AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT TO STOCK PURCHASE AGREEMENT ("this Amendment") is entered into as
of April 16, 1998, by and among Econophone, Inc., a New York corporation
("Buyer"); and Xxxxxxx Xxxxxx, an individual domiciliary of the State of New
York ("Xxxxxx"), and Xxxxxx Xxxxxx, an individual domiciliary of the State of
Connecticut ("Xxxxxx"), together the former holders of all the issued and
outstanding shares of capital stock of VoiceNet Corporation, a New York
corporation ("the Company") (each of Xxxxxx and Xxxxxx individually a "Seller"
and together, jointly and severally, the "Sellers").
RECITALS
The parties previously have entered into a Stock Purchase Agreement
dated as of January 28, 1998 ("the Agreement").
The parties mutually desire to amend the Agreement in certain respects,
and to restate and reconfirm the remaining unperformed terms and conditions of
the Agreement that are not amended hereby.
Now, therefore, in consideration of the foregoing covenants and
promises, and other good and valuable consideration, the parties agree as
follows:
1. All defined terms in the Agreement shall have the same meanings in
this Amendment, unless otherwise specified.
2. Section 3.1 of the Agreement is hereby deleted in its entirety and
the following text is substituted in place of the deleted provisions:
3.1 The Purchase Price payable in respect of the Shares shall be
increased by an amount (the "Earn-Out Bonus"), calculated and
paid as follows:
3.1.1 DURING THE PERIOD FROM AND INCLUDING APRIL 16, 1998
TO AND INCLUDING APRIL 15, 1999: the Earn-Out Bonus
shall be calculated on two components, computed over
the period from and including the 16th of each
calendar month to and including the 15th of the
following calendar month: (A) 4.08% of Base Year
Calling Card Revenues (as defined below), plus (B)
1.2% of Base Year Additional Revenues (as defined
below); PROVIDED, that no single element of Earn-Out
Bonus will be calculated on both of the separate
components specified in this subsection. For all
purposes of this subsection 3.1.1, the following
definitions shall apply:
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(w) "Base Year Calling Card Revenues" shall mean that
amount by which Net Monthly Revenues ("NMR", as
defined below) of Calling Card Services (defined
below) shall exceed US$3,500,000;
(x) "Base Year Additional Revenues" shall mean the
combined NMR of postpaid "1+", prepaid "1+", fixed
termination toll-free "800"/"888", reroutable
toll-free "800"/ "888", ITFS, and local access PIN
services generated by the VoiceNet business unit of
Econophone (collectively, the "Other Services"),
calculated upon the full US dollar increment above a
base of zero;
(y) "NMR" shall mean the gross monthly revenues of
Calling Card Services or Other Services, as the case
may be, generated by the VoiceNet business unit of
Econophone, but shall not include (a) universal
service charges and other access fees, payphone
surcharges and other surcharges, directory assistance
charges, line and installation charges, monthly fees,
taxes, promotional discounts, minimum usage charges,
fraudulent charges, or subsequently credited charges
for any of the foregoing, or (b) those revenues for
which Sellers or their Affiliates otherwise receive
commissions pursuant to separate agreements or
arrangements;
(z) "Calling Card Services" shall mean the following
calling card products and services only, and no other
products or services: (a) postpaid calling card
products and postpaid calling card services marketed
by the VoiceNet business unit of Econophone
(excluding postpaid calling card products and
services marketed by Econophone independently of the
VoiceNet business unit, other than those products or
services that were developed by the VoiceNet business
unit) and (b) prepaid calling card products and
prepaid calling card services marketed by the
VoiceNet business unit of Econophone (excluding
prepaid calling card products and services marketed
by Econophone independently of the VoiceNet business
unit, other than those products or services that were
developed by the VoiceNet business unit).
3.1.2 DURING THE PERIOD FROM AND INCLUDING APRIL 16, 1999
TO AND INCLUDING APRIL 15, 2000: the Earn-Out Bonus
shall be calculated on two components, computed over
the period from and including the 16th of each
calendar month to and including the 15th of the
following calendar month: (A) 2.5% of Second Year
Calling Card Revenues (as defined below), plus (B)
1.2% of Second Year
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Additional Revenues (as defined below); provided,
that no single element of Commission will be
calculated on both of the separate components
specified in this subsection. For all purposes of
this subsection 3.1.2, the following definitions
shall apply:
(w) "Second Year Calling Card Revenues" shall mean
that amount by which NMR of Calling Card Services
during the applicable month shall exceed the average
NMR of Calling Card Services for the three-month
period from and including January 16, 1999 through
and including April 15, 1999;
(x) "Second Year Additional Revenues" shall mean the
amount by which the combined NMR of Other Services
shall exceed the average combined NMR of Other
Services for the three-month period January 16, 1999
through April 15, 1999.
3.1.3 DURING THE PERIOD FROM AND INCLUDING APRIL 16, 2000
TO AND INCLUDING APRIL 15, 2001: the Commission shall
be calculated on two components, computed over the
period from and including the 16th of each calendar
month to and including the 15th of the following
calendar month: (A) 2.5% of Third Year Calling Card
Revenues (as defined below), plus (B) 1.2% of Third
Year Additional Revenues (as defined below);
provided, that no single element of Commission will
be calculated on both of the separate components
specified in this subsection. For all purposes of
this subsection 3.1.3, the following definitions
shall apply:
(w) "Third Year Calling Card Revenues" shall mean
that amount by which NMR of Calling Card Services
shall exceed the average of the actual monthly
revenues for the three-month period from and
including January 16, 2000 through and including
April 15, 2001;
(x) "Third Year Additional Revenues" shall mean the
amount by which the combined NMR of Other Services
shall exceed the average of the combined NMR of Other
Services for the three-month period from and
including January 16, 2000 through and including
April 15, 2001.
3.1.4 The actual amount of each monthly payment of Earn-Out
Bonus shall be the figure determined in accordance
subsection 3.1.1, 3.1.2 or 3.1.3 hereof, as the case
may be, less $15,000.
3.1.5 In the event that the Employment Agreements (as
defined in subsection 5.1.6 below) are terminated
pursuant to paragraphs (a),
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(b) or (c) of Section 8 thereof, any Earn-Out-Bonus
theretofore accrued but not paid up to the date of
such termination shall be due and payable in
accordance with the terms of subsection 3.2.1 of this
Agreement.
3. Section 3.2.1 of the Agreement is hereby deleted in its entirety and
the following text is substituted in place of the deleted provision:
3.2.1 The Earn-Out Bonus shall be computed and paid by
Econophone no later than the 10th day following the
conclusion of any billing cycle (currently the 15th
day of each calendar month) with respect to the
immediately preceding concluded billing cycle, and
shall be payable with respect to all complete billing
cycles (and on a pro rata basis for any partial
billing cycle) for so long as both Employment
Agreements (as defined in subsection 5.1.6 below)
continue in effect; PROVIDED, HOWEVER, that in the
event either Employment Agreement is terminated
pursuant to Section 8(d) thereof, with the effect
that no further Earn-Out Bonus shall be payable on
account of such termination, then Sellers shall be
entitled to a single final payment equal to the
amount (if any) by which the average of the last
three cycle payments of Earn-Out Bonus prior to the
termination exceeds six months' salary payable
pursuant to Section 8(d) of the Employment Agreement.
4. The Employment Agreements dated February 12, 1998, referenced in
Subsection 5.1.6 of the Agreement and annexed to the Agreement as Exhibits A-1
and A-2 are hereby terminated and shall be of no further force and effect. Each
of Sellers has entered into a replacement Employment Agreement dated as of the
same date as this Amendment, copies of which are annexed hereto as Exhibits A-1
and A-2, and all references in the Agreement to either or both of the Employment
Agreements shall hereafter mean the replacement Employment Agreements described
herein in this Paragraph 3.
5. All others terms and conditions of the Agreement shall remain in
full force and effect. In the event of any ambiguity between the provisions of
this Amendment and the language of the Agreement, the provisions of this
Amendment shall control.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
SELLERS: BUYER:
XXXXXXX XXXXXX ECONOPHONE, INC.
________________________________ By: ________________________________
XXXXXX XXXXXX Name: ______________________________
________________________________ Title: _______________________________
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EXHIBIT X-0
XXXXXX XXXXXXXXXX XXXXXXXXX
0
XXXXXXX X-0
XXXXXX EMPLOYMENT AGREEMENT
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