Exhibit 10.3
PROMISSORY NOTE
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$350,000 Springfield, Virginia
Effective as of December 28, 1996
FOR VALUE RECEIVED, Erol Onaran, an individual residing in the Commonwealth
of Virginia ("Onaran"), and Erol's Computer & TV/VCR Service, Inc., a Virginia
corporation ("ECS") (Onaran and ECS hereinafter collectively referred to as
"Makers") jointly and severally promise to pay to the order of Erol's Internet,
Inc., a Delaware corporation, or its successors and assigns ("Payee") the
principal sum of Three Hundred Fifty Thousand Dollars ($350,000).
1. This Note will mature and the entire unpaid balance of principal hereof
together with all accrued and unpaid interest hereon, shall become due and
payable to Payee three (3) weeks after the date on which Makers have received
written notice from an officer of Payee that Loan Number 1600598566, in the
principal amount of Seven Hundred Thousand Dollars ($700,000) from Horizon Bank
of Virginia to OEO, Inc., has been fully satisfied, and that Onaran has been
released as guarantor of Loan Number 1600598566.
2. All payments of this Note shall be applied first to the payment of
accrued but unpaid interest, and any remainder shall be applied to reduction of
the principal balance hereof. Interest shall accrue on the unpaid principal sum
from the date hereof at rate of interest equal to the Applicable Federal Rate
as defined in Section 1274(d) of the Internal Revenue Code of 1986, as amended,
as such rate may be from time to time adjusted. The rate of interest hereon
shall be calculated on the basis of a 360-day year factor applied to actual days
elapsed. All payments hereunder shall be payable in lawful money of the United
States of America and shall be made to the Payee at 7921 Woodruff Court,
Springfield, VA 22151 or at such other address as Payee may from time to time
designate in writing to Makers.
3. Makers waive presentment and demand for payment, notice of intent to
accelerate maturity, notice of acceleration of maturity, protest or notice of
protest and nonpayment, bringing of suit and diligence in taking any action to
collect any sums owing hereunder or in proceeding against any of the rights and
properties securing payment hereof.
4. Makers shall have the right in their discretion to set off against any
amount of accrued and unpaid interest and principal payable by Makers to Payee
hereunder a like amount of any obligation of Payee to Makers under any binding
written agreement.
5. For purposes of this Note the occurrence of each of the following
events shall constitute a "Default": (i) with respect to any payment required
under this Note, Makers fail to make payment of the full amount thereof within
five (5) days of the date such payment is required; (ii) a Maker admits in
writing that it or he is unable to meet its or his obligations as and when such
obligations become due; (iii) a Maker makes an assignment for the benefit of its
or his creditors or file a petition in bankruptcy; (iv) a Maker is adjudged
insolvent; or (v) an involuntary petition in bankruptcy (or other similar
statute) is filed against a Maker and is not dismissed within 60 days after the
filing thereof. Upon the occurrence of a Default, Payee may (A) declare all or
any portion of the entire unpaid principal amount of this Note, and all interest
accrued thereon (collectively the "Outstanding Balance"), immediately due and
payable or (B) set off all or any portion of the entire Outstanding Balance
against any amount owed by Payee to Makers, which rights shall continue until
the Default is cured.
6. This Note shall be governed by and construed according to the laws of
the Commonwealth of Virginia, without regard to principles of conflict of laws.
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IN WITNESS THEREOF, this Note is executed in Springfield, Virginia as of
the date and year above written.
EROL ONARAN
/s/ Erol Onaran
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Erol Onaran
EROL's COMPUTER & TV/VCR SERVICE, INC.
By: /s/ Orhan Onaran
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It's: President
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