PROMISSORY NOTE CANCELLATION AND REISSUANCE AGREEMENT
Exhibit
4.5
THIS
PROMISSORY NOTE CANCELLATION AND REISSUANCE AGREEMENT (“Agreement”) is made and
entered into as of March 28, 2006 (the “Effective Date”), by and between Execute
Sports, Inc., a Nevada corporation (“Maker”), and NewHeart
Ministries,
an
organization located at ________________, California (“Holder”).
RECITALS
A. On
the
terms and conditions set forth herein, (i) Maker and Holder (the “Parties”)
agree to cancel that certain promissory note between Maker and Holder dated
February 28, 2005 bearing interest at two percent (2%) monthly (a copy of which
is attached as Exhibit A) (the “2005 Note”); and (ii) Maker will issue Holder a
new interest bearing promissory note (the “New Note”) (a copy of which is
attached as Exhibit B).
B. This
Agreement, together with Exhibits A and B, each of which are attached hereto
and
incorporated herein by this reference, and any additional exhibits, schedules,
or attachments as set forth herein, are referred to collectively herein as
the
“PCRA”.
AGREEMENT
1. CANCELLATION
OF ORIGINAL NOTE AND RELEASE. Subject to the terms and conditions set forth
herein, Holder agrees to deliver to Maker at Closing (defined below) the 2005
Note marked across its face "CANCELLED" and upon such delivery thereby shall
forever release and discharge Maker of any and all of its obligations under
the
Note, including any obligation to pay principal and interest, except as set
forth in this Agreement.
2. ISSUANCE
OF NEW NOTE. Subject to the terms and conditions set forth herein, Maker agrees
to deliver to Holder at Closing (defined below) the New Note and upon such
delivery thereby shall be obligated to pay the principal of the New Note on
the
terms of the New Note.
3. CLOSING;
CLOSING DATE. The closing of the transactions contemplated hereby shall be
effective as of the delivery date of the closing deliveries described below
(“Closing”) at the offices of Execute Sports, Inc. at 10:00 a.m. on March 15,
2006, or at such time and place as the Parties mutually agree (“Closing Date”).
| a. |
Holder
shall deliver to Maker the 2005 Note marked across the face “Cancelled”
(incorporated by reference herein as Exhibit A); and
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b. Maker
shall deliver to Holder the New Note (attached hereto as Exhibit B); and
4. WAIVERS.
No action taken pursuant to this Agreement, including any investigation by
or on
behalf of any party will be deemed to constitute a waiver by the party taking
such action, or compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any
subsequent breach. The waiver by any party hereto at or before the Closing
Date
of any condition to its obligations hereunder which is not fulfilled shall
preclude such party from seeking redress from the other party hereto for breach
of any representations, warranty, covenant or agreement contained in this
Agreement.
5. RELEASES.
a. The
Holder jointly and severally hereby forever release, discharge, acquit and
forgive from any and all claims, actions, suits, demands, agreements, and each
of them, if more than one, liabilities, judgments, and proceedings both at
law
and in equity arising from the beginning of time to the date of these presents
and as more particularly related to or arriving from the issuance and subsequent
cancellation of the 2005 Note and the non-payment of Unpaid Interest in cash.
In
regard to the 2005 Note, the Parties, and each of them, agree to and do hereby
waive and relinquish all rights and benefits afforded under the provisions
of
Section1542 of the Civil Code of the State of California, which provides as
follows:
"A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor."
b. If
the
Holder has instituted any legal proceedings against the Maker settled by this
release, the Holder covenants to have them dismissed at the Holder's cost with
express prejudice to bringing further proceedings against the Maker arising
out
of the same matter.
c. The
Holder also covenants not to make any claim or institute any proceedings against
any person who might claim over against or claim contribution or indemnity
from
the Maker in connection with any matter for which this release is
given.
d. The
Holder also acknowledges that the Maker does not admit liability to the Holder
in connection with any matter for which this release is given.
e. This
release shall be binding upon and inure to the benefit of the parties, their
successors, assigns and personal representatives.
f. This
release applies only to the foregoing, and no other debt, obligation, agreement
or liability by and between the parties, which, if existing, shall survive
this
release.
6. BINDING
EFFECT: BENEFITS. This Agreement shall inure to the benefit of the Parties
hereto and shall be binding upon the parties hereto and their respective
successors and assigns, heirs and legal representatives. Except as otherwise
set
forth herein, nothing in this Agreement, express or implied, is intended to
confer on any person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
of by reason of this Agreement.
7. GOVERNING
LAW; JURISDICTION; VENUE; REMEDIES; INDEPENDENT LEGAL COUNSEL. This Agreement
shall be interpreted and construed as to both validity and performance and
enforced in accordance with and governed by the laws of the State of California,
without giving effect to the choice of law principles thereof. The Parties
agree
that any action hereunder will be held exclusively in the courts in the State
of
California. The Parties acknowledge that remedies at law, including monetary
damages, may be inadequate to remedy a breach of certain material terms herein,
including Holder's delivery of the Note, and the Parties agree that equitable
remedies may be necessary to enforce such terms and covenants, including
specific performance. Holder and Maker acknowledge that the terms of this
Agreement have been negotiated by the Parties hereto and each of them has had
a
full opportunity to receive independent business, tax and legal counsel with
respect to this Agreement and the transactions contemplated herein.
8. COUNTERPARTS.
This Agreement may be executed in counterpart 2005s, each of which shall
constitute an executed 2005 and together shall constitute a fully-executed
document.
11.
NOTICES.
All notices, requests, demands, and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given on the date
of
service if served personally on the party to whom notice is to be given, or
within 72 hours after mailing, if mailed to the party to whom notice is to
be
given, by first-class mail, registered or certified, postage prepaid, and
properly addressed to the party at the address set forth below, or any other
address that a party may designate by written notice to the others.
Maker: Holder:
Execute
Sports,
Inc.
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Attn:
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Attn:
Exhibits:
Exhibit
A: 2005
Promissory Note
Exhibit
B: New
Promissory Note
IN
WITNESS WHEREOF, the parties have executed and delivered the PCRA for all
purposes as of the Effective Date.
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Maker:
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Holder:
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By:
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By:
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Signature
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Signature
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Name:
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Name:
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Print
or Type Name
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or Type Name
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PAYMENT
IN KIND PROMISSORY NOTE
$11,728.57
March
28, ▇▇▇▇
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FOR
VALUE
RECEIVED, the undersigned, Execute Sports, Inc., a Nevada corporation ("Maker"),
hereby promise to pay, to NewHeart Ministries, or order ("Payee"), the principal
sum of
Eleven
Thousand, Seven Hundred, Twenty Eight and 57/100 Dollars ($11,728.57), with
interest on the unpaid principal at the rate of four percent (2%) per annum
until March 28, 2007 (“due date”). Principal and interest shall be payable as
follows: Interest only shall be paid annually; at Payee’s option, either in
Maker’s common stock or cash until the due date, at which time the remaining
outstanding balance of the principal, any accrued but unpaid interest and all
other sums hereunder shall be payable in full.
If
Payee
elects for Maker to make an interest payment in its common stock, Maker shall
calculate the amount of interest due on the anniversary of the date of this
Note
and convert such amount into the Maker’s common stock at a conversion price of
price of $0.50 per share for every one dollar ($1.00) of Interest owed to the
Holder. If not so paid and at the option of Holder, or its assigns, all
principal and interest shall become immediately due and payable.
Interest
shall be computed on the basis of a 365-day year and actual days lapsed. Maker
shall have the privilege of prepaying the principal under this Note in whole
or
in part, without penalty or premium at any time. All payments hereunder shall
be
applied first to interest, then to principal.
Maker
shall pay upon demand any and all expenses, including reasonable attorney fees,
incurred or paid by Holder of this Note without suit or action in attempting
to
collect funds due under this Note. In the event an action is instituted to
enforce or interpret any of the terms of this Note, including but not limited
to
any action or participation by Maker in, or in connection with, a case or
proceeding under the Bankruptcy Code or any successor statute, the prevailing
party shall be entitled to recover all expenses reasonably incurred at, before
and after trial and on appeal or review, whether or not taxable as costs,
including, without limitation, attorney fees, witness fees (expert and
otherwise), deposition costs, copying charges and other expenses.
This
Note
is executed in connection with the transaction set out in that certain
Promissory Note Cancellation and Re-issuance Agreement of even date, by and
among the Maker and Holder and is subject to the terms thereof.
All
parties to this Note hereby waive presentment, dishonor, notice of dishonor,
and
protest. All parties hereto consent to, and Holder is hereby expressly
authorized to make, without notice, any and all renewals, extensions,
modifications, or waivers of the time for or the terms of payment of any sum
or
sums due hereunder, or under any documents or instruments relating to or
securing this Note, or of the performance of any covenants, conditions or
agreements hereof or thereof or the taking or release of collateral securing
this Note. Any such action taken by Holder shall not discharge the liability
of
any party to this Note.
This
Note
has been executed and delivered in the State of California and shall be governed
and construed in accordance with the laws of the State of
California.
Execute
Sports, Inc.
A
Nevada
corporation
____________________________________________
By:
Its:
EXHIBIT
A
The
2005 Note