Exhibit 10.8

 

 

WAIVER

This Waiver (this “Waiver”) is made and entered into as of March 19, 2008, by
and among Silverstar Holdings, Ltd., a Bermuda corporation (the “Company”), and
each of the investors signatory hereto (each, a “Holder” and collectively, the
“Holders”).

WHEREAS, the Company and each of the Holders are parties to that certain
Purchase Agreement (the “October 2005 Purchase Agreement”), dated October 21,
2005, as amended, pursuant to which the Company issued to the Holders its
Variable Rate Secured Convertible Debentures with an aggregate principal amount
of $5,000,000, as amended and restated on June 28, 2007 (the “A&R October 2005
Debentures”);

WHEREAS, the Company and each of the Holders are parties to that certain
Purchase Agreement (the “October 2006 Purchase Agreement” and collectively with
the October 2005 Purchase Agreement, the “Purchase Agreements”), dated October
19, 2006, as amended, pursuant to which the Company issued to the Holders its
Variable Rate Secured Convertible Debentures with an aggregate principal amount
of $1,400,000, as amended and restated on June 28, 2007 (the “A&R October 2006
Debentures” and collectively with the A&R 2005 Debentures, the “A&R
Debentures”);

WHEREAS, $0 currently remains outstanding with respect to the October 2005
Debentures and $1,400,000 currently remains outstanding with respect to the
October 2006 Debentures;

WHEREAS, the Company desires to issue to accredited investors, in a transaction
exempt from the registration requirements of the Securities Act of 1933, as
amended, 9% Secured Convertible Debentures in the aggregate principal amount of
$7,500,000 due March 19, 2012 (the “March Financing”); and

WHEREAS, the parties desire to waive certain provisions of the Purchase
Agreements and the A&R Debentures pursuant to the terms hereof.

NOW THEREFORE, in consideration of the terms and conditions contained in this
Waiver, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties, intending to be legally bound
hereby, agree as follows:

Section 1. Definitions. Capitalized terms not defined in this Waiver shall have
the meanings ascribed to such terms in the A&R Debentures.

Section 2. Waivers to the Purchase Agreements. The undersigned hereby agrees
that the restrictions on Variable Rate Transactions set forth in Section 4.14(b)
of the Purchase Agreements shall not apply with respect to any weighted average
dilution protection under Section 5(b) of the form of debentures and Section
3(b) of the form of warrants to be issued in the March Financing.

 

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Section 3. Waivers to the A&R Debentures. Solely with respect to the March
Financing, the Holders hereby waive the restrictions on the Company or any
Subsidiary set forth in (i) Section 7(a) of the A&R Debentures to enter into,
create, incur, assume, guarantee or suffer to exist any indebtedness for
borrowed money of any kind, including but not limited to, a guarantee, on or
with respect to any of its property or assets now owned or hereafter acquired or
any interest therein or any income or profits therefrom; (ii) Section 7(b) of
the A&R Debentures to enter into, create, incur, assume or suffer to exist any
liens of any kind, on or with respect to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or profits
therefrom; and (iii) Section 7(e) of the A&R Debentures to enter into any
agreement with respect to (i) and (ii) above.

Section 4. Adjustment to Conversion Price. As a result of the March Financing,
the new conversion price on each of the A&R Debentures will be $1.50 and further
dilutive issuances of securities by the Company will result in further
adjustments to the conversion price of each of the A&R Debentures then
outstanding pursuant to the anti-dilution provisions of the A&R Debentures. 

Section 5. Effect on Transaction Documents. The foregoing waivers and agreements
are given solely in respect of the transactions described herein. Except as
expressly set forth herein, all of the terms and conditions of the Transaction
Documents (as defined in the Purchase Agreements) shall continue in full force
and effect after the execution of this Waiver, and shall not be in any way
changed, modified or superseded by the terms set forth herein.

Section 6. Execution and Counterparts. This Waiver may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf”signature page were an original
thereof.

Section 7. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Waiver shall be determined in accordance
with the provisions of the October 2006 Purchase Agreement.

Section 8. Severability. If any term, provision, covenant or restriction of this
Waiver is held by a court of competent jurisdiction to be invalid, illegal, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

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Section 9. Headings. The headings in this Waiver are for convenience only, do
not constitute a part of the Waiver and shall not be deemed to limit or affect
any of the provisions hereof.

Section 10. Independent Nature of Holders’ Obligations and Rights. The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holders hereunder, and no Holder shall be responsible
in any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this Waiver. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Waiver, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
executed this Waiver as of the date first set forth above.

 

 

SILVERSTAR HOLDINGS, LTD.

           

By:

  

Name:

Title:

 

 

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[SIGNATURE PAGE OF HOLDERS TO SSTR WAIVER]

Name of Holder: __________________________

Signature of Authorized Signatory of Holder: __________________________

Name of Authorized Signatory: _________________________

Title of Authorized Signatory: __________________________