EXHIBIT 10.16
FULL-RECOURSE PROMISSORY NOTE
$1,300,000 August 6, 1998
FOR VALUE RECEIVED, the undersigned Borrower promises to pay to the
order of FORTE SOFTWARE, INC, ("COMPANY"), at its office located at 1800
Harrison Street, Oakland CA 94612, the aggregate principal amount outstanding
hereunder (as specified from time to time on Exhibit A hereto), which principal
amount shall in no event exceed ONE MILLION THREE HUNDRED THOUSAND UNITED
STATES DOLLARS (U.S. $1,300,000), plus interest accrued on the unpaid
principal, upon the terms and conditions specified below.
Borrower may request the making of loans by Company pursuant to the
terms of this Note and in an aggregate principal amount not to exceed one
million three hundred thousand United States dollars ($1,300,000) by giving at
least 7 days written notice to the Company's Chief Financial Officer specifying
the business day on which Borrower requests Company to make the particular loan
("Funding Date") and the aggregate principal amount of the particular loan
("Loan Amount") to be made on such date. Each Funding Date and Loan Amount
shall be reflected on Exhibit A.
Borrower acknowledges and agrees that on August 6, 1998, Company loaned
Borrower an aggregate principal amount of TWO HUNDRED AND ONE THOUSAND AND
SEVEN UNITED STATES DOLLARS ($201,007).
Borrower further acknowledges and agrees that on August 14, 1998, Company
loaned Borrower an additional aggregate principal amount of FIVE HUNDRED AND
FIFTY THOUSAND UNITED STATES DOLLARS ($550,000).
1. TERM. The aggregate principal balance of this Note, together
with interest accrued and unpaid to date, shall be due and payable at the close
of business on August 6, 2000; provided, however, that Borrower shall have the
right to extend the payment due date until close of business on August 6, 2002,
upon written notice to Company on or before August 6, 2000.
2. RATE OF INTEREST. Interest shall accrue under the Note on any
unpaid principal balance at the rate of seven and one-half percent (7.5%) per
annum, compounded annually.
3. PREPAYMENT. Prepayment of principal and interest may be made at
any time without penalty.
4. EVENTS OF ACCELERATION. The entire unpaid principal sum and
unpaid interest under this Note shall become immediately due and payable upon:
(a) The date when the Borrower ceases to be employed by the
Company;
(b) The failure of the Borrower to pay when due the principal
balance and accrued interest on this Note and the continuation of such
default for more than thirty (30) days;
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(c) The insolvency of the Borrower, the commission of an act of
bankruptcy by the Borrower, the execution by the Borrower of a general
assignment for the benefit of creditors, or the filing by or against
the Borrower of a petition in bankruptcy or a petition for relief
under the provisions of the federal bankruptcy act or another state or
federal law for the relief of debtors and the continuation of such
petition without dismissal for a period of ninety (90) days or more;
(d) The occurrence of a material event of default under the
Stock Pledge Agreement(s) securing this Note or any obligation secured
thereby; or
(e) Borrower's failure to maintain the Required Security Value
in accordance with Section 5 below.
5. SECURITY. Payment of this Note shall be secured by Stock Pledge
Agreement(s) to be executed and delivered by the Borrower and covering shares of
the Company's Common Stock with a fair market value equal to at least one
million eight hundred and twenty thousand US dollars ($1,820,000) (the "Required
Security Value"). On the first day of each calendar quarter, Borrower shall
execute and deliver additional Stock Pledge Agreements as necessary to maintain
the Required Security Value based on the fair market value of the Company's
Common Stock as of such date. Notwithstanding the foregoing, the Borrower,
shall remain personally liable for payment of this Note, and assets of the
Borrower, in addition to the collateral under the Stock Pledge Agreement(s), may
be applied to the satisfaction of the Borrower's obligations hereunder.
6. COLLECTION. If action is instituted to collect this Note, the
Borrower promises to pay all reasonable costs and expenses (including reasonable
attorney's fees) incurred in connection with such action.
7. WAIVER. No previous waiver and no failure or delay by the
Company or the Borrower in acting with respect to the terms of this Note or the
Stock Pledge Agreement shall constitute a waiver of any breach, default or
failure of condition under this Note, the Stock Pledge Agreement or the
obligations secured thereby. A waiver of any term of this Note, the Stock
Pledge Agreement or of any of the obligations secured thereby must be made in
writing and signed by a duly authorized officer of the Company and shall be
limited to the express terms of such waiver.
The Borrower hereby expressly waives presentment and demand for payment at
such time as any payments are due under this Note.
8. CONFLICTING AGREEMENTS. In the event of any inconsistencies
between the terms of this Note and the terms of any other document related to
the loan evidenced by the Note, the terms of this Note shall prevail.
9. GOVERNING LAW. This Note shall be construed in accordance with
the laws of the State of California.
By: ____________________
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Martin J. Sprinzen
EXHIBIT A
Funding Date Loan Amount Aggregate Principal Amount Outstanding
- ------------ ----------- --------------------------------------
August 6, 1998 $201,007 $201,007
August 14, 1998 $550,000 $751,007
September 23, 1998 $344,000 $1,095,007
October 12, 1998 ($200,000) $895,007
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