EX-4.9
SUPPLEMENTARY AGREEMENT
SUPPLEMENTARY AGREEMENT
THIS SUPPLEMENTARY AGREEMENT ("Supplementary Agreement") is
dated as of June 27, 2002, by and between FREESTAR TECHNOLOGIES,
INC., a Nevada corporation, with headquarters located at 1140 Avenue
of the Americas, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Company"),
vFinance Investments, Inc. ("vFinance"), Boat Basin Investors LLC
("Boat Basin"), Xxxx Xxxxxx ("Xxxxxx"), Xxxxx Xxxxxxxxx
("Xxxxxxxxx"), and Xxxxxxx Xxxxxxxxx ("Xxxxxxxxx") (who, together
with permitted assigns, will be collectively referred to herein as
the "Investors").
W I T N E S S E T H
WHEREAS, simultaneously with the execution of this Supplementary
Agreement, the Company entered into a Financing Agreement ("Financing
Agreement") and Series 2002A $400,000 8% Convertible Notes ("$400,000
Notes") with the Investors and Papell Holdings Ltd. to loan to the
Company, subject to the terms and conditions set forth herein, an
aggregate of up to Four Hundred Thousand and 00/100 ($400,000.00)
Dollars.
WHEREAS, simultaneously with the execution of this Supplementary
Agreement, Xxxx Xxxx ("Pledgor"), has executed a Pledge Agreement
("Pledge Agreement") wherein Pledgor has agreed to pledge 14,400,000
shares of Pledgor's shares of common stock in the Company as security
for: (i) the performance by the Company of its obligations under the
Notes payable to the Investors (the "Notes"); (ii) the performance by
the Company of its obligations, covenants, and agreements under the
Financing Agreements between the Company and the Investors as well as
the Related Agreements (as that term is defined in the Financing
Agreement), and (iii) the performance by the Pledgor under the
Unconditional Guaranty executed by the Pledgor (the "Guaranty").
Capitalized terms in this Agreement which are not identified herein
will have the meanings given such terms in the $400,000 Notes.
WHEREAS, a portion of the $400,000 Notes include debts
previously owed, but unpaid, to some of the Investors.
NOW, THEREFORE, for and in consideration of the premises and the
mutual agreement contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Prior Loans - Xxxxxxxxx, Xxxxxxxxx and Xxxxxx.
a. On June 12, 2002, the Company entered into a certain Loan
Agreement ("SSR Loan Agreement") and Notes ("SSR Notes") with
Stefansky, Siegel, and Xxxxxxxxx, wherein Xxxxxxxxx, Xxxxxx and
Xxxxxxxxx loaned to the Company the aggregate of Sixty Thousand and
00/100 ($60,000.00) Dollars.
b. On or about August 29, 2002, the Company defaulted under
the SSR Loan Agreement and SSR Notes by failing to repay the
principal and interest due. Xxxxxxxxx, Xxxxxx and Xxxxxxxxx agreed
to extend the maturity date under the SSR Agreement and SSR Notes.
c. In consideration for extending the maturity date under
the SSR Loan Agreement and SSR Notes, the Company accrued interest
and late penalty charges and increased the principal amount owed
under the SSR Notes by an aggregate of $110,000 ("Revised SSR
Notes"). Pursuant to the Revised SSR Notes: (i) Xxxxxxxxx)s note was
increased to $60.000 (consisting of an original note principal
balance of $20,000, accrued interest and late charge penalties of
$10,000, and $30,000 of the vFinance Fee Balance, as defined below),
(ii) Xxxxxxxxx'x note was increased to $60,000 (consisting of an
original note principal balance of $20,000, accrued interest and late
charge penalties of $10,000) and $30,000 of the vFinance Fee Balance,
as defined below), and (iii) Xxxxxx'x note was increased to $40,000
(consisting of an original note principal balance of $20,000, accrued
interest and late charge penalties of $10,000, and $10,000 of the
vFinance Fee Balance, as defined below). The Company also issued an
aggregate of 1,000,000 shares of the Company's common stock to
Xxxxxx, Xxxxxxxxx and Xxxxxxxxx in connection with and as
compensation for the issuance of the SSR Notes. The Revised SSR
Notes constitute a portion of the $400,000 Notes.
2. Prior Loan - Boat Basin Investors LLC.
a. On June 12, 2002, the Company entered into a certain Loan
Agreement ("Boat Basin Loan Agreement") and Note ("Boat Basin Note")
with Boat Basin, wherein Boat Basin loaned to the Company Fifty
Thousand and 00/100 ($50,000.00) Dollars (the "Boat Basin Loan").
b. On or about August 29, 2002, the Company defaulted under
the Boat Basin Loan Agreement and Boat Basin Note by failing to repay
the principal and interest due. Boat Basin agreed to extend the
maturity date of the Boat Basin Agreement and Boat Basin Note.
c. In consideration for extending the maturity date under the
Boat Basin Loan Agreement and Boat Basin Notes, the Company accrued
interest and late penalty charges and increased the principal amount
owed under the Boat Basin Note by $15,000 ("Revised Boat Basin
Note"). The Revised Boat Basin Note constitutes a portion of the
$400,000 Notes.
3. vFfinance Obligation.
a. Pursuant to an Agency Agreement dated March 24, 2002,
between the Company and vFinance ("Agency Agreement"), the Company
agreed to pay vFinance (i) a retainer fee of $7,500 per month for a
period of 12 consecutive months from the date of the Agency
Agreement, for a total retainer fee of $90,000 ("Retainer Fees");
(ii) on each Closing Date and Subsequent Closing Date, as defined in
the Agency Agreement, a consulting fee equal to 3% of the funds
raised in such Closing and Subsequent Closing, for a total consulting
fee of $6,810 ("Consulting Fees"); and (iii) a placement fee equal to
10% of the gross proceeds of the Notes ("Placement Fee"), as defined
under the Agency Agreement, for a total placement fee of $22,700..
b. In addition to the vFinance Fees, the Company owed vFinance
an additional sum of $10,000 representing travel expenses as incurred
by vFinance ("Travel Expenses").
c. The Retainer Fees, Consulting Fees, Placement Fees and
Travel Expenses, totaling $129,510 are collectively referred to as
the "vFinance Fees."
d. The Company has failed to pay vFinance the vFinance Fees as
provided in the Agency Agreement.
e. The Company has issued a note to vFinance in the amount of
$58,000 ("vFinance Note"), which constitutes a portion of the
$400,000 Notes.
f. The balance of the vFinanee Fees in the amount of $70,000
($129,510 less the vFiinance Note) ("vFinance Fee Balance"), was
apportioned among Siegel, Stefansky, and Xxxxxxxxx, as described
above in section 1(c), and constitutes a portion of the $400,000 Notes.
4. Merger of All Prior Loans.
a. The Company, Boat Basin Investors LLC, Xxxxxx, Xxxxxxxxx
and Xxxxxxxxx have, simultaneously with the execution of this
Supplementary Agreement, executed the Financing Agreement, and the
$400,000 Notes are being issued by the Company.
b. The SSR Notes and Boat Basin Note have been merged into the
$400,000 Notes and are superceded by the $400,000 Notes and are
subject to the terms and conditions set forth in the Financing Agreement.
5. Affirmation of Representations and Warranties. The Company
hereby affirms, ratifies and certifies each of the representations
and warranties made by the Company in the SSR Loan Agreement, SSR
Notes, Boat Basin Loan Agreement and Boat Basin Note as of the date
of this Agreement, and acknowledges that the same are in full force
and effect.
6. Governing Law. This Supplementary Agreement shall be
governed by and construed in accordance with the laws of the State of
New York. Each of the parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the City of New
York or the state courts of the State of New York sitting in the City
of New York in connection with any dispute arising under this
Supplementary Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on
forum non coveniens, to the bringing of any such proceeding in such
jurisdictions.
7. Severability. If a court of competent jurisdiction
determines that any provision of this Supplementary Agreement is
invalid, unenforceable or illegal for any reason, such determination
shall not affect or impair the validity, legality and enforceability
of the other provisions of this Supplementary Agreement. If any such
invalidity, unenforceability or illegality of a provision of this
Supplementary Agreement becomes known or apparent to any of the
parties hereto, the parties shall negotiate promptly and in good
faith in an attempt to make appropriate changes and adjustments to
such provision specifically and this Supplementary Agreement
generally to achieve as closely as possible, consistent with
applicable law, the intent and spirit of such provision specifically
and this Supplementary Agreement generally.
8. Execution in Counterparts. This Supplementary
Agreement may be signed in any number of counterparts with the same
effect as if the signatures upon any counterpart were upon the same
instrument. All signed counterparts shall be deemed to be one
original. This Supplementary Agreement, once executed by a party, may
be delivered to the other parties hereto by telephone line facsimile
transmission of a copy of this Supplementary Agreement bearing the
signature of the parties so delivering this Supplementary Agreement.
A facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto.
IN WITNESS WHEREOF, the parties have executed this Supplementary
Agreement as of the date first written above.
COMPANY:
FREESTAR TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxx
Xxxx Egtan, President
INVESTORS:
VFINANCE, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
BOAT BASIN INVESTORS LLC
By: /s/ Xxx Xxxx
Xxx Xxxx, Manager
XXXXXXX XXXXXXXXX
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
XXXXX XXXXXXXXX
/s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
XXXX XXXXXX
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
