Omnibus Amendment and Waiver Agreement between Island Pacific, Inc. and Laurus Master Fund, Ltd.

Summary

Island Pacific, Inc. and Laurus Master Fund, Ltd. have agreed to amend and waive certain terms of their previous loan and securities agreements. The amendment postpones principal payments due in late 2006 and early 2007, extends maturity dates, and updates certain definitions and obligations. Island Pacific will issue Laurus an option to purchase additional shares at a set price and will publicly disclose the amendment. Payments postponed will be due at maturity, and regular payments will resume in March 2007. The agreement ensures both parties' rights and obligations are updated and clarified.

EX-10.1 2 island_8k-ex1001.txt OMNIBUS AMENDMENT EXHIBIT 10.1 OMNIBUS AMENDMENT AND WAIVER This OMNIBUS AMENDMENT AND WAIVER (this "AMENDMENT"), dated as of November 27, 2006, is entered into by and between ISLAND PACIFIC, INC., a Delaware corporation (the "COMPANY"), and LAURUS MASTER FUND, LTD., a Cayman Islands company ("LAURUS"), for the purpose of amending and amending and restating and waiving certain terms of (i) the Amended and Restated Secured Term Note, dated as of November 17, 2005 (as amended and restated, amended, modified and/or supplemented from time to time, the "NOVEMBER 2005 BRIDGE NOTE") issued by the Company to Laurus, (ii) the Registration Rights Agreement by and between the Company and Laurus dated November 17, 2005 (as amended, modified or supplemented from time to time, the "NOVEMBER 2005 REG. RIGHTS AGREEMENT"), (iii) the Securities Purchase Agreement, dated as of November 17, 2005 (as amended, modified or supplemented from time to time, the "NOVEMBER 2005 PURCHASE AGREEMENT") by and between the Company and Laurus, (iv) the Amended and Restated Secured Convertible Term Note, dated as of July 12, 2004 (as amended and restated, amended, modified and/or supplemented from time to time, THE "JULY 2004 TERM NOTE") issued by the Company to Laurus, (v) the Securities Purchase Agreement, dated as of July 12, 2004 (as amended, modified or supplemented from time to time, the "JULY 2004 PURCHASE AGREEMENT") by and between the Company and Laurus, (vi) the Registration Rights Agreement by and between the Company and Laurus dated July 12, 2004 (as amended, modified or supplemented from time to time, the "JULY 2004 REG. RIGHTS AGREEMENT"), (vii) the Secured Convertible Term Note, dated as of June 15, 2005 (as amended, modified and/or supplemented from time to time, the "JUNE 2005 TERM NOTE" and together with the July 2004 Term Note, the "TERM NOTES" and each, a "TERM NOTE") issued by the Company to Laurus, (viii) the Securities Purchase Agreement, dated as of June 15, 2005 (as amended, modified or supplemented from time to time, the "JUNE 2005 PURCHASE AGREEMENT" and together with the November 2005 Purchase Agreement and the July 2004 Purchase Agreement, the "PURCHASE AGREEMENTS" and each, a "PURCHASE AGREEMENT") by and between the Company and Laurus and (ix) the Registration Rights Agreement by and between the Company and Laurus dated June 15, 2005 (as amended, modified and/or supplemented from time to time, the "JUNE 2005 REG. RIGHTS AGREEMENT" and together with the November 2005 Reg. Rights Agreement and the July 2004 Reg. Rights Agreement, the "REG. RIGHTS AGREEMENTS" and each, a "REG. RIGHTS AGREEMENT"). Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the applicable November 2005 Bridge Note, Term Note, Purchase Agreement or Reg. Rights Agreement. WHEREAS, the Company and Laurus have agreed to make certain changes to the November 2005 Bridge Note, the Term Notes, the Purchase Agreements and the Reg. Rights Agreements as set forth herein. NOW, THEREFORE, in consideration of the above, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: WAIVERS A.Laurus and the Company hereby agree that the Company shall not be required to pay the principal portion of any Monthly Amount (as defined in the July 2004 Term Note) due on the first business day of each of the following months: September 2006, October 2006, November 2006, December 2006, January 2007 and February 2007 on such dates (collectively the "July 2004 Postponed Principal"); provided that, the July 2004 Postponed Principal shall be paid in full on the Maturity Date (as defined in the July 2004 Term Note), together with all other amounts due and payable on such date under the July 2004 Purchase Agreement and the Related Agreements referred to in the July 2004 Purchase Agreement. Monthly Amount payments shall resume pursuant to the terms of the July 2004 Term Note on March 1, 2007. B.Laurus and the Company hereby agree that the Company shall not be required to pay the principal portion of any Monthly Amount (as defined in the June 2005 Term Note) due on the first business day of each of the following months: September 2006, October 2006, November 2006, December 2006, January 2007 and February 2007 on such dates (collectively, the "June 2005 Postponed Principal"); provided that, the June 2005 Postponed Principal shall each be paid in full on the Maturity Date (as defined in the June 2005 Term Note), together with all other amounts due and payable on such date under the June 2005 Purchase Agreement and the Related Agreements referred to in the June 2005 Purchase Agreement. Monthly Amount payments shall resume pursuant to the terms of the June 2005 Term Note on March 1, 2007. AMENDMENTS - ---------- 1. The November 2005 Bridge Note is hereby amended and restated in the form attached hereto as Exhibit A (the "SECOND AMENDED AND RESTATED SECURED TERM NOTE"). For the avoidance of doubt, the amendment and restatement of the November 2005 Bridge Note as set forth in this Section 1 shall be in substitution for and not in satisfaction of the November 2005 Bridge Note. Upon the execution of this Amendment and Waiver and prior to Company delivering an originally executed copy of the Second Amended and Restated Secured Term Note to Laurus, Laurus will return the originally executed Secured Term Note dated November 17, 2005 and the Amended and Restated Secured Term Note dated March 21, 2006 to the Company. The parties acknowledge and agree that (a) the $750,000 provided by Laurus to the Company on August 31, 2006 shall be treated as an advance pursuant to, and applied against any funds deliverable to the Company in connection with, the Second Amended and Restated Bridge Note, and (b) any funds distributed to Laurus from Loeb & Loeb LLP at the direction of the Company on or around August 31, 2006 shall be treated as an advance pursuant to, and applied against, any funds deliverable to Laurus as a Closing Payment as described in Section 8 below. 2. The definition of Maturity Date appearing in the November 2005 Bridge Note is hereby amended to extend such Maturity Date to "February 28, 2007". 3. For avoidance of doubt, the definition of Maturity Date appearing on the July 2004 Term Note is July 12, 2007 and the definition of Maturity Date appearing on the June 2005 Term Note is June 15, 2008. 4. Laurus understands that the Company has an affirmative obligation to make prompt public disclosure of material agreements and material amendments to such agreements. The Company hereby covenants to report the terms and provisions of this Amendment on a current report on Form 8-K within five (5) business days of the date hereof. 5. In each place where the term "Option" is used in the Purchase Agreements and/or the Registration Rights Agreements, such term shall be deemed to include the Additional Option (as defined herein) issued in connection with this Amendment. 6. The first sentence of Section 6.2 of the Purchase Agreements shall be amended to state: "By January 1, 2007, the Company shall secure the listing of the shares of Common Stock issuable upon the exercise of the Warrant and upon exercise of the Option on the NASD OTC Bulletin Board (the "Principal Market") upon which shares of Common Stock are listed and shall maintain such listing so long as any other shares of Common Stock shall be so listed." MISCELLANEOUS - ------------- 7. The Company agrees that it shall issue on the date hereof an Option (the "Additional Option") to Laurus to purchase up to 1,706,250 shares of the Common Stock of the Company with an exercise price of $0.01 per share, such Additional Option to be in the form attached hereto as Exhibit B. 8. The Company agrees that, in connection with this Amendment, the Company shall pay to Laurus Capital Management, LLC a payment in an amount equal to twenty-four thousand dollars ($24,000). The foregoing fee is referred to herein as the "Closing Payment". 9. Each amendment and waiver set forth herein shall be effective as of the date first above written (the "AMENDMENT EFFECTIVE DATE") on the date when (i) each of the Company and Laurus shall have executed and the Company shall have delivered to Laurus its respective counterpart to this Amendment, and (ii) the Company shall have executed and delivered to Laurus each of the Additional Option and the Second Amended and Restated Secured Term Note. 10. All representations and warranties made in the Purchase Agreements (as qualified by any disclosure schedules or similar documents previously delivered to Laurus by the Company) with respect to any Warrant, Option, Warrant Shares or Option Shares shall be deemed to have been made as of the date hereof with respect to the Additional Option and the shares of the Company's Common Stock issuable to Laurus upon exercise thereof. 11. Except as specifically set forth in this Amendment, there are no other amendments, modifications or waivers to the Term Notes, Purchase Agreements or Reg. Rights Agreements, and all of the other forms, terms and provisions of the Term Notes and the Purchase Agreements remain in full force and effect. 12. The Company hereby represents and warrants to Laurus that after giving effect to this Amendment: (i) on the date hereof, all representations, warranties and covenants made by the Company in connection with the Second Amended and Restated Secured Term Note, the Term Notes and the Purchase Agreements (as qualified by any disclosure schedules or similar documents delivered to Laurus by the Company) are true, correct and complete except as qualified or limited in any manner by the information set forth in the disclosure schedule delivered by the Company to Laurus pursuant to Section 4 of the November 2005 Purchase Agreement or in the SEC Reports and except that the Company did not file its reports on Form 10-K for the years ended March 31, 2005 and March 31, 2006 and Form 10-Q for the quarters ended June 30, 2006, June 30, 2005, September 30, 2005 and December 31, 2005; and (ii) on the date hereof, all of the Company's and its Subsidiaries' covenant requirements set forth in the Second Amended and Restated Secured Term Note, the Term Notes, the Purchase Agreements, the Reg. Rights Agreements and Related Agreements (as defined in the respective Purchase Agreements) have been met. 13. From and after the Amendment Effective Date, all references to the November 2005 Bridge Note, the Term Notes and the Purchase Agreements shall be deemed to be references to the Second Amended and Restated Secured Term Note, the Term Notes and Purchase Agreements as modified hereby. 14. This Amendment shall be binding upon the parties hereto and their respective successors and permitted assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and their respective successors and permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, each of the Company and Laurus has caused this Amendment to be signed in its name effective as of this _____ day of November 2006. ISLAND PACIFIC, INC. By: ----------------------------------- Name: Barry Schechter Title: Chief Executive Officer LAURUS MASTER FUND, LTD. By: ----------------------------------- Name: Title: EXHIBIT A SECOND AMENDED AND RESTATED BRIDGE NOTE EXHIBIT B ADDITIONAL OPTION