EX-2 3 p18621-ex2_911.txt EXHIBIT 2.9.11 Exhibit 2.9.11 ADDENDUM 3 TO CONVERTIBLE LOAN AGREEMENT THIS ADDENDUM 3 TO CONVERTIBLE LOAN AGREEMENT (this "Addendum") dated as of November 18, 2003 ("Effective Date"), is by and between Commtouch Software Ltd., an Israeli corporation ("Commtouch"), and the lenders signing below (each, a "Lender", and collectively, the "Lenders"). WHEREAS, Commtouch and the Lenders previously executed the Convertible Loan Agreement on January 29, 2003 and amended the agreement on March 28, 2003 and May 15, 2003 by way of Addendum 1 and Addendum 2, respectively ("Agreement"); and WHEREAS, the parties are interested at this time in effecting a Conversion of the Loan; NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the parties agree as follows: 1. Conversion Provided shareholders approve this transaction as set out in the proxy statement for the December 26, 2003 annual general meeting, then pursuant to Section 3 of each Promissory Note held by each of the undersigned Lenders (hereinafter "Converting Lenders"), the Converting Lenders, constituting a Lender Majority, on the Effective Date of this Addendum will be deemed to have effected a Conversion of the Loan plus interest accumulated on the Loan up to the Effective Date. This Addendum shall be deemed a Conversion Notice, as defined under the Agreement. As a result thereof, Commtouch shall (i) cause its transfer agent to issue the Ordinary Shares listed in Column A next to each Converting Lender's name on Appendix "A" hereto and (ii) issue Warrants on the accumulated interest, in accordance with the terms of the Agreement, being 100% warrant coverage, with 1/3 exercisable at each of $0.25, $0.33 and $0.50, in the amounts and at the prices set forth in Column C next to each Converting Lender's name on Appendix "A". 2. Warrants Exercise Provided shareholders approve this transaction as set out in the proxy statement for the December 26, 2003 annual general meeting, the Converting Lenders agree to exercise the number of warrants at the exercise price(s) set forth in Column E next to each Converting Lender's name on Appendix "A" hereto by providing a warrant exercise notice and payment of the exercise price to Commtouch within five (5) business days following the shareholder approval. 3. Additional Interest Payment a) In consideration of Converting Lenders actions described in Sections 1 and 2 above, Commtouch agrees to pay additional interest equal to 7.5% of the Loan Amount by way of a share issuance based on a Conversion as described in Section 1 above. In particular, Commtouch shall (i) cause its transfer agent to issue the Ordinary Shares listed in Column B next to each Converting Lender's name on Appendix "A" hereto and (ii) issue Warrants on the aforementioned additional interest, being 100% warrant coverage, with 1/3 exercisable at each of $0.25, $0.33 and $0.50, in accordance with the terms of the Agreement, in the amounts and at the prices set forth in Column D next to each Converting Lender's name on Appendix "A". b) For certainty, the Agreement contemplated 100% warrant coverage for principal and interest. The increase in interest payable, contemplated by this Addendum will result in an increased number of shares available on conversion, and therefore an equally increased number of warrants, as set out in Column B and Column D of Appendix "A". 4. Registration Statement a) With the execution of this Addendum by Commtouch and a Lender Majority, Commtouch shall immediately begin preparing a registration statement covering the Ordinary Shares and Ordinary Shares underlying Warrants listed in Appendix "A" hereto plus all shares that may be issued upon future exercise of remaining Warrants held by Converting Lenders, and will work diligently to have the registration statement filed with the SEC and declared effective, all in accordance with Section 7 of the Agreement. Commtouch shall be entitled to aggregate in one registration statement the Converting Lenders' shareholding interests described above with those of investors under the agreements entered into by Commtouch with certain investors on July 10, 2003 and July 29, 2003, as well as with shareholding interests in Commtouch held by any other parties that may require registration. Once the registration statement becomes effective, the lenders may at any time resell their shares registered thereunder on the open market. b) The registration will register the total number of warrants lenders possess, not just those exercised pursuant to this Addendum, so investors will be free thereafter to exercise and sell at their discretion. c) If (a) the Registration Statement is not filed by the Company within 60 days from the date of signing by the Lender Majority, (b) the Registration Statement is not declared effective by the Commission within 120 days from the date of signing by the Lender Majority, (c) such Registration Statement is not maintained as effective by the Company for 36 months as from the date of signing by the Lender Majority, or (d) NASDAQ approval (if required) is not obtained, (each a "Registration Default"), and the reason for any one of the above occurrences is not an event of Force Majeure, then the Company will pay each Investor (pro-rata on a monthly basis), for each Registration Default then in effect, as liquidated damages and not as a penalty, during any period in which a Registration Default is occurring, 5% (five percent) per calendar month or portion thereof of (i) the aggregate principal plus interest owed to the Investor for the Securities, and (ii) the value of any outstanding Warrants (valued at the difference between the average volume weighted average price [based on a trading day from 9:30 a.m. to 4:00 p.m.] on the NASDAQ SmallCap Market as reported by Bloomberg Financial LP using the AQR function [i.e. volume weighted average quote recap] for the Ordinary Shares for each Trading Day (the "VWAP") during the applicable month and the exercise price multiplied by the number of Warrant Shares the Warrants are exercisable into, but in no case less than zero), held by such Investor until such corresponding Registration Default no longer exists ("Liquidated Damages"). Such payment of the Liquidated Damages shall be made to the Investor upon 5 Trading Days' irrevocable notice to the Investor, in cash or registered Ordinary Shares (based on the average of the closing sale prices of an Ordinary Share during the 5 Trading Days immediately following such irrevocable notice by the Company of such issuance), on the last day of each month during which a Registration Default occurred or was continuing, without demand therefor by the Investor; provided, however, that the payment of the Liquidated Damages shall not relieve the Company from its obligations to register the Securities pursuant to this Section. Provided however that in no event shall the amount of Liquidated Damages payable hereunder to any Investor exceed 45% (forty-five percent) of the Purchase Price paid by that Investor. And provided however that the Company retains the discretion whether to pay such Liquidated Damages in cash or registered Ordinary Shares. To the extent that the issuance of Ordinary Shares that are registered as Liquidated Damages is subject to the same delay, notwithstanding the above monthly requirement for payment, the Company may deliver to the Investor such shares as soon as they become registered. 5. General a. Terms used herein shall have the same meaning as ascribed to such terms in the Agreement. b. Subject to s.4(a), this Addendum and the performance hereunder is conditioned on receipt of shareholder approval at the upcoming annual meeting of December 26, 2003. c. Except to the extent amended hereby, the terms and conditions of the Agreement shall remain in full force and effect as between the parties hereto throughout the term of the Agreement. IN WITNESS WHEREOF, the parties have caused this Addendum to be executed as of the Effective Date by their respective authorized representatives. COMMTOUCH SOFTWARE LTD. By: ________________ By: _______________ Title: _______________ Title:______________
LENDERS: AxcessNet Resources LLC Yona Hollander By: ____________________________ By: ____________________________ Title: _________________________ Title: _________________________ Bert Amato By: ____________________________ Title: _________________________ Compugen Systems Ltd. Delta Capital Investments Ltd. By: ____________________________ By: ____________________________ Title: _________________________ Title: _________________________ KKB Ventures LLC Lloyd E. Shefsky By: ____________________________ By: ____________________________ Title: _________________________ Title: _________________________ XDL Capital Corp. (as lender and not as Collateral Agent) OZF Ltd. By: ____________________________ By: ____________________________ Title: _________________________ Title: _________________________ Edward B. Roberts Clarenville Ltd. By: ____________________________ Title: _________________________ By: ____________________________ Title: _________________________ LENE L.P. By: ____________________________ Title: _________________________
APPENDIX "A"
Column A Column B Column C Column D Column E Lenders' Names and Ordinary Ordinary Warrants to be Warrants Warrants Addresses Shares to be Shares issued on to be to be issued to be issued accumulated issued on exercised by following following interest on additional Converting Conversion conversion of Loan (and 7.5% Lenders Loan and Additional exercise interest (and (and Accumulated 7.5% (and exercise exercise Interest Interest prices) prices) prices) AxcessNet 842,433 60,000 14,145@$0.25 20,000@$0.25 150,406@$0.25 Resources LLC. ------- ------ ------------ ------------ ------------- 1050 Winter Street (Suite 2400), 14,144@$0.33 20,000@$0.33 150,406@$0.33 Waltham, MA 02451 ------------ ------------ ------------- Tel: (781)466-8888; Fax:(781)466-8822; 14,144@$0.50 20,000@$0.50 150,405@$0.50 Email:eyal@axcess-net.com ------------ ------------ ------------- Bert Amato 422,795 30,000 7,599@$0.25 10,000@$0.25 75,467@$0.25 364 Glencairn Avenue ------- ------ ------------ ------------ ------------- Toronto, Ontario M5N 1V1 7,598@$0.33 10,000@$0.33 75,466@$0.33 Phone: (416) 488-9459 ----------- ------------ ------------ Fax:(416) 484-1409 Email: bamato@sympatico.ca 7,598@$0.50 10,000@$0.50 75,466@$0.50 ----------- ------------ ------------ Compugen Systems Ltd. 528,493 37,500 9,498@$0.25 12,500@$0.25 94,333@$0.25 25 Leek Crescent ------- ------ ----------- ------------ ------------ Richmond Hill, ON Canada L4B 4B3 9,498@$0.33 12,500@$0.33 94,333@$0.33 tel: 905 707-2050, ----------- ------------ ------------ 1-800-387-5045; fax: (905) 707-2020 9,497@$0.50 12,500@$0.50 94,332@$0.50 Email: hzarek@compugen.com ----------- ------------ ------------ Column A Column B Column C Column D Column E Delta Capital 211,397 15,000 3,799@$0.25 5,000@$0.25 37,733@$0.25 Investments Ltd. ------- ------ ----------- ----------- ------------ 37-41 Bedford Row London, WC1R4JH 3,799@$0.33 5,000@$0.33 37,733@$0.33 Fax 44-20-76112396 ----------- ----------- ------------ Email: delta51@attglobal.net Attn: David Teacher 3,799@$0.50 5,000@$0.50 37,733@$0.50 ----------- ----------- ------------ KKB Ventures LLC 1,061,370 75,000 20,457@$0.25 25,000@$0.25 189,396@$0.25 Attn: Ken Casey --------- ------ ------------ ------------ ------------- 285 Musketaquid Rd. Concord, Ma. 01742 20,457@$0.33 25,000@$0.33 189,395@$0.33 Tel: 617 320-9764 ------------ ------------ ------------- Fax: none Email: kfcasey@hotmail.com 20,456@$0.50 25,000@$0.50 189,395@$0.50 ------------ ------------ ------------- XDL Capital Corp. 905,852 64,500 15,284@$0.25 21,500@$0.25 161,726@$0.25 30 St. Clair Avenue ------- ------ ------------ ------------ ------------- West, Ste. 901, Toronto, M4V 3A1 15,284@$0.33 21,500@$0.33 161,726@$0.33 Attn: David Latner, ASO ------------ ------------ ------------- & Dennis Bennie Tel:416-250-1990 15,284@$0.50 21,500@$0.50 161,725@$0.50 fax:416-250-6330 ------------ ------------ ------------- Email: dbennie@xdl.com; dlatner@xdl.com Edward B. Roberts 317,095 22,500 5,699@$0.25 7,500@$0.25 56,600@$0.25 David Sarnoff Professor ------- ------ ----------- ----------- ------------ of the Management of Technology 5,698@$0.33 7,500@$0.33 56,599@$0.33 MIT Sloan School of ----------- ----------- ------------ Management 300 Boylston St. 5,698@$0.50 7,500@$0.50 56,599@$0.50 Boston, MA 02116 ----------- ----------- ------------ Tel: 617-482-0671 Fax: 617-426-9107 Email: eroberts@mit.edu Column A Column B Column C Column D Column E LENE L.P. 211,397 15,000 3,799@$0.25 5,000@$0.25 37,733@$0.25 c/o Lloyd E. Shefsky, ------- ------ ----------- ----------- ------------ General Partner 444 N. Michigan Ave. 3,799@$0.33 5,000@$0.33 37,733@$0.33 Chicago, IL 60611 ----------- ----------- ------------ Tel: 312-836-4001 Fax: 312-527-9931 3,799@$0.50 5,000@$0.50 37,733@$0.50 Email: ----------- ----------- ------------ leshefsky@shefskyltd.com Yona Hollander 84,559 6,000 1,520@$0.25 2,000@$0.25 15,094@$0.25 19261 Phil Lane ------ ----- ----------- ----------- ------------ Cupertino, CA 95014 Tel: 408-996-1579 1,520@$0.33 2,000@$0.33 15,094@$0.33 Fax: 408 467 4601 ----------- ----------- ------------ yhollander@entercept.com 1,519@$0.50 2,000@$0.50 15,093@$0.50 ----------- ----------- ------------ Lloyd E. Shefsky 104,822 7,500 1,608@$0.25 2,500@$0.25 18,721@$0.25 444 N. Michigan Ave. ------- ----- ----------- ----------- ------------ Chicago, IL 60611 Tel: 312-836-4001 1,607@$0.33 2,500@$0.33 18,720@$0.33 Fax: 312-527-9931 ----------- ----------- ------------ Email: leshefsky@shefskyltd.com 1,607@$0.50 2,500@$0.50 18,720@$0.50 ----------- ----------- ------------ OZF Ltd. 377,359 27,000 5,787@$0.25 9,000@$0.25 67,394@$0.25 Tropic Isle Building ------- ------ ----------- ----------- ------------ Wickhams Cay, P.O. Box 964 5,786@$0.33 9,000@$0.33 67,393@$0.33 Road Town, Tortola, ----------- ----------- ------------ British Virgin Islands c/o Tis Prager, Prager 5,786@$0.50 9,000@$0.50 67,393@$0.50 Dreifuss, ----------- ----------- ------------ Muehlebachstr. 6, CH-8008 Zurich, Switzerland Fax: +41 1 254 55 99 Email: mail@prager-dreifuss.com Column A Column B Column C Column D Column E Clarenville Ltd. 209,644 15,000 3,215@$0.25 5,000@$0.25 37,441@$0.25 Nora Court 86, CY-3040 ------- ------ ----------- ----------- ------------ Athinon Street Limassol, Cyprus 3,215@$0.33 5,000@$0.33 37,441@$0.33 Attn: Shlomo Weintraub ----------- ----------- ------------ Tel: +1 408 666 8201 Fax: +1 408 255 7420 3,214@$0.50 5,000@$0.50 37,440@$0.50 Email: ----------- ----------- ------------ shlomowein@yahoo.com; simon@capital-inv.com Attn: Mr. Elikos Elia Tel: 357 2 5555000 Fax: 357 2 5555001 Email: elikos.elia@cy.pwc.com