Exhibit 10.11
June 25, 2004
DataLogic International, Inc.
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Re: Restricted Account: Account Number_____________________ ,
Account Name: DataLogic International Inc., maintained at North
Fork Bank (the "Restricted Account").
Reference is made to (i) that certain Securities Purchase Agreement,
dated as of June 25, 2004 (as amended, modified or supplemented from time to
time, the "Purchase Agreement"), by and between DataLogic International, Inc.,
a Delaware corporation (the "Company"), and Laurus Master Fund, Ltd. (the
"Purchaser") and (ii) that certain Restricted Account Agreement, dated as of
June 25, 2004 (as amended, modified or supplemented from time to time, the
"Restricted Account Agreement"), by and among the Company, Laurus and North
Fork Bank (the "Bank"). Capitalized terms used but not defined herein shall
have the meanings ascribed them in the Purchase Agreement or the Restricted
Account Agreement, as applicable. Pursuant to the Section 3.2 of the Purchase
Agreement, the Company is required to place $1,250,000 in the Restricted
Account, and, subject to the provisions of this letter, the Purchase Agreement
and any Related Agreement, maintain such amount in the Restricted Account for
as long as the Purchaser shall have any obligations outstanding under the Note
and to assign the Restricted Account for the benefit of the Purchaser as
security for the performance of the Company's obligations to the Purchaser.
The Purchaser and the Company desire to clarify certain aspects regarding
the use of funds contained in the Restricted Account, and for good
consideration, the receipt and sufficiency of which is here acknowledged, the
Company and the Purchaser agree that, so long as the Amortizing Principal
Amount (as defined in the Note) at such time has been reduced (through
conversions or otherwise) to $0, promptly following any conversion of a
Monthly Principal Amount (as defined in the Note) or such other Principal
Amounts into Common Stock of the Company (such event, a "Conversion"), the
Purchaser shall direct the Bank, pursuant to a Release Notice (as defined in
the Restricted Account Agreement), to wire an amount of funds equal to the
corresponding dollar amount by which the aggregate Principal Amount of the
Note has been reduced pursuant to such a Conversion from the Restricted
Account to such bank account as the Company may direct the Purchaser in
writing.
Furthermore, the Company and the Purchaser agree that (i) in the event
that the Purchaser voluntary converts (such a Conversion, a "Voluntary
Conversion") a Principal Amount of the Note pursuant to Article III of the
Note in excess of the sum of (A) any Monthly Principal Amount that is due (or
will become due) in the calendar month in which any such Voluntary Conversion
occurs plus (B) any other amount that is due and payable by the Company or any
of its Subsidiaries with respect to the Note, the Purchase Agreement and/or
any Related Agreement at the time of any such Voluntary Conversion and (ii) so
long as (x) no Event of Default (as defined in the Note) has occurred and is
continuing, (y) the accounts receivable balance of the Company and its
Subsidiaries as of the last day the most recently ended calendar month is at
least $2,000,000 (as set forth on a consolidated balance sheet of the Company
and its Subsidiaries) and (z) the Company has provided the Purchaser with the
consolidated balance sheet referred to in the immediately preceding clause (y)
(which balance sheet shall be certified by the chief financial officer of the
Company and otherwise be satisfactory to the Purchaser), the Purchaser shall
direct the Bank, pursuant to a Release Notice, to wire an amount of funds
equal to the corresponding dollar amount by which the aggregate Principal
Amount of the Note has been reduced pursuant to such a Voluntary Conversion
from the Restricted Account to such bank account as the Company may direct the
Purchaser in writing.
This letter may not be amended or waived except by an instrument in
writing signed by the Company and the Purchaser. This letter may be executed
in any number of counterparts, each of which shall be an original and all of
which, when taken together, shall constitute one agreement. Delivery of an
executed signature page of this letter by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof or thereof, as
the case may be. This letter shall be governed by, and construed in
accordance with, the laws of the State of New York. This letter sets forth
the entire agreement between the parties hereto as to the matters set forth
herein and supersede all prior communications, written or oral, with respect
to the matters herein.
If the foregoing meets with your approval please signify your acceptance
of the terms hereof by signing below.
Signed,
Laurus Master Fund, Ltd.
By:__/s/ Xxxxx Grin
_______________________________
Name: Xxxxx Grin
Title:
Agreed and Accepted this 25th day of June, 2004.
DataLogic International, Inc.
/s/ Xxxxx Xxxxxx
By:_____________________
Name: Xxxxx Xxxxxx
Title: CFO
