Exhibit 10.44

 

PROMISSORY NOTE

 

$6,165,065.14

August 26, 2002
Los Angeles, California

 

FOR VALUE RECEIVED, the undersigned (hereinafter “Maker”), hereby promises to
pay to the order of SILICON VALLEY BANK, a California state bank (hereinafter
“Holder”), in such coin or currency of the United States which shall be legal
tender in payment of all debts and dues, public and private, at the time of
payment, the principal sum of $6,165,065.14 (which said principal sum represents
the Past Due Purchase Obligations of Maker to Holder as of the date hereof in
accordance with Schedule A to the Forbearance Agreement (as defined below)), or
such greater or lesser amount as may be outstanding hereunder from time to time
in accordance with the terms hereof, together with interest from and after the
date hereof on the unpaid principal balance outstanding as set forth herein.

 

Forbearance Agreement. This Promissory Note (this “Note”) is one of the
“Promissory Notes” referred to in, and is issued pursuant to, that certain
Forbearance Agreement (the “Forbearance Agreement”), dated as of the date
hereof, among Maker, the subsidiaries of Maker identified on the signature pages
thereof, Fleet Business Credit, LLC, a Delaware limited liability company, as
successor to Sanwa Business Credit Corporation (“Fleet”), Wells Fargo HSBC Trade
Bank, N.A., a national banking association (the “Trade Bank”), and Silicon
Valley Bank, a California state bank (“SVB”; together witb Fleet and the Trade
Bank, each, a “Purchaser”, collectively “Purchasers”), and Fleet, as agent for
the Purchasers (in such capacity, together with its successors in such capacity,
“Purchaser Agent”). All of the terms, covenants and conditions of the
Forbearance Agreement and the other Forbearance Documents are hereby made a part
of this Note and are deemed incorporated herein in full. Capitalized terms used
herein and not otherwise defined herein shall have the meanings set forth in the
Forbearance Agreement.

 

Senior Debt. The obligations of Maker hereunder (whether of principal, interest
or otherwise) shall constitute “Senior Debt” under the Indenture.

 

Payments of Principal and Interest. The principal amount and accrued interest of
this Note shall be due and payable on the dates and in the manner hereinafter
set forth:

 

(a)           Interest. Interest on the outstanding principal balance hereof
shall accrue at a per annum rate of 6.00%; provided, however, that upon the
occurrence and during the continuation of a New Event of Default, interest on
the outstanding principal balance hereof shall accrue at a per annum rate of
9.00%. Interest shall accrue monthly and shall be due and payable on the first
day of each calendar month, in arrears, until such time as the full principal
balance hereof, together with all other amounts owing hereunder, shall have been
paid in full. The foregoing to the contrary notwithstanding, upon the
commencement of the first, if any, Chapter 11 Proceeding filed by or against
maker, (a) during the period from the Filing Date thereof through

 

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the Moratorium End Date, interest shall accrue during the period from such
Filing Date through the Moratorium End Date (without compounding during such
period) and on the Moratorium End Date shall be added to the outstanding
principal balance hereof, (b) any interest accruing for any period prior to such
Filing Date and due and payable after such Filing Date shall be payable in
accordance with the immediately preceding sentence, and (c) after the Moratorium
End Date, interest shall accrue and be due and payable in accordance with the
immediately preceding sentence. Notwithstanding the date of this Note, in
addition to the interest otherwise payable hereunder, on the first due date of
interest hereunder, Maker shall pay interest on the outstanding Past Due
Purchase Obligations during the period from August 1, 2002 through and including
the date of this Note at the rate applicable to the principal amount hereof.
Without limiting Maker’s obligation to pay interest on the due date thereof,
subject to the interest moratorium provisions above, any interest not paid when
due shall be added to the outstanding principal balance hereof and thereafter
interest shall accrue on such amount in accordance with the terms hereof.

 

(b)           Principal. (i) The principal balance of this Note shall be
amortized over three years commencing on August 1, 2003 as set forth in the
below table:

 

Period

 

Annual Amortization (as a
percentage of the “Adjusted
Original Principal Balance” (as
hereinafter defined) of each
Promissory Note”

 

 

 

August 1, 2003 through July 31, 2004

 

20%

 

 

 

August 1, 2004 through July 31, 2005

 

30%

 

 

 

August 1, 2005 through July 31, 2006

 

30%

 

(ii)           Principal on this Note shall be payable in monthly installments
commencing on the first day of each period set forth above and continuing on the
first day of each calendar month during each such period until paid in full, in
an amount equal to (a) the “Adjusted Original Principal Balance” (as hereinafter
defined) of this Note (as of the date on which such payment is due), multiplied
by (b) a fraction, (i) the numerator of which is the “Annual Amortization” for
such period (as set forth in the table above), and (ii) the denominator of which
is 12. As used herein the “Adjusted Original Principal Balance” of this Note
shall mean the original principal amount hereof plus the aggregate amount that
is added to the original principal balance hereof after the date hereof as a
result of Holder or any other holder hereof exercising its rights under its
Purchase

 

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Documents to have any Peregrine Party repurchase any of Holder’s Purchased
Accounts, plus the amount of any accrued interest added to the principal balance
of such Promissory Note pursuant to section (a) above on the Moratorium End Date
minus the aggregate amount that is subtracted from the original principal
balance hereof after the date hereof as a result of any payments received by
Holder from the account debtor or other obligor on any Purchased Account the
repurchase price of which is evidenced hereby.

 

The entire remaining principal amount then outstanding, together with all
accrued and unpaid interest and any and all other amounts due hereunder, shall
be due and payable in full on July 31, 2006.

 

Prepayments. This Note may be prepaid in full or in part without penalty or
premium. This Note is subject to mandatory prepayment in accordance with the
terms of the Forbearance Agreement.  Any prepayment of less than the outstanding
amount of principal, accrued interest, and other amounts payable hereunder,
shall be applied first to accrued interest, then to the outstanding principal
balance, and then to the other amounts payable hereunder.

 

Past Due Purchase Obligations. If any Past Due Purchase Obligations owing to
Holder arise after the date hereof, then such Past Due Purchase Obligations may
be added to the outstanding principal balance hereof in accordance with the
terms of the Forbearance Agreement.

 

Holder’s Books and Records. Holder is authorized, at Holder’s option, to note
the date and amount of each payment or prepayment of principal hereunder and the
incurrence of any new Past Due Purchase Obligations in its books and records,
including computer records. Such books and records reasonably and in good faith
maintained shall constitute conclusive evidence, absent manifest error, of the
accuracy of the information contained therein. From time to time, on Holder’s
request, Maker shall execute and deliver to Holder, a new promissory note, in
the same form as this Note, in substitution of this promissory note in a
principal amount equal to the then outstanding principal balance hereof.

 

Rights and Remedies. Upon the occurrence of a New Event of Default, Holder (at
its election but without notice of its election and without demand) shall have
all of the rights and remedies set forth in Section X of the Forbearance
Agreement.

 

Collection Costs.  In addition to Holder’s other rights and remedies, in the
event Maker shall fail to pay any payment of principal or interest, or both,
required hereunder, Maker shall pay all collection costs (including attorneys’
fees and expenses) incurred by Holder.

 

Remedies Cumulative. The rights and remedies of Holder under this Note, the
Forbearance Agreement and the other Forbearance Documents shall be cumulative.
Holder shall have all other rights and remedies not inconsistent herewith as
provided under the Uniform Commercial Code (as in effect in California from time
to time), by law, or in equity. No exercise by Holder of one right or remedy
shall be deemed an election, and no

 

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waiver by Holder of any Event of Default shall be deemed a continuing waiver. No
delay by Holder shall constitute a waiver, election, or acquiescence by it.

 

Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest
rate or rates payable under this Note, plus any other amounts paid in connection
herewith, exceed the highest rate permissible under any law that a court of
competent jurisdiction shall, in a final determination, deem applicable.  Maker
and Holder, in executing and delivering this Note, intend legally to agree upon
the rate or rates of interest and manner of payment stated within it; provided,
however, that, anything contained herein to the contrary notwithstanding, if
said rate or rates of interest or manner of payment exceeds the maximum
allowable under applicable law, then, ipso facto, as of the date of this Note,
Maker is and shall be liable only for the payment of such maximum as allowed by
law, and payment received from Maker in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of Maker’s
obligations hereunder to the extent of such excess.

 

Time is of the essence of this Note. Subject to the provisions of the
Forbearance Agreement and/or Forbearance Documents requiring the giving of
notices, to the fullest extent permitted by applicable law, Maker, for itself
and its legal representatives, successors and assigns, expressly waives
presentment, demand, protest, notice of dishonor, notice of non-payment, notice
of maturity, notice of protest, presentment for the purpose of accelerating
maturity, diligence in collection, and the benefit of any exemption or
insolvency laws.

 

Wherever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or remaining provisions of this
Note. No delay or failure on the part of Holder in the exercise of any right or
remedy hereunder shall operate as a waiver thereof, nor as an acquiescence in
any default, nor shall any single or partial exercise by Holder of any right or
remedy preclude any other right or remedy. Holder, at its option, may enforce
its rights against any collateral securing this Note without enforcing its
rights against Maker, any guarantor of the indebtedness evidenced hereby or any
other property or indebtedness due or to become due to Maker. Maker agrees that,
without releasing or impairing Maker’s liability hereunder, Holder may at any
time release, surrender, substitute or exchange any collateral securing this
Note and may at any time release any party primarily or secondarily liable for
the indebtedness evidenced by this Note.

 

Governing Law. This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of California.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, Maker has caused this Note to be duly executed and delivered
on the date first above written.

 

 

PEREGRINE SYSTEMS, INC.

 

a Delaware corporation (“Maker”)

 

 

 

By:

 /s/ [ILLEGIBLE]

 

Title:

  CEO

 

S-1

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