AMENDMENT TO SECURITIES PURCHASE AGREEMENT
Exhibit 2
AMENDMENT TO
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT
THIS
AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “Amendment”) is dated as of November
11, 2005 by and among Ace*Comm Corporation, a Maryland corporation (the “Company”) and each of the
purchasers listed on Exhibit 1 attached hereto and made a part hereof (each a “Purchaser”
and collectively, the “Purchasers”).
Recitals
A. The Company previously sold the Securities to the Purchasers in a transaction completed on
April 1, 2005 (the “Original Transaction”) pursuant to the provisions of a Securities Purchase
Agreement dated as of March 31, 2005 (the “Purchase Agreement”).
B. The Company and the Purchasers desire to undo the portions of the Original Transaction
relating to the Warrant-B and the Warrant-C by canceling each Warrant-B (including the Warrant-C
underlying each Warrant-B) issued under the Purchase Agreement (the “Original Warrant-B”) and enter
into a new transaction (the “New Transaction”) by the Company issuing a new Warrant-B to each
Purchaser pursuant to the terms of this Amendment.
C. The Purchasers are executing this Amendment in order to effect such changes to the Original
Transaction and make related changes to the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt, adequacy, and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Defined Terms. Capitalized terms used in this Amendment but not otherwise defined
herein shall have the respective meanings given to such terms in the Purchase Agreement.
2. Amendments to Purchase Agreement. The Purchase Agreement is hereby amended as
follows:
(a) The defined term “Warrant-C” is hereby deleted in its entirety from Section 1.1 of the
Purchase Agreement, and all references to Warrant-C are hereby deleted from the Purchase Agreement.
(b) The defined terms “Unit” and “Warrants” under Section 1.1 of the Purchase Agreement are
hereby amended and restated in their entirety to read as follows:
“Unit” means one Share, a Warrant-A to acquire 0.50 shares of common stock
and a Warrant-B to acquire 1.9 shares of Common Stock.
“Warrants” means, collectively, each Warrant-A and each Warrant-B issued and
sold under this Agreement.
(c) Section 2.2(a)(ii) of the Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
“a Warrant-B, registered in the name of such Purchaser, pursuant to which
such Purchaser shall have the right to acquire such number of Underlying
Shares indicated below such Purchaser’s name on the signature page of this
Agreement under the heading “Warrant-B Shares” on the terms set forth
therein;”
(d) Clause (y) of Section 6.1(d) is hereby amended and restated in its entirety to read as
follows:
“(y) on each monthly anniversary of each such Event Date thereof (if the
applicable Event shall not have been cured by such date) up to and including
the nine-month anniversary of the Event Date, the Company shall pay to each
Purchaser an amount in cash, as partial liquidated damages and not as a
penalty, equal to 1% of the aggregate purchase price paid by such Purchaser
pursuant to the Purchase Agreement, but not exceeding in the aggregate 9% of
the aggregate purchase price paid by all Purchasers.”
(e) The Original Warrant-B attached as Exhibit B to the Purchase Agreement is hereby deleted
in its entirety and a new Warrant-B in the form attached as Exhibit 2 hereto is hereby
added as a new Exhibit B to the Purchase Agreement.
(f) The Warrant-C attached as Exhibit C to the Purchase Agreement is hereby deleted in its
entirety.
3. Closing. The closing of the transactions contemplated by this Amendment (the
“Closing”) shall take place at the offices of Proskauer Rose LLP on the date hereof, or at such
other location, date and time as may be agreed upon between the Purchasers and the Company (the
“Closing Date”).
4. Closing Deliveries.
(a) At the Closing, the Company shall deliver or cause to be delivered to each Purchaser the
following:
(i) a Warrant-B, registered in the name of such Purchaser as set forth on Exhibit 1 to
this Amendment, pursuant to which such Purchaser shall have the right to acquire such number of
Underlying Shares indicated opposite such Purchaser’s name as set forth on Exhibit 1;
and
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(ii) a legal opinion of Company Counsel, executed by such counsel and delivered to the
Purchasers.
(b) At the Closing, each Purchaser shall surrender the Original Warrant-B issued to such
Purchaser to the Company for cancellation. The parties agree that even if a Purchaser fails to
surrender the Original Warrant-B issued to such Purchaser to the Company under this paragraph, that
such Original Warrant-B shall be deemed cancelled and of no further force and effect upon the
issuance to such Purchaser of a new Warrant-B under Section 4(a)(i) above.
6. Registration.
(a) The parties acknowledge that pursuant to the Purchase Agreement, the Company filed with
the Commission a registration statement on Form S-3 on April 26, 2005, for the resale of
Registrable Securities (the “April Registration Statement”), but despite efforts by the Company to
cause the April Registration Statement to be declared effective by the Commission, the Commission
advised the Company that it will not declare the April Registration Statement effective. Each
party further acknowledges that following discussions with the Commission and the Purchasers about
canceling the Original Warrant-B and issuing a new Warrant-B, the Company has withdrawn the April
Registration Statement from filing with the Commission. Each Purchaser understands that it was
necessary to withdraw the April Registration Statement to complete the New Transaction without
drawing further objection from the Commission. The Company and each Purchaser acknowledge and
agree that no liquidated damages are due and owing under Section 6.1(d) of the Purchase Agreement
with respect to the failure to cause the April Registration Statement to be declared effective by
the Commission.
(b) The Company agrees that it will file a new registration statement on Form S-3 (the “New
Registration Statement”) for the resale of Registrable Securities within three (3) business days of
the Closing. The provisions under Article VI of the Purchase Agreement relating to effectiveness
of a filed Registration Statement shall also relate to the New Registration Statement, and from and
after the date hereof the term “Effective Date” shall be deemed to refer to the effective date of
the New Registration Statement. The parties further acknowledge and agree that:
(i) for purposes of Section 6.1(d) and other applicable sections of the Purchase Agreement,
the date upon which the Company first knows, or reasonably should have known, that the New
Registration Statement is required to be filed shall be the Closing Date hereunder, so that
liquidated damages shall be due and owing under Section 6.1(d)(iii) of the Purchase Agreement if
the New Registration Statement is not declared effective within sixty (60) days of the Closing Date
hereunder; and
(ii) notwithstanding the provisions of Section 6.1(d) and other sections of the Purchase
Agreement applicable to the New Registration Statement, no liquidated damages shall be due and
owing due to delays arising from comments from the Commission relating to the accounting treatment
of the transaction contemplated under the Purchase Agreement.
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7. Consent and Waiver. For purposes of Section 7.5 and other applicable provisions of
the Purchase Agreement, each of the undersigned Purchasers hereby consents to the amendment of the
Purchase Agreement as set forth in this Amendment. Each of the undersigned Purchasers hereby
waives the restrictions contained in Section 6.1(e) of the Purchase Agreement with respect to the
registration statement filed by the Company on October 14, 2005 for the resale registration of
common stock the Company issued to a third party as partial consideration for a software license
under a software license agreement dated May 31, 2005. Except as expressly set forth herein, this
Amendment shall not be deemed to be a waiver, amendment or modification of any provisions of the
Purchase Agreement or of any right, power or remedy of the Purchasers, or constitute a waiver of
any provision of the Purchase Agreement (except to the extent herein set forth), or any other
document, instrument and/or agreement executed or delivered in connection therewith, in each case
whether arising before or after the date hereof or as a result of performance hereunder or
thereunder. Except as set forth herein, the Purchasers reserve all rights, remedies, powers, or
privileges.
8. Full Force and Effect. Except as specifically amended by this Amendment, the terms
of the Purchase Agreement shall remain unmodified and in full force and effect.
9. Counterparts. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute but one and the same
instrument.
10. Governing Law. This Amendment shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to its conflicts of laws
provisions.
11. Entire Agreement; Amendment; Waiver. This Amendment, together with all exhibits
hereto, contains the entire understanding and agreement among the parties hereto with respect to
the subject matter hereof, and supersedes all prior discussions and understandings (whether oral or
written) between them with respect thereto. No amendment to, or modification or waiver of, any of
the terms of this Amendment shall be valid unless in writing signed by the party against whom
enforcement of such amendment, modification or waiver is sought.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of
the date first above written.
| Company: Ace*Comm Corporation |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President and Chief Financial Officer | |||
[Additional Signature Pages Follow]
Signature Page to Amendment to
Securities Purchase Agreement
Securities Purchase Agreement
| PURCHASER: IROQUOIS CAPITAL LP |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Purchase Price | $[ ] | |||
| Units Purchased: | [ ] | |||
Warrant-A Shares: |
[ ] | |||
Warrants-B Shares: |
[ ] | |||
| PURCHASER: [ ] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Purchase Price | $[ ] | |||
| Units Purchased: | [ ] | |||
| Warrant-A Shares: | [ ] | |||
| Warrants-B Shares: | [ ] | |||
Exhibit 1
Schedule of Purchasers
| Fund | Dollar Amount | Units Purchased | Warrant A Shares | Warrant B Shares | Total Shares | |||||||||||||||
Bluegrass Growth Fund,
L.P. |
$ | 125,000.00 | 50,000 | 25,000 | 95,000 | 170,000 | ||||||||||||||
Bluegrass Growth Fund,
Ltd. |
$ | 125,000.00 | 50,000 | 25,000 | 95,000 | 170,000 | ||||||||||||||
Nite Capital LP |
$ | 300,000.00 | 120,000 | 60,000 | 228,000 | 408,000 | ||||||||||||||
DKR SoundShore Oasis
Holding Fund Ltd. |
$ | 250,000.00 | 100,000 | 50,000 | 190,000 | 340,000 | ||||||||||||||
Enable Growth Partners LP |
$ | 300,000.00 | 120,000 | 60,000 | 228,000 | 408,000 | ||||||||||||||
Omicron Master Trust |
$ | 250,000.00 | 100,000 | 50,000 | 190,000 | 340,000 | ||||||||||||||
Smithfield Fiduciary LLC |
$ | 250,000.00 | 100,000 | 50,000 | 190,000 | 340,000 | ||||||||||||||
Harborview Master Fund LP |
$ | 200,000.00 | 80,000 | 40,000 | 152,000 | 272,000 | ||||||||||||||
Iroquois Capital LP |
$ | 700,000.00 | 280,000 | 140,000 | 532,000 | 952,000 | ||||||||||||||
TOTAL |
$ | 2,500,000.00 | 1,000,000 | 500,000 | 1,900,000 | 3,400,000 | ||||||||||||||
