Exhibit 10.5

 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT

AND CLASS A WARRANTS AND CLASS B WARRANTS

 

This Amendment (this “Amendment”) to the Securities Purchase Agreement dated as
of May 15, 2018 (the “SPA”) and to the Class A Warrants and Class B Warrants
(together, the “Warrants”) to purchase common stock issued pursuant to the SPA
is made and entered into as of July 8, 2019, among XpresSpa Group, Inc., a
Delaware corporation (the “Company”), and the purchasers (as identified on the
signature pages hereto), constituting a Majority in Interest (the “Specified
Purchasers”). Capitalized terms used herein but not defined shall have the
meaning ascribed to such terms in the SPA.

 

RECITALS:

 

WHEREAS, the Company, the Specified Purchasers and certain other parties thereto
entered into a the SPA pursuant to which the Specified Purchasers were issued
Notes and the Warrants; and

 

WHEREAS, (i) pursuant to Section 5.5 of the SPA, no provision of the SPA may be
waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Majority in Interest and
(ii) pursuant to Section 9 of the Warrants, no provision of the Warrants may be
amended or waived without the written consent of the Company and the Required
Holders;

 

WHEREAS, the Specified Purchasers constitute a Majority in Interest and the
Required Holders;

 

WHEREAS, the Company and the Specified Purchasers desire to amend certain terms
of the SPA and the Warrants; and

 

WHEREAS, as consideration for the Specified Purchasers agreeing to the terms of
this Amendment, subject to the receipt of approval of the Company’s
shareholders, the Company will issue shares of Series F Preferred Stock to the
Holders as set forth on Schedule A.

 

NOW, THEREFORE, in consideration of the premises and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:

 

1.          Section 1.1 of the SPA is hereby amended and restated to delete the
following definitions:

 

·“Equity Line of Credit”;

 

·“Variable Priced Equity Linked Instruments”; and

 

·“Variable Rate Transaction.”

 

2.          The definition of “Exempt Issuance” in Section 1.1 of the SPA is
hereby amended and restated as follows:

 

 

 

 

“Exempt Issuance” means the issuance of (a) shares of Common Stock and options
to officers, directors, employees or consultants of the Company after the
Closing Date pursuant to plans approved by the shareholders of the Company and
which issuances are approved by a majority of the independent members of a
committee of the board of directors, (b) securities exercisable or exchangeable
for or convertible into shares of Common Stock issued and outstanding on the
date of this Agreement, provided that such securities and any term thereof have
not been amended since the date of this Agreement to increase the number of such
securities or to decrease the issue price, exercise price, exchange price or
conversion price of such securities and which securities and the principal terms
thereof are set forth on Schedule 3.1(g), and described in the SEC Reports, (c)
securities issued pursuant to acquisitions or strategic transactions approved by
a majority of the disinterested directors of the Company, provided that any such
issuance shall only be to a Person (or to the equity holders of a Person) which
is, itself or through its subsidiaries, an operating company or an owner of an
asset in a business synergistic with the business of the Company and shall be
intended to provide to the Company substantial additional benefits in addition
to the investment of funds, but shall not include a transaction in which the
Company is issuing securities primarily for the purpose of raising capital or to
an entity whose primary business is investing in securities; provided, however,
that the securities to be issued pursuant to that certain Securities Purchase
Agreement dated as of July 8, 2019 by and between the Company and Calm.com shall
not be deemed to be an Exempt Issuance, (d) up to 25,000 shares of Common Stock,
(e) securities as payment for investment banking services provided to the
Company, (f) securities issued to third party vendors as payment for goods or
services, (g) securities issued to the Company’s Airport Concession
Disadvantaged Business Enterprise partners, (h) securities issued or issuable to
the Purchasers and their assigns pursuant to this Agreement, the Notes or the
Warrants and other Transaction Documents, including without limitation, Section
4.17 herein, or upon exercise, conversion or exchange of any such securities,
and (i) securities issued as payment of interest pursuant to the Credit
Agreement dated as of April 22, 2015, as subsequently amended through the date
hereof by and between XpresSpa Holdings, LLC and Rockmore Investment Master Fund
Ltd. (including, without limitation, that certain Fourth Amendment to Credit
Agreement, dated as of July 8, 2019, by and between the Company and B3D, LLC)1.”

 

3.          Section 3.1(rr) of the SPA is hereby deleted in its entirety.

 

4.          Section 4.13 of the SPA is hereby irrevocably waived in its entirety
with respect to the transactions contemplated by (a) the Securities Purchase
Agreement dated as of July 8, 2019 by and between the Company and Calm.com, (b)
the amendment to the Certificate of Designation of Preferences, Rights and
Limitations of Series E Convertible Preferred Stock, (c) the Credit Agreement
dated as of April 22, 2015, as subsequently amended through the date hereof by
and between XpresSpa Holdings, LLC and Rockmore Investment Master Fund Ltd.
(including, without limitation, that certain Fourth Amendment to Credit
Agreement, dated as of July 8, 2019, by and between the Company and B3D, LLC),
(d) the amendment to the Certificate of Designation of Preferences, Rights and
Limitations of Series D Convertible Preferred Stock, (e) the amendment to
certain outstanding warrants issued in December 2016 to the holders of the
Company’s Series D Convertible Preferred Stock, (f) the Certificate of
Designation of Preferences, Rights and Limitations of the Series F Preferred
Stock and (g) the transactions contemplated by this Amendment. Upon receipt of
Shareholder Approval (as defined below), Section 4.13 of the SPA shall be
deleted in its entirety.

 

5.          Section 4.17 of the SPA is hereby deleted in its entirety.

 

6.          Section 4.24 of the SPA is hereby deleted in its entirety.

 

7.          Section 1(c) of the Class A Warrants is hereby amended and restated
in its entirety as follows:

 

 

1 Pursuant to the terms of the Fourth Amendment to Credit Agreement, subject to
Shareholder Approval, the number of shares to be issued as payment of interest
will be determined by dividing the amount of the Share Portion (as defined in
the Fourth Amendment to Credit Agreement) set forth in the exercise notice by a
price per share of Common Stock equal to ninety percent (90%) of the VWAP (as
defined in the Fourth Amendment to Credit Agreement) on the trading date
immediately preceding the date of the exercise notice.

 

 2 

 

 

“Company’s Failure to Timely Deliver Securities. If (I) the Company shall fail
for any reason or for no reason on or prior to the Share Delivery Date either
(a) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program and the Warrant Shares are eligible to be issued
without a restrictive legend, to issue to the Holder a certificate without any
restrictive legend for the number of shares of Common Stock to which the Holder
is entitled and register such shares of Common Stock on the Company’s share
register or (b) if the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program and the Warrant Shares are eligible to be issued
without a restrictive legend, to credit the Holder’s balance account with DTC,
for such number of shares of Common Stock to which the Holder is entitled upon
the Holder’s exercise of this Warrant and the Warrant Shares are not eligible to
be issued without a restrictive legend, to issue and dispatch by overnight
courier to the address as specified in the Exercise Notice for delivery on or
before the Share Delivery Date a certificate, registered in the Company’s share
register in the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise, (II) with
respect to only the Warrant Shares originally issuable pursuant to this Warrant
prior to any adjustment pursuant to Section 2(a) of this Warrant (the “Base
Warrant Shares”), after the Initial Effective Date (as defined in the
Registration Rights Agreement) and during the Registration Period (as defined in
the Registration Rights Agreement), (x) the Registration Statement (as defined
in the Registration Rights Agreement) covering the resale of all of the Base
Warrant Shares that are the subject of the Exercise Notice (the “Unavailable
Base Warrant Shares”) is not available for the resale of such Unavailable Base
Warrant Shares, (y) the Company fails to promptly, but in no event later than as
required pursuant to the Registration Rights Agreement so notify the Holder and
(z) the Company fails to, on or prior to the Share Delivery Date, deliver the
Base Warrant Shares electronically without any restrictive legend by crediting
such aggregate number of Base Warrant Shares to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit/Withdrawal At Custodian system, or (III) with respect to
any Additional Shares (as defined below), after 90 days after the Issuance Date
(the “Additional Shares Effectiveness Deadline”), (x) a registration statement
covering the resale of all of the Additional Shares that are the subject of the
Exercise Notice (the “Unavailable Additional Shares”) is not available for the
resale of such Unavailable Additional Shares, (y) the Company fails to promptly
so notify the Holder and (z) the Company fails to, on or prior to the Share
Delivery Date, deliver the Additional Shares electronically without any
restrictive legend by crediting such aggregate number of Additional Shares to
which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit/Withdrawal At Custodian
system (the event described in the immediately foregoing clauses (II) and (III)
are hereinafter referred to as a “Notice Failure”) and either a Notice Failure
or an event described in clause (I) above (referred to herein as an “Exercise
Failure”) occurs, then, in addition to all other remedies available to the
Holder, (X) the Company shall pay in cash to the Holder on each day after the
Share Delivery Date and during such Notice Failure or Exercise Failure an amount
equal to 1.0% of the product of (A) the number of shares of Common Stock not
issued to the Holder on or prior to the Share Delivery Date and to which the
Holder is entitled, and (B) the higher of (i) the then in effect Exercise Price
of this Warrant or (ii) the closing price of the Common Stock on the date of the
applicable Exercise Notice, and (Y) the Holder, upon written notice to the
Company, may void its Exercise Notice with respect to, and retain or have
returned, as the case may be, any portion of this Warrant that has not been
exercised pursuant to such Exercise Notice; provided that the voiding of an
Exercise Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice pursuant to this Section
1(c) or otherwise. If the Company is required to pay liquidated damages
hereunder solely as a result of a Notice Failure, the liquidated damages related
thereto will cease to accrue when the registration statement requirements set
forth in the Registration Rights Agreement are complied with. For the avoidance
of doubt, the Company acknowledges that the Company may be liable for
Registration Delay Payments pursuant to the Registration Rights Agreement in the
event of an Exercise Failure or Notice Failure. In the event of a Notice
Failure, damages will accrue at the higher of (a) 1.0% of the product of (A) the
number of shares of Common Stock not issued to the Holder on or prior to the
Share Delivery Date and to which the Holder is entitled, and (B) the higher of
(i) the then in effect Exercise Price of this Warrant or (ii) the closing price
of the Common Stock on the date of the applicable Exercise Notice and (b) the
rate set forth in the Registration Rights Agreement; provided, however, that
damages shall not be cumulative. In addition to the foregoing, if an Exercise
Failure or Notice Failure occurs, and if on or after the Share Delivery Date the
Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale through a broker by the Holder of
shares of Common Stock issuable upon such exercise that the Holder anticipated
receiving from the Company (a “Buy-In”), then the Company shall, within three
(3) Trading Days after the Holder’s request and in the Holder’s discretion,
either (i) pay cash to the Holder in an amount equal to the Holder’s total
purchase price (including brokerage commissions and other reasonable out of
pocket expenses related to the Buy-In, if any) for the shares of Common Stock so
purchased (such number of shares not to exceed the number of Warrant Shares
failed to be delivered) (the “Buy-In Price”), at which point the Company’s
obligation to deliver such certificate (and to issue such shares of Common
Stock) or credit such Holder’s balance account with DTC for such shares of
Common Stock shall terminate, or (ii) promptly honor its obligation to deliver
to the Holder a certificate or certificates representing such shares of Common
Stock or credit such Holder’s balance account with DTC, as applicable, and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock, times (B) the
sale price of the Common Stock at which the sell order giving rise to such
purchase obligation was executed. Nothing shall limit the Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity,
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock (or to electronically deliver
such shares of Common Stock) upon the exercise of this Warrant as required
pursuant to the terms hereof.”

 

 3 

 

 

8.          The Company and the Specified Purchasers hereby acknowledge that the
Class B Warrants shall be terminated, cancelled and extinguished immediately and
of no further force or effect, and the Company shall be released from its
obligations thereunder. The Company acknowledges and agrees that subject to
approval of The Nasdaq Stock Market, an additional 178,231 shares of Common
Stock originally allocated to the Class B Warrants shall be allocated to the
holders of the Class A Warrants as indicated on Schedule A.

 

9.          As consideration for the Specified Purchasers agreeing to the terms
of this Amendment, the Company will issue shares of Series F Preferred Stock to
the Holders as set forth on Schedule A; provided, however that if Shareholder
Approval is not received, the shares of Series F Preferred Stock issued to the
Holders shall be immediately forfeited by the Holders. The shares of Series F
Convertible Preferred Stock shall not be convertible into shares of Common Stock
until receipt of approval of the Company’s shareholders (the “Shareholder
Approval”) for the issuance of any additional shares of its Common Stock that
would be issued pursuant to this Amendment (and, for the avoidance of doubt,
with respect to any Class A Warrants to purchase shares of Common Stock in
excess of 344,356 shares of Common Stock) and pursuant to Sections 6 and 7.1.3
of the Certificate of Designation of Preferences, Rights and Limitations of
Series F Convertible Preferred Stock (the “Series F Certificate of
Designation”).

 

10.        The Company undertakes to use commercially reasonable efforts to
obtain within one hundred (120) days after the date of this Amendment,
Shareholder Approval for the transactions contemplated by this Amendment,
including, without limitation, (a) the issuance of all the shares of its Common
Stock that could be issued pursuant to Sections 6 and 7.1.3 of the Series F
Certificate of Designation and (b) the reduction of the exercise price with
respect to the Additional Shares (as defined in the Class A Warrants) to be
issued in connection with Section 2(a) of the Class A Warrants to $2.00;
provided, that in no event shall the Company seek the consent of its
shareholders for the approval of the reduction in the exercise or conversion
prices of any other security of the Company, whether or not outstanding on the
date hereof, unless such approval is conditional upon simultaneous receipt of
the Shareholder Approval. If, despite the Company’s commercially reasonable
efforts the Shareholder Approval is not initially obtained, the Company shall
cause an additional shareholder meeting to be held every three (3) months
thereafter until such Shareholder Approval is obtained. Notwithstanding anything
to the contrary contained in this Section 10, the Company shall have no
obligation to solicit or obtain the Shareholder Approval if Nasdaq Listing Rule
5635(d) no longer applies to the Company or would not prohibit a Holder from
acquiring shares of Common Stock pursuant to the Series F Certificate of
Designation or Class A Warrants without receipt of such Shareholder Approval.

 

 4 

 

 

11.         The Company and the Specified Purchasers hereby acknowledge and
agree that the additional shares of Common Stock issuable pursuant to, and as a
result of, the terms of this Amendment shall be deemed to be an “Exempt
Issuance” pursuant to the definition of “Exempt Issuance” as defined in the SPA.

 

12.         The Company represents that the holding period of the Class A
Warrants as determined under Rule 144 is not affected by the terms of this
Amendment and tacks back to the original issue date of the Class A Warrant.

 

13.         Except with respect to the material terms and conditions of this
Amendment, which the Company undertakes to publicly disclose in a press release
and a Form 8-K to be filed with the Securities and Exchange Commission no later
than two (2) business days after the date of this Amendment, the Company
covenants and agrees that neither it, nor any other Person acting on its behalf
will provide the Holder or its agents or counsel with any information that
constitutes, or the Company reasonably believes constitutes, material non-public
information, unless prior thereto such Holder shall have consented to the
receipt of such information and agreed with the Company to keep such information
confidential.

 

14.         Except as explicitly modified herein, the SPA and Class A Warrant
shall remain in full force and effect.

 

15.         This Amendment shall be governed in accordance with terms of the
SPA.

 

16.         This Amendment may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by the Company and the
Purchaser, it being understood that the parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.

 

[REST OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

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Schedule A

 

Holder  Number of Shares of
Series F Preferred Stock
to be issued by the
Company2   Number of Class A
Warrants to initially
be subject to $2.00
exercise price   Number of
additional Class A
Warrants to be
subject to $2.00
exercise price
upon Nasdaq
approval  Alpha Capital Anstalt   4,056    174,575    90,725  Anson Investments
Master Fund LP   901    38,794    20,161  Brio Capital Master Fund Ltd.   450  
 19,397    10,080  The Hewlett Fund LP   630    27,156    14,112  Intracoastal
Capital, LLC   901    38,794    20,161  L1 Capital Global Opportunities Master
Fund   901    38,794    20,161  Palladium Capital Advisors, LLC   1,157  
 6,789    3,528 

 

 

2 Series F Preferred Stock to have a $100 stated value – each share of Series F
Preferred Stock will initially convert into 50 shares of common stock

 

 6 

 

 

IN WITNESS WHEREOF, the Company and the Purchaser have executed this Amendment
as of the date first above written.

 

COMPANY

 

XpresSpa Group, Inc.

 

    By:   Its:  

 

[Purchaser signature page follows]

 

 7 

 

 

IN WITNESS WHEREOF, the Company and the Purchaser have executed this Amendment
as of the date first above written.

 

 

Alpha Capital Anstalt   [Print Name of Purchaser]           [Signature]      
Name:   Title:  

 

 8 

 

 

Anson Investments Master Fund LP   [Print Name of Purchaser]          
[Signature]       Name:   Title:  

 

 9 

 

 

Brio Capital Master Fund Ltd.   [Print Name of Purchaser]           [Signature]
      Name:   Title:  

 

 10 

 

 

The Hewlett Fund LP   [Print Name of Purchaser]           [Signature]      
Name:   Title:  

 

 11 

 

 

Intracoastal Capital, LLC   [Print Name of Purchaser]           [Signature]    
  Name:   Title:  

 

 12 

 

 

L1 Capital Global Opportunities Master Fund
[Print Name of Purchaser]           [Signature]       Name:   Title:  

 13 

 

 

Palladium Capital Advisors, LLC
[Print Name of Purchaser]           [Signature]       Name:   Title:  

 

 14