MODIFICATION AGREEMENT
Exhibit
10.3
This
Modification Agreement (“Agreement”) is entered into as of June 26, 2007,
between IDO Security Inc., formerly known as “The Medical Exchange Inc.” (the
“Company”) and Double U Master Fund, LP (“Holder”). The Company issued to Holder
a Secured Promissory Note on February 28, 2007, in the principal amount of
$1,134,000 that is due June 28, 2007 (the “Note”). Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
relevant Holder’s Note.
The
Company has requested that the Maturity Date of the Note be extended to August
31, 2007. Holder is willing to amend the Note on the terms and conditions
specified below.
NOW,
THEREFORE, for good and valuable consideration receipt of which is hereby
acknowledged, Holder and the Company do hereby agree, subject to the execution
and delivery of this Agreement by Holders and the Company, as
follows:
1. The
Principal Amount of the Note is increased to $1,179,360.
2. The
Maturity Date of the Note as defined by the Note and the Subscription
Agreements, pursuant to which Note was issued, shall mean August 31,
2007.
3. In
further consideration of Holder’s execution and delivery of this Agreement, the
Company agrees to issue to such Holder an additional warrant (“Additional
Warrant”) for the purchase of up to 1,701,000 shares
of
the Company’s common stock. All other terms and conditions of the Additional
Warrant, including without limitation, the per share exercise price and the
exercise period, shall be identical to the Warrant issued to Holder on the
Issue
Date (except that the Issue Date of the Additional Warrant shall be the date
hereof). The Additional Warrant reflects the forward stock split (by way of
a
dividend) that was effected in June 2007. As of the date hereof, the term
Warrant (as used in the Subscription Agreement) shall be deemed to include
the
Additional Warrant.
4. The
Company will also issue to the Holder 315,000 shares of the Company’s common
stock. The additional shares reflects the forward stock split (by way of a
dividend) that was effected in June 2007.
5. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
any
other party, it being understood that all parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were an original
thereof. A copy of this Agreement annexed to the Note shall be sufficient to
reflect the amendment thereto.
6. Except
as
specified herein, all terms and conditions of the Notes and all other
Transaction Documents (as defined in the Subscription Agreements), as heretofore
amended, shall remain in full force and effect.
IN
WITNESS WHEREOF, each of the parties has executed and delivered this Agreement
as of the date first above written.
| COMPANY | HOLDER | ||
| IDO SECURITY INC. | DOUBLE U MASTER FUND, LP | ||
| __________________________ | __________________________ | ||
| By: | By: | ||
| Its: | Its: |
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