DRAFT 2/22/98
3
PROMISSORY NOTE
$7,500,000 , 1998
FOR VALUE RECEIVED, Executive TeleCard, Ltd., a
Delaware corporation (the "Maker"), promises to pay to the order
of IDT Corporation, a Delaware corporation, or assigns (the
"Holder"), at 190 Main Street, Hackensack, New Jersey, or at such
other place as the Holder of this Note may from time to time
designate, on the date that is 18 months after the date hereof
(the "Maturity Date"), the principal amount of Seven Million Five
Hundred Thousand Dollars ($7,500,000), together with interest on
the unpaid principal amount hereof from the date hereof until
paid in full, said interest to be due and payable on the Maturity
Date, at a rate per annum equal to eight and seven eighths
percent (8-7/8%), simple interest. All payments hereunder shall
be made in lawful money of the United States of America, without
offset.
The indebtedness evidenced by this Note shall be senior
to all indebtedness incurred by Maker except for up to aggregate
of no more than $1 million of indebtedness to be specified in
writing by maker on or before March 6, 1998.
The unpaid principal amount of this Note may be prepaid
in whole or in part at any time or times without premium or
penalty. Each prepayment shall be applied first to the payment
of all interest and other amounts accrued hereunder on the date
of any such prepayment, and the balance of any such prepayment
shall be applied to the principal amount hereof.
The occurrence of any one or more of the following
shall constitute an event of default ("Event of Default")
hereunder:
(1) Failure to pay, when due, the principal, any
interest, or any other sum payable hereunder (whether
upon maturity hereof, upon any prepayment date, upon
acceleration, or otherwise);
(2) Failure to pay, when due, whether upon
maturity, upon acceleration, or otherwise, of
indebtedness other than this Note in the amount of
$500,000 or more;
(3) The failure of the Maker generally to pay its
debts as such debts become due, the admission by the
Maker in writing of its inability to pay its debts as
such debts become due, or the making by Maker of any
general assignment for the benefit of creditors;
(4) The commencement by the Maker of any case,
proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or
composition of its debts under any law relating to
bankruptcy, insolvency, or reorganization, or relief of
debtors, or seeking appointment of a receiver, trustee,
custodian, or other similar official for all or any
substantial part of its property;
(5) The commencement of any case, proceeding, or
other action against the Maker seeking to have any
order for relief entered against the Maker as debtor,
or seeking reorganization, arrangement, adjustment,
liquidation, dissolution, or composition of the Maker
or its debts under any law relating to bankruptcy,
insolvency, reorganization, or relief of debtors, or
seeking appointment of a receiver, trustee, custodian,
or other similar official for the Maker or for all or
any substantial part of the property of the Maker, and
(i) the Maker shall, by any act or omission, indicate
its consent to, approval of, or acquiescence in such
case, proceeding, or action, or (ii) such case,
proceeding, or action results in the entry of an order
for relief which is not fully stayed within seven
business days after the entry thereof.
Upon the occurrence of any such Event of Default
hereunder, the entire principal amount hereof, and all accrued
and unpaid interest thereon, shall be accelerated, and shall be
immediately due and payable, at the option of the Holder without
demand or notice, and in addition thereto, and not in
substitution therefor, the Holder shall be entitled to exercise
any one or more of the rights and remedies provided by applicable
law. Failure to exercise said option or to pursue such other
remedies shall not constitute a waiver of such option or such
other remedies or of the right to exercise any of the same in the
event of any subsequent Event of Default hereunder.
In the event that the principal amount hereof, any
interest or any other sum due hereunder is not paid when due and
payable, the whole of the unpaid principal amount evidenced
hereby and all unpaid accrued interest thereon shall, from the
date when such payment was due and payable until the date of
payment in full thereof, bear interest at the higher of the rate
of interest hereinbefore provided for or the rate of
percent ( %) per annum, which rate, if applicable, shall
commence, without notice, immediately upon the date when said
payment was due and payable.
The Maker promises to pay all costs and expenses
(including without limitation attorneys' fees and disbursements)
incurred in connection with the collection hereof.
Any payment on this Note coming due on a Saturday, a
Sunday, or a day which is a legal holiday in the place at which a
payment is to be made hereunder shall be made on the next
succeeding day which is a business day in such place, and any
such extension of the time of payment shall be included in the
computation of interest hereunder.
Whenever used herein, the words "Maker" and "Holder"
shall be deemed to include their respective successors and
assigns.
This Note shall be governed by and construed under and
in accordance with the laws of the ____________________ (but not
including the choice of law rules thereof).
IN WITNESS WHEREOF, the undersigned has duly executed
this Note, or have caused this Note to be duly executed on their
behalf, as of the day and year first hereinabove set forth.
[SEAL]