EXHIBIT 10.81
AGREEMENT
WHEREAS, Applied Data Communications, Inc., ("ADC" or "Borrower") requires
additional financing to capitalize on business opportunities, presently
available to it, and Xxxxxx X. Xxxxx ("Lender") is willing to provide such
financing ("Borrowing") under terms and conditions as set forth below,
NOW THEREFORE, ADC and Lender (collectively "Parties"), in exchange for the
foregoing and other good and valuable consideration, do hereby agree and
covenant as follows:
1. Amount of Borrowing.
Amount of the Borrowing shall be $300,000.
2. Rate, Fees.
Borrower shall compensate Lender with interest paid monthly, in the
amount of 1% per month, in addition to administrative fees paid
monthly, in the amount of 1% per month. Lender hereby grants to
Borrower the right to pay interest and fees in registered common shares
of the Borrower's stock, valued at $ .50 per share, with said shares to
be issued within thirty (30) days of payoff of the note.
Lender will permit Borrower to pay interest and fees in Series B
preferred shares, convertible to common shares at the exchange rate of
100 shares of common stock for every share of Series B preferred stock.
Such Series B preferred shares will be adjusted upward to yield 20%
more shares of common stock, should Borrower be unable to provide
registered shares in its place. Lender will permit borrower to convert
the note prior to its maturity date, provided that the number of such
shares paid for interest and fees will assume the note was held to
maturity.
3. Term, Prepayment.
The Borrowing shall commence on June 1, 2001 and shall be repayable in
its entirety on December 1, 2001. Said Borrowing may be repaid in whole
or in part, by the Borrower, without premium or penalty, at any time
prior to the Maturity Date, at the option of the Borrower, provided,
however, that the Lender shall be entitled to retain all options as
defined under paragraph 4 hereunder, regardless of whether borrowing is
prepaid.
4. Additional Consideration.
Borrower shall grant Lender options to purchase 375,000 shares of
registered common stock of the Borrower, at a price of $ .80 per common
share, such options being available for a period of twenty-four months,
commencing with the date of this note. Options may not be exercised
prior to January 1, 2002.
5. Legal and Collection Fees.
Borrower agrees to compensate Lender for reasonable legal and
collection fees and expense incurred by Lender, in the event that
Borrower is unable to repay Borrowing when due, or issue registered
common shares when due.
6. Modification.
The terms of this Agreement shall not be varied, altered or modified
except in writing signed by the Borrower and the Lender.
7. Conversion.
Conversion of borrowings as defined hereunder, shall occur on or before
December 1, 2001. Lender agrees to convert principal amount $300,000 to
1.0 million shares of the Borrower's "registered" common stock (price
of $ .30 per common stock). Lender will permit Borrower to convert said
note into Borrower's Series B preferred shares, convertible to common
shares at the exchange rate of 100 shares of common stock for every
share of Series B preferred stock. Such Series B preferred shares will
be adjusted upward to yield 20% more shares of common stock, adjusted
to 1.2 million common shares, should Borrower be unable to provide
registered common shares on the conversion date.
Should Lender request conversion of this note to such shares of Series
B preferred stock, prior to maturity of the note, Lender will be
entitled to receive all of such interest and fee shares, per paragraph
2, herein, as if such note were held to maturity.
Pursuant thereto, total shares, including interest and fees (six
months), under the conversion option, would be the aforementioned 1.2
million common shares, plus 86,400 shares for fees and interest, or a
total of 1,286, 400 (12,864 shares of Series B Preferred Stock).
8. Conversion of Series B Preferred Stock.
Borrower will convert all Series B Preferred Stock to registered common
shares of the Borrower's stock not later than December 31, 2001. The
Borrower will take all necessary action to insure conversion of Series
B Preferred stock to registered shares of Borrower's common stock
before December 31, 2001. It is agreed that Borrower will increase the
total number of common shares due (1,286,400) by 25% if conversion is
not effected by March 31, 2002. After that date, penalty and shares
will be an additional 15% per month, or fraction thereof, on a
cumulative basis, until registered common shares are issued and
delivered.
9. Validity Period.
All provisions herein are subject to renegotiation after June 14, 2001.
10. Jurisdiction, Arbitration.
The provisions of this Agreement are to be construed according to, and
are to be governed by the laws of the State of California.
IN WITNESS WHEREOF, Parties acknowledge their agreement with the
aforementioned terms and conditions, by their signatures, as indicated below.
Applied Date Communications, Inc. Xxxxxx X. Xxxxx
By: /s/ Xxxxxx X. Xxxx /s/ Xxxxxx X. Xxxxx
----------------------- ---------------------
Lender
Xxxxxx X. "Xxx" Xxxx,
President
0000 Xxxxx Xxxxx Xxxxxx 00000 Xxxxxxx Xxxx Xx., #00X
Xxxxx Xxx, XX 00000 Xxxxx Xxxxx, XX 00000
Date: 6-1-01 Date: 6-1-01
--------- ---------
