Exhibit 10.10
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
STAR MARKETING SERVICE, 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 Fifty
Thousand and No/100 Dollars ($50,000.00) payable to
the order of Tomas Revesz
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
FIFTY THOUSAND AND NO/100
DOLLARS ($50,000.00)
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 Fifty Thousand and 00/100 ($50,000.00) to
Fifty-Five
Thousand and 00/100 Dollars ($55,000.00) (the "New Principal Balance"),
an
increase of Five Thousand and No/100 Dollars ($5,000.00). Borrower
Hereby
promises to pay to the Lender at P.O. Box 3303
McAllen, Texas 78502, 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 One
Hundred Five and 00/100 Dollars ($105.00), 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 Fina
