PROMISSORY NOTE
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$500,000
June 14, 2000
Passaic, New Jersey
FOR VALUE RECEIVED, the undersigned Voice & Data Communications (Latin America),
Inc., a Delaware corporation ("Maker"), promises to pay to the order of VDC
Communications, Inc., a Delaware corporation ("Holder"), which term shall
include any subsequent holder of this Note, at 75 Holly Hill Lane, Greenwich, CT
06830 (or at such other place as Holder shall designate in writing) in lawful
money of the United States of America, the aggregate principal sum of Five
Hundred Thousand Dollars ($500,000), with interest thereon at the rate (the
"Interest Rate") described below.
1. Interest Rate. The Interest Rate shall be eight percent (8%) per
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annum.
2. Outstanding Principal Balance. All references to the "Outstanding
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Principal Balance" shall mean the amount of Five Hundred Thousand
Dollars ($500,000), less any principal repaid.
3. Payments. This note shall be payable in full on June 14, 2004
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(the "Maturity Date") when the entire Outstanding Principal
Balance, and any accrued but unpaid interest, shall be due and
payable.
4. Application of Payments. All payments on this Note shall be
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applied first to the payment of accrued and unpaid interest, and
then to the reduction of the Outstanding Principal Balance.
5. Prepayment Right. Maker shall have the right to prepay at any
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time, in whole or in part, the Outstanding Principal Balance of
this Note, without premium or penalty.
6. Accelerated Maturity. Notwithstanding anything in this Note to the
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contrary and irrespective of the Maturity Date, the entire
Outstanding Principal Balance and accrued interest shall become
immediately due and payable upon the earliest to occur of the
following (the "Accelerated Maturity Date"): (a) the sale of all
or substantially all of the assets of the Maker or the common
stock of the Maker to a third party; or (b) the issuance of the
securities of Maker on the public market.
7. Modifications. From time to time, without affecting the
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obligation of Maker to pay the Outstanding Principal Balance or to
observe the covenants of Maker contained herein, and without
giving notice to or obtaining the consent of Maker, Holder may, at
the option of Holder, extend the time for payment of the
Outstanding Principal Balance or any part thereof, reduce the
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payments hereunder, release any person liable hereunder, accept a
renewal or extension of this Note, join in any extension or
subordination agreement, release any security given herefor, take
or release security, or agree in writing with Maker to modify
the Interest Rate or any other provision of this Note.
8. Events of Default. Time is of the essence hereof. Upon the
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occurrence of any of the following events (the "Events of
Default"), payment of the entire Outstanding Principal Balance and
accrued interest of this Note shall, at the option of the Holder,
be accelerated and shall be immediately due and payable without
notice or demand:
(a) Failure of Maker to pay the Outstanding Principal Balance
and accrued interest in full on the Maturity Date or the
Accelerated Maturity Date; or
(b) All or the majority of the value of the assets of Maker is
seized or levied upon by writ of attachment, garnishment,
execution or otherwise, and such seizure or levy is not
released within thirty (30) calendar days thereafter; or
(c) Maker executes a general assignment for the benefit of its
creditors, convenes any meeting of its creditors, becomes
insolvent, admits in writings its insolvency or inability
to pay its debts, or is unable to pay or is generally not
paying its debts as they become due; or
(d) A receiver, trustee, custodian or agent is appointed to
take possession of all or any substantial portion of
Maker's assets; or
(e) Any case or proceeding is voluntarily commenced by Maker
under any provision of the federal Bankruptcy Code or any
other federal or state law relating to debtor
rehabilitation, insolvency, bankruptcy, liquidation or
reorganization, or any such case or proceeding is
involuntarily commenced against Maker and not dismissed
within thirty (30) calendar days thereafter; or
(f) Any representation made by Maker in this Note or in any of
the other documents delivered in connection therewith,
shall have been untrue or incorrect in any material
respect when made.
9. Default Rate. In the event that Maker fails to pay the Outstanding
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Principal Balance and all accrued interest in full on the Maturity
Date or the Accelerated Maturity Date, the amount past due
(including any acceleration of the Outstanding Principal Balance),
and unpaid shall bear interest at an annual rate equal to the
lesser of (i) fifteen percent (15%), or (ii) the maximum amount
permitted by law (the "Default Rate"), computed from the date on
which said amount was due and payable until paid. The charging or
collecting of interest at the Default Rate shall not limit any of
Holder's other rights or remedies under this Note.
10. Governing Law. Maker, and each endorser and cosigner of this Note,
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acknowledges and agrees that this Note is made and is intended to
be paid and performed in the State of New Jersey and the
provisions hereof will be construed in accordance with the laws of
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the State of New Jersey and, to the extent that federal law may
preempt the applicability of state laws, federal law. Maker, and
each endorser and cosigner of this Note further agree that upon
the occurrence of an Event of Default, this Note may be enforced
in any court of competent jurisdiction in the State of New Jersey,
and they do hereby submit to the jurisdiction of such courts
regardless of their residence.
11. Remedies Cumulative: Waiver. The remedies of Holder as provided
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herein shall be cumulative and concurrent, and may be pursued
singularly, successively or together, in the sole discretion of
Holder, and may be exercised as often as occasion therefor shall
arise. No act of omission or commission of Holder, including
specifically any failure to exercise any right, remedy or
recourse, shall be deemed to be a waiver or release of the same;
such waiver or release to be affected only through a written
document executed by Holder and then only to the extent
specifically recited therein. Without limiting the generality of
the preceding sentence, acceptance by Holder of any payment with
knowledge of the occurrence of an Event of Default by Maker shall
not be deemed a waiver of such Event of Default, and acceptance by
Holder of any payment in an amount less than the amount then due
hereunder shall be an acceptance on account only and shall not in
any way affect the existence of an Event of Default hereunder. A
waiver or release with reference to any one event shall not be
construed as continuing, as a bar to, or as a waiver or release
of, any subsequent right, remedy or recourse as to a subsequent
event.
12. No Usury Intended. All agreements between Maker and Holder are
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expressly limited so that in no contingency or event whatsoever,
whether by reason of: error of fact or law; payment, prepayment or
advancement of the proceeds hereof; acceleration of maturity of
the Outstanding Principal Balance, or otherwise, shall the amount
paid or agreed to be paid to Holder hereof for the use,
forbearance or retention of the money to be advanced hereunder,
including any charges collected or made in connection with the
indebtedness evidenced by this Note which may be treated as
interest under applicable law, if any, exceed the maximum legal
limit (if any such limit is applicable) under United States
federal law or state law (to the extent not preempted by federal
law, if any), now or hereafter governing the interest payable in
connection with such agreements. If, from any circumstances
whatsoever, fulfillment of any provision hereof at the time
performance of such provision shall be due shall involve
transcending the limit of validity (if any) prescribed by law
which a court of competent jurisdiction may deem applicable
hereto, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any
circumstances, Holder shall ever receive as interest an amount
which would exceed the maximum legal limit (if any such limit is
applicable), such amount which would be excessive interest shall
be applied to the reduction of the Outstanding Principal Balance
due hereunder and not to the payment of interest or, if necessary,
rebated to Maker. This provision shall control every other
provision of all agreements between Maker and Holder.
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13. Guaranty. Not applicable.
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14. Purpose of Loan. Maker certifies that the loan evidenced by this
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Note is obtained for business or commercial purposes and that the
proceeds thereof shall not be used for personal, family,
household, or agricultural purposes.
15. Miscellaneous Provisions.
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(a) Maker, and each endorser and cosigner of this Note expressly
grants to Holder the right to release or to agree not to sue
any other person, or to suspend the right to enforce this Note
against such other person or to otherwise discharge such
person; and Maker, and each endorser and cosigner agrees that
the exercise of such rights by Holder will have no effect on
this liability of any other person, primarily or secondarily
liable hereunder. Maker, and each endorser and cosigner of
this Note waives, to the fullest extent permitted by law,
demand for payment, presentment for payment, protest, notice
of protest, notice of dishonor, notice of nonpayment, notice
of acceleration of maturity, diligence in taking any action to
collect sums owing hereunder, any duty or obligation of Holder
to effect, protect, perfect, retain or enforce any security
for the payment of this Note or to proceed against any
collateral before otherwise enforcing this Note, and the right
to plead as a defense to the payment hereof any statute of
limitations.
(b) This Note and each payment of principal and interest hereunder
shall be paid when due without deduction or setoff of any kind
or nature whatsoever.
(c) Maker agrees to reimburse Holder for all costs, including,
without limitation, reasonable attorneys' fees (including an
allocable portion of in-house counsel fees), incurred to
collect this Note if this Note is not paid when due,
including, but not limited to, attorneys' fees (including an
allocable portion of in-house counsel fees) incurred in
connection with any bankruptcy proceedings instituted by or
against Maker (including relief from stay litigation).
(d) If any provision hereof is for any reason and to any extent,
invalid or unenforceable, then neither the remainder of the
document in which such provision is contained, nor the
application of the provision to other persons, entities or
circumstances shall be affected thereby, but instead shall be
enforceable to the maximum extent permitted by law.
(e) This Note shall be a joint and several obligation of Maker,
and of all endorsers and cosigners hereof and shall be binding
upon them and their respective heirs, personal
representatives, successors and assigns.
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(f) This Note may not be modified or amended orally, but only by a
modification or amendment in writing signed by Holder and
Maker.
(g) When the context and construction so require, all words used
in the singular herein shall be deemed to have been used in
the plural and the masculine shall include the feminine and
neuter and vice versa. The word "person" as used herein shall
include any individual, company, firm, association,
partnership, corporation, trust or other legal entity of any
kind whatsoever.
(h) The headings of the paragraphs and sections of this Note are
for convenience or reference only, are not to be considered a
part hereof and shall not limit or otherwise affect any of the
terms hereof.
(i) In the event that at any time any payment received by Holder
hereunder shall be deemed by final order of a court of
competent jurisdiction to have been a voidable preference or
fraudulent conveyance under the bankruptcy or insolvency laws
of the United States, or shall otherwise be deemed to be due
to any party other than Holder, then, in any such event, the
obligation to make such payment shall survive any cancellation
of this Note and/or return thereof to Maker and shall not be
discharged or satisfied by any prior payment thereof and/or
cancellation of this Note, but shall remain a valid and
binding obligation enforceable in accordance with the terms
and provisions hereof, and the amount of such payment shall
bear interest at the Default Rate from the date of such final
order until repaid hereunder.
IN WITNESS WHEREOF Maker has executed this Promissory Note as of the
day and year first above written.
"Maker"
VOICE & DATA COMMUNICATIONS (LATIN
AMERICA), INC.
By /s/ Frederick A. Moran
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Frederick A. Moran
CEO
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