EXHIBIT 10.8(a)(1)
ADDENDUM DATED February 9, 2005
TO THE NOTE DATED August 23, 2004
This First Addendum ("First Addendum") to the Secured Commercial Promissory Note
(The "Note") dated August 23, 2004, is entered into by and between Cyber Defense
Systems, Inc. ( "Cyber" or the "Company"), a Florida corporation, inclusive of
its successors and assigns, and 0000-0000 Xxxxxx, Inc., a Province of Quebec,
Canadian corporation (the "LENDER"), or to any holder hereof (the "Holder"),
Inc., as follows:
R E C I T A L S
WHEREAS, Company and Purchaser entered into a Note dated as of August 23rd,
2004, which provided the terms under which Company will repay the loan made to
the Company pursuant to the Note; and,
WHEREAS, the Borrower agreed to execute to the benefit of the Company any
and all documents required by the Company to perfect the Lender's interest in
said Note; and,
WHEREAS, the parties desire to modify certain provisions and reaffirm all
other provisions of the Note, 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 Note just as if the provisions
had been included in the Note at the time the Note was entered into between the
parties. Accordingly, the parties agree as follows:
1. In the event that the principal and interest due on the Note is not paid to
the Lender by the Company, on February 18, 2005, then the Lender shall be
entitled to sell, at the earliest time available to it, and by any legal
means available, sufficient shares of the collateral so pledged for such
purpose by the Company, so that the Lender may receive the following
payments:
a. One Hundred Sixteen Thousand Four Hundred Fifty dollars ($116,450) of
Principal reduction on the loan, and,
b. Interest in the amount of Nineteen Thousand Three Hundred Thirty-one
dollars ($19,331), representing interest due through March 10, 2005,
and,
c. An extension fee of Twenty-Five Thousand dollars ($25,000), and,
d. Any ordinary and reasonable cost associated with the sale of the
pledged securities by the Lender, inclusive of any fees due to
SearchPro Corporation, for its services in negotiating and providing
this Addendum, and for the services rendered through its Client Trust
Account as custodian for the pledged securities relating to their
sale(s) through NASD member broker dealers, or any legal method of
sale available to the Lender, as its liquidation agent.
2. The Lender shall apply the proceeds of such sales of pledged collateral
securities first to the payment of the extension fee, then to the payment
of interest, then to the payment of principal, and then to the payment of
costs and fees associated with the liquidation of the pledged securities,
and only to the extent that such costs have not been otherwise paid by the
Company prior to the sale of pledged securities to pay such costs and/or
fees.
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3. Any remaining Principal and Interest due subsequent to the payments made
pursuant to sections 1 and 2 above, or prior to the sale of the pledged
securities in sufficient amounts to satisfy the provisions of sections 1
and 2, above, shall be payable within forty-five days of the completion of
the payments made to the Lender pursuant to Sections 1 and 2, above, as
follows:
a. From any equity or loan proceeds obtained by the Company from the date
of this Addendum until the repayment of all amounts due the Lender
pursuant to the Note and any Addendums or Amendments to the Note, and,
b. From corporate cash flow or resources, as available.
4. In the event that the balance of the Note, inclusive of interests,
applicable fees and cost, is not paid pursuant to section 3, above, then
the Lender may sell the amount of the pledged securities held as collateral
to pay the remaining balances due to the Lender, inclusive of all costs and
applicable fees.
5. All other collateral pledged, or contemplated to be pledged, by the
Company, pursuant to the Note, shall remain as collateral for repayment of
the loan evidenced by the Note, until the Note is paid in full, inclusive
of all interest, costs and fees incident to the payments due the Lender.
6. The Lender waives none of its rights to effect repayment of the Note by the
Company by the execution of this Addendum.
7. The Pledged collateral securities may be sold through broker dealers, who
will charge an ordinary and customary commission for the sale of such
securities, and only the net amounts, after deduction of such commissions,
shall constitute liquidation proceeds available to the liquidation agent
for application to costs and disbursements to the Lender. Any proceeds sold
in this manner shall be subject to a customary and ordinary liquidation fee
by the liquidation agent of five percent (5%) of the net proceeds so
available, payable at the time cleared funds are available to the
liquidation agent.
8. The Pledged collateral securities may be sold through any legal means, if
not through broker dealers, and any costs associated with such sale(s)
shall be deducted first from such proceeds, and any net amount available to
the liquidation agent shall be subject to a customary and ordinary
liquidation fee by the liquidation agent of five percent (5%) of the net
proceeds so available, payable at the time cleared funds are available to
the liquidation agent.
9. The Company shall pay Two Thousand dollars ($2,000) to the SearchPro
Corporation for the provision of documents and services relating to this
Addendum, and for its expenses and costs related to the provision of this
Addendum, due and payable upon the execution of this Amendment by the
parties hereto.
10. Conflict and Ratification. Since the intent of this Addendum to the Note 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 Note, in the event the terms and provisions of this Addendum conflict
with the terms and conditions of the Note, or any other agreements executed
by the parties concerning the Note, the terms of this Addendum shall
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prevail only to the extent that this Addendum 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 August 23, 2004; otherwise, the terms and
conditions of such Agreements are hereby ratified and confirmed.
11. Limitations of this Agreement. Limited by its additions, deletions, or
modifications to the specific terms and conditions of the Note, this
Addendum 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 Note, 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 Note. The provision of
this Addendum shall not be deemed nor construed as a breach, remedy, or
settlement of any provision of the Note, as Amended or add- ended, or any
other documents executed or delivered on, or after, August 23, 2004, by the
parties.
12. Counterparts. This Addendum 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.
13. Amendments. This Addendum may not be amended or modified without the
written consent of the Company and the Purchaser, nor shall any waiver be
effective against any party unless in writing executed on behalf of such
party.
14. Severability. If any provision of this Addendum shall be declared void or
unenforceable by any judicial or administrative authority, the validity of
any other provision and of the entire Addendum #1 shall not be affected
thereby.
15. Titles and Subtitles. The titles and subtitles used in this Addendum #1 are
for convenience only and are not to be considered in construing or
interpreting any term or provision of this Addendum .
16. Successors and Assigns. This Addendum may not be assigned by any party
hereto without the prior written consent of the other party hereto. The
terms and conditions of this Addendum shall inure to the benefit of and are
binding upon the parties, their respective successors, executors,
beneficiaries and permitted assigns of the parties hereto.
17. 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 Addendum (b) any
discussions or negotiations relating to this Addendum and (c) the identity
of the parties to this Addendum 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
Addendum or the transactions contemplated hereby, unless the parties
otherwise agree in writing, or as required by applicable regulation or law.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY
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IN WITNESS WHEREOF, the Company and the Purchaser have caused this Addendum
to be executed and delivered by the undersigned as of the 9th day of February,
2005.
COMPANY: Cyber Defense Systems, Inc., and on behalf of all predecessors,
successors, affiliates and assigns to which this Addendum may apply
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, CEO & President
LENDER: 9145-6442 Quebec, Inc.
By: /s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx, President
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