Re: Loan Agreement between
EXHIBIT
10.18
VIA
E-MAIL TO XXXX@XXXXXXX.XXX
Avraham
(Miko) Xxxxx
Xxxxx
Group Ltd.
1 Azrieli
Center, Circular Tower
Tel-Aviv,
Israel
December
2, 2009
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Re:
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Loan
Agreement between
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Defense Solutions, Inc. and Xxxxx
Grou
Dear
Miko:
This
letter is intended to confirm our agreement with respect to the modification of
certain terms of the Loan Agreement dated as of November 1, 2007 between Defense
Solutions, Inc. (“Defense Solutions”) and Xxxxx Group Ltd. (the “Loan
Agreement”) and the Promissory Note dated November 1, 2007 (the “Note”) issued
pursuant to the Loan Agreement.
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1.
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Defense
Solutions shall arrange for the payment of a $100,000 extension fee (the
“Extension Fee”) to Xxxxx Group Ltd. Upon delivery of such
extension fee, the Maturity Date of the Note shall be automatically
extended until November 30, 2010. All accrued and unpaid
interest under the Note shall be due upon the extended Maturity Date of
the Note. Xxxxx Group Ltd. acknowledges that the extension fee
payable pursuant to this Paragraph 1 shall be in full satisfaction of all
other extension fees which may have been owed to
date.
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2.
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Upon
delivery of the Extension Fee, Sections 6.1 and 6.2 of the Loan Agreement
shall be amended and restated to read in their entirety as
follows:
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6. REVENUE
STREAM
6.1 In
addition to the Loan (and any interest accrued thereupon and/or the Extension
Fee, if any), but in lieu of the Warrant Coverage (as defined below in section
7), the Company shall pay the Lender a percentage of Defense Solutions Holding,
Inc.’s EBITDA realized until the later of (i) the last day of the calendar
quarter immediately preceding the date of the full payment of the Note or (ii)
November 30, 2010 equal to 25%, up to a maximum amount equal to one
(1) times the Aggregate Advances loaned to the Company (“Revenue Stream
Payments. In order to avoid any doubts, the Revenue Stream
Payments shall be paid by the Company regardless of whether the Loan remains
outstanding or not.
6.2 Payment
of the Revenue Stream Payments shall be made not later than May 31, 2011 with
respect to amounts owed with respect to the period ending November 30, 2010,
based on the audited financial statements Defense Solutions Holding, Inc. for
2010. To the extent that any additional Revenue Stream Payments are owed with
respect to periods after November 30, 2010, such payments shall be made within
sixty (60) days of the end of each calendar quarter and shall be based upon the
financial statements included by Defense Solutions Holding, Inc. in its
quarterly reports filed with the Securities and Exchange Commission (the “SEC
Reports”). Notwithstanding the provisions of Section 8.4, upon any payment of
such Revenue Stream Payments, the Company shall furnish the Lender a certified
copy of any such audited financial statements or SEC Reports, as the case may
be.
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3.
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Upon
delivery of the Extension Fee, Section 7 of the Loan Agreement shall be
amended and restated to read in its entirety as
follows:
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7. WARRANT
COVERAGE
In
addition to the Loan (and any interest accrued thereupon and/or the Extension
Fee, if any), but as an alternative to the Revenue Stream Payments, the Lender
may elect, in its sole discretion, at any time on or prior to October 31, 2010,
to have a warrant coverage (the “Warrant Coverage”), whereby each hundred
thousand United States dollars (US$100,000) actually Advanced to the Company
under this Agreement shall entitle the Lender to purchase 2,710,071 shares of
common stock of Defense Solutions Holding, Inc., at an exercise price per share
equal to the par value of Defense Solutions Holding, Inc.’s capital stock (i.e.
US $0.001) all as detailed in a Warrant. The Warrant shall be
exercisable for a period of seven (7) years from the date thereof, by means of
cash or cancellation of all or part of the indebtedness represented by the Note,
on a dollar for dollar basis.
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5.
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The
Warrant shall be in the form attached as Exhibit A
hereto.
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If you
agree with the terms set forth above, please countersign this letter in the
space provided below and return the signed copy to the undersigned.
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Defense
Solutions, Inc.
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By:
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Name:
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Xxxxxxx
X. Xxxxxxxx
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Title:
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Chief
Executive Officer
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Agreed
to:
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Xxxxx
Group Ltd.
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By:
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Name:
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Avraham
(Miko) Gilat
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Title:
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President
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