Exhibit 10.2

 

Exhibit B

PROMISSORY NOTE

 

$1,700,000.00

 

September     , 2013

 

FOR VALUE RECEIVED, Agel Enterprises, Inc., a Delaware corporation (the
“Company”), promises to pay Agel Enterprises, LLC, a Utah limited liability
company (“Payee”), in lawful money of the United States of America, the
principal amount of One Million Seven Hundred Thousand and no/100 Dollars
($1,700,000.00) together with simple interest on the unpaid principal balance of
this Note at a rate equal to five percent (5.0%) per annum, computed on the
basis of the actual number of days elapsed and a year of 365 days.

 

This Note is issued by the Company pursuant to the terms and conditions of an
Asset Purchase Agreement between Payee and the Company, dated effective even
date herewith (the “Purchase Agreement”).

 

The following is a statement of the rights of Payee and the conditions to which
this Note is subject, and to which Payee, by acceptance of this Note, agrees:

 

1.                                      Payments.

 

(a)                                 Principal and Interest. This Note shall bear
interest at the rate of five percent (5%) per annum. The principal and interest
of this Note shall be due and payable in sixty (60) monthly installments in the
amount of $32,081.10 each, payable on the      day of each month beginning on
October     , 2013 and with any remaining unpaid principal and interest being
due on the fifth anniversary (the “Maturity Date”) of the date hereof (the
“Issuance Date”).

 

(b)                                 Notwithstanding anything to the contrary in
this Note or in the Purchase Agreement, this Note may be prepaid, in whole or in
part, at any time, without premium or penalty.

 

2.                                      Subordination.

 

(a)                                 Subordination to Senior Indebtedness. The
Company covenants and agrees, and Payee covenants and agrees, expressly for the
benefit of the holders of Senior Indebtedness, that the cash payment of the
principal of, and interest on, this Note and any other amounts pursuant to this
Note or the Purchase Agreement are hereby expressly subordinate and junior to
the prior payment and satisfaction in full of all Senior Indebtedness as set
forth in this Section 2.

 

(b)                                 Suspension of Payments. Upon any
dissolution, winding-up, voluntary or involuntary liquidation or reorganization
of the Company (including any bankruptcy, insolvency, receivership proceeding,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company pursuant to any debtor relief laws), the Company
shall not pay, and Payee shall not be entitled to receive, any additional amount
in respect of the principal of, interest on or any other amounts payable
pursuant to this Note or the Purchase Agreement unless and until the Senior
Indebtedness shall have been paid and satisfied in full or otherwise completely
discharged.

 

(c)                                  Payments to Senior Indebtedness. Upon any
dissolution, winding up, voluntary or involuntary liquidation or reorganization
of the Company, any payment or distribution of assets of the Company, whether in
cash, property or securities, which Payee would be entitled to receive but for
the provisions hereof shall be paid by the liquidating trustee or agent or other
Person making such payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise, directly to the holders of Senior
Indebtedness or their representatives, ratably according to the aggregate
amounts remaining unpaid on Senior Indebtedness held or represented by each, to
the extent necessary to pay the Senior Indebtedness in full after giving effect
to any

 

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concurrent payment or distribution to the holders of Senior Indebtedness. This
Section 2(c) defines the relative rights of the holders of the Senior
Indebtedness and Payee.

 

(d)                                 Senior Indebtedness Default. No payment
shall be made by the Company with respect to the principal of, or interest on,
this Note if (i) a Senior Indebtedness Default shall have occurred and shall not
have been cured or waived, (ii) a payment by the Company to or for the benefit
of Payee could reasonably be expected to result, immediately after giving effect
thereto, in a Senior Indebtedness Default, or (iii) full payment of all amounts
then due for principal of, and interest on, Senior Indebtedness shall not then
have been made or duly provided for. If, notwithstanding the foregoing, the
Company shall make any payment prohibited by the preceding sentence, then,
unless and until any such Senior Indebtedness Default shall have been cured or
waived or shall cease to exist, such payment shall be deemed to be the property
of the holders of Senior Indebtedness and shall be held in trust for the benefit
of, and shall be paid over to, the holders of Senior Indebtedness as their
respective interests may appear, to the extent necessary to pay in full all
Senior Indebtedness then due, after giving effect to any concurrent payment to
the holders of such Senior Indebtedness. During the existence of one or more of
the circumstances described in (i), (ii), or (iii) above, the Company not making
cash payments to Payee shall not be considered a default or breach of the
Company’s Obligations to Payee, and Payee shall not have any right to institute
any legal proceedings to enforce any payment of principal or interest then due
on this Note or accelerate the Obligations hereunder.

 

(e)                                  Subordination Agreements. Payee agrees to
execute and deliver from time to time after the Issuance Date for the benefit of
any lender of the Company holding Senior Indebtedness any Subordination
Agreement requested by such lender subordinating this Note and all of the
Company’s Obligations hereunder to Senior Indebtedness held by such lender. In
addition, Payee irrevocably appoints each executive officer of the Company as
Payee’s attorney-in-fact, with full power of substitution, to execute and
deliver any and all Subordination Agreements such attorney-in-fact, in his or
her sole discretion, determines are reasonably necessary in order to subordinate
this Note and all Obligations hereunder to any Senior Indebtedness; provided,
however, Payee shall be given a reasonable opportunity to first execute and
deliver such documents and instruments prior to the execution and delivery by an
executive officer of the Company. The power of attorney granted pursuant to this
section is coupled with an interest and will be irrevocable until this Note is
paid in full.

 

3.                                      Events of Default. Subject to the terms
of Section 2 of this Note, each of the following shall constitute an “Event of
Default” under this Note:

 

(a)                                 Failure to Pay. The Company shall fail to
pay any principal or interest payment under this Note on the date due and such
payment shall not have been made within fifteen (15) business days of the
Company’s receipt of written notice from or on behalf of Payee of such failure
to pay; or

 

(b)                                 Voluntary Bankruptcy or Insolvency
Proceedings. The Company shall (i) apply for or consent to the appointment of a
receiver, trustee, liquidator or custodian of itself or of all or a substantial
part of its property, (ii) admit in writing its inability to pay its debts
generally as they mature, (iii) make a general assignment for the benefit of its
or any of its creditors, (iv) be dissolved or liquidated, (v) commence a
voluntary case or other 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 consent to any such relief or to
the appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vi) take any
action for the purpose of effecting any of the foregoing; or

 

(c)                                  Involuntary Bankruptcy or Insolvency
Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator
or custodian of the Company, or of all or a substantial part of the property of
the Company, or an involuntary case or other proceedings seeking liquidation,
reorganization or other relief with respect to the Company, or the debts of the
Company under any bankruptcy, insolvency or other similar law now or hereafter
in effect shall be commenced and an order for relief entered, and such
proceeding shall not be dismissed or discharged within 90 days of commencement.

 

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4.                                      Rights of Payee upon Default.

 

(a) Upon the occurrence of any Event of Default (other than an Event of Default
described in Sections 3(b) or 3(c)) and at any time thereafter during the
continuance of such Event of Default, Payee may, by written notice to the
Company, declare all outstanding Obligations hereunder to be immediately due and
payable without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived, anything contained herein to the
contrary notwithstanding. Upon the occurrence of any Event of Default described
in Sections 3(b) and 3(c), immediately and without notice, all outstanding
Obligations hereunder shall automatically become immediately due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived, anything contained herein to the contrary
notwithstanding. In addition to the foregoing remedies, upon the occurrence and
during the continuance of any Event of Default, Payee may exercise any other
right power or remedy granted to it or permitted to it by law, either by suit in
equity or by action at law, or both.

 

(b)                                 All rights of Payee under this Section 4 are
expressly subject and subordinate to the provisions of Section 2, so that the
provisions of Section 2 shall control and prevail in the event of any conflict
with this Section 4.

 

5.                                      Definitions. As used in this Note, the
following capitalized terms have the following meanings:

 

(a)                                 The term “Event of Default” has the meaning
given in Section 3 hereof.

 

(b)                                 The term “Obligations” shall mean and
include all indebtedness, loans, advances, debts, liabilities and obligations,
howsoever arising, owed by the Company to Payee of every kind and description,
now existing or hereafter arising, under or pursuant to the terms of this Note
or the Purchase Agreement, including all principal, interest, fees, charges,
expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable
to and payable by the Company hereunder and thereunder, in each case, whether
direct or indirect, absolute or contingent, due or to become due, and whether or
not arising after the commencement of a proceeding under Title 11 of the United
States Code (11 U. S. C. Section 101 et seq.), as amended from time to time
(including post-petition interest) and whether or not allowed or allowable as a
claim in any such proceeding.

 

(c)                                  The term “Person” shall mean and include an
individual, a partnership, a corporation (including a business trust), a joint
stock company, a limited liability company, an unincorporated association, a
joint venture, a trust or other entity or a governmental authority.

 

(d)                                 The term “Senior Indebtedness” means any and
all obligations (including, but not limited to, principal, interest and fees) of
the Company or any of its direct or indirect parent entities or subsidiaries,
whether outstanding on the date hereof or hereafter created or incurred, on or
relating to (i) any indebtedness for money borrowed or evidenced by bonds,
notes, debentures or similar instruments, or indebtedness for money borrowed
under any loan agreements, credit agreements, applications for or agreements of
reimbursement of advances under letters of credit, open account, or overdraft,
(ii) obligations arising under hedging agreements or in connection with bank
products, (iii) indebtedness arising under a guaranty by the Company of
indebtedness of others of the type referred to in the immediately preceding
clause (i) or (ii), (iv) all deferrals, renewals, extensions, modifications,
increases and refinancings of any such indebtedness and (v) any deferred
purchase price (whether represented by a promissory note, earn-out, contractual
obligation or otherwise) hereafter payable by the Company or any direct or
indirect subsidiary of the Company in consideration, in whole or in part, to
(A) one or more of the equity owners of a Person the equity of which is being
acquired, in whole or in part, by the Company or any direct or indirect
subsidiary of the Company and/or (B) any Person the assets of which are being
acquired by the Company or any direct or indirect subsidiary of the Company.

 

(e)                                  The term “Senior Indebtedness Default”
means the occurrence of a default or any event of default (or any event which,
with the giving of notice or passage of time or both, would be a default or an
event of default) with respect to any Senior Indebtedness, as default and/or
event of default are defined therein or any instrument under which the same is
outstanding.

 

(f)                                   The term “Subordination Agreement” means a
subordination agreement, inter-creditor agreement or other agreement that a
holder of Senior Indebtedness requires Payee to execute with respect to the
payment of the Obligations.

 

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6.                                      Miscellaneous.

 

(a)                                 Successors and Assigns; No Transfer of this
Note Without the Company’s Prior Express Written Consent.

 

(i)             The rights and obligations of the Company and Payee shall be
binding upon and benefit the successors, assigns, legatees, heirs,
administrators and transferees of the parties.

 

(ii)          Neither this Note nor the rights or obligations hereunder may be
transferred or assigned, in whole or in part, without the prior written consent
of the Company.

 

(b)                                 Waiver and Amendment. Any provision of this
Note may be amended, waived or modified only upon the written consent of the
Company and Payee.

 

(c)                                  Notices. All notices, requests, demands,
consents, instructions or other communications required or permitted hereunder
shall be in writing and faxed, mailed or delivered to the Company and Payee at
the respective address of each pursuant to the Purchase Agreement. All such
notices and other communications will be deemed effectively given the earlier of
(i) when received, (ii) when delivered personally, (iii) one business day after
being delivered by facsimile (with receipt of appropriate confirmation),
(iv) one business day after being deposited with Federal Express or UPS for
overnight delivery or (v) four days after being deposited in the U.S. mail,
first class, with postage prepaid.

 

(d)                                 Payment. Payment of the outstanding
principal of this Note shall be made in lawful tender of the United States.
Payment of interest hereunder shall be made in lawful tender of the United
States.

 

(e)                                  Usury. In the event any interest is paid or
payable on this Note and is deemed to be in excess of the then legal maximum
rate, then that portion of the interest payment representing an amount in excess
of the then legal maximum rate shall automatically be deemed a payment of
principal and applied against the outstanding principal of this Note.

 

(f)                                   Expenses; Waivers. Subject to Section 2
hereof, if an Event of Default occurs under this Note, such Event of Default is
not cured and continues and an action is instituted by or on behalf of Payee to
collect this Note, then the Company promises to pay all reasonable and necessary
costs and expenses, including reasonable attorneys’ fees and costs, incurred by
Payee in connection with such action. The Company hereby waives notice of
default, presentment or demand for payment, protest or notice of nonpayment or
dishonor and all other notices or demands relative to this Note.

 

(g)                                  Governing Law. This Note and all actions
arising out of or in connection with this Note shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
the conflicts of law provisions of the State of Texas.

 

(h)                                 Waiver of Jury Trial; Judicial Reference. By
acceptance of this Note, Payee hereby waives, and the Company hereby waives, all
rights to a jury trial of any claim or cause of action based upon or arising out
of this Note. The parties agree that any litigation directly or indirectly
relating to this agreement must be brought before and determined by a court of
competent jurisdiction within Dallas, Texas, and the parties hereby agree to
waive any rights to object to, and hereby agree to submit to, the jurisdiction
of such courts.

 

(i)                                    Right of Offset.   This Note has been
given by Company to Payee as consideration under the terms of the Purchase
Agreement. In the event Company is entitled to indemnification from Payee

 

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pursuant to the terms of the Purchase Agreement Company will have the option of
setting off all or any part of any Adverse Consequences (as defined in the
Purchase Agreement) Company suffers by notifying Payee that Company is reducing
the principal amount outstanding under this Note by the amount of such Adverse
Consequences.

 

The Company has caused this Note to be issued as of the date first written
above.

 

.

Agel Enterprises, Inc.

 

 

 

By:

/s/ Kelly L. Kittrell

 

Name:

Kelly L. Kittrell

 

Title:

Chief Financial Officer

 

PROMISSORY NOTE — SIGNATURE PAGE

 

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