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EXHIBIT 10.3
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 AUGUST 13, 1999
$12,000,000.00 SEPTEMBER 14, 1998
For value received, INTELECT COMMUNICATIONS, INC., a Delaware
corporation ("ICI" or the "Maker"), promises and agrees to pay on or before July
31, 2000, (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 lesser of: (i) the
principal sum of TWELVE MILLION AND NO/100 DOLLARS ($12,000,000.00); or (ii) the
aggregate unpaid principal amount of all Loans and Advances made by the Holder
in its sole discretion hereunder which may be outstanding on the Termination
Date; and in either case together with all outstanding interest and/or other
obligations of Maker. Each Loan shall be due and payable on the Maturity Date.
In no event shall any Maturity Date fall on a date after the Termination Date.
Subject to the limitations set forth herein, Maker may borrow, repay and
reborrow hereunder in Holder's discretion and there is no limitation on the
number of Advances made hereunder in Holder's discretion so long as the total
unpaid principal amount at anytime outstanding does not exceed $12,000,000.00.
Capitalized terms used herein shall have the meaning attributed to them in the
Loan Agreement between Maker and Holder of even date herewith. This Note is
given in amendment, restatement and renewal of the note dated September 14,
1998, and the note dated November 24, 1998, each by Maker to Holder.
The Maker further agrees to pay interest, in like money, on the unpaid
principal amount owing hereunder from time to time from the later of the date
hereof or the date of the initial Advance, at the Prime Rate plus the Margin
Percentage. Such accrued interest shall be due and payable on the Interest
Payment Dates, with a final payment on the Maturity Date.
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, as hereinafter defined. The Obligations (as herein defined) of the
Maker contained in this Note are secured by the Security, Assignment, and Pledge
Agreement.
Each Maker and any and each co-maker, endorsers, guarantors and
sureties 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 of Property 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.
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This Note is secured by the Security, Assignment and Pledge Agreement
between Maker and Holder, dated August 13 1999. This Note, and each Advance, and
all sums payable hereunder, are each subject to the terms and conditions of that
certain AMENDED AND RESTATED LOAN AGREEMENT FOR RECEIVABLES- AND
INVENTORY-BACKED BORROWING between Maker and Holder, dated August 13, 1999, as
amended from time to time.
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:
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Herman M. Frietsch
Chairman & CEO
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PROMISSORY NOTE
SCHEDULE OF PAYMENTS
Name of
Amount of Unpaid Person
Accrued Principal Principal Making
Date Interest Repayment Balance Advances Notation
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