Document:

Exhibit 10.4

 

Addendum to

PROMISSORY NOTE

On or about February 1, 2014, Smack Sportswear., a Nevada corporation (the “Payor”) and Frank Gillen (the "Holder") entered into a “Promissory Note" for EIGHTY THREE THOUSAND SIX HUNDRED DOLLARS ($83,600) due by January 31, 2016, along with accrued interest.

Both Parties have agreed to amend original Promissory Note as follows:

1  The Promissory Note can be increased, from time-to-time to $150,000. In other words, the Promissory Note becomes a line of credit where the Payor can borrow up to $150,000 from the Holder, at the same terms, prior to January 31, 2016..

2.            The amount owing on Promissory Note is now $93,600, which represents a payment by the Holder to the Law Offices of Thomas C. Cook, Ltd. for $10,000 in legal services on behalf of the Payor.

3.            As a point of clarification, Valois Properties LLC, a note holder on the Smack Sportswear financials, is a single member LLC solely owned and managed by Frank Gillen. On or about December 31, 2012, Valois Properties LLC ceased to exist, and all assets and liabilities owned by Valois Properties LLC were transferred to name Frank Gillen. Frank Gillen, personally, is now owed any monies an interest owed to Valois Properties LLC by Smack Sportswear.

This addendum, executed on or about February 12, 2014, only modifies the terms listed above, it does not modify any of the other terms in the Promissory Note.

Smack Sportswear

Payor

/s/ Bill Sigler                                      

Bill Sigler                                                    Date 

Chief Executive Officer

Holder

/s/ Frank Gillen                                   

Frank Gillen                                                Date

 

Smack Sportswear

Citibank Disbursement Approval Procedure

I.  Background

Smack Sportswear has a separate account with Citibank that will be used for the loan advance payments to cover the 6-month plan. It has been agreed that EVERY dollar disbursed from the Citibank account will be preapproved by Mr. Frank Gillen, Mr. Bill Sigler and Mr. Tom Mercer, prior to disbursement. In order to establish controls on the Citibank account, Smack Sportswear adopts an accountable disbursement policy.

II.        Introduction

a.                  Issue disbursement(s) only for those business expenses that SmackSportswear can substantiate as to the date, amount, and business nature of each expense.  and;

b.        This Disbursement Approval Procedure is intended to help Smack Sportswear staff and coworkers file a check request properly, to receive the reimbursement check without delay, and to make necessary purchases within the budget. It is the responsibility of Smack Sportswear staff and coworkers to ensure that every Smack Sportswear-related purchase fully complies with general accounting practices. A payment may have to withheld if the required documents are not submitted, or if the purchase does not qualify as related to Smack Sportswear business.

III.        Who can file a check request?

Smack Sportswear staff, coworkers and anyone who conducts a business transaction for the Smack Sportswear or on behalf of the Smack Sportswear may file a check request as a requester. However, Mr. Frank Gillen, Mr. Bill Sigler and Mr. Tom Mercer, jointly have right to approve, verify, adjust, or reject the amount or the good(s) stated on the request form. Payment will not be made if either Mr. Frank Gillen, Mr. Bill Sigler or Mr. Tom Mercer decline to approve the request.

IV.        To make a purchase

It is highly recommended for the requester to always check with the Department Head before filing a request to ensure there is a budget for the purchase. To make a purchase, the requester must complete all the information, and acquire the required signatures of Mr. Frank Gillen, Mr. Bill Sigler and Mr. Tom Mercer to receive pre-approval before making the purchase.

V.      Disbursement approval procedure

To file a disbursement approval request, the requester must obtain prior approval from Mr. Frank Gillen, Mr. Bill Sigler and Mr. Tom Mercer, jointly, and follow the instructions.

Agreed to and approved by:

/s/ Frank Gillen                                                  

Frank Gillen                                                Date 

 

/s/ Bill Sigler                                                     

Bill Sigler                                                    Date

/s/ Tom Mercer                                                 

Tom Mercer                                               DateExhibit 10.5

 

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT'). NO SALE OR DISPOSITION OF THIS PROMISSORY NOTE MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER THE ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO OBLIGATOR THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

PROMISSORY NOTE

	
Up to $150,000

	
February 1, 2014

	 	
Torrance CA 90501

For value received, Smack Sportswear, a Nevada corporation, located at 20316 Gramercy Place, Torrance, CA 90501 ("Obligator") promises to pay to Bill Kotlar, an individual and resident of California, or his assigns ("Holder") the principal sum of up to $150,000 (the "Credit Limit"), or such lesser amount as Holder shall advance to Obligator in accordance with Section 1 hereof, together with accrued and unpaid interest thereon, each due and payable on the dates and in the manner set forth below.

This note (the "Note") is issued pursuant to the terms of the Line of Credit Agreement (as amended from time to time, the "Agreement") dated herewith, by and between Obligator and the Holder.  Capitalized terms used in this Note and not otherwise defined herein have the meaning given such terms in the Agreement.

1.            Principal Amounts. Subject to the terms and conditions of the Agreement, Holder agrees to advance that amount of funds to the Obligator upon Loan Requests by the Obligator, such that the amount of principal advanced hereunder and not then-repaid shall not exceed the Credit Limit.  Schedule A hereto, as amended from time to time, shall set forth the amount and date of any such advances, and any repayments made by the Obligator of advanced principal and accrued interest thereon.  The outstanding principal amount of this Note and all accrued interest thereon (collectively, the "Outstanding Balance") shall be due and payable on or before December 31, 2016 and subject to the terms and conditions of the Agreement.

2.            Interest Rate. The Obligor also promises to pay to the order of the Holder interest on the principal amount hereof at a rate per annum equal to ten (10%) APR.

3.            Attorneys' Fees. Obligator shall pay all fees, costs and expenses (including court costs and attorneys' fees) incurred by Holder in connection with enforcing and collecting this Note, and in connection with any amendment, modification or supplement to this Note, whether by negotiation, legal proceedings or otherwise.

4.            Events of Default. The Agreement provides for acceleration of the obligations due hereunder upon Events of Default, as defined in the Agreement.

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5.            Certain Waivers. Obligator hereby waives demand, notice, presentment, protest and notice of dishonor.

6.            Governing Law. This Note and all disputes arising out of or relating to this Note shall be governed by and construed under the laws of the State of Nevada, as applied to agreements among Nevada residents, made and to be performed entirely within the State of Nevada, without giving effect to conflict of laws principles that would cause the application of the laws of any other jurisdiction. Any proceeding in connection with the interpretation or enforcement of this Note shall take place in any federal or state court located in Orange County, Nevada.

7.            Amendment; Waiver, No amendment, modification, termination or waiver of any provision of this Note nor consent to any departure by Holder therefore, shall in any event be effective unless the same shall be in writing and signed by Holder, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

8.            Successors and Assigns. The provisions of this Note shall inure to the benefit of and be binding on any successor to Obligator and shall extend to any Holder hereof. Interest and principal shall be paid solely to the registered holder of this Note. Such payment shall constitute full discharge of Obligator' obligation to pay such interest and principal. This Note is freely assignable by any Holder hereof.

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IN WITNESS WHEREOF, this Note is duly executed and delivered as of the date first above written.

Smack Sportswear

/s/ Bill Sigler                      2/1/14

Bill Sigler                        Date

Principal Executive Officer

Note Holder

/s/ Bill Kotlar                       2/1/14

Bill Kotlar                          Date

	 

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Schedule A

Advances and Repayments

	
Date of Advance or Repayment (as indicated)

	
Amount

	 	 
	 	
$80,000  (Already Loaned to the Company)

	 	
$  1,000 (Accounting Fees Paid)

	 	 
	 	 
	 	 
	 	 

 

 

 

4Exhibit

Exhibit 10.1

ACTIVE POWER, INC.
CASH INCENTIVE PLAN

1.    Purpose.  The Active Power, Inc. Cash Incentive Plan (the “Plan”) was adopted by the Compensation Committee of the Board of Directors of Active Power, Inc. (the “Company”) to promote the interests of the Company and to be effective as of February 10, 2016.   The Plan is intended to provide for the issuance of cash awards to employees, directors and other service providers of the Company or its Affiliates.    
2.    Definitions.  Capitalized terms used but not otherwise defined herein shall have the meanings set forth below:
“Administrator” means the Committee unless the Board elects to administer the Plan in which case the “Administrator” means the Board.  
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“Board” means the Board of Directors of the Company.
“Committee” means the Compensation Committee of the Board of Directors of the Company.
3.    Awards.  The Administrator may grant awards under this Plan to employees, directors and other service providers of the Company or its Affiliates.  All awards will be denominated in and settled in cash.  Awards will vest and be settled pursuant to the terms and conditions determined by the Administrator, which conditions may include continued service, the achievement of individual performance goals, performance goals related to the Company or any division or department of the Company or any of their Affiliates or any combination thereof.  
4.    Administration of the Plan.  The Plan shall be administered by the Administrator.  The Administrator shall have the power and authority to prescribe, amend and rescind rules and procedures governing the administration of this Plan, including, but not limited to, the full power and authority (a) to interpret the terms of this Plan, (b) to determine the rights of any person under this Plan, or the meaning of requirements imposed by the terms of this Plan or any rule or procedure established by the Administrator, (c) to accelerate the vesting of any award and (d) delegate any of its authorities, duties or responsibilities under the Plan to a committee of the Board or any officer or employee of the Company.  Each action of the Administrator shall be binding on all persons who receive awards under the Plan or otherwise benefit under awards granted pursuant to the Plan.
5.    Taxes.  The Company shall be entitled, if necessary or desirable, to withhold (or secure payment from any person in lieu of withholding) the amount of any withholding or other tax due with respect to the Company with respect to any amount payable under any award granted pursuant to this Plan, and the Company may defer such payment or issuance unless indemnified to its satisfaction.

Exhibit 10.1

6.    Rights of Participants.  Nothing in this Plan or in any award agreement shall interfere with or limit in any way the right of the Company or any of its Affiliates to terminate any person’s service relationship at any time (with or without cause), nor confer upon any person any right to continue in the service of the Company or any of its Affiliates for any period of time or to continue such person’s present (or any other) rate of compensation.  No person shall have a right to be selected as a recipient of an award or, having been so selected, to be selected again as a recipient.  There is no obligation for uniformity of treatment of recipients of awards under this Plan.
7.    Amendment, Suspension, and Termination of Plan.  The Administrator may suspend or terminate the Plan or any portion thereof at any time and may amend the Plan or any award granted pursuant to the Plan from time to time in such respects as the Administrator may deem advisable; provided that no such amendment, suspension, or termination shall materially impair the rights of recipients of awards previously granted without the consent of the holders affected thereby, except to the extent provided for in any award agreement. 
8.    Award Agreements.  In the event of any inconsistency or conflict between any of the provisions of this Plan and any of the provisions of any award agreement, such provisions of such award agreement shall control.

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