Exhibit 4.5
SMART ONLINE, INC.
SECOND AMENDMENT AND AGREEMENT TO JOIN AS A PARTY TO
CONVERTIBLE SECURED SUBORDINATED NOTE PURCHASE AGREEMENT AND
REGISTRATION RIGHTS AGREEMENT
THIS SECOND AMENDMENT AND AGREEMENT TO JOIN AS A PARTY TO CONVERTIBLE
SECURED SUBORDINATED NOTE PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT
(this "Agreement") is entered into this 21st day of November 2008, by and among
Smart Online, Inc., a Delaware corporation (the "Company"), and each of the
undersigned holders (the "Holders," and individually, a "Holder") of Secured
Subordinated Convertible Promissory Notes (the "Notes") issued pursuant to that
certain Convertible Secured Subordinated Note Purchase Agreement dated as of
November 14, 2007, by and among the Company and the Investors referenced on
Schedule A attached thereto, as amended on August 12, 2008 (as amended, the
"Original Purchase Agreement") and certain additional purchasers of the Notes
(the "New Investors" and individually, a "New Investor"). Capitalized terms used
but not defined herein shall have the meanings assigned to them in the Original
Purchase Agreement.
RECITALS
WHEREAS, in connection with the sale of the Notes, the Company entered
into the Original Purchase Agreement with the Investors named therein, the
Registration Rights Agreement dated as of November 14, 2007 with the Investors
named therein (the "Registration Rights Agreement") and a Security Agreement
dated as of November 14, 2007 with Doron Roethler as collateral agent for the
holders of the Notes (the "Security Agreement");
WHEREAS, the Company and the Holders desire to amend the Original
Purchase Agreement and the Registration Rights Agreement to permit the Company
to sell Additional Notes to the New Investors in a Subsequent Closing;
WHEREAS, each New Investor desires to join as a party to the Original
Purchase Agreement, and the Registration Rights Agreement in connection with its
purchase of Additional Notes in the principal amount set forth opposite the New
Investor's name on Exhibit A hereto;
WHEREAS, Section 9(a) of the Original Purchase Agreement provides that
any provision of the Agreement may be amended with the written consent of the
Company and the Investors named therein holding at least a majority of the
aggregate outstanding principal amount of the Notes;
WHEREAS, Section 3.6 of the Registration Rights Agreement provides that
any provision of the Registration Rights Agreement may be amended with the
written consent of the Company and the Investors named therein holding at least
a majority of the aggregate outstanding principal amount of the Notes.
WHEREAS, the Holders constitute a majority of the aggregate outstanding
principal amount of the Notes necessary to amend the provisions of the Original
Purchase Agreement and the Registration Rights Agreement.
NOW, THEREFORE, in consideration of the promises and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Amendments to Original Purchase Agreement.
(a) The terms "Investor" and "Investors" referenced in the
Original Purchase Agreement shall be amended to include each of the New
Investors and the terms "Note" or "Notes" shall be amended to include each of
the Additional Notes purchased by the New Investors.
(b) Schedule 1 to the Original Purchase Agreement shall be
amended to include the schedule set forth in Exhibit A hereto
2. Amendment to Registration Rights Agreement. The terms "Investor" and
"Investors" referenced in the Registration Rights Agreement shall be amended to
include each of the New Investors and the terms "Note" or "Notes" shall be
amended to include each of the Additional Notes purchased by the New Investors.
3. Acknowledgement and Joinder. Each New Investor hereby acknowledges
that it has received a copy of the Original Purchase Agreement, the Security
Agreement and the Registration Rights Agreement and has had the opportunity to
review the terms thereof. Each New Investor hereby joins as a party and agrees
to be bound by the terms and conditions of the Original Purchase Agreement, as
hereby amended, and the Registration Rights Agreement, as hereby amended, on the
date hereof. Each New Investor further acknowledges and agrees that pursuant to
the Original Purchase Agreement and the Security Agreement, Doron Roethler is
appointed as the agent for the Investors, including the New Investors, with
respect to the matters set forth therein.
4. Consent of the Company and the Holders. The Company and the Holders
hereby consent to the New Investors joining as a party to the Original Purchase
Agreement, as hereby amended, and the Registration Rights Agreement, as hereby
amended, to the addition of the name of the New Investors to the applicable
exhibit or schedule to such agreements and to the distribution of such
applicable exhibit or schedule, as amended, to the other parties to such
agreements.
5. Representations and Warranties of the New Investors. Each New
Investor hereby confirms that each representation and warranty contained in
Section 3 of the Original Purchase Agreement, as hereby amended, is true in all
respects on and as of the date of this Agreement as though such representations
and warranties were made by such New Investor on and as of the date hereof. Each
New Investor further confirms that all agreements and conditions contained in
the Original Purchase Agreement, as hereby amended, that are required to be
performed or complied with by such New Investor on or before the date hereof
have been performed and complied with in all material respects as of the date
hereof.
6. Ratification. Except as specifically amended pursuant to this
Agreement, each of the Original Purchase Agreement and the Registration Rights
Agreement remains in full force and effect in accordance with its terms.
7. Validity. The parties agree that this Agreement is entered into in
accordance with Section 9(a) of the Original Purchase Agreement and Section 3.6
of the Registration Rights Agreement.
8. Governing Law. This Agreement and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflicts of laws
or choice of law provisions thereof.
9. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their heirs, successors and
assigns.
11. Effectiveness of Agreement. This Agreement shall become effective
upon the receipt by the Company of the funds set forth on Exhibit A under the
caption "2nd Subsequent Closing Note Principal Amount."
[Signature page to follow]
[Signature Page to Second Amendment and Agreement to Join as a Party to
Convertible Secured Subordinated Note Purchase Agreement and
Registration Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Second Amendment and
Agreement to Join as a Party to Convertible Secured Subordinated Note Purchase
Agreement and Registration Rights Agreement as of the date first above written.
COMPANY: SMART ONLINE, INC.
By: /s/ David E. Colburn
---------------------------
Name: David E. Colburn
Title: President/CEO
[Signature Page to Second Amendment and Agreement to Join as a Party to
Convertible Secured Subordinated Note Purchase Agreement and
Registration Rights Agreement]
HSBC PRIVATE BANK (SUISSE) SA
By: /s/ Francois de Szy
---------------------------
Name: Francois de Szy
Title: Associate
By: /s/ Giorgio Gagliani
---------------------------
Name: Giorgio Gagliani
Title: Associate
[Signature Page to Second Amendment and Agreement to Join as a Party to
Convertible Secured Subordinated Note Purchase Agreement and
Registration Rights Agreement]
UBP, UNION BANCAIRE PRIVEE
By: /s/ Malgioglio /s/ F. Rossi
--------------------------------
Name: S. Malgioglio F. Rossi
Title: Associate
EXISTING HOLDERS: CRYSTAL MANAGEMENT LTD.
By: /s/ Doron Roethler
---------------------------
Name: Doron Roethler
Title: Beneficial Owner
ATLAS CAPITAL S.A.
By: /s/ Avy Lugassy
---------------------------
Name: Avy Lugassy
Title:
WILLIAM FURR
/s/ William Furr
------------------------------------
THE BLUELINE FUND
By: /s/ Ph. Pouponnot
---------------------------
Name: Ph. Pouponnot
Title:
Exhibit A
SCHEDULE I
Schedule of Investors
Subsequent Closing Held on November 21, 2008
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INVESTOR'S NAME AND ADDRESS 2nd Subsequent Closing
Note Principal Amount
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HSBC Private Bank (Suisse) SA US$250,000
Corporate Actions Department (TITCC)
Montbrillant Business Center
PO Box 3580
CH. 1211 Geneva 3
Switzerland
Fax: + 41 (0)58 705 52 50
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Exhibit A
SCHEDULE I
Schedule of Investors
Subsequent Closing Held on November 21, 2008
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INVESTOR'S NAME AND ADDRESS 2nd Subsequent Closing
Note Principal Amount
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UBP, Union Bancaire Privee US$250,000
96-98, rue du Rhone
Case postale 1320
CH-1211 Geneve 1
Switzerland
Fax: 41 588 193 686
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