ADDENDUM TO FUNDING AGREEMENT
This Addendum to Funding Agreement (hereinafter referred to as "ADDENDUM"),
dated the 4th day of August, 2000 is by and between XXXXXXX.XXX, INC., a
Delaware Corporation (hereinafter referred to as "SYCD"), and ALLIANCE EQUITIES,
INC., a Florida Corporation (hereinafter referred to as "ALLIANCE"). SYCD and
ALLIANCE are sometimes referred to herein as the "Parties".
R E C I T A L S:
WHEREAS, SYCD and ALLIANCE entered into that certain Funding Agreement
dated December 16, 1999, (hereinafter referred to as the "FUNDING AGREEMENT");
and
WHEREAS, a dispute has arisen among the Parties to the FUNDING AGREEMENT;
and
WHEREAS, the Parties are desirous of resolving all pending claims, and/or
potential litigation and claims; and
WHEREAS, all of the Parties to this ADDENDUM to FUNDING AGREEMENT agree to
the terms and conditions as set forth hereafter.
NOW, THEREFORE, in exchange for TEN ($10.00) DOLLARS and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
in consideration of the mutual covenants contained herein which each of the
Parties is relying upon and intends to be bound by, enters into this ADDENDUM to
FUNDING AGREEMENT and agrees as follows:
1. Recitals. The above recitals are true and correct and have the same
force and effect as if fully set forth herein.
2. Representations and Warranties of SYCD. In order to induce ALLIANCE to
enter into this ADDENDUM, SYCD hereby represents and warrants as follows:
a. The execution of this Addendum by SYCD and the performance of the
requirements under this Addendum will not:
i. Violate any provision or law, regulation or any judgment, writ, injunction,
decree or any order of any Court or any other government authority relating to
SYCD;
ii. Violate any indenture, contract, or other commitment or restriction by which
SYCD is bound;
iii. Be in conflict with, result in or constitute a breach or default on the
part of SYCD of any indenture, contract or other commitment or restriction under
which they are bound; or
iv. Result in the breach of or default under any agreement, contract,
undertaking or other instrument or documents.
b. SYCD has the full power and authority to make, deliver, enter into and
perform all obligations pursuant to the terms and conditions of this Addendum
and all exhibits hereto and has taken all necessary action to authorize the
president of SYCD to execute, deliver and perform on its behalf, the execution,
delivery and performance of the terms and conditions of this Addendum, its
exhibits, and all documents to be executed and delivered in connection with this
Addendum or in order to consummate the transaction contemplated by this
Addendum;
c. SYCD has freely and voluntarily entered into this Addendum and has had
the benefit of legal counsel for all negotiations and drafting in connection
with this Addendum;
d. SYCD shall use its best efforts and good faith to perform all
obligations created hereunder;
e. All warranties and representations by SYCD that are contained in this
Addendum are material to this Addendum are complete, true and accurate, can be
reasonably relied upon by ALLIANCE without further investigation, are made
freely, voluntarily, and without duress, and are or have been made for the
specific purpose of inducing ALLIANCE to enter into this Addendum.
3. Representation and Warranties of ALLIANCE. In order to induce SYCD to
enter into this Addendum, ALLIANCE hereby represents and warrants as follows:
a. The execution of this Addendum by ALLIANCE the performance of the
requirements under this Addendum will not:
i. Violate any provision or law, regulation or any judgment, writ, injunction,
decree or any order of any Court or any other government authority relating to
ALLIANCE;
ii. Violate any indenture, contract, or other commitment or restriction by which
ALLIANCE is bound;
iii. Be in conflict with, result in or constitute a breach or default on the
part of ALLIANCE, of any indenture, contract or other commitment or restriction
under which they are bound; or
iv. Result in the breach of or default under any agreement, contract,
undertaking or other instrument or documents.
b. ALLIANCE has the full power and authority to make, deliver, enter into
and perform all obligations pursuant to the terms and conditions of this
Addendum and all exhibits hereto and has taken all necessary action to authorize
ALLIANCE to execute, deliver and perform on its behalf, the execution, delivery
and performance of the terms and conditions of this Addendum, its exhibits, and
all documents to be executed and delivered in connection with this Addendum or
in order to consummate the transaction contemplated by this Addendum;
c. ALLIANCE has freely and voluntarily entered into this Addendum and has
had the benefit of legal counsel for all negotiations and drafting in connection
with this Addendum;
d. ALLIANCE shall use its best efforts and good faith to perform all
obligations created hereunder;
e. All warranties and representations by ALLIANCE that are contained in
this Addendum are material to this Addendum are complete, true and accurate, can
be reasonably relied upon by SYCD without further investigation, are made
freely, voluntarily, and without duress, and are or have been made for the
specific purpose of inducing SYCD to enter into this Addendum.
4. Modifications to Agreement. The Parties hereby agree to modify and/or
amend the Funding Agreement between the Parties as follows:
a. With respect to Paragraph 1, Financing Commitment, the Parties hereby
agree that ALLIANCE's maximum funding obligation to SYCD is hereby reduced from
an aggregate of TWO MILLION ($2,000,000.00) DOLLARS to an aggregate of ONE
MILLION ($1,000,000.00) DOLLARS. SYCD acknowledges receipt of FIVE HUNDRED
THOUSAND ($500,000.00) DOLLARS previously funded in accordance with the Funding
Agreement and ALLIANCE acknowledges receipt of 1,269,492 shares of SYCD Common
Stock as repayment in full of such FIVE HUNDRED THOUSAND ($500,000.00) DOLLAR
loan. ALLIANCE agrees to make the
remaining FIVE HUNDRED THOUSAND ($500,000.00) DOLLAR loan, in installments, to
SYCD as follows:
i. ONE HUNDRED TWENTY-FIVE THOUSAND ($125,000.00) DOLLARS upon the execution of
this Addendum by the Parties (the "Initial Funding Date"); and
ii. ONE HUNDRED TWENTY-FIVE THOUSAND ($125,000.00) DOLLARS two (2) weeks after
the Initial Funding Date (the "Second Funding Date"); and
iii. ONE HUNDRED TWENTY-FIVE THOUSAND ($125,000.00) DOLLARS two (2) weeks after
the Second Funding Date (the "Third Funding Date"); and
iv. ONE HUNDRED THOUSAND ($100,000.00) DOLLARS two (2) weeks after the Third
Funding Date (the "Fourth Funding Date"); and
v. TWENTY-FIVE THOUSAND ($25,000.00) DOLLARS two (2) weeks after the Fourth
Funding Date as the final payment, in each case by wire transfer to SYCD of
available funds.
b. Provided SYCD receives from ALLIANCE the ONE HUNDRED TWENTY-FIVE
THOUSAND ($125,000.00) DOLLAR loan on the Initial Funding Date, within five (5)
days after such date, SYCD shall issue to ALLIANCE, in repayment of the loan,
that number of shares of SYCD Common Stock valued at fifty (50%) percent of the
closing bid price of SYCD's Common Stock on the day immediately preceding the
date of SYCD's receipt of the subject loan funding payment, as shall equal the
principal amount of the loan installment. Following SYCD's receipt from ALLIANCE
of each subsequent loan installment, SYCD shall issue to ALLIANCE as repayment
of that loan installment, within five (5) days after SYCD's receipt of the loan
proceeds therefrom, that number of shares of SYCD Common Stock valued at fifty
(50%) percent of the closing bid price of SYCD's Common Stock on the day
immediately preceding the date of SYCD's receipt of the subject loan funding
payment, as shall equal the principal amount of the loan installment. Inasmuch
as all loan installments are to be repaid in shares of SYCD Common Stock, each
loan installment shall not bear any interest. In the event SYCD is in default of
the obligations in this Section 4.b., ALLIANCE shall not be required to pay the
next loan installment due, at ALLIANCE's sole discretion, and thereafter
ALLIANCE shall be deemed to have fully performed all of ALLIANCE's obligations
under there terms of this Addendum. In the event ALLIANCE fails to make a loan
when due, SYCD shall not be obligated to accept any late loan installment. In
the event SYCD fails to timely repay the loan when due, ALLIANCE shall not be
obligated to accept any late loan payment.
c. With respect to the current prospectus status of SYCD as filed with the
Securities and Exchange Commission ("SEC"), the Parties hereby agree that upon
SYCD's receipt from ALLIANCE of the ONE HUNDRED TWENTY-FIVE THOUSAND
($125,000.00) DOLLAR loan installment on the Initial Funding Date, SYCD shall
use its best efforts to enable its counsel to file a Post-Effective
Amendment to the SB-2 (or an entirely new SB filing, if necessary), disclosing
the terms of this Addendum and such other information as said counsel deems
necessary under the Federal Securities Law, within five (5) business days after
the Initial Funding Date in order to cause the Post-Effective Amendment to the
SB-2 to become effective as soon as practicable. SYCD hereby further represents
and warrants that from the Initial Funding Date it will use best efforts to
comply in all material respects with all such applicable federal, state, and
local laws as it relates to the business of SYCD and its continued compliance
with all laws and regulations as may be imposed by the SEC or any other
governing agency.
d. Furthermore, the Parties hereby agree that the payment of the second
tranche of ONE HUNDRED TWENTY-FIVE THOUSAND ($125,000.00) DOLLARS constituting
the second payment, or any future loan installments thereafter, shall not be
funded by ALLIANCE to SYCD until the Post-Effective Amendment to the SB-2 is
declared effective by the SEC in writing. Furthermore, in the event that SYCD is
not current with any and all of its filings with the SEC, including, but not
limited to, filings of the 10-Q, 10-K or if SYCD receives an "E" suffix to their
trading symbol, then all further loan funding payments will be suspended (the
"suspension date") and ALLIANCE shall not be required to fund any future loan
installments due, in its sole discretion, until after SYCD becomes current or
the "E" is removed, and thereafter ALLIANCE shall recommence the loan funding
payments as of the suspension date, so long as SYCD not in default as
hereinafter setforth, after all applicable cure period. Notwithstanding anything
to the contrary, SYCD shall be in default ("event of default") of this Addendum,
if (i), if SYCD does not file the Post-Effective Amendment to the SB-2 with the
SEC within thirty (30) days from the Initial Funding Date, (ii)the
Post-Effective Amendment to the SB-2 is not declared effective by the SEC, in
writing within sixty (60) days after filing the Post-Effective Amendment to the
SB-2, or (iii) in the event, after sixty (60) days written notice from ALLIANCE,
SYCD is not current in the with any and all of its filings with the SEC, and
(iv) in the event, after sixty (60) days written notice from ALLIANCE, SYCD is
in default of any other obligation, covenant, representation or warranty
contained in this Addendum. In the event of SYCD's uncured default, ALLIANCE, in
its sole discretion, shall have the right to permanently suspend all future loan
installments, and thereafter ALLIANCE shall be deemed to have fully performed
all of ALLIANCE's obligations under there terms of this Addendum.
ALLIANCE acknowledges that SYCD shall be late in its 10-Q filing with the SEC
for the period ending June 30, 2000, due August 15, 2000. Notwithstanding such,
ALLIANCE shall not waive its rights to declare such late filing by SYCD in
default of SYCD's obligations herein, and after the expiration of all applicable
cure periods, such shall be an event of default.
e. Upon the performance of ALLIANCE's obligations set forth in this
Addendum, the Parties hereby agree that any inducement fee, consulting fee or
any other previous payment paid to ALLIANCE and/or XXXXXXX is deemed fully paid
and/or earned as may be applicable.
f. Upon the performance of ALLIANCE's obligations set forth in this
Addendum, then SYCD, upon receipt of such consideration, by this Addendum,
hereby remises, releases, acquits, satisfies and forever discharges ALLIANCE and
XXXXXXX XXXXXXX ("XXXXXXX") of and from all manner of action and actions, cause
and causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, including, without limitation, claims
for lost profits, consequential damages and/or punitive damages, judgments,
executions, claims and demands whatsoever, in law or in equity, which SYCD, its
subsidiaries and/or affiliates, ever had, now has, or which any personal
representative, successor, heir or assign of SYCD, hereafter can, shall or may
have, against ALLIANCE or XXXXXXX, for, upon or by reason of any matter, cause
or thing whatsoever, from the beginning of the world to the date of this
Addendum.
g. Upon the performance of SYCD's obligations set forth in this Addendum,
then ALLIANCE and XXXXXXX, upon receipt of such consideration, by this Addendum,
hereby remises, releases, acquits, satisfies and forever discharges SYCD of and
from all manner of action and actions, cause and causes of action, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, claims and demands whatsoever, in law or in equity, which
ALLIANCE, its subsidiaries and/or affiliates, and XXXXXXX ever had, now has, or
which any personal representative, successor, heir or assign of SYCD, hereafter
can, shall or may have, against SYCD, for, upon or by reason of any matter,
cause or thing whatsoever, from the beginning of the world to the date of this
Addendum.
h. SYCD shall have the right, at any time, to terminate ALLIANCE's funding
obligations as set forth herein. In the event of any such termination, ALLIANCE
shall have no further funding obligations to SYCD hereunder or under the Funding
Agreement, and SYCD agrees to waive ALLIANCE's breach of the Funding Agreement
for not making the FIVE HUNDRED THOUSAND ($500,000.00) DOLLAR loan to SYCD upon
the effectiveness of SYCD's SB-2 and agrees not to seek damages against ALLIANCE
or XXXXXXX and its affiliates, resulting from such breach, and thereafter
ALLIANCE shall be deemed to have fully performed all of ALLIANCE's obligations
under there terms of this Addendum.
i. Except as expressly set forth herein, all of the terms of the Funding
Agreement shall remain in full force and effect.
5. Miscellaneous Provisions.
a. Notices. All notices required or permitted to be given under the terms
of this Agreement shall be in writing. Notices may be personally delivered to a
Party, or may be given by fax if electronic confirmation of transmission is
obtained, or may be mailed to a Party. Notices are deemed given when received by
the Party
being noticed. However if a notice is mailed to a Party by certified mail,
return receipt requested, proper postage prepaid, in an envelope addressed to
the address of the Party set forth in the first paragraph of this Agreement (or
such other address as may be designated by a Party by giving notice thereof to
all other Parties) then such notice shall be deemed given on the third day after
it is turned over to the custody of the United States Postal Service. SYCD's
number for notification via facsimile is (000) 000-0000, and ALLIANCE's number
for notification via facsimile is (000) 000-0000.
b. Further Assurances. All Parties shall execute and deliver such other
instruments and do such other acts as may be necessary to carry out the intent
and purposes of this Agreement.
c. Gender. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.
d. Counterparts. This Agreement may be executed in any number of
counterparts. All executed counterparts shall constitute one agreement,
notwithstanding that all signatories are not signatories to the original or the
same counterpart.
e. Captions. The captions contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit, extend or prescribe the
scope of this Agreement or the intent of any provision hereof.
f. Completeness and Modification. This Addendum constitutes the entire
understanding among the Parties concerning the subject matter hereof and, to the
extent it modifies the Funding Agreement, it supersedes all prior or
contemporaneous agreements or understandings. No waiver or modification of the
terms hereof shall be valid unless in writing signed by the Party or Parties to
be charged and only to the extent therein set forth. No covenant, representation
or condition not expressed in this Agreement shall offset or be effective to
interpret, change or restrict the express provisions of this Agreement.
g. Severability. The invalidity in whole or in part of any covenant,
promise or undertaking, or any section, subsection, paragraph, sentence, clause,
phrase or word, or of any provision of this Agreement shall not affect the
validity of the remaining portions thereof.
h. Construction. Each Party has reviewed this Agreement and the rule of
construction that ambiguities are to be resolved against the Party drafting this
Agreement shall not apply.
i. Binding Effect. This Agreement shall be binding upon the heirs, personal
representatives, guardians, legal representatives, administrators, assigns and
successors of the parties hereto.
j. Time is of the Essence. With respect to all of the obligations of each
Party contained in this Agreement, time shall be of the essence.
IN WITNESS WHEREOF the above parties have executed this ADDENDUM on the day
and date first above-written.
WITNESSES: ALLIANCE EQUITIES, INC.
/s/ Xxxxxxx Xxxxxxx
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XXXXXXX XXXXXXX, President
XXXXXXX.XXX, INC.
/s/ Xxxxxxx Xxxxxx
------------------------------
XXXXXXX XXXXXX, President
JOINDER BY XXXXXXX XXXXXXX
The undersigned, Xxxxxxx Xxxxxxx, individually, hereby joins in the provision of
Section 4.g. only
/s/ Xxxxxxx Xxxxxxx
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XXXXXXX XXXXXXX
6643.006 Amendment to Funding Agr.4
