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EXHIBIT 10.10
PROMISSORY NOTE AND SECURITY AGREEMENT
$928,210.00 November 25, 1996
Promise to Pay. For value received, the undersigned (referred to
collectively and individually in this Note as "Maker"), jointly and severally
promise and agree to pay to National Applied Computer Technologies, Inc., a
Utah corporation with a place of business at 000 Xxxx 000 Xxxxx, Xxxx, Xxxx
00000 ("NACT"), in lawful money of the United States of America, the principal
sum of Nine Hundred Twenty-Eight Thousand Two Hundred One Dollars ($928,201
.00) plus interest from the date of this Note as provided below.
Additional Amounts. This Note shall also encompass and govern any
additional sums that the Maker may borrow from NACT in the future without need
of any additional documentation, which additional sums loaned to Maker by NACT
shall automatically be added to the principal amount payable hereunder and
shall be subject to the same rate of interest charged hereunder and all other
terms and conditions hereof.
Interest. Interest shall accrue on the unpaid balance of this Note at
a rate of Twelve percent (12%) per annum, and shall be paid as provide below.
After the occurrence of any event of default, and during the continuance of the
default, this Note shall bear interest at a rate of eighteen percent (18%) per
annum.
Payment. The principal and interest shall be payable in monthly
installments beginning on December 2, 1996 and continuing thereafter on the
20th day of each succeeding month until all sums payable under this Note have
been paid in full. The amount of each monthly installment, including principal
and interest shall be equal to
(a) six percent (6%) of Makers's combined gross billing for the
immediately preceding calendar month, plus
(b) the greater of (i) Twenty-five percent (25%) of Maker's
combined net profits before taxes for the immediately
preceding calendar month, or (ii) Two Thousand Five Hundred
dollars ($2,500)
For purposes of this Note, combined gross xxxxxxxx during a calendar
month shall be calculated by dividing the carrier charges billed to Maker
during the month by 75%. Net profit before taxes shall mean Gross billing less
carrier usage and operating expenses.
Financial Statements. Together with each payment under this Note,
maker shall provide to NACT, a statement of operations and cash flow for the
preceding calendar month, and a statement indicating how the monthly payment
was calculated. All financial statements provided to NACT hereunder shall be
prepared using generally accepted accounting principles consistently applied.
Maker shall not change any of its accounting methods or procedures from methods
and procedures used in preparing financial statements that previously have been
provided to NACT.
Application of Payments. All payments shall be applied first, to
expenses incurred to
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enforce the Maker's obligations under this Note, second, to any accrued
interest, and the remainder shall be applied to principal.
Prepayment. Prepayments hereunder may be made at any time and in any amount
without penalty. Any partial prepayment made under this Note shall be applied
to installments due in reverse order of maturity and shall not operate to
postpone, suspend the obligation to make, or alter the size of any future
payment(s) due hereunder.
Place and Manner of Payment. All payment shall be made by certified
check or other form of payment acceptable to NACT and shall be delivered to
NACT at the address first set out above, attn: Xxxx Xxxx.
Default. Each of the following shall constitute an event of default
under this Note:
(a) Maker fails to pay any sum due under this Note in the
agreed upon amount on the due date as promised in this
Note, and the failure remains uncured for a period of
fifteen (15) days.
(b) Maker fails to perform any promise made by Maker in
this Note Or any other written agreement with NACT.
(c) Any Maker or any guarantor or person acknowledging
this Note makes any false representation to NACT, or
provides information that is false, or refuses to
supply financial information to NACT upon NACT's
request.
(d) Any Maker or guarantor is dissolved or liquidated, or
any Maker ceases to function as a going concern or
ceases to conduct its operations in the normal course
of business, or makes an assignment for the benefit
of its property, or any proceedings are commenced by
or against Maker under any bankruptcy, insolvency, or
debtor's relief law.
Certain Rights upon Default. In the event of any default under this
Note, all sums payable hereunder shall be accelerated and shall become
immediately due and payable. Maker agrees to pay any and all costs and expenses
(regardless of the particular nature thereof and whether incurred with or
without suit or before or after judgment) that may be incurred by NACT in
connection with the enforcement of any of NACT's rights under this Note,
including but not limited to NACT's court costs and reasonable attorneys' fees.
Security. As security for all of Maker's obligations under this Note,
Maker hereby grants to NACT a security interest in all of its accounts
receivable, inventory, equipment, capital assets and customer lists as shown on
Schedule A to this Note. As further security, Maker hereby grants to NACT an
assignment of its contracts with all of its customers. In the event of any
default under this Note, NACT shall have the right immediately to use Maker's
customer lists
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without compensation to Maker and to contact Maker's customers and obtain the
customers' consent to the assignment granted hereunder and/or to enter into new
agreements with the customers. Any and all sums received by NACT arising out of
such agreements , less expenses incurred by NACT in connections therewith,
shall be applied to this Note. NACT shall also have the right to take
possession of any tangible assets given as security for this Note and to notify
accounts to make payments directly to NACT. All of NACT's rights hereunder may
be exercised by NACT without judicial process.
Further Assurances. Maker agrees to do such further acts and execute
and deliver such further documents and/or instruments as may be necessary or
desirable to assure payment of all amounts payable under this Note, and Maker
agrees to cooperate with NACT in filing any financing statement or other
document reasonably deemed necessary by NACT to perfect NACT's security
interest hereunder.
Certain Waivers by Maker. Maker waives presentment for payment,
protest, demand, notice of protest, notice of dishonor, and notice of
nonpayment, and expressly agrees that this Note, or any payment hereunder, may
be extended from time to time by NACT hereof without in any way affecting
Maker's liability. This Note shall be fully binding upon Maker and Maker's
lawful heirs, representatives, successors, and permitted assignees.
Waiver by NACT. The acceptance of any payment after the occurrence of
a default or any event giving rise to a right of acceleration shall not
constitute a waiver of the right of acceleration in connection with the default
or event or any subsequent default or event.
Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Utah, and the parties hereto consent
to personal jurisdiction in any court in the State of Utah.
MC INTERNATIONAL OVERSEAS
/s/ Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
____________________________________ ___________________________________
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President of Operations Title: Vice President of Operations
The undersigned represent and warrant that they are familiar with the
operations of the makers of this Note, that the accounts being handled by
Lender under the Maker's names are accounts of the makers, and that the
security interest granted under this Note is valid and binding with respect to
such accounts and the other assets identified herein.
/s/ Xxxxx X. Xxxx 12/2/96 /s/ Xxxx Xxxxx 12/2/96
______________________________ ______________________________
Xxxxx Xxxx Date Xxxx Xxxxx Date
/s/ Xxxxx X. Xxxxxx 12/2/96
______________________________
Xxxxx Xxxxxx Date
