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Exhibit 10.7
This Secured Promissory Note ("Note") has been executed and delivered
by Xxxxx X. Kitchen (the "Maker") to Z-Tel Technologies, Inc. (the "Payee")
pursuant to a certain Loan and Guaranty Agreement between them of even date
herewith. Under that Agreement, Z-Tel agreed to guarantee a certain loan from
Xxxxxx Xxxxxx Partners ("Xxxxxx") to the Maker (the "Loan") and to deposit
funds in an account with Xxxxxx (the "Account") equal or greater than the
balance of the Loan. To the extent any funds in the Account are foreclosed upon
by Xxxxxx to reduce or pay the Loan, such amount or amounts will be deemed
advances on this Note by Payee to the Maker.
SECURED PROMISSORY NOTE
Date: January 11, 2001
FOR VALUE RECEIVED, the undersigned, Xxxxx X. Kitchen hereby promises
to pay to the order of Z-Tel Technologies, Inc., or the Payee's successors or
assigns, (the Payee, the Payee's successors and assigns and any holder of this
Note are collectively referred to in this Note as the "Holder"), at 000 X.
Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000, or such place as the
Holder of this Note may designate in writing, the principal sum of all advances
made by the Payee to the Maker, together with interest on the unpaid balance in
accordance with the following provisions:
A. Interest will accrue on the unpaid principal balance at an
annual rate equal to the Prime Rate plus two percent. The Prime Rate will be
the Prime Rate published from time to time by the Wall Street Journal.
B. Principal and accrued interest will be payable ON DEMAND.
C. All payments will be applied first to accrued interest due
and payable and then to principal. Interest will accrue at a rate of 1/365th of
the annual rate of interest for each day that principal is outstanding. The
Maker may prepay any portion of this Note any time without penalty or premium.
All advances will be additions to principal and will constitute a single
indebteness. No individual advance will be considered a separate loan. Rather
such advances will represent increases in the unpaid principal balance.
D. In the event the amount of interest due or payments in the
nature of interest exceed the maximum rate of interest allowed by applicable
law, then the excess sum, if paid, will be applied to principal. Under no
circumstances will the Maker be required to pay interest in excess of the
maximum rate allowed by law.
E. Time is of the essence of this Note. If the Maker fails to
make any payment when due under this Note and the failure is not cured within
ten days after notice is given to the Maker,
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or if the Maker defaults on any obligation contained in any other agreement
between the Maker and the Payee or defaults on any other indebtedness owing to
the Holder and the failure has not been cured in accordance with the other
agreement or instrument of the indebtedness, or if the Maker becomes insolvent
or bankrupt, then, at the option of the Holder, the entire unpaid balance of
principal and accrued interest will become due and payable immediately without
demand or notice.
F. Except as otherwise expressly set forth in this Note, the
Maker hereby waives presentment for payment, protest, grace and all notices or
demands of any kind whatsoever, including notice of dishonor or non-payment.
G. The Maker promises to pay all costs, including reasonable
court costs, attorneys' fees, and the costs of paralegals and other
investigative and legal support personnel, incurred by the Holder in enforcing
this Note and collecting the amounts due. All such costs will be added to a
become principal under this Note.
H. This obligations under this Note are further evidenced by a
certain pledge and security agreement between the Maker and the Payee. All
rights and remedies of the Holder whether evidenced by this Note or any other
document or instrument will be cumulative and may be exercised severally or
concurrently.
I. Every provision of this Note is intended to be severable. If
any court of competent jurisdiction determines that any provision or portion of
a provision in this Note is illegal or invalid, then the remainder of this Note
will not be affected. Moreover, any provision of this Note determined by such
court to be unreasonable, arbitrary or against public policy will be modified
as necessary so that it is not unreasonable, arbitrary or against public
policy.
J. A waiver by the Holder of any default or failure by the Maker
under this Note will not operate or be construed as a waiver of any other
default or failure or a waiver of the same default or failure on a future
occasion. No delay or omission by the Holder in enforcing any rights under this
Note, acceptance by the Holder of a past-due payment or the granting of any
other indulgence from time to time by the Holder will operate or be construed
as a waiver or a novation, prevent the Holder from insisting on strict
compliance with the terms of this Note or prevent the Holder from exercising
any rights granted by this Note or applicable laws. No extension of the time
for payment will operate to release, discharge, modify, change or affect the
original liability of the Maker or any person, entity or organization liable
for payment under this Note, either in whole or part, unless the Holder agrees
otherwise in writing. This Note may not be modified or amended except by a
writing signed by the party against whom enforcement of the modification or
amendment is sought.
K. All references to the "Maker" and the "Holder" under this
Note will be deemed to include their respective legal representatives,
administrators, executors, successors and assigns, whether arising voluntarily
or by operation of law.
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L. Wherever from the context it appears appropriate, each term
stated in either the singular or the plural will include the singular and the
plural and pronouns stated in the masculine, feminine or neuter gender will
include the masculine, feminine and neuter genders.
M. This Note will be governed by and interpreted in accordance
with the substantive laws of the State of Florida without reference to
conflicts of law. Venue for the purposes of any litigation in connection with
this Note will, at the option of the Holder, lie solely in the Circuit Court in
and for Hillsborough County, Florida or the United States District Court in and
for the Middle District of Florida. The Maker hereby consents to the
jurisdiction of the federal and state courts located in Florida, and hereby
consents to service of process by regular mail at the Maker's address set forth
below. The Maker hereby irrevocably waives all rights to demand a jury trial.
N. The obligations of the Maker under this Note are absolute and
unconditional and are not subject to set-off or any deductions of any kind.
IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND, the undersigned
has executed effective as of the date first set forth above.
MAKER:
/s/ Xxxxx X. Kitchen
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Xxxxx X. Kitchen
000 Xxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx 00000
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Address
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