AMENDMENT NO. 3 TO SECURED TERM NOTE AND CONSENT
This Amendment No. 3 to Secured Term Note and Consent (this
"Amendment"), dated as of June 30, 2006, is entered into by and between
DATALOGIC INTERNATIONAL, INC., a Delaware corporation (the "Company"), and
LAURUS MASTER FUND, LTD., a Cayman Islands company ("Laurus"), for the purpose
of amending the terms of (i) the Secured Convertible Term Note, dated January
20, 2006 (as amended, modified or supplemented from time to time, the "Secured
Term Note") issued by the Company pursuant to the Securities Purchase
Agreement dated as of January 20, 2006, by and between the Company and Laurus
(as amended, modified or supplemented from time to time, the "Securities
Purchase Agreement" and, together with the Secured Term Note and the other
Related Agreements (as defined in the Securities Purchase Agreement), the
"Loan Documents"). Capitalized terms used herein without definition shall
have the meanings ascribed to such terms in the Secured Term Note.
WHEREAS, the Company and Laurus have agreed to make certain changes to
the Secured Term Note as set forth herein; and
WHEREAS, Laurus has agreed to release on the terms and conditions set
forth herein certain Collateral of the Company identified in Exhibit A
attached hereto (the "Purchased Assets") in connection with the sale by the
Company of such Purchased Assets to a third-party in an arms-length
transaction.
NOW, THEREFORE, in consideration of the above, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Laurus hereby consents to the execution and performance by the
Company and its Subsidiaries of (i) the Asset Purchase Agreement, dated June
30, 2006, among the Company, IPN Communications, Inc. and Huron Holdings, Inc.
in the form of Exhibit B hereto (the "Asset Purchase Agreement"), (ii) the
Assignment and Assumption Agreement in the form attached as Exhibit C to the
Asset Purchase Agreement and (iii) the Technology License Agreement in the
form of Exhibit B to the Asset Purchase Agreement (the "Technology License
Agreement"). Without limiting the foregoing, Laurus consents to the sale of
the Purchased Assets to Huron Holdings, Inc. for a purchase price of no more
than $450,000 in cash and the issuance by Huron Holdings, Inc. to the Company
of a promissory note in the initial principal amount of $250,000 and hereby
releases any and all of it security interests in the Purchased Assets arising
under the Master Security Agreement or otherwise effectively immediately upon
consummation of the sale of the Purchased Assets.
2. Upon consummation of the closing of the transactions contemplated
by the Asset Purchase Agreement, the Company agrees to make a payment of the
Principal Amount of the Secured Term Note equal to $225,000 (the
"Prepayment"). The Prepayment shall be deemed to be made pursuant to Section
1.2 of the Secured Term Note and shall be applied against the Company's
obligations under the Secured Term Note to make payments of the Monthly Amount
on the Amortization Dates immediately following the date of the Prepayment,
until the full amount of the Prepayment is applied in respect of such
payments. The Prepayment shall be made
without premium or penalty. Failure by the Company to apply the Prepayment in
partial repayment of the Company's obligations under the Secured Term Note
immediately upon consummation of the closing of the transactions contemplated
by the Asset Purchase Agreement shall give rise to an immediate Event of
Default under the Secured Term Note.
3. This Amendment shall be effective as of the date hereof following
the execution and delivery of same by each of the Company and Laurus.
4. Except as specifically set forth in this Amendment, there are no
other amendments to the Loan Documents, and all of the other forms, terms and
provisions of the Loan Documents remain in full force and effect.
5. The Company hereby represents and warrants to Laurus that as of
the date hereof all representations, warranties and covenants made by Company
in connection with the Loan Documents are true, correct and complete and all
of Company's and its Subsidiaries' covenant requirements have been met.
6. The Company understands that it has an affirmative obligation to
make prompt public disclosure of material agreements and material amendments
to such agreements. It is the Company's determination that this Amendment and
the transactions contemplated in the Asset Purchase Agreement are material.
The Company agrees to file an 8-K within 4 days of the date hereof and in the
form otherwise prescribed by the SEC.
7. This Amendment shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and its successors and
permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This
Amendment may be executed in any number of counterparts, each of which shall
be an original, but all of which shall constitute one instrument.
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IN WITNESS WHEREOF, each of the Company and Laurus has caused this
Amendment to the Secured Term Note to be signed in its name effective as of
this 30th day of June, 2006.
DATALOGIC INTERNATIONAL, INC.
/s/ Xxxxx Xxxxx
By:________________________________
Name: Xxxxx Xxxxx
Title: CEO
LAURUS MASTER FUND, LTD.
/s/ Xxxxxx Grin
By:______________________________
Name: Xxxxxx Grin
Title: Director
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EXHIBIT A
PURCHASED ASSETS
EXHIBIT B
ASSET PURCHASE AGREEMENT
EXHIBIT C
TECHNOLOGY LICENSE AGREEMENT
