seaway10ksba1123107ex10-8.htm


    
      

      

    

    
      EXHIBIT 10.8

       

      SECURED & COLLATERALIZED PROMISSORY
NOTE

      $1,000,000
PLUS INTEREST DUE & PAYABLE

      DOCUMENT
C-12102007

      


      THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR
PROVISION.

      


      FOR VALUE
RECEIVED, on the Effective Date, as defined below, JMJ Financial (the
"Borrower,” or “Writer”), hereby promises to pay to the Lender (“Lender” or “
Holder”), as defined below, the Principal Sum, as defined below, along with the
Interest Rate, as defined below, according to the terms herein.

      


      


      
        	
                 

                The
      "Effective Date" shall be:

              	
                 

                December
      10, 2007

              
	
                 

                The
      "Holder" shall be:

              	
                 

                Seaway
      Valley Capital Corp.

              
	
                 

                The
      "Principal Sum" shall be:

              	
                 

                $1,000,000
      (one million US Dollars); Subject to the following: accrued, unpaid
      interest shall be added to the Principal Sum.

              
	
                 

                The
      “Consideration” shall be:

              	
                 

                $1,000,000
      (one million) dollars in the form of this $1,000,000 Secured &
      Collateralized Promissory Note as memorialized and evidenced by the
      attached Exhibit A Collateral and Security Agreement.

              
	
                 

                The
      "Interest Rate" shall be:

              	
                 

                12%
      one-time interest charge on the Principal Sum.   No interest or
      principal payments are required until the Maturity Date, but both
      principal and interest may be prepaid prior to maturity date.
       

              
	
                 

                The
      “Recourse” terms shall be:

              	
                 

                This
      is a full recourse Note such that if the Writer defaults on the payment of
      this Note, forcing the Holder to foreclose on the security/collateral and
      there is a deficiency between (1) the outstanding principal and interest
      amount and (2) the foreclosure liquidation amount; then the Holder has the
      right to pursue additional claims against the Writer for that
      deficiency.

              
	
                 

                The
      “Collateral” or “Security” shall be:

              	
                 

                XXXX
      (XXXXXX) shares of common stock of XXXXXXX, a Nasdaq listed publicly
      traded company, worth in excess of $1,000,000, as memorialized and
      evidenced by the attached Exhibit A Collateral and Security
      Agreement.

              
	
                 

                The
      "Maturity Date" is the date upon which the Principal Sum of this Note, as
      well as any unpaid interest shall be due and payable, and that date shall
      be:

              	
                 

                 

                December
      10, 2012

              
	
                 

                The
      “Prepayment Terms” shall be:

              	
                 

                Prepayment
      is permitted at any time by payment in the form of  any of the
      following: (1) cash, or (2) other negotiated form of payment mutually
      agreed to in writing, or (3) by surrender of the Convertible Promissory
      Note Document B-12102007, or (4) by surrender of the of the Collateral or
      Security with which this Promissory Note is
  secured.

              


      

      


      


      DOCUMENT
C-12102007

       

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      


      ARTICLE
1 PAYMENT-RELATED PROVISIONS

      


      1.1 Loan
Payment Schedule. While no principal or interest payments are required until the
Maturity Date, unless otherwise adjusted by Writer with written notice to
Holder, or unless otherwise prepaid as set forth above whereby prepayment is
permitted at any time by payment of cash, or other mutually agreed and
negotiated payment, or by surrender of the Convertible Promissory Note Document
B-12102007, or by surrender of the Collateral or Security related hereto;
provided that all conversions are honored as set forth under Convertible
Promissory Note Document B-12102007 and provided that Rule 144 is available to
remove the restrictive legend from those shares obtained in those conversions
and such that the shares effectively become immediately freely tradable, Writer
will plan to make payments in total monthly amounts of $100,000 beginning 180
days from the execution of this agreement.  Writer reserves the right to
(1) make payments prior to 180 days from the execution of this agreement, and
(2) to make payments in monthly amounts in excess of $100,000, and (3) to adjust
this payment schedule and payment amounts with written notice to
Holder.

      


      1.2  
Interest Rate.  Interest payable on this Note will accrue interest at the
Interest Rate and shall be applied to the Principal Sum.  Interest Rate is
defined as 12% one-time interest charge on the Principal Sum incurred at the
effective date.   

      


      1.3  
Application of Payment.  Unless otherwise specified in writing by Writer,
all payments made on this Note will be first applied to the Principal
Sum.

      


      


      


      ARTICLE
2 MISCELLANEOUS

      


      2.1. 
Notices. Any notice required or permitted hereunder must be in writing and be
either personally served, sent by facsimile or email transmission, or sent by
overnight courier.  Notices will be deemed effectively delivered at the
time of transmission if by facsimile or email, and if by overnight courier the
business day after such notice is deposited with the courier service for
delivery.

      


      2.2. 
Amendment Provision. The term "Note" and all reference thereto, as used
throughout this instrument, means this instrument as originally executed, or if
later amended or supplemented, then as so amended or supplemented.

      


      2.3. 
Assignability. This Note will be binding upon the Writer and its successors and
permitted assigns, and will inure to the benefit of the Holder and its
successors and permitted assigns, and may be assigned by the Holder only with
written consent by Writer.

      


      2.4. 
Governing Law. This Note will be governed by, and construed and enforced in
accordance, with the laws of the State of Florida, without regard to the
conflict of laws principles thereof.

      


      2.5. 
Maximum Payments. Nothing contained herein may be deemed to establish or require
the payment of a rate of interest or other charges in excess of the maximum
permitted by applicable law. In the event that the rate of interest required to
be paid or other charges hereunder exceed the maximum permitted by such law, any
payments in excess of such maximum will be credited against amounts owed by the
Borrower to the Holder and thus refunded to the Writer.

      


      


      DOCUMENT
C-12102007


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      2.6. 
Attorney Fees. In the event any attorney is employed by either party to this
Note with regard to any legal or equitable action, arbitration or other
proceeding brought by such party for the enforcement of this Note or because of
an alleged dispute, breach, default or misrepresentation in connection with any
of the provisions of this Note, the prevailing party in such proceeding will be
entitled to recover from the other party reasonable attorneys' fees and other
costs and expenses incurred, in addition to any other relief to which the
prevailing party may be entitled.

      


      2.7. No
Public Announcement. No public announcement may be made regarding this Note,
payments, or conversions without written permission by both Writer and
Holder.

      


      2.8. 
Transfer, Pledge, Sale, Collateral, Offer.  Holder may not transfer,
pledge, sell, use as collateral, offer, or hypothecate this Note to any third
party without written approval from Writer.  

      


      2.9. 
Effective Date.  This Note will become effective only upon occurrence of
the three following events: the Effective Date of December 10, 2007 has been
reached, execution by both parties, delivery of Document B-12102007 by the
Writer.  

      


      


      
        	
                HOLDER:

              	 
      
	 
      	
                WRITER:

              
	 
      	 
      
	 
      	 
      
	 
      	
                /s/
      JMJ FINANCIAL

              
	
                /s/ Thomas
      Sozzafava

              	 
      
	 
      	
                ____________________________

              
	
                Thomas
      Scozzafava

              	 
      
	 
      	
                JMJ
      Financial / Its Principal

              
	
                Chairman
      & CEO

              	 
      
	
                Seaway
      Valley Capital Corp.

              	 
      


      

      


       

      

        DOCUMENT
C-12102007


      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        EXHIBIT
A

        COLLATERAL
& SECURITY AGREEMENT

        


        


        1. Security Interest .
Writer hereby grants to Holder a security interest in the following described
property (“Security” or “Collateral” or “Security Interest”):

        


        XXXXX
(XXXXXXXX) shares of common stock of XXXXXXX, a Nasdaq listed publicly traded
company, worth in excess of $1,000,000

        


        This
Collateral and security interest will secure the payment and performance of the
Writer’s Secured & Collateralized Promissory Note Document C-12102007 in the
amount of $1,000,000 (one million).

        


        


        2. 
Warranties and
Covenants of Writer .  Writer makes the following warranties and
covenants to Holder:

        


        (A)
Writer is the sole owner of the Collateral free from any lien, security
interest, or encumbrance, and Writer will defend the Collateral against all
claims and demands of all parties at any time claiming interest
therein.

        


        (B) This
Collateral has not been pledged, assigned, or hypothecated for any other
purpose, and no financing statement is on file in any local, state, or federal
institution, bureau, government, or public office.

        


        (C) While
the principal and interest balance of the Secured & Collateralized
Promissory Note Document C-12102007 remains outstanding, Writer will not
transfer, sell, offer to sell, assign, pledge, liquidate, spend, or otherwise
transfer to any party an amount of the Collateral equal to or greater than the
outstanding balance of the Secured & Collateralized Promissory Note Document
C-12102007.

        


        (D)
Writer will pay promptly when due all taxes, expenses, and assessments upon the
Collateral.

        


        


        3. Perfection . Holder
has the right, upon its election, to perfect the Collateral and security and
this Collateral and Security Agreement by filing a financing statement or like
instrument with its proper local, state, or federal institution, bureau,
government, or public office.  Holder is encouraged to perfect this
instrument, and Writer will reasonably assist in Holder’s doing so.

        


        


        4. Remedies Upon Default
.. In the event of Writer’s default on the Secured & Collateralized
Promissory Note Document C-12102007, Holder may declare all obligations secured
hereby immediately due and payable and shall have the remedies of a secured
party, including without limitation the right to take immediate and exclusive
possession of the Collateral or any part thereof, or to obtain a court order to
do so; and the Writer must surrender the security and Collateral to the Holder
within 5 (five) business days of receiving written notice that Holder is taking
possession of the Collateral as remedy of default.

        


        


        DOCUMENT
C-12102007


        
          
             


          

          
             


            
              

            

          

          
             


          

        


        5. 
Normal Course of
Business .  Provided that no default has occurred on the Secured
& Collateralized Promissory Note Document C-12102007, Writer will use and
possess the Collateral in the normal course of business.  Further, Writer
may liquidate, transfer, or exchange the Collateral into another viable
investment vehicle with equal or greater market value, such as liquidation of
shares into cash or money market, or liquidation of shares or money market fund
for purposes of investing in other viable investment vehicles including but not
limited to bonds, other money market funds, mutual funds, or stocks.
 However, any liquidation, transfer, or exchange into another viable
investment vehicle will not affect Holder’s security, rights, or claims to the
underlying Collateral. At any time upon Holder’s request, Writer will promptly
provide update on the investment vehicle placement of this
Collateral.

        


        


        6. 
Termination of
Security .  At the time of prepayment or payoff of the Secured &
Collateralized Promissory Note Document C-12102007 to Holder by Writer, Holder’s
security interest in this Collateral shall automatically terminate.  In the
event that the Collateral and security interest were perfected by Holder as set
forth in Section 3, upon termination of security as set forth in this section 6,
the Holder will withdraw any and all perfection instruments on the collateral
and security within 5 (five) business days.

        


        


        7. Governing Law . This
agreement will be governed by, and construed and enforced in accordance, with
the laws of the State of Florida, without regard to the conflict of laws
principles thereof.

        


        


        8. No Public
Announcement . No public announcement may be made regarding this
Collateral & Security Agreement without written permission by both Writer
and Holder.   In the
event that any securities law requires this document to be filed publicly, all
information regarding description of the Collateral that is considered personal
financial information shall be struck out with X and listed as
follows
:

        


        XXXXX
(XXXXXXXXXX) shares of common stock of XXXXX, a Nasdaq listed publicly traded
company, worth in excess of $1,000,000

        


        


        9. Effective Date .
 This agreement will become effective as set forth in Section 2.9 of
Secured & Collateralized Promissory Note Document C-12102007.

        


        


        


        
          	
                  HOLDER/SECURED
      PARTY:

                	 
      
	 
      	
                  WRITER:

                
	 
      	 
      
	 
      	 
      
	 
      	
                  /s/
      JMJ FINANCIAL

                
	
                  ____________________________

                	 
      
	 
      	
                  ____________________________

                
	
                  Thomas
      Scozzafava

                	 
      
	 
      	
                  JMJ
      Financial / Its Principal

                
	
                  Chairman
      & CEO

                	 
      
	
                  Seaway
      Valley Capital Corp.

                	 
      


        

        
 

        


        DOCUMENT
C-12102007