. (iii) Deliver, or cause to be delivered,
directly to the Bank for deposit to the Collection Account, all revenues
(excluding interest income on permitted portfolio investments), monies, checks,
drafts income and proceeds of Accounts received by Borrower or by others on
behalf of Borrower with such collections on the Accounts accompanied by
sufficient information to identify the invoice to which such collections relate;
(iv) Cause each Account Debtor to make all payments due to Borrower by check,
wire transfer or credit card draft payable to Borrower and to mail or deliver
such payments to the Lockbox and Collection account (or credit card merchant
account which is automatically transferred to the Collection Account), except
that Borrower shall be permitted to receive directly payments made by express
delivery to Borrower in accordance with any standing arrangement with any
Account Debtor which is approved in advance by Bank in writing, (such payments
agreed to be fully subject to Borrower's agreement in the next subsection B to
be delivered immediately to Bank) ; (v) Take all action as Bank may request to
permit Bank to have at all times the benefit of all rights and agreements with
respect to the Lockbox and Collection Account granted in this Agreement and the
other Loan Documents. B. Collection Account: Bank shall have full right and
------------------
authority at any time to notify and direct any Account Debtor to deliver all
payments directly to Bank for deposit into the Collection Account. Bank shall
have the sole right to make withdrawals from, and to administer the Collection
Account. Any collections on account of any Accounts owed to Borrower received
directly by Borrower shall be received in trust for the benefit of Bank,
segregated from other funds of Borrower and immediately paid over to Bank in
same form as received with any endorsement to be held in the Collection Account.
Bank shall be entitled in its sole discretion, but not required, to daily apply
all collected deposits in the Collection Account first to the principal amount
of the Revolving Loans then to interest on the Revolving Loans then to fees and
expenses and other amounts owing to Bank and any excess after such application
shall be maintained in the Collection Account; it being understood that Borrower
shall be responsible for making all payments required under this Agreement and
the Notes. C. Power of Attorney. Borrower hereby appoints Bank as Borrower's
-----------------
attorney-in-fact and grants Bank full right and authority to supply any
necessary endorsement on checks and drafts received, including endorsing
Borrower's name thereon as appropriate and to forward such items for collection
in normal course and deposit the proceeds thereof. This power of attorney is
irrevocable, shall survive the dissolution or liquidation of Borrower, and is
deemed coupled with an interest. This power of attorney shall terminate only at
such times as all Obligations have been paid in full. Termination of the power
of attorney shall not affect the validity of any acts performed by the Bank
pursuant to the power of attorney prior to termination. ▇. ▇▇▇▇▇ of Security
-----------------
Interest. Borrower assigns and pledges to Bank, and grants to Bank a security
--------
interest in, all of Borrower's right, title and interest in and to the
Collection Account, and all certificates and instruments, if any, from time to
time representing or evidencing the Collection Account; and all proceeds of any
and all of the foregoing.
5. NEGATIVE COVENANTS. The Borrower will not, and no Subsidiary of Borrower
------------------
will:
INDEBTEDNESS 5.1 Create, incur, or permit to exist, or assume or guarantee,
directly or indirectly, or become or remain liable with respect to, any
Indebtedness, contingent or otherwise unless there is a permitted amount set
forth in Exhibit D, except: (a) Indebtedness to Bank, or secured by Liens
--------- ------
permitted by this Agreement, or otherwise approved in writing by Bank, and
renewals and extensions (but not increases) thereof; and (b) current accounts
payable and unsecured current liabilities, not the result of borrowing, to
vendors, suppliers and Persons providing services, for expenditures for goods
and services normally required by it in the ordinary course of business and on
ordinary trade terms.
LIENS 5.2 Create or permit to exist any Lien upon any of its Property now
owned or hereafter acquired, or acquire any Property upon any conditional sale
or other title retention device or arrangement or any purchase money security
agreement; or in any manner directly or indirectly sell, assign, pledge or
otherwise transfer any of its accounts or other Property, except: (a) Liens, not
------
for borrowed money, arising in the ordinary course of business; (b) Liens for
taxes not delinquent or being contested in good faith by appropriate
proceedings; (c) Liens in effect on the date hereof and disclosed to Bank in
writing, so long as neither the indebtedness secured thereby nor the Property
covered thereby increases; and (d) Liens in favor of Bank, or otherwise approved
in writing by Bank (which shall be deemed to include any lien specifically
permitted by this Agreement). Notwithstanding anything to the contrary herein,
Borrower will not, and no Subsidiary of Borrower will permit any Lien on any
inventory that secures the Loans unless Bank shall provide Borrower with Bank's
prior written consent.
FINANCIAL AND OTHER COVENANTS 5.3 Fail to comply with the required financial
covenants and other covenants described, and calculated as set forth, in
Exhibit D. Unless otherwise provided on Exhibit D, all such amounts and ratios
--------- ---------
will be calculated: (a) on the basis of GAAP; and (b) on a consolidated basis.
Compliance with the requirements of Exhibit D will be determined as of the dates
---------
of the financial statements to be provided to Bank.
Page 4 of 9
Credit Agreement (With Borrowing Base) March 31, 1997
Pervasive Software Inc.
CORPORATE CHANGES 5.4 In any single transaction or series of transactions,
directly or indirectly: (a) liquidate or dissolve; (b) be a party to any merger
or consolidation; (c) sell or dispose of any interest in any of its
Subsidiaries, or permit any of its Subsidiaries to issue any additional equity
other than to Borrower; (d) sell, convey or lease all or any substantial part of
its assets, except for sale of inventory in the ordinary course of business; or
------
(e) permit any change in ownership of Borrower, unless (i) approved in writing
by Bank, or (ii) occurring in the ordinary course of the First Amended and
Restated 1994 PERVASIVE SOFTWARE INC. Incentive Plan. The Bank is aware of (a)
Borrower's intent to increase the number of shares issuable under the Incentive
Plan and (b) Borrower's intent to amend or replace the Incentive Plan in its
entirety prior to a possible initial public offering. Additionally, the Bank is
fully aware of the possibility that the Borrower may do an initial public
offering during the terms of this Agreement.
RESTRICTED PAYMENTS 5.5 Unless otherwise permitted on Exhibit D, at any time:
---------
(a) redeem, retire or otherwise acquire, directly or indirectly, any shares of
its capital stock or other equity interest (except as occurring in the ordinary
course of the First Amended and Restated 1994 PERVASIVE SOFTWARE INC. Incentive
Plan); (b) declare or pay any dividend (except stock dividends and dividends
------
paid to Borrower); or (c) make any other distribution or contribution of any
Property or cash or obligation to owners of an equity interest or to a
Subsidiary in their capacity as such.
NATURE OF BUSINESS; MANAGEMENT 5.6 Change the nature of its business or enter
into any business which is substantially different from the business in which it
is presently engaged, or permit any material change in its management, unless
approved in writing by Bank.
AFFILIATE TRANSACTIONS 5.7 Enter into any transaction or agreement with any
Affiliate except upon terms substantially similar to those obtainable from
wholly unrelated sources.
SUBSIDIARIES 5.8 Form, create or acquire any Subsidiary (other than as
disclosed in Annex II).
LOANS AND INVESTMENTS 5.9 Unless otherwise provided on Exhibit D, make any
---------
advance, loan, extension of credit, or capital contribution to or investment in,
or purchase, any stock, bonds, notes, debentures, or other securities of, any
Person, except: (a) readily marketable direct obligations of the United States
of America or any agency thereof with maturities of one year or less from the
date of acquisition; (b) fully insured certificates of deposit with maturities
of one year or less from the date of acquisition issued by any commercial bank
operating in the United States of America having capital and surplus in excess
of $50,000,000.00; (c) commercial paper of a domestic issuer if at the time of
purchase such paper is rated in one of the two highest rating categories of
Standard and Poor's Corporation or ▇▇▇▇▇'▇ Investors Service; or (d) a mutual
fund predominantly invested in investments described in (a), (b), and (c).
CHANGE IN LOCKBOX 5.10 Instruct or otherwise permit any Account Debtor of
Borrower to remit payments to any account, lockbox or other location other than
the Lockbox, except for payments on account received by Btrieve Technologies
Japan, Ltd. related to receivables owned by Btrieve Technologies Japan Ltd.
6. EVENTS OF DEFAULT AND REMEDIES.
------------------------------
REMEDIES 6.1 If any Event of Default occurs, then Bank may do any or all of
the following: (1) declare the Obligations to be immediately due and payable
without notice of acceleration or of intention to accelerate, presentment and
demand or protest, all of which are hereby expressly waived; (2) without notice
to any Obligor, terminate the Commitment and accelerate the Termination Date;
(3) set off, in any order, against the indebtedness of Borrower under the Loan
Documents any debt owing by Bank to Borrower (whether such debt is owed
individually or jointly), including, but not limited to, any deposit account,
which right is hereby granted by Borrower to Bank; and (4) exercise any and all
other rights pursuant to the Loan Documents, at law, in equity or otherwise;
provided, however, that Borrower shall have a period of 10 days to cure ("Cure
Period") any default that consists of delay in delivery of financial statements
or reports, or curable failure to maintain a financial covenant set out in
Exhibit D. During the Cure Period, and Event of Default shall be deemed to have
---------
occurred and be continuing until cured, but Bank shall not exercise any of the
remedies set out in this section except that Bank shall not be obligated to fund
any Loan under the Commitment. If an Event of Default subject to a Cure Period
is not fully cured during such Cure Period, then Bank shall have all the rights
and remedies provided for in this Note, the Loan Documents and otherwise as if
such Cure Period had in no way existed, and Borrower expressly agrees that all
actions taken by Bank thereafter shall relate back to the first date of the
Event of Default for all purposes.
EVENTS OF DEFAULT 6.2 Each of the following is an "Event of Default":
----------------
(a) Any Obligor fails to pay any principal of or interest on the Note or under
any application or any other obligation under any Loan Document as and when due;
or
(b) Any Obligor or any Subsidiary of Borrower fails to pay at maturity, or
within any applicable period of grace, any principal of or interest on any other
borrowed money obligation or fails to observe or perform within any applicable
period of grace any term, covenant or agreement contained in any agreement or
obligation by which it is bound; or
(c) Any representation or warranty made in connection with any Loan Document was
incorrect, false or misleading when made; or
(d) Any Obligor violates any covenant contained in any Loan Document; or
(e) An event of default occurs under any other Loan Document; or
(f) Final judgment for the payment of money is rendered against Obligor or any
Subsidiary of Borrower and remains undischarged for a period of 30 days during
which execution is not effectively stayed; or
(g) The sale, encumbrance or material abandonment (except as otherwise expressly
permitted by this Agreement ) of any of the Collateral or the making of any
levy, seizure, garnishment, sequestration or attachment thereof or thereon; or
the loss, theft, substantial damage, or destruction of any material portion of
such Property; or
(h) Any order is entered in any proceeding against Borrower or any Subsidiary of
Borrower decreeing the dissolution, liquidation or split-up thereof, and such
order shall remain in effect for 30 days; or
(i) Any Obligor or any subsidiary of Borrower makes a general assignment for the
benefit of creditors or shall petition or apply to any tribunal for the
appointment of a trustee, custodian, receiver or liquidator of all or any
substantial part of its business, estate or assets or shall commence any
proceeding under any bankruptcy, insolvency, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect; or any such petition or
application shall be filed or any such proceeding shall be commenced against any
Obligor or any subsidiary of Borrower and the Obligor or such subsidiary by any
act or omission shall indicate approval thereof, consent thereto or acquiescence
therein, or an order shall be entered appointing a trustee, custodian, receiver
or liquidator of all or any substantial part of the
Page 5 of 9
Credit Agreement (With Borrowing Base) March 31, 1997
Pervasive Software Inc.
assets of any Obligor or any subsidiary of Borrower or granting relief to any
Obligor or any subsidiary of Borrower or approving the petition in any such
proceeding, and such order shall remain in effect for more than 30 days; or any
Obligor or any subsidiary of Borrower shall fail generally to pay its debts as
they become due or suffer any writ of attachment or execution or any similar
process to be issued or levied against it or any substantial part of its
property which is not released, stayed, bonded or vacated within 30 days after
its issue or levy; or
(j) Any Obligor or any Subsidiary of Borrower conceals or removes any part of
its Property, with intent to hinder, delay or defraud any of its creditors,
makes or permits a transfer of any of its Property which may be fraudulent under
any bankruptcy, fraudulent conveyance or similar law; or makes any transfer of
its Property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or
(k) A material adverse change occurs in the assets, liabilities, financial
condition, business or affairs of any Obligor (determined on a consolidated
basis); or
(l) Any change occurs in the ownership of Borrower except as permitted in
section 5.4 or 5.6; or
(m) Any individual Obligor dies or any Obligor that is not an individual
dissolves.
REMEDIES CUMULATIVE 6.3 No remedy, right or power of Bank is exclusive of any
other remedy, right or power now or hereafter existing by contract, at law, in
equity, or otherwise, and all remedies, rights and powers are cumulative.
7. MISCELLANEOUS.
-------------
NO WAIVER 7.1 No waiver of any default or Event of Default will be a waiver of
any other default or Event of Default. No failure to exercise or delay in
exercising any right or power under any Loan Document will be a waiver thereof,
nor shall any single or partial exercise of any such right or power preclude any
further or other exercise thereof or the exercise of any other right or power.
The making of any Loan during either the existence of any default or Event of
Default, or subsequent to the occurrence of an Event of Default will not be a
waiver of any such default or Event of Default. No amendment, modification or
waiver of any Loan Document will be effective unless the same is in writing and
signed by the Person against whom such amendment, modification or waiver is
sought to be enforced. No notice to or demand on any Person shall entitle any
Person to any other or further notice or demand in similar or other
circumstances.
NOTICES 7.2 All notices required under the Loan Documents shall be in writing
and either delivered against receipt therefor, or mailed by registered or
certified mail, return receipt requested, in each case addressed to the address
shown on the signature page hereof or to such other address as a party may
designate. Except for the notices required by Section 2.1, which shall be given
-----------
only upon actual receipt by Bank, notices shall be deemed to have been given
(whether actually received or not) when delivered (or, if mailed, on the next
Business Day).
GOVERNING LAW/ARBITRATION 7.3
(a) UNLESS OTHERWISE SPECIFIED THEREIN, EACH LOAN DOCUMENT IS GOVERNED BY TEXAS
LAWS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. To the maximum
extent permitted by law, any controversy or claim arising out of or relating to
the Loans or any Loan Document, including but not limited to any claim based on
or arising from an alleged tort or an alleged breach of any agreement contained
in any of the Loan Documents, shall, at the request of any party to the Loan or
Loan Documents (either before or after the commencement of judicial
proceedings), be settled by mandatory and binding arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (the
"AAA Rules") and pursuant to Title 9 of the United States Code, or if Title 9
does not apply, the Texas General Arbitration Act. In any arbitration
proceeding: (i) all statutes of limitations which would otherwise be applicable
shall apply; and (ii) the proceeding shall be conducted in the city in which the
office of Bank originating the Loans is located (i.e., Austin, Texas), by a
single arbitrator if the amount in controversy is $1 million or less, or by a
panel of three arbitrators if the amount in controversy (including but not
limited to all charges, principal, interest fees and expenses) is over $1
million. Arbitrators are empowered to resolve any controversy by summary rulings
substantially similar to summary judgments and motions to dismiss. Arbitrators
may order discovery conducted in accordance with the Federal Rules of Civil
Procedures. All arbitrators will be selected by the process of appointment from
a panel, pursuant to the AAA Rules. Any award rendered in the arbitration
proceeding will be final and binding, and judgment upon any such award may be
entered in any court having jurisdiction.
(b) If any party to the Loan Documents files a proceeding in any court to
resolve any controversy or claim, such action will not constitute a waiver of
right of such party or a bar to right of any other party to seek arbitration
under the provisions of this Section or that of any other claim or controversy,
and the court shall, upon motion of any party to the proceeding, direct that the
controversy or claim be arbitrated in accordance with this Section.
(c) No provision of, or the exercise of any rights under, this Section shall
limit or impair the right of any party to the Loan Documents before, during or
after any arbitration proceeding to: (i) exercise self-help remedies including
but not limited to setoff or repossession; (ii) foreclose any Lien on or
security interest in any Collateral; or (iii) obtain relief from a court of
competent jurisdiction to prevent the dissipation, damage, destruction,
transfer, hypothecation, pledging or concealment of assets or Collateral
including, but not limited to attachments, garnishments, sequestrations,
appointments of receivers, injunctions or other relief to preserve the status
quo.
(d) To the maximum extent permitted by applicable law and the AAA Rules, neither
Bank nor any Obligor or any Affiliate, officer, director, employee, attorney, or
agent of either shall have any liability with respect to, and Bank and each
Obligor waives, releases, and agrees not to ▇▇▇ any of them upon, any claim for
any special, indirect, incidental and consequential damages suffered or incurred
by such Person in connection with, arising out of, or in any way related to,
this Agreement or any of the other Loan Documents. Each of Bank and each
Obligor waives, releases, and agrees not to ▇▇▇ each other or any of their
Affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
Nothing contained herein, however, shall be construed as a waiver of any
Obligor's or the Bank's right to compel arbitration of disputes pursuant to
subparagraphs (a) and (b), above.
(e) Nothing herein shall be considered a waiver of the right or protections
afforded Bank by 12 U.S.C. 91, Texas Banking Code Art. 342-609 or any similar
statute.
(f) Each party agrees that any other party may proceed against any other liable
Person, jointly or severally, or against one or more of them, less than all,
without impairing rights against any other liable Persons. A party shall not be
required to join the principal Obligor or any other liable Persons (e.g.,
sureties or guarantors) in any proceeding against any Person. A party may
release or settle with one or more liable Persons as the party deems fit without
releasing or impairing right to proceed against any Persons not so released.
SURVIVAL; PARTIES BOUND; TERM OF AGREEMENT 7.4 All representations,
warranties, covenants and agreements made by or on behalf of Borrower in
connection with the Loan Documents will survive the execution and delivery of
the Loan Documents; will not be affected by any investigation made by any
Person, and will bind Borrower and the successors, trustees, receivers and
assigns of
Page 6 of 9
Credit Agreement (With Borrowing Base) March 31, 1997
Pervasive Software Inc.
Borrower and will benefit the successors and assigns of Bank; provided that
--------
Bank's agreement to make Loans to Borrower or issue Letters of Credit will not
inure to the benefit of any successor or assign of Borrower. Except as otherwise
provided herein, the term of this Agreement will be until the later of the final
maturity of the Term Note and the Revolving Note or the last expiry date of any
Letter of Credit, whichever is later, and the full and final payment of all
amounts due under the Loan Documents.
DOCUMENTARY MATTERS 7.5 This Agreement may be executed in several identical
counterparts, on separate counterparts; each counterpart will constitute an
original instrument, and all separate counterparts will constitute but one and
the same instrument. The headings and captions in the Loan Documents have been
included solely for convenience and should not be considered in construing the
Loan Documents. If any provision of any Loan Document is invalid, illegal or
unenforceable in any respect under any applicable law, the remaining provisions
will remain effective. The Loans and all other obligations and indebtedness of
Borrower to Bank are entitled to the benefit of the Loan Documents.
EXPENSES 7.6 Any provision to the contrary notwithstanding, and whether or not
the transactions contemplated by this Agreement are consummated, Borrower agrees
to pay on demand all reasonable out-of-pocket expenses (including, without
limitation, reasonable fees and expenses of counsel for Bank) in connection with
the negotiation, preparation, execution, filing, recording, modification,
supplementing and waiver of the Loan Documents and the making, servicing and
collection of the Loans. Borrower agrees to pay Bank's (i) standard
Documentation Preparation and Processing Fee for preparation, negotiation and
handling of this Agreement; (ii) lockbox processing fees; (iii) account
maintenance fees for the Collection Account; and (iv) any expenses of collection
or other expenses incurred by Bank in connection with the maintenance of the
Collection Account, at customary rates charged by the Bank for the services.
Bank may obtain reimbursement by causing other depository accounts of Borrower
at Bank to be charged from time to time therefor. The obligations of Borrower
under this and the following section will survive the termination of this
Agreement.
INDEMNIFICATION 7.7 The Borrower agrees to indemnify, defend and hold Bank
harmless from and against any and all loss, liability, obligation, damage,
penalty, judgment, claim, deficiency and expense (including interest, penalties,
attorneys' fees and amounts paid in settlement) to which the Bank may become
subject arising out of or based upon the Loan Documents, any Loan or the
receipt, handling, payment and application of the monies received in connection
with the Collection Account, including that resulting from Bank's own
negligence, except and to the extent caused by Bank's gross negligence or
------
willful misconduct.
NATURE OF OBLIGATIONS 7.8 If more than one Borrower executes this Agreement,
all of the representations, warranties, covenants and agreements of Borrower
shall be joint and several obligations of all Borrowers.
USURY NOT INTENDED 7.9 Borrower and Bank intend to conform strictly to
applicable usury laws. Therefore, the total amount of interest (as defined
under applicable law) contracted for, charged or collected under this Agreement
or any other Loan Document will never exceed the Highest Lawful Rate. If Bank
contracts for, charges or receives any excess interest, it will be deemed a
mistake. Bank will automatically reform the Loan Document or charge to conform
to applicable law, and if excess interest has been received, Bank will either
refund the excess to Borrower or credit the excess on any unpaid principal
amount of the Note or any other Loan Document. All amounts constituting
interest will be spread throughout the full term of the Loan Document or
applicable Note in determining whether interest exceeds lawful amounts.
RIGHTS OF BORROWER AND BANK 7.10 Bank has not exercised any control, and Bank
shall not exercise any control, over Borrower in the determination of which of
Borrower's creditors Borrower will pay or which payments Borrower will make in
the ordinary course of Borrower's business. Borrower, alone, shall exercise
such judgment and determination. Nothing contained herein, however, shall, in
any manner, affect, limit or impair the rights or remedies of Bank under this
Agreement or any other Loan Documents as otherwise provided by applicable law,
whether with regard to realization on the Collateral, rights of set off,
compensation or otherwise.
SECURITY INTEREST IN ACCOUNTS RECEIVABLES OF NON-U.S. SUBSIDIARIES 7.11 The
Bank, does not have, nor does any other party, a Security Interest in Accounts
Receivables invoiced by non-U.S. subsidiaries of the Borrower.
NO COURSE OF DEALING 7.12 NO COURSE OF DEALING BY BORROWER WITH BANK, NO
COURSE OF PERFORMANCE AND NO TRADE PRACTICES OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE MAY BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
AGREEMENT.
8. DEFINITIONS. Unless the context otherwise requires, capitalized terms used
-----------
in Loan Documents and not defined elsewhere shall have the meanings provided by
GAAP, except as follows:
Affiliate means, as to any Person, any other Person (a) that directly or
---------
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person; (b) that directly or indirectly
beneficially owns or holds five percent (5%) or more of any class of voting
stock of such Person; or (c) five percent (5%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means to possess, directly or indirectly, the
power to direct the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise. Bank is not under
any circumstances an Affiliate of Borrower or any of its Subsidiaries.
Accounts means all accounts as such term is defined in the Texas Business and
--------
Commerce Code, which represent amounts payable for goods and services provided
to Account Debtors by Borrower.
Account Debtor means any person in any way obligated on or in connection with
--------------
any Account.
Authority Documents means certificates of authority to transact business,
-------------------
certificates of good standing, borrowing resolutions (with secretary's
certificate), secretary's certificates of incumbency, and other documents which
empower and enable Borrower or its representatives to enter into agreements
evidenced by Loan Documents or evidence such authority.
Business Day means a day when the main office of Bank is open for the conduct of
------------
commercial lending business.
Collateral means all Property, tangible or intangible, real, personal or mixed,
----------
now or hereafter subject to Security Documents, or intended so to be.
Corporation means corporations, partnerships, limited liability companies, joint
-----------
ventures, joint stock associations, associations, banks, business trusts and
other business entities.
Government Accounts means receivables owed by the U.S. government or by
-------------------
government of any state, county, municipality, or other political subdivision as
to which Bank's security interest or ability to obtain direct payment of
proceeds is governed by any federal or state statutory requirements other than
those of the UCC, including, without limitation, the Federal Assignment of
Claims Act of 1940, as amended.
Page 7 of 9
Credit Agreement (With Borrowing Base) March 31, 1997
Pervasive Software Inc.
Governmental Authority means any foreign governmental authority, the United
----------------------
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, department, commission, board, bureau,
court or other tribunal having jurisdiction over Bank or any Obligor, or any
Subsidiary of Borrower or their respective Property.
Highest Lawful Rate means the maximum nonusurious rate of interest permitted to
-------------------
be charged by applicable Federal or Texas law (whichever permits the higher
lawful rate) from time to time in effect. If Chapter One of the Texas Credit
Code establishes the Highest Lawful Rate, the Highest Lawful Rate is the
"indicated rate ceiling" as defined in that Chapter.
Indebtedness means and includes (a) all items which in accordance with GAAP
------------
would be included on the liability side of a balance sheet on the date as of
which Indebtedness is to be determined (excluding capital stock, surplus,
surplus reserves and deferred credits); (b) all guaranties, endorsements and
other contingent obligations in respect of, or any obligations to purchase or
otherwise acquire, Indebtedness of others, and (c) all Indebtedness secured by
any Lien existing on any interest of the Person with respect to which
indebtedness is being determined, in Property owned subject to such Lien,
whether or not the Indebtedness secured thereby has been assumed.
Legal Requirement means any law, ordinance, decree, requirement, order,
-----------------
judgment, rule, regulation (or interpretation of any of the foregoing) of, and
the terms of any license or permit issued by, any Governmental Authority.
Lien shall mean any mortgage, pledge, charge, encumbrance, security interest,
----
collateral assignment or other lien or restriction of any kind, whether based on
common law, constitutional provision, statute or contract.
Loan Documents means this Agreement, the Notes, the agreements, documents,
--------------
instruments and other writings contemplated by this Agreement or listed on Annex
I, all other assignments, deeds, guaranties, pledges, instruments, certificates
and agreements now or hereafter executed or delivered to the Bank pursuant to
any of the foregoing, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the foregoing.
Lockbox means the postal lockbox maintained by Bank into which Borrower directs
-------
Account Debtors to make payment and remittance in respect to Accounts. "Lockbox
Processing Agreement" shall mean the Bank's standard form of agreement for
Lockbox arrangements, either as a separate agreement or as an addendum to the
Bank's treasury management services agreement, as circumstances warrant.
Obligations means all principal, interest and other amounts which are or become
-----------
owing under this Agreement, the Note or any other Loan Document.
Obligor means each Borrower and any guarantor, surety, co-signer, general
-------
partner or other person who may now or hereafter be obligated to pay all or any
part of the Obligations.
Organizational Documents means, with respect to a corporation, the certificate
------------------------
of incorporation, articles of incorporation and bylaws of such corporation; with
respect to a limited liability company, the articles of organization,
regulations and other documents establishing such entity, with respect to a
partnership, joint venture, or trust, the agreement, certificate or instrument
establishing such entity; in each case including all modifications and
supplements thereof as of the date of the Loan Document referring to such
Organizational Document and any and all future modifications thereof which are
consented to by Bank.
Parties means all Persons other than Bank executing any Loan Document.
-------
Person means any individual, Corporation, trust, unincorporated organization,
------
Governmental Authority or any other form of entity.
Proper Form means in form and substance satisfactory to the Bank.
-----------
Property means any interest in any kind of property or asset, whether real,
--------
personal or mixed, tangible or intangible.
Security Documents means those Security Agreements listed on Annex I and all
------------------
supplements, modifications, amendment, extensions thereof and all other
agreements hereafter executed and delivered to Bank to secure the Loans.
Subordinated Debt means any Indebtedness subordinated to Indebtedness due Bank
-----------------
pursuant to a written subordination agreement in Proper Form by and among Bank,
subordinated creditor and Borrower which at a minimum must prohibit: (a) any
action by subordinated creditor which will result in an occurrence of an Event
of Default or default under this Agreement, the subordination agreement or the
subordinated Indebtedness; and (b) upon the happening of any Event of Default or
default under any Loan Document, the subordination agreement, or any instrument
evidencing the subordinated Indebtedness (i) any payment of principal and
interest on the subordinated Indebtedness; (ii) any act to compel payment of
principal or interest on subordinated Indebtedness; and (iii) any action to
realize upon any Property securing the subordinated Indebtedness .
Subsidiary means, as to a particular parent Corporation, any Corporation of
----------
which 50% or more of indicia of equity rights is directly or indirectly owned by
such parent Corporation or by one or more Persons controlled by, controlling or
under common control with such parent Corporation.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN BANK AND THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF BANK AND THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN BANK AND THE PARTIES.
Page 8 of 9
Credit Agreement (With Borrowing Base) March 31, 1997
Pervasive Software Inc.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
BORROWER: PERVASIVE SOFTWARE INC.
By:____________________________________________________________________________
Name:__________________________________________________________________________
Title:_________________________________________________________________________
Address:_______________________________________________________________________
BANK: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:____________________________________________________________________________
Name:__________________________________________________________________________
Title:_________________________________________________________________________
Address:_______________________________________________________________________
EXHIBITS: ANNEXES:
I Loan Documents
A Application for Standby Letter of Credit II Subsidiaries
B Borrowing Base Report
C Request for Loan
D Reporting Requirements, Financial Covenants,
and Compliance Certificate
Page 9 of 9
Exhibit B
Borrowing Base Report
Accounts Receivable
Borrowing Base Report for Period Beginning:_____________and Ending ("Current
Period") required by the Credit Agreement dated the Effective Date (as amended,
restated, and supplemented from time to time, the "agreement") by and between
PERVASIVE SOFTWARE INC. and Texas Commerce Bank National Association.
--------------------------------------------------------------------------------
THE BORROWING BASE REPORT MUST BE SUBMITTED TO BANK WITHIN THE PERIOD SPECIFIED
IN EXHIBIT E, AND WITH THE SUPPORTING SCHEDULES AND INFORMATION SPECIFIED IN
EXHIBIT E.
--------------------------------------------------------------------------------
Total for Total for
Reconciliation Borrowing Base
Total Accounts Receivable: $ $
-------------- --------------
Btrieve Technologies Japan, Ltd.
Trade A/R (all from AG-Tech) $ $ N/A
-------------- --------------
OEM and other Contract A/R $ $ N/A
-------------- --------------
PERVASIVE SOFTWARE INC..
Trade A/R per Detail Report, net of Prepaid Orders $ $
-------------- --------------
Reclassify Prepaid Orders to Deferred Revenue $ $
-------------- --------------
OEM and other contract A/R
IBM $ $
-------------- --------------
Jostens $ $
-------------- --------------
Solomon $ $
-------------- --------------
Magic $ $
-------------- --------------
Cheyenne $ $
-------------- --------------
Enterprise Systems $ $
-------------- --------------
IPG (Germany) $ $
-------------- --------------
$ $
----------------------------- -------------- --------------
$ $
----------------------------- -------------- --------------
$ $
----------------------------- -------------- --------------
Total Accounts per Consolidated Financial Statements $ $
-------------- --------------
Total Deferred Revenue:
SSQL 4.0 Coupon $ $
-------------- --------------
Prepaid Orders $ $
-------------- --------------
Fee based Support $ $
-------------- --------------
Upgrade protection $ $
-------------- --------------
$ $
----------------------- -------------- --------------
Deferred Revenue associated with OEM and other Contract A/R
$ $
--------------------------------- -------------- --------------
$ $
--------------------------------- -------------- --------------
$ $
--------------------------------- -------------- --------------
$ $
--------------------------------- -------------- --------------
Total Deferred Revenue per Consolidated Financial Statements $ $
-------------- --------------
1 Total Accounts as defined in Agreement as of the end of the Current Period $
--------------
Ineligible Accounts as of the end of the Current Period:
2 That portion (e.g., invoice) of all the Accounts
of any Account Debtor where all the Account is more than
90 days from invoice date $
--------------
Add unapplied payments and credits in over 90 day column $
--------------
3 All of the Accounts, not already included in Line 2, of any Account Debtor
if 20% of the dollar amount of all of the Accounts of such Account Debtor
are more than 90 days from invoice date $
--------------
4 That portion of all of the Accounts of any Account Debtor which exceeds 10%
of the dollar amount of the total of all Accounts for all Account Debtors
for
EXHIBIT B Page 1 of 2
the Current Period (Line 1)
(except for (i) all OEM contracts and (ii) Tech Data) $
------
--------------
5 Intercompany and Affiliate Accounts Receivable $
--------------
6 Federal Government Accounts $
--------------
7 Foreign Accounts (unless secured by a letter of
------
credit issued by a bank satisfactory to the Bank OR
insured) $
--------------
8 Accounts subject to dispute or setoff or contra account $
--------------
9 Other Ineligible Accounts $
--------------
10 Total Ineligible Accounts for the Current Period
(Add Lines 2 through 9) $
--------------
11 Total Eligible Accounts (Line 1 - Line 10) $
--------------
12 Multiplied by: Borrowing Base Factor 80%
--------------
--------------
13 Equals: BORROWING BASE (not to exceed $2,000,000) as of
-------
the end of the Current Period $
--------------
14 Less: Unreimbursed drawings, if any, under $126,000.00 letter of credit
-----
issued for Borrower's account to secure lease obligations: $
--------------
15 Less: Aggregate principal amount outstanding under the Revolving Note
-----
as of the end of the Current Period: $
--------------
16 Equals: Amount available for borrowing subject to the terms of
-------
the Agreement, if positive; or if amount due, if negative: $
--
--------------
The following definitions shall be controlling over the presentation of
Borrowing Base factors and calculations above. "Accounts" shall have the meaning
set forth in the Texas Business and Commerce Code in effect as of the date of
the Agreement, and shall include only such amounts owed to Borrower which are
entitled to be recognized by Borrower as revenue under GAAP. "Other Ineligible
Accounts" shall mean all such Accounts of Borrower that are not subject to a
first and prior Lien in favor of Bank; all Accounts that are subject to any Lien
not in favor of Bank; and such other Accounts of Borrower as Bank in its sole
good faith discretion shall deem from time to time to be ineligible for purposes
of] determining the Borrowing Base. All other terms not defined herein shall
have the respective meanings as in the Agreement.
Borrower certifies that the above information and computations are true,
correct, complete and not misleading as of the date hereof.
Borrower: PERVASIVE SOFTWARE INC.
By:
-------------------------------------------------
Name:
-------------------------------------------------
Title:
-------------------------------------------------
Address:
-------------------------------------------------
Date:
-------------------------------------------------
EXHIBIT B Page 2 of 2
EXHIBIT A
Application for Standby Letter of Credit
(Insert Application for Standby Letter of Credit Here...)
EXHIBIT A Page 1 of 1
EXHIBIT C
REQUEST FOR LOAN
Letterhead of PERVASIVE SOFTWARE INC.
Texas Commerce Bank National Association
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Request for Loan under Agreement
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇-Day
Gentlemen:
This letter confirms our oral or telephonic request of ______________, 19___ ,
for a Revolving Loan in accordance with that certain Amendment and Restatement
of Credit Agreement with Letter of Credit Sublimit as amended, restated and
supplemented from time to time, the "Agreement") dated as of the Effective Date
between you and us. Any term defined in the Agreement and used in this letter
has the same meaning as in the Agreement.
The proposed Revolving Loan is to be in the amount of $___________ and is to be
made on _____________ , 19____ , which is a Business Day at least ____ Business
Days after the date of this letter. The proceeds of the proposed Revolving Loan
should be (check one):
. deposited into account number __________________ with the Bank.
. ___________________________________________________________.
The undersigned hereby certifies that:
(1) The representations and warranties made by the Borrower or by any
other Person in the Agreement and the other Loan Documents are
true and correct on and as of this date as though made on this
date.
(2) The proposed Loan complies with all applicable provisions of the
Agreement.
(3) No Event of Default has occurred and is continuing.
Sincerely,
PERVASIVE SOFTWARE INC.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
EXHIBIT C Page 1 of 1
ANNEX I
Loan Documents
"Loan Documents" includes, but is not limited to, the following:
1. Agreement
2. Applications
3. Revolving Note; Advance/Term Note
4. Lockbox Processing Agreement, Treasury Services Management Agreement,
related account documents
5. Borrowing Base Report
6. Financial Statements of Borrower as required by Exhibit D
---------
7. Compliance Certificate
8. Security Agreements, in Proper Form, covering:
Accounts and General Intangibles, Inventory, Equipment
9. Financing Statements
10. UCC search
11. Certified Copies of Organizational and Authority Documents
12. Insurance policies and certificates
Loan Documents - ANNEX I Page 1 of 1
ANNEX II
Subsidiaries
Subsidiary Name Where
and Address Incorporated
-------------- ------------
% Owned
--------
Pervasive Software European Service and Support Center Ireland 100.0%
▇▇▇ ▇▇▇▇▇
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇
Pervasive Software GmbH Germany 100.0%
Hessenring 1221
D-61348 Bad homburg
Germany
Pervasive Software FSC Inc. Barbados 100.0%
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇. ▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Btrieve Technologies Japan, Ltd. Japan 65.5%
Mas. Mita ▇▇▇▇▇▇▇▇
▇-▇▇-▇ ▇▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇ 101
Note: Bank is aware that Borrower is presently attempting to restructure its
-----
operations in Japan. Such restructuring may involve the acquisition of the
remaining 34.5% interest in Btrieve Technologies Japan, Ltd. OR the winding down
of the affairs of Btrieve Technologies Japan, Ltd. and the creation of a new
wholly-owned subsidiary to serve as the Borrower's operating entity in Japan.
Bank is further aware that the restructuring may involve the acquisition of
assets of AG-Tech Corporation in exchange for consideration which may include
shares of approximately 100,000 shares of common stock of the Borrower (not as
part of the Stock Option Plan). Bank hereby consents to the above without
further notice from the Borrower.
Subsidiary planned to be formed as of Agreement Effective Date and
------------------------------------------------------------------
permitted under Agreement (Names are subject to change) Where
------------------------------------------------------- Incorporated % Owned
------------ --------
Pervasive Software Southern Europe France 100.0%
Rue des Trois Fontanots
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Note: Will be incorporated in France as a S.A.R.L. Currently operating as a branch of the Borrower.
Pervasive Software (U.K.) U.K. 100.0%
Pervasive Software N.V. Belgium 100.0%
▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇-▇▇▇▇ Diegem
Belgium
Pervasive Software International Inc.
Note: A U.S. holding company which will own all foreign subsidiaries and branch operations).
ANNEX II Page 1 of 1
EXHIBIT D to Agreement between
PERVASIVE SOFTWARE INC, ("Borrower") and Texas Commerce Bank National
Association ("Bank")
dated the Effective Date as same may be amended, restated and supplemented in
writing.
REPORTING REQUIREMENTS, FINANCIAL COVENANTS AND
COMPLIANCE CERTIFICATE FOR CURRENT REPORTING PERIOD ENDING ______, 199__
("END DATE")
A. Reporting Period. Borrower will provide this Exhibit completed in
----------------
Proper Form with each financial statement delivered under the Agreement.
THIS REPORT IS FOR THE MONTH ("REPORTING PERIOD") ENDING _________, 199__
("END DATE").
BORROWER'S FISCAL YEAR ENDS ON ______________________ , 19___.
===================================================================================================================================
B. Financial Reporting. Borrower will provide the following financial information within the times indicated: Compliance
-------------------
===============================================================================================================--------------------
WHO WHEN DUE WHAT (Circle):
--- -------- ----
-----------------------------------------------------------------------------------------------------------------------------------
BORROWER (i) Within 90 days of Borrower's fiscal GAAP financial statements (balance sheet, Yes No
year end income, cash flow) audited with
unqualified opinion by independent CPAs
satisfactory to Bank, with Compliance
Certificate
-------------------------------------------------------------------------------------------------------------
(ii) Within 30 days of each month End Date Unaudited financial statements Yes No
including FYE month accompanied by Compliance Certificate of
Borrower only
-------------------------------------------------------------------------------------------------------------
(iii) Within 45 days of each month End Unaudited consolidated financial Yes No
Date including FYE month statements accompanied by Compliance
Certificate
-------------------------------------------------------------------------------------------------------------
(iv) Within 20 days of each month Borrowing Base Report (Exhibit A), with Yes No
End Date including FYE month if accounts receivable aging and listing;
any outstandings under the accounts payable aging
Revolving Loan, otherwise
within 30 days of each month
End Date including FYE month
-----------------------------------------------------------------------------------------------------------------------------------
(v) Within 30 days of each month End Date Deferred Revenue schedule Yes No
===================================================================================================================================
C. FINANCIAL COVENANTS. Borrower will comply with the following financial covenants, applying GAAP, XXXXXXXXXXX
-------------------
the definitions in Section 8, and the calculations and adjustments from the Actual Reported
---------------------------------------------------------
column below:
-------------
---------------------------------------------------------------------------------------------------------------
REQUIRED. Each applies at all times and is ACTUAL REPORTED. As of End Date or for reporting (Circle)
-------- ---------------
reported as indicated: period specified for financial test, as appropriate:
===================================================================================================================================
1. Maintain a ratio of total Indebtedness as Liabilities (GAAP) $_______________ Yes No
adjusted to Tangible Net Worth as adjusted no Plus: Min. Int. in Subs. $_______________
greater than the following: Minus: Deferred Revenue where no
future performance is required or future
2.50 : 1.00 for each fiscal quarter until and performance is limited to delivery of
including December 31, 1997 upgrades on a "when and if available
2.35 : 1.00 for the fiscal quarter ending basis" and where cash has been
March 31, 1998 received and is non-refundable. $_______________
2.15 : 1.00 for the fiscal quarter ending
June 30, 1998 Equals: Indebtedness
2.00 : 1.00 for the fiscal quarters ending as adjusted $
September 30, 1998 and December 31, 1998 =========
1.75 to 1.00 for the fiscal quarter ending
March 31, 1999 and each fiscal quarter
thereafter
Stockholders' Equity $
---------
Minus: Goodwill $ -----
---------
Other Intangible Assets $
-----
= Tangible Net Worth as adjusted $
=========
$ / $
----------------------- ----------
------- = -------
Indebtedness (adjusted) TNW(adjusted) Ratio
------------------------------------------------------------------------------------------------------------------------------------
2. Maintain a minimum EBITDA no less than the Income Yes No
following: $
__________
$300,000 for the fiscal quarter ending September 30,
1997 Plus: Interest
$500,000 for the fiscal quarters ending December 31, $
1997 and March 31, 1998 __________
$700,000 for the fiscal quarter ending June 30, Taxes
1998 and each fiscal quarter thereafter. $
__________
Depreciation
$
__________
Amortization
$
__________
Equals: EBITDA
$
__________
====================================================================================================================================
====================================================================================================================================
3. Capital Expenditures shall not exceed the following Capital Expenditures will exclude any Capital Expenditures Yes No
without prior written consent from the Bank: associated with any merger or acquisition that has been
approved by the Bank.
$3,600,000 for the Fiscal Year Ending June 30, 1998 10%
of Gross Revenues for the prior four (4) fiscal quarters
beginning with the fiscal quarter ending September 30,
1998 and each fiscal quarter thereafter.
==========================================================================================================================----------
EXHIBIT D Page 1 of 2
===================================================================================================================================
D. Other Required Covenants to be maintained and to be certified. COMPLIANCE Compliance
-------------------------------------------------------------
CERTIFICATE
===================================================================================================================================
REQUIRED ACTUAL REPORTED
-------- --------------- (Circle)
-----------------------------------------------------------------------------------------------------------------------------------
(i) No significant change in management/ownership. Yes No
-----------------------------------------------------------------------------------------------------------------------------------
(ii) No additional debt other than normal trade debt; financing Yes No
insurance premiums for ordinary coverages; or debt consented to in
advance by Bank, which consent shall be given unless Bank believes in
its good faith discretion that Borrower, giving effect to such consent,
shall be subject to a lower credit grade under its normal standards
than such grade as it was of the Effective Date.
-----------------------------------------------------------------------------------------------------------------------------------
(iii) The Borrower shall not have over $1,500,000 in Yes No
unencumbered foreign accounts receivable at any time
without written consent from the Bank.
===================================================================================================================================
THE ABOVE SUMMARY REPRESENTS SOME OF THE COVENANTS AND AGREEMENTS CONTAINED IN
THE AGREEMENT AND DOES NOT IN ANY WAY RESTRICT OR MODIFY THE TERMS AND
CONDITIONS OF THE AGREEMENT. IN CASE OF CONFLICT BETWEEN THIS EXHIBIT AND THE
AGREEMENT, THE AGREEMENT SHALL CONTROL.
The undersigned certifies that the above information and computations are true
and correct and not misleading as of the date hereof, and that since the date of
the Borrower's most recent Compliance Certificate (if any):
No default or Event of Default has occurred under the Agreement
during the current Reporting Period, or been discovered from a prior
period, and not reported.
A default or Event of Default (as described below) has occurred
during the current Reporting Period or has been discovered from a
prior period and is being reported for the first time and:
was cured on ___________________________________.
was waived by Bank in writing on ______________________________.
is continuing.
Description of Event of Default: ____________________________________
________________________________________________________________________________
________________________________________________________________________________
Executed ________________________________________ , 19____________.
BORROWER: PERVASIVE SOFTWARE INC.
SIGNATURE: _____________________________________________________________________
NAME:_______________________________ TITLE: _____________________________
(CFO, Director of Finance,
Controller or President)
ADDRESS: ____________________________
EXHIBIT D Page 2 of 2
SECURITY AGREEMENT -- INVENTORY
(this "Agreement")
PERVASIVE SOFTWARE INC., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Debtor"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION ("Secured Party"), agree as follows:
1. DEFINITIONS. (a) "Collateral" means all Inventory, all Accounts and all
Proceeds, together with all books and records of Debtor, whether in paper or
electronic form, relating to the Collateral. "Inventory" means all inventory,
including without limitation materials, supplies, returned or repossessed goods,
goods in transit and goods held by others under lease, consignment or other
arrangements, and all documents or certificates of title relating to the
foregoing. If, but only if, this box " is checked by Secured Party, the
Inventory is limited to Inventory described on the schedule or schedules
attached to this Agreement. "Accounts" means all accounts, general intangibles,
instruments, negotiable documents, chattel paper and deposit accounts arising in
connection with the Inventory. (b) "Obligations" means all debts, obligations
and liabilities of every kind and character of Debtor, whether joint or several,
contingent or otherwise, now or hereafter existing in favor of Secured Party,
including without limitation all liabilities arising under or from any note,
open account, overdraft, letter of credit application, endorsement, surety
agreement, guaranty, interest rate swap or other derivative product, acceptance,
foreign exchange contract or depository service contract, whether payable to
Secured Party or to a third party and subsequently acquired by Secured Party.
Debtor and Secured Party specifically contemplate that Debtor may hereafter
become further indebted to Secured Party. (c) "Past Due Rate" means the
highest nonusurious rate of interest that Secured Party may contract for, charge
or receive under applicable law, or 18% if applicable law does not specify such
a rate. (d) "Proceeds" means all products and proceeds, in cash or otherwise,
of all other Collateral. (e) "Security Interest" means the security interests
created by this Agreement. (f) "UCC" means the Texas Uniform Commercial Code,
as amended from time to time. All terms defined in the UCC are used in this
Agreement as defined in the UCC unless otherwise defined in this Agreement.
2. CREATION OF SECURITY INTEREST. To secure the payment and performance of
the Obligations, Debtor grants to Secured Party a security interest in and
assigns to Secured Party all Collateral which Debtor owns or later acquires.
3. DEBTOR'S REPRESENTATIONS AND WARRANTIES. (a) Debtor is the sole lawful
owner of the Collateral, free and clear of all encumbrances, and has the right
and power to transfer the Collateral to Secured Party. No financing statement
covering the Collateral, other than in favor of Secured Party, is on file in any
public office. (b) This Agreement constitutes the legal, valid and binding
obligation of Debtor, enforceable in accordance with its terms. (c) The
Collateral and the Debtor's production, sale and use thereof comply with all
applicable laws, rules and regulations (including without limitation the Fair
Labor Standards Act), and Debtor has obtained any consents necessary to execute,
deliver and perform its obligations under this Agreement. (d) The address set
forth above is Debtor's place of business, if Debtor has only one place of
business, Debtor's chief executive office, if Debtor has more than one place of
business, or Debtor's residence, if Debtor has no place of business. (e) The
Collateral is free from damage caused by fire or other casualty. (f) Except as
disclosed on attached schedules, no Collateral is covered by a certificate of
title or subject to a certificate of title law.
4. DEBTOR'S AGREEMENTS. (a) Debtor will warrant and defend its title to and
Secured Party's interest in the Collateral against any adverse claimant. Debtor
will promptly take all reasonable and appropriate steps to collect the Accounts.
Debtor will not agree to a material modification of the terms of any Account
without the written consent of Secured Party, other than in connection with the
Debtor's standard sales programs as existing on the date of this Agreement, if
in any such case such amendment, modification or waiver would be reasonably
likely to impair the collectability of any receivable or materially adversely
affect the rights of Bank with respect thereto or hereunder.. (b)
Notwithstanding the security interest in Proceeds granted herein, Debtor will
not sell, transfer, assign or otherwise dispose of any interest in the
Collateral, except as authorized in this Agreement or in writing by Secured
Party, and Debtor will keep the Collateral (including Proceeds) free from unpaid
charges, including taxes and assessments, and from all encumbrances other than
those in favor of Secured Party. Debtor may sell or lease Inventory in the
ordinary course of business. Sale in the ordinary course of business does not
include a transfer in total or partial satisfaction of a debt. (c) Secured
Party may require that Debtor (i) deposit all payments on the Accounts in a
special bank account over which Secured Party alone has power of withdrawal, and
(ii) direct each account debtor to send remittances to an address designated by
Secured Party. Secured Party may hold the funds in the account as security, or
apply the funds to pay the Obligations. (d) Debtor will furnish Secured Party
all information Secured Party may request with respect to the Collateral.
Debtor will notify Secured Party promptly of any event that could have a
material adverse effect on the aggregate value of the Collateral or on the
Security Interest, or any change in Debtor's location, name, identity or
organizational structure. (e) Debtor will keep accurate books and records
regarding the Collateral and will allow Secured Party to inspect the Collateral
and to inspect and make copies (including electronic copies) of its books and
records as provided in Credit Agreement executed by Debtor and Secured Party of
even date herewith.. Secured Party may make test verifications of the
Collateral.
5. FURTHER ASSURANCES. Secured Party may file this Agreement or any financing
statements wherever Secured Party believes necessary to perfect the Security
Interest. A photographic or other reproduction of this Agreement or any
financing statement relating to this Agreement will be sufficient as a financing
statement. Debtor authorizes Secured Party and irrevocably appoints Secured
Party as Debtor's attorney-in-fact to file any financing statement (including
any amendments) relating to this Agreement electronically, and Secured Party's
transmission of Debtor's name as part of any filing relating to this Agreement
will constitute Debtor's signature on the financing statement. Debtor will take
such action as Secured Party may at any time require to protect, assure or
enforce the Security Interest. If any Collateral is located on or in leased
property, Debtor will furnish Secured Party an executed landlord's waiver
satisfactory to Secured Party. Debtor will promptly deliver to Secured Party any
part of the Collateral that constitutes instruments, and will make a designation
on all of its chattel paper, instruments and negotiable documents to reflect the
Security Interest.
6. DEBTOR'S USE OF COLLATERAL; INSURANCE. (a) Debtor will keep the Inventory
at its address listed above or at MagRabbit, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. (b) Debtor will properly maintain the
Inventory and will comply with all applicable laws, rules and regulations in the
use, sale and production of the Inventory (including without limitation the Fair
Labor Standards Act). (c) DEBTOR WILL MAINTAIN INSURANCE ON THE COLLATERAL
against all customary risks for goods of the same type and use, including
without limitation fire and theft, and any other risks designated by Secured
Party. DEBTOR MAY FURNISH INSURANCE THROUGH EXISTING POLICIES DEBTOR OWNS OR
CONTROLS OR THROUGH NEW POLICIES ISSUED BY ANY COMPANY AUTHORIZED TO TRANSACT
BUSINESS IN TEXAS. Secured Party will be named on a customary loss payee
endorsement to all such insurance, providing for payment to Secured Party and
Debtor (and no other person) as their interests appear, and providing for at
least 30 days written notice
to Secured Party before cancellation. Secured Party is irrevocably appointed
attorney in fact for Debtor to obtain, adjust, settle and cancel such insurance.
Secured Party may apply all proceeds of insurance to repayment of the
Obligations, whether Debtor is in default or not.
7. COSTS AND EXPENSES. Secured Party shall have the rights of reimbursement
for all costs, expenses and the like with respect to this Agreement which are
provided for in the Credit Agreement executed by Debtor and Secured Party of
even date herewith. If any part of the Obligations is governed by Chapter 3, 4,
5 or 15 of the Texas Credit Code, this Section is limited to the extent required
by those chapters.
8. DEFAULT. "Event of Default" shall have the same meaning as in the Credit
Agreement executed by Debtor and Secured Party of even date herewith. After an
Event of Default occurs, Secured Party may, without notice to any person,
declare the Obligations to be immediately due and payable. Debtor WAIVES demand,
presentment and all notices, including without limitation notice of dishonor and
default, notice of intent to accelerate and notice of acceleration.
9. SECURED PARTY'S RIGHTS AND REMEDIES. After an Event of Default occurs,
Secured Party will have all rights and remedies of a secured party after default
under the UCC and other applicable law. Secured Party may, without waiving any
default, do anything Debtor is required to do by this Agreement but fails to do.
Secured Party may require Debtor to assemble the Collateral and make it
available at a reasonably convenient place Secured Party designates. Except for
the safe custody of any Collateral in its possession and accounting for moneys
actually received by it, Secured Party will have no duty as to any Collateral,
including any duty to preserve rights against prior parties. Debtor irrevocably
appoints Secured Party Debtor's attorney-in-fact to endorse any checks or other
instruments included in the Collateral, or to take other action to enforce,
collect or compromise the Collateral. Secured Party is not required to take
possession of any Collateral prior to any sale, nor to have any Collateral
present at any sale. Secured Party may sell part of the Collateral without
waiving its right to proceed against the remaining Collateral. If any sale is
not completed or is defective in the opinion of Secured Party, Secured Party may
make a subsequent sale of the same Collateral. Any ▇▇▇▇ of sale or other
instrument evidencing any foreclosure sale will be prima facie evidence of
factual matters stated or recited therein. If a sale of Collateral is conducted
in conformity with customary practices of banks disposing of similar property,
the sale will be deemed commercially reasonable, but Secured Party will have no
obligation to advertise or to sell Collateral on credit. Written notice to
Debtor mailed 10 days prior to public or private sale is reasonable notice. By
exercising its rights, Secured Party will not become liable for, and Debtor will
not be released from, any of Debtor's duties or obligations under the contracts
and agreements included in the Collateral. Secured Party may purchase Collateral
at any public sale, and may credit the purchase price against the Obligations.
All remedies in this Agreement are cumulative of any and all other legal,
equitable or contractual remedies available to Secured Party. Debtor WAIVES any
rights to a marshalling of assets or sale in inverse order of alienation, and
any rights to notice except as provided in the UCC.
10. ADDITIONAL AGREEMENTS. (a) This Agreement will remain in effect until the
Secured Party executes and delivers to Debtor a written termination statement.
(b) No modification or waiver of the terms of this Agreement will be effective
unless in writing and signed by Secured Party. Secured Party may waive any
default without waiving any other prior or subsequent default. Secured Party's
failure to exercise or delay in exercising any right under this Agreement will
not operate as a waiver of such right. No single or partial exercise of any
right under this Agreement will preclude any other or further exercise of that
right or any other right. (c) Any notice required or permitted under this
Agreement will be given in writing by United States mail, by hand delivery or
delivery service, or by telegraphic, telex, telecopy or cable communication,
sent to the intended addressee at the address shown in this Agreement, or to
such different address as the addressee designates by 10 days notice. Notice by
United States mail will be effective when mailed. All other notices will be
effective when received. Written confirmation of receipt will be conclusive. (d)
If any provision of this Agreement is unenforceable or invalid, that provision
will not affect the enforceability or validity of any other provision. If the
application of any provision of this Agreement to any person or circumstance is
illegal or unenforceable, that application will not affect the legality or
enforceability of the provision as to any other person or circumstance. (e) The
section headings in this Agreement are for convenience only and shall not be
considered in construing this Agreement. (f) This Agreement may be executed in
any number of counterparts and by different parties in separate counterparts,
each of which will constitute one and the same agreement. (g) This Agreement
benefits the Secured Party and its successors and assigns and is binding on
Debtor and its heirs, legal representatives, successors and assigns. (h) If any
of the Obligations are subject to Chapter 3, 4, 5 or 15 of the Texas Credit Code
or Regulation AA of the Board of Governors of the Federal Reserve System
(collectively, the "Consumer Restrictions"), (1) nothing in this Agreement
waives any rights which cannot be legally waived under the Consumer
Restrictions, and (2) the Collateral does not include any assignment of wages or
any non-possessory, non-purchase money security interest in household goods. (i)
This Agreement is governed by the laws of the State of Texas. (j) Secured Party
is executing this Agreement for the purpose of acknowledging the following
notice, and Secured Party's failure to execute this Agreement will not
invalidate this Agreement.
This written loan agreement represents final agreement between the parties and
may not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties.
Executed to be effective as of September 18, 1996
DEBTOR: PERVASIVE SOFTWARE INC.
By:
---------------------------------------------------------------
Typed Name:
-------------------------------------------------------
Title:
------------------------------------------------------------
SECURED PARTY: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:
---------------------------------------------------------------
Typed Name:
-------------------------------------------------------
Title:
------------------------------------------------------------
SECURITY AGREEMENT -- ACCOUNTS AND GENERAL INTANGIBLES
(this "Agreement")
PERVASIVE SOFTWARE INC., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Debtor"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION ("Secured Party"), agree as follows:
1 .DEFINITIONS. (a) "Collateral" means all Accounts and all Proceeds,
together with all books and records of Debtor, whether in paper or electronic
form, relating to the Collateral. "Accounts" means all accounts, general
intangibles, instruments, negotiable documents, chattel paper, and deposit
accounts. (b) "Obligations" means all debts, obligations and liabilities of
every kind and character, whether joint or several, contingent or otherwise, of
Debtor now or hereafter existing in favor of Secured Party, including without
limitation all liabilities arising under or from any note, open account,
overdraft, letter of credit, endorsement, surety agreement, guaranty, interest
rate swap, or other derivative produce, acceptance, foreign exchange contract or
depository service contract, whether payable to Secured Party or to a third
party and subsequently acquired by Secured Party. Debtor and Secured Party
specifically contemplate that Debtor may hereafter become further indebted to
Secured Party. (c) "Past Due Rate" means the highest nonusurious rate of
interest that Secured Party may contract for, charge or receive under applicable
law, or 18% if applicable law does not specify such a rate. (d) "Proceeds"
means the rights and interests of Debtor in goods, the sale and delivery of
which give rise to any Account, including all returned or repossessed goods, and
all products and proceeds, in cash or otherwise, of all Collateral. (e)
"Security Interest" means the security interests created by this Agreement. (f)
"UCC" means the Texas Uniform Commercial Code, as amended from time to time.
All terms defined in the UCC are used in this Agreement as defined in the UCC
unless otherwise defined in this Agreement.
2 .CREATION OF SECURITY INTEREST. To secure the payment and performance of
the Obligations, Debtor grants to Secured Party a security interest in and
assigns to Secured Party all Collateral which Debtor owns or later acquires.
3 .DEBTOR'S REPRESENTATIONS AND WARRANTIES. (a) Debtor is the sole lawful
owner of the Collateral, free and clear of all encumbrances, and has the right
and power to transfer the Collateral to Secured Party. No financing statement
covering the Collateral, other than in favor of Secured Party, is on file in any
public office. (b) This Agreement constitutes the legal, valid and binding
obligation of Debtor, enforceable in accordance with its terms. (c) The
Collateral and the Debtor's use thereof comply with all applicable laws, rules
and regulations, and Debtor has obtained any consents necessary to execute,
deliver and perform its obligations under this Agreement. (d) The address set
forth above is Debtor's place of business, if Debtor has only one place of
business, Debtor's chief executive office, if Debtor has more than one place of
business, or Debtor's residence, if Debtor has no place of business.
4 .DEBTOR'S AGREEMENTS. (a) Debtor will warrant and defend its title to and
Secured Party's interest in the Collateral against any adverse claimant. Debtor
will promptly take all reasonable and appropriate steps to collect the
Collateral. Debtor will not agree to a material modification of the terms of
any Account without the written consent of Secured Party, other than in
connection with the Debtor's standard sales programs as existing on the date of
this Agreement, if in any such case such amendment, modification or waiver would
be reasonably likely to impair the collectability of any receivable or
materially adversely affect the rights of Bank with respect thereto or
hereunder. (b) Notwithstanding the security interest in Proceeds granted
herein, Debtor will not sell, transfer, assign or otherwise dispose of any
interest in the Collateral, except as authorized in this Agreement or in writing
by Secured Party, and Debtor will keep the Collateral (including Proceeds) free
from unpaid charges, including taxes and assessments, and from all encumbrances
other than those in favor of Secured Party. (c) Secured Party may require that
Debtor (i) deposit all payments on the Accounts in a special bank account over
which Secured Party alone has power of withdrawal, and (ii) direct each account
debtor to send remittances to an address designated by Secured Party. Secured
Party may hold the funds in the account as security, or apply the funds to pay
the Obligations. (d) Debtor will furnish Secured Party all information Secured
Party may request with respect to the Collateral. Debtor will notify Secured
Party promptly of any event that could have a material adverse effect on the
aggregate value of the Collateral or on the Security Interest, or any change in
Debtor's location, name, identity or organizational structure. (e) Debtor will
keep accurate books and records regarding the Collateral and will allow Secured
Party to inspect and make copies (including electronic copies) of its books and
records as provided in Credit Agreement executed by Debtor and Secured Party of
even date herewith. Secured Party may make test verifications of the
Collateral.
5 .FURTHER ASSURANCES. Secured Party may file this Agreement or any financing
statements wherever Secured Party believes necessary to perfect the Security
Interest. A photographic or other reproduction of this Agreement or any
financing statement relating to this Agreement will be sufficient as a financing
statement. Debtor authorizes Secured Party and irrevocably appoints Secured
Party as Debtor's attorney-in-fact to file any financing statement (including
any amendments) relating to this Agreement electronically, and Secured Party's
transmission of Debtor's name as part of any filing relating to this Agreement
will constitute Debtor's signature on the financing statement.Debtor will take
such action as Secured Party may at any time require to protect, assure or
enforce the Security Interest. Debtor will promptly deliver to Secured Party any
part of the Collateral that constitutes instruments, and will make a designation
on all of its chattel paper, instruments and negotiable documents to reflect the
Security Interest.
6 .COSTS AND EXPENSES. Secured Party shall have the rights of reimbursement
for all costs, expenses and the like with respect to this Agreement which are
provided for in the Credit Agreement executed by Debtor and Secured Party of
even date herewith. If any part of the Obligations is governed by Chapter 3, 4,
5 or 15 of the Texas Credit Code, this Section is limited to the extent required
by those chapters.
7 .DEFAULT. "Event of Default" shall have the same meaning as in the Credit
Agreement executed by Debtor and Secured Party of even date herewith. After an
Event of Default occurs, Secured Party may, without notice to any person,
declare the Obligations to be immediately due and payable. Debtor WAIVES
demand, presentment and all notices, including without limitation notice of
dishonor and default, notice of intent to accelerate and notice of acceleration.
8 .SECURED PARTY'S RIGHTS AND REMEDIES. After an Event of Default occurs,
Secured Party will have all rights and remedies of a secured party after default
under the UCC and other applicable law. Secured Party may, without waiving any
default, do anything Debtor is required to do by this Agreement and fails to do.
Secured Party may require Debtor to assemble the Collateral and make it
available at a reasonably convenient place Secured Party designates. Except for
the safe custody of any Collateral in its possession and accounting for moneys
actually received by it, Secured Party will have no duty as to any Collateral,
including any duty to preserve rights against prior parties. Debtor irrevocably
appoints Secured Party Debtor's attorney-in-fact to endorse any checks or other
instruments included in the Collateral, or to take any other action to enforce,
collect or compromise the Collateral. Secured Party is not required to take
possession of any Collateral prior to any sale, nor to have any Collateral
present at any sale. Secured Party may
sell part of the Collateral without waiving its right to proceed against the
remaining Collateral. If any sale is not completed or is defective in the
opinion of Secured Party, Secured Party may make a subsequent sale of the same
Collateral. Any ▇▇▇▇ of sale or other instrument evidencing any foreclosure sale
will be prima facie evidence of factual matters stated or recited therein. If a
sale of Collateral is conducted in conformity with customary practices of banks
disposing of similar property, the sale will be deemed commercially reasonable,
but Secured Party will have no obligation to advertise or to sell Collateral on
credit. Written notice to Debtor mailed 10 days prior to public or private sale
is reasonable notice. By exercising its rights, Secured Party will not become
liable for, and Debtor will not be released from, any of Debtor's duties or
obligations under the contracts and agreements included in the Collateral.
Secured Party may purchase Collateral at any public sale, and may credit the
purchase price against the Obligations. All remedies in this Agreement are
cumulative of any and all other legal, equitable or contractual remedies
available to Secured Party. Debtor WAIVES any rights to a marshalling of assets
or sale in inverse order of alienation, and any rights to notice except as
provided in the UCC.
9 .ADDITIONAL AGREEMENTS. (a) This Agreement will remain in effect until the
Secured Party executes and delivers to Debtor a written termination statement.
(b) No modification or waiver of the terms of this Agreement will be effective
unless in writing and signed by Secured Party. Secured Party may waive any
default without waiving any other prior or subsequent default. Secured Party's
failure to exercise or delay in exercising any right under this Agreement will
not operate as a waiver of such right. No single or partial exercise of any
right under this Agreement will preclude any other or further exercise of that
right or any other right. (c) Any notice required or permitted under this
Agreement will be given in writing by United States mail, by hand delivery or
delivery service, or by telegraphic, telex, telecopy or cable communication,
sent to the intended addressee at the address shown in this Agreement, or to
such different address as the addressee designates by 10 days notice. Notice by
United States mail will be effective when mailed. All other notices will be
effective when received. Written confirmation of receipt will be conclusive. (d)
If any provision of this Agreement is unenforceable or invalid, that provision
will not affect the enforceability or validity of any other provision. If the
application of any provision of this Agreement to any person or circumstance is
illegal or unenforceable, that application will not affect the legality or
enforceability of the provision as to any other person or circumstance. (e) If
more than one person executes this Agreement as Debtor, their obligations under
this Agreement are joint and several, and the term Collateral includes any
property described in Section 1 that is owned by any Debtor individually or
jointly with any other Debtor and the term "Obligations" includes both several
and joint obligations of each Debtor. (f) The section headings in this Agreement
are for convenience only and shall not be considered in construing this
Agreement. (g) This Agreement may be executed in any number of counterparts and
by different parties in separate counterparts, each of which will constitute one
and the same agreement. (h) This Agreement benefits the Secured Party and its
successors and assigns and is binding on Debtor and its heirs, legal
representatives, successors and assigns. (i) If any of the Obligations are
subject to Chapter 3, 4, 5 or 15 of the Texas Credit Code or Regulation AA of
the Board of Governors of the Federal Reserve System (collectively, the
"Consumer Restrictions"), (1) nothing in this Agreement waives any rights which
cannot be legally waived under the Consumer Restrictions, and (2) the Collateral
does not include any assignment of wages or any non-possessory, non-purchase
money security interest in household goods. (j) This Agreement is governed by
the laws of the State of Texas. (k) Secured Party is executing this Agreement
for the purpose of acknowledging the following notice, and Secured Party's
failure to execute this Agreement will not invalidate this Agreement.
This written loan agreement represents the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties. There are no unwritten oral agreements between
the parties.
Executed to be effective as of September 18, 1996
DEBTOR: PERVASIVE SOFTWARE INC.
By:
---------------------------------------------------------------
Typed Name:
-------------------------------------------------------
Title:
------------------------------------------------------------
SECURED PARTY: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:
---------------------------------------------------------------
Typed Name:
-------------------------------------------------------
Title:
------------------------------------------------------------
AMENDMENT AND RESTATEMENT OF
REVOLVING CREDIT NOTE
(this "Note")
----
FOR VALUE RECEIVED, ON OR BEFORE the Termination Date, PERVASIVE SOFTWARE
INC. ("Borrower," jointly and severally if more than one), promises to pay to
the order of Texas Commerce Bank National Association ("Bank") at its office at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other location
as Bank may designate, in immediately available funds and lawful money of the
United States of America, the sum of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
DOLLARS (U.S. $2,000,000.00) or the aggregate unpaid amount of all advances
hereunder, whichever is lesser, plus interest on the unpaid principal balance
outstanding from time to time at a rate per annum equal to the lesser of (i) the
Prime Rate (as hereinafter defined) from time to time in effect plus zero
percent (0%), (the "Stated Rate") or (ii) the Highest Lawful Rate. If the Stated
Rate at any time exceeds the Highest Lawful Rate, the actual rate of interest to
accrue on the unpaid principal amount of this Note will be limited to the
Highest Lawful Rate, but any subsequent reductions in the Stated Rate due to
reductions in the Prime Rate will not reduce the interest rate payable upon the
unpaid principal amount of this Note below the Highest Lawful Rate until the
total amount of interest accrued on this Note equals the amount of interest
which would have accrued if the Stated Rate had at all times been in effect.
"Prime Rate" means the rate of interest per annum publicly announced from time
to time by Chase Manhattan Bank as its prime rate in effect at its principal
office in New York City. Without notice to Borrower or any other Person, the
Prime Rate shall change automatically from time to time as and in the amount by
which said prime rate shall fluctuate with each such change to be effective as
of the date of each change in such prime rate. THE PRIME RATE IS A REFERENCE
RATE AND DOES NOT NECESSARILY REPRESENT THE LOWEST OR BEST RATE. BANK AND CHASE
MANHATTAN MAY MAKE LOANS AT RATES OF INTEREST AT, ABOVE OR BELOW THE PRIME
RATE..
This Note is the Revolving Credit Note described in Section 1.1 of the
Credit Agreement (Borrowing Base) between Borrower and Bank dated as of March
31, 1997 (as amended, restated and supplemented from time to time, the
"Agreement") and sometimes referred to therein as the Note. Capitalized terms
used in this Note have the meanings used in the Agreement.
Accrued and unpaid interest shall be due and payable monthly, beginning on
April 30, 1997, and continuing on the last day of each calendar month thereafter
and at Termination Date when all unpaid principal and accrued and unpaid
interest shall be finally due and payable. Borrower must make the payments
required by Sections 1.3 and 1.4 of the Agreement.
Interest shall be computed on the basis of the actual number of days
elapsed and a year comprised of 360 days, unless such calculation would result
in a usurious interest rate, in which case interest will be calculated on the
basis of a 365 or 366 day year, as applicable.
All past-due principal and, to the extent permitted by applicable law,
interest on this Note, shall, at Bank's option, bear interest at the Highest
Lawful Rate, or if applicable law shall not provide for a maximum nonusurious
rate of interest, at a rate per annum equal to eighteen percent (18%).
The unpaid principal balance of this Note at any time shall be the total
amounts advanced by Bank, less the amount of all payments of principal. Absent
manifest error, the records of Bank shall be conclusive as to amounts owed.
Subject to the terms and conditions of the Agreement, Borrower may use all or
any part of the credit provided for herein at any time before the Termination
Date.
Time is of the essence. Borrower may at any time pay the full amount or any
part of this Note without the payment of any premium or fee. At Bank's sole
option, all payments may be applied to accrued interest, to principal, or to
both.
If any Event of Default occurs, then Bank may exercise any and all rights
and remedies under the Loan Documents, at law, in equity or otherwise.
Each and all Obligors severally waive notice, demand, presentment for
payment, notice of nonpayment, notice of intent to accelerate, notice of
acceleration, protest, notice of protest, and the filing of suit and diligence
in collecting this Note and all other demands and notices, and consent and agree
that their liabilities and obligations shall not be released or discharged by
any or all of the following, whether with or without notice to them or any of
them, and whether before or after the stated maturity hereof: (i) extensions of
the time of payment; (ii) renewals; (iii) acceptances of partial payments; (iv)
releases or substitutions of any collateral or any Obligor; and (v) failure, if
any, to perfect or maintain perfection of any security interest in any
collateral. Each Obligor agrees that acceptance of any partial payment shall not
constitute a waiver.
Bank and any subsequent owner or holder hereof reserves the right, in its
sole discretion, without notice to Borrower, to sell participations or assign
its interest or both, in all or any part of this Note. For purposes of this
Note, any assignee or subsequent holder of this Note will be considered the
"Bank," and each successor to Borrower will be considered the "Borrower."
IN WITNESS WHEREOF, Borrower has executed this Note effective as of the
Effective Date.
BORROWER: PERVASIVE SOFTWARE INC.
By:
---------------------------------------------------------------
Typed Name:
-------------------------------------------------------
Title:
------------------------------------------------------------
BANK: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:
---------------------------------------------------------------
Typed Name:
-------------------------------------------------------
Title:
------------------------------------------------------------
SECURITY AGREEMENT -- EQUIPMENT AND FIXTURES
(this "Agreement")
PERVASIVE SOFTWARE INC., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Debtor"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION ("Secured Party"), agree as follows:
1 .DEFINITIONS. (a) "Collateral" means all Equipment and all Proceeds
located in the United States, together with all books and records of Debtor,
whether in paper or electronic form, relating to the Collateral. "Equipment"
means all equipment, furniture, furnishings and fixtures. If, but only if, this
box " is checked by Secured Party, the Equipment is limited to Equipment
described following the signature lines of this Agreement. Whether or not the
preceding box is checked, Equipment includes all accessions and appurtenances
to, renewals or replacements of or substitutions for all Equipment, and all
documents or certificates of title relating to all Equipment. (b)
"Obligations" means all debts, obligations and liabilities of every kind and
character of Debtor, whether joint or several, contingent or otherwise, now or
hereafter existing in favor of Secured Party, including without limitation all
liabilities arising under or from any note, open account, overdraft, letter of
credit, endorsement, surety agreement, guaranty, interest rate swap or other
derivative product, acceptance, foreign exchange contract or depository service
contract, whether payable to Secured Party or to a third party and subsequently
acquired by Secured Party. Debtor and Secured Party specifically contemplate
that Debtor may hereafter become further indebted to Secured Party. (c) "Past
Due Rate" means the highest nonusurious rate of interest that Secured Party may
contract for, charge or receive under applicable law, or 18% if applicable law
does not specify such a rate. (d) "Proceeds" means all products and proceeds,
in cash or otherwise, of all Collateral. (e) "Security Interest" means the
security interests created by this Agreement. (f) "UCC" means the Texas
Uniform Commercial Code, as amended from time to time. All terms defined in the
UCC are used in this Agreement as defined in the UCC unless otherwise defined in
this Agreement.
2 .CREATION OF SECURITY INTEREST. To secure the payment and performance of
the Obligations, Debtor grants to Secured Party a security interest in and
assigns to Secured Party all Collateral which Debtor owns or later acquires.
3 .DEBTOR'S REPRESENTATIONS AND WARRANTIES. (a) Debtor is the sole lawful
owner of the Collateral, free and clear of all encumbrances, and has the right
and power to transfer the Collateral to Secured Party. No financing statement
covering the Collateral, other than in favor of Secured Party, is on file in any
public office. (b) This Agreement constitutes the legal, valid and binding
obligation of Debtor, enforceable in accordance with its terms. (c) The
Collateral and the Debtor's use thereof comply with all applicable laws, rules
and regulations, and Debtor has obtained any consents necessary to execute,
deliver and perform its obligations under this Agreement. (d) The address set
forth above is Debtor's place of business, if Debtor has only one place of
business, Debtor's chief executive office, if Debtor has more than one place of
business, or Debtor's residence, if Debtor has no place of business. (e) The
Collateral is free from damage caused by fire or other casualty. (f) Except as
disclosed on attached schedules or unless the box in Section 1 is checked, no
Collateral is covered by a certificate of title or subject to a certificate of
title law, or subject to registration with the Federal Aviation Administration,
Coast Guard or Interstate Commerce Commission.
4 .DEBTOR'S AGREEMENTS. (a) Debtor will warrant and defend its title to and
Secured Party's interest in the Collateral against any adverse claimant. (b)
Notwithstanding the security interest in Proceeds granted herein, Debtor will
not sell, transfer, assign or otherwise dispose of any interest in the
Collateral, except as authorized in this Agreement or in writing by Secured
Party, and Debtor will keep the Collateral (including Proceeds) free from unpaid
charges, including taxes and assessments, and from all encumbrances other than
those in favor of Secured Party. (c) Debtor will furnish Secured Party all
information Secured Party may request with respect to the Collateral. Debtor
will notify Secured Party promptly of any event that could have a material
adverse effect on the aggregate value of the Collateral or on the Security
Interest, or any change in Debtor's location, name, identity or organizational
structure. (d) Debtor will keep accurate books and records regarding the
Collateral and will allow Secured Party to inspect and make copies (including
electronic copies) of its books and records during regular business hours.
Secured Party may make test verifications of the Collateral.
5 .DEBTOR'S USE OF COLLATERAL; INSURANCE. (a) Debtor will keep the
Equipment at the address set forth above or other locations of which Debtor
notifies Secured Party in writing from time to time, except for temporary
removal in connection with ordinary use. (b) Debtor will properly maintain the
Equipment and will comply with all applicable laws, rules and regulations in the
use, sale and production of the Equipment. Debtor will replace obsolete or worn-
out Equipment with comparable new Equipment, and may sell obsolete or worn-out
Equipment which has been replaced with comparable new Equipment. (c) DEBTOR WILL
MAINTAIN INSURANCE ON THE COLLATERAL against all customary risks for goods of
the same type and use, including without limitation fire and theft, and any
other risks designated by Secured Party. DEBTOR MAY FURNISH INSURANCE THROUGH
EXISTING POLICIES DEBTOR OWNS OR CONTROLS OR THROUGH NEW POLICIES ISSUED BY ANY
COMPANY AUTHORIZED TO TRANSACT BUSINESS IN TEXAS. Secured Party will be named on
a customary loss payee endorsement to all such insurance, providing for payment
to Secured Party and Debtor (and no other person) as their interests appear, and
providing for at least 30 days written notice to Secured Party before
cancellation. Secured Party is irrevocably appointed attorney-in-fact for Debtor
to obtain, adjust, settle and cancel such insurance. Secured Party may apply all
proceeds of insurance to repayment of the Obligations, whether Debtor is in
default or not.
6 .FIXTURES AND APPURTENANCES. If any part of the Collateral is or will be
affixed to real estate or other goods, a description of the real estate or other
goods and the record owner of the real estate or other goods is listed below:
N/A
None of the real estate is subject to a construction mortgage. Debtor will
furnish Secured Party on demand one or more instruments signed by all persons
having an interest in the real estate or other goods, subordinating any interest
in any Collateral to Secured Party's interest.
7 .FURTHER ASSURANCES. Secured Party may file this Agreement or any
financing statements wherever Secured Party believes necessary to perfect the
Security Interest. A photographic or other reproduction of this Agreement or any
financing statement relating to this Agreement will be sufficient as a financing
statement. Debtor authorizes Secured Party and irrevocably appoints Secured
Party as Debtor's attorney-in-fact to file any financing statement (including
any amendments) relating to this Agreement electronically, and Secured Party's
transmission of Debtor's name as part of any filing relating to this Agreement
will constitute Debtor's signature on the financing statement. Debtor will take
such action as Secured Party may at any time require to protect, assure or
enforce the Security Interest. Debtor will promptly deliver to Secured Party any
part of the Collateral that constitutes instruments, and will make a designation
on all of its chattel paper, instruments and negotiable documents to
reflect the Security Interest.
8 .COSTS AND EXPENSES. Debtor will pay, or reimburse Secured Party for, all
costs and expenses of every character incurred from time to time in connection
with this Agreement (including all modifications and renewals) and the
Obligations, including costs and expenses incurred (a) for mortgage or recording
taxes, (b) to satisfy any obligation of Debtor under this Agreement or to
protect the Collateral, (c) in connection with the evaluation, monitoring or
administration of the Obligations or the Collateral (whether or not an Event of
Default has occurred), and (d) in connection with the exercise of Secured
Party's rights and remedies. Costs and expenses include reasonable fees and
expenses of outside counsel and other outside professionals and charges imposed
for the services of attorneys and other professionals employed by Secured Party
or its affiliates. Any amount owing under this Section will be due and payable
on demand and will bear interest from the date of expenditure by Secured Party
until paid at the Past Due Rate. If any part of the Obligations is governed by
Chapter 3, 4, 5 or 15 of the Texas Credit Code, this Section is limited to the
extent required by those chapters.
9 .DEFAULT. Each of the following events or conditions is an "Event of
Default:" (a) Debtor fails to pay when due (or within any contractually agreed
grace period) any of the Obligations; (b) any event occurs that gives Secured
Party the immediate right to declare any of the Obligations due and payable in
full prior to final maturity; (c) any warranty, representation or statement
contained in this Agreement or made in connection with this Agreement or any of
the Obligations was false or misleading in any respect when made; (d) Debtor
violates any covenant, condition or agreement contained in this Agreement or any
other document relating to the Obligations; (e) any Collateral is lost, stolen,
substantially damaged, destroyed, abandoned, levied upon, seized or attached; or
(f) Debtor conceals or removes any part of the Collateral with intent to hinder,
delay or defraud the Secured Party. After an Event of Default occurs, Secured
Party may, without notice to any person, declare the Obligations to be
immediately due and payable. Debtor WAIVES demand, presentment and all notices,
including without limitation notice of dishonor and default, notice of intent to
accelerate and notice of acceleration.
10 .SECURED PARTY'S RIGHTS AND REMEDIES. After an Event of Default occurs,
Secured Party will have all rights and remedies of a secured party after default
under the UCC and other applicable law. Secured Party may, without waiving any
default, do anything Debtor is required to do by this Agreement and fails to do.
Secured Party may require Debtor to assemble the Collateral and make it
available at a reasonably convenient place Secured Party designates. Except for
the safe custody of any Collateral in its possession and accounting for moneys
actually received by it, Secured Party will have no duty as to any Collateral,
including any duty to preserve rights against prior parties. Debtor irrevocably
appoints Secured Party Debtor's attorney-in-fact to endorse any checks or other
instruments included in the Collateral, or to take any other action to enforce,
collect or compromise the Collateral. Secured Party is not required to take
possession of any Collateral prior to any sale, nor to have any Collateral
present at any sale. Secured Party may sell part of the Collateral without
waiving its right to proceed against the remaining Collateral. If any sale is
not completed or is defective in the opinion of Secured Party, Secured Party may
make a subsequent sale of the same Collateral. Any ▇▇▇▇ of sale or other
instrument evidencing any foreclosure sale will be prima facie evidence of
factual matters stated or recited therein. If a sale of Collateral is conducted
in conformity with customary practices of banks disposing of similar property,
the sale will be deemed commercially reasonable, but Secured Party will have no
obligation to advertise or to sell Collateral on credit. Written notice to
Debtor mailed 10 days prior to public or private sale is reasonable notice. By
exercising its rights, Secured Party will not become liable for, and Debtor will
not be released from, any of Debtor's duties or obligations under the contracts
and agreements included in the Collateral. Secured Party may purchase
Collateral at any public sale, and may credit the purchase price against the
Obligations. All remedies in this Agreement are cumulative of any and all other
legal, equitable or contractual remedies available to Secured Party. Debtor
WAIVES any rights to a marshaling of assets or sale in inverse order of
alienation, and any rights to notice except as provided in the UCC.
11 .ADDITIONAL AGREEMENTS. (a) This Agreement will remain in effect until
the Secured Party executes and delivers to Debtor a written termination
statement. (b) No modification or waiver of the terms of this Agreement will
be effective unless in writing and signed by Secured Party. Secured Party may
waive any default without waiving any other prior or subsequent default.
Secured Party's failure to exercise or delay in exercising any right under this
Agreement will not operate as a waiver of such right. No single or partial
exercise of any right under this Agreement will preclude any other or further
exercise of that right or any other right. (c) Any notice required or
permitted under this Agreement will be given in writing by United States mail,
by hand delivery or delivery service, or by telegraphic, telex, telecopy or
cable communication, sent to the intended addressee at the address shown in this
Agreement, or to such different address as the addressee designates by 10 days
notice. Notice by United States mail will be effective when mailed. All other
notices will be effective when received. Written confirmation of receipt will
be conclusive. (d) If any provision of this Agreement is unenforceable or
invalid, that provision will not affect the enforceability or validity of any
other provision. If the application of any provision of this Agreement to any
person or circumstance is illegal or unenforceable, that application will not
affect the legality or enforceability of the provision as to any other person or
circumstance. (e) If more than one person executes this Agreement as Debtor,
their obligations under this Agreement are joint and several, and the term
Collateral includes any property described in Section 1 that is owned by any
Debtor individually or jointly with any other Debtor and the term "Obligations"
includes both several and joint obligations of each Debtor. (f) The section
headings in this Agreement are for convenience only and shall not be considered
in construing this Agreement. (g) This Agreement may be executed in any number
of counterparts and by different parties in separate counterparts, each of which
will constitute one and the same agreement. (h) This Agreement benefits the
Secured Party and its successors and assigns and is binding on Debtor and its
heirs, legal representatives, successors and assigns. (i) If any of the
Obligations are subject to Chapter 3, 4, 5 or 15 of the Texas Credit Code or
Regulation AA of the Board of Governors of the Federal Reserve System
(collectively, the "Consumer Restrictions"), (1) nothing in this Agreement
waives any rights which cannot be legally waived under the Consumer
Restrictions, and (2) the Collateral does not include any assignment of wages or
any non-possessory, non-purchase money security interest in household goods.
(j) This Agreement is governed by the laws of the State of Texas. (k) Secured
Party is executing this Agreement for the purpose of acknowledging the following
notice, and Secured Party's failure to execute this Agreement will not
invalidate this Agreement.
This written loan agreement represents the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties. There are no unwritten oral agreements between
the parties.
Executed to be effective as of March 31, 1997.
DEBTOR: PERVASIVE SOFTWARE INC.
By: Date:
------------------------------------------------- -----------
Name:
-----------------------------------------------
Title:
----------------------------------------------
SECURED PARTY: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: Date:
------------------------------------------------- -----------
Name:
-----------------------------------------------
Title:
----------------------------------------------
ADVANCING PROMISSORY NOTE
CONVERTING TO A TERM NOTE
(this "Note")
================================================================================
U.S. $2,000,000.00 March 31, 1997 (the "DATE")
--------------------------------------------------------------------------------
ACCOUNT NUMBER: NOTE NUMBER: RENEWAL CODE: TELLER: OFFICER:
------------ -------- ------- -------- --------
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇ BEFORE December 31, 1999 ("Stated Maturity Date"), FOR VALUE
--------------------
RECEIVED, PERVASIVE SOFTWARE INC. (the "Borrower", jointly and severally if more
--------
than one), promises to pay to the order of TEXAS COMMERCE BANK NATIONAL
ASSOCIATION ("Bank") at its banking house at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
----
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or at such other location as Bank may designate, in lawful
money of the United States of America, the sum of TWO MILLION AND NO/100THS
UNITED STATES DOLLARS (U.S. $2,000,000.00) (the "Maximum Amount of Note") or the
----------------------
aggregate unpaid amount of all advances hereunder, whichever is the less.
Borrower will also pay interest on the unpaid principal balance outstanding from
time to time at a rate per annum equal to a fluctuating rate of interest equal
to the sum of the Prime Rate (as hereinafter defined) from time to time in
effect plus zero percent (0%) (the "Stated Rate"); provided, however, in no
-----------
event shall interest hereon ever be charged, paid, collected or received at a
rate in excess of the maximum nonusurious rate of interest from time to time
allowed by applicable federal or Texas law, whichever shall permit the higher
lawful rate (the "Highest Lawful Rate"). If the Stated Rate at any time exceeds
-------------------
the Highest Lawful Rate, the actual rate of interest to accrue on the unpaid
principal amount of this Note will be limited to the Highest Lawful Rate, but
any subsequent reductions in the Stated Rate due to reductions in the Prime Rate
will not reduce the interest rate payable upon the unpaid principal amount of
this Note below the Highest Lawful Rate until the total amount of interest
accrued on this Note equals the amount of interest which would have accrued if
the Stated Rate had at all times been in effect.
"Prime Rate" means the rate determined from time to time by Chase Manhattan
----------
Bank as its prime rate. The Prime Rate will change automatically from time to
time without notice to Borrower or any other person. THE PRIME RATE IS A
REFERENCE RATE AND MAY NOT BE BANK'S LOWEST RATE.
If Texas law determines the Highest Lawful Rate, Bank has elected the
"indicated" (weekly) ceiling as defined in the Texas Credit Code (Texas Revised
---------
Civil Statutes Article 5069-1.04) or any successor statute. Bank may from time
to time, as to current and future balances, elect and implement any other
ceiling under such Code and/or revise the index, formula or provisions of law
used to compute the rate on this open-end account by notice to Borrower, if and
to the extent permitted by, and in the manner provided in such Code.
Interest will be computed on the basis of the actual number of days elapsed
and a year comprised of: o 365 (or 366 as the case may be) days [x] 360 days,
unless such calculation would result in a usurious interest rate, in which case
such interest will be calculated on the basis of a 365 or 366 day year, as the
case may be.
All past-due principal and interest on this Note, shall, at Bank's option,
bear interest at the Highest Lawful Rate, or if applicable law does not provide
for a maximum nonusurious rate of interest, at a rate per annum equal to the
Prime Rate plus five percent (5%).
In addition to all principal and accrued interest on this Note, Borrower
agrees to pay: (a) all reasonable costs and expenses incurred by Bank and all
owners and holders of this Note in collecting this Note through probate,
reorganization, bankruptcy or any other proceeding; and (b) reasonable
attorney's fees if and when this Note is placed in the hands of an attorney for
collection.
Borrower and Bank intend to conform strictly to applicable usury laws.
Therefore, the total amount of interest (as defined under applicable law)
contracted for, charged or collected under this Note will never exceed the
Highest Lawful Rate. If Bank contracts for, charges or receives any excess
interest, it will be deemed a mistake. Bank will automatically reform the
contract or charge to conform to applicable law, and if excess interest has been
received, Bank will either refund the excess to Borrower or credit the excess on
the unpaid principal amount of this Note. All amounts constituting interest
will be spread throughout the full term of this Note in determining whether
interest exceeds lawful amounts.
The unpaid principal balance of this Note at any time shall be the total
amounts advanced by Bank, less the amount of all payments of principal. Absent
manifest error, the records of Bank shall be conclusive as to amounts owed.
Subject to the terms and conditions of this Note, and provided that no Event of
Default has occurred, Borrower may use all or any part of the credit provided
for herein at any time before December 31, 1997 (the "Advance Termination Date")
------------------------
and may borrow and repay but not reborrow hereunder prior to the Advance
Termination Date. There is no limitation on the number of advances made
hereunder so long as the total amount advanced prior to the Advance Termination
Date does not exceed the Maximum Amount of Note.
Each advance must be at least ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
DOLLARS (U.S.$50,000.00).
Accrued interest shall be due and payable monthly, beginning on May 31,
1997, and continuing on the last day of each month thereafter and at the
maturity when all unpaid principal and accrued and unpaid interest shall be
finally due and payable. The principal advanced and outstanding shall be due in
twenty-four (24) substantially equal monthly principal installments determined
by dividing the amount of principal outstanding on the Advance Termination Date
by twenty-four (24), each such payment to be due on the last day of each month
beginning on January 31, 1998 and continuing on the same day of each month
thereafter until the Stated Maturity Date. In addition to principal installments
due hereunder, accrued and unpaid interest is due on the same dates as and when
principal payments are due. All remaining unpaid principal and accrued and
unpaid interest are finally due on the Stated Maturity Date. All payments and
prepayments hereon may, at the Bank's sole option, be applied to accrued
interest, to principal, or to both.
"Loan Document" means this Note, and any document or instrument evidencing,
-------------
securing, guaranteeing or given in connection with this Note. "Obligations"
-----------
means all principal, interest and other amounts which are or become owing under
this Note or any other Loan Document. "Obligor" means Borrower and any
-------
guarantor, surety, co-signer, general partner or other person who may now or
hereafter be obligated to pay all or any part of the Obligations. Where
appropriate, the masculine gender includes the feminine and the neuter and the
singular number includes the plural number.
Each of the following events or conditions is an "Event of Default:" (1)
-----------------
any Obligor fails to pay any of the Obligations when due; (2) any warranty,
representation or statement now or hereafter contained in or made in connection
with any Loan Document was false or misleading in any respect when made; (3) any
Obligor violates any covenant, condition or agreement contained in any Loan
Document; (4) any Obligor fails or refuses to submit financial information
requested by Bank or to permit Bank to inspect its books and records on request;
(5) any event of default occurs under any other Loan Document; (6) any
individual Obligor dies, or any Obligor that is an entity dissolves; (7) a
receiver, conservator or similar official is appointed for any Obligor or any
Obligor's assets; (8) any petition is filed by or against any Obligor under any
bankruptcy, insolvency or similar law; (9) any Obligor makes an assignment for
the benefit of creditors; (10) a final judgment is entered against any Obligor
and remains unsatisfied for 30 days after entry, or any property of any Obligor
is attached, garnished or otherwise made subject to legal process; (11) any
material adverse change occurs in the business, assets, affairs or financial
condition of any Obligor; and (12) Borrower is in default of any other
obligation to or any other agreement with Bank. If any Event of Default occurs,
then Bank may do any or all of the following: (i) cease making advances
hereunder; (ii) declare the Obligations to be immediately due and payable,
without notice of acceleration or of intention to accelerate, presentment and
demand or protest or notice of any kind, all of which are hereby expressly
waived; (iii) set off, in any order, against the Obligations any debt owing by
Bank to any
Borrower, including, but not limited to, any deposit account, which right is
hereby granted by Borrower to Bank; and (iv) exercise any and all other rights
under the Loan Documents, at law, in equity or otherwise.
No waiver of any default is a waiver of any other default. Bank's delay in
exercising any right or power under any Loan Document is not a waiver of such
right or power.
Each Obligor severally waives notice, demand, presentment for payment,
notice of nonpayment, notice of intent to accelerate, notice of acceleration,
protest, notice of protest, and the filing of suit and diligence in collecting
this Note and all other demands and notices, and consents and agrees that its
liabilities and obligations shall not be released or discharged by any or all of
the following, whether with or without notice to it or any other Obligor, and
whether before or after the stated maturity hereof: (i) extensions of the time
of payment; (ii) renewals; (iii) acceptances of partial payments; (iv) releases
or substitutions of any collateral or any Obligor; and (v) failure, if any, to
perfect or maintain perfection of any security interest in any collateral. Each
Obligor agrees that acceptance of any partial payment will not constitute a
waiver and that waiver of any default will not constitute waiver of any prior or
subsequent default.
Borrower represents and agrees that: all advances evidenced by this Note
are and shall be for business, commercial, investment or other similar purpose
and not primarily for personal, family, or household use as such terms are used
in Chapter One of the Texas Credit Code. Borrower represents and agrees that
each of the following statements is true unless the box preceding that statement
is checked and initialed by Borrower and Bank: (i) o __________ ____________ No
advances will be used primarily for agricultural purposes as such term is used
in the Texas Credit Code. (ii) o __________ ____________ No advances will be
used for the purpose of purchasing or carrying any margin stock as that term is
defined in Regulation U of the Board of Governors of the Federal Reserve System
(the "Board"). Notwithstanding anything contained herein or in any other Loan
-----
Document, if this is a consumer credit obligation (as defined or described in 12
C.F.R. 227, Regulation AA, promulgated by the Board), the security for this
credit obligation will not extend to any non-possessory security interest in
household goods (as defined in Regulation AA) other than a purchase money
security interest, and no waiver of any notice contained herein or therein will
extend to any waiver of notice prohibited by Regulation AA.
Chapter 15 of the Texas Credit Code shall not apply to this Note or to any
advance evidenced by this Note.
This Note is governed by Texas law. If any provision of this Note is
illegal or unenforceable, that illegality or unenforceability will not affect
the remaining provisions of this Note. THE BORROWER(S) AND THE BANK AGREE THAT
THE COUNTY IN WHICH BANK'S PRINCIPAL OFFICE IS LOCATED IN TEXAS IS PROPER VENUE
FOR ANY ACTION OR PROCEEDING BROUGHT BY THE BORROWER(S) OR BANK, WHETHER IN
CONTRACT, TORT, OR OTHERWISE. ANY ACTION OR PROCEEDING AGAINST BORROWER(S) MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT IN SUCH COUNTY TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW
BORROWER(S) HEREBY IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURTS, AND (B) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY
SUCH COURT IS AN INCONVENIENT FORUM. BORROWER(S) AGREES THAT SERVICE OF PROCESS
UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
AT ITS ADDRESS SPECIFIED ABOVE. BANK MAY SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW AND MAY BRING ANY ACTION OR PROCEEDING AGAINST BORROWER(S) OR
WITH RESPECT TO ANY OF ITS PROPERTY IN COURTS IN OTHER PROPER JURISDICTIONS OR
VENUES.
Bank and any subsequent owner or holder hereof reserves the right, in its
sole discretion, without notice to Borrower, to sell participations or assign
its interest or both, in all or any part of this Note. For purposes of this
Note, any assignee or subsequent holder of this Note will be considered the
"Bank," and any successor to Borrower will be considered the "Borrower."
Each Borrower and cosigner represents that if it is not a natural person,
it is duly organized and validly existing and in good standing under the laws of
the state of its incorporation or organization; has full power to own its
properties and to carry on its business as now conducted; is duly qualified to
do business and is in good standing in each jurisdiction in which the nature of
the business conducted by it makes such qualification desirable; and has not
commenced any dissolution proceedings. Each Borrower and cosigner that is
subject to the Texas Revised Partnership Act ("TRPA") agrees that Bank is not
----
required to comply with Section 3.05(d) of the TRPA and agrees that Bank may
proceed directly against one or more partners or their property without first
seeking satisfaction from partnership property. Each Borrower and cosigner
represents that if it conducts business under an assumed business or
professional name it has properly filed Assumed Name Certificate(s) in the
office(s) required by Chapter 36 of the Texas Business and Commerce Code. Each
of the persons signing below as Borrower or cosigner represents that he/she has
full requisite power and authority to execute and deliver this Note to Bank on
behalf of the party for whom he/she signs and to bind such party to the terms
and conditions of this Note and that this Note is enforceable against such
party.
NO COURSE OF DEALING BETWEEN BORROWER AND BANK, NO COURSE OF PERFORMANCE,
NO TRADE PRACTICES, AND NO EXTRINSIC EVIDENCE OF ANY NATURE MAY BE USED TO
CONTRADICT OR MODIFY ANY TERM OF THIS NOTE OR ANY OTHER LOAN DOCUMENT.
THIS NOTE AND THE OTHER WRITTEN LOAN DOCUMENTS CONSTITUTE A "LOAN
AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND COMMERCE
CODE AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the Borrower has executed this Note effective as of the
Date.
BORROWER: PERVASIVE SOFTWARE INC.
By: Date:
----------------------------------------------------- ----------
Name:
---------------------------------------------------
Title:
--------------------------------------------------
ADDRESS OF Borrower: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(The Bank's signature is provided as its acknowledgment of the above as the
final written agreement between the parties.)
BANK: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:
---------------------------
Typed Name:
---------------------------
Title:
---------------------------