Exhibit 10.3
PROMISSORY NOTE
$500,000.00 December 29, 2005
FOR VALUE RECEIVED, TelePlus Wireless, Corp., a Nevada corporation
(referred to herein as "Maker"), promises to pay to the order of Star Number,
Inc., a Delaware corporation (referred to herein as "Payee," which term shall
also include any subsequent holder of this Note), the principal sum of Five
Hundred Thousand Dollars ($500,000.00), as set forth in this Note. All
capitalized terms used herein, unless expressly defined herein, shall have the
meanings set forth in that certain Security Agreement dated on or about even
date herewith by the Maker, in favor of Payee (the "Security Agreement").
1. Fixed Interest Rate. No interest shall accrue and be payable on the
outstanding unpaid principal balance of this Note. In Payee's discretion, upon
and after the occurrence of an Event of Default, interest shall accrue and be
payable on the unpaid principal balance of this Note at the interest rate per
annum that is one percent (1.00%) plus the prime rate.
2. Principal Payments. Maker shall make principal payments of $125,000 no
later than each of March 31, 2006, June 30, 2006, September 30, 2006 and
December 31, 2006, less any adjustments as provided for in the Asset Purchase
Agreement. Unless sooner paid in full, the entire unpaid principal balance of
this Note, together with all outstanding and unpaid accrued interest, late
charges, fees, and Collection Costs (herein defined) shall be due and payable on
the first anniversary of the Effective Date.
3. Minimum Funds Balance. At all times, Maker shall maintain a minimum
cash balance of at least fifty percent (50%) of the remaining balance
outstanding on this Note. Maker shall notify Payee within twenty-four (24) hours
if it has not maintained a minimum funds balance at least fifty percent (50%) of
the remaining balance outstanding on this Note.
4. Late Charges. If any scheduled installment payment of principal under
this Note is not paid within fifteen (15) days after the date that the
installment payment is due, Maker promises to pay to Payee a late charge equal
to five percent (5%) of the amount past due. The 15-day period provided in the
preceding sentence is not a grace or cure period and Payee shall be entitled to
exercise all of Payee's rights and remedies upon the occurrence of an Event of
Default regardless of whether Payee imposes or is entitled to impose any late
charge.
5. Manner of Payment. All payments shall be made in U.S. dollars in
immediately available funds without set-off or counterclaim or deduction of any
kind on the due dates of such payments, except as provided for in the Asset
Purchase Agreement. Payments shall be made to the address set forth herein for
notices to Payee. Any payments by check shall be accepted subject to collection
in immediately available funds. Payments shall be applied to interest,
principal, late charges, expenses and fees in such order as Payee may determine
in Payee's discretion.
6. Prepayment. Maker shall be privileged to prepay this Note in whole or
in part at any time without penalty or premium. All partial prepayments shall be
applied in inverse order of maturity.
7. Collection Costs. (a) Maker shall pay to Payee, within ten (10) days
after Payee's request or demand for such payment, all amounts necessary to pay,
or to reimburse Payee for, all costs and expenses of enforcing this Note,
including without limitation any and all costs and expenses of collecting the
principal, interest, late charges, fees and expenses due under this Note and
exercising Payee's rights and remedies under any guaranties and security
agreements in favor of Payee relating to this Note, and any other costs and
expenses incurred by Payee after the occurrence of any default under this Note,
and regardless of whether an Event of Default shall have been declared,
including, without limitation, any and all such costs and expenses incurred by
Payee in or relating to any bankruptcy or insolvency proceedings (all thereof
referred to herein as "Collection Costs"). Collection Costs include, without
limitation, all of Payee's reasonable attorney's fees, paralegal fees and
litigation expenses of any kind incurred in enforcing, or collecting this Note.
(b) If Maker shall fail to pay Collection Costs to Payee within ten
(10) days after Payee's request or demand for such payment, and Payee shall have
paid or advanced such Collection Costs (Payee being hereby authorized, but not
obligated, to pay or advance such Collection Costs), Payee shall be entitled to
add the amount so requested or demanded to the amount of principal outstanding
under this Note and thereafter charge interest thereon at the interest rate set
forth in Section 1 of this Note.
(c) If Payee shall add the amount of Collection Costs so requested
or demanded, but not paid, to the amount of principal outstanding under this
Note as provided in this Section, neither the addition of such unpaid amount to
the principal outstanding under this Note, nor the charging of interest thereon,
shall relieve Maker of any Event of Default for failure to pay Collection Costs
when due, and Payee shall be entitled to exercise all of Payee's rights and
remedies upon the occurrence of any such Event of Default.
8. Default; Acceleration. The occurrence of any of the following events
shall be an "Event of Default": (a) failure of Maker to make any payment of
principal under this Note when due; (b) failure of Maker to make any payment of
late charges or fees under this Note within ten (10) days after Payee's written
request or demand for such payments; (c) failure of Maker to make any payment of
Collection Costs within ten (10) days after Payee's written request or demand
for such payments; (d) TelePlus Enterprises, Inc. (the "Parent"), the owner of
all of the outstanding capital stock of Maker, fails to obtain the consent of
Cornell Capital Partners, LP to the execution of the Security Agreement by Maker
and that certain Guaranty Agreement of even date herewith by the Parent in favor
of Payee within thirty (30) days after the date hereof; (e) an Event of Default
shall occur under the Security Agreement or any other Credit Document; or (f)
failure of Maker to maintain the minimum funds balance provided for in Section 3
of this Note within ten (10) days after Payee's written notification thereof.
Upon the occurrence of an Event of Default, the unpaid principal and all other
sums evidenced by this Note shall, at the option of Payee and in Payee's
discretion, become immediately due and payable.
2
9. Confession of Judgment. If this Note is not paid when due (whether as
scheduled, or upon acceleration or maturity), or any other Event of Default
shall occur, Maker does hereby authorize any clerk of any court of record or any
attorney to enter in any court of competent jurisdiction in the State of
Delaware or any other State, Commonwealth or Territory of the United States
judgment by confession against Maker (jointly and severally, if more than one)
and in favor of the holder of this Note for the entire principal amount of this
Note then remaining unpaid with interest thereon, together with attorney's fees
of fifteen percent (15%) of the unpaid principal amount, and court costs,
without stay of execution or right of appeal, expressly waiving the benefit of
all exemption laws and all irregularity or error in entering said judgment or
the execution thereon. No single exercise of the foregoing power to confess
judgment shall be deemed to exhaust the power, whether or not any such exercise
shall be held by any court to be invalid, voidable or void, but the power shall
continue undiminished, and the power to confess judgment may be exercised from
time to time as often as the holder of this Note shall elect, until such time as
the holder of this Note shall have received payment in full of all indebtedness
of Maker to the holder of this Note.
10. Notices. Any notice or demand required or permitted by or in
connection with this Note shall be given in accordance with the terms of the
Asset Purchase Agreement.
11. Certain Waivers. As to this Note, Maker and each other Obligor, if
any, severally waive all applicable exemption rights, whether under any state
constitution, homestead laws or otherwise, and also waive valuation and
appraisement, presentment, notice of dishonor, and protest, notice of demand and
nonpayment of this Note, and notice of acceleration and expressly agrees that
the maturity of this Note, or any payment under this Note, may be extended from
time to time without in any way affecting the liability of Maker or the
liability of any other Obligor. If Payee transfers this Note to another holder
who takes this Note for value and without actual knowledge of a claim or defense
of Maker against any prior holder of this Note, such transferee shall not be
subject to any claims, set-offs or defenses that Maker may have against any
holder of this Note prior to such transfer, and such transferee shall have all
of the rights of a holder in due course against Maker even if, absent this
provision, such transferee would not qualify as a holder in due course under
applicable law.
12. Preservation of Payee Rights. No failure on the part of Payee to
exercise any right or remedy hereunder, whether before or after the happening of
an Event of Default shall constitute a waiver thereof, and no waiver of any past
Event of Default shall constitute waiver of any future default or of any other
Event of Default. No failure to accelerate the indebtedness evidenced hereby by
reason of any Event of Default hereunder, or acceptance of a past due payment,
or indulgence granted from time to time, shall be construed to be a waiver of
the right to insist upon prompt payment thereafter or to impose late charges
retroactively or prospectively, or shall be deemed to be a novation of this Note
or as a reinstatement of the indebtedness evidenced hereby or as a waiver of
such right of acceleration or any other right, or be construed so as to preclude
the exercise of any right that Payee may have, whether by the laws of the State
of Delaware, by agreement, or otherwise; and Maker and each endorser or
guarantor hereby expressly waives the benefit of any statute or rule of law or
equity that would produce a result contrary to or in conflict with the
foregoing.
3
13. Amendments. This Note may not be changed orally, but only by an
agreement in writing signed by the party against whom such agreement is sought
to be enforced.
14. Severability. In case any provision (or any part of any provision)
contained in this Note shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the affected
provision) of this Note, but this Note shall be construed as if such invalid,
illegal, or unenforceable provision (or part thereof) had never been contained
herein but only to the extent such provision (or part thereof) is invalid,
illegal, or unenforceable.
15. Delaware Law. This Note shall be governed by the laws of the State of
Delaware (excluding Delaware conflicts of laws rules).
16. Jurisdiction; Venue. Maker hereby irrevocably consents to the
non-exclusive personal jurisdiction of the courts of the State of Delaware and,
if a basis for federal jurisdiction exists, the non-exclusive jurisdiction of
the United States District Court for the District of Delaware. Maker agrees that
venue shall be proper in any Superior Court of the State of Delaware selected by
Payee or, if a basis for federal jurisdiction exists, in the United States
District Court for the District of Delaware. Maker waives any right to object to
the maintenance of any suit or claim in any of the state or federal courts of
the State of Delaware on the basis of improper venue or of inconvenience of
forum. Any suit or claim brought by Maker against Payee that is based, in whole
or in part, directly or indirectly, on this Note or any matters relating to this
Note, shall be brought in a court only in the State of Delaware. Maker shall not
file any counterclaim against Payee in any suit or claim brought by Payee
against Maker in a jurisdiction outside of the State of Delaware unless under
the rules of the court in which Payee brought such suit or claim the
counterclaim is mandatory, and not permissive, and would be considered waived
unless filed as a counterclaim in the claim or suit instituted by Payee against
Maker. Maker agrees that any forum outside the State of Delaware is an
inconvenient forum and that a suit brought by Maker against Payee in any court
outside the State of Delaware should be dismissed or transferred to a court
located in the State of Delaware. Nothing in this Note shall affect the right of
Payee to commence legal proceedings or to otherwise proceed against Maker in any
jurisdiction.
17. Time. Time is of the essence of this Note.
18. Maximum Rate of Interest. Anything herein to the contrary
notwithstanding, the obligations of Maker under this Note (or any other
instrument, agreement or other document evidencing or securing the indebtedness
evidenced by this Note) shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt of any such payment of
interest by Payee would be contrary to provisions of law applicable to the
indebtedness evidenced hereby (or applicable to Maker or Payee) limiting the
maximum rate of interest that may be charged or collected by Payee on this Note
or the indebtedness evidenced hereby. Without limiting the generality of the
foregoing, all calculations of the rate of interest contracted for, charged or
received under this Note which are made for the purposes of determining whether
such rate of interest exceeds the maximum rate of interest permitted by
applicable law shall be made, to the extent permitted by applicable law, by
amortizing, prorating, allocating and spreading in equal parts during the period
of the full stated term of this Note, all interest at any time contracted for,
charged or received in connection with the indebtedness evidenced by this Note,
and then to the extent that any excess remains, all such excess shall be
automatically credited against and in reduction of the principal balance, and
any portion of said excess which exceeds that principal balance shall be paid by
Payee to Maker, it being the intent of the parties hereto that under no
circumstances shall Maker be required to pay any interest in excess of the
highest rate permissible under applicable law.
4
19. MUTUAL WAIVER OF JURY TRIAL. MAKER AND PAYEE WAIVE ALL RIGHTS TO TRIAL
BY JURY OF ANY CLAIMS OF ANY KIND ARISING UNDER OR RELATING IN ANY WAY TO THIS
NOTE. MAKER AND PAYEE ACKNOWLEDGE THAT THIS IS A WAIVER OF A LEGAL RIGHT AND
REPRESENT TO EACH OTHER THAT THESE WAIVERS ARE MADE KNOWINGLY AND VOLUNTARILY
AFTER CONSULTATION WITH COUNSEL OF THEIR CHOICE. MAKER AND PAYEE AGREE THAT ALL
SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION,
WITHOUT A JURY.
[Signature Page Follows]
5
IN WITNESS WHEREOF, and intending to be legally bound hereby Maker
executes this Note under seal as of the date first written above.
WITNESS: TELEPLUS WIRELESS, CORP.
/s/ Marius Silvasan
_____________________________ By:___________________________(SEAL)
Name:
Title:
I have the authority to bind the
Corporation
6
_____________ OF _____________, CITY/COUNTY OF _________________, SS:
On this _____ day of ______________, 200___ before me personally came
________________, known to me (or whose identity was satisfactorily proven to
me), who, being by me duly sworn, did depose and say that he/she is the
____________ of TelePlus Wireless, Corp., a Delaware corporation, the Maker
described in the foregoing promissory note, and that in his/her capacity as
______________, and being authorized to do so, he/she executed the foregoing
promissory note on behalf of the said corporation for the purposes set forth
therein.
AS WITNESS my hand and notarial seal.
__________________________________
Notary Public
7