THIRD AMENDMENT TO LOAN AGREEMENT
Exhibit
10.4
THIRD
AMENDMENT TO LOAN AGREEMENT
This
Third Amendment to the Loan Agreement (this “Amendment”),
is
made and entered into as of March 28, 2008, by and among IXI
MOBILE (R&D) LTD.,
an
Israeli limited liability company, (the “Company”),
IXI MOBILE,
INC.,
a
Delaware corporation (the “Parent
Guarantor”)
and
SOUTHPOINT
MASTER FUND LP
(the
“Lender).
The
parties hereby agree as follows:
RECITALS
WHEREAS,
the
Company, the Parent Guarantor and the Lender have previously entered into that
certain Loan Agreement dated as of June 19, 2006, a First Amendment thereto
dated as of June 26, 2006 and a Second Amendment thereto dated December 5,
2006
(collectively, the "Loan
Agreement");
and
WHEREAS,
The
parties acknowledge that as of March 31, 2008, the sum of $4,160,000 will be
owing as outstanding Loans to the Lender and the sum of $2,904,800 will be
owing
as accrued and unpaid interest thereon to the Lender. The parties agree that
such accrued and unpaid interest shall from and after April 1, 2008 be
capitalized and treated as principal such that for all purposes under this
agreement the amount of Loans outstanding after giving effect hereto shall
be
$7,064,800.
WHEREAS,
the
parties now wish to further amend the Loan Agreement as set forth in this
Amendment.
NOW,
THEREFORE,
in
consideration of the foregoing and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereby
agree as follows:
Unless
otherwise defined below, all capitalized terms herein shall have the meanings
assigned to such terms in the Loan Agreement
1. Amendment
of the Loan Agreement.
1.1 The
definition of the term "Basic Interest Rate" is hereby amended and restated
in
its entirety to read as follows:
"“Basic
Interest Rate”
means
with respect to each Loan, 10% per annum until March 31, 2008 and 20%
thereafter;
1.2 Section
2.3 of the Loan Agreement is hereby amended and restated in its entirety to
read
as follows:
"2.3 Repayment.
(a) All
payment obligations to the Lenders under the Loan Documents shall be due and
payable on the earlier to occur of: (i) the acceleration of the Loans in
accordance with the terms of this Agreement, including Section 2.4; and
(ii) June 5, 2010 (subsections (i) and (ii) to be referred to
herein as the “Maturity
Date”)
unless
any such portion of the principal amount of the Loan and any accumulated unpaid
interest thereon has already been prepaid in full pursuant to Section 2.5
hereof. The parties hereby agree that the Lenders shall have the right to
convert all or any part of each their respective Loan pursuant to Section 3.2
below and that any amount so converted into Conversion Stock will be deemed
fully paid and all Obligations relating thereto will be deemed fully
satisfied.
(b) The
parties acknowledge that all payment obligations of the Loan Parties to the
Leumi Guarantor assuming any part of the Leumi Debt (both terms as defined
in
Section 4.22(b) below) pursuant to Section 3.1 below, including, without
limitation, payment of the entire unpaid principal of such assumed amount and
any accumulated unpaid interest thereon, shall be due and payable on the earlier
to occur of: (i) the Repayment Date; and (ii) the two dates combining of the
Maturity Date. The parties hereby agree that the Leumi Guarantor shall have
the
right to convert all or any part of its respective Conversion Amount pursuant
to
Section 3.2 below and that any amount so converted into Conversion Stock will
be
deemed fully paid and all obligations relating thereto will be deemed fully
satisfied."
1.3 Section
2.4 of the Loan Agreement is hereby amended and restated in its entirety to
read
as follows:
"2.4 Loan
Interest Rate.
The
Company shall pay interest on the unpaid principal amount of each Loan from
the
Closing Date until such Loan has been paid in full, at a per annum rate of
interest equal to the Basic Interest Rate. All computations of interest on
each
Loan shall be based on a year of 365 days for actual days elapsed. The amount
of
interest payable shall be added to, and deemed for all purposes of, the Loans
to
constitute a portion of the principal amount of the Loans outstanding as of
the
date hereof. Notwithstanding any other provision hereof, the amount of interest
payable hereunder shall not in any event exceed the maximum amount permitted
by
the law applicable to interest charged on commercial loans. Accrued and
unpaid interest
on any portion of the principal amount of the Loan outstanding shall be payable
on the Maturity Date. In any event, all unpaid principal and accrued and unpaid
interest through the Maturity Date shall be due and payable in full upon a
change of control of the Company or the Parent Guarantor without the prior
written consent of the Lenders which is prohibited by Section 7.11, or on the
Maturity Date.
2. No
Other Modifications.
Except
as expressly set forth herein, all other terms and conditions of the Loan
Agreement shall remain in full force and effect.
3. Miscellaneous.
3.1 Counterparts;
Fax Signatures.
This
Amendment may be executed in counterparts, each of which shall constitute an
original, but all of which together shall constitute one and the same Amendment.
Originally executed counterparts may be delivered by facsimile and any such
delivery shall be valid for all purposes as delivery of a manual signature
and
equally admissible in any legal proceedings to which any of the Company, the
Parent Guarantor, or the Lender is a party.
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3.2 Severability.
If any
provision of this Amendment or the application thereof, shall for any reason
and
to any extent be determined by a court of competent jurisdiction to be invalid
or unenforceable under applicable law, the remaining provisions of this
Amendment shall be interpreted so as best to reasonably effect the intent of
the
parties hereto.
3.3 Entire
Agreement.
This
Amendment, together with the Loan Documents and all exhibits hereto and thereto,
constitute the entire understanding and agreement of the parties with respect
to
the transactions contemplated herein and supersede all prior and contemporaneous
understandings and agreements, whether written or oral, with respect to such
transactions.
3.4 Governing
Law;
Forum.
This
Amendment shall be governed in all respects by Section 9.10 and 9.13 of the
Loan
Agreement.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties have executed this Third Amendment to Loan
Agreement as of the date first written above.
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IXI
MOBILE (R&D) LTD.
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By:
/s/
Xxxx
Xxxxx
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Name:
Xxxx Xxxxx
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Title:
CFO
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By:
/s/
Xxxx
Xxxxx
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Name:
Xxxx Xxxxx
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Title:
CFO
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[Signature
Page to Third Amendment to Letter Agreement]
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IN
WITNESS WHEREOF, the parties have executed this Third Amendment to Loan
Agreement as of the date first written above.
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SOUTHPOINT
MASTER FUND, LP
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By:
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Southpoint
GP, LP, its general partner
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By:
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Southpoint
GP, LLC
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By:/s/
Xxxx X. Xxxxx,
XX
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Name:
Xxxx X. Xxxxx, XX
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Title:
Manager
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[Signature
Page to Third Amendment to Letter Agreement]
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