EXHIBIT 10.4
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY OTHER APPLICABLE SECURITIES LAWS AND, ACCORDINGLY,
THIS NOTE MAY NOT BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED, EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER, THE SECURITIES ACT AND IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS.
PROMISSORY NOTE
AMENDED AND RESTATED AS OF DECEMBER 31, 1998
$750,000.00 NOVEMBER 24, 1998
For value received, INTELECT COMMUNICATIONS, INC., a Delaware corporation
("ICI" or the "MAKER"), promises and agrees to pay on or before May 1, 1999 (the
"MATURITY DATE") to the order of THE COASTAL CORPORATION SECOND PENSION TRUST
(hereinafter called "HOLDER"), or its registered transferees and assigns, at the
office of Custodian at Houston, Texas, in currency of the United States of
America which at the time of payment is legal tender for the payment of public
and private debts, or as otherwise provided in that certain Loan Agreement
between Maker and Holder of even date herewith, the principal sum of SEVEN
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($750,000.00) together with all
outstanding interest and/or other obligations of Maker, all as set forth below
and in the Loan Agreement. Capitalized terms used herein shall have the meaning
attributed to them in the Loan Agreement between Maker and Holder of even date
herewith.
The principal sum of the Loan shall be due and payable as follows:
March 1, 1999, $250,000 plus accrued interest.
April 1, 1999, $250,000 plus accrued interest.
May 1, 1999, $250,000, plus accrued interest, plus all other unpaid
Obligations under the Note or the Loan
Agreement.
The Maker agrees to pay interest, in like money, on the unpaid principal
amount owing hereunder at the Prime Rate plus the Margin Percentage. Such
accrued interest shall be due and payable as aforesaid.
Any holder of this Note is entitled to all of the rights, remedies,
benefits and privileges provided for herein and in the other Transaction
Documents. The Obligations of the Maker contained in this Note are secured by
the Security Agreement.
Each Maker and any and each co-maker, endorser, guarantor and surety or
each other Person liable for payment or collection of this Note expressly and
severally waives grace, demand, presentment for payment, notice of nonpayment,
notice of dishonor, notice of intent to accelerate the maturity, notice of
acceleration of the maturity, notice of default, protest and notice of protest,
bringing of suit, and diligence in taking any action to collect amounts called
for hereunder and in the handling at any time existing as security in connection
herewith, and shall be directly and primarily liable for the payment of all sums
owing and to be owing hereon, regardless of and without any notice, diligence,
act or omission as or with respect to the collection of any amount called for
hereunder or in connection with any Lien at any time had or existing as security
for any amount called for hereunder, and agrees to all renewals, extensions or
partial payments hereon and to any release or substitution of security hereof,
in whole or in part, with or without notice, before or after maturity.
In the event of an Event of Default or a Default in the payment of this
Note in whatever manner, Holder may, by written notice to the Maker declare all
Loans then outstanding to be immediately due and payable without presentment,
demand, protest, notice of protest, or dishonor. If this Note is thereupon
placed in the hands of attorneys for collection, or if the same is collected
through probate, bankruptcy or other similar proceedings, the Maker, jointly and
severally, promise to pay all reasonable attorneys' fees and expenses incurred
by the Holder in connection with such Default or collection proceedings.
The Holder agrees to make Advances to the Maker at any time and from time
to time on and after the date of this Note to, but excluding, the Maturity Date,
up to a principal amount not to exceed the Loan Maximum, as more fully
set forth in the Loan Agreement. All Advances shall mature and be due and
payable in full on the Maturity Date. Each Advance shall be made in accordance
with the procedures set forth in the Loan Agreement.
This Note is secured by the Security Agreement, between Maker and Holder,
each dated November 24, 1998. This Note, and each Advance, and all sums payable
hereunder, are each subject to the terms and conditions of that certain Loan
Agreement between Maker and Holder, dated November 24, 1998.
Each provision in this Note and the other Transaction Documents is
expressly limited so that in no event whatsoever shall the amount paid, or
otherwise agreed to be paid, to the Holder for the use, forbearance or detention
of the money to be loaned under this Note or any Transaction Document or
otherwise (including any sums paid as required by any covenant or obligation
contained herein or in any other Transaction Document which is for the use,
forbearance or detention of such money), exceed that amount of money which would
cause the effective rate of interest to exceed the Highest Lawful Rate, and all
amounts owed under this Note and each other Transaction Document shall be held
to be subject to reduction to the effect that such amounts so paid or agreed to
be paid which are for the use, forbearance or detention of money under this Note
or such Transaction Document shall in no event exceed that amount of money which
would cause the effective rate of interest to exceed the Highest Lawful Rate.
Anything in this Note or any other Transaction Document to the contrary
notwithstanding, the Maker shall never be required to pay unearned interest on
this Note or ever be required to pay interest on this Note at a rate in excess
of the Highest Lawful Rate, and if the effective rate of interest which would
otherwise be payable with respect to this Note would exceed the Highest Lawful
Rate, or if the Holder shall receive any unearned interest or shall receive
monies that are deemed to constitute interest which would increase the effective
rate of interest payable by the Maker with respect to this Note to a rate in
excess of the Highest Lawful Rate, then (i) the amount of interest which would
otherwise be payable by the Maker with respect to this Note shall be reduced to
the amount allowed under applicable law and (ii) any unearned interest paid by
the Maker or any interest paid by the Maker in excess of the Highest Lawful Rate
shall be in the first instance credited on the principal of this Note with the
excess thereof, if any, refunded to the Maker. It is further agreed that,
without limitation of the foregoing, all calculations of the rate of interest
contracted for, charged or received by the Holder under this Note or the other
Transaction Documents, are made for the purpose of determining whether such rate
exceeds the Highest Lawful Rate applicable to the Holder (such Highest Lawful
Rate being the Holder's "MAXIMUM PERMISSIBLE RATE"), shall be made, to the
extent permitted by usury laws applicable to the Holder (now or hereafter
enacted), by (a) characterizing any non-principal payment as an expense, fee or
premium rather than as interest and (b) amortizing, prorating and spreading in
equal parts during the period of the full stated term of the Advances evidenced
by the Note all interest at any time contracted for, charged or received by the
Holder in connection therewith.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO PRINCIPLES OF CHOICE OF
LAW) AND THE LAWS OF THE UNITED STATES AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF SAID STATE AND OF THE UNITED
STATES.
THIS NOTE AND THE OTHER TRANSACTION DOCUMENTS TO WHICH ANY OF MAKER OR ANY
OF ITS SUBSIDIARIES IS A PARTY CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN
SECTION 26.02(A) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO ORAL AGREEMENTS BETWEEN THE PARTIES.
THIS NOTE EXECUTED AS OF THE EFFECTIVE DATE:
INTELECT COMMUNICATIONS, INC.
By: ___________________________________
Herman M. Frietsch
Chairman & CEO
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