Exhibit 10.2
NON-NEGOTIABLE PROMISSORY NOTE
$1,495,000.00 July 30, 2007
FOR VALUE RECEIVED, FirstPlus Development Company and FirstPlus
Enterprises, Inc., each Texas corporations (collectively, the "MAKER"), hereby
promise to pay Globalnet Enterprises, LLC, a Pennsylvania limited liability
company ("PAYEE"), the principal amount of ONE MILLION FOUR HUNDRED NINETY FIVE
THOUSAND DOLLARS ($1,495,000.00), with interest on the principal amount hereof
from time to time outstanding from the date hereof at the rate of seven percent
(7%) per annum, or, if and when applicable, at the Default Rate (as defined in
Section 2.2 below), such interest and principal to be paid as set forth below,
in lawful currency of the United States of America in immediately available
funds, without counterclaim or setoff (except as provided herein) and free and
clear of, and without any deduction or withholding for, any taxes or other
payments.
This Note has been delivered pursuant to, and in connection with the
closing of the transactions contemplated by that certain Agreement for the
Purchase and Sale of Membership Interests, dated the date hereof, by and among
Maker, Payee and Others (the "PURCHASE AGREEMENT"). The Purchase Agreement and
all other agreements, documents and instruments collateral thereto, together
with all amendments, replacements, increases, renewals and modifications thereof
or thereto, are collectively referred herein as the "TRANSACTION DOCUMENTS".
ARTICLE I
PAYMENT; MATURITY
Section 1.1 Subject to Payee's right to demand payment of principal and
accrued interest as otherwise set forth in this Note, the principal amount of
this Note, and interest thereon, shall be due and payable in a lump sum on July
___, 2009 (the "MATURITY DATE").
Section 1.2 All computations of interest shall be made on the basis of the
actual number of days elapsed in a three hundred sixty (360) day year.
Section 1.3 The principal amount of this Note is pre-payable in whole or
in part at any time, without premium or penalty; provided, however, that any
such prepayment is accompanied by payment of all accrued and unpaid interest on
the amount prepaid to the date of prepayment and payment of all other amounts
due and payable hereunder.
Section 1.4 All payments shall be applied first to payment of all fees,
expenses and other amounts due to Payee (excluding principal and interest), then
to accrued interest, and the balance on account of outstanding principal;
provided, however, that after an Event of Default hereunder, payments will be
applied to the obligations of Maker to Payee as Payee determines in its sole
discretion.
ARTICLE II
ADDITIONAL PAYMENTS; USURY LIMITATION
Section 2.1 From and after the Maturity Date, either as stated in Section
1.1 hereof or as the result of a declaration of maturity made by Payee, whether
by acceleration or otherwise, and from and after the occurrence of any Event of
Default hereunder irrespective of any declaration of maturity, the entire
principal remaining unpaid hereunder, as well as any amounts owing pursuant to
Section 2.1, shall bear interest at the rate of ten percent (10%) per annum (the
"DEFAULT RATE"), or the highest applicable lawful rate, whichever is then less.
The Default Rate shall continue to apply whether or not judgment shall be
entered on this Note. Maker acknowledges that: (i) such additional rate is a
material inducement to Payee to enter into the Transaction Documents; (ii) Payee
would not have agreed to the terms of the Transaction Documents in the absence
of the agreement of Maker to pay interest at the Default Rate; (iii) the Default
Rate represents compensation for increased risk to Payee that the Note will not
be repaid; and (iv) such rate is not a penalty and represents a reasonable
estimate of compensation to Payee for losses that are difficult to ascertain.
Section 2.2 If the entire amount of unpaid principal and interest and any
accrued but unpaid fees, costs and expenses hereunder are not paid in full
within fifteen (15) days after the Maturity Date or following demand by Payee in
accordance with the terms of this Note, Maker shall pay to Payee a late fee
equal to five percent (5%) of such amount. Such fifteen-day period shall not be
construed in any way to extend the Maturity Date. Maker acknowledges that: (i)
such late fee is a material inducement to Payee to enter into the Transaction
Documents; (ii) Payee would not have agreed to the terms of the Transaction
Documents in the absence of the agreement of Maker to pay such late fee; (iii)
such late fee represents compensation for increased risk to Payee that the Note
will not be repaid; and (iv) such late fee is not a penalty and represents a
reasonable estimate of compensation to Payee for losses that are difficult to
ascertain.
Section 2.3 If any provision of this Note requires interest payments in
excess of the highest rate permitted by law, the provision in question shall be
deemed to require only the highest such payment permitted by law. Any amounts
theretofore received by Payee hereunder in excess of the maximum amount of
interest so permitted to be collected by Payee shall be applied by Payee in
reduction of the outstanding principal balance hereof or, if this Note shall
have theretofore been paid in full, the amount of such excess shall be promptly
returned by Payee to the Maker. Any judgment obtained for sums due hereunder
shall accrue interest at the Default Rate as aforesaid until paid.
ARTICLE III
DEFAULT
Section 3.1 Each of the following shall constitute an event of default
hereunder (an "EVENT OF DEFAULT"):
(a) The nonpayment of principal and interest due hereunder on the
Maturity Date.
(b) The nonpayment within fifteen (15) days of the date when first
due of any sum payable under this Note other than the principal and interest due
hereunder.
(c) Default in the performance of any obligations, agreements or
covenants of Maker hereunder or under any of the other Transaction Documents.
(d) Any representation or warranty made by Maker hereunder or under
any of the other Transaction Documents is untrue in any material respect as of
the date hereof, or becomes untrue in any material respect prior to all of the
obligations hereunder being fully, finally and irrevocably paid.
(e) The entry of a judgment or judgments against Maker in excess of
$250,000 in the aggregate and the failure of Maker to discharge or bond over the
judgment(s) within twenty (20) days of the entry thereof.
(f) The filing by or on behalf of or against Maker of a petition of
bankruptcy or a petition to take advantage of any insolvency act including,
without limitation, a petition for reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any bankruptcy or
insolvency law, which is not withdrawn or dismissed within sixty (60) days of
filing, or any assignment for the benefit of creditors by Maker.
(g) The dissolution or termination of existence of Maker.
(h) Any material adverse change in Maker's financial condition from
the financial condition thereof represented and/or disclosed to Payee as of the
date hereof. For the purposes hereof, "material adverse change" shall mean any
event that Maker's parent corporation, FirstPlus Financial Group, Inc., would be
obligated to report under Item 2.04 of a Current Report on Form 8-K filed under
the Securities and Exchange Act of 1934, as amended.
Section 3.2 REMEDIES.
(a) Upon the occurrence of an Event of Default, Payee may exercise
any right, power or remedy permitted by law or as set forth herein or in any of
the other Transaction Documents and, without limiting the generality of the
foregoing, Payee shall thereupon have the right at its option and without notice
to Maker to declare the entire unpaid principal amount hereof and all interest
accrued hereon, and all other sums guaranteed by the Purchase Agreement to be,
and such principal, interest and other sums shall thereupon become, forthwith
due and payable. The failure by Payee to exercise the acceleration option shall
not constitute a waiver of its right (i) to exercise the acceleration option at
any other time so long as that Event of Default remains outstanding and uncured,
or (ii) to exercise it upon the occurrence of another Event of Default.
(b) In addition to all other sums due and payable hereunder, upon
the occurrence of any alleged Event of Default, if Payee at any time retains one
or more attorneys to enforce any obligation of Maker hereunder, or to defend
itself against any claim by Maker, whether or not suit is filed, and Payee is
wholly or partially successful, then, upon written demand, Maker shall pay
Payee's reasonable attorney's fees, expenses and litigation costs, if any. Any
such attorney's fees, expenses and litigation costs payable by Maker to Payee
shall be payable as principal hereunder.
ARTICLE IV
RIGHTS CUMULATIVE
The rights and remedies of Payee as provided herein and in the other
Transaction Documents shall be cumulative and concurrent, and may be pursued
singly, successively or together, at the sole discretion of Payee; and the
failure to exercise any such right or remedy shall in no event be construed as a
waiver or release of the same. Payee shall not by any act of omission or
commission be deemed to waive any of its rights or remedies under this Note
unless such waiver is in writing and signed by Payee, and then only to the
extent specifically set forth therein; and a waiver of one event shall not be
construed as continuing or as a bar to or waiver of such right or remedy upon a
subsequent event.
ARTICLE V
WAIVERS
Section 5.1 Maker expressly waives presentment for payment, demand, notice
of dishonor, protest, notice of protest, diligence of collection, and any other
notice of any kind, and hereby consents to any number of renewals and extensions
of time of payment hereof, which renewals and extensions shall not affect the
liability of the Maker. Maker further agrees that Payee may accept, by way of
compromise or settlement, from any one or more of the parties liable hereunder
or under any of the other Transaction Documents, a sum or sums less than the
amount of this Note, and may give releases to such parties without affecting the
liability of any other party for the unpaid balance. Any such renewals or
extensions may be made and any such partial payments accepted or releases given
without notice to any such party.
Section 5.2 Maker hereby waives and releases all procedural errors,
defects and imperfections in any proceedings instituted by Payee under the terms
of this Note, or of any of the other Transaction Documents, as well as all
benefit that might accrue to Maker by virtue of any present or future laws
exempting any property, real, personal or mixed, or any part of the proceeds
arising from any sale of such property, from attachment, levy or sale under
execution, or providing for any stay of execution, exemption from civil process,
or extension of time for payment. Maker agrees that any real estate that may be
levied upon pursuant to a judgment obtained by virtue hereof, or upon any writ
of execution issued thereon, may be sold upon any such writ in whole or in part
in any order desired by Payee.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Maker hereby agrees to indemnify, defend and hold Payee and
Payee's members, officers, employees and agents harmless from and against any
and all liabilities, losses, injuries, costs, expenses and damages (including,
without limitation, reasonable attorneys' fees) which Payee may incur as a
result of or in connection with an Event of Default under this Note. Should
Payee incur any indemnifiable liability, the amount thereof, including costs,
expenses and reasonable attorneys' fees, as well as interest thereon at the
Default Rate, shall be guaranteed by FirstPlus and Maker agrees to reimburse
Payee immediately upon demand.
Section 6.2 Any amounts due and owing hereunder shall be offset by the
amount of any Loss (as defined in the Purchase Agreement) for which
indemnification is provided under Section 7.1 of the Purchase Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Upon receipt of an affidavit of Payee or its representative as
to the loss, theft, destruction or mutilation of this Note, Maker will issue in
lieu thereof, a replacement note in the same principal amount thereof and
otherwise of like tenor.
Section 7.2 This Note shall be governed by and construed in accordance
with the domestic laws of the Commonwealth of Pennsylvania without giving effect
to any choice or conflict of law provision or rule (whether of the Commonwealth
of Pennsylvania or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the Commonwealth of Pennsylvania. Any
and all legal proceedings concerning the infringement, breach or contemplated
breach of this Note shall at Payee's election be filed in the Commonwealth of
Pennsylvania, Philadelphia County only, and the parties hereto consent to such
jurisdiction and venue.
Section 7.3 All notices, demands or requests required or permitted to be
made pursuant to or under this Note must be in writing and mailed, postage
prepaid and by certified or registered mail, return receipt requested, or
delivered by a reputable independent overnight delivery courier providing
written evidence of delivery, or by hand delivery by a reputable independent
courier providing written evidence of delivery, addressed to Maker, at its
principal business address first set forth above, or Payee, at its principal
business address. Such notices, demands or requests shall be deemed to have been
given and delivered on the earlier of the date of actual receipt thereof or (i)
if delivered by such an overnight delivery courier, on the business day next
succeeding the date on which the same was delivered by the sender to such
courier, or (ii) if by United States certified or registered mail, as of three
(3) business days after the date of mailing, or on the date of actual receipt,
whichever is earlier. Maker or Payee may change the address to which such
notices, demands or requests shall be mailed hereunder by written notice of such
new address mailed to the other party hereto in accordance with the provisions
of this Section. Notice given by legal counsel on behalf of any person shall be
deemed to be given by such person.
Section 7.4 The provisions of this Note are deemed to be severable, and
the invalidity or unenforceability of any provision shall not affect or impair
the remaining provisions which shall continue in full force and effect. In
determining the meaning hereof, no term shall be construed against the drafter.
Section 7.5 Whenever used, the singular shall include the plural, the
plural the singular, and the use of any gender shall be applicable to all
genders. The headings preceding the text of the sections and paragraphs hereof
are inserted solely for convenience of reference and shall not constitute a part
of this Note nor shall they affect its meaning, construction or effect. The word
"Maker" whenever used herein is intended to and shall be construed to mean Maker
or their successors and assigns. The word "Payee" whenever used herein is
intended to and shall be construed to mean the Payee, its successors and
assigns. This Note and all rights and powers granted hereby shall bind Maker and
its respective successors and assigns and inure to the benefit of Payee and its
successors and assigns. The word "person" shall mean individual, corporation,
partnership, limited liability company, joint venture or unincorporated
association. The use of any gender shall include all genders. The singular
number shall include the plural and the plural the singular as the context may
require.
Section 7.6 Each of the entities comprising Maker represents and warrants
that it: (i) has the legal capacity, power and authority (including full
corporate power and authority) to execute and deliver this Note and to perform
its obligations hereunder; (ii) has taken all corporate and other actions or
proceedings to authorize and permit its execution and delivery hereof and
performance of its obligations hereunder; (iii) has duly executed and delivered
this Note, which constitutes its legal, valid and binding obligations,
enforceable in accordance with their terms and conditions; and (iv) is not
required to give any notice to any third party in connection herewith. Each of
the entities comprising Maker represents and warrants that: (a) its exact legal
names are as set forth in the first paragraph of this Note; and (b) it is a
corporation duly incorporated, and validly existing and in good standing under
the laws of the jurisdiction of its incorporation, organization or formation,
and has full power and authority to execute, deliver and comply with this Note,
and to carry on its business as it is now being conducted and is duly licensed
or qualified as a foreign limited liability company in good standing under the
laws of each other jurisdiction in which the character or location of the
properties owned by it or the business transacted by it requires such licensing
or qualification, except where the failure to be so licensed or qualified would
not have a material adverse effect on the assets, business, operations or
financial condition of Maker or the ability of Maker to perform its obligations
hereunder.
Section 7.7 The liabilities and obligations under this Note shall be
binding upon the successors and assigns of Maker.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, intending to be legally bound hereby, Maker has caused
the execution and delivery of this Note by its duly authorized officer as of the
date first above written.
MAKER:
FirstPlus Development Company
a Texas corporation
BY: /s/ William Bianco
--------------------------------------------
Name: William Bianco
Title: President
FirstPlus Enterprises, Inc.
a Texas corporation
BY: /s/ John W. Maxwell
--------------------------------------------
Name: John W. Maxwell
Title: President
The undersigned hereby guarantees the payment and performance of the
liabilities and obligations of Maker hereunder.
FirstPlus Financial Group, Inc.
a Nevada corporation
BY: /s/ John W. Maxwell
--------------------------------------------
Name: John W. Maxwell
Title: President and Chief
Executive Officer
