AMENDMENT NO. 4 TO SECURITIES PURCHASE AGREEMENT
Exhibit
10.18
AMENDMENT
NO. 4 TO
This
Amendment to Securities Purchase Agreement (this “Amendment”)
is dated as of
May 7, 2007 by and between Digital Angel Corporation, a Delaware corporation
(the “Company”), and Imperium Master Fund, Ltd. (the “Investor”)
and is made with reference to that certain Securities Purchase Agreement dated
as of February 6, 2007 (the “Purchase Agreement”) between the Company and
the Investor, pursuant to which the Company issued to the Investor a 10.25%
Senior Secured Debenture (the “Debenture”) and a Warrant to purchase
common stock of the Company (the “Warrant”). Capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth
in
the Purchase Agreement and the Debenture, as applicable.
WHEREAS,
pursuant to Section 4.10(b)(vi) of the Purchase
Agreement, the Liabilities of Signature shall at all times be less than
$2,000,000;
WHEREAS, the Company believes that the Liabilities of Signature
may be greater than $2,000,000 at some point in the upcoming year and has
requested that section 4.10(b)(vi) of the Purchase Agreement be
amended;
WHEREAS,
in exchange for granting the requested
amendment and to avoid the need for future amendments and/or waivers, the
Investor has asked the Company to agree to restructure the terms of the Purchase
Agreement, Debenture and Warrant.
NOW
THEREFORE, for consideration, the adequacy of which
is hereby acknowledged by all parties, the parties hereto hereby agree to the
following:
1.
Amendment to Section 4.10(b) of the Purchase Agreement. Section
4.10(b) of the Purchase Agreement is hereby amended and restated in relevant
part to read as follows:
“4.10
Limitation on Debt and Liens; Financial Covenants.
(b) ...
During
the
period beginning on the Execution Date and ending on the Termination Date,
the
Company shall, and shall ensure that each of the Company Subsidiaries, comply
with each of the following financial covenants:
...
(vi)
The
Liabilities of Signature shall at
all times be less than:
(A) $2,600,000 during the period commencing February 6, 2007 through May 5,
2008; and
(B) $2,000,000 during the period commencing on May 6, 2008 and ending on the
Termination Date.”
2.
Addition
of Sections 4.23 and 4.24 to the Purchase Agreement. Section 4 of the
Purchase Agreement is further amended to add the following two
covenants:
“4.23
Covenant to Restructure. The Company and the Investor shall (i) by June
7, 2007 execute a binding term sheet setting forth mutually acceptable terms
for
revising and restructuring this Securities Purchase Agreement, the Debenture
and
Warrant (the “Negotiation Deadline”), and (ii) by July 7, 2007 execute a
revised and restructured Securities Purchase Agreement, Debenture, and Warrant
pursuant to the terms of such term sheet (the “Documentation Deadline”).
The failure to meet either the Negotiation Deadline or the Documentation
Deadline shall be an Event of Default under the Debenture. Effective immediately
upon such Event of Default the Debenture shall thereafter bear Interest on
the
unpaid principal amount thereof at an annual rate equal to 15.25%.
Notwithstanding any other provision in the Debenture, the foregoing remedy
shall
be the sole and exclusive remedy for such Event of Default.
4.24
No
Prepayment Prior to Documentation Deadline. Notwithstanding any other
provision in this Securities Purchase Agreement or the Debenture, the Company
shall have no right to effect a Prepayment of the Debenture prior to the
Documentation Deadline.”
3.
Entire Agreement; Amendment. This Amendment contains the entire
understanding of the parties with respect to the matters covered hereby and,
except as specifically set forth herein, neither the Company nor the Investor
makes any representation, warranty, covenant or undertaking with respect to
such
matters. No provision of this Amendment may be waived or amended other than
by a
written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought.
4.
Governing
Law. This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements
executed and to be performed entirely within such State.
5.
Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
6.
Authorization. The parties hereby represent and warrant to each
other that the signatories hereto have full power and authority to sign this
Amendment for and on behalf of the entities for which they purport to be signing
and that their signatures hereto shall be binding and enforceable upon the
purported parties hereto.
All
other terms and provisions of the Purchase Agreement shall remain the same
and
in full force and effect.
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[Signature
Page Follows]
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In
Witness Whereof, the parties hereto have executed this Amendment to Securities
Purchase Agreement as of the date set forth in the first paragraph
hereof.
COMPANY: | |
DIGITAL ANGEL CORPORATION | |
By: /s/ Xxxxx X. XxXxxxx | |
Name: Xxxxx X. XxXxxxx | |
Title: President & CEO | |
INVESTOR: | |
IMPERIUM MASTER FUND, LTD. | |
By: /s/ Maurla Hiyshko | |
Name: Maurla Hiyshko | |
Title: Counsel |