EXHIBIT 10.6(a)(4)
AMENDMENT DATED FEBRUARY 8, 2005, TO THE
EQUIPMENT PURCHASE AGREEMENT OF EQUIPMENT DEPOT, INC.,
DATED MAY 31, 2004
This Amendment ("Amendment") to the Equipment Purchase Agreement dated
May 31, 2004 (the "EPA"), inclusive of all of its Exhibits, Addendums and
Amendments, is entered into by and between On Alert Systems, Inc. ( "OAS or the
"Company"), a Nevada corporation, inclusive of its successors and assigns, Cyber
Defense Systems, Inc. ("CYDF"), a Florida corporation, and Equipment Depot,
Inc., Florida corporation (the "Seller"), as follows:
R E C I T A L S
WHEREAS, Company and Seller entered into an Equipment Purchase Agreement
dated May 31, 2004, and other Agreements attached thereto, such as a Money
Purchase Contract ("MPC"), a Registration Rights Agreement ("RRA"), various
exhibits thereto, and Addendums and Amendments of various dates, which provided
the terms under which the Company will purchase from the Seller certain
Equipment, inclusive of terms and conditions relating to collateral pledged by
the Company to the Seller to insure payment there under; and,
WHEREAS, the Seller and the Company agreed to execute to the benefit of the
Seller and the Company any and all documents required by the Seller or the
Company to perfect its interest in and payment of the obligations of the Company
thereto; and,
WHEREAS, the Company has modified the nature and amount of the Equipment,
subsequent to the date of the EPA, which has changed the price and valuation of
the Equipment, and therefore the parties desire to reflect such modifications,
as applicable, to the EPA, on a universal basis, to be applicable to any and all
documents relating to the transactions; and,
WHEREAS, the parties desire to modify certain provisions and reaffirm all
other provisions of the EPA, as applicable;
Now Therefore, in consideration of the mutual covenants, representations
and agreements heretofore entered into between the parties and hereinafter set
forth below, the parties agree that the following provisions should become a
part of the EPA, just as if the provisions had been included in the EPA, at the
time the Agreement was entered into between the parties. Accordingly, the
parties agree as follows:
1. The modifications that are incorporated hereunder are pursuant to the
EPA, RRA, MPC, and their various Addendums and Amendments previously
executed by the parties, and unless otherwise specified herein, each
reference to the EPA utilized throughout this Amendment shall be construed
to mean all the aforementioned executed Agreements that constitute the
understandings between the Parties. The parties agree herein that no
modification incorporated hereunder is intended to affect the operation of
the Agreement as previously executed.
2. The Purchase Price of the Purchased Equipment shall be changed to Five
Million Four Hundred Eight Thousand Dollars ($5,408,000), subject to
adjustment at Closing for variances in the value or price of substituted
Equipment, or for modifications to the Equipment at the request of the
Company.
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3. The initial cash portion of the Purchase Price, not inclusive of
payments to third party vendors not affiliated with the Seller, due at the
Closing, based upon the pro-ration as described in the EPA, shall be
changed to Three Hundred Ninety-Three Thousand, Eight Hundred Ninety-Two
Dollars ($393,892). Of this amount, One Hundred Thousand Dollars ($100,000)
shall be utilized at the Closing as part of the payment due to third party
vendors contracted by the Seller.
4. The final cash portion of the Purchase Price, not inclusive of payments
to third party vendors not affiliated with the Seller, due pursuant to the
terms described in the EPA, based upon the pro-ration as described in the
EPA, shall be changed to Three Hundred Thirty Thousand Six Hundred Seventy
Dollars ($330,670). Of this amount, Fifty Thousand Dollars ($50,000) shall
be utilized at the Closing as part of the payment due to third party
vendors contracted by the Seller.
1. The portion of the Purchase Price deliverable by the Purchaser in
free-trading, exempt, or registered shares of common stock, pursuant to the
terms described in the EPA, based upon the pro-ration as described in the EPA,
shall be changed to Three Hundred Fifty Thousand (350,000) shares.
2. The portion of the Purchase Price deliverable by the Purchaser in registrable
or exempt shares of common stock, pursuant to the terms described in the EPA,
based upon the pro-ration as described in the EPA, shall be changed to One
Million Four Hundred Ninety-Two Thousand (1, 492,000) shares.
3. The Subordination Fee due to the Seller, pursuant to the EPA, shall be
utilized at the Closing as part of the payment due to third party vendors
contracted by the Seller.
4. The cash fee payable to SearchPro Corporation, for the fee due relating to
the Machine Tool Equipment ("MTE"), shall be Forty Thousand Three Hundred Thirty
Dollars ($40,330), payable at the Closing.
5. The cash reimbursement payable to Lauderdale Consulting Corporation, for the
amounts advanced on behalf of the Company, and due relating to the Amendments
regarding the Machine Tool Equipment ("MTE"), shall be Thirty-seven Thousand
Nine Hundred Fifteen Dollars ($37,915), calculated through February 8, 2005,
payable at the Closing.
6. As of the Date of this Amendment, the amount of the advance rent due for
storage of the Equipment, stored in plants or warehouses as attached in Exhibit
A of the EPA, and pursuant to the terms and conditions as described therein,
relating to each such facility, shall be Ninety-Three Hundred Eighty-Six Dollars
($9,386), subject to adjustment for amounts not available as of this date.
Seventy-Two Hundred Dollars of this amount represents six months of pre-paid
storage at the Berks County, Pa., plant facility, where approximately Ninety-Six
(96) pieces of the Equipment is stored, while awaiting removal by the Company.
The remainder of the $9,386, representing $2,186, represents one month's advance
payment of rent at three other locations in Altamonte, California; Chicago,
Illinois; and Milwaukee, Wisconsin. The location in Wilmington, North Carolina,
and in South Chicago, Illinois, are initiating a paid rental period within sixty
days of the anticipated Closing Date, and as such, cannot be ascertained at the
time of this Amendment. Such rents are expected to be in the range of Two
Hundred ($200) to Four Hundred ($400) per month per location, but no assurance
can be relied upon as of the date of this Amendment that such rates will be
actually contracted until definitive agreements with such storage facility
operators can be executed.
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7. The approximate amount payable by the Company at the Closing, in addition to
the other payments aforementioned above, as part of the payment due to third
party vendors contracted by the Seller, shall include One Hundred Seventy-Two
Thousand Two Hundred Twenty Dollars ($172,220), subject to adjustment at the
Closing for variations in substituted Equipment value, prices, and method of
financing, which cannot be determined as of the date of this Amendment.
8. All obligations, representations, and warranties of On Alert Systems, Inc.,
become the obligations, representations, and warranties of CYDF, and all
obligations, representations, and warranties of PSC Equipment, Inc., become the
obligations, representations, and warranties of Seller.
9. Conflict and Ratification. Since the intent of this Amendment to the EPA, is
to modify certain terms and conditions where the addition, deletion, or
modification of terms and conditions, as contained herein, become a part of the
EPA, in the event the terms and provisions of this Amendment conflict with the
terms and conditions of the EPA, or any other agreements executed by the parties
concerning the EPA, the terms of this Amendment shall prevail only to the extent
that this Amendment has modified such applicable terms, and shall not be deemed
nor construed to add, delete, waive, or modify any other terms or conditions, or
subject any existing terms and conditions to any interpretation other than what
was agreed and executed by the parties in the Agreements of October 12, 2004,
and other applicable dates as executed; otherwise, the terms and conditions of
such Agreements are hereby ratified and confirmed.
10. Limitations of this Agreement. Limited by its additions, deletions, or
modifications to the specific terms and conditions of the EPA, this Amendment
constitutes the sole and entire agreement of the parties with respect to such
additions, deletions, or modifications to the specific terms and conditions of
the EPA, and supersedes any and all prior or contemporaneous agreements,
discussions, representations, warranties or other communications regarding such
specific additions, deletions, or modifications to the terms and conditions of
the EPA. The provision of this Amendment shall not be deemed nor construed as a
breach, remedy, or settlement of any provision of the EPA, or any other
documents executed or delivered prior to, or contemporaneously with, this
Amendment, and/or any other applicable dates, by the parties.
15. Counterparts. This Amendment may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
16. Addendums. This Amendment may not be amended or modified without the written
consent of the Company and the Seller, nor shall any waiver be effective against
any party unless in writing executed on behalf of such party.
17. Severability. If any provision of this Amendment shall be declared void or
unenforceable by any judicial or administrative authority, the validity of any
other provision and of the entire Amendment shall not be affected thereby.
18. Titles and Subtitles. The titles and subtitles used in this Amendment are
for convenience only and are not to be considered in construing or interpreting
any term or provision of this Amendment.
19. Successors and Assigns. This Amendment may not be assigned by any party
hereto without the prior written consent of the other party hereto. The terms
and conditions of this Amendment shall inure to the benefit of and are binding
upon the parties, their respective successors, executors, beneficiaries and
permitted assigns of the parties hereto.
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20. Confidentiality. Each party hereto agrees that, except with the prior
permission of the other party, it shall at all times keep confidential and not
divulge, furnish or make accessible to anyone any information or knowledge
relating to (a) any provisions of this Amendment (b) any discussions or
negotiations relating to this Amendment and (c) the identity of the parties to
this Amendment except as required by law or any regulatory agencies. The parties
hereto further agree that there shall be no press release or other public
statement issued by either party relating to this Amendment or the transactions
contemplated hereby, unless the parties otherwise agree in writing, or as
required by applicable regulation or law.
21. Registration Rights. All registration rights granted by the RRA of May 31,
2004, by the Company shall be construed to be applicable to any and all
provisions of the modifications and amendments incorporated herein as if such
provisions had been in place at the time of the execution of the various
Agreements, as amended or add ended.
22. Money Purchase Contract. All rights granted by the MPC of May 31, 2004, by
the Company shall be construed, as applicable, to any and all provisions of the
modifications and amendments incorporated herein to be granted by the Company as
if such provisions had been in place at the time of the execution of the various
Agreements, as amended or add ended.
23. Adjustment Shares. The Equipment Purchase Agreement of May 31, 2004,
provided that in the event of a decline in Market Capitalization from the
contractually agreed amount, additional shares were to be issued by On Alert,
now Cyber Defense Systems, Inc.. This adjustment is hereby modified subject to a
maximum amount of shares to be so issued based on a floor of Cyber Defense's
capitalization representing a maximum 24% decline from the stated contractual
Market Capitalization, and pro-rata for any decline less than the maximum.
IN WITNESS WHEREOF, the Company and the Seller have caused this Addendum to
be executed and delivered by the undersigned as of the 8th day of February,
2005.
COMPANY: Cyber Defense Systems, Inc., and on behalf of all predecessors,
inclusive of On Alert Systems, Inc., successors, affiliates and assigns to which
this Amendment may apply
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President & CEO
SELLER: Equipment Depot, Inc.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, Vice-President
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