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                                                                   Exhibit 10.12

                                  DEMAND NOTE

533,334 Shares of iExalt, Inc.
Houston, Texas                                       November 22, 2000

For value received, iExalt, Inc., a Nevada Corporation ("Maker") unconditionally
promises to pay to Donald W. Sapaugh (Holder), on demand after six months from
the date of this note, with notice as provided herein, the principal amount of
533,334 shares of iExalt, Inc., and a further 5,333 shares per month of iExalt,
Inc., which further amount represents the accrued interest from the date of this
note. The number of shares paid for interest shall be calculated using twelve
(12) percent on an annual basis. Principal shares returned, and interest are
payable in lawful security of iExalt, Inc.(ie. Common Stock), at 12000 Aerospace
Avenue, Suite 110, Houston, Texas, or at such place as may later be designated
by written notice from the Holder to the Maker hereof, as follows:

      All principal and accrued interest (payable in shares issued) is due on
      demand after thirty (30) days' written notice by Holder to Maker. Demand
      may not be made before February 1, 2001, or such time as the Company is
      unable to return principle shares due to liquidation. In any event, the
      entire indebtedness, principal and accrued interest is due no later than
      six (6) months from the date of this note.

Optional Repayment:

At the option of Holder, on notice to Maker, this note may be repaid in common
stock of iExalt, Inc., at a rate based on the following formula (as approved by
the Directors of iExalt, Inc., on the 22nd day of November, 2000):

For each share of common stock (which was held by the Holder for a period of not
less than twelve (12) months ["Loan Stock"]), loaned to the Company by a
Director/Investor, that Director/Investor may elect to receive restricted common
stock of the Company as repayment of the common stock tendered by the Holder
under the terms of this note ("Repayment Stock"). The value of the Loan Stock
shall be the aggregate value of the Loan Stock at the date of tender or the date
of this Demand Note, whichever is higher. The amount of Repayment Stock shall
then be valued at a price that is equal to the lowest price at which the Company
has sold its common stock during the period between the date of the Demand Note
and the date of the exercise of the option ("Option Period").


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        Example Calculation:

                  (1) Assume the number of shares of Loan Stock equals 50,000,
                  the closing price of the stock traded at the date of tender is
                  $0.95, and the closing price of the stock traded on the Demand
                  Note date is $1.00, then the amount to be used for the
                  Repayment Stock calculation above is $50,000 (50,000 times the
                  highest price of $1.00).

                  (2) If the lowest share price at which the Company has sold
                  its common stock within the Option Period is $0.72, then if
                  the $50,000 Loan Stock value is converted to stock, the total
                  shares to be received by the Holder will be 69,444 restricted
                  common shares for repayment of principal.

Any partial payments shall be first applied to accrued interest and the balance
to principal.

This Note may be prepaid, at any time, in whole or in part, without penalty.

This Note shall at the option of the Holder hereof be immediately due and
payable upon failure to make any payment due hereunder or for breach of any
condition of any security interest, mortgage, pledge agreement or guaranty
granted as collateral security for this Note or breach of any condition of any
security agreement or mortgage, if any, having a priority over any security
agreement or mortgage on collateral granted, in whole or in part, as collateral
security for this Note or upon the filing by any of the undersigned of an
assignment for the benefit of creditors, bankruptcy, or for relief under any
provisions of the Bankruptcy Code; or by suffering an involuntary petition in
bankruptcy or receivership not vacated within thirty days.

In the event this Note shall be in default, and placed with an attorney for
collection, then Maker agrees to pay all reasonable attorney's fees and costs of
collection. Any payments not made within five days of due date demanded shall be
subject to a late charge of ten percent (10%) of the payment due. All payments
under this Demand Note shall be made to such address as may from time to time be
designated by any holder hereof.

In the event of a default of any of the terms of this demand note, the
undersigned and all other parties to this Note, whether as endorsers,
guarantors, or sureties, waive demand, presentment, and protest and all notices
thereto and further agree to remain bound,


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notwithstanding any extension, modification, waiver, or other indulgence by any
holder or upon the discharge or release of any obligor hereunder or to this
Note, or upon the exchange, substitution, or release of any collateral granted
as security for this Note.

This Demand Note shall be governed by the Section 3 of the Uniform Commercial
Code and by the laws of the State of Texas.


Signed this 15th day of February, 2001.

                              By: iExalt, Inc. a Nevada Corporation


                              /s/Donald W. Sapaugh
                              --------------------
                              Donald W. Sapaugh, Chief Executive Officer
                              12000 Aerospace Avenue
                              Suite 375
                              Houston, Texas 77034


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