Exhibit 4.1
May 14, 2003
Southern Software Group, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx X
Xxxxxxxxx, Xxxxxxxx, 00000
Attention: Xxxxx Xxxxxx, President
SecureD Services, Inc.
0000 Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx X0X 0X0
Attention: King Xxxxx, CEO
Re: Letter Agreement for loan to Southern Software Group, Inc., a Delaware
corporation ("SSGI"); and Amended and Restated Consulting Agreement
between Corporate Capital Management, LLC, a Minnesota limited liability
company ("CCM"), its principals, employees and consultants, and SecureD
Services, Inc., a Delaware corporation ("SSI")
Dear Mr. Xxxxxxxxx:
On or about February 14, 2003, XXXX and SSI executed a Letter of
Intent respecting a proposed reorganization whereby SSGI would acquire all of
the outstanding securities of SSI. In connection with the execution and delivery
of this Letter of Intent, SSI agreed to advance to SSGI approximately $15,000
towards the payment of its auditor's fees for its year end audit at December 31,
2002. It is our understanding that substantial delays have occurred in
attempting to finalize the proposed reorganization between XXXX and SSI that was
outlined in the Letter of Intent, and consequently, SSI has not been in a
position to advance the funds it had agreed to provide to SSGI for it audit
because such funds cannot be released until certain conditions precedent have
been satisfied by SSI. SSI desire to be released from this liability unless and
until the proposed reorganization is completed with SSGI.
The audit was prepared, and the fees are still due SSGI's auditor;
however, SSGI now has a 10-QSB Quarterly Report for the quarter ended March 31,
2003, that is due to be filed with the
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May 14, 2003
Securities and Exchange Commission on May 20, 2003, taking into account a
five day extension that has or will be automatically granted to SSGI on the
filing with the Securities and Exchange Commission of a Form 12b-25. The
auditors will not proceed with the completion of the required review of the
quarterly financial statements of SSGI that are part of this Quarterly Report
unless they are paid past due fees. It is very important that this Quarterly
Report be timely filed, as the failure to do so will result in a substantial
diminution of the value of SSGI to SSI or any other privately-held company
desiring to become a publicly-held company by a reorganization with SSGI.
SSI was to pay CCM an "introduction fee" for CCM's introduction of
SSGI to SSI of 200,000 shares of SSI common stock that would be exchanged for a
like number of shares of SSGI common stock on the closing of the proposed
reorganization between SSGI and SSI. SSI and CCM would like to resolve that
liability as outlined below.
SSI also entered into a Consulting Agreement with CCM and certain of
its principals, employees or consultants, dated as of March 4, 2003, whereby SSI
agreed to issued 300,000 shares of SSI common stock that would be exchanged for
a like number of shares of SSGI common stock on the closing of the proposed
reorganization between SSGI and SSI. These shares were to be issued under Rule
701 of the Securities and Exchange Commission for services rendered to SSI
respecting its acquisition of certain property, assets and business from
Xxxxxx.xxx, Inc. a Delaware corporation ("Dolfin"), and VASCO Data Security
International, Inc., a Delaware corporation ("VASCO").
The services required of CCM by SSI in connection with the Dolfin
and VASCO acquisitions have been far in excess of those contemplated.
CCM is willing to loan SSGI the sum of $20,000 so that is past due
auditor's fees can be paid and to pay for the review of its financial statements
that are a part of its Quarterly Report that is required to filed by SSGI with
the Securities and Exchange Commission, provided that its Consulting Agreement
with SSI is amended to reflect that 500,000 shares shall be issued thereunder
rather than 300,000 shares, all under Rule 701 of the Securities and Exchange
Commission. CCM will compromise its "introduction fee" payable by SSI as part
of this Letter Agreement and in consideration of the execution and delivery of
the Amended and Restated Consulting Agreement.
Based upon and in consideration of the foregoing, CCM will loan SSGI
immediately on the execution and delivery of the promissory note attached
hereto, as Exhibit A by SSGI and the Amended and Restated Consulting Agreement
attached hereto as Exhibit B by SSI, subject further, to the following:
1. The promissory note shall bear interest at the rate of 10% per
annum;
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May 14, 2003
2. The promissory note shall be due and payable on the closing of
the proposed reorganization between SSGI and SSI, or if that
reorganization does not close, the closing of any
reorganization or similiar transaction involving SSGI that
results in a change of control in the outstanding voting
securities or results in its acquisition of or a succession by
SSGI of another business or opportunity (the "SSGI New
Venture").
3. CCM shall be granted 20,000 "cashless" warrants, expiring in
three years, granting CCM the right to acquire 20,000 shares
of common stock of SSGI at an exercise price of $1.50 per
share (subject to adjustment for recapitalizations and splits
and dividends), with "piggy-back" registration rights to
include the shares underlying these warrants in any
registration statement filed by SSGI with the Securities and
Exchange Commission (except those on Forms S-4 or S-8)
at no cost to CCM.
4. CCM shall have the exclusive right to find and introduce and
negotiate, subject to SSGI Board approval, any other SSGI New
Venture with SSGI in the event that the proposed
reorganization with SSI is not completed, for a fee to be
negotiated that shall not exceed 5% of the post-SSGI New
Venture outstanding securities of SSGI; in the event that any
SSGI New Venture is completed by SSGI without the aid and
assistance of CCM or without its written consent, CCM shall
be entitled to a fee of 5% of the post-SSGI New Venture
outstanding securities of SSGI as liquidated damages for a
breach of this provision.
If the foregoing correctly sets forth the substance of the
understanding of the parties, please execute this Letter Agreement in duplicate,
retain one copy for your records, and return one to Xxxxxxx X. Xxxxxxxxxx, Esq.
at this address, which is Suite 000 Xxxxxx Xxxxxxxx, 000 Xxxx 000 Xxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000; you may also send one signed copy by facsimile
transmission to Xx. Xxxxxxxxxx'x office to 000-000-0000.
Very truly yours,
CORPORATE CAPITAL MANAGEMENT, LLC
By
---------------------------------------
Xxxx Xxxxxx, Manager
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May 14, 2003
SOUTHERN SOFTWARE GROUP, INC.
Accepted this 14th day of May,
2003.
By
---------------------------------------
Xxxxx Xxxxxx, President
SECURED SERVICES, INC.
Accepted this __ day of May,
2003.
By
--------------------------------------
Xxxx Xxxxx, CEO
