EXHIBIT 10.8
AMENDMENT AND PAYMENT EXTENSION AGREEMENT
THIS AMENDMENT AND PAYMENT EXTENSION AGREEMENT (this "AMENDMENT") is
made as of March 17th, 2004, by and between XXXXXXXX TECHNOLOGIES, INC., a
Florida Corporation ("XXXXXXXX"), SECURITY AND TECHNOLOGY RESEARCH, INC., a
Maryland corporation ("STR") and Xxxxxx Xxxx, an individual residing in the
State of Maryland ("YANG").
WHEREAS, Xxxxxxxx, STR and Yang are all parties to an Agreement and
Plan of Merger dated as of October __, 2003 (the "MERGER AGREEMENT:);
WHEREAS, STR is a wholly-owned subsidiary of a corporation that is
itself wholly-owned by Xxxxxxxx;
WHEREAS, in consideration for the completion of the transaction set
forth in the Merger Agreement, Yang received voting common stock of Xxxxxxxx,
cash and STR's promissory note in the amount of Three Hundred Seventy-Five
Thousand Dollars (the "NOTE");
WHEREAS, the Note is payable in four (4) principal installments, the
first due 150 days following the Agreement Date (as defined in the Merger
Agreement), the second due 210 days following the Agreement Date, the third due
270 days following the Agreement Date and the final Note payment due 360 days
following the Agreement date (collectively, the "NOTE PAYMENT SCHEDULE");
WHEREAS, as a condition to the closing of the Merger Agreement,
Xxxxxxxx entered into a one (1) year consulting agreement with Yang (the
"CONSULTING AGREEMENT"), pursuant to which, in consideration for his performance
of services thereunder, Yang is to receive compensation in the aggregate amount
of Two Hundred Eighty-Five Thousand Dollars ($285,000.00) Term (the "FEE");
WHEREAS, the Fee is payable in four (4) installments, the first due on
March 15, 2004, the second due on May 15, 2004, the third due on July 15, 2004
and the final Fee payment due on October 15, 2004 (collectively, the "FEE
PAYMENT SCHEDULE");
WHEREAS, Xxxxxxxx and STR have experienced certain unexpected cash flow
problems;
WHEREAS, Xxxxxxxx, STR and Yang each desire to extend the terms of both
the Note Payment Schedule and Fee Payment Schedule by amending the Note and the
Consulting Agreement, respectively.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein, the parties hereby agree as follows:
1
1. AMENDMENT OF THE NOTE. The Note Payment Schedule in the Note (the
second paragraph of the Note) is hereby amended by deleting it in its entirety
and inserting in its place the following provision:
"THE PRINCIPAL ON THE PROMISSORY NOTE SHALL BE PAYABLE IN FIVE
(5) EQUAL PRINCIPAL PAYMENTS IN THE AMOUNT OF SEVENTY-FIVE
THOUSAND DOLLARS ($75,000) THAT SHALL BE DUE ON JUNE 15, 2004,
JULY 15, 2004, AUGUST 15, 2004, SEPTEMBER 15, 2004 AND OCTOBER
15, 2004, RESPECTIVELY."
2. AMENDMENT OF THE CONSULTING AGREEMENT. The Fee Payment Schedule in
the Consulting Agreement (Section 5.1 thereof) is hereby amended by deleting it
in its entirety and inserting in its place the following provision:
"5.1 CONSULTING FEES. IN CONSIDERATION FOR THE CONSULTING
SERVICES TO BE RENDERED BY CONSULTANT DURING THE TERM AND THE
OTHER COVENANTS MADE BY CONSULTANT UNDER THIS AGREEMENT, THE
COMPANY SHALL PAY TO CONSULTANT THE NEGOTIATED SUM OF TWO
HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($285,000) TERM (THE
"FEE"). THE FEE SHALL BE PAYABLE AS FOLLOWS: TWENTY-FIVE
THOUSAND DOLLARS ($25,000) SHALL BE PAYABLE ON JULY 15, 2004,
A SECOND PAYMENT IN THE AMOUNT OF THIRTY-FIVE THOUSAND DOLLARS
($35,000), SHALL BE DUE AUGUST 15, 2004, A THIRD PAYMENT IN
THE AMOUNT OF SIXTY THOUSAND DOLLARS ($60,000) SHALL BE DUE ON
SEPTEMBER 15, 2004, A FOURTH PAYMENT IN THE AMOUNT OF SIXTY
THOUSAND DOLLARS ($60,000) SHALL BE DUE ON OCTOBER 15, 2004, A
FIFTH PAYMENT IN THE AMOUNT OF SIXTY THOUSAND DOLLARS
($60,000) SHALL BE DUE ON NOVEMBER 15, 2004 AND A SIXTH AND
FINAL PAYMENT IN THE AMOUNT OF FORTY-FIVE THOUSAND DOLLARS
($45,000) SHALL BE DUE ON DECEMBER 15, 2005. THE COMPANY SHALL
NOT WITHHOLD ANY FEDERAL, STATE OR LOCAL TAXES OR OTHER
WITHHOLDINGS FROM ANY PAYMENT DUE TO CONSULTANT. ANY AND ALL
RESPONSIBILITY FOR PAYMENT OF SUCH TAXES AND OTHER
WITHHOLDINGS SHALL BE THE SOLE AND EXCLUSIVE RESPONSIBILITY OF
CONSULTANT."
3. PAYMENT EXTENSION CONSIDERATION. In consideration of Yang's
agreement to extend the term of both the Note Payment Schedule and Fee Payment
Schedule, through the above set forth amendments to the Note and Consulting
Agreement, respectively, Xxxxxxxx shall pay Yang the following consideration.
Promptly after the due execution of this Amendment, though in no event more than
seven (7) business thereafter, Xxxxxxxx shall deliver to Yang Fifty Thousand
(50,000) shares of Xxxxxxxx'x single class of voting common stock, $0.0001 par
value per share (the "STOCK CONSIDERATION"). In addition to the Stock
Consideration, Xxxxxxxx shall also pay cash in the sum of Forty Thousand Dollars
($40,000) to Yang (the "CASH CONSIDERATION"). The Cash Consideration shall be
paid as follows: a partial payment of the Cash Consideration in the amount of
Ten Thousand Dollars ($10,000) shall be due and payable on September 15, 2004, a
second partial payment of the Cash Consideration in the amount of Ten Thousand
Dollars ($10,000) shall be due and payable on October 15, 2004, a third partial
payment of the Cash Consideration in the amount of Ten Thousand Dollars
($10,000) shall be due and payable on November 15, 2004 and a forth and final
partial payment of the Cash
2
Consideration in the amount of Ten Thousand Dollars ($10,000) shall be due and
payable on December 15, 2004. The Cash Consideration shall be paid by Xxxxxxxx
to Xxxx at his mailing address first set forth in the Note, or at such other
address as Yang may specify in writing to Xxxxxxxx. Payment shall be made by
means of a check or wire transfer in immediately available funds to be received
Yang on or before the relevant due date. Payments that are not paid when due
under this Amendment shall be subject to interest charges at a rate of twelve
percent (12%) per annum.
4. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall constitute an
original hereof, and it shall not be necessary in making proof of this Amendment
to produce or account for more than one original counterpart hereof.
5. CONTROLLING LAW. This Amendment is made under, and shall be
construed in accordance with, the laws of the State of Maryland applicable to
agreements made and to be performed solely therein, without giving effect to
principles of conflicts of law.
6. DEFINITIONS. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed thereto in the Merger Agreement.
7. NO NOVATION. This Amendment is only an agreement amending certain
provisions of the Note and Consulting Agreement, respectively. All of the
provisions of the Note and Consulting Agreement are incorporated herein by
reference and shall remain and continue in full force and effect as amended by
this Amendment.
[Signatures on the following page]
3
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first written above.
XXXXXXXX TECHNOLOGIES, INC.
By: /S/ XXXXXX XXXXXX
--------------------------------------
Xxxxxx Xxxxxx, CEO
SECURITY AND TECHNOLOGY RESEARCH, INC.
By: /S/ XXXXXX XXXXXX
--------------------------------------
Xxxxxx Xxxxxx, CEO
/S/ XXXXXX XXXX 3/18/04
-------------------------------------------
Xxxxxx Xxxx
4
