AMENDED AND RESTATED LOAN AGREEMENT AND CONVERTIBLE PROMISSORY NOTE
EXHIBIT
10.4
Xxxx
XxXxxx Note
AMENDED
AND RESTATED LOAN AGREEMENT AND CONVERTIBLE PROMISSORY
NOTE
THIS
AMENDED AND RESTATED LOAN AGREEMENT AND CONVERTIBLE PROMISSORY NOTE, dated
as of
August 11, 2006 (the “Note”),
between SMI PRODUCTS, INC., a Nevada Corporation
(the
"Maker"),
having an address at 0000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxx 00000
and Xxxx
XxXxxx (the
"Payee"),
having
an
address at 0000 Xxxx Xxxxxxxxxx Xxxx, Xxxxxxx, X.X., X0X 0X0.
Each of
the Maker and the Payee are referred to herein as a “Party”,
and
collectively as the “Parties.”
WHEREAS,
on March 9, 2005 and on May 15, 2005, the Parties entered into certain Loan
Agreements, as amended (the “Original
Loan Agreements”),
pursuant to which, the Payee agreed to provide funds to the Maker in the total
amount of $5,000 (the “Loans”)
for
its corporate purposes, on the terms and conditions set forth therein;
and
WHEREAS,
the Parties desire amend and restate the Original Loan Agreements and to
evidence the amount due thereunder by this Amended and Restated Loan Agreement
and Convertible Promissory Note (“Note”)
which
shall accrue interest at a rate of 2% per annum and shall be payable on
demand.
NOW
THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto hereby agree as follows:
1. The
Original Loan Agreements are hereby amended and restated in its entirety herein
and now solely evidenced by this Note. Any attempt to present the Original
Loan
Agreements for payment, separate from this Note, shall be invalid and shall
be
of no effect.
2. The
Maker, unconditionally promises to pay to the order of the Payee, the principal
sum of the Loans together
with accrued interest thereon from the date of issuance of the Loans, which,
as
of the date hereof, is $88.93. The
Maker
further agrees to pay all costs of collection, including reasonable attorneys'
fees, incurred by the Payee or by any other holder of this Note in any action
to
collect this Note, whether or not suit is brought.
3. Principal
and accrued interest shall be payable on August 11, 2007. Maker shall have
the
right at any time to prepay, in whole or in part, the principal and accrued
interest without penalty upon fifteen (15) days prior written notice to the
Payee.
4. The
amounts due hereunder are payable without deduction or offset in lawful money
of
the United States of America in immediately available funds to the Payee at
its
address as set forth above, or at such other place as the holder of this Note
shall from time to time designate.
5. It
shall
be an event of default (“Event
of Default”),
and
the then unpaid portion of this Note shall become immediately due and payable,
at the election of Payee, upon the occurrence of any of the following
events:
(a) any
failure on the part of Maker to make any payment hereunder when due, whether
by
acceleration or otherwise;
(b) Maker
shall commence (or take any action for the purpose of commencing) any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
moratorium or similar law or statute; or
(c) a
proceeding shall be commenced against Maker under any bankruptcy,
reorganization, arrangement, readjustment of debt, moratorium or similar law
or
statute and relief is ordered against Maker, or the proceeding is controverted
but is not dismissed within sixty (60) days after the commencement
thereof.
6. The
principal balance of this Note and all accrued interest hereunder shall be
convertible, in whole or in part, into shares of the Maker’s common stock in the
manner described below at the option of the Payee or other holder hereof at
any
time prior to maturity, upon ten (10) days advance written notice to the Maker.
The number of shares of the Maker’s common stock issuable upon such conversion
shall be determined by the Board of Directors of the Company based on what
it
determines the fair market value of the Company is at the time of such
conversion. Upon conversion, this Note shall be canceled and a replacement
note
on identical terms shall be promptly issued by the maker to the holder hereof
to
evidence the remaining outstanding principal amount hereof as of the date of
the
conversion, if applicable. In the event of a stock-split, combination, stock
dividend, recapitalization of the Maker or similar event, the conversion price
and number of shares issuable upon conversion shall be equitably adjusted to
reflect the occurrence of such event.
7. No
failure on the part of the Payee or any other holder of this Note to exercise
and no delay in exercising any right, remedy or power hereunder or under any
other document or agreement executed in connection herewith shall operate as
a
waiver thereof, nor shall any single or partial exercise by the Payee or any
other holder of this Note of any right, remedy or power hereunder preclude
any
other or future exercise of any other right, remedy or power.
8. This
Note
shall be binding upon the Maker and the Maker’s successors and
assigns.
9. This
Note
shall be governed by and construed in accordance with the laws of the State
of
New York, excluding the conflicts of laws principles thererof.
10. In
the
event that any one or more of the provisions of this Note shall for any reason
be held to be invalid, illegal or unenforceable, in whole or in part, or in
any
respect, or in the event that any one or more of the provisions of this Note
shall operate, or would prospectively operate, to invalidate this Note, then,
and in any such event, such provision or provisions only shall be deemed null
and void and of no force or effect and shall not affect any other provision
of
this Note, and the remaining provisions of this Note shall remain operative
and
in full force and effect, shall be valid, legal and enforceable, and shall
in no
way be affected, prejudiced or disturbed thereby.
11. All
agreements between Maker and Payee are hereby expressly limited so that in
no
event whatsoever, whether by reason of deferment in accordance with this Note
or
under any agreement or by virtue of acceleration or maturity of the Note, or
otherwise, shall the amount paid or agreed to be paid to the Payee hereunder
or
to compensate Payee for damages to be suffered by reason of a late payment
hereof, exceed the maximum permissible under applicable law. If enforcement
of
any provision hereof at the time performance of such provision shall be due,
shall exceed the limit of validity prescribed by law, the relevant obligations
to be fulfilled shall be deemed reduced to the limit of such validity. This
provision shall never be superseded or waived and shall control every other
provision of all agreements among Maker and Payee.
12. Subject
to applicable federal and state securities laws, the Payee may assign this
Note
without first obtaining the consent of the Maker.
13. Subject
to the applicable cure periods contained herein, time is of the essence of
this
Note.
14. EXCEPT
AS
OTHERWISE SPECIFICALLY PROVIDED HEREIN, THE MAKER, AND ALL OTHERS THAT MAY
BECOME LIABLE FOR ALL OR ANY PART OF THE OBLIGATIONS EVIDENCED BY THIS NOTE,
HEREBY WAIVES PRESENTMENT, DEMAND, NOTICE OF NONPAYMENT, PROTEST AND ALL OTHER
DEMANDS AND NOTICES IN CONNECTION WITH THE DELIVERY, ACCEPTANCE, PERFORMANCE
OR
ENFORCEMENT OF THIS NOTE, AND DOES HEREBY CONSENT TO ANY NUMBER OF RENEWALS
OR
EXTENSIONS OF THE TIME OF PAYMENT HEREOF AND AGREE THAT ANY SUCH RENEWALS OR
EXTENSIONS MAY BE MADE WITHOUT NOTICE TO ANY SUCH PERSONS AND WITHOUT AFFECTING
THEIR LIABILITY HEREIN AND DO FURTHER CONSENT TO THE RELEASE OF ANY PERSON
LIABLE WITH RESPECT TO FAILURE TO GIVE SUCH NOTICE, (ALL WITHOUT AFFECTING
THE
LIABILITY OF THE OTHER PERSONS, FIRMS, OR CORPORATIONS LIABLE FOR THE PAYMENT
OF
THIS NOTE).
15. TO
THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE MAKER HEREBY KNOWINGLY AND
VOLUNTARILY WAIVES TRIAL BY JURY AND THE RIGHT THERETO IN ANY ACTION OR
PROCEEDING OF ANY KIND ARISING UNDER OR OUT OF OR OTHERWISE RELATED TO OR
CONNECTED WITH THIS NOTE OR ANY RELATED DOCUMENT.
[Signature
Page Follows]
2
IN
WITNESS WHEREOF, each of the undersigned has duly executed this Amended and
Restated Loan Agreement and Convertible Promissory Note on the date first above
written.
| SMI PRODUCTS, INC. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxx | |
|
Xxxxx Xxxxxx |
||
| President | ||
| PAYEE: | ||
| |
|
|
| /s/ Xxxx XxXxxx | ||
|
Xxxx XxXxxx |
||
