EXHIBIT 4.1(b)
Agreement of Amendment and Modification
Agreement of Amendment and Modification made as of September 29, 1998,
by and among ObjectSoft Corporation, a Delaware corporation (the "Company"),
Avalon Capital, Inc., Austost Anstalt ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Funds, S.A. (collectively
referred to as the "Investors"), Settondown Capital International, Ltd. (the
"Placement Agent"), and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLP (the "Escrow Agent").
Capitalized terms used herein and not otherwise defined herein shall
have the meanings given to them in the Private Equity Line of Credit Agreement
dated as of May 13, 1998 by and among the Company, Investors and the Placement
Agent (the "Equity Line Agreement").
Witnesseth:
WHEREAS, the Company and the Investors executed the Equity Line
Agreement pursuant to which the Investors (i) purchased an aggregate of $900,000
principal amount of Common Stock of the Company on the Subscription Date, (ii)
agreed to purchase up to an aggregate of $1,200,000 aggregate principal amount
of Preferred Stock of the Company in two separate tranches, and (iii) subject to
conditions contained therein, agreed to purchase an aggregate value of
$5,000,000 in Put Shares;
WHEREAS, the Company, the Investors and the Placement Agent entered
into a Registration Rights Agreement dated as of May 13, 1998 (the "Registration
Rights Agreement");
WHEREAS, the Company, the Investors, the Placement Agent, and the
Escrow Agent, entered into a Escrow Agreement dated as of May 13, 1998 (the
"Escrow Agreement", and together with the Equity Line Agreement and the
Registration Rights Agreement are hereinafter referred to as the "Transaction
Agreements"); and
WHEREAS, the Company, the Investors and the Placement Agent wish to
amend the Equity Line Agreement and the Registration Rights Agreement, and the
Company, the Investors, the Placement Agent, and the Escrow Agent wish to amend
the Escrow Agreement.
Now, therefore, in consideration of the mutual covenants, conditions
and promises contained herein, the parties agrees as follows:
1. Sections 1.16, 1.39, and 1.43 of the Equity Line Agreement are hereby
deleted.
2. Section 1.41 of the Equity Line Agreement is hereby deleted and replaced
with the following:
"Section 1.41 "Reset Price" shall mean eighty (80%) percent of the
Bid Price on the Trading Day immediately preceding the Effective Date."
3. Section 1.35 of the Equity Line Agreement is hereby amended to delete any
reference to Repricing Shares.
4. All references in the Transaction Documents to the Repricing Shares is
hereby deleted.
5. Section 2.8 (c) of the Equity Line Agreement is hereby deleted.
6. Sections 2.9 (a), (b), and (c) of the Equity Line Agreement is hereby
deleted and replaced with the following:
"Section 2.9 Repricing. Within five trading days after the Effective
Date the Company agrees to pay to the Investors and the Placement Agent
in cash the dollar amount equal to the product of (x) that number of
additional shares of Common Stock (if any) resulting from the deficiency
between that number of Initial Shares (including those issued to the
Placement Agent) which would have been issued had the Reset Price been
utilized as the Purchase Price for the Initial Shares, and the Initial
Shares (including those issued to the Placement Agent) actually issued on
the Subscription Date multiplied by (y) the average of the Reset Price
and the Bid Price on the trading Day immediately preceding the Effective
Date."
7. The following portions of Section 2.11 of the Equity Line Agreement are
hereby deleted and replaced with the following:
"Section 2.11 Preferred Stock. The Company agrees to sell and the
Investors agree to purchase up to an aggregate principal amount of One
Million Two Hundred Thousand ($1,200,000) Dollars principal amount of
Preferred Stock in two separate tranches as set forth in (a) and (b)
below. The number of shares of Common Stock issuable upon conversion of
the Preferred Stock shall be determined by dividing $1,200,000 by the
conversion formula contained in the Certificate of Designation."
"(a) First Tranche. The Investors shall purchase (pro rata) an
aggregate principal amount of Nine Hundred Thousand ($900,000) Dollars
(the "First Tranche Investment Amount") principal amount of Preferred
Stock, on the fifth trading day following the effective date of a
Registration Statement covering the Underlying Shares, upon the
satisfaction of the following conditions:"
"(ii) delivery into escrow by the Company of an aggregate
principal amount of Nine Hundred Thousand ($900,000) Dollars of original
Preferred Stock, as more fully set forth in the Escrow Agreement attached
hereto as Exhibit F;"
"(v) the Investors shall have received written proof that
the Registration
Statement (which includes all Underlying Shares) has become effective and
is effective during the three Trading Days immediately prior to the
Closing Date for the first tranche, and (A) neither the Company nor any
of the Investors shall have received notice that the SEC has issued or
intends to issue a stop order with respect to the Registration Statement
or that the SEC otherwise has suspended or withdrawn the effectiveness of
the Registration Statement, either temporarily or permanently, or intends
or has threatened to do so (unless the SEC's concerns have been addressed
and the Investors are reasonably satisfied that the SEC no longer is
considering or intends to take such action), and (B) no other suspension
of the use or withdrawal of the effectiveness of the Registration
Statement or related prospectus shall exist;"
"(b) Second Tranche. The Investors shall purchase (pro rata)
an aggregate principal amount of Three Hundred Thousand ($300,000)
Dollars (the "Second Tranche Investment Amount") principal amount of
Preferred Stock, on the thirtieth (30th) day following the effective date
of a Registration Statement covering the Underlying Shares, upon the
satisfaction of the following conditions:"
"(ii) delivery into escrow by the Company of an aggregate
principal amount of Three Hundred Thousand ($300,000) Dollars of original
Preferred Stock, as more fully set forth in the Escrow Agreement attached
hereto as Exhibit F;"
"(v) the Investors shall have received written proof that the
Registration Statement (which includes all Underlying Shares) has
previously become effective and remains effective for at least 30 days
and is effective during the three Trading Days immediately prior to the
Closing Date for the second tranche, and (A) neither the Company nor any
of the Investors shall have received notice that the SEC has issued or
intends to issue a stop order with respect to the Registration Statement
or that the SEC otherwise has suspended or withdrawn the effectiveness of
the Registration Statement, either temporarily or permanently, or intends
or has threatened to do so (unless the SEC's concerns have been addressed
and the Investors are reasonably satisfied that the SEC no longer is
considering or intends to take such action), and (B) no other suspension
of the use or withdrawal of the effectiveness of the Registration
Statement or related prospectus shall exist;"
8. The last paragraph of Section 2.11 of the Equity Line Agreement is hereby
deleted and replaced by the following:
"(c) In no event shall the Investors be obligated to purchase any
shares of Preferred Stock if a Registration Statement including the
Underlying Shares, is not declared effective prior to eighteen (18)
months after the Subscription Date. Notwithstanding Sections 2.11 (a) and
(b) herein, the Company may, at its option, terminate the second tranche
as set forth in Section 2.11 (b), by giving written notice to the
Placement Agent and each of the Investors at any time prior to twenty
five (25) days after the effective date of a Registration Statement
covering the Underlying Shares. The Preferred Stock shall be convertible
pursuant to the terms and conditions of the Certificate of Designation."
9. The Transaction Documents shall be modified throughout to reflect that there
is not a "first tranche" and "second tranche", but rather a "Closing for the
Preferred Stock", and that there is not a First and Second Repricing Date, but
rather one "Repricing Date."
10. The Company shall not be obligated to include the Put Shares in the
Registration Statement, but the Put Shares must be included in a registration
statement that has been declared effective by the SEC prior to the Company
serving a Put, and the conditions contained in Section 7.2 of the Equity Line
Agreement shall remain in full force and effect.
11. The remaining Articles of the Escrow Agreement, and the remaining Sections
of the Equity Line Agreement and Registration Rights Agreement are hereby
renumbered sequentially to reflect the aforementioned deletions.
12. The Company agrees tp pay the Repricing Payment to the Investors, out of the
net proceeds of the first tranche of the Preferred Stock. The Escrow Agreement
shall be amended to reflect that the Company agrees to send to the Escrow Agent
a Net Letter instructing the Escrow Agent to disburse to the Investors pro rata,
out of the net proceeds of the first tranche of Preferred Stock held in escrow
by the Escrow Agent, the Repricing Payment period.
13. Section 13.7 of the Equity Line Agreement shall be amended to reflect that
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLP. is to receive $9,000 out of the proceeds of
the first tranche of Preferred Stock.
14. The deleted sections and articles of the Escrow Agreement, Equity Line
Agreement and Registration Rights Agreement shall be titled "Intentionally
Omitted."
15. Except for the provisions of this Agreement of Amendment and Modification,
all of the terms, conditions, and covenants of the Transaction Agreements
(including all Exhibits annexed thereto) shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement of Amendment and Modification as of the date first set forth above.
OBJECTSOFT CORPORATION
By /s/ ▇▇▇▇▇ E.Y. Syrna
SETTONDOWN CAPITAL INTER-
NATIONAL LTD.
Placement Agent
By /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇
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AVALON CAPITAL, INC.
Investor
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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AUSTOST ANSTALT ▇▇▇▇▇▇
Investor
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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BALMORE FUNDS S.A.
Investor
By /s/ Francois Morax
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLP,
Escrow Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
