Exhibit 10.38
March 1, 1999
$265,000.00
DEMAND PROMISSORY NOTE
AMNEX, INC., A New York corporation ("AMNEX") and AMERICAN
NETWORK EXCHANGE, INC., a Delaware corporation and wholly-owned subsidiary of
AMNEX ("ANEI", and together with AMNEX, the "Makers"), for value received,
hereby jointly and severally promise to pay to the order of XXXXXXXXX XXXXXX
(the "Holder"), within fifteen (15) days following the date of receipt of demand
for payment (the "Due Date"), at the offices of the Holder indicated in
paragraph 5 hereof the aggregate principal sum of TWO HUNDRED AND SIXTY FIVE
THOUSAND ($265,000.00)DOLLARS in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts and to pay interest on such principal sum from the date
hereof at a fluctuating rate per annum at all times equal to the prime rate of
interest announced from time to time by The Chase Manhattan Bank plus two
percent (2%) (the "Note Rate"). Accrued interest on the unpaid principal balance
of this Demand Promissory Note ("Note") shall be payable on the first business
day of each month commencing April 1, 1999, and on the Due Date.
1. Registered Owner. The Makers may consider and treat the person in whose
name this Note shall be registered as the absolute owner thereof for
all purposes whatsoever (whether or not this Note shall be overdue) and
the Makers shall not be affected by any notice to the contrary. The
registered owner of this Note shall have the right to transfer it by
assignment and the transferee thereof upon his registration as owner of
this Note, shall become vested with all the powers and rights of the
transferor. Registration of any new owner shall take place upon
presentation of this Note to AMNEX at its offices together with an
assignment duly authenticated. In case of transfers by operation of
law, the transferee shall notify the Makers of such transfer and of his
address, and shall submit appropriate evidence regarding the transfer
so that this Note may be registered in the name of the transferee. This
Note is transferable only on the books of the Makers by the holder
hereof in person or by attorney, on the surrender hereof duly endorsed.
Communications sent to any registered owner shall be effective as
against all holders or transferees of this Note not registered at the
time of sending the communication.
2. Redemption. The Holder, by its acceptance of this Note, hereby
acknowledges that at any time, and from time to time, notwithstanding
the lack of demand for payment on the part of the Holder, any of the
Makers may, at its option, by written notice given to the Holder, elect
to redeem and prepay all or any portion of the outstanding principal
indebtedness evidenced by this Note, together with accrued interest
thereon, without premium or penalty. Any such
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notice of a Maker's election to redeem and prepay as provided for
hereinabove shall be given not less than five (5) business days prior
to the date fixed in such notice as the date for redemption of this
Note (the "Redemption Date"). Any payments received on this Note shall
be applied first to any unpaid fees or other sums due and owing
hereunder, next to accrued but unpaid interest, and then to the
principal amount outstanding.
3. Default Rate of Interest: Late Charge. In the event the Makers shall
fail to pay all or any portion of the principal amount hereof on or
before the Due Date, any such unpaid amount shall bear interest, for
each day from the Due Date, until paid in full, at a fluctuating rate
per annum at all times equal to the Note Rate plus five percent (5%)
instead of the Note Rate as hereinabove provided, payable upon demand.
In the event the Makers shall fail to pay timely any other amount due
hereunder, the Makers, jointly and severally, agree to make a payment,
in addition to all other required payments hereunder, equal to two
percent (2%) of the overdue payment.
4. Applicable Law. This Note is issued under and shall for all purposes be
governed by and construed in accordance with the laws of the State of
New York, excluding choice of law rules thereof.
5. Notices. Any and all notices or other communications or deliveries
required or permitted to be given or made pursuant to any of the
provisions of this Note shall be in writing and shall be deemed to have
been duly given or made for all purposes when hand delivered or sent by
certified or registered mail, return receipt requested and postage
prepaid, overnight mail or courier, or telecopier as follows:
If to Holder at: 000 Xxxxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000-1989
Attention: Xxxxx X. Xxxxxx
Telecopier Number: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxx, Esq.
000 Xxxxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000-1989
Telecopier Number: (000) 000-0000
If to AMNEX at: 000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
Attention: Chairman
Telecopier Number: (000) 000-0000
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With a copy to: Xxx Xxxxxxxxxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
Telecopier Number: (000) 000-0000
If to ANEI at: 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: President
Telecopier Number: (000) 000-0000
With a copy to: Xxx Xxxxxxxxxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
Telecopier Number: (000) 000-0000
or any such other address as the Holder or any Maker may specify by
notice given to the other party in accordance with this paragraph 5.
6. Use of Proceeds. $265,000 is being advanced directly to the Makers from
the Holder for its general corporate purposes.
7. Waivers. Makers hereby waive presentment for payment, protest and
demand, and notice of protest, demand and/or dishonor and nonpayment of
this Note, and all other notices of demands otherwise required by law
that Makers may lawfully waive. The Makers expressly agree that this
Note, or any payment hereunder may be extended from time to time
without in any way affecting the liability of Makers. No unilateral
consent or waiver by Holder with respect to any action or failure to
act which, without consent, would constitute a breach of any provision
of this Note shall be valid and binding unless in writing and signed by
Xxxxxx.
8. Consent to Jurisdiction: Jury Trial Waiver. Makers hereby submit to the
jurisdiction of the courts of the State of New York located in the City
of Schenectady and the United States District Court for the Northern
District of New York as well as to the jurisdiction of all courts to
which an appeal may be taken or other review sought from the aforesaid
courts, for the purpose of any suit, action or other proceeding arising
out of Makers obligations under and with respect to this Note, and
expressly waive any and all obligations they may have as to venue of
any of such courts. MAKERS AND HOLDER EACH HEREBY WAIVES TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM
AGAINST THE OTHER ON ANY MATTERS WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, ANY ACTION, PROCEEDING OR
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COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS NOTE, OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN). No party to this Note,
including but not limited to any assignee of or successor to Makers or
Holder, shall seek a jury trial in any lawsuit, proceeding,
counterclaim or any other litigation procedure based upon or arising
out of this Note or the relationship between the parties. No party will
seek to consolidate any such action, in which a jury trial has been
waived, with any other action in which a jury trial cannot be or has
not been waived. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
DISCUSSED BY MAKERS AND HOLDER, AND THESE PROVISIONS SHALL BE SUBJECT
TO NO EXCEPTIONS. NO PARTY HAS, IN ANY WAY, AGREED WITH OR REPRESENTED
TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE
FULLY ENFORCED IN ALL INSTANCES.
9. Savings Clause. All agreements between Makers and Holder are hereby
expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be
paid to Holder for the use, forbearance or detention of the
indebtedness evidenced hereby exceed the maximum permissible under
applicable law. Any interest received by Holder which would exceed the
maximum permissible under applicable law shall be applied to the
reduction of the principal balance evidenced hereby and not to the
payment of interest. This provision shall control every other provision
of all agreements between Makers and Holder.
10. Attorney's Fees. If this Note shall not be paid when due and shall be
placed by the Holder hereof in the hands of any attorney for
collection, through legal proceedings or otherwise, the Makers shall
pay (on demand) all reasonable costs and expenses of collection
incurred, including reasonable attorneys' fees.
11. Section Headings. Any section headings in this Note are included herein
for convenience of reference and shall not constitute a part of this
Note for any other purpose.
12. Miscellaneous.
1. This Note constitutes the rights and obligations of the Holder
and the Makers. No provision of this Note may be modified
except by an instrument in writing signed by the party against
whom the enforcement of any modification is sought.
2. Payment of interest due under this Note prior to the Due Date
or Redemption Date, as the case may be, shall be made to the
registered holder of this Note. Payment of principal and
interest due hereunder on the Due Date or Redemption Date, as
the case may be, shall be made to the registered holder of
this Note in accordance with the terms hereof following
presentation of this Note upon or after such applicable date.
No interest shall be due on this Note for such period of time
that may elapse between the Due Date or Redemption Date, as
the case may be, and its presentation for payment.
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3. No recourse shall be had for the payment of the principal of
or interest on this Note against any officer, director or
agent of any Maker, past, present or future, all such
liability of the officers, directors and agents being waived,
released and surrendered by the Holder hereof by the
acceptance of this Note.
IN WITNESS WHEREOF, the Makers have caused this Note to be
signed on its behalf in its corporate name, by its duly authorized officer, all
as of the day and year first above written.
AMNEX, INC.
By:
---------------------------------
Name:
Title:
AMERICAN NETWORK EXCHANGE, INC.
By:
---------------------------------
Name:
Title:
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