Exhibit 4.3
AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT
Amendment No. 1 to Securities Purchase Agreement (this "Amendment") dated
and effective as of June 4, 2002, among SmartServ Online, Inc., a Delaware
corporation (the "Company"), and the purchasers identified on the signature page
hereto (each a "Purchaser" and collectively the "Purchasers").
WHEREAS the Company and the Purchasers are party to the Securities Purchase
Agreement, dated May 20, 2002 (the "Purchase Agreement");
WHEREAS the parties now desire to amend certain provisions of the Purchase
Agreement.
NOW, THEREFORE, in consideration of mutual covenants and agreements set
forth below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Capitalized terms not defined herein that are defined in the Purchase
Agreement shall have the meanings set forth in the Purchase Agreement.
2. Unless otherwise expressly amended herein, all of the terms, conditions
and provisions of the Purchase Agreement and the Transaction Documents shall
remain in full force and effect unaffected by this Amendment.
3. The definition of "Per Share Price" in Section 1.1 of the Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"Per Share Price" equals $1.40."
4. Section 2.4 of the Purchase Agreement is hereby deleted in its entirety
and replaced with the following:
"2.4 Conditions to Closing. The obligation of the Purchasers to acquire
Securities and to perform at the Closing is subject to the satisfaction (or
waiver by each Purchaser) of the following conditions: (i) the Nasdaq National
Market shall have confirmed that the transaction as contemplated in the
Transaction Documents does not violate Rule 4350 under the Rules of The Nasdaq
Stock Market and no changes or amendments are required to such Transaction
Documents for such purpose, (ii) the Nasdaq Stock Market shall have waived any
requirement that the Company provide a listing application for the Shares and
Warrant Shares prior to Closing, (iii) the Common Stock shall have been listed
for trading on the Nasdaq National Market at all times from the Execution Date
through the Closing Date, (iv) the Company shall have provided the Purchasers
with each of the items listed in Section 2.3(a), and (v) the representations and
warranties of the Company set forth herein shall be true and correct on and as
of the Closing Date as if first given on the Closing Date."
5. Section 2.5 of the Purchase Agreement is hereby deleted in its entirety
and replaced with the following:
"2.5 Termination by Purchasers. A Purchaser may terminate its obligations
under this Agreement by notice to the Company if the Closing does not occur by
June 6, 2002."
6. The following shall be added to Section 3.1 of the Purchase Agreement:
"(x) The Company confirms, represents and warrants that the Nasdaq
Stock Market has confirmed that the transaction as contemplated by the
Transaction Documents does not violate the shareholder approval rule of The
Nasdaq Stock Market and no changes or amendments are required to the
Transaction."
7. Section 5.1 of the Purchase Agreement is hereby deleted in its entirety
and replaced with the following:
"5.1 Fees and Expenses. The Company will reimburse the following sums
at Closing (a) $25,000 to each Purchaser for such Purchaser's due diligence and
related expenses incurred in connection with the transactions contemplated
hereby and (b) $30,000 in the aggregate to the Purchasers on account of the
Purchaser's Counsel's fees incurred to prepare and negotiate the Transaction
Documents. At the Closing, such payments will be withheld from the Investment
Amount payable to the Company by the Purchasers. In addition, on the earlier to
occur of (1) the six month anniversary of the Closing Date and (2) the date of
the Call Notice (as defined in the Callable Warrant), the Company shall
reimburse each Purchaser an additional $25,000. The parties agree that each
Purchaser may offset such unpaid amount from the Exercise Price (if any) (as
defined in the Callable Warrant) payable by such Purchaser on the Call Date (as
defined in the Callable Warrant). Except as specified in the immediately
preceding sentence and as contemplated in the Registration Rights Agreement,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. The Company shall pay all stamp and other taxes and duties
levied in connection with the sale of the Securities".
8. The Investment Amount of each of the Purchasers on the signatory pages
to the Purchase Agreement shall be deleted and replaced with the following:
"$550,000.00."
9. The form of Non-Callable Warrant referenced as Exhibit C to the Purchase
Agreement is hereby deleted in its entirety and replaced with Exhibit C attached
to this Amendment. The form of Callable Warrant referenced as Exhibit D to the
Purchase Agreement is hereby deleted in its entirety and replaced with Exhibit D
attached to this Amendment.
10. The following shall be added to the end of Section 2(c) of the
Registration Rights Agreement:
"In furtherance of the forgoing, the Company shall file an additional
Registration Statement under this Section not later than the 30th day following
the "Expiration Date" under the Callable Warrants in order to register the
resale by the holders thereof of the shares of Common Stock issuable upon
exercise any Non-Callable Warrants issuable to the holders upon the exercise of
the Callable Warrants."
11. Section 2(b) of the Registration Rights Agreement is hereby deleted in
its entirety and replaced with the following:
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"(b) If: (a) a Registration Statement is not filed on or prior to the 15th
day following its Filing Date (if the Company files a Registration Statement
without affording the Holder the opportunity to review and comment on the same
as required by Section 3(a), the Company shall not be deemed to have satisfied
clause (a)), or (b) the Company fails to file with the Commission a request for
acceleration in accordance with Rule 461 promulgated under the Securities Act,
within five Trading Days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the Commission that a Registration Statement
will not be "reviewed," or not subject to further review, or (c) prior to the
Effective Date, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the Commission in respect of
such Registration Statement within fifteen Trading Days after the receipt of
comments by or notice from the Commission that such amendment is required in
order for a Registration Statement to be declared effective, or (d) a
Registration Statement filed or required to be filed hereunder is not declared
effective by the Commission by its Effectiveness Date, or (e) after the
Effective Date, a Registration Statement ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is required
to be effective, or the Holders are not permitted to utilize the Prospectus
therein to resell such Registrable Securities, for in any such cases an
aggregate of twenty Trading Days (which need not be consecutive Trading Days)
(any such failure or breach being referred to as an "Event," and for purposes of
clause (a) or (d) the date on which such Event occurs, or for purposes of clause
(b) the date on which such five Trading Day period is exceeded, or for purposes
of clauses (c) the date which such fifteen Trading Day period is exceeded, or
for purposes of clause (e) the date on which such twenty Trading Day period is
exceeded being referred to as "Event Date"), then in addition to any other
rights the Holders may have hereunder or applicable law: (x) on each such Event
Date the Company shall pay to each Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 1.5% of the aggregate Investment Amount
paid by such Holder pursuant to the Purchase Agreement; and (y) on each monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay
to each Holder an amount in cash, as liquidated damages and not as a penalty,
equal to 3% of the aggregate Investment Amount paid by such Holder pursuant to
the Purchase Agreement. If the Company fails to pay any liquidated damages
pursuant to this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 12% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such liquidated damages are due until such amounts,
plus all such interest thereon, are paid in full."
* * * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
SMARTSERV ONLINE, INC.
By: /s/ Thomas W. Haller
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Thomas W. Haller
SVP & Chief Financial Officer
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
VERTICAL VENTURES INVESTMENTS, LLC
By: /s/ Josh Silverman
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Josh Silverman
Manager
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
BONANZA MASTER FUND, LTD.
By: /s/ Brian Ladin
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Brian Ladin
Managing Director
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