EXHIBIT 10.2
TWELVE MONTH CONVERTIBLE NOTE AMENDMENT
This Amendment (the "Agreement"), is effective as of this 14th day of March,
2007 and amends the Twelve Month Convertible Note, ("NOTE"), between Xxxxxx X.
Xxxxx and Intercontinental Assets Corporation ("Holder" or "Holders") and and
MotorSports Emporium, Inc., ("Issuer"), with offices at X.X. Xxx 00000,
Xxxxxxxxxx, XX 00000.
WITNESSETH
WHEREAS, the Issuer and Holders desire to change the terms of the note for the
benefit of both parties and to facilitate the Stock Sale and Purchase Agreement,
("Purchase Agreement"), between Xxxxx Xxxxxxxx and Xxxxxxx Xxxxx.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter stated, it
is agreed as follows:
All amendments to the original NOTE as described below are contingent upon the
execution and completion of the Purchase Agreement otherwise this Agreement
shall be null and void.
1. NOTE EXTENSION.
The Extensions at Option of Issuer section of the note is no longer valid and
Issuer shall have no option to extend the note other than agreed to herein or
amended in writing between the parties.
2. NOTE PAYMENT.
Payments on the Note after March 31, 2007 shall be deferred until June 1, 2007,
however interest shall accrue per the terms of the note and the Note payment
shall remain at $5,000 or more per month beginning on June 1, 2007.
3. NOTE DISCOUNT FOR EARLY PAYMENT IN FULL.
Issuer shall earn a discount off the accrued principal and interest due on the
note as follows:
a. If the total accrued interest and principal is paid in full before
October 1, 2007 then a total discount of $50,000 shall be applied to
the final payment. The discount will be reduced by the amount of the
discount applied to any portion of the note sold by Xxxxxx X. Xxxxx to
a third party. In particular if Xxxxx sells the note with a discount
of $18,960.63 then the final remaining discount upon payment by
October 1, 2007 shall be $31,039.37.
b. If the total accrued interest and principal is paid in full between
October 2, 2007 and January 1, 2008 then a total discount of $25,000
shall be applied to the final payment. The discount will be reduced by
the amount of the discount applied to any portion of the note sold by
Xxxxxx X. Xxxxx to a third party. In particular if Xxxxx sells the
note with a discount of $18,960.63 then the final remaining discount
upon payment by January 1, 2008 shall be $6,039.37.
1
4. NOTE TERM
The term of the note shall be extended from August 30, 2007 to May 30, 2008 when
all accrued interest and principal shall be due and payable.
5. CONVERSION OF NOTE INTO COMMON SHARES
The provision of conversion only upon default is modified to allow conversion at
any time after notice is given to ISSUER by Holder(s). The conversion rate shall
be changed from eighty percent (80%) to seventy-five percent (75%) with a
further constraint that the converted number of shares issued to a Holder will
always be such that the number of shares beneficially owned by a Holder will be
less than 4.9% of the outstanding common shares of the corporation.
6. EVENTS OF DEFAULT
The following paragraph shall be deleted:
In the event of default, ISSUER agrees to issue to HOLDERS, at no cost to
HOLDERS, a number of shares of Series B Preferred Stock such that HOLDERS shall
possess fifty one per cent (51%) or more of the voting rights of the Series B
Preferred Stock and ISSUER shall continue to owe the unpaid portion of this Note
at the time of default in addition to other remedies due to HOLDERS.
The following paragraph shall be added to the Events of Default section of the
Note:
a. In the event of default, ISSUER agrees to issue to HOLDERS, at no cost
to HOLDERS, a number of shares of Series B Preferred Stock such that HOLDERS
shall possess fifty one per cent (51%) or more of the authorized shares of the
Series B Preferred Stock and ISSUER shall continue to owe the unpaid portion of
this Note at the time of default in addition to other remedies due to HOLDERS.
ISSUE also agrees not to change the Rights, Preferences and Privileges or
authorized shares of the Series B Preferred Stock in effect on the date of the
Note while any balance on this note is due to Holder(s). Any change shall
constitute a default under this Note.
7. MISCELLANEOUS.
MODIFICATION: This Amendment sets forth the entire understanding of the Parties
with respect to the subject matter hereof. This Amendment may be amended only in
writing signed by both Parties.
NOTICES: Any notice required or permitted to be given hereunder shall be in
writing and shall be mailed or otherwise delivered in person or by facsimile
transmission at the address of such Party set forth above or to such other
address or facsimile telephone number as the Party shall have furnished in
writing to the other Party.
WAIVER: Any waiver by either Party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a Party to insist upon strict adherence to any term of
2
this Agreement on one or more occasions will not be considered a waiver or
deprive that Party of the right thereafter to insist upon adherence to that term
of any other term of this Agreement.
SEVERABILITY: If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
DISAGREEMENTS: Any dispute or other disagreement arising from or out of this
Agreement shall be submitted to arbitration under the rules of the American
Arbitration Association and the decision f the arbiter(s) shall be enforceable
in any court having jurisdiction thereof. Arbitration shall occur only in San
Diego County, CA. The interpretation and the enforcement of this Agreement shall
be governed by California Law as applied to residents of the State of California
relating to contracts executed in and to be performed solely within the State of
California. In the event any dispute is arbitrated, the prevailing Party (as
determined by the arbiter(s)) shall be entitled to recover that Party's
reasonable attorney's fees incurred (as determined by the arbiter(s)).
IN WITNESS WHEREOF, this Consulting Agreement has been executed by the Parties
as of the date first above written.
For and on behalf of:
Xxxxxx Xxxxx MotorSports Emporium, Inc.
/s/ Xxxxxx Xxxxx /s/ Xxxxx Xxxxxxxx
----------------------------------- ------------------------------------
Xxxxx Xxxxxxxx, President and CEO
Intercontinental Assets Corporation
/s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, President
3
