AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
Exhibit
10.40
AMENDMENT
TO REGISTRATION RIGHTS AGREEMENT
THIS
AMENDMENT, dated as of the latter of the two dates set forth under the
signatures below (the “Amendment”), to the Registration Rights Agreement,
effective _________ ____, 2005 (the “Agreement”), is by and between Smart
Online, Inc., a Delaware corporation (the “Company”) and the undersigned
(together with its affiliates, successors, assigns, or transferees of its
rights
under the Agreement or this Amendment, the “Investor”).
WHEREAS,
the Company and the Investor previously entered into the Agreement in connection
with the Subscription Agreement with the Company for the purchase of a certain
number of shares of the Company’s common stock (the “Shares”), and
WHEREAS,
the Agreement provides that, inter
alia,
the
Company is required to pay a certain penalty each month to the Investor if
the
Shares have not been registered for resale with the Securities and Exchange
Commission (“SEC”) by a certain date (the “Penalty”), and
WHEREAS,
the Company and the Investor wish to amend the Agreement to settle the amount
of
the Penalty owed to the Investor as calculated under the Agreement.
NOW
THEREFORE, in consideration of the mutual promises and covenants set forth
in
the Agreement and the Amendment, the receipt and sufficiency of which are
hereby
acknowledged, the Company and the Investor agree as follows:
1. Section
2(b) of the Agreement is deleted in its entirety and replaced with the
following:
(b) Payment
by the Company.
The
Company shall use its best efforts to obtain effectiveness of the Registration
Statement as soon as reasonably practicable. If the Registration Statement
covering the Registrable Securities required to be filed by the Company pursuant
to Section 2(a) hereof is not filed by the Target Filing Date, then the Company
will make payment to the Investor in such amount and at such time determined
pursuant to this Section 2(b) as liquidated damages by reason of any such
delay
in their ability to sell the Registrable Securities (which remedy shall be
exclusive of any other remedies available at law or in equity). The Company
shall pay to Investor an amount (the “Damage Amount”) equal to $_______. In the
sole discretion of the Company, the Company may issue to Investor in lieu
of the
cash payment described above, a number of shares of Common Stock of the Company
equal to the quotient derived by dividing (i) the Damage Amount, by (ii)
purchase price per share set forth in Paragraph (1) of the Subscription
Agreement.
1
2. The
cash
payment to be made as the Damage Amount as set forth in Paragraph 1 of this
Amendment shall be paid, or the shares in lieu of a cash payment shall be
issued, within thirty (30) days of the date of this Amendment.
3. All
capitalized terms not otherwise defined herein shall have the meaning set
forth
in the Agreement.
4. All
other
terms and conditions of the Agreement shall remain in full force and
effect.
IN
WITNESS WHEREOF, the Company and the Investor have duly executed and delivered
this Amendment, effective as of the date set forth above.
|
SMART
ONLINE, INC.
By:
______________________________
Name:
____________________________
Title:
_____________________________
Date:
_____________________________
|
INVESTOR
By:
______________________________
Name:
____________________________
Title:
_____________________________
Date:
_____________________________
|
2
