Exhibit 10.4
ADDITIONAL MODIFICATION
AGREEMENT
THIS ADDITIONAL MODIFICATION
AGREEMENT (this “Agreement”) is dated as of
February 6, 2009, by and between ELANDIA INTERNATIONAL INC., a
Delaware corporation (the “Company”) and STANFORD
INTERNATIONAL BANK LTD., an Antiguan banking corporation
(“Stanford”).
RECITALS
WHEREAS, the Company and Stanford
entered into that certain Modification Agreement as of the date
hereof (the “Modification Agreement”); and
WHEREAS, in partial consideration of
the Company agreeing to the amendment of the Credit Agreement
described in the Modification Agreement, Stanford has also agreed
to (i) transfer and exchange $2,325,000 in indebtedness due
from Desca Holding LLC originally to Stanford Bank (Panama), S.A.
under the Contrato de Limea de Adelantos dated April 16, 2008
and related documentation (the “Transferred Debt”) into
344,444 shares of Series B Convertible Preferred Stock of the
Company (the “Additional Series B Preferred Stock”) in
accordance with the terms and conditions set forth herein, and
(ii) cancel any accrued and unpaid interest outstanding on
such principal amount.
NOW, THEREFORE, IN CONSIDERATION of
the mutual covenants contained in this Agreement, and for other
good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. Transfer and Exchange .
Stanford hereby agrees, subject to the issuance of the Additional
Series B Preferred Stock as provided in Section 2 below and
the transfer in due form by Stanford of the promissory note(s)
evidencing the Transferred Debt, to transfer the Transferred Debt,
free and clear of any liens, claims or encumbrances, to the Company
at any time on or before February 28, 2009 (the “Outside
Transfer Date”). Following such transfer, the Transferred
Debt shall remain the lawful indebtedness of the Maker to the
Company.
2. Issuance of Additional Series
B Preferred Stock . At the time of transfer, the Company shall,
and hereby agrees to issue one or more stock certificates
evidencing the Additional Series B Preferred Stock which stock
shall initially be registered in the name of Stanford and, subject
to the effectiveness of such agreement at the time of transfer of
the Transferred Debt, transferred to the trustee on the date of
issuance pursuant to the Voting Trust Agreement among Stanford, the
Company and Pete Pizarro (the “Voting Trust
Agreement”). The Additional Series B Preferred Stock shall
have the terms set forth in the Amended and Restated Certificate of
Designations, Rights and Preferences of the Additional Series B
Preferred Stock in the form attached as Exhibit “C” to
the Modification Agreement (the “Amended and Restated
Certificate of Designation”). Simultaneously with the
execution hereof, the Board of Directors of the Company shall cause
the Company’s certificate of incorporation to be amended to
incorporate the terms and provisions of the Amended and Restated
Certificate of Designation.
3. Failure to Accomplish
Transfer . In the event Stanford does not transfer the
Transferred Debt by the Outside Transfer Date, the parties hereby
agree that the Transferred Debt shall not be transferred, and in
lieu of such transfer, Stanford, or the trustee under the Voting
Trust Agreement if then effective, shall surrender and deliver to
the Company for cancellation 1,801,740 shares of Common Stock on
March 1, 2009.
4. Representations and Warranties
of the Company . The Company represents and warrants to
Stanford as follows:
a. Corporate Existence and
Power . The Company is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization and is duly qualified or licensed to transact business
in all places where such qualification or license is necessary. The
Company has the power to enter into and perform this Agreement and
the other documents contemplated hereby, and such documents when
duly executed and delivered for value will, constitute the legal,
valid and binding obligations of the Company enforceable in
accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws relating to the enforcement of creditors’
rights generally and by general equitable principles.
b. Authority . The making and
performance by the Company and the additional documents pursuant
hereto, has been duly authorized by all necessary legal action of
the Company, and does not and will not violate any provision of law
or regulation, or any writ, order or decree of any court,
governmental, regulatory authority or agency, and does not and will
not, with the passage of time or the giving of notice, result in a
breach of, or constitute a default or require any consent under, or
result in the creation of any lien, charge or encumbrance upon any
property or assets of the Company, pursuant to any instrument or
agreement to which the Company is a party or by which the Company
or its properties may be bound or affected.
c. Concerning the Common Stock
and the Preferred Stock . The Additional Series B Preferred
Stock, the Option and the Common Stock issuable upon conversion of
the Additional Series B Preferred Stock when issued and delivered
and paid for in compliance with the provisions of this Agreement,
are and shall be duly and validly issued, fully paid and
non-assessable and will not subject the holder thereof to personal
liability by reason of being such a holder.
5. Representations and Warranties
of Stanford . Stanford represents and warrants to the Company
as follows:
a. Corporate Existence and
Power . Stanford is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization and is duly qualified or licensed to transact business
in all places where such qualification or license is necessary.
Stanford has the power to enter into and perform this Agreement and
the other documents contemplated hereby, and such documents when
duly executed and delivered for value will, constitute the legal,
valid and binding obligations of Stanford
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enforceable in accordance with their respective
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws relating to the
enforcement of creditors’ rights generally and by general
equitable principles.
b. Authority . The making and
performance by Stanford and the additional documents pursuant
hereto, has been duly authorized by all necessary legal action of
Stanford, and does not and will not violate any provision of law or
regulation, or any writ, order or decree of any court,
governmental, regulatory authority or agency, and does not and will
not, with the passage of time or the giving of notice, result in a
breach of, or constitute a default or require any consent under, or
result in the creation of any lien, charge or
