EXHIBIT 10.3
PROMISSORY NOTE AND LOAN AGREEMENT
Honolulu, Hawaii
$450,000.00 February 9th, 1998
FOR VALUE RECEIVED, WAVETECH, INC., a New Jersey corporation, and
INTERPRETEL, INC., an Arizona corporation (singularly and collectively, the
"Maker"), jointly and severally promise to pay to the order of IMAGITEL, INC., a
Nevada corporation, at 0000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, Xxxxxx 00000, or
at such other place as the holder of this Note (the "Holder") may from time to
time designate, the lesser of the principal sum of FOUR HUNDRED FIFTY AND NO/100
DOLLARS ($450,000.00) or the principal balance remaining from time to time
unpaid (the "Loan Funds"), plus interest from the date that such principal sum
is first disbursed to Maker pursuant hereto at the interest rate specified
below.
INTEREST. The interest rate payable under this Note shall be twelve percent
(12%) per annum from the date hereof until maturity. Interest shall be computed
on the basis of a 360-day year of twelve 30-day months.
DISBURSEMENTS. The Loan Funds shall be disbursed the Holder to the Maker in
installments on the dates, in the amounts and for the purposes set forth in
Exhibit A attached hereto.
USE OF THE LOAN FUNDS. As a material part of the consideration given to the
Holder by the Maker for the disbursement of the Loan Funds, the Maker covenants
and agrees to use the Loan Funds only for the purposes and in the amounts set
forth in the budget attached hereto and made a part hereof as Exhibit A. The
Maker agrees to provide the Holder, upon the Holder's request, with written
evidence of the Maker's compliance with this covenant.
PAYMENTS; MATURITY DATE. All unpaid principal and accrued but unpaid
interest shall be due and payable on July 1, 1998, unless sooner due as
hereinafter provided.
APPLICATION OF PAYMENTS. Except in the case of an election to the contrary
by the Holder in the event of a default, and to the extent permitted by law, all
payments will be applied first to charges, then interest, and then principal.
PREPAYMENTS. The Maker may make prepayments of principal in whole or in
part without a prepayment charge. Any prepayment shall be applied against the
principal sum outstanding.
DEFAULT. If the Maker shall default in the payment of principal, interest
or other fees or charges when due under this Note, or if the Maker shall default
in the performance of or compliance with any material term, covenant, condition
or provision required to be performed or complied with by the Maker under this
Note, that certain Pledge and Security Agreement (the "Pledge"), that certain
Security Agreement (the "Security Agreement") or those certain financing
statements (the "Financing Statements") all executed concurrently herewith by
the Maker for the security of the Holder, or in any other agreement or security
instrument referred to therein (this Note, the Pledge, the Security Agreement,
and the Financing Statements, and such other agreements or instruments being
hereinafter called the "Loan Documents") and such default shall not have been
remedied during the period the Maker is required to remedy such default, then,
and in any such event, the Holder shall have the option to declare the unpaid
principal sum of this Note together with all charges and interest accrued
thereon to be immediately due and payable, and such principal sum, charges, and
interest shall thereupon become and be due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
and, upon such maturity by acceleration or otherwise, the unpaid principal
balance shall thereafter bear interest until fully paid at a rate per annum
equal to four (4) percentage points higher than the fixed rate specified in this
Note.
Failure to exercise this option shall not constitute a waiver of the right
to exercise the same in the event of the same or any subsequent default.
LATE CHARGES. If the Maker fails to pay all sums due at maturity (whether
or not resulting from acceleration due to an event of default under the Loan
Documents), the Holder, in addition to its other remedies, may collect, and the
Maker shall pay on demand, a late charge equal to five percent (5%) of the
amount overdue.
REASONABLENESS OF DEFAULT CHARGES. The Maker acknowledges that nonpayment
at maturity (whether or not resulting from acceleration due to an event
of default under the Loan Documents) will result in damages to the Holder
by reason of the additional expenses incurred in servicing the indebtedness
evidenced by this Note and by reason of the loss to the Holder of the use of
the money due and frustration to the Holder in meeting its other commitments.
The Maker also acknowledges and agrees that the occurrence of any other
event of default under the Loan Documents will result in damages to the
Holder by reason of the detriment caused thereby. The Maker further
acknowledges that it is and will be extremely difficult and impracticable to
ascertain the extent of such damages caused by nonpayment of any sums when
due or resulting from any other event of default under the Loan Documents. The
2
Maker by its execution and delivery hereof and the Holder hereof by the
acceptance of this Note agree that a reasonable estimate of such damages must be
based in part upon the duration of the default and that the late charge
specified above with respect to a delinquent payment and the rate of interest
prescribed above with respect to the amount due and payable after maturity or
acceleration would not unreasonably compensate the Holder for such damages.
U. S. MONEY. Principal and interest shall be payable in lawful money of the
United States of America in immediately available funds.
ATTORNEYS' FEES. The Maker promises to pay the Holder's reasonable
attorneys' fees and such expenses as are incurred to induce or compel the
payment of this Note or any portion of the indebtedness evidenced hereby,
whether suit is brought hereon or not.
WAIVER. The Maker and all others who may become liable for any part of this
obligation severally waive presentment, protest, demand and notice of protest,
demand, dishonor and nonpayment of this Note and consent to any number of
renewals or extensions of the time of payment hereof and to any release of
parties obligated hereunder or forbearance in the enforcement hereof.
NO ORAL WAIVER, MODIFICATION OR CANCELLATION. No provision in this Note may
be waived, modified or cancelled orally, but only by an agreement in writing and
signed by the party against whom enforcement of any waiver, modification,
discharge or cancellation is sought.
GOVERNING LAW. This Note shall be governed by and construed according to
the laws of the State of Hawaii.
LIMITATIONS ON INTEREST. Notwithstanding any provision to the contrary
contained in the Loan Documents, the rate and amount of interest which the Maker
shall be required to pay to the Holder shall in no event, contingency or
circumstance exceed the maximum rate or amount limitation, if any, imposed by
applicable law. If, from any circumstance whatsoever, performance by the Maker
of any obligation under the Loan Documents at the time performance shall be due
(including, without limiting the generality of the foregoing, the payment of any
fee, charge or expense paid or incurred by the Maker which shall be held to be
interest), shall involve transcending the limits of validity prescribed by law,
if any, then, automatically, such obligation to be performed shall be reduced to
the limit of such validity prescribed by applicable law. If, notwithstanding the
foregoing limitations, any excess interest shall at the maturity of the Note be
determined to have been received, the same shall be deemed to have been held
3
as additional security. The foregoing provisions shall never be superseded or
waived and shall control every other provision of all agreements between the
Holder and the Maker.
OBLIGATIONS OF MAKER. The obligations of the undersigned hereunder shall be
joint and several.
IN WITNESS WHEREOF, the Makers have caused this Note to be duly executed.
MAKER: WAVETECH, INC.
By /s/ Xxxxxx X. Xxxxx
------------------------------------
Its President
By /s/ Xxxxxxx Xxxxxxx
------------------------------------
Its Secretary
INTERPRETEL, INC.
By /s/ Xxxxxx X. Xxxxx
------------------------------------
Its President
By /s/ Xxxxxxx Xxxxxxx
------------------------------------
Its Secretary
WITNESSED:
/s/ Xxxxx Xxxx Xxxxx
-------------------------------------
-------------------------------------
4
EXHIBIT A
AMOUNT OF DATE OF
DISBURSEMENT DISBURSEMENT PURPOSE OF DISBURSEMENT
$210,000 February 17, 1998 $50,000 to legal counsel
Balance to payees approved by Imagitel
$ 60,000 March 1, 1998 Current operating expenses
$ 60,000 April 1, 1998 Current operating expenses
$ 60,000 May 1, 1998 Current operating expenses
$ 60,000 shall be paid upon request from Wavetech
--------- for purposes approved by Imagitel in the
$450,000 sole discretion of Imagitel
