Document:

Amendment No. 1 to Securities Purchase Agreement, dated as of February 16, 2005

 EXHIBIT 4.2 
  

AMENDMENT NO. 1 
 TO

 SECURITIES PURCHASE AGREEMENT 
  
 THIS AMENDMENT NO. 1 to Securities Purchase Agreement (the “Amendment”) is entered into effective as of the 16th day of February, 2005,
by and between Axeda Systems Inc., a Delaware corporation (the “Company”), and Laurus Master Fund, Ltd. (the “Purchaser”). 
  
 WHEREAS, the Company and the Purchaser have entered into that certain Securities Purchase Agreement, dated as of October 5, 2004 (the “Purchase
Agreement”). 
  
 WHEREAS, the Company has requested, and
the Purchaser has agreed, to amend the provisions of the Purchase Agreement resulting in the payment of damages in the event that the Company fails to satisfy certain obligations. 
  
 WHEREAS, the Purchase Agreement may be amended with the consent of the Company and the Purchaser. 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
conditions of this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Amendment of Agreement. This Amendment hereby amends the Purchase Agreement as provided in Section 2 below. Except
as explicitly provided in this Amendment, the Purchase Agreement will remain unchanged and in full force and effect. The term “Agreement” as used in the Purchase Agreement and all other instruments and agreements executed thereunder shall
for all purposes refer to the Purchase Agreement as amended by this Amendment. 
  
 2. Modifications to the Agreement. Section 9.1(c) of the Purchase Agreement is amended and restated so that it reads in its entirety, as follows: 
  
 (c) The Company understands that a delay in the delivery of the Note Shares in the form required pursuant to
Section 9 hereof beyond the Delivery Date could result in economic loss to the Purchaser. In the event that the Company fails to direct its transfer agent to deliver the Note Shares to the Purchaser via the DWAC system within the time frame set
forth in Section 9.1(b) above and the Note Shares are not delivered to the Purchaser by the Delivery Date, as compensation to the Purchaser for such loss, the Company agrees to pay late payments to the Purchaser for late issuance of the Note Shares
in the form required pursuant to Section 9 hereof upon conversion of the Note in the amount equal to the greater of: (i) $500 per business day after the Delivery Date; or (ii) the Purchaser’s actual damages from such delayed delivery. Such
payment shall be made to the Purchaser in a warrant to purchase shares of Common Stock in substantially the form attached to the Securities Purchase Agreement as Exhibit B with a value equivalent to the amount of the payment; provided,
however, that the Company shall not be obligated to issue a warrant for more shares of Common 

 
Stock than it has authorized but unissued. Notwithstanding the foregoing, the Company will not owe the Purchaser any late payments if the delay in the
delivery of the Note Shares beyond the Delivery Date is solely out of the control of the Company and the Company is actively trying to cure the cause of the delay. In the case of actual damages, the Purchaser shall provide reasonable documentation
of the amount of such damages. Such documentation shall show the number of shares of Common Stock the Purchaser is forced to purchase (in an open market transaction) which the Purchaser anticipated receiving upon such conversion, and shall be
calculated as the amount by which (A) the Purchaser’s total purchase price (including customary brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Note,
for which such Conversion Notice was not timely honored. 
  
 3.
Counterparts. This Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 4. Capitalized Terms. Capitalized terms used but not otherwise defined
herein shall have the meaning ascribed to them in the Purchase Agreement. 
  
 5. Continued Effect; Conflict of Terms. Each of the parties hereto hereby confirms that the Purchase Agreement, except as expressly amended by this Amendment, remains in full force and effect. To the extent
there is any conflict between the terms of the Purchase Agreement and this Amendment, the terms of this Amendment shall take precedence. 
  
 6. Governing Law. This Amendment shall be governed by and construed under the laws of the State of New York as applied to agreements among New York
residents entered into and to be performed entirely within New York. 
  
 [Signature Page Follows] 
  
  

 2 

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

			
	COMPANY:
	
	AXEDA SYSTEMS INC.
		
	 By:
	 	/s/ Karen F. Kupferberg
	 	 	 
	Name:	 	Karen F. Kupferberg
	 	 	 
	 Title:
	 	Executive Vice President and Chief
	 	 	Financial Officer

  
  
  
  
  
  
  
  
  
  
  
 [Signature Page to Amendment No. 1 to Securities Purchase Agreement] 

 Counterpart Signature Page 
 to Amendment No. 1 to 
 Securities Purchase Agreement 
  

			
	LAURUS MASTER FUND, LTD.
		
	By:	 	/s/ David Grin
	 	 	 
	 Name:
	 	David Grin
	 	 	 
	 Title:
	 	Partner

  
  
  
  
  
  
  
  
  
  
  
 [Signature Page to Amendment No. 1 to Securities Purchase Agreement]Amendment No. 1 to Registration Rights Agreement, dated as of February 16, 2005

 EXHIBIT 4.3 
  

AMENDMENT NO. 1 
 TO

 REGISTRATION RIGHTS AGREEMENT 
  
 THIS AMENDMENT NO. 1 to Registration Rights Agreement (the “Amendment”) is entered into effective as of the 16th day of February, 2005,
by and between Axeda Systems Inc., a Delaware corporation (the “Company”), and Laurus Master Fund, Ltd. (the “Purchaser”). 
  
 WHEREAS, the Company and the Purchaser have entered into that certain Registration Rights Agreement, dated as of October 5, 2004 (the “Rights
Agreement”). 
  
 WHEREAS, the Company has requested, and
the Purchaser has agreed, to amend the provisions of the Rights Agreement resulting in liquidated damages in the event that the Company fails to satisfy certain obligations with respect to the effectiveness of the Registration Statement. 

 
 WHEREAS, the Rights Agreement may be amended with the consent of the
Company and the Holders of a majority of the outstanding Registrable Securities, and the Purchaser constitutes such Holders for purposes of Section 7(f) of the Rights Agreement. 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual promises and conditions of this Amendment, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Amendment of Agreement. This Amendment hereby amends the Rights Agreement as provided in Section 2 below. Except as explicitly provided in this
Amendment, the Rights Agreement will remain unchanged and in full force and effect. The term “Agreement” as used in the Rights Agreement and all other instruments and agreements executed thereunder shall for all purposes refer to the
Rights Agreement as amended by this Amendment. 
  
 2.
Modifications to the Agreement. 
  
         2.1 The definition of “Filing Date” in Section 1 of the Rights Agreement is amended and restated so that it reads in its entirety, as follows: 
  
 “Filing Date” means, with respect to (i)
the initial Registration Statement required to be filed hereunder, a date no later than thirty (30) days following the date hereof and (ii) with respect to Liquidated Damages Shares or shares of Common Stock issuable to the Holder as a result of
adjustments to the Fixed Conversion Price made pursuant to Section 3.4 of the Secured Convertible Term Note or Section 4 of the Warrant or otherwise, thirty (30) days after the occurrence of such event or the date of the adjustment of the Fixed
Conversion Price. 

         2.2 The definition of “Registrable
Securities” in Section 1 of the Rights Agreement is amended and restated so that it reads in its entirety, as follows: 
  
 “Registrable Securities” means the shares of Common Stock issued upon the conversion of the Note and issuable upon
exercise of the Warrants and the Liquidated Damages Shares. 
  
         2.3 Section 1 of the Rights Agreement is amended to add a new defined term “Liquidated Damages Shares” as follows: 
  
 “Liquidated Damages Shares” means shares of
Common Stock issuable upon exercise of Warrants issued pursuant to Section 2(b) hereof and pursuant to Section 9.1(c) of the Securities Purchase Agreement. 
  
         2.4 Section 2(b) of the Rights Agreement is amended and restated so that it reads in its entirety, as
follows: 
  
 If: (i) the Registration Statement
(other than one relating solely to Liquidated Damages Shares) is not filed on or prior to the Filing Date; (ii) the Registration Statement (other than one relating solely to Liquidated Damages Shares) is not declared effective by the Commission by
the Effectiveness Date; (iii) after the Registration Statement (other than one relating solely to Liquidated Damages Shares) is filed with and declared effective by the Commission, the Registration Statement ceases to be effective (by suspension or
otherwise) as to all Registrable Securities (other than pursuant to the request of Purchaser) to which it is required to relate at any time prior to the expiration of the Effectiveness Period (without being succeeded immediately by an additional
registration statement filed and declared effective) for a period of time which shall exceed 45 days in the aggregate per year or more than 25 consecutive calendar days (defined as a period of 365 days commencing on the date the Registration
Statement is declared effective); or (iv) the Common Stock is not listed or quoted, or is suspended from trading on any Trading Market for a period of three (3) consecutive Trading Days (provided the Company shall not have been able to cure such
trading suspension within 30 days of the notice thereof or list the Common Stock on another Trading Market and provided that such trading suspension is not generally applicable to the Trading Market); (any such failure or breach being referred to as
an “Event,” and for purposes of clause (i) or (ii) the date on which such Event occurs, or for purposes of clause (iii) the date which such 45 day or 25 consecutive day period (as the case may be) is exceeded, or for purposes of clause
(iv) the date on which such three (3) Trading Day period is exceeded, being referred to as “Event Date”), then until the applicable Event is cured, the Company shall pay to each Holder an amount, as liquidated damages and not as a penalty,
equal to one and one half percent (1.50%) for each thirty (30) day period (prorated for partial periods) on a daily basis of the original principal amount of the Note. Such payment shall be made to each Holder in a warrant to purchase shares of
Common Stock in substantially the form attached to the Securities Purchase Agreement as Exhibit B with a value equivalent to the amount of the payment; provided, however, that the Company shall not be obligated to issue a
warrant exercisable for more shares of Common Stock than it has authorized but unissued. While such Event continues, such liquidated damages shall be paid not 

  

 2 

 
less often than each thirty (30) days. Any unpaid liquidated damages as of the date when an Event has been cured by the Company shall be paid within three
(3) days following the date on which such Event has been cured by the Company. 
  
 3. Counterparts. This Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 4. Capitalized Terms. Capitalized terms used but not otherwise defined
herein shall have the meaning ascribed to them in the Rights Agreement. 
  
 5. Continued Effect; Conflict of Terms. Each of the parties hereto hereby confirms that the Rights Agreement, except as expressly amended by this Amendment, remains in full force and effect. To the extent there is any conflict
between the terms of the Rights Agreement and this Amendment, the terms of this Amendment shall take precedence. 
  
 6. Governing Law. This Amendment shall be governed by and construed under the laws of the State of New York as applied to agreements among New York
residents entered into and to be performed entirely within New York. 
  
 [Signature Page Follows] 
  
  

 3 

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

			
	 COMPANY:
  
 AXEDA SYSTEMS INC.

		
	By:	 	 /s/ Karen F. Kupferberg

		
	Name:	 	 Karen F. Kupferberg

		
	Title:	 	 Executive Vice President and Chief

	 	 	 Financial Officer

  
  
 [Signature Page to Amendment No. 1 to Registration Rights Agreement] 
  
  

 Counterpart Signature Page 
 to Amendment No. 1 to 
 Registration Rights Agreement 
  
  

			
	LAURUS MASTER FUND, LTD.
		
	By:	 	 /s/ David Grin

		
	Name:	 	 David Grin

		
	Title:	 	 Partner

  
  
 [Signature Page to Amendment No. 1 to Registration Rights Agreement]

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