PROMISSORY NOTE
June 1, 1996 Houston, Texas $500,000.00
FOR VALUE RECEIVED, ENHANCED SERVICES COMPANY, INC., a Colorado
corporation ("Maker"), promises to pay pursuant to the terms of payment
hereinafter set forth to the order of FCA INVESTMENT COMPANY, a Delaware
corporation, or its assigns ("Payee"), the principal sum of FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($500,000.00), or so much thereof as may be
advanced, with interest on the principal balance from time to time remaining
unpaid prior to maturity as hereinafter provided. The principal sum of this Note
is to be advanced in accordance with the terms and conditions of that certain
Loan Agreement between the Maker as borrower therein and the Payee as lender
dated as of January 19, 1996, as amended by that certain First Amendment dated
as of June 1, 1996 (the "Loan Agreement").
This Promissory Note amends and restates that one certain Promissory
Note in the original principal sum of $500,000.00, dated January 19, 1996,
executed by the Maker and payable to the order of Payee.
Scheduled Payment Terms. Interest on this Note is due and payable in
monthly installments with the first installment payable one (1) month from the
date hereof, and continuing regularly and monthly thereafter on the same day of
the month until one (1) year from the date hereof, when the entire amount
hereof, principal and interest then remaining unpaid, shall be due and payable;
interest being calculated on the unpaid principal to the date of each
installment paid and the payment made credited first to the discharge of
interest accrued and the balance to the reduction of the principal.
Mandatory Prepayments. The Company agrees to make mandatory prepayments
as prescribed in the Loan Agreement.
Interest Rate: The unpaid principal balance of this Note from time to
time outstanding bears interest until this Note has been paid in full, at an
annual rate (the "Applicable Rate") equal the national prime rate as quoted in
the "Money Rates" section of the Wall Street Journal in effect during the term
of this Note ("the Prime Rate"), plus two percentage points (2.0%). Should the
Wall Street Journal fail for any reason to quote a prime rate, Payee may select
as a substitute any prime lending rate quoted by a national banking association.
Interest shall be computed on the basis of a 360-day year and the actual number
of days elapsed. All adjustments to the Applicable Rate, if any, will be made on
each day that the Prime Rate changes. Any increase to the Prime Rate may be
carried over to a subsequent adjustment date without resulting in a waiver or
forfeiture of such adjustment, provided an adjustment to the Applicable Rate is
made within one year from the date of such increase.
Annual Interest Rate on Matured Unpaid Amounts: All past due principal
and interest on this Note bear interest from maturity thereof until paid at the
rate of eighteen (18%) per annum, but in no event in excess of the Maximum Rate,
as defined below.
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Initialed for Identification
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Place of Payment: All payments on this Note shall be made in Harris
County, Texas at the office of Payee at 5847 San Felipe, Suite 850, Houston,
Texas 77057, or at such other place as the holder hereof may from time to time
designate.
Holidays: If any payment of this Note falls due on a Saturday, Sunday
or public holiday at the place of payment, then the due date shall be extended
to the next succeeding full business day and interest shall be payable
accordingly.
Maximum Rate of Interest: The term "Maximum Rate" as used herein means
the greater of the maximum rate of interest from time to time permitted to be
contracted for, charged, or collected by the holder hereof under whichever of
the following allows the highest rate: (a) all federal laws from time to time
applicable to the indebtedness evidenced hereby, (b) the "indicated rate
ceiling" from time to time in effect, as referred to and defined in Article
1.04(a)(1), Title 79, Revised Civil Statutes of Texas 1925, as amended (Tex.
Rev. Civ. Stat. Ann. art. 5069- 1.04), subject, however to the limitations on
said ceiling set forth in Article 1.04(b)(2) of said Title 79, or (c) any other
ceiling under said Title 79 or any other Texas law from time to time applicable
to the indebtedness evidenced hereby which the holder hereof subsequently
designates as the determinative interest ceiling applicable thereto under Texas
law by notice to the undersigned in the manner required by applicable law now or
hereafter in effect.
Usury: It is the intention of Maker and Payee to conform strictly to
the usury laws in force in the State of Texas and the United States of America.
It is therefore agreed that (i) in the event the maturity hereof is accelerated
by reason of an election by Payee, or if the same is prepaid prior to maturity,
all unearned interest, if any, shall be canceled automatically, or if
theretofore paid, shall either be refunded to Maker or credited on the unpaid
principal amount of this Note, whichever remedy is chosen by Payee, (ii) the
aggregate of all interest and other charges constituting interest under
applicable law and contracted for, chargeable or receivable under this Note, or
otherwise in connection with this loan transaction, shall never exceed the
maximum amount of interest allowed under applicable law, nor produce a rate in
excess of the Maximum Rate, and (iii) if any excess interest is provided for, it
shall be deemed a mistake and the same shall either be refunded to Maker, or
credited on the unpaid principal amount hereof, whichever remedy is chosen by
Payee and this Note shall be automatically deemed reformed so as to permit only
the collection of the maximum non-usurious rate and amount of interest allowed
under applicable law. All sums paid or agreed to be paid to the holder hereof
for the use, forbearance or detention of the indebtedness evidenced hereby
shall, to the full extent allowed under applicable law, be amortized, prorated,
allocated and spread through the full term of this Note.
Default and Acceleration of Maturity: Time is of the essence with
respect to this Note. It is understood and agreed that any of the following
events or conditions shall constitute a default on this Note: (i) the failure to
pay any amount hereunder when due; (ii) the failure to perform any covenant or
condition in any assignment, security agreement or other instruments made with
the holder hereof in connection with this obligation; and (iii) the failure to
pay any other indebtedness of Maker to Payee when due. Upon the occurrence of
any default hereunder, the holder may, at its option, without notice or demand
to Maker, declare the entirety of this Note, both unpaid principal and accrued,
unpaid interest, immediately due and payable, and failure to exercise said
option shall not constitute a waiver on the part of Payee of the right to
exercise the same at any other time; provided that (1) in the case of the
occurrence of any failure, event or condition constituting an event of default
under Subparagraphs (i) and (iii) above
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(such failure, event or condition being herein called a "Monetary Default"),
Payee will not exercise any of its rights or remedies with respect to such
Monetary Default unless the Monetary Default shall remain uncured for a period
of ten (10) days after the delivery by the holder to Maker of written notice of
the Monetary Default; provided further that, the holder shall not be required to
given written notice of a Monetary Default more than one (1) time during any
twelve (12) month period during the term of this Note and upon the occurrence of
a second (2nd) Monetary Default during any 12-month period, without the
necessity of delivery of written notice or the expiration of such 10-day period,
the holder may exercise any of its rights or remedies with respect to such
Monetary Default, and (2) in the case of the occurrence of any failure, event or
condition constituting an Event of Default under Subparagraph (ii) above (any
such failure, event or condition being herein called a "Non-Monetary Default"),
Payee will not exercise any of its rights or remedies with respect to such
Non-Monetary Default unless such Non-Monetary Default shall remain uncured for a
period of thirty (30) days after delivery of written notice by the holder to the
Maker of such Non-Monetary Default.
Attorney's Fees and Expenses of Collection: In the event default is
made in the payment of this Note, or in the performance of any covenant,
agreement or obligation in any instrument executed as security for or otherwise
in connection with this Note, and the same are, or any of them is, placed in the
hands of an attorney for collection or enforcement, or if suit is brought for
collection or enforcement, or if this Note is, or any of said documents are,
collected or enforced through probate, bankruptcy or other proceedings, Maker
promises to pay to Payee, in addition to all other amounts due, reasonable
attorney's fees plus other expenses and costs incurred by Payee in connection
therewith.
Waiver: Maker, and every surety, endorser and guarantor of this Note,
hereby expressly waive grace, notice, demand, presentment for payment, notice of
non-payment, protest, notice of protest, notice of intention to accelerate,
notice of acceleration of the indebtedness due hereunder and all other notice,
filing of suit and diligence in collecting this Note, and the enforcing of any
security rights of Payee, and consent and agree that the time of payment hereof
may be extended, renewed and modified without notice at any time and from time
to time, whether or not for a period or terms in excess of the original term
hereof, without notice or consideration to, or consent from, any of them, all
without in any manner affecting their liability hereunder or otherwise with
respect to this Note.
Security for Payment: This Note is secured by all liens, assignments,
security interests, security agreements, and other rights and documents granted
or executed by Maker, or any third party in favor of Payee, whether the same
presently exist or are hereafter created or executed, including, without
limitation a Receivables Security Agreement of even date herewith from Maker to
Payee.
Governing Law: This Note is made and delivered in Harris County, Texas,
where all advances and repayments shall be made. The Maker hereby specially
agrees that this Note shall be construed in accordance with and governed by the
laws of the State of Texas. The Maker further agrees that the state district
court of Texas for Harris County, Texas, or (in the case of diversity of
citizenship) the United States District Court for the Southern District of
Texas, shall have jurisdiction of any action or proceeding arising under this
Note, including any action instituted by the Payee to collect the proceeds of
the Note, unless the Payee agrees otherwise.
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THIS LOAN IS PAYABLE IN FULL ONE (1) YEAR FROM THE DATE HEREOF. YOU
MUST REPAY THE ENTIRE PRINCIPAL BALANCE ON THE LOAN AND UNPAID INTEREST THEN
DUE. THE LENDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. YOU
WILL THEREFORE BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY OWN OR
YOU WILL HAVE TO FIND A LENDER WILLING TO LEND YOU THE MONEY AT PREVAILING
MARKET RATES WHICH MAY BE CONSIDERABLY HIGHER THAN THE INTEREST RATE ON THIS
LOAN. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL
CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING
FROM THE SAME LENDER.
EXECUTED to be effective as of the 1st day of June, 1996.
ENHANCED SERVICES COMPANY, INC.
By:____________________________
Robert Smith, Treasurer
Address for Maker:
16000 Barker's Point Lane, Suite 100
Houston, Texas 77079
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