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EXHIBIT 10.1(b)
AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT TO STOCK PURCHASE AGREEMENT (the "AGREEMENT") is entered
into as of December 8, 1999, by and between I.T. Technology, Inc., a Delaware
Corporation ("I.T.") and Xxxxxxxxxx.xxx Inc., a New York corporation
("STAMPVILLE").
RECITALS
A. I.T. and Stampville have entered into a Stock Purchase Agreement (the
"Original Agreement") dated as of June 18, 1999 relating to the acquisition of
stock of Stampville by I.T.
B. I.T. has, as of the date of this Agreement, paid $325,000 of the
consideration contemplated by the Original Agreement.
C. I.T. and Stampville now desire to amend certain terms of the Original
Agreement,
NOW, THEREFORE, in consideration of the promises and the terms,
provisions, covenants and conditions hereinafter set forth, and for other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
AGREEMENT
1. Definitions unless otherwise defined in this Agreement, all
capitalized terms used in this Agreement shall have the meanings set forth in
the Original Agreement.
2. Acceleration of Consideration Notwithstanding the provisions of the
Original Agreement I.T. agrees to pay the balance of the Stage One Consideration
and the Stage Two Consideration as follows:
2.1 $75,000 upon execution of this Amendment;
2.2 $100,000 on or before December 10, 1999;
2.3 Not later than sixty (60) days following the date of this Agreement,
I.T. shall pay to Stampville the sum of One Million Dollars ($1,000,000) a
portion of the Stage Two Consideration; and
2.4 The remainder of the Stage Two Consideration shall be paid in eight
equal quarterly installments of One Hundred Fifty-Six Two Hundred Fifty Dollars
($156,250.00), commencing on [the first day of the third month following the
date on which I.T. completes the investment described in Section 2.3 above], but
in any event not later than one hundred fifty
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(150) days from the date of this Agreement. I.T. may, but shall not be required
to, accelerate any payment pursuant to this Section 2.
3. Additional Payment. In addition to the payment of the Stage One
Consideration and the Stage Two Consideration, I.T. agrees to use commercially
reasonable efforts to make a further payment, or otherwise cause a party or
parties designated by I.T. to invest, an additional Five Million Dollars
($5,000,000) in Stampville (the "Additional Payment"). The Additional Payment
shall be made not later than twelve (12) months from the date of this Agreement;
or alternatively within 30 days following the closing of an initial public
offering "IPO" by I.T., that raises a minimum amount of Ten Million Dollars
($10,000,000) provided however, that the sole recourse of Stampville or any
other party shall be the reduction in equity ownership provided in Section 5.2,
below.
4. Elimination of Stage Three Consideration. The Stage Three
Consideration described in the Original Agreement is hereby eliminated, and I.T.
shall have no obligation therewith.
5. Equity Ownership.
5.1 In consideration for the accelerated payments provided in this
Agreement, I.T. shall be granted, effective as of the date of this Agreement,
50.1% of the total equity interests in Stampville on a fully-diluted basis, it
being understood that such equity interest shall include the equity interests
currently held by I.T, and that except for the provisions of Section 5.2 below,
I.T.'s voting rights in respect of such 50.1% equity interest , on a
fully-diluted basis, may not be limited or compromised under any circumstances
at any time. In order to effect the foregoing, Stampville shall, concurrently
with the execution of this Agreement, (a) amend its Articles of Incorporation to
authorize the issuance of 100,000 shares of common stock of Stampville (the
"Common Stock), (b) cause I.T. to own 50,100 shares of Common Stock (which
shares shall replace all shares of any series or class of capital stock of
Stampville issued to I.T.) and which shall constitute 50.1% of the outstanding
shares of Common Stock (including all securities convertible into Common Stock
and all shares of Common Stock to be issued pursuant to any option, warrant or
other agreement), and (c) cause the remaining shareholders of Stampville to own
49,900 shares of Common Stock (which shares shall replace all shares of any
series or class of capital stock of Stampville issued to the shareholders of
Stampville other than I.T.).
5.2 Notwithstanding the foregoing, if I.T., for any reason, fails to
make or arrange for the Additional Payment, I.T. shall surrender such number of
shares of Common Stock so that, upon such surrender, I.T. shall hold a
percentage of the outstanding shares of Common Stock (including all securities
convertible into common stock and all shares of Common Stock to be issued
pursuant to any option, warrant or other agreement) equal to the lesser of (a)
27.5% of the outstanding shares of Common Stock, or (b) the total amount
invested by I.T. pursuant to this Agreement and the Original Agreement divided
by 100,000. Thus, for purposes of illustration only, if I.T. invests an
aggregate of $2,500,000 in Stampville and does not make or arrange the
Additional Payment, I.T.'s percentage investment in Stampville shall be
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25% ($2,500,000 / 100,000 = 25). In the event that I.T. shall arrange for the
Additional Payment, rather than provide the Additional Payment itself, the
equity interest of I.T. in Stampville shall be reduced by the amount required by
the party providing the Additional Payment; provided, however, that I.T.'s
equity interest shall not be reduced below 27.5%, without a pro rata reduction
in the ownership interests of all the other shareholders of Stampville other
than I.T. (the "Malamuds").
6. Management. Concurrently with the execution of this Agreement,
Stampville, I.T. and the shareholders of Stampville shall amend the Shareholders
Agreement among Stampville and its shareholders to provide for the following:
6.1 Concurrently with the execution of this Agreement, I.T. shall be
entitled to appoint to the Board of Directors of Stampville such additional
nominees selected by I.T. so that at all times half of the members of the Board
of Directors of Stampville shall consist of individuals nominated by I.T. and
one-half of the members of the Board of Directors of Stampville shall consist of
individuals nominated by the current shareholders of Stampville other than I.T.
(collectively, the "Xxxxxxx Shareholders").
6.2 I.T. shall be entitled to designate an individual to serve as the
chief operating officer, or such other position as the Board of Stampville may
designate(s) will be paid by Stampville. The individual(s) designated by I.T.
shall work predominantly for Stampville out of Stampville's offices, but may
retain a title with and serve in a concurrent position with I.T. in a
consultative role.
6.3 Any check, draft or other instrument shall be executed by two
individuals, one designated by I.T. and one designated by the Malamuds and shall
be accompanied by a check requisition form containing information and back-up
materials.
6.4 Notwithstanding the foregoing, if I.T. fails to make or arrange
the Additional Payment, I.T.'s management rights shall be limited to those set
forth in the Original Agreement.
7. IGPC Contract. It shall be a condition precedent to any of I.T.'s
performance under this Agreement that Stampville shall have entered into an
agreement with Inter-Governmental Philatelic Corporation substantially in the
form of Exhibit A hereto.
8. Audits and Reports.
8.1 Stampville agrees that, as a condition to the performance of I.T.
hereunder, Stampville shall cause to be performed an audit of its financial
condition, books and records with a independent public auditor selected by I.T.,
which may be the independent auditor for I.T., the costs of which audit shall be
borne by Stampville; and in the future will furnish and assist I.T. and its
representatives in conducting any such further audits, revues, materials or
accounts of Stampville as may be required, the cost of such audits or revues
shall be borne by
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I.T., with the exception of one full audit to be conducted annually by an
independent auditor selected by I.T., the costs of which shall be borne by
Stampville.
8.2 Stampville shall, in addition to any other reports required under
the Shareholders Agreement or Original Agreement, provide weekly and "flash"
reports of operations, cash flows and such other matters as I.T. may reasonably
request.
9. Representations and Warranties. As additional inducement to I.T. to
make the Stage One Investment, the Stage Two Investment and the Additional
Payment, Stampville hereby confirms as accurate each of the representations and
warranties set forth in Section 7 of the Original Agreement as if made on the
date hereof.
10. Malamuds-Options in I.T. I.T. shall, upon completion of the Stage
One Investment and the earlier of a completion of the Additional Payment or the
closing of an IPO by I.T., which raises a minimum of Ten million dollars
($10,000,000), grant to designees of the Xxxxxxx Shareholders (which designees
shall be limited to employees, officers and directors of Stampville who are
regularly engaged in the operations of Stampville) options (the "Options") to
purchase 1,600,000 shares of Common Stock. at an exercise price of equal to
$1.25 per share pursuant to a Stock Option Agreement substantially in the form
of Exhibit B hereto. The Options shall become exercisable commencing two years
from the date of grant and then in increments of twenty percent (20%) per annum
thereafter. The Stock Option Agreement will include provisions for the cashless
exercise of the Options.
11. Survival of Provisions. Except as specifically provided in this
Agreement, all of the terms and conditions contained in the Original Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
XXXXXXXXXX.XXX INC. I.T. TECHNOLOGY, INC.
By: /s/ [Signature Illegible] By: /s/ XXXX XXXXXXX
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Name: [Illegible] Name: Xxxx Xxxxxxx
Title: President Title: Chief Executive Officer
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