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EXHIBIT 10.11
PROMISSORY NOTE
$2,150,000 April 14, 1999
Spokane, Washington
Multi-Link Telecommunications, Inc., a Colorado corporation and
Multi-Link Communications, Inc., a Colorado corporation and majority owned
subsidiary of Multi-Link Telecommunications, Inc. (hereinafter collectively
referred to as "Maker") jointly and severally promise to pay to Westburg Media
Capital L. P. ("Holder"), the principal sum of $2,150,000, or so much thereof
as shall have been advanced by Holder to Maker and remains unpaid, together
with interest on that amount, upon the agreements, terms and conditions
provided in this Note.
1. DEFINITIONS. Most of the capitalized terms used in this Note are
defined in the Borrowing Agreement or other of the Loan Documents. Other
capitalized terms are defined elsewhere in this Note.
2. ADVANCES. Holder has heretofore advanced Maker the sum of
$2,100,000 under this Note, and Maker hereby acknowledges receipt of the same.
Holder shall advance Maker the additional sum of $50,000 under this Note (from
which it will pay itself a supplemental Loan Fee in the amount of $2,000)
against receipt of a compliance certificate signed by Maker's president and
chief executive officer and each Guarantor, signifying that Maker and each
Guarantor is in full compliance with all of the terms, conditions and covenants
the Borrowing Agreement and the other Loan Documents, and that all of the
representations and warranties of Maker and Guarantors were true and correct
when made and are true and correct as of the date of the advance. Such
additional advance, together with any other amounts payable by Maker under this
Note or under any of the other Loan Documents shall be added to the principal
of this Note, and shall be paid, together with interest thereon, as herein
provided. Holder's obligation to make advances under this Note shall expire at
5:00 p.m., Spokane time, on April 30, 1999.
3. INTEREST. All sums owing on this Note shall bear interest from the
date funds are advanced under this Note until paid, at a rate of interest equal
to the prime rate of interest from time-to-time offered by U. S. Bank of
Washington, N. A. plus three percent, such rate to be adjusted as of the date
any change in such prime rate is announced. As of the date of this Note, such
rate of interest, as hereinabove determined, is ten and three-quarters percent.
Upon the occurrence of an Event of Default and expiration of the applicable
Cure Period, all sums owing on this Note shall bear interest at the rate of
interest otherwise payable on this Note plus four percent (the "Default Rate")
for so long as the Event of Default continues. All computations of interest
shall be based on a 360-day year for the actual number of days elapsed.
4. PAYMENT. Maker shall pay Holder interest only on this Note in
monthly installments on or before the 15th day of each month, commencing with
the payment due in October of 1998 and ending with the payment due in September
of 1999. Thereafter, Maker shall pay Holder an equal amount per month, on or
before the 15th day of each month, based on a ten
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year amortization of amounts due on this Note, which amount shall be applied
first to interest and secondly to principal; provided, however, that the entire
principal amount of this Note, plus any accrued but unpaid interest, shall be
paid in full on or before October 31, 2003; and provided, further, that if
monthly payments are insufficient to pay interest, then Holder shall have the
right, upon written notice to Maker, to increase monthly payments by an amount
sufficient to pay such interest. All payments shall be made in the lawful
currency of the United States of America. All payments shall be made to Holder
by deduction from Maker's bank account (account number: 0410121059; account
name: Multi-Link Communications, Inc.) maintained at Vectra Bank in Denver,
Colorado (bank routing no. 102003154). By executing this Note, Maker agrees to
execute such other and further authorizations or approvals as Holder or such
bank may require to enable Holder to deduct such payments from Maker's account.
5. ADDITIONS TO PRINCIPAL. All advances made by Holder to Maker,
together with any other amounts payable by Maker under this Note or under any
of the other Loan Documents, shall be added to the principal of this Note, and
shall be paid, together with interest thereon, as herein provided.
6. PREPAYMENT. Maker may prepay any or all amounts owing on this Note
without incurring any additional charge, provided that Maker gives Holder
written notice of the amount to be prepaid at least three (3) days before the
date of prepayment. Notwithstanding any prepayment, Maker shall continue to
make all succeeding installments or other payments as they become due until
this Note is completely paid.
7. SECURITY. The payment of all sums owing on this Note shall be
secured by liens and security interests covering certain assets of Maker, by
the personal guaranties of Nigel V. Alexander and Shawn B. Stickle, by the
pledges by Mr. Alexander and Mr. Stickle of an aggregate of 960,000 shares of
voting capital stock of Multi-Link Telecommunications, Inc. owned beneficially
or of record by them, and by the pledge by Multi-Link Telecommunications, Inc.
of all of the shares of capital stock of Multi-Link Communications, Inc. owned
beneficially or of record by it, all as is more specifically set forth in the
Borrowing Agreement and the other Loan Documents.
8. NOTICE OF EVENT OF DEFAULT; CURE. Upon the occurrence of an Event
of Default, Holder shall give Notice of the Event of Default to Maker, and
Maker shall have the right to cure such Event of Default within the applicable
Cure Period. If Maker fails to cure the Event of Default within the applicable
Cure Period, then Holder may accelerate all amounts owing on this Note. Such
accelerated amounts shall become immediately due and payable. If Holder
accelerates the amounts due under this Note, Holder shall have the right to
pursue any or all of the remedies provided in the Loan Document, including, but
not limited to, the right to bring suit on this Note.
9. REMEDIES. Upon the occurrence of an Event of Default and expiration
of the applicable Cure Period, Holder shall have all rights available to it at
law or in equity, including all
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rights available to it under the Washington Uniform Commercial Code. Any unpaid
balance outstanding at such time, and any costs or other expenses incurred by
Holder in realizing on this Note, shall bear interest at the Default Rate. All
rights and remedies granted under this Note shall be deemed cumulative and not
exclusive of any other right or remedy available to Holder. Maker waives all
rights to presentment, notice of dishonor and protest of this Note.
10. FEES, COSTS AND EXPENSES IN EVENT OF DEFAULT. Maker agrees to pay
on demand all costs and expenses of Holder in connection with an Event of
Default, including all reasonable attorneys' fees, costs and expenses incurred
by Holder in enforcing any of the provisions of this Note or any other Loan
Document, or in collecting payments due under this Note or any other Loan
Document through litigation or other dispute resolution. Such fees, costs and
other expenses shall include all statutory costs and disbursements, all costs
associated with discovery depositions and expert witness fees, and all
out-of-pocket costs incurred by Holder in the prosecution or defense of the
action. For purposes of this section, the phrase "litigation or other dispute
resolution" shall be deemed to include any proceeding commenced in any court of
general or limited jurisdiction, any arbitration or mediation, any proceeding
commenced in the bankruptcy courts of the United States, and any appeal from
any of the foregoing. The amount of all such fees, costs and expenses shall
bear interest at the Default Rate from the date of demand and shall be secured
by the Loan Documents.
11. TRANSFER; OBLIGATIONS BINDING ON SUCCESSORS. Maker may not
transfer any of its rights, duties or obligations under this Note without the
prior written consent of Holder. This Note, and the duties set forth in this
Note, shall bind Maker and its successors and assigns. All rights and powers
established in this Note shall benefit Holder and its successors and assigns.
12. GOVERNING LAW AND VENUE. This Note will be construed, and the
rights, duties, and obligations of the parties will be determined, in
accordance with the laws of the State of Washington, including the Washington
Uniform Commercial Code, and the federal laws of the United States of America.
If any action or other proceeding shall be brought in connection with this
Note, the venue of such action may, in the discretion of Holder, be in Spokane
County, Washington. Maker hereby consents to the exclusive personal
jurisdiction of the Superior Court of Spokane County and the United States
District Court for the Eastern District of Washington.
13. HEADINGS. Headings used in this Note have been included for
convenience and ease of reference only, and will not in any manner influence
the construction or interpretation of any provision of this Note.
14. WAIVER. No right or obligation under this Note will be deemed to
have been waived unless evidenced by a writing signed by the party against whom
the waiver is asserted, or by its duly authorized representative. Any waiver
will be effective only with respect to the specific instance involved, and will
not impair or limit the right of the waiving party to insist upon strict
performance of the right or obligation on any other instance, in any other
respect, or at any other time. No failure on the part of Holder to exercise,
and no delay in exercising, any right or obligation under this Note shall
operate as a waiver thereof.
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15. SEVERABILITY. The parties intend that this Note be enforced to the
greatest extent permitted by applicable law. Therefore, if any provision of
this Note, on its face or as applied to any person or circumstances, is or
becomes unenforceable to any extent, the remainder of this Note and the
application of that provision to other persons, circumstances or extent, will
not be impaired.
16. REFERENCES. Except as otherwise specifically indicated, all
references in this Note to numbered or lettered sections or subsections refer
to sections or subsections of this Note. All references to this Note include
any subsequent amendments to this Note.
17. MAXIMUM INTEREST. Notwithstanding any other provisions of this
Note, any interest, fees, or charges payable by reason of the indebtedness
evidenced by this Note shall not exceed the maximum permitted by law.
18. MISCELLANEOUS PROVISIONS. This Note amends and replaces that
certain promissory note dated September 25, 1998 in the principal amount of
$2,100,000 given by Maker to Holder pursuant to the Borrowing Agreement and the
other Loan Documents of even date therewith. By executing this Note, Maker and
each Guarantor and Pledgor hereby reaffirm its or their obligations to Holder
under the Borrowing Agreement and all of the other Loan Documents, specifically
including the Security Agreement, the Guaranties, the Pledge Agreements and the
Performance Fee Agreement.
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ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.
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MAKER:
Multi-Link Telecommunications, Inc.,
a Colorado corporation
By: /s/ Nigel V. Alexander
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its duly authorized officer
Multi-Link Communications, Inc.,
a Colorado corporation
By: /s/ Nigel V. Alexander
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its duly authorized officer
By signing in the spaces provided below, Nigel V. Alexander and Shawn B.
Stickle, hereby affirm their obligations to Holder pursuant to the Guaranties
dated September 15, 1998.
/s/ Nigel V. Alexander
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Nigel V. Alexander
/s/ Shawn B. Stickle
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Shawn B. Stickle
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