-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WbMkALlj8kuaSNJ0koc1hg/WDTU9qZqY5APaq6P31hlBIijbF4BaAfaOAuC/81Sz ocgPj+3uahKT+421ZBQKbg== 0001072613-08-000716.txt : 20080314 0001072613-08-000716.hdr.sgml : 20080314 20080314164943 ACCESSION NUMBER: 0001072613-08-000716 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20080305 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Material Modifications to Rights of Security Holders ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080314 DATE AS OF CHANGE: 20080314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: iVoice Technology, Inc. CENTRAL INDEX KEY: 0001307969 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 201862731 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-120490 FILM NUMBER: 08690044 BUSINESS ADDRESS: STREET 1: 750 HIGHWAY 34 CITY: MATAWAN STATE: NJ ZIP: 07747 BUSINESS PHONE: 732-441-7700 MAIL ADDRESS: STREET 1: 750 HIGHWAY 34 CITY: MATAWAN STATE: NJ ZIP: 07747 8-K 1 form-8k_15812.txt FORM 8-K DATED MARCH 5, 2008 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest reported event): March 5, 2008 IVOICE TECHNOLOGY, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its chapter) NEW JERSEY 333-120490 20-1862731 - -------------------------------------------------------------------------------- (State of (Commission (I.R.S. Employer organization) File Number) Identification No.) 750 HIGHWAY 34, MATAWAN, NJ 07747 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (732) 441-7700 ---------------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (SEE General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On March 5, 2008, iVoice Technology, Inc. ("iVoice Technology") and iVoice, Inc. ("iVoice") entered into an Amendment (the "Amendment") to the Administrative Services Agreement originally dated August 1, 2004. Pursuant to the terms of the Amendment, effective September 1, 2005, the monthly Service Fee was reduced to $4,220.96 and the past due and future earned, accrued and unpaid Services Fees were converted into a Convertible Promissory Note secured with all of the assets of iVoice Technology. On March 6, 2008, YA Global Investments, L.P. ("YA Global") and iVoice Technology, Inc. ("iVoice Technology"), in connection with a Secured Convertible Debenture (the "Debenture") held by YA Global, have agreed that on March 14, 2008 ("Redemption Date") the Company shall redeem all amounts outstanding under the Debenture except for One Hundred Eighty-six Thousand and Five Hundred Sixty-six Dollars and Seventy-seven Cents ($186,566.77) of the outstanding interest remaining on the promissory notes that were originally exchanged for the Debenture (the "Promissory Note Interest"). The amount to be redeemed on the Redemption Date shall be Six Hundred and Ninety-one Thousand and Twenty-one Dollars and Twenty-seven Cents ($691,021.27), including: (i) all accrued and unpaid interest on the Debenture through the date hereof, excluding the Promissory Note Interest and (ii) the Redemption Premium and shall be paid by wire transfer of immediately available funds in accordance with the wire instructions attached hereto. The Debenture shall be amended as follows: as of the Redemption Date, the Promissory Note Interest shall be due and payable on March 14, 2009 (the "Maturity Date"), shall accrue interest at the rate of fifteen percent (15%) per year payable at the Maturity Date, and shall be convertible at the option of YA Global, in whole or in part, from time to time, at a conversion price equal to seventy percent (70%) of the lowest closing bid price of the Company's common stock during the thirty (30) trading days immediately preceding the conversion date, as quoted by Bloomberg, LP. YA Global will not make any conversions pursuant to the Debenture prior to November 1, 2008. SECTION 3 - SECURITIES AND TRADING MARKETS ITEM 3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS. See Item 5.03 herein. SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR. On March 10, 2008, the Treasurer of the State of New Jersey accepted an Amendment to the Certificate of Incorporation of iVoice Technology, Inc. (the "Amendment"). This Amendment revised the Conversion Price of the Series A 10% Secured Convertible Preferred Stock ("Series A Preferred Stock") to be calculated by dividing the number of shares of Series A Preferred Stock being converted times the Series A Initial Value, as defined in the Certificate of Incorporation and subject to adjustment as set forth in the Certificate of Incorporation, by eighty percent (80%) of the lowest price that the Class A Common Stock has ever been issued at. The Amendment is attached herein as Exhibit 3.1 to Item 9.01 of this Report. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits 3.1 Amendment to the Certificate of Incorporation dated March 10, 2008. 10.1 Administrative Services Agreement Amendment No. 1 by and between iVoice Technology, Inc. and iVoice, Inc. dated March 5, 2008. 10.2 Convertible Promissory Note dated March 5, 2008 payable to iVoice, Inc. 10.3 Security Agreement by and between iVoice Technology, Inc. and iVoice, Inc. dated March 5, 2008. 10.4 Amendment to Secured Convertible Debenture held by YA Global Investments, L.P. dated March 6, 2008. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IVOICE TECHNOLOGY, INC. Date: March 14, 2008 By: /s/ Jerome Mahoney ------------------ Jerome Mahoney President and Chief Executive Officer INDEX OF EXHIBITS 3.1 Amendment to the Certificate of Incorporation dated March 10, 2008. 10.1 Administrative Services Agreement Amendment No. 1 by and between iVoice Technology, Inc. and iVoice, Inc. dated March 5, 2008. 10.2 Convertible Promissory Note dated March 5, 2008 payable to iVoice, Inc. 10.3 Security Agreement by and between iVoice Technology, Inc. and iVoice, Inc. dated March 5, 2008. 10.4 Amendment to Secured Convertible Debenture held by YA Global Investments, L.P. dated March 6, 2008. EX-3.1 2 exhibit3-1_15812.txt CERTIFICATE OF INCORPORATION AMENDMENT EXHIBIT 3.1 ----------- AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF IVOICE TECHNOLOGY, INC. iVoice Technology, Inc., a corporation organized and existing under the laws of the State of New Jersey (the "Corporation"), hereby certifies as follows: 1. The name of the corporation is iVoice Technology, Inc. The Certificate of Incorporation of the Corporation was filed by the New Jersey Treasurer on November 10, 2004. 2. An Amended and Restated Certificate of Incorporation was filed by the New Jersey Treasurer on January 11, 2005. 3. This Amendment to the Certificate of Incorporation herein certified was authorized by the unanimous written consent of the Board of Directors on March 6, 2008 and pursuant to the New Jersey Business Corporation Act of the State of New Jersey (the "Corporation Law"). 3. The Amendment to the Certificate of Incorporation herein certified effects the following changes: Article III, Preferred Stock, Section C, Subparagraph 6(i) shall be amended to revise the formula for calculating the Conversion Price. To accomplish the foregoing amendment, Section C, Subparagraph 6(i) of Article III, Preferred Stock of the Certificate of Incorporation is hereby deleted in its entirety and replaced with the following new subparagraph: "6. Conversion. The shares of Series A Preferred Stock shall be subject to conversion rights as follows (the "Conversion Rights "): (i) Holder Conversion Right. Subject to the limitation set forth in Section 6(ii), each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share and on or prior to the day prior to the Liquidation Date, if any, as may have been fixed in any Liquidation Notice, at the office of this Corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Liquidation Amount by the Conversion Price applicable to such share, determined as hereafter provided, in effect on the date the certificate is surrendered for conversion. The "Conversion Price" per share shall initially be calculated by dividing the number of shares of Series A Preferred Stock being converted times the Series A Initial Value, subject to adjustment as set forth in the Certificate of Incorporation, by eighty percent (80%) of the lowest price that the Corporation has ever issued its Class A Common Stock, subject to adjustment as set forth in Section 6(iv). I, the undersigned officer of iVoice Technology, Inc., certify that the foregoing Amendment to the Certificate of Incorporation of iVoice Technology, Inc. sets forth the Amendment to the Certificate of Incorporation of the said Corporation as of the 6th day of March 2008. By:________________________________ Jerome Mahoney President EX-10.1 3 exhibit10-1_15812.txt SERVICES AGREEMENT AMENDMENT EXHIBIT 10.1 ------------ ADMINISTRATIVE SERVICES AGREEMENT AMENDMENT NO. 1 This Amendment dated March 5, 2008 to the Administrative Services Agreement (the "Agreement") originally dated August 1, 2004 by and between iVoice, Inc., a New Jersey corporation ("iVoice") and iVoice Technology, Inc., a New Jersey corporation (the "Company"). WHEREAS, the parties have agreed to amend this Agreement. NOW THEREFORE, in consideration of the foregoing premises and the respective promises and agreements of the parties set forth herein, the parties hereto agree as follows: 1. Effective on September 1, 2005, the Services Fee shall be revised to equal Four Thousand and Two Hundred and Twenty Dollars and Ninety-six Cents ($4,220.96). 2. The Services Fees as defined in Section 3 of this Agreement and that are earned, accrued and remain unpaid shall be aggregated and converted into a Convertible Promissory Note in substantially the form as set forth in Exhibit A herein. 3. All other terms and conditions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of date written below: IVOICE, INC. IVOICE TECHNOLOGY, INC. By: ___________________ By: ___________________ Jerome Mahoney Jerome Mahoney President and President and Chief Executive Officer Chief Executive Officer EX-10.2 4 exhibit10-2_15812.txt CONVERTIBLE PROMISSORY NOTE EXHIBIT 10.2 ------------ MARCH 5, 2008 CONVERTIBLE PROMISSORY NOTE THEREFORE, FOR VALUE RECEIVED the undersigned, promises to pay to iVoice, Inc., the principal sum of Fifty Thousand Six Hundred and Fifty-one Dollars and Fifty-two Cents ($50,651.52), at the rate of prime plus 1 percent per annum on the unpaid balance until paid or until default, both principal and interest payable in lawful money of the United States of America, at iVoice, Inc. (the "iVoice") 750 Highway 34, Matawan, New Jersey 07747, or at such place as the legal holder hereof may designate in writing. It is understood and agreed that additional amounts may be advanced by the holder hereof as provided in the instruments, if any, securing this Note and such advances will be added to the principal of this Note and will accrue interest at the above specified rate of interest from the date of advance until paid. Such advances may include Services Fees accrued pursuant to the Administrative Services Agreement, as amended (the "Agreement") originally dated August 1, 2004 by and between iVoice, Inc., a New Jersey corporation ("iVoice") and iVoice Technology, Inc., a New Jersey corporation (the "Company"). The principal and interest shall be due and payable as follows: (a) interest shall accrue monthly on the unpaid balance and shall be paid annually, and (b) principal shall be payable on demand. Notwithstanding anything to the contrary herein, the Note holder may elect payment of the principal and/or interest, at the holder's sole discretion, owed pursuant to this Note by requiring the Company to issue to iVoice, or his assigns either: (i) one Class B common stock share of the Company par value $.01 per share, for each dollar owed, (ii) the number of Class A common stock shares of the Company calculated by dividing (x) the sum of the principal and interest that the Note holder has decided to have paid by (y) eighty percent (80%) of the lowest issue price of Class A common stock since the first advance of funds under this Note, or (iii), payment of the principal of this Note, before any repayment of interest. For purposes of determining the holding period of this Convertible Promissory Note under Rule 144 of the regulations promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, Exhibit I attached herein shows the date that each monthly obligation pursuant to the Agreement became due and unpaid. This Exhibit I shall be amended from time to time to reflect additional monthly advances made pursuant to the Agreement referenced above. Unless otherwise provided, this Note may be prepaid in full or in part at any time without penalty or premium. Partial prepayments shall be applied to installments due in reverse order of their maturity. In the event of (a) default in payment of any installment of principal or interest hereof as the same becomes due and such default is not cured within ten (10) days from the due date, or (b) default under the terms of any instrument securing this Note, and such default is not cured within fifteen (15) days after written notice to maker, then in either such event the holder may, without further notice, declare the remainder of the principal sum, together with all interest accrued thereon, and the prepayment premium, if any, at once due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time. The unpaid principal of this Note and any part thereof, accrued interest and all other sums due under this Note shall bear interest at the rate of prime plus 2 percent per annum after default until paid. All parties to this Note, including maker and any sureties, endorsers, or guarantors, hereby waive protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to continue to remain bound for the payment of principal, interest, and all other sums due under this Note, notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive all and every kind of notice of such change or changes and agree that the same may be made without notice or consent of any of them. Upon default, the holder of this Note may employ an attorney to enforce the holder's rights and remedies and the maker, principal, surety, guarantor and endorsers of this Note hereby agree to pay to the holder reasonable attorneys fees, plus all other reasonable expenses incurred by the holder in exercising any of the holder's right and remedies upon default. The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies or the right to exercise any of them at another time. This Note is to be governed and construed in accordance with the laws of the State of New Jersey. IN TESTIMONY WHEREOF, each corporate maker has caused this instrument to be executed in its corporate name by its President, and its corporate seal to be hereto affixed, all by order of its Board of Directors first duly given, the day and year first written above: IVOICE TECHNOLOGY, INC. By: _________________________ Jerome Mahoney President and Chief Executive Officer EX-10.3 5 exhibit10-3_15812.txt SECURITY AGREEMENT EXHIBIT 10.3 ------------ SECURITY AGREEMENT ------------------ THIS SECURITY AGREEMENT (the "Agreement"), is entered into and made effective as of March 14, 2008, by and between iVoice Technology, Inc., a New Jersey Corporation, with its principal office at 750 Route 34, Matawan, NJ, 07747 (the "Company"), and iVoice , Inc., a New Jersey corporation, with its principal office at 750 Route 34, Matawan, NJ, 07747 (the "Secured Party"). WHEREAS, the Company executed a Convertible Promissory Note dated March 14, 2008 (the "Promissory Note"); NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1. DEFINITIONS AND INTERPRETATIONS ------------------------------- Section 1.1. Recitals. The above recitals are true and correct and are incorporated herein, in their entirety, by this reference. Section 1.2. Interpretations. Nothing herein expressed or implied is intended or shall be construed to confer upon any person other than the Secured Party any right, remedy or claim under or by reason hereof. Section 1.3. Obligations Secured. In exchange and the consideration for the Secured Party purchasing the Promissory Note dated the date hereof and thereby permitting the Secured Party to loan to the Company Fifty Thousand Six Hundred and Fifty-one Dollars and Fifty-two Cents ($50,651.52) on the date hereof in the form of a Promissory Note, the Company hereby agrees to permit the Secured Party to secure the obligations pursuant to this Security Agreement and such the Promissory Note dated the date hereof for the sum of Fifty Thousand Six Hundred and Fifty-one Dollars and Fifty-two Cents ($50,651.52) and any other amounts now or hereafter owed to the Secured Party by the Company thereunder or hereunder, (collectively, the "Obligations"). ARTICLE 2. PLEDGED PROPERTY, ADMINISTRATION OF COLLATERAL ---------------------------------------------- AND TERMINATION OF SECURITY INTEREST ------------------------------------ Section 2.1. Pledged Property. (a) Company hereby pledges to the Secured Party, and creates in the Secured Party for its benefit, a security interest in and to all of the property of the Company as set forth in Exhibit A attached hereto and the products thereof and the proceeds of all such items (collectively, the "Pledged Property") for such time until the Obligations are paid in full. (b) Simultaneously with the execution and delivery of this Agreement, the Company shall make, execute, acknowledge, file, record and deliver to the Secured Party any documents reasonably requested by the Secured Party to perfect its security interest in the Pledged Property. Simultaneously with the execution and delivery of this Agreement, the Company shall make, execute, acknowledge and deliver to the Secured Party such documents and instruments, including, without limitation, financing statements, certificates, affidavits and forms as may, in the Secured Party's reasonable judgment, be necessary to effectuate, complete or perfect, or to continue and preserve, the security interest of the Secured Party in the Pledged Property, and the Secured Party shall hold such documents and instruments as secured party, subject to the terms and conditions contained herein. Section 2.2. Rights; Interests; Etc. (a) So long as no Event of Default (as hereinafter defined) shall have occurred and be continuing: (i) the Company shall be entitled to exercise any and all rights pertaining to the Pledged Property or any part thereof for any purpose not inconsistent with the terms hereof; and (ii) the Company shall be entitled to receive and retain any and all payments paid or made in respect of the Pledged Property. (b) Upon the occurrence and during the continuance of an Event of Default: (i) All rights of the Company to exercise the rights which it would otherwise be entitled to exercise pursuant to Section 2.2(a)(i) hereof and to receive payments which it would otherwise be authorized to receive and retain pursuant to Section 2.2(a)(ii) hereof shall be suspended, and all such rights shall thereupon become vested in the Secured Party who shall thereupon have the sole right to exercise such rights and to receive and hold as Pledged Property such payments; PROVIDED, HOWEVER, that if the Secured Party shall become entitled and shall elect to exercise its right to realize on the Pledged Property pursuant to Article 5 hereof, then all cash sums received by the Secured Party, or held by Company for the benefit of the Secured Party and paid over pursuant to Section 2.2(b)(ii) hereof, shall be applied against any outstanding Obligations; 2 (ii) All interest, dividends, income and other payments and distributions which are received by the Company contrary to the provisions of Section 2.2(b)(i) hereof shall be received in trust for the benefit of the Secured Party, shall be segregated from other property of the Company and shall be forthwith paid over to the Secured Party; and (iii) The Secured Party in its sole discretion shall be authorized to sell any or all of the Pledged Property at public or private sale in order to recoup all of the outstanding principal plus accrued interest owed pursuant to the Debenture as described herein (c) Each of the following events shall constitute a default under this Agreement (each an "Event of Default"): (i) any default, whether in whole or in part, shall occur in the payment to the Secured Party of principal, interest or other item comprising the Obligations as and when due or with respect to any other debt or obligation of the Company to a party other than the Secured Party; (ii) any default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms or provisions to be performed under the Transaction Documents (as defined in the Merger Agreement); (iii) the Company shall: (1) make a general assignment for the benefit of its creditors; (2) apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties; (3) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code; (4) file with or otherwise submit to any governmental authority any petition, answer or other document seeking: (A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (5) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law; or (6) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction; or (iv) any case, proceeding or other action shall be commenced against the Company for the purpose of effecting, or an order, judgment or decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in Section 2.2(c)(iii) hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of thirty (30) days. 3 ARTICLE 3. ATTORNEY-IN-FACT; PERFORMANCE ----------------------------- Section 3.1. Secured Party Appointed Attorney-In-Fact. Upon the occurrence of an Event of Default, the Company hereby appoints the Secured Party as its attorney-in-fact, with full authority in the place and stead of the Company and in the name of the Company or otherwise, from time to time in the Secured Party's discretion to take any action and to execute any instrument which the Secured Party may reasonably deem necessary to accomplish the purposes of this Agreement, including, without limitation, to receive and collect all instruments made payable to the Company representing any payments in respect of the Pledged Property or any part thereof and to give full discharge for the same. The Secured Party may demand, collect, acknowledge, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Pledged Property as and when the Secured Party may determine. To facilitate collection, upon the occurrence of an Event of Default, the Secured Party may notify account debtors and obligors on any Pledged Property to make payments directly to the Secured Party. Section 3.2. Secured Party May Perform. If the Company fails to perform any agreement contained herein, the Secured Party, at its option, may itself perform, or cause performance of, such agreement, and the expenses of the Secured Party incurred in connection therewith shall be included in the Obligations secured hereby. ARTICLE 4. REPRESENTATIONS AND WARRANTIES ------------------------------ Section 4.1. Authorization; Enforceability. Each of the parties hereto represents and warrants that it has taken all action necessary to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby; and upon execution and delivery, this Agreement shall constitute a valid and binding obligation of the respective party, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights or by the principles governing the availability of equitable remedies. Section 4.2. Ownership of Pledged Property. The Company warrants and represents that it is the legal and beneficial owner of the Pledged Property. 4 ARTICLE 5. DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL ---------------------------------------- Section 5.1. Default and Remedies. (a) If an Event of Default described in Section 2.2(c)(i) and (ii) occurs, then in each such case the Secured Party may declare the Obligations to be due and payable immediately, by a notice in writing to the Company, and upon any such declaration, the Obligations shall become immediately due and payable. If an Event of Default described in Sections 2.2(c)(iii) or (iv) occurs and is continuing for the period set forth therein, then the Obligations shall automatically become immediately due and payable without declaration or other act on the part of the Secured Party. (b) Upon the occurrence of an Event of Default, the Secured Party shall: (i) be entitled to receive all distributions with respect to the Pledged Property, (ii) to cause the Pledged Property to be transferred into the name of the Secured Party or its nominee, (iii) to dispose of the Pledged Property, and (iv) to realize upon any and all rights in the Pledged Property then held by the Secured Party. Section 5.2. Method of Realizing Upon the Pledged Property: Other Remedies. Upon the occurrence of an Event of Default, in addition to any rights and remedies available at law or in equity, the following provisions shall govern the Secured Party's right to realize upon the Pledged Property: (a) Any item of the Pledged Property may be sold for cash or other value in any number of lots at brokers board, public auction or private sale and may be sold without demand, advertisement or notice (except that the Secured Party shall give the Company ten (10) days' prior written notice of the time and place or of the time after which a private sale may be made (the "Sale Notice")), which notice period is hereby agreed to be commercially reasonable. At any sale or sales of the Pledged Property, the Company may bid for and purchase the whole or any part of the Pledged Property and, upon compliance with the terms of such sale, may hold, exploit and dispose of the same without further accountability to the Secured Party. The Company will execute and deliver, or cause to be executed and delivered, such instruments, documents, assignments, waivers, certificates, and affidavits and supply or cause to be supplied such further information and take such further action as the Secured Party reasonably shall require in connection with any such sale. (b) Any cash being held by the Secured Party as Pledged Property and all cash proceeds received by the Secured Party in respect of, sale of, collection from, or other realization upon all or any part of the Pledged Property shall be applied as follows: (i) first, to the payment of all amounts due the Secured Party for the expenses reimbursable to it hereunder or owed to it pursuant to Section 8.3 hereof; (ii) second, to the payment of the Obligations then due and unpaid; and 5 (iii) the balance, if any, to the person or persons entitled thereto, including, without limitation, the Company. (c) In addition to all of the rights and remedies which the Secured Party may have pursuant to this Agreement, the Secured Party shall have all of the rights and remedies provided by law, including, without limitation, those under the Uniform Commercial Code. (i) If the Company fails to pay such amounts due upon the occurrence of an Event of Default which is continuing, then the Secured Party may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company and collect the monies adjudged or decreed to be payable in the manner provided by law out of the property of Company, wherever situated. (ii) The Company agrees that it shall be liable for any reasonable fees, expenses and costs incurred by the Secured Party in connection with enforcement, collection and preservation of the Transaction Documents, including, without limitation, reasonable legal fees and expenses, and such amounts shall be deemed included as Obligations secured hereby and payable as set forth in Section 8.3 hereof. Section 5.3. Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relating to the Company or the property of the Company or of such other obligor or its creditors, the Secured Party (irrespective of whether the Obligations shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Secured Party shall have made any demand on the Company for the payment of the Obligations) shall be entitled and empowered, by intervention in such proceeding or otherwise: (i) to file and prove a claim for the whole amount of the Obligations and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Secured Party (including any claim for the reasonable legal fees and expenses and other expenses paid or incurred by the Secured Party permitted hereunder and of the Secured Party allowed in such judicial proceeding), and (ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by the Secured Party to make such payments to the Secured Party and, in the event that the Secured Party shall consent to the making of such payments directed to the Secured Party, to pay to the Secured Party any amounts for expenses due it hereunder. Section 5.4. Duties Regarding Pledged Property. The Secured Party shall have no duty as to the collection or protection of the Pledged Property or any income thereon or as to the preservation of any rights pertaining thereto, beyond 6 the safe custody and reasonable care of any of the Pledged Property actually in the Secured Party's possession. ARTICLE 6. AFFIRMATIVE COVENANTS --------------------- The Company covenants and agrees that, from the date hereof and until the Obligations have been fully paid and satisfied, unless the Secured Party shall consent otherwise in writing (as provided in Section 8.4 hereof): Section 6.1. Existence, Properties, Etc. (a) The Company shall do, or cause to be done, all things, or proceed with due diligence with any actions or courses of action, that may be reasonably necessary (i) to maintain Company's due organization, valid existence and good standing under the laws of its state of incorporation, and (ii) to preserve and keep in full force and effect all qualifications, licenses and registrations in those jurisdictions in which the failure to do so could have a Material Adverse Effect (as defined below); and (b) the Company shall not do, or cause to be done, any act impairing the Company's corporate power or authority (i) to carry on the Company's business as now conducted, and (ii) to execute or deliver this Agreement or any other document delivered in connection herewith, including, without limitation, any UCC-1 Financing Statements required by the Secured Party to which it is or will be a party, or perform any of its obligations hereunder or thereunder. For purpose of this Agreement, the term "Material Adverse Effect" shall mean any material and adverse effect as determined by Secured Party in its sole good-faith discretion, whether individually or in the aggregate, upon (a) the Company's assets, business, operations, properties or condition, financial or otherwise; (b) the Company's ability to make payment as and when due of all or any part of the Obligations; or (c) the Pledged Property. Section 6.2. Financial Statements and Reports. The Company shall furnish to the Secured Party such financial data as the Secured Party may reasonably request. Without limiting the foregoing, the Company shall furnish to the Secured Party (or cause to be furnished to the Secured Party) the following: (a) as soon as practicable and in any event within ninety (90) days after the end of each fiscal year of the Company, the balance sheet of the Company as of the close of such fiscal year, the statement of earnings and retained earnings of the Company as of the close of such fiscal year, and statement of cash flows for the Company for such fiscal year, all in reasonable detail, prepared in accordance with generally accepted accounting principles consistently applied, certified by the chief executive and chief financial officers of the Company as being true and correct and accompanied by a certificate of the chief executive and chief financial officers of the Company, stating that the Company has kept, observed, performed and fulfilled each covenant, term and condition of this Agreement during such fiscal year and that no Event of Default hereunder has occurred and is continuing, or if an Event of Default has occurred and is continuing, specifying the nature of same, the period of existence of same and the action the Company proposes to take in connection therewith; 7 (b) within thirty (30) days of the end of each calendar month, a balance sheet of the Company as of the close of such month, and statement of earnings and retained earnings of the Company as of the close of such month, all in reasonable detail, and prepared substantially in accordance with generally accepted accounting principles consistently applied, certified by the chief executive and chief financial officers of the Company as being true and correct; and (c) promptly upon receipt thereof, copies of all accountants' reports and accompanying financial reports submitted to the Company by independent accountants in connection with each annual examination of the Company. Section 6.3. Accounts and Reports. The Company shall maintain a standard system of accounting in accordance with generally accepted accounting principles consistently applied and provide, at its sole expense, to the Secured Party the following: (a) as soon as available, a copy of any notice or other communication alleging any nonpayment or other material breach or default, or any foreclosure or other action respecting any material portion of its assets and properties, received respecting any of the indebtedness of the Company in excess of $15,000 (other than the Obligations), or any demand or other request for payment under any guaranty, assumption, purchase agreement or similar agreement or arrangement respecting the indebtedness or obligations of others in excess of $15,000, including any received from any person acting on behalf of the Secured Party or beneficiary thereof; and (b) within fifteen (15) days after the making of each submission or filing, a copy of any report, financial statement, notice or other document, whether periodic or otherwise, submitted to the shareholders of the Company, or submitted to or filed by the Company with any governmental authority involving or affecting (i) the Company that could have a Material Adverse Effect; (ii) the Obligations; (iii) any part of the Pledged Property; or (iv) any of the transactions contemplated in this Agreement or any other Transaction Document. Section 6.4. Maintenance of Books and Records; Inspection. The Company shall maintain its books, accounts and records in accordance with generally accepted accounting principles consistently applied, and permit the Secured Party, its officers and employees and any professionals designated by the Secured Party in writing, at any time to visit and inspect any of its properties (including but not limited to the collateral security described in the Transaction Documents), corporate books and financial records, and to discuss its accounts, affairs and finances with any employee, officer or director thereof. Section 6.5. Maintenance and Insurance. (a) The Company shall maintain or cause to be maintained, at its own expense, all of its assets and properties in good working order and condition, making all necessary repairs thereto and renewals and replacements thereof. (b) The Company shall maintain or cause to be maintained, at its own expense, insurance in form, substance and amounts (including deductibles), which the Company 8 deems reasonably necessary to the Company's business, (i) adequate to insure all assets and properties of the Company, which assets and properties are of a character usually insured by persons engaged in the same or similar business against loss or damage resulting from fire or other risks included in an extended coverage policy; (ii) against public liability and other tort claims that may be incurred by the Company; (iii) as may be required by the Transaction Documents and/or applicable law and (iv) as may be reasonably requested by Secured Party, all with adequate, financially sound and reputable insurers. Section 6.6. Contracts and Other Collateral. The Company shall perform all of its material obligations under or with respect to each instrument, receivable, contract and other intangible included in the Pledged Property to which the Company is now or hereafter will be party on a timely basis and in the manner therein required, including, without limitation, this Agreement. Section 6.7. Defense of Collateral, Etc. The Company shall defend and enforce its right, title and interest in and to any part of: (a) the Pledged Property; and (b) if not included within the Pledged Property, those assets and properties whose loss could have a Material Adverse Effect, the Company shall defend the Secured Party's right, title and interest in and to each and every part of the Pledged Property, each against all manner of claims and demands on a timely basis to the full extent permitted by applicable law. Section 6.8. Payment of Debts, Taxes, Etc. The Company shall pay, or cause to be paid, all of its indebtedness and other liabilities and perform, or cause to be performed, all of its obligations in accordance with the respective terms thereof, and pay and discharge, or cause to be paid or discharged, all taxes, assessments and other governmental charges and levies imposed upon it, upon any of its assets and properties on or before the last day on which the same may be paid without penalty, as well as pay all other lawful claims (whether for services, labor, materials, supplies or otherwise) as and when due Section 6.9. Taxes and Assessments; Tax Indemnity. The Company shall (a) file all tax returns and appropriate schedules thereto that are required to be filed under applicable law, prior to the date of delinquency, (b) pay and discharge all taxes, assessments and governmental charges or levies imposed upon the Company, upon its income and profits or upon any properties belonging to it, prior to the date on which penalties attach thereto, and (c) pay all taxes, assessments and governmental charges or levies that, if unpaid, might become a lien or charge upon any of its properties; PROVIDED, HOWEVER, that the Company in good faith may contest any such tax, assessment, governmental charge or levy described in the foregoing clauses (b) and (c) so long as appropriate reserves are maintained with respect thereto. 9 Section 6.10. Compliance with Law and Other Agreements. The Company shall maintain its business operations and property owned or used in connection therewith in compliance with (a) all applicable federal, state and local laws, regulations and ordinances governing such business operations and the use and ownership of such property, and (b) all agreements, licenses, franchises, indentures and mortgages to which the Company is a party or by which the Company or any of its properties is bound. Without limiting the foregoing, the Company shall pay all of its indebtedness promptly in accordance with the terms thereof. Section 6.11. Notice of Default. The Company shall give written notice to the Secured Party of the occurrence of any default or Event of Default under this Agreement or any other Transaction Document or any other agreement of Company for the payment of money, promptly upon the occurrence thereof. Section 6.12. Notice of Litigation. The Company shall give notice, in writing, to the Secured Party of (a) any actions, suits or proceedings wherein the amount at issue is in excess of $50,000, instituted by any persons against the Company, or affecting any of the assets of the Company, and (b) any dispute, not resolved within fifteen (15) days of the commencement thereof, between the Company on the one hand and any governmental or regulatory body on the other hand, which might reasonably be expected to have a Material Adverse Effect on the business operations or financial condition of the Company. ARTICLE 7. NEGATIVE COVENANTS ------------------ The Company covenants and agrees that, from the date hereof until the Obligations have been fully paid and satisfied, the Company shall not, unless the Secured Party shall consent otherwise in writing: Section 7.1. Indebtedness. The Company shall not directly or indirectly permit, create, incur, assume, permit to exist, increase, renew or extend on or after the date hereof any indebtedness on its part, including commitments, contingencies and credit availabilities, or apply for or offer or agree to do any of the foregoing, except in the ordinary course of business. Section 7.2. Liens and Encumbrances. Except in the ordinary course of business, the Company shall not directly or indirectly make, create, incur, assume or permit to exist any assignment, transfer, pledge, mortgage, security interest or other lien or encumbrance of any nature in, to or against any part of the Pledged Property or of the Company's capital stock, or offer or agree to do so, or own or acquire or agree to acquire any asset or property of any character subject to any of the foregoing 10 encumbrances (including any conditional sale contract or other title retention agreement), or assign, pledge or in any way transfer or encumber its right to receive any income or other distribution or proceeds from any part of the Pledged Property or the Company's capital stock; or enter into any sale-leaseback financing respecting any part of the Pledged Property as lessee, or cause or assist the inception or continuation of any of the foregoing. Section 7.3. Dividends, Etc. The Company shall not declare or pay any dividend of any kind, in cash or in property, on any class of its capital stock, nor purchase, redeem, retire or otherwise acquire for value any shares of such stock, nor make any distribution of any kind in respect thereof, nor make any return of capital to shareholders, nor make any payments in respect of any pension, profit sharing, retirement, stock option, stock bonus, incentive compensation or similar plan (except as required or permitted hereunder), without the prior written consent of the Secured Party. Section 7.4. Guaranties; Loans. The Company shall not guarantee nor be liable in any manner, whether directly or indirectly, or become contingently liable after the date of this Agreement in connection with the obligations or indebtedness of any person or persons, except for (i) the indebtedness currently secured by the liens identified on the Pledged Property identified on Exhibit A hereto and (ii) the endorsement of negotiable instruments payable to the Company for deposit or collection in the ordinary course of business. The Company shall not make any loan, advance or extension of credit to any person other than in the normal course of its business. Section 7.5. Debt. The Company shall not create, incur, assume or suffer to exist any additional indebtedness of any description whatsoever in an aggregate amount in excess of $25,000 (excluding any indebtedness of the Company to the Secured Party, trade accounts payable and accrued expenses incurred in the ordinary course of business and the endorsement of negotiable instruments payable to the Company, respectively for deposit or collection in the ordinary course of business). Section 7.6. Conduct of Business. The Company will continue to engage, in an efficient and economical manner, in a business of the same general type as conducted by it on the date of this Agreement. Section 7.7. Places of Business. The location of the Company's chief place of business is 750 Highway 34, Matawan, NJ 07747. The Company shall not change the location of its chief place of business, chief executive office or any place of business disclosed to the Secured Party or move any of the Pledged Property from its current location without thirty (30) days' prior written notice to the Secured Party in each instance. 11 ARTICLE 8. MISCELLANEOUS ------------- Section 8.1. Notices. All notices or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as duly given on: (a) the date of delivery, if delivered in person against written receipt therefor, or by nationally recognized overnight delivery service or (b) five (5) days after mailing if mailed from within the continental United States by postage pre-paid certified mail, return receipt requested to the party entitled to receive the same: If to the Secured Party: iVoice , Inc. 750 Highway 34 Matawan, NJ 07747 Attention: Jerome Mahoney Telephone: (732) 441-7700 Facsimile: (732) 441-9895 With a copy to: Meritz & Muenz LLP 2021 O Street, NW Washington, DC 20036 Attention : Lawrence A. Muenz, Esquire Telephone: (202) 728-2909 Facsimile: (202) 728-2910 And if to the Company: iVoice Technology, Inc. 750 Highway 34 Matawan, NJ 07747 Attention: Jerome Mahoney Telephone: (732) 441-7700 Facsimile: (732) 441-9895 Any party may change its address by giving notice to the other party stating its new address. Commencing on the tenth (10th) day after the giving of such notice, such newly designated address shall be such party's address for the purpose of all notices or other communications required or permitted to be given pursuant to this Agreement. Section 8.2. Severability. If any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render invalid or unenforceable any other severable provision of this Agreement, and this Agreement shall be carried out as if any such invalid or unenforceable provision were not contained herein. 12 Section 8.3. Expenses. In the event of an Event of Default, the Company will pay to the Secured Party the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel, which the Secured Party may incur in connection with: (i) the custody or preservation of, or the sale, collection from, or other realization upon, any of the Pledged Property; (ii) the exercise or enforcement of any of the rights of the Secured Party hereunder or (iii) the failure by the Company to perform or observe any of the provisions hereof. Section 8.4. Waivers, Amendments, Etc. The Secured Party's delay or failure at any time or times hereafter to require strict performance by Company of any undertakings, agreements or covenants shall not waiver, affect, or diminish any right of the Secured Party under this Agreement to demand strict compliance and performance herewith. Any waiver by the Secured Party of any Event of Default shall not waive or affect any other Event of Default, whether such Event of Default is prior or subsequent thereto and whether of the same or a different type. None of the undertakings, agreements and covenants of the Company contained in this Agreement, and no Event of Default, shall be deemed to have been waived by the Secured Party, nor may this Agreement be amended, changed or modified, unless such waiver, amendment, change or modification is evidenced by an instrument in writing specifying such waiver, amendment, change or modification and signed by the Secured Party. Section 8.5. Continuing Security Interest. This Agreement shall create a continuing security interest in the Pledged Property and shall: (i) remain in full force and effect until payment in full of the Obligations; and (ii) be binding upon the Company and its successors and heirs and (iii) inure to the benefit of the Secured Party and its successors and assigns. Upon the payment or satisfaction in full of the Obligations, the Company shall be entitled to the return, at its expense, of such of the Pledged Property as shall not have been sold in accordance with Section 5.2 hereof or otherwise applied pursuant to the terms hereof and the Secured Party shall release the Pledged Property and execute such documents as the Company may, in its sole reasonable discretion, request to evidence such release and/ or termination of the Security Interests. Section 8.6. Independent Representation. Each party hereto acknowledges and agrees that it has received or has had the opportunity to receive independent legal counsel of its own choice and that it has been sufficiently apprised of its rights and responsibilities with regard to the substance of this Agreement. Section 8.7. Applicable Law: Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New Jersey without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard in Hudson County, New Jersey, and expressly consent to the jurisdiction and venue of the Superior Court of New Jersey, sitting in Hudson 13 County and the United States District Court for the District of New Jersey sitting in Newark, New Jersey for the adjudication of any civil action asserted pursuant to this Paragraph. Section 8.8. Waiver of Jury Trial. AS A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT AND TO MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION. Section 8.9 [Intentionally omitted] Section 8.10 Entire Agreement. This Agreement constitutes the entire agreement among the parties and supersedes any prior agreement or understanding among them with respect to the subject matter hereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 14 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. COMPANY: IVOICE TECHNOLOGY, INC. By: ____________________________ Name: Jerome Mahoney Title: President and Chief Executive Officer SECURED PARTY: IVOICE, INC. By: ____________________________ Name: Jerome Mahoney Title: President and Chief Executive Officer 15 EXHIBIT A DEFINITION OF PLEDGED PROPERTY ------------------------------ For the purpose of securing prompt and complete payment and performance by the Company of all of the Obligations, the Company unconditionally and irrevocably hereby grants to the Secured Party a continuing security interest in and to, and lien upon, the following Pledged Property of the Company: (a) all goods of the Company, including, without limitation, machinery, equipment, furniture, furnishings, fixtures, signs, lights, tools, parts, supplies and motor vehicles of every kind and description, now or hereafter owned by the Company or in which the Company may have or may hereafter acquire any interest, and all replacements, additions, accessions, substitutions and proceeds thereof, arising from the sale or disposition thereof, and where applicable, the proceeds of insurance and of any tort claims involving any of the foregoing; (b) all inventory of the Company, including, but not limited to, all goods, wares, merchandise, parts, supplies, finished products, other tangible personal property, including such inventory as is temporarily out of Company's custody or possession and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing; (c) all contract rights and general intangibles of the Company, including, without limitation, goodwill, trademarks, trade styles, trade names, leasehold interests, partnership or joint venture interests, patents and patent applications, copyrights, deposit accounts whether now owned or hereafter created; (d) all documents, warehouse receipts, instruments and chattel paper of the Company whether now owned or hereafter created; (e) all accounts and other receivables, instruments or other forms of obligations and rights to payment of the Company (herein collectively referred to as "Accounts"), together with the proceeds thereof, all goods represented by such Accounts and all such goods that may be returned by the Company's customers, and all proceeds of any insurance thereon, and all guarantees, securities and liens which the Company may hold for the payment of any such Accounts including, without limitation, all rights of stoppage in transit, replevin and reclamation and as an unpaid vendor and/or lienor, all of which the Company represents and warrants will be bona fide and existing obligations of its respective customers, arising out of the sale of goods by the Company in the ordinary course of business; (f) to the extent assignable, all of the Company's rights under all present and future authorizations, permits, licenses and franchises issued or granted in connection with the operations of any of its facilities; and (g) all products and proceeds (including, without limitation, insurance proceeds) from the above-described Pledged Property. (h) all cash, cash equivalents, certificate of deposits, depository accounts, marketable securities. A-1 EX-10.4 6 exhibit10-4_15812.txt SECURED CONVERTIBLE DEBENTURE EXHIBIT 10.4 ------------ YA GLOBAL INVESTMENTS, L.P. 101 HUDSON STREET, SUITE 3700 JERSEY CITY, NJ 07302 March 5, 2008 iVoice Technology, Inc. 750 Highway Matawan, NJ 07747 Attention: Jerome Mahoney Chief Executive Officer RE: CONVERTIBLE DEBENTURE DATED MARCH 30, 2007 ("DEBENTURE") Dear Mr. Mahoney: The letter shall memorialize the agreement between YA Global Investments, L.P. ("YA Global") and iVoice Technology, Inc. (the "Company") in connection with the Debenture referenced above issued by the Company to YA Global. YA Global and the Company have agreed that on March 14, 2008 ("Redemption Date") the Company shall redeem all amounts outstanding under the Debenture except for One Hundred Eighty-six Thousand and Five Hundred Sixty-six Dollars and Seventy-seven Cents ($186,566.77) of the outstanding interest remaining on the promissory notes that were originally exchanged for the Debenture (the "Promissory Note Interest"). The amount to be redeemed on the Redemption Date shall be Six Hundred and Ninety-one Thousand and Twenty-one Dollars and Twenty-seven Cents ($691,021.27), including: (i) all accrued and unpaid interest on the Debenture through the date hereof, excluding the Promissory Note Interest and (ii) the Redemption Premium and shall be paid by wire transfer of immediately available funds in accordance with the wire instructions attached hereto. The Debenture shall be amended as follows: as of the Redemption Date, provided such redemption payment is made, the Promissory Note Interest shall be due and payable on March 14, 2009 (the "Maturity Date"), shall accrue interest at the rate of fifteen percent (15%) per year payable at the Maturity Date, and shall be convertible at the option of YA Global, in whole or in part, from time to time, at a conversion price equal to seventy percent (70%) of the lowest closing bid price of the Company's common stock during the thirty (30) trading days immediately preceding the conversion date, as quoted by Bloomberg, LP. YA Global agrees that so long as the Company's common stock continues trading on the OTC Bulletin Board and remains current with all its obligations to file reports and disclosures with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, YA Global will not make any conversions pursuant to the Debenture prior to November 1, 2008. Sincerely, YA GLOBAL INVESTMENTS, L.P. BY: YORKVILLE ADVISORS, LLC ITS: GENERAL PARTNER By: _________________________ Name: Mark Angelo Agreed and accepted IVOICE TECHNOLOGY, INC. By: ____________________________ Name: Jerome Mahoney Title: President and Chief Executive Officer WIRE INSTRUCTIONS: YA Global Investments, L.P.-Wiring Instructions- - ------------------------------------------------ BANK NAME: Wachovia Bank Downtown Financial Center 101 Hudson Street, NJ1022 Jersey City NJ 07302 Telephone# 201-413-6607 ABA/ROUTING# 031 201 467 ACCOUNT# 2000018639380 ACCOUNT NAME: YA Global Investments, L.P. SWIFT CODE: PNBPUS33 - for international wires Outstanding Balance as of March 14, 2008 Total Principal $ 572,815.00 Redemption Premium $ 85,922.25 Total Interest - on debenture $ 32,284.02 ------------ $ 691,021.27 ------------ -----END PRIVACY-ENHANCED MESSAGE-----