Exhibit 10.3
DEBT EXTENSION AGREEMENT
This Agreement is made and entered into as of this 1st day of
November 2008, by
and between G. S. Beckwith Gilbert, of 35 Vista Drive, Greenwich,
Connecticut
06830 ("Lender"), and PASSUR Aerospace, Inc. (formerly MEGADATA
CORPORATION), a
New York corporation, with a principal place of business at 47 Arch
Street,
Greenwich, Connecticut 06830 ("Borrower" or "PASSUR
Aerospace"):
WITNESSETH
WHEREAS, PASSUR Aerospace has issued
a promissory note to Lender for value
received;
WHEREAS, the total amount due and
owing under the promissory note and
accrued interest as of November 1, 2008 is $13,814,880; and
WHEREAS, Lender and PASSUR Aerospace
desire to modify certain terms and
conditions of the outstanding promissory note as of the date of
this Agreement
and issue a replacement promissory note for value received upon the
terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of
the foregoing and the agreements
contained herein, the parties hereby agree as follows:
1. MODIFICATION OF PREVIOUS NOTES:
The outstanding promissory note
previously issued to Lender plus accrued
interest totaling $13,814,880 in aggregate principal amount shall
be modified as
set forth herein.
2. ISSUANCE AND TERMS OF REPLACEMENT NOTE:
For value received, PASSUR Aerospace
shall issue a Replacement Note (the
"Replacement Note") to Lender in the aggregate principal amount of
$13,814,880.
The Replacement Note will be in the form attached as Exhibit A
hereto.
(b) TERM. The principal
amount of the Replacement Note, together with
any and all accrued and unpaid interest thereon, shall be paid
in
full on November 1, 2011.
(c) INTEREST. The
Replacement Note or any New Replacement Note shall
bear interest on the unpaid principal amount, from the date of
issuance until paid in full at maturity. Interest shall be
payable
at the annual rate of 4.5% from November 1, 2008 to January 31,
2009
payable in cash. Beginning February 1, 2009 through October 31,
2011
the annual interest rate will be 9% payable as follows: (i)
interest
at the annual rate of 6% will be payable in cash and (ii) the
remaining interest at the annual rate of 3% will be payable, at
the
option of the Company in cash or "paid in kind" and added to
the
principal of the note. Interest payments shall be made annually
at
October 31 of each year.
(d) NEW REPLACEMENT
NOTES. If at October 31, 2009 any interest for the
year has been "paid in kind" rather than cash, a New
Replacement
Note shall be issued in the aggregate amount of the Replacement
Note, plus any interest "paid in kind". If at October 31, 2010
any
interest for the period from November 1, 2009 to October 31,
2010
has been "paid in kind" rather than cash, a second New
Replacement
Note shall be issued in the aggregate amount of either the
Replacement Note or the New Replacement Note, whichever is
outstanding at October 31, 2009 plus any interest "paid in
kind"
during that fiscal year.
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(e) PREPAYMENT TERMS.
The Replacement Note or any New Replacement Note
plus accrued interest may be prepaid in full at anytime without
penalty.
3. MISCELLANEOUS.
(a) AMENDMENT AND MODIFICATION. This Agreement may be
amended, modified and
supplemented only by a written
instrument signed by all of the parties
hereto expressly stating that such
instrument is intended to amend, modify
or supplement this Agreement.
(b) ENTIRE AGREEMENT. This Agreement contains the
entire agreement between the
parties hereto with respect to the
subject matter hereof and supersedes
all prior agreements and
understandings, oral or written, with respect to
such matters.
(c) SEVERABILITY. If any provision of this Agreement
shall be determined to be
invalid or unenforceable under law,
such determination shall not affect
the validity or enforceability of
the remaining provisions of this
Agreement.
(d) GOVERNING LAW; JURISDICTION. This Agreement shall
be governed by and
construed in accordance with the
laws of the State of New York, without
regard to the conflicts of law rules
of such state.
(e) COUNTERPARTS. This Agreement may be executed in one
or more counterparts,
each of which shall be deemed an
original, and all of which shall
constitute one and the same
agreement and shall become effective when one
or more counterparts have been
signed by each of the parties and delivered
to the other party, it being
understood that both parties need not sign
the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the
day and year written above.
PASSUR Aerospace, Inc.
47 Arch Street
Greenwich, CT 06830
By: /s/ James T. Barry
--------------------------
Name: James T. Barry
Title: President and Chief Executive Officer
By: /s/ Jeffrey P. Devaney
--------------------------
Name: Jeffrey P. Devaney
&n
