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EXHIBIT 10.13
NOTE
(AXISTEL INTERNATIONAL, INC.)
$750,000 August 20, 1999
FOR VALUE RECEIVED, on or before the Maturity Date (as hereinafter
defined), the undersigned and if more than one, each of them, jointly and
severally (hereinafter referred to as "Borrower"), promises to pay to the order
of Infinity Emerging Holdings Subsidiary Limited ("Lender") at its offices at
Xxxxxxx Waterfront Plaza, P.O. Box 556, Main Street, Charleston Nevis, West
Indies, the principal amount of Seven Hundred Fifty Thousand and 00/100 DOLLARS
($750,000) ("Total Principal Amount"), together with interest thereon from the
date of this Note until paid at a fixed rate per annum equal to the lesser of
(a) the Maximum Rate (as hereinafter defined) or (b) ten percent (10%),
calculated on the basis of actual days elapsed but computed as if each year
consisted of 360 days. The term "Maximum Rate," as used herein, shall mean at
the particular time in question the maximum rate of interest, if any, which,
under applicable law, may then be charged on this Note. If such maximum rate of
interest changes after the date hereof and this Note provides for a fluctuating
rate of interest, the Maximum Rate shall be automatically increased or
decreased, as the case may be, without notice to Borrower from time to time as
of the effective date of each change in such maximum rate. If applicable law
ceases to provide for such a maximum rate of interest, the Maximum Rate shall be
equal to eighteen percent (18%) per annum.
The principal of and all accrued but unpaid interest on this Note shall
be due and payable as follows:
(a) interest shall be due and payable monthly as it accrues,
commencing on the last day of September, 1999 and continuing
on the last day of each successive month thereafter during the
term of this Note; and
(b) the outstanding principal balance of this Note, together with
all accrued but unpaid interest, shall be due and payable on
the Maturity Date.
The Maturity Date means December 30, 1999. If a payment is ten (10) or
more days late, Borrower will pay a delinquency charge in an amount equal to the
greater of (i) 5.0% of the
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amount of the delinquent payment up to the maximum amount of $250.00, or (ii)
$25.00. Upon an Event of Default (as hereinafter defined), including failure to
pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law and in addition to any other remedies available, do one or both
of the following: (a) increase the interest rate provided for herein by three
(3.00) percentage points and (b) add any unpaid accrued interest to principal
and such sum will bear interest therefrom until paid at the rate provided in
this Note.
This Note has been executed and delivered pursuant to that certain
Securities Purchase Agreement, as amended of even date herewith by and between
Borrower, Lender, IEO Holdings Limited and AxisTel Communications, Inc. (the
"Company"), the parent corporation of Borrower (as amended by the First
Amendment to Securities Purchase Agreement and Related Agreements dated as of
April __, 1999 and the Second Amendment to Securities Purchase Agreement and
Related Agreements (the "Second Amendment") dated as of August __, 1999, the
"Securities Purchase Agreement"), evidences obligations and indebtedness from
time to time owing by Borrower to Lender under the Securities Purchase Agreement
and is secured by the Security Documents, each of even date herewith by Xxxxxxxx
and certain Affiliates of Borrower, covering certain collateral as more
particularly described therein.
This Note, the Securities Purchase Agreement, such Security Documents
and all other documents evidencing, securing, governing, guaranteeing and/or
pertaining to this Note, including, but not limited to, those documents
described above and the Company Guarantee, AxisTel Metro Guarantee and the
Shareholder Guarantees (as such term is defined in the Second Amendment), are
hereinafter collectively referred to as the "Loan Documents." The holder of this
Note is entitled to the benefits and security provided in the Loan Documents.
Borrower may from time to time prepay all or any portion of the
principal of this Note without premium or penalty. Unless otherwise agreed to in
writing, or otherwise required by applicable law, payments will be applied first
to unpaid accrued interest, then to principal, and any remaining amount to any
unpaid collection costs, delinquency charges and other charges (as hereinafter
defined); provided, however, upon delinquency or other Event of Default (as
hereinafter defined), Lender reserves the right to apply payments among
principal, interest, delinquency charges, collection costs and other charges, at
its discretion. All prepayments shall be applied to the indebtedness owing
hereunder in such order and manner as Xxxxxx may from time to time determine in
its sole discretion. All payments and prepayments of principal of or interest on
this Note shall be made in lawful money of the United States of America in
immediately available funds, at the address of Lender indicated above, or such
other place as the holder of this Note shall designate in writing to Borrower.
If any payment of principal of or interest on this Note shall become due on a
day which is not a Business Day (as hereinafter defined), such payment shall be
made on the next succeeding Business Day and any such extension of time shall be
included in computing interest in connection with such payment. As used herein,
the term "Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which national banking associations are authorized to be closed.
The books and records of Xxxxxx shall be prima facie evidence of all outstanding
principal of and accrued and unpaid interest on this Note.
Xxxxxxxx agrees that no advances under this Note shall be used for
personal, family or
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household purposes, and that all advances hereunder shall be used solely for
business, commercial, investment or other similar purposes.
Xxxxxxxx agrees that upon the occurrence of any one or more of the
following events of default ("Event of Default"):
(a) failure of Borrower to pay when due all or any part of the
principal on this Note or any other Note issued pursuant to
the terms of the Securities Purchase Agreement;
(b) failure of Borrower to pay within five (5) Business Days of
the due date thereof any interest on this Note or any other
Note issued pursuant to the terms of the Securities Purchase
Agreement;
(c) any representation, warranty, certification or statement made
by the Company or Borrower in the Securities Purchase
Agreement or any Related Agreement (as such term is defined in
the Securities Purchase Agreement) or which is contained in
any certificate, document or financial or other statement
furnished at any time under or in connection with the
Securities Purchase Agreement or any Related Agreement shall
prove to have been untrue in any material respect when made;
(d) failure on the part of the Company or Borrower to observe or
perform any of the covenants or agreement contained in Section
11 of the Securities Purchase Agreement (Negative Covenants),
which failure, to the extent curable, is not cured within a
period of fifteen (15) days of such failure;
(e) failure on the part of the Company, Borrower or the Founders
(as such term is defined in the Securities Purchase Agreement)
to observe or perform any covenant or agreement contained in
the Securities Purchase Agreement or any Related Document
(other than those covered by clauses (a) through (d) above),
which failure is not cured within forty-five (45) days of such
failure (which cure period shall be extended for a period not
to exceed an additional forty-five (45) days in the event that
the Company, Borrower or the Founders are diligently pursuing
such cure);
(f) the Company, Borrower or any Subsidiary (as such term is
defined in the Securities Purchase Agreement) has commenced a
voluntary case or other proceeding seeking liquidation,
winding-up, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency,
moratorium or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial
part of its property, or has consented to any such relief or
to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it, or has made a general assignment for the benefit
of creditors, or has failed generally to pay its debts as they
become due, or has taken any corporate action to authorize any
of the foregoing;
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(g) an involuntary case or other proceeding has been commenced
against the Company, Borrower or any Subsidiary, seeking
liquidation, winding-up, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency,
moratorium or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period
of 60 days, or an order for relief has been entered against
the Company, Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(h) default in any provision (including payment) of any agreement
governing the terms of any Debt of the Company or any
Subsidiary in excess of $250,000, which has not been cured
within five (5) days of the expiration of any applicable
period of grace associated therewith; or
(i) judgments or orders for the payment of money which in the
aggregate at any one time exceed $250,000 and are not covered
by insurance have been rendered against the Company, Borrower
or any Subsidiary by a court of competent jurisdiction and
such judgments or orders shall continue unsatisfied and
unstayed for a period of 60 days;
then holder of this Note may, at its option, without further notice or demand,
(i) declare the outstanding principal balance of and accrued but unpaid interest
on this Note at once due and payable, (ii) refuse to advance any additional
amounts under this Note, (iii) foreclose all liens securing payment hereof, (iv)
pursue any and all other rights, remedies and recourses available to the holder
hereof, including but not limited to any such rights, remedies or recourses
under the Related Agreements and Loan Documents, at law or in equity, or (v)
pursue any combination of the foregoing.
The failure to exercise the option to accelerate the maturity of this
Note or any other right, remedy or recourse available to the holder hereof upon
the occurrence of an Event of Default hereunder shall not constitute a waiver of
the right of the holder of this Note to exercise the same at that time or at any
subsequent time with respect to such Event of Default or any other Event of
Default. The rights, remedies and recourses of the holder hereof, as provided in
this Note and in any of the other Loan Documents, shall be cumulative and
concurrent and may be pursued separately, successively or together as often as
occasion therefore shall arise, at the sole discretion of the holder hereof. The
acceptance by the holder hereof of any payment under this Note which is less
than the payment in full of all amounts due and payable at the time of such
payment shall not (i) constitute a waiver of or impair, reduce, release or
extinguish any right, remedy or recourse of the holder hereof, or nullify any
prior exercise of any such right, remedy or recourse, or (ii) impair, reduce,
release or extinguish the obligations of any party liable under any of the Loan
Documents as originally provided herein or therein.
This Note and all of the other Loan Documents and Related Agreements
are intended to be performed in accordance with, and only to the extent
permitted by, all applicable usury laws. If any provision hereof or of any of
the other Loan Documents or Related Agreements or the
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application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, neither the application of such
provision to any other person or circumstance nor the remainder of the
instrument in which such provision is contained shall be affected thereby and
shall be enforced to the greatest extent permitted by law. It is expressly
stipulated and agreed to be the intent of the holder hereof to at all times
comply with the usury and other applicable laws now or hereafter governing the
interest payable on the indebtedness evidenced by this Note. If the applicable
law is ever revised, repealed or judicially interpreted so as to render usurious
any amount called for under this Note or under any of the other Loan Documents,
or contracted for, charged, taken, reserved or received with respect to the
indebtedness evidenced by this Note, or if Xxxxxx's exercise of the option to
accelerate the maturity of this Note, or if any prepayment by Borrower results
in Borrower having paid any interest in excess of that permitted by law, then it
is the express intent of Xxxxxxxx and Lender that all excess amounts theretofore
collected by Xxxxxx be credited on the principal balance of this Note (or, if
this Note and all other indebtedness arising under or pursuant to the other Loan
Documents have been paid in full, refunded to Borrower), and the provisions of
this Note and the other Loan Documents and Related Documents immediately be
deemed reformed and the amounts thereafter collectable hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder or thereunder. All sums paid, or
agreed to be paid, by Borrower for the use, forbearance, detention, taking,
charging, receiving or reserving of the indebtedness of Borrower to Lender under
this Note or arising under or pursuant to the other Loan Documents and Related
Agreements shall, to the maximum extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the rate or amount of interest on
account of such indebtedness does not exceed the usury ceiling from time to time
in effect and applicable to such indebtedness for so long as such indebtedness
is outstanding. Notwithstanding anything to the contrary contained herein or in
any of the other Loan Documents and Related Agreements, it is not the intention
of Lender to accelerate the maturity of any interest that has not accrued at the
time of such acceleration or to collect unearned interest at the time of such
acceleration.
If this Note is placed in the hands of an attorney for collection, or
is collected in whole or in part by suit or through probate, bankruptcy or other
legal proceedings of any kind, Xxxxxxxx agrees to pay, in addition to all other
sums payable hereunder, all costs and expenses of collection, including, but not
limited to, reasonable attorneys' fees.
Borrower and any and all endorsers and guarantors of this Note
severally waive presentment for payment, notice of nonpayment, protest, demand,
notice of protest, notice of intent to accelerate, notice of acceleration and
dishonor, diligence in enforcement and indulgences of every kind and without
further notice hereby agree to renewals, extensions, exchanges or releases of
collateral, taking of additional collateral, indulgences or partial payments,
either before or after maturity.
Any and all payments by Borrower hereunder to any holder of this Note
shall be made free and clear of and without deduction or withholding for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto (all such taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred
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to as "Taxes") unless such Taxes are required by law or the administration
thereof to be deducted or withheld.
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SAID STATE.
BORROWER:
AXISTEL INTERNATIONAL, INC.
By:
Name:
Title:
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(AxisTel International, Inc.)
