Exhibit 2
PROMISSORY NOTE
| U.S. $1,820,000.00 | June 26, 2014 |
| Dallas, Texas |
FOR VALUE RECEIVED, the undersigned, RUPERT IRELAND (“Borrower”), unconditionally promises to pay to the order of DANIEL M. FERRIS (“Lender”), the principal sum of One Million Eight Hundred Twenty Thousand and No/100 Dollars ($1,820,000.00) in lawful money of the United States and in immediately available funds, together with accrued but unpaid interest on the outstanding principal balance under this Promissory Note (this “Note”), in like money and funds, at the rate per annum and on the dates provided below;provided,that the interest payable shall not exceed the Maximum Rate (as defined below).
1. Purchase Agreement. This Note has been executed and delivered pursuant to, and is subject to certain terms and conditions set forth in, that certain Stock Purchase Agreement dated as of the date hereof by and among Borrower and Lender (the “Purchase Agreement”). All capitalized terms used in this Note but not otherwise defined shall have the respective meanings given to such terms in the Purchase Agreement.
2. Interest. The unpaid principal balance under this Note from time to time shall bear interest at a per annum rate of five percent (5.0%).
For purposes of this Note, “Maximum Rate” shall mean the maximum non-usurious rate of interest that may be charged by Lender to Borrower under applicable law. Notwithstanding anything to the contrary contained herein, no provisions of this Note shall require the payment or permit the collection of interest in excess of the Maximum Rate. If any excess of interest in such respect is herein provided for, or shall be adjudicated to be so provided, in this Note or otherwise in connection with this loan transaction, the provisions of this paragraph shall govern and prevail, and neither Borrower nor the sureties, guarantors, successors or assigns of Borrower shall be obligated to pay the excess amount of such interest, or any other excess sum paid for the use, forbearance or detention of sums loaned pursuant hereto. If for any reason interest in excess of the Maximum Rate shall be deemed charged, required or permitted by any court of competent jurisdiction, any such excess shall be applied as a payment and reduction of the principal of indebtedness evidenced by this Note; and, if the principal amount hereof has been paid in full, any remaining excess shall forthwith be paid to Borrower. In determining whether or not the interest paid or payable exceeds the Maximum Rate, Borrower and Lender shall, to the extent permitted by applicable law, (i) characterize any non-principal payment as an expense, fee, or premium rather than as interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the entire contemplated term of the indebtedness evidenced by this Note so that the interest for the entire term does not exceed the Maximum Rate.
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3. Payments of Principal and Interest. All accrued interest hereon, together with the outstanding unpaid principal balance of this Note, shall be due and payable in full on June 26, 2016 (the “Maturity Date”). The foregoing notwithstanding, all accrued interest on this Note, and the outstanding unpaid principal balance hereof, shall be immediately due and payable in full upon the maturity of the principal of this Note, whether by acceleration or otherwise. All payments made under this Note shall be applied first to costs of enforcement or collection of this Note (if any) after the occurrence of a default by Borrower under this Note, second, to accrued but unpaid interest, and third, to outstanding principal. All payments shall be made by wire or other transfer of immediately available funds to Lender to an account as provided by Lender to Borrower in writing. All payments of principal of this Note shall reduce the unpaid principal balance then due under this Note. Upon payment in full by Borrower of all principal outstanding and accrued but unpaid interest thereon, this Note shall be considered extinguished and Lender shall surrender this Note to Borrower.
4. Prepayment. This Note may be prepaid at any time, in whole or in part, without premium or penalty, at the option of Borrower.
5. Events of Default. Borrower shall be in default hereunder upon the happening of any of the following events or conditions (each such event or condition hereinafter referred to as an “Event of Default”):
(a) Borrower shall fail to pay when due any principal of or accrued and unpaid interest on this Note.
(b) Borrower shall breach any of Borrower’s representations or warranties under the Purchase Agreement or fail to perform or observe any of Borrower’s covenants in the Purchase Agreement, which breach or failure shall continue for thirty (30) days after written notice of such breach or failure is provided to by Lender to Borrower.
(c) Borrower shall commence a voluntary proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it or shall make a general assignment for the benefit of creditors or shall generally fail to pay his debts as they become due (the term “consent” as used in thisSection 5(c) shall mean the failure to file a petition or motion in opposition to such proceeding or to vacate or discharge any order, judgment or decree providing for such appointment within sixty (60) days after the appointment of a receiver or trustee).
(d) Any involuntary proceeding shall be commenced against Borrower seeking liquidation, reorganization, or other relief with respect to him or his debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, and such involuntary proceeding shall remain undismissed and unstayed for a period of ninety (90) days.
6. Acceleration. Upon the occurrence and during the continuance of any Event of Default, the holder hereof may, at its option, declare the entire unpaid principal of and accrued interest on this Note immediately due and payable without notice, demand or presentment, all of which are hereby waived, and upon such declaration, the same shall become and shall be immediately due and payable, and the holder hereof shall have the right to offset against this Note any sum or sums owed by the holder hereof to Borrower. Failure of the holder hereof to exercise this option shall not constitute a waiver of the right to exercise the same upon the occurrence of a subsequent Event of Default.
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7. Attorney’s Fees. If the holder hereof expends any effort in any attempt to enforce payment of all or any part or installment of any sum due the holder hereunder, or if this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceedings, Borrower agrees to pay all collection costs and fees incurred by the holder, including reasonable attorneys' fees.
8. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF TEXAS, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
9. Jurisdiction and Venue. Any jurisdictional proceeding brought by or against any of the parties to this Note, on any dispute arising out of this Note or any matter related hereto shall be brought in the courts of Harris County, State of Texas, and, by execution and delivery of this Note, Borrower accepts for himself the exclusive jurisdiction and venue of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Note after exhaustion of all appeals (or by the appropriate appellate court if such appellate court renders judgment).
10. Waiver of Notice and Presentment. Borrower and each surety, guarantor, endorser and other party ever liable for payment of any sums of money payable on this Note hereby jointly and severally waive notice, presentment, demand for payment, protest, notice of protest and non-payment or dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, diligence in collecting, grace, and all other formalities of any kind, and consent to all extensions without notice for any period or periods of time and partial payments, before or after maturity, and any impairment of any collateral securing this Note, all without prejudice to the holder. The holder shall similarly have the right to deal in any way, at any time, with one or more of the foregoing parties without notice to any other party, and to grant any such party any extensions of time for payment of any of said indebtedness, or to release or substitute part or all of the collateral securing this Note, or to grant any other indulgences or forbearances whatsoever, without notice to any other party and without in any way affecting the personal liability of any party hereunder.
11. Notices. Unless otherwise provided herein, all notices, requests, consents and demands shall be in writing and shall be delivered to the following addresses:
If intended for Lender, to:
Daniel M. Ferris
311 N. Robertson Blvd
Beverly Hills, CA 90211
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If intended to Borrower, to:
Rupert Ireland
1515 7th Street, Suite 59
Santa Monica, CA 90401
12. No Waiver. No waiver or consent by Lender with respect to any act or omission of Borrower on one occasion shall constitute a waiver or consent with respect to any other act or omission by Borrower on the same or any other occasion, and no failure on the part of Lender to exercise and no delay in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any right hereunder preclude any other further right of exercise thereof or the exercise of any other right.
13. Severability. If any provision of this Note is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Note, such provision shall be fully severable; this Note shall be construed and enforced as if such illegal, invalid and unenforceable provision had never comprised a part hereof and this Note shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Note.
14. Entire Agreement. THIS NOTE AND THE PURCHASE AGREEMENTconstitute the entire agreement among the Parties concerning the subject matter hereof AND THEREOF. THERE ARE NO UNWRITTEN ORAL AGREEMENTS among THE PARTIES, AND THIS NOTE ANDTHE PURCHASE AGREEMENTMAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
15. Modification. No modification or waiver of any provision of this Note shall be effective unless such modification or waiver shall be in writing and executed by both Lender and Borrower.
IN WITNESS WHEREOF, Borrower hereby executes this Note as of the date first written above.
/s/ Rupert Ireland
Rupert Ireland
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