Exhibit 10.8
RENEWAL, EXTENSION AND MODIFICATION AGREEMENT
THE STATE OF TEXAS
COUNTY OF BEXAR
THIS RENEWAL, EXTENSION AND MODIFICATION AGREEMENT ("Agreement") is entered
into this 14th day April 2004, to be effective October 31, 2003, by and between
BEST INTEL, INC., a Texas corporation ("Lender"), and NIGHTHAWK SYSTEMS, INC.,
("Borrower"). Borrower has requested that Lender modify certain provisions of
the Note, as hereinafter provided, and in consideration thereof Borrower has
made certain agreements with Lender as hereinafter more fully set forth
WITNESSETH:
A. Borrower executed and delivered that certain Convertible Promissory Note
(the "Note") dated October 3, 2003, in the original principal amount of One
Hundred Thousand and No/Dollars ($100,000.00) payable to the order of Xxxxx
Xxxxxx and subsequently transferred to Lender, which Note was unsecured,
B. Borrower has requested that Lender modify certain provisions of the
Note, as hereinafter provided, and in consideration thereof Borrower has made
certain agreements with Lender as hereinafter more fully set forth.
C. The Note matured in accordance with its terms on October 31,2003.
D. Lender has agreed to such requests, subject to the terms and conditions
set forth herein.
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and agreed, Borrower and Lender hereby agree as follows:
1. Acknowledgment of Outstanding Balance. The parties hereto acknowledge
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that the outstanding principal balance of the Note as of the effective date is
ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00)
2. Increase of Principal Balance. From and after the date hereof, the
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principal balance of the Note is increased, pursuant to an additional advance
made by Lender, from One Hundred Thousand and 00/100 ($100,000.00) to One
Hundred and Ten Thousand and 00/100 Dollars ($110,000.00) (the "New Principal
Balance"), an increase of Ten Thousand and No/100 Dollars ($10,000.00). Borrower
Hereby promises to pay to the Lender at X.X. Xxx 0000 XxXxxxx, Xxxxx 00000, the
sum equal to the New Principal Balance in lawful and legal money of the United
States of America with interest as it accrues on the New Principal Balance
pursuant to the terms of the Note.
3. Collateral. In consideration for the New Principal Balance, the Note is
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secured by that certain Security Agreement (the "Security Agreement") of even
date herewith in favor of Lender, evidencing a security interest in certain
personal property described therein, to which Security Agreement reference is
here made for a description of the property covered thereby and the nature and
extent of the security and the rights and powers of the holder of this Note in
respect of such security.
4. Modification of Maturity. The Note is hereby renewed and the maturity of
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the Note is hereby extended to July 31,2004 ("Revised Maturity Date").
5. Modification of Payments. From and after the effective date of this
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Agreement, principal and interest shall be due and payable under the Note as
follows:
(a) Interest on the principal balance for the period from August 21, 2003
until March 1, 2004 shall be paid in cash at the Stated Rate (as defined herein)
within twenty four (24) hours following the execution of this Renewal, Extension
and Modification Agreement
(b) Interest on the principal balance for the period from March 1,2004
until and including July 31, 2004, shall be pre-paid within five (5) business
days following the execution of this Agreement at the Stated Rate (as defined
herein) except that Borrower shall pay Lender in cash monthly the amount of Two
Hundred Twenty and 00/100 Dollars ($220.00), commencing on March 1, 2004, and
continuing on the last day of each consecutive calendar month thereafter until
and including July 31,2004. The Interest accrued during this period, less the
amount of cash paid for Interest during this period, shall be pre-paid in equity
of the Borrower at a value of $0.20 per share with an issue date of March 1,
2004.
6. Conversion to Long Term Note. Borrower is in the process of capital
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fundraising. If Borrower raises One Million Dollars ($1,000,000.00), or an
amount no less than ninety percent (90%) of One Million dollars, from sources
other than Lender, by July 31,2004, then, at Borrower's option, Lender agrees to
extend the Maturity Date of this Note to January 31,2005.
7. Modification of Interest Rate. The parties hereby agree that effective
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as of the date of this Agreement, interest shall accrue on the unpaid principal
balance of this Note from time to time outstanding until maturity at the Stated
Rate (as defined herein) and interest on all past due amounts, both principal
and accrued interest, at the Past Due Rate (as defined herein); provided, that
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for the full term of this Note the interest rate produced by the aggregate of
all sums paid or agreed to be paid to the holder of this Note for the use,
forbearance or detention of the debt evidenced hereby shall not exceed the
Highest Lawful Rate (as defined herein).
"Stated Rate" means, on any day, a fixed rate per annum equal to eight and
00/100 percent (8.00%); provided, that if on any day the Stated Rate shall
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exceed the Highest Lawful Rate for that day, then the Stated Rate shall be fixed
at the Highest Lawful Rate on that day and on each day thereafter until the
total amount of interest accrued at the Stated Rate on the unpaid balance of
this Note equals the total amount of interest which would have accrued if there
were no Highest Lawful Rate. However, neither the maturity of this Note nor
Maker's privilege to prepay it shall be affected by this paragraph.
"Past Due Rate" means the Highest Lawful Rate, or if applicable law shall
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not provide for a maximum nonusurious rate, a rate per annum equal to the Stated
Rate plus five percent (5%).
"Highest Lawful Rate" means the maximum nonusurious rate of interest
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permitted to be charged by applicable federal or Texas law (whichever shall
permit the higher lawful rate) from time-to-time in effect. At all times, if
any, as Title 4 of the Texas Finance Code, as in effect on the date of this
Note, shall establish the Highest Lawful Rate, the Highest Lawful Rate shall be
the "Weekly Ceiling" (as defined in Title 4 of the Texas Finance Code) from
time-to-time in effect. If the obligation is an open-ended account, Payee may
from time to time, as to then-current and future balances, implement any other
ceiling under Title 4 of the Texas Finance Code and/or revise the index, formula
or provision of law used to compute the rate on such obligation, if and to the
extent permitted by, and in the manner provided in, Title 4 of the Texas Finance
Code.
Interest on this Note shall be computed for the actual number of days
elapsed in a year consisting of three hundred sixty-five (365) days, unless the
Highest Lawful Rate would thereby be exceeded, in which event, to the extent
necessary to avoid exceeding the Highest Lawful Rate, interest shall be computed
on the basis of the actual number of days elapsed in the applicable calendar
year in which it accrued.
8, Usury. No provisions of this Agreement or the Note or any instrument
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evidencing or securing the Note, or otherwise relating to the indebtedness
evidenced by the Note, shall require the payment or permit the collection,
application or receipt of interest in excess of the maximum permitted by
applicable state or federal law. If any excess of interest in such respect is
herein or in any such other instrument provided for, or shall be adjudicated to
be so provided for herein or in any such instrument, the provisions of this
paragraph shall govern, and neither Borrower nor any endorsers of the Note nor
their respective heirs or personal representatives shall be obligated to pay the
amount of such interest to the extent it is in excess of the amount permitted by
applicable law. It is expressly stipulated and agreed to be the intent of
Borrower and Lender to at all times comply with the usury and other laws
relating to the Note, the Security Agreement, and any subsequent revisions,
repeals or judicial interpretations thereof, to the extent applicable thereto.
In the event Lender or other holder of the Note ever receives, collects or
applies as interest any such excess, such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance of
the Note, and, if upon such application the principal balance of the Note is
paid in full, any remaining excess shall be forthwith paid to Borrower and the
provisions of the Note and Security Agreement shall immediately be deemed
reformed and the amounts thereafter collectible thereunder reduced, without the
necessity of execution of any new document, so as to comply with the then
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for thereunder. In determining whether or not the interest paid or
payable under any specific contingency exceeds the maximum interest allowed to
be charged by applicable law, Borrower and Lender or other holder hereof shall,
to the maximum extent permitted under applicable law, amortize, prorate,
allocate and spread the total amount of interest throughout the entire term of
the Note so that the amount or rate of interest charged for any and all periods
of time during the term of the Note is to the greatest extent possible less than
the maximum amount or rate of interest allowed to be charged by law during the
relevant period of time. Notwithstanding any of the foregoing, if at any time
applicable laws shall be changed so as to permit a higher rate or amount of
interest to be charged than that permitted prior to such change, then unless
prohibited by law, references in the Note to "applicable law" for purposes of
determining the maximum interest or rate of interest that can be charged shall
be deemed to refer to such applicable law as so amended to allow the greater
amount or rate of interest.
9. Release and Waiver of Usury Claims. In consideration of the benefits
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received by Borrower hereunder, Borrower hereby waives, releases and terminates
all claims, or right to claim, whether known or unknown, that Lender has
charged, collected or received usurious interest under the Note or the Security
Agreement and hereby waives and releases any right or power to bring any claim
against Lender for usury or to pursue any cause of action against Lender based
on any claim or usury.
10. Release and Waiver of Other Claims. In consideration of (i) the
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modification of certain provisions of the Note, as herein provided, and (iii)
the other benefits received by Borrower hereunder, Borrower hereby RELEASES,
RELINQUISHES and forever DISCHARGES Lender, as well as its predecessors,
successors, assigns, agents, officers, directors, employees and representatives,
of and from any and all claims, demands, actions and causes of action of any and
every kind or character, whether known or unknown, present or future, which
Borrower may have against Lender and its predecessors, successors, assigns,
agents, officers, directors, employees and representatives arising out of or
with respect to any and all transactions relating to the Note or the Security
Agreement occurring prior to the date hereof, including any loss, cost or
damage, of any kind or character, arising out of or in any way connected with or
in any way resulting from the acts, actions or omissions of Lender, and its
predecessors, successors, assigns, agents, officers, directors, employees and
representatives, including any breach of fiduciary duty, breach of any duty of
fair dealing, breach of confidence, breach of funding commitment, undue
influence, duress, economic coercion, conflict of interest, negligence, bad
faith, malpractice, violations of the Racketeer Influenced and Corrupt
Organizations Act, intentional or negligent infliction of mental distress,
tortious interference with contractual relations, tortious interference with
corporate governance or prospective business advantage, breach of contract,
deceptive trade practices, liable, slander or conspiracy, but in each case only
to the extent permitted by applicable law.
11. Reaffirmation of Representations, Etc. Borrower hereby reaffirms to
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Lender each of the representations, warranties, covenants and agreements of
Borrower set forth in the Note.
12. Enforceable Obligations. Borrower hereby ratifies, affirms, reaffirms,
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acknowledges, confirms and agrees that the Note represents a valid and
enforceable obligation of Borrower, and Borrower further acknowledges that there
are no existing claims, defenses, personal or otherwise, or rights of setoff
whatsoever with respect to the Note, and Borrower further acknowledges and
represents that no event has occurred and no condition exists which would
constitute a default under the Note, the Security Agreement or this Agreement,
either with or without notice or lapse of time, or both.
13. Additional Modifications. Notwithstanding anything to the contrary
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contained herein or inferred hereby or in any other instrument executed by
Borrower or in any other action or conduct undertaken by Borrower on or before
the date hereof, the agreements, covenants and provisions contained herein shall
constitute the only evidence of Lender's consent to modify the terms and
provisions of the Note. No express or implied consent to any further
modifications involving any of the matters set forth in this Agreement or
otherwise, shall be inferred or implied from Lender's execution of this
Agreement. Further, Lender's execution of this Agreement shall not constitute a
waiver (either express or implied) of the requirement that any further
modifications of the Note shall require the express written approval of Lender,
no such approval (either express or implied) having been given as of the date
hereof.
14. Miscellaneous.
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(a) As modified hereby, the provisions of the Note shall continue in full
force and effect, and the Borrower acknowledges and reaffirms its liability to
Lender thereunder. In the event of any inconsistency between this Agreement and
the terms of the Note, or the Security Agreement, this Agreement shall govern.
(b) Any default by Borrower in the performance of its obligations herein
contained shall constitute a default under the Note and the Security Agreement
and shall allow Lender to exercise all of its remedies set forth in the Note and
the Security Agreement.
(c) Lender does not, by its execution of this Agreement, waive any rights
it may have against any person not a party thereto.
(d) Borrower hereby acknowledges and agrees that the present unpaid
principal balance of the Note, and any future advances of principal drawn off of
the Note by Borrower, together with accrued but unpaid interest thereon at the
rate provided for in the Note, is due and payable upon the terms and conditions
set forth in this Agreement and that Lender is under no obligation to refinance
the Note or further modify the Revised Maturity Date.
(e) In case any of the provisions of this Agreement shall for any reason be
held to be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
(f) This Agreement, the Security Agreement and all other documents and
instruments executed in connection with the Note shall be governed and construed
according to the Laws of the State of Texas and the applicable laws of the
United States.
(g) This Agreement shall be binding upon and inure to the benefit of
Lender, Borrower and their respective heirs and legal representatives.
(h) Borrower hereby acknowledges and agrees that it has entered into this
Agreement of its own free will and accord and in accordance with its own
judgment after advice of its own legal counsel, and states that it has not been
induced to enter into this Agreement by any statement, act or representation of
any kind or character on the part of the parties hereto, except as expressly set
forth in this Agreement.
(i) This Agreement may be executed in multiple counterparts, each of which
shall constitute an original instrument, but all of which shall constitute one
and the same agreement.
(j) All other terms, conditions and provisions of the Note shall remain in
full force and effect as of the date thereof.
THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
EXECUTED as of the day and year first above written.
BORROWER(S):
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NIGHTHAWK SYSTEMS INC. LENDER
A NEVADA CORPORORATION BEST INTEL, INC.,
A TEXAS CORPORTATION
BY: /S/ H Xxxxxxx Xxxxxxxx BY: /S/ Xxxxx Xxxxxx
______________________________ ________________________________
H. XXXXXXX XXXXXXXX XXXXX XXXXXX, PRESIDENT
CHIEF EXECUTIVE OFFICER
