SECURED PROMISSORY NOTE
$500,000.00 May 13, 1996
FOR VALUE RECEIVED, the undersigned, ILD COMMUNICATIONS, INC., a Delaware
corporation, and INTELLICALL OPERATOR SERVICES, INC., a Delaware corporation
(collectively "Maker"), jointly and severally promise to pay to the order of
XXXXX RIVER VENTURES, LIMITED PARTNERSHIP, a South Carolina limited partnership
("Payee"; Payee and any subsequent holder[s] hereof are hereinafter referred to
collectively as "Holder"), at the office of Payee at P.O. Box 17526, Greenville,
SC, 29606 Attn: Administrative Director, or at such other place as Holder may
designate to Maker in writing from time to time, the principal sum of FIVE
HUNDRED THOUSAND AND NO/100THS DOLLARS ($500,000.00), together with interest on
the outstanding principal balance hereof from the date hereof at the rate of
thirteen and one-half percent (13.5%) per annum (computed on the basis of a
360-day year).
Interest only on the outstanding principal balance hereof shall be due and
payable monthly, in arrears, with the first installment being payable on the
first (1st) day of July, 1996, and subsequent installments being payable on the
first (1st) day of each succeeding month thereafter until May 2001 (the
"Maturity Date"), at which time the entire outstanding principal balance,
together with all accrued and unpaid interest, shall be immediately due and
payable in full.
The indebtedness evidenced hereby may be prepaid in whole or in part, at
any time and from time to time, without penalty. Any such prepayments shall be
credited first to any accrued and unpaid interest and then to the outstanding
principal balance hereof.
Time is of the essence of this Note. It is hereby expressly agreed that in
the event that any Event of Default (as defined in the Loan Agreement) shall
occur under that certain Loan Agreement of even date herewith, between Maker,
Payee and the other Lenders named therein (the "Loan Agreement"), which Event of
Default is not cured following the giving of any applicable notice and within
any applicable cure period set forth in said Loan Agreement; or should any
default by Maker be made in the performance or observance of any covenants or
conditions contained in any other instrument or document now or hereafter
evidencing, securing or otherwise relating to the indebtedness evidenced hereby
(subject to any applicable notice and cure period provisions that may be set
forth therein); then, and in such event, the entire outstanding principal
balance of the indebtedness evidenced hereby, together with any other sums
advanced hereunder, under the Loan Agreement and/or under any other instrument
or document now or hereafter evidencing, securing or in any way relating to the
indebtedness evidenced hereby, together with all unpaid interest accrued
thereon, shall, at the option of the Agent (as defined in the Loan Agreement)
and without notice to Maker, at once become due and payable and may
be collected forthwith, regardless of the stipulated date of maturity. Upon
the occurrence of any default as set forth herein, at the option of Holder
and without notice to Maker, all accrued and unpaid interest, if any, shall
be added to the outstanding principal balance hereof and the entire
outstanding principal balance, as so adjusted, shall bear interest thereafter
until paid at an annual rate (the "Default Rate") equal to the lesser of (i)
the rate that is seven percentage points (7.0%) in excess of the
above-specified interest rate, or (ii) the maximum rate of interest allowed
to be charged under applicable law (the "Maximum Rate"), regardless of
whether or not there has been an acceleration of the payment of principal as
set forth herein. All such interest shall be paid at the time of and as a
condition precedent to the curing of any such default.
In the event this Note is placed in the hands of an attorney for
collection, or if Holder incurs any costs incident to the collection of the
indebtedness evidenced hereby, Maker and any endorsers hereof agree to pay to
Holder an amount equal to all such costs, including without limitation all
actual reasonable attorney's fees and all court costs.
Presentment for payment, demand, protest and notice of demand, protest and
nonpayment are hereby waived by Maker and all other parties hereto. No failure
to accelerate the indebtedness evidenced hereby by reason of default hereunder,
acceptance of a past-due installment or other indulgences granted from time to
time, shall be construed as a novation of this Note or as a waiver of such right
of acceleration or of the right of Holder thereafter to insist upon strict
compliance with the terms of this Note or to prevent the exercise of such right
of acceleration or any other right granted hereunder or by applicable laws. No
extension of the time for payment of the indebtedness evidenced hereby or any
installment due hereunder, made by agreement with any person now or hereafter
liable for payment of the indebtedness evidenced hereby, shall operate to
release, discharge, modify, change or affect the original liability of Maker
hereunder or that of any other person now or hereafter liable for payment of the
indebtedness evidenced hereby, either in whole or in part, unless Xxxxxx agrees
otherwise in writing. This Note may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
The indebtedness and other obligations evidenced by this Note are further
evidenced by (i) the Loan Agreement and (ii) certain other instruments and
documents, as may be required to protect and preserve the rights of Maker and
Payee as more specifically described in the Loan Agreement.
All agreements herein made are expressly limited so that in no event
whatsoever, whether by reason of advancement of proceeds hereof, acceleration of
maturity of the unpaid balance hereof or otherwise, shall the amount paid or
agreed to be paid to Holder for the use of the money advanced or to be advanced
hereunder exceed the Maximum Rate. If, from any circumstances whatsoever, the
fulfillment of any provision of this Note or any other agreement or instrument
now or hereafter evidencing, securing or in any way relating to the indebtedness
evidenced hereby shall involve the payment of interest in excess of the Maximum
Rate, then, IPSO FACTO, the obligation to pay interest hereunder
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shall be reduced to the Maximum Rate; and if from any circumstance
whatsoever, Holder shall ever receive interest, the amount of which would
exceed the amount collectible at the Maximum Rate, such amount as would be
excessive interest shall be applied to the reduction of the principal balance
remaining unpaid hereunder and not to the payment of interest. This
provision shall control every other provision in any and all other agreements
and instruments existing or hereafter arising between Maker and Holder with
respect to the indebtedness evidenced hereby.
This Note is intended as a contract under and shall be construed and
enforceable in accordance with the laws of the State of Tennessee, except to the
extent that federal law may be applicable to the determination of the Maximum
Rate.
As used herein, the terms "Maker" and "Holder" shall be deemed to include
their respective successors, legal representatives and assigns, whether by
voluntary action of the parties or by operation of law.
MAKERS:
ILD COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
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Title: President
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INTELLICALL OPERATOR SERVICES, INC.,
a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxxxxxx
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Title: V.P.
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