Exhibit 10.1

 

SUPPLEMENTAL AGREEMENT

 

This Supplemental Agreement (the “Agreement”), dated as of June 8, 2017, 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 (as amended from
time to time, the “Original Note”). Pursuant to the Original Note, the Borrowers
shall make quarterly payments on each of (i) October 10, 2016, (ii) May 1,
20171, and (iii) September 1, 2017, and the Maturity Date of the Original Note
is December 20, 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 (as amended from
time to time, the “Second Note”). Pursuant to the Second Note, the Borrowers
shall make quarterly payments on each of (i) May 1, 20172, and (ii) September 1,
2017, and the Maturity Date of the Second Note is December 20, 2017.

 

(C) On December 22, 2016 the parties entered into a supplemental agreement to
the Second Purchase Agreement (the “First Supplemental 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 $1,000,000 (as amended from time to time, the “Third Note”). Pursuant to the
Third Note, the Borrowers shall make all payments on the Maturity Date of the
Third Note, which is December 20, 2017.

 

(D) 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, the Second Note, and the Third Note is 3,700,000 (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”).

 

(E) The parties desire to further 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
$600,000 on the terms and conditions set forth herein and make other
modifications to the payment terms of the Original Note, the Second Note, and
the Third Note as set forth herein.

 

 

1 The October 10, 2016 and the May 1, 2017 payments have been paid by the
Borrowers.

2 The May 1, 2017 payment has been paid by the Borrowers. 

 

 

 

AGREED TERMS

 

1. Definitions and interpretation

 

1.1 Capitalized 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 $600,000, 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 “Third 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 “Third 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 Third Closing Date (i) the Investor shall deliver to the Borrowers as set
forth herein the principal amount of the Note to be issued and sold to the
Investor on such Closing, and (ii) the Borrowers shall deliver to the Investor,
the Note duly executed on behalf of the Borrowers in the principal amount so
purchased. The Note issued to the Investor at the Third Closing shall be in the
form of Exhibit A attached hereto with a maturity date of December 31, 2018.

 

2.3        Warrants. In connection with the Third Closing the Company shall
grant to the Investor a warrant in the form of Exhibit B attached to the Second
Purchase Agreement to purchase 90,000 shares of common stock of the Company at
an exercise price of $2.00 per share and a term of 5 years from the date of
issuance

 

2.4        Fees. In connection with the Third Closing, the Borrowers shall pay
to YA Global II SPV LLC (as designee of the Investor) a commitment fee in the
amount equal to $25,000. In addition, the parties agree that in consideration of
the agreements of the Investor set forth herein, including the agreements of the
Investor to defer the repayments under the First Note, Second Note, and Third
Note, the remaining $50,000 commitment fee described in Section 2.4 of the First
Supplemental Agreement shall be accelerated and due and payable on the date
hereof and paid in cash.

 

2.5        Conditions Precedent to the Third Closing. The obligation of the
Investor hereunder to purchase the Note at the Third Closing is subject to the
satisfaction, at or before the Third 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.

 

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3. Modifications to Original Note, the Second Note, and the Third Note.

 

3.1        Modifications to the Original Note. The Maturity Date of the Original
Note shall be amended to December 31, 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, 2016, (ii)
May 1, 20173, (iii) September 30, 2017, and (iv) December 31, 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 March 31, 2018. 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. (i) On May 1, 2017 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
date4, (ii) on September 30, 2017 the Borrowers shall make a payment to the
Holder in the amount of $100,000 of Principal plus all accrued and unpaid
Interest outstanding under this Note as of such payment date, (iii) on December
31, 2017 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, and (iv) on March 31, 2018 the Borrowers
shall make a payment to the Holder in the amount of $100,000 of Principal plus
all accrued and unpaid Interest outstanding under this Note as of such payment
date (each such date, a “Payment Due 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 For the avoidance of doubt, the October 10, 2016 and May 1, 2017 payments has
been paid by the Borrowers.

4 For the avoidance of doubt, the May 1, 2016 payment has been paid by the
Borrowers.

 

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3.3        Modifications to the Third Note. The Maturity Date of the Third Note
shall be amended to September 30, 2018. In addition Section (c) of the Third
Note shall be deleted in its entirety and replaced with the following:

 

1(c) Payments of Principal and Interest. (i) On March 31, 2018 the Borrowers
shall make a payment to the Holder in the amount of $300,000 of Principal plus
all accrued and unpaid Interest outstanding under this Note as of such payment
date, (ii) on June 30, 2018 the Borrowers shall make a payment to the Holder in
the amount of $400,000 of Principal plus all accrued and unpaid Interest
outstanding under this Note as of such payment date, and (iii) on September 30,
2018 the Borrowers shall make a payment to the Holder in the amount of $300,000
of Principal plus all accrued and unpaid Interest outstanding under this Note as
of such payment date, (each such date, a “Payment Due 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.

 

3.4        For the sake of clarity, the chart below shall summarize the required
Principal payments on all the Notes as modified herein:

 

  Repayment Date  Principal Repayment   TOTAL       MICT LN1   MICT LN2   MICT
LN3   MICT LN4        September 30, 2017   150,000.00    100,000.00    -    -  
$250,000.00    December 31, 2017   150,000.00    150,000.00    -    -  
$300,000.00    March 31, 2018   -    100,000.00    300,000.00    -  
$400,000.00    June 30, 2018   -    -    400,000.00        $400,000.00   
September 30, 2018             300,000.00    100,000.00   $400,000.00   
December 31, 2018                  500,000.00   $500,000.00    TOTALS 
$300,000.00   $350,000.00   $1,000,000.00   $600,000.00   $2,250,000.00 

 

3.5        Consideration for Modifications. As consideration for the
modifications made to the Original Note, the Second Note, and the Third Note,
the Borrowers shall:

 

(i) pay 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 the
date hereof; and

 

(ii) enter into warrant amendment agreements in the form set forth on Exhibit B
attached hereto pursuant to which the warrant exercise price of the warrants
issued to the Investor shall be reduced to $2.00 per share.

 

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

 

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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.

 

  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: General Counsel     By: Yorkville Advisors Global LLC
    Its: General Counsel           By: /s/ David Gonzalez   Name: David Gonzalez
  Title: General Counsel

 

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EXHIBIT A

 

FORM OF NOTE

 

 

 

 

 

 

 

EXHIBIT B

 

FORM WARRANT AMENDMENTS