MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT (the "Agreement") is made as of September
19, 2000 by and between SALES ONLINE DIRECT, INC., a Delaware corporation (the
"Company") and the AUGUSTINE FUND, L.P. (the "Buyer").
WITNESSETH
R.1 On March 23, 2000 (the "Transaction Date"), the Company and the
Buyer entered into a Securities Purchase Agreement (the "Purchase Agreement")
pursuant to which the Buyer purchased from the Company a Series A Eight Percent
Convertible Note (the "Note") convertible into shares of the Company's common
stock, par value $.001 per share (the "Common Stock"), with the first payment of
interest to be made on September 30, 2000 (the "Interest Due Date").
R.2. In connection with the issuance of the Note, the Buyer was also
granted a five year warrant to purchase 300,000 shares of the Company's Common
Stock and the placement agent, Delano Group Securities, LLC, was granted a
warrant to purchase 100,000 shares (collectively, the "Warrants").
R.3. In connection with the issuance of the Note and the Warrants, the
Company and the Buyer executed a Registration Rights Agreement, pursuant to
which the Company agreed to file with the Securities and Exchange Commission
(the "Commission") within 180 days after the closing date (the "Filing Date") a
Registration Statement for the resale of the shares of Common Stock issuable
upon the conversion of the Note and the exercise of the Warrants (the Purchase
Agreement, the Note, the Warrants, and the Registration Rights Agreement are
collectively referred to herein as the "Transaction Documents"). The
Registration Rights Agreement further provides that the Registration Statement
shall be declared effective by the Commission by September 30, 2000 (the
"Effectiveness Date") and if such Registration Statement is not filed by the
Filing Date or declared effective by the Effectiveness Date, the Company shall
pay certain liquidated damages to the Buyer.
R.4 The Company and the Buyer agreed to extend (i) the Interest Due
Date from September 30, 2000 to October 31, 2000, (ii) the Filing Date from the
180th day following the closing date to October 25, 2000, and (iii) the
Effectiveness Date from September 30, 2000 to December 15, 2000.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Buyer hereby
agree as follows:
1. Recitals; Definitions. The recitals set forth above are true and
correct in every respect and are incorporated herein by reference. Any
capitalized terms contained herein not defined herein shall have the meaning
assigned to such term in the Purchase Agreement, Note, or Registration Rights
Agreement.
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2. Amendment to Note. The Note is hereby amended by deleting from the
first sentence of the second paragraph of the first page the reference to
"September 30, 2000" and inserting "October 31, 2000" in lieu thereof.
3. Amendments to Registration Rights Agreement.
(a) Section 1 of the Registration Rights Agreement, captioned
Definitions is hereby amended as follows:
(i) The definition captioned "Effectiveness Date" is hereby
amended and hereafter the Effectiveness Date shall mean with respect to the
Registration Statement December 15, 2000.
(ii) The definition captioned "Filing Date" is hereby amended
and hereafter the Filing Date means October 25, 2000.
(iii) Section 7(e) captioned Failure to File Registration
Statement and Other Events is hereby amended
by inserting the following immediately following the third sentence:
"In calculating the Periodic Amount, the thirty (30) day
periods shall be calculated beginning on September 23, 2000."
4. Not a Novation. The Company and the Buyer each ratifies and confirms
all of its liabilities and obligations under the Transaction Documents and
agrees that, except as expressly modified by this Agreement, the Transaction
Documents continue in full force and effect. The Company and the Buyer agree
that this Agreement shall not be construed as an agreement to extinguish the
Company's original obligations under the Note and other Transaction Documents
and shall not constitute a novation as to the obligations of the Company under
the Note.
5. Registration Rights Agreement and Note. The term "Registration
Rights Agreement" shall hereinafter mean the Registration Rights Agreement dated
the Transaction Date, as amended and modified by this Agreement. The term "Note"
shall hereinafter mean the Series A Eight Percent Convertible Note dated the
Transaction Date, as amended and modified by this Agreement.
6. Amendment. The Transaction Documents may not be further amended,
altered or extended without, in each instance, the prior written consent of the
parties.
7. Counterparts. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute one Agreement.
8. Successors and Assigns. Whenever used herein the words "Company" and
"Buyer" shall be deemed to include their respective successors and assigns. All
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words used herein shall be deemed to refer to the singular, plural, masculine,
feminine or neuter as the identity of the person or entity or the context may
require.
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IN WITNESS WHEREOF the Company and the Buyer have caused this Agreement
to be executed under seal as the date first above written.
WITNESS/ATTEST: SALES ONLINE DIRECT, INC.
_______________________________ By:/s/ Gregory P. Rotman (SEAL)
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Gregory P. Rotman (Name)
CEO Sales Online Direct, Inc.(Title)
AUGUSTINE FUND, L.P.
/s/ David M. Matteson By: /s/ Thomas F. Duszynsky (SEAL)
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General Counsel Thomas F. Duszynsky (Name)
COO, Augustine Capital Management,
General Partner (Title)
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