Document:

Filed by sedaredgar.com - Liberty Star Uranium & Metals Corp. - Exhibit 10.8

THIRD MODIFICATION, WAIVER AND ACKNOWLEDGEMENT
AGREEMENT

     This Third Modification, Waiver
and Acknowledgement Agreement (“Agreement”) dated as of August 27, 2008 is
entered into by and among Liberty Star Uranium & Metals Corp., a Nevada
corporation (the “Company”) and the subscribers identified on the signature page
hereto (each herein a “Subscriber” and collectively “Subscribers” or the
“Parties”).

     WHEREAS, the Company and the
Subscribers are parties to a Subscription Agreement (“Subscription Agreement”)
and other Transaction Documents dated at and about May 11, 2007 as amended on or
about February 12, 2008 and May 12, 2008, respectively, relating to an aggregate
purchase by Subscribers of $4,400,000 of principal amount of promissory notes
(the “Notes”) of the Company convertible into shares of the Company’s $.001 par
value common stock and Warrants exercisable for Common Stock; and

     WHEREAS, the Company is in
default of material terms of the Transaction Documents and the Subscribers may
elect to exercise their rights to accelerate the Maturity Date of the Notes;
and

     WHEREAS, the Company is
contemplating an offering of $500,000 of Convertible Notes of the Company (“New
Offering”), to the Subscribers which New Offering will result in the activation
of Subscribers’ rights under the Transaction Documents, including but not
limited to Section 12(b) of the Subscription Agreement, Section 3.4D of the
Notes and Section 3.4 of the Warrants; and

     WHEREAS, the Company and
Subscribers desire to further restructure the terms of the Transaction Documents
to their mutual benefit.

     NOW THEREFORE, in consideration
of the mutual covenants and other agreements contained in this Agreement, the
Company and the Subscribers hereby agree as follows:

     1.      Capitalized
terms employed herein shall have the meanings attributed to them in the
Transaction Documents.

     2.      Effective
as of the date of this Agreement, Section 2.1 of the Notes is deleted and
replaced with the following:

	 	
      “2.1.      Payment of
      Monthly Amount in Cash or Common Stock. Subject to Section 3.2 hereof,
      the Borrower shall pay the Monthly Amount on the applicable Repayment Date
      at the Borrower’s election, in either of the following manners: (i) in
      cash equal to 110% of the Principal portion of the Monthly Amount and 100%
      of all other components of the Monthly Amount, or (ii) with Common Stock
      at an applied conversion rate equal to the lesser of (A) the Fixed
      Conversion Price (as defined in section 3.1 hereof), or (B) eighty percent
      (80%) of the average daily closing bid prices of the Common Stock as
      reported by Bloomberg L.P. for the Principal Market for the five trading
      days preceding such Repayment Date (as such amount may be adjusted as
      described herein). Amounts paid with cash or shares of Common Stock must
      be delivered to the Holder not later than three business days after the
      applicable Repayment Date. The Borrower must send notice to the Holder by
      confirmed telecopier not later than 6:00 PM, New York City time on the
      tenth calendar day preceding a Repayment Date notifying Holder of
      Borrower’s election to pay the Monthly Amount in cash or Common Stock. The
      Notice must state the amount of the Monthly Amount including a description
      of the components of such Monthly Amount and include supporting 
	 

	 	
      calculations. The same election must be made to all
      Holders and Other Holders. If such notice is not given, or is not timely
      given or if the Monthly Redemption Amount is not timely delivered, then
      the Holder shall at anytime thereafter have the right on three business
      days prior notice to the Borrower to elect to receive such Monthly Amount
      in cash or Common Stock as described in Sections (i) and (ii) above.
      Anything to the contrary herein notwithstanding in addition to any other
      rights of the Holder, the Holder may convert up to one-twelfth
      (1/12th) of the initial Principal Amount of this Note, on a
      cumulative basis, each 30 days for a period of 180 days commencing August
      30, 2008, at a conversion price equal to the lesser of (i) the Fixed
      Conversion Price, or (ii) eighty percent (80%) of the average daily
      closing bid prices of the Common Stock as reported by Bloomberg L.P. for
      the Principal Market for the five trading days preceding the date the
      Notice of Conversion (as defined in Section 3.3) is given to the Borrower
      in connection with such converted amount.” 
	 

     3.      The
Company acknowledges and agrees that as a direct result of the New Offering,
pursuant to the anti-dilution provisions contained in Section 12(b) of the
Subscription Agreement, Section 3.4D of the Notes and Section 3.4 of the
Warrants, effective as of the closing date of the New Offering, the Fixed
Conversion Price (as defined in the Notes) and the Exercise Price (as defined in
the Warrants) are each reduced to $0.05, subject to further reduction as
described in the Transaction Documents and the Interest Rate defined in Section
1.1 of the Note is increased to 12%. The Company further acknowledges that the
holding period of the Notes, Warrants and Common Stock issuable upon conversion
of the Notes commenced on May 11, 2007, for purposes of Rule 144 under the
Securities Act of 1933.

     4.      The
Company undertakes to make a public announcement on Form 8-K describing the
terms of this Agreement not later than the fourth business day after the
execution of this Agreement.

     5.      For
the benefit of the parties hereto, the Company hereby makes all the
representations, warranties, covenants undertakings and indemnifications
contained in the Transaction Documents, as if such representations were made by
the Company as of this date.

     6.      Subject
to the modifications and amendments provided herein, the Transaction Documents
shall remain in full force and effect, including but not limited to the accrual
of interest and liquidated damages, if any. Except as expressly set forth
herein, this Agreement shall not be deemed to be a waiver, amendment or
modification of any provisions of the Transaction Documents or of any right,
power or remedy of the Subscribers, or constitute a waiver of any provision of
the Transaction Documents (except to the extent herein set forth), or any other
document, instrument and/or agreement executed or delivered in connection
therewith, in each case whether arising before or after the date hereof or as a
result of performance hereunder or thereunder. Except as set forth herein, the
Subscribers reserve all rights, remedies, powers, or privileges available under
the Transaction Documents, at law or otherwise. This Agreement shall not
constitute a novation or satisfaction and accord of the Transaction Documents or
any other document, instrument and/or agreement executed or delivered in
connection therewith.

     7.      The
obligations of each Subscriber hereunder are several and not joint with the
obligations of any other Subscribers hereunder, and no Subscriber shall be
responsible in any way for the performance of the obligations of any other
Subscriber hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Subscriber
pursuant hereto, shall be deemed to constitute the Subscribers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Subscribers are in any way acting in concert with respect
to such obligations or the transactions contemplated by this Agreement. Each
Subscriber shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other 

Subscriber to be joined as an additional party in any
proceeding for such purpose, except as otherwise agreed by the Subscribers.

     8.      This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of each of the parties; provided, however, that
no party may assign this Agreement or the obligations and rights of such party
hereunder without the prior written consent of the other parties hereto, except
as same is permitted under the Transaction Documents.

     9.      This
Agreement constitutes the entire agreement among the parties regarding the
subject matter herein, and supersedes all prior and contemporaneous agreements
and understandings of the parties in connection herewith. No changes,
modifications, terminations or waivers of any of the provisions hereof shall be
binding unless in writing and signed by all of the parties thereto.

     10.    All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined pursuant to the governing law provisions
of the Transaction Documents.

     11.    The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party.

     12.    Each
of the undersigned states that he has read the foregoing Agreement and
understands and agrees to it.

     13.    This
Agreement 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 any
other party, it being understood that all parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or electronically, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same with the same force and effect as if such facsimile
signature were an original thereof.

[Signature Page Follows]

     IN WITNESS WHEREOF, the
undersigned have executed and delivered this Third Modification, Waiver and
Acknowledgement Agreement as of the date first written above.

	 	LIBERTY STAR URANIUM & METALS
      CORP. 
	 	the “Company” 
	 	 	  
	 	 	  
	 	 	  
	 	By:	/s/
      James Briscoe

“SUBSCRIBERS”

	/sl Konrad Ackerman	 	/s/ Navigator Management Ltd. 
	ALPHA CAPITAL ANSTALT 	 	HARBORVIEW MASTER FUND L.P. 
	  	 	  
	  	 	  
	  	 	  
	/s/ Mark
      Nordlicht	 	/s/
      Eric S. Swartz
	PLATINUM PARTNERS LONG TERM 	 	BRIDGEPOINTE MASTER FUND, LTD. 
	GROWTH VI 	 	  
	  	 	  
	  	 	  
	  	 	  
	/s/ Shaye
      Hirsch	 	/s/ Navigator Management Ltd.  
	BRIO CAPITAL LP 	 	DOUBLE U MASTER FUND LP 
	  	 	  
	  	 	  
	  	 	  
	/s/ Joshua
      Silverman	 	/s/
      Brendan O’Neil
	IROQUOIS MASTER FUND LTD. 	 	ENABLE GROWTH PARTNERS LP 
	  	 	  
	  	 	  
	  	 	  
		 	
	ENABLE OPPORTUNITY PARTNERS LPExhibit 10.1 

		
	 $150,000  	
San Diego, California 

September 2, 2008 

PEPPERBALL
TECHNOLOGIES, INC. 

PROMISSORY NOTE 

        PepperBall
Technologies, Inc., a Delaware corporation (the “Company”), for value
received, hereby acknowledges the receipt from Security With Advanced Technology, Inc., a
Colorado corporation (the “Holder”), of One Hundred Fifty Thousand
Dollars and no/100 ($150,000). Capitalized terms not otherwise defined in this promissory
note (“Note”) shall have the meanings given them in the Agreement and
Plan of Merger and Reorganization dated as of May 28, 2008 among the Company, the Holder
and PTI Acquisition Corp., a Delaware corporation (the “Agreement”). 

    
    1.           Payment.  
The Company shall only be obligated to repay the amount of this           Note in the
event the Merger is not consummated due to either (i) the           Company’s
failure to obtain the Company Stockholder Approval, or (ii) the           Company Board
Recommendation is withdrawn (the occurrence of (i) or (ii) is           referred to
herein as a “Repayment Event”). The amount of this           Note shall
be payable to the Holder within 90 days of a Repayment Event (the           “Repayment
Period”).  

    
    2.           Forgiveness.  
All obligations of the Company under this Note, including           without limitation
the Company’s obligation repay any amount under this           Note, shall, without
any further action by the Company or the Holder, be           automatically forgiven if
the Merger is not consummated for any reason other           than the occurrence of a
Repayment Event.  

    
    3.           Interest.  
This Note shall not bear interest.  

    
    4.           Additional
Agreements.   As additional consideration for the loan evidenced           by this Note
(the “Loan”), the Company agrees that the           principal amount of
the Loan ($150,000) shall be credited toward the minimum           amount of unrestricted
cash that the Holder must have on hand at the Effective           Time of the Merger
pursuant to Section 6.3(b) of the Agreement (so that the           minimum required
unrestricted cash on hand at the Effective Time of the Merger           shall be $850,000
rather than $1,000,000).  

    
    5.           Default.  
If the Company fails to pay any amount when due hereunder, the           Holder may
elect, by written notice delivered to the Company, to take at any           time any or
all of the following actions: (i) declare this Note to be forthwith           due and
payable, whereupon the entire unpaid principal amount of this Note shall           become
forthwith due and payable, without presentment, demand, protest or any           other
notice of any kind, all of which are hereby expressly waived by the           Company,
anything contained herein to the contrary notwithstanding; and (ii)           exercise
any and all other remedies provided hereunder or available at law or in           equity.
If the Company fails to pay any amount when due hereunder, the Company           agrees
to pay, in addition to the principal amount of this Note, reasonable           attorneys’ fees
and any other reasonable costs and expenses incurred by the           Holder in
connection with its pursuit of its remedies under this Note.  

    
    6.       Miscellaneous.    

        
         6.1  
Transfer of Note.   This Note shall not be transferable or assignable in any manner
without the express written consent of the Company, and any such attempted disposition of
this Note or any portion hereof shall be of no force or effect.  

        
         6.2  
Titles and Subtitles.   The titles and subtitles used in this Note are for
convenience only and are not to be considered in construing or interpreting this Note.  

        
         6.3  
Notices.   Any notice required or permitted under this Note shall be given in
writing in accordance with the Agreement.  

        
         6.4  
Amendments and Waivers.   Any term of this Note may be amended and the observance of
any term of this Note may be waived (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company and the
Holder. No delay or omission by the Holder in exercising any of its rights, remedies,
powers or privileges hereunder or at law or in equity and no course of dealing between
the Holder and the Company or any other party shall be deemed a waiver by the Holder of
any such rights, remedies, powers or privileges, even if such delay or omission is
continuous or repeated, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise thereof by the Holder or the
exercise of any other right, remedy, power or privilege by the Holder.  

        
        6.5  
Severability.   If one or more provisions of this Note are held to be unenforceable
under applicable law, such provision shall be excluded from this Note and the balance of
the Note shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.  

        
         6.6  
Governing Law.   This Note shall be governed by and construed and enforced in
accordance with the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within California.  

[Remainder of page
intentionally left blank] 

        IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by its officer,
thereunto duly authorized as of the date first above written. 

		
		PEPPERBALL TECHNOLOGIES, INC.

By: /s/ Christin Lewis

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