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EXHIBIT (c)
PROMISSORY NOTE
$425,000 December 31, 1996
FOR VALUE RECEIVED, the undersigned, XXXXXXX XXXXXX & COMPANY, INC., an
Iowa corporation, and X. X. XXXXXXX INVESTMENTS, L.P., an Iowa limited
partnership (collectively "Maker") jointly, severally and unconditionally
promise to pay to the order of INTELLICALL, INC., a Delaware corporation
("Payee"), at 0000 Xxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx 00000-0000 or such
other address given to Maker by Payee the principal sum of FOUR HUNDRED
TWENTY-FIVE THOUSAND AND 00/100 DOLLARS ($425,000), in lawful money of the
United States of America, together with interest (calculated on the basis of a
365 or 366-day year, as appropriate), on the unpaid principal balance from
day-to-day remaining, computed from the date of advance until maturity at the
rate per annum which shall from day-to-day be equal to ten percent (10%).
Section 1. Payment. The principal of and interest upon this Note
shall be due and payable as follows:
(a) Interest, computed as aforesaid, shall be due and payable
quarterly as it accrues, commencing March 31, 1997, and thereafter,
on the last day of each succeeding calendar quarter during the term
of this Note and at maturity; and
(b) The principal of this Note shall be due and payable in one
installment on December 31, 1997, in the amount of the unpaid
principal balance of and accrued unpaid interest upon this Note as
of such date.
Should the principal of, or any installment of the principal of or
interest upon, this Note become due and payable on any day other than a
Business Day, the payment thereof shall be extended to the next succeeding
Business Day, and interest shall be payable with respect to such extension.
All payments of principal of and interest on this Note shall be made by Maker
to Payee in federal or other immediately available funds. Payments made to
Payee by Maker hereunder shall be applied first to accrued interest and then to
principal. The term "Business Day" shall mean a day upon which business is
transacted by national banks in Dallas, Texas.
All past due principal of and, to the extent permitted by applicable law,
interest upon this Note shall bear interest at the maximum rate established by
applicable law, or if no maximum rate is established by applicable law, then at
the rate per annum which shall from day-to-day be equal to sixteen percent
(16%).
Section 2. Waiver. Maker and each surety, endorser, guarantor and
other party ever liable for payment of any sums of money payable upon this
Note, jointly and severally waive presentment, demand, protest, notice of
protest and non-payment or other notice of default, notice of acceleration and
intention to accelerate or other notice of any kind, and agree that their
liability under this Note shall not be affected by any renewal or extension in
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payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes, regardless of the
number of such renewals, extensions, indulgences, releases or changes.
No waiver by Payee of any of its rights or remedies hereunder or under any
other document evidencing or securing this Note or otherwise, shall be
considered a waiver of any other subsequent right or remedy of Payee; no delay
or omission in the exercise or enforcement by Payee of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Payee; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Payee.
Section 3. Events of Default and Remedies. An "Event of Default"
shall exist hereunder if any one or more of the following events shall occur
and be continuing: (a) Maker shall fail to pay on or before the 10th day
following the due date any principal of, or interest upon, this Note; (b) any
representation or warranty made by Maker to Payee herein or in any of other
documents executed herewith shall prove to be untrue or inaccurate in any
material respect; (c) default shall occur in the performance of any of the
covenants or agreements of Maker contained herein or in any other document
executed or delivered to Payee in connection herewith; (d) Maker, or either of
them, shall (1) apply for or consent to the appointment of a receiver, trustee,
intervenor, custodian or liquidator of itself or of all or a substantial part
of its assets, (2) be adjudicated a bankrupt or insolvent or file a voluntary
petition for bankruptcy or admit in writing that it is unable to pay its debts
as they become due, (3) make a general assignment for the benefit of creditors,
(4) file a petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy or insolvency laws, or (5)
file an answer admitting the material allegations of, or consent to, or default
in answering, a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding, or take corporate action for the purpose of effecting
any of the foregoing; (e) an order, judgment or decree shall be entered by any
court of competent jurisdiction or other competent authority approving a
petition seeking reorganization of Maker, or either of them, or appointing a
receiver, trustee, intervenor or liquidator of any such person, or of all or
substantially all of its or their assets, and such order, judgment or decree
shall continue unstayed and in effect for a period of sixty (60) days; or (f)
the dissolution or termination of Maker, or either of them.
If Maker fails or refuses to pay any part of the principal of or interest
upon this Note or the Obligation as the same become due, or upon the occurrence
of any Event of Default hereunder of under any other agreement or instrument
securing or assuring the payment of this Note or executed in connection
herewith, then in any such event the holder hereof may, at its option, (i)
declare, the entire unpaid balance of principal of and accrued interest under
this Note to be immediately due and payable without presentment or notice of
any kind which Maker waives pursuant to Section 2 herein, (ii) reduce any claim
to judgment; and/or (iii) pursue and enforce any of Payee's rights and remedies
available pursuant to any applicable law or agreement.
Section 4. Notice. Whenever this Note requires or permits any notice,
approval, request or demand from one party to another, the notice, approval,
request or demand must
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be in writing and shall be deemed to have been given when personally served
or when deposited in the United States mails, registered or certified, return
receipt requested, addressed to the party to be notified at the following
address (or at such other address as may have been designated by written
notice):
Payee: INTELLICALL, INC.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000-0000
Maker: Xxxxxxx Xxxxxx & Company
000 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxx 00000
X. X. Xxxxxxx Investments, L.P.
000 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxx 00000
Section 5. Voluntary Prepayment. Maker reserves the right to prepay
the outstanding principal balance of this Note, in whole or in part, at any
time and from time to time, without premium or penalty. Any such prepayment
shall be made together with payment of interest accrued on the amount of
principal being prepaid through the date of such prepayment, and shall be
applied to the installments of principal due hereunder in the inverse order of
maturity.
Section 6. Usury Laws. Regardless of any provisions contained in this
Note, the Payee shall never be deemed to have contracted for or be entitled to
receive, collect or apply as interest on the Note, any amount in excess of the
highest lawful rate, and, in the event Payee ever receives, collects or applies
as interest any such excess, such amount which would be excessive interest
shall be applied to the reduction of the unpaid principal balance of this Note,
and, if the principal balance of this Note is paid in full, any remaining
excess shall forthwith be paid to Maker. All interest paid or agreed to be
paid to Payee shall, to the extent permitted by any applicable law, be
amortized, prorated, allocated, and spread throughout the full period
(including any renewal or extension) until payment in full of the principal so
that the interest hereon for such full period shall not exceed the maximum
amount permissible under such law. Payee expressly disavows any intent to
contract for, charge or receive interest in an amount which exceeds the maximum
amount permissible, under any applicable law. This Section shall control all
agreements between the Maker and Payee.
Section 7. Letter Agreement. This Note is delivered in partial
payment of certain securities being sold by Payee to Maker pursuant to that
certain letter agreement dated December 31, 1996 (the "Letter Agreement") by
and among Maker and Payee. Each of Maker and Payee represent and warrant to
the other that each has obtained all necessary corporate and partnership
authority to execute and deliver the Letter Agreement and this Note, where
applicable, and to consummate the transactions contemplated therein and herein
and that the execution and delivery of the Letter Agreement and this Note does
not and will not violate any agreement binding on either Maker or Payee (except
for the consent of Xxxxx's senior secured
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lender, which Payee has or will obtain prior to the delivery of the Securities
as defined in the Letter Agreement).
Section 8. Costs. If this Note is placed in the hands of an attorney
for collection, or if it is collected through any legal proceeding at law or in
equity, or in bankruptcy, receivership or other court proceeding, Maker agrees
to pay all costs of collection, including, but not limited to, court costs and
reasonable attorneys' fees, including all costs of appeal.
Section 9. Applicable Law. This Note is being executed and delivered,
and is intended to be performed in the State of Texas. Except to the extent
that the laws of the United States may apply to the terms hereof, the
substantive laws of the State of Texas shall govern the validity, construction
enforcement and interpretation of this Note. In the event of a dispute
involving this Note or any other instruments executed in connection herewith,
the undersigned irrevocably agrees that venue for such dispute shall lie in any
court of competent jurisdiction in Dallas County, Texas.
Maker:
XXXXXXX XXXXXX & COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: President and CEO
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X. X. XXXXXXX INVESTMENTS, L.P.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: President of
General Partner
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[XXXX, XXXXXXX, XXXXXXX & LOGAN LETTERHEAD]
January 7, 1997
Xxxxxxx X. Xxxxxx
Intellicall, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxxx
President
Xxxxxxx Xxxxxx & Company
000 Xxxxxx Xxxxxx X.X.
Cedar Rapids, Iowa 52407-4250
Xxxxxx X. Xxxxxxx
President of the General Partner
X. X. Xxxxxxx Investments, L.P.
000 Xxxxxx Xxxxxx X.X.
Cedar Rapids, Iowa 52407-4250
Re: Binding Letter of Intent regarding the purchase by Xxxxxxx Xxxxxx &
Company and X. X. Xxxxxxx Investments, L.P. of Xxxxxxx Communications
Corporation securities that are owned by Intellicall, Inc. letter dated
December 31, 1996 (the "Letter Agreement")
Gentlemen:
Pursuant to the terms of the Letter Agreement, the firm of Xxxx, Russell,
Xxxxxxx & Xxxxx, P.C. has agreed to act as the Escrow Agent for the
consummation of the transactions contemplated by the Letter Agreement. Acting
in our capacity under the Letter Agreement we currently have in our possession
the following: (1) wired funds currently in our Trust Account representing
$212,500 from each of Xxxxxxx Xxxxxx & Company ("BFC") and X. X. Xxxxxxx
Investments, L.P. ("TJB") for a total of $425,000 (the "Cash"); (2) Promissory
Note dated December 31, 1996 executed by BFC and TJB in the original principal
amount of $425,000 (the "Promissory Note"); (3) Xxxxxxx Xxxxxxx & Associates,
Inc. $1 million Preferred Stock Subordinated Note dated December 31, 1994 (the
"Xxxxxxx Note"); and (4) Stock Purchase Warrant No. A-00060 and Stock Purchase
Warrant No. W00087 issued by Xxxxxxx Xxxxxxx & Associates, Inc. (the
"Warrants").
By your execution below, each of you hereby authorizes, empowers and
directs Xxxx, Xxxxxxx, Xxxxxxx & Xxxxx, P.C., acting in its capacity as Escrow
Agent under the Letter
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January 7, 1997
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Agreement, to distribute the items set forth above as follows: (a) to Xxxxxxx
X. Xxxxxx, on behalf of Intellicall, Inc., the Cash and the Promissory Note and
(b) to Xxxxxx X. Xxxxxxx, on behalf of BFC and TJB, the Xxxxxxx Note and the
Warrants. The documents to be delivered to Xx. Xxxxxxx will be delivered by
Federal Express for delivery on Wednesday, January 8, 1997.
Upon compliance with the distribution instructions contained in the
foregoing paragraph, each of you hereby releases Xxxx, Xxxxxxx, Xxxxxxx &
Xxxxx, P.C., and its attorneys, from any further or other obligation, liability
or duty under the Letter Agreement. If the foregoing meets with your approval,
please execute in the spaces provided below. Each of you agree that receipt of
facsimile signatures by the undersigned shall be sufficient. This letter may
be executed in counterparts all of which shall be deemed one and the same
letter.
Very truly yours,
XXXX, XXXXXXX, XXXXXXX & XXXXX, P.C.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
PVS:lb
AGREED as of January 7, 1997.
INTELLICALL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Senior Vice President
and Chief Financial Officer
XXXXXXX XXXXXX & COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
X. X. XXXXXXX INVESTMENTS, L.P.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President of the
General Partner
