EXHIBIT 4.7
CONSENT TO MODIFICATIONS
This Consent to Modifications, dated March 17, 2003, is given and
agreed to by the "Purchasers" under the Second Amended Note and Warrant Purchase
Agreement by and among the Purchasers, Integral Vision, Inc., a Michigan
corporation (the "Company"), and Warren Cameron Faust & Asciutto, P.C., as
Agent.
Factual Statements
A. The undersigned is a Purchaser under the Second Amended Note and
Warrant Purchase Agreement, dated effective as of the date of execution
by such Purchaser, for the purchase of the Notes and Warrants of the
Company (the "Purchase Agreement").
B. The parties to this Purchase Agreement wish to modify certain portions
of the Purchase Agreement, which shall be accomplished by attaching
said changes to the Purchase Agreement in the form of an addendum to
the Purchase Agreement. One of the modifications desired by the parties
to the Purchase Agreement is to increase the amount of notes authorized
under said Purchase Agreement from the present limit of $2,000,000 to
$2,500,000 and to clarify that the limit applies to the amount of notes
outstanding at any time rather than to the amount issued.
C. The Company is indebted to Purchasers of Class 1 Notes numbered 1
through 20 pursuant to the terms of the Promissory Notes (the "Class 1
Notes") purchased by the Purchasers pursuant to the Purchase Agreement
which provides for quarterly interest payments and quarterly principal
payments. None of the required interest and principal payments have
been paid to such Purchasers. The parties now wish to postpone the
payment of all interest due Purchasers of Class 1 Notes until December
31, 2003, to postpone the requirement that the Company commence
principal payments as specified under said Class 1 Notes until March
31, 2004, and to extend the maturity date for said Class 1 Notes until
February 27, 2007.
D. The Company is also indebted to the Purchasers of Class 2 Notes
numbered 8 through 16 (the "Class 2 Notes") purchased by the Purchasers
pursuant to the Purchase Agreement and subsequent amendments to some of
the Class 2 Notes. The parties now wish to further amend said notes to
extend the maturity date of the Class 2 Notes from the current March
31, 2003 maturity date to September 30, 2003.
Agreement
1. Modifications. The undersigned agree to the modifications to the
Purchase Agreement as follows:
SECTION 1.A.: The reference to "Section 2(c)" in the last sentence of
this section shall be corrected to refer to "Section 2(d)."
SECTION 1.B.: In the portion of said section stating, "As used herein,
"Notes" means either "Class 1 Notes" or "Class 2 Notes" in a total
aggregate amount not to exceed $2,000,000" shall be modified to read,
"As used herein, "Notes" means either "Class 1 Notes" or "Class 2
Notes" in a total aggregate amount outstanding at any time not to
exceed $2,500,000."
SECTION 1.(B)(I): In the portion of said section stating, "Class 1
Notes issued after April 15, 2002 will be subordinated to the Class 1
Notes issued on or before April 15, 2001 in their rights to receive
payment under the Collateral Assignment, as defined below" shall be
corrected to read, "Class 1 Notes issued after April 15, 2002 will be
subordinated to the Class 1 Notes issued on or before April 15, 2002 in
their rights to receive payment under the Collateral Assignment, as
defined below."
SECTION 2.D. shall be amended by adding the following to said section:
"For all notes and warrants issued under this Purchase Agreement after
December 31, 2001 the Company and its tax advisors have determined that
the limited marketability of the Company's common shares does not
provide a reasonable basis for the Company and its advisors to
determine a value for the warrants issued. Therefore, all warrants
issued by the company pursuant the Purchase Agreement after December
31, 2001 shall have only a minimal or negligible value ascribed to
them."
SECTION 11.1. shall be modified by adding the following to said
section: "or (v) modify the subordination terms in the Purchase
Agreement, including without limitation, the subordination terms in
Sections 1.(b) (i), 1. (b) (ii), 6.1. (c), and 20.2. without the
consent of the holder of each Note so affected."
2. Modifications to Class 1 Notes, Class 2 Notes, and Warrants and
additional agreements to implement sections C and D above.
CLASS 1 NOTES. The undersigned holders of Class 1 Notes hereby agree to
the postponement of all interest payments due Purchasers of Class 1
Notes until December 31, 2003, to the postponement of the requirement
that the Company commence principal payments as specified under said
Class 1 Notes until March 31, 2004, and to extend the maturity date for
said Class 1 Notes until February 27, 2007.
CLASS 2 NOTES. The undersigned holders of Class 2 Notes hereby agree to
extend the maturity date for said Class 2 Notes from March 31, 2003 to
September 30, 2003.
UNANIMOUS APPROVAL. These above modifications to Class 1 Notes and
Class 2 Notes require the unanimous consent of all holders of Class 1
Notes and Class 2 Notes specified in sections C and D above.
CONSIDERATION. All of the parties to this CONSENT TO MODIFICATIONS
agree that the consideration for the holders of Class 1 Notes and Class
2 Notes specified in sections C and D to consent to the modifications
in this section shall be as follows:
a. At the time each of the Class 1 Notes was purchased by the
Purchaser, the Company issued to each Purchaser Common Stock
Purchase Warrant Certificates ("Warrants"). The date specified
in said Warrants for their exercise shall be extended from the
fourth anniversary of the date said Warrants were issued to
February 27, 2007. Additionally, the purchase price per share
specified in said Warrants shall be reduced from whatever
price was originally specified to $0.25 per share.
b. At the time each of the Class 2 Notes was purchased by the
Purchaser, the Company agreed to issue to each Purchaser
Warrants with an exercise price of $0.35 per share. This $0.35
per share
exercise price shall be reduced to $0.25 per share, which is
acknowledged to be at or above the market price for the
Company's common stock at the date of this Agreement.
c. In addition the Company agrees that it will require that all
new Class 1 Notes issued by the Company after March 17, 2003
("New Notes") shall include an agreement from each New Note
holder to defer all interest payments due each New Note holder
until December 31, 2003.
d. The Company agrees to issue each Class 1 Note holder, Class 2
Note holder, and Warrant holder an addendum duly endorsed by
an authorized officer of the Company to attach to each said
note or warrant incorporating the changes agreed to herein.
3. Voluntary and Informed Execution. THE PARTIES ACKNOWLEDGE THAT THEY
HAVE HAD AN OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL WITH RESPECT TO
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AND THAT THE
MODIFICATIONS SET FORTH HEREIN WERE KNOWINGLY AND VOLUNTARILY MADE.
4. Effective Date. This agreement shall be effective on the date all
parties to this Consent to Modification, including the Company and
Agent, have signed this agreement (or counter part thereto) and the
Board of Directors of the Company has accepted the terms and conditions
herein if, and only if, all of the aforementioned parties sign this
agreement and the Board of Directors of the Company accepts these terms
and conditions on or before March 31, 2003.
5. Remaining Terms Unaffected. Except as set forth in this Consent to
Modifications, the terms of the Purchase Agreement shall continue in
full force and effect.
Integral Vision, Inc. Warren Cameron Faust & Asciutto, P.C., Agent
By: _______________________ By:_________________________________
Charles J. Drake, Chairman J. Michael Warren, President
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Charles J. Drake J. Michael Warren
Maxco, Inc. ________________________________________________
Max A. Coon, Individually and as Custodian under
The Michigan Uniform Transfers to Minors Act
By:__________________________________ For Max Andrew Coon and Kelsey Coon-Lennon
Max A. Coon, President