Exhibit 10.1

 

SUPPLEMENTAL AGREEMENT

 

This Supplemental Agreement (the “Agreement”), dated as of December 22, 2016, is
entered into by and between YA II PN, LTD., a Cayman Islands exempt limited
partnership (the “Investor”), MICRONET ENERTEC TECHNOLOGIES, INC., a corporation
organized and existing under the laws of the State of Delaware (the “Company” or
a “Borrower”), and ENERTEC ELECTRONICS LTD., a corporation organized and
existing under the laws of the State of Israel (“Enertec” or a “Borrower” and
collectively with the Company, the “Borrowers”).

 

BACKGROUND

 

(A)On June 30, 2016 the parties entered into a note purchase agreement (the
“Original Purchase Agreement”) pursuant to which the Borrowers issued and sold
to the Investor, and the Investor purchased from the Borrowers, a secured
promissory note in an aggregate principal amount of $600,000 (the “Original
Note”). Pursuant to the Original Note, the Borrowers shall make quarterly
payments on each of (i) October 10, 2016 (which has already been made), (ii)
January 10, 2017, (iii) April 10, 2017, and (iv) July 10, 2017, and the Maturity
Date of the Original Note is July 10, 2017.

 

(B)On October 28, 2016 the parties entered into a note purchase agreement (the
“Second Purchase Agreement”) pursuant to which the Borrowers issued and sold to
the Investor, and the Investor purchased from the Borrowers, a secured
promissory note in an aggregate principal amount of $500,000 (the “Second
Note”). Pursuant to the Second Note, the Borrowers shall make quarterly payments
on each of (i) March 20, 2017, (ii) June 20, 2017, (iii) September 20, 2017, and
(iv) November 20, 2017, and the Maturity Date of the Second Note is November 20,
2017.

 

(C)In connection with the Original Note the parties entered in a pledge
agreement and escrow deed on June 30, 2016 (collectively, the “Pledge
Agreements”) pursuant to which Enertec provided a first priority lien and
security interest over certain shares of Micronet Ltd. (“Micronet”) and
deposited such pledged shares into a bank account in Israeli controlled by an
escrow agent appointed by the parties pursuant to an escrow deed dated June 30,
2016 (the “Escrow Deed”). As of the date hereof, the number of Ordinary Shares
of Micronet pledged as collateral security by Enertec in connection with both
the Original Note and the Second Note is 2,700,000 (the “Micronet Stock” and
collectively, along with any such additional shares of Micronet Stock as pledged
from time to time in accordance with Section 1(f) of the Second Purchase
Agreement, collectively, the “Pledged Shares”).

 

(D)The parties desire to supplement the Second Purchase Agreement in order to
provide for an additional Closing of the issuance and sale of a new Note (as
defined in the Second Purchase Agreement) in the principal amount of $1,000,000
on the terms and conditions set forth herein and make other modifications to the
payment terms of the Original Note and the Second Note as set forth herein.

 

  

 

 

AGREED TERMS

 

1. Definitions and interpretation

 

1.1Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Original Purchase Agreement or the Second Purchase Agreement, as
applicable.

 

2. Additional Closing

 

2.1           Purchase of Note. The Investor shall purchase, and the Borrowers
shall sell, a Note in the aggregate principal amount of $1,000,000, which shall
be purchased for 100% of the face amount of the Note issued and sold. This
Closing of the purchase and sale of this Note (the “Second Closing”) shall occur
in one tranche as soon as possible after the first date that all the conditions
precedent to the Closing set forth in Section 1(e) of the Second Purchase
Agreement have been satisfied (or such other date as may be agreed upon by the
parties) (the “Second Closing Date”), subject to the satisfaction of all the
conditions precedent set forth therein and herein.

 

2.2          Form of Payment. Subject to the satisfaction of the terms and
conditions of the Second Purchase Agreement as supplemented by this Agreement,
on the Second Closing Date (i) the Investor shall deliver to the Borrowers as
set forth herein the principal amount of the Notes to be issued and sold to the
Investor on such Closing, and (ii) the Borrowers shall deliver to the Investor,
the Notes duly executed on behalf of the Borrowers in the principal amount so
purchased. The Note issued to the Investor at the Second Closing shall be in the
form of Exhibit A attached to the Second Purchase Agreement, except that the
Maturity Date of such Note shall be December 20, 2017 and no payments shall be
due prior (other than prepayments that may be made at any time at the option of
the Borrowers) to the Maturity Date.

 

2.3         Warrants. In connection with the Second Closing the Company shall
grant to the Investor a warrant in the form of Exhibit B attached to the Second
Purchase Agreement to purchase 120,000 shares of common stock of the Company at
an exercise price of $3.00 per share and a term of 5 years from the date of
issuance.

 

2.4          Fees. In connection with the Second Closing, the Borrowers shall
pay to YA Global II SPV LLC (as designee of the Investor) a commitment fee in
the amount equal to $100,000. 50% of the commitment fee ($50,000) shall be due
and payable in cash on the Second Closing Date. The remaining $50,000 shall be
paid in cash or in freely tradable shares of common stock as follows: (i)
$25,000 on or before July 1, 2017, and (ii) $25,000 on or before December 31,
2017, provided that these remaining portions shall be waived if the Borrowers
have repaid at least $500,000 of the principal amount of the $1,000,000 Note to
be issued at the Second Closing on or before July 1, 2017.

 

2.5          Conditions Precedent to the Second Closing. The obligation of the
Investor hereunder to purchase the Note at the Second Closing is subject to the
satisfaction, at or before the Second Closing Date, of each of the conditions
precedent set forth in Section 1(e) of the Second Purchase Agreement, provided
that these conditions are for the Investor’s sole benefit and may be waived by
the Investor at any time in its sole discretion. The parties agree that clause
(ii) of Section 1(e)(v) of the Second Purchase Agreement shall be satisfied by
the grant of a first priority perfected lien and security interest over an
additional 1,000,000 Micronet Shares (for a total of 3,700,000 Pledged Shares).

 

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3. Modifications to Original Note and Second Note.

 

3.1           Modifications to the Original Note. The Maturity Date of the
Original Note shall be amended to December 20, 2017. In addition Section (c) of
the Original Note shall be deleted in its entirety and replaced with the
following:

 

1(c) Payments of Principal and Interest. On each of (i) October 10, 20161, (ii)
May 1, 2017, and (iii) September 1, 2017 (each such date, a “Payment Due Date”),
the Borrowers shall make a payment to the Holder in the amount of $150,000 of
Principal plus all accrued and unpaid Interest outstanding under this Note as of
such payment date by wire transfer of immediately available funds to the account
listed on Schedule I hereto (or to any other account specified by the Holder to
the Borrowers in writing) to be received on or before such Payment Due Date.

 

3.2           Modifications to the Second Note. The Maturity Date of the Second
Note shall be amended to December 20, 2017. In addition Section (c) of the
Second Note shall be deleted in its entirety and replaced with the following:

 

1(c) Payments of Principal and Interest. On each of (i) May 1, 2017, and (ii)
September 1, 2017 (each such date, a “Payment Due Date”), the Borrowers shall
make a payment to the Holder in the amount of $150,000 of Principal plus all
accrued and unpaid Interest outstanding under this Note as of such payment date
by wire transfer of immediately available funds to the account listed on
Schedule I hereto (or to any other account specified by the Holder to the
Borrowers in writing) to be received on or before such Payment Due Date.

 

3.3           Consideration for Modifications. As consideration for the
modifications made to the Original Note and the Second Note, the Borrowers shall
to YA Global II SPV LLC (as designee of the Investor) an extension fee in the
amount equal to $25,000 in cash, which shall be due and payable on or before
January 10, 2017.

 

4.Representations and warranties

 

4.1           The Borrowers represents and warrants to the Investor as of the
date of this Agreement that:

 

(a)it has the requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement;

 

(b)it has taken all necessary corporate actions to authorize the execution,
delivery and performance of this Agreement and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection
therewith;

 

(c)the obligations assumed by the Borrowers in this Agreement are legal, valid,
and enforceable obligations binding on it in accordance with its terms; and

 

 

1 For the avoidance of doubt, the October 10, 2016 payment has been paid by the
Borrowers.

 

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5. Counterparts and delivery

 

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 each
other party, it being understood that the parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.

 

6. Governing law

 

This Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under the Second Purchase Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement
to be signed by their duly authorized officers.

 

  BORROWERS:       MICRONET ENERTEC TECHNOLOGIES, INC.         By:  /s/ David
Lucatz   Name: David Lucatz   Title: Chairman President and CEO          
ENERTEC ELECTRONICS LTD           By:   /s/ Tali Dinar   Name: Tali Dinar  
Title: CFO of Enertec Electronics Ltd.           INVESTOR:       YA II PN, LTD.
      By: Yorkville Advisors Global LP   Its: Investment Manager     By:
Yorkville Advisors Global LLC     Its: Portfolio manager           By: /s/ Mark
Angelo   Name: Mark Angelo   Title:  Portfolio manager

 

 

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