EX-10.1 9 w43802bex10-1.txt COLLATERAL NOTE 1 EXHIBIT 10.1 COLLATERAL NOTE (hereinafter the 'Collateral Note") Borrowers: Sonus Communication Holdings, Inc. Lender: Citizens Telecommunications Company 1600 Wilson Boulevard, Suite 1008 3 High Ridge Park Arlington, VA 22209 Stamford, CT 06905 and Empire One Telecommunications, Inc. 254 West 31st Street New York, NY 10001 Principal Amount: $358,461.88 Interest Rate: 10.5% Date of Collateral Note: March 29, 2000
For value received, the undersigned, SONUS COMMUNICATION HOLDINGS, INC. jointly and severally with its wholly owned subsidiary, EMPIRE ONE TELECOMMUNICATIONS, INC. ("Borrowers") both Delaware corporations, promise to pay to CITIZENS TELECOMMUNICATIONS COMPANY, ("Lender") or order, the principal amount of Three Hundred Fifty Eight Thousand Four Hundred Sixty One and 88/100 Dollars ($358,461.88), together with interest thereon. Said sum shall be paid in the following manner: Borrowers will pay this Collateral Note in eleven (11) payments as follows: one irregular payment of Nineteen Thousand Eight Hundred and Eighty Three Dollars and Eight Four Cents (19,883.84) on April 1, 2000, nine regular payments of Thirteen Thousand Eight Hundred Ten and 98/100 Dollars ($13,810.98) each and one irregular last payment of Two Hundred Thirty-Five Thousand Seven Hundred Sixty-Eight and 77/100 Dollars ($229,695.83). Borrower's first payment is due April 1, 2000, and all subsequent payments are due on the first day of each month thereafter until the full amount of the principal and interest is paid. Borrower's final payment due March 1, 2001, will be for all principal and accrued interest not yet paid. Payments include principal and interest. Interest on this Collateral Note is computed on a 360 day year simple interest basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding using a 360 day year. Unless otherwise agreed or required by applicable law, payments will be applied first to accrued unpaid interest, then to principal, and any remaining amount to any unpaid collection costs and late charges. A schedule of principal and interest payments is attached hereto as Attachment 3. Conditions Precedent to Release of Proceeds by Lender 61 2 (a) Lender shall have received evidence that this Collateral Note, the Security Agreement, and the Stock Pledge and Escrow Agreement have been duly authorized, executed, and delivered by Borrower to Lender; and (b) All guaranties required by Lender for the Loan shall have been executed by each guarantor listed below, delivered to Lender, and be in full force and effect. The guarantors are:
Guarantor Title --------- ----- JOHN K. FRIEDMAN COO of SONUS Communication Holdings, Inc and CEO of Empire One Telecommunications, Inc. W. TODD COFFIN CEO of SONUS Communication Holdings, Inc.
SECURITY. Borrowers have granted Lender a security interest, to secure the payment of this note, in the following property: all of the undersigned corporations' now owned and hereafter acquired accounts, including, but not limited to, accounts receivable and contract rights, client base list, chattel paper, documents and instruments and the right to receive payment under them. Every maker, endorser, and guarantor of this Collateral Note, or the obligation represented by it, waives, in the event of default, presentment, demand, notice, protest, and all other demands and notices in connection with the delivery, acceptance, performance, or enforcement of this Collateral Note, assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral, and/or to the addition or the release of any other party or persons primarily or secondarily liable. Lender agrees to grant a cure period of ten (10) business days after written notice of default has been given to the undersigned corporation. Subject to this opportunity to cure, this Collateral Note will automatically accelerate in the event of default and all amounts will become immediately due and payable. This Collateral Note dated March 29, 2000 replaces the Collateral Note dated April 4, 1997 by and between Empire One Telecommunications, Inc. (a predecessor New York corporation) and Citizens Telecommunications Company. Upon the execution of this note by the Parties hereto, the Collateral Note dated April 4, 1997 will be considered satisfied. The undersigned will pay (i) on demand all costs of collection and (ii) reasonable attorneys' fees, incurred or paid by the holder in enforcing this Collateral Note on default. As herein used, the word "holder" shall mean the payee or other endorsee of 62 3 this Collateral Note, who is in possession of it, or the bearer of it, if this Collateral Note is at the time payable to the bearer. SONUS COMMUNICATION HOLDINGS, INC. By: /s/ W. Todd Coffin -------------------------------------- W. Todd Coffin Chief Executive Officer EMPIRE ONE TELECOMMUNICATIONS, INC. By: /s/ John K. Friedman -------------------------------------- John K. Friedman Chief Executive Officer 63