EXHIBIT 10.27
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AMENDMENT TO STOCK PURCHASE AGREEMENT
BY AND BETWEEN
HEARTSOFT, INC. AND HI-TEL GROUP, INC.
THIS AMENDMENT TO STOCK PURCHASE AGREEMENT (the "Amendment") is dated
as of the 27th day of September, 2000, by and between HEARTSOFT, INC., a
Delaware corporation (the "Company"), and HI-TEL GROUP, INC., a Florida
corporation ("Purchaser").
RECITALS
WHEREAS, the Company and Purchaser executed that certain Stock Purchase
Agreement dated March 1, 2000 (the "Stock Purchase Agreement") pursuant to which
the Company issued to Purchaser seven hundred and seventy-five thousand
(775,000) shares of Series A Convertible Preferred Stock of the Company (the
"Preferred Stock") and a warrant to purchase two hundred thousand shares
(200,000) of the Company's common stock (the "Warrant") in exchange for seven
hundred and seventy-five thousand dollars ($775,000);
WHEREAS, pursuant to Section 7.1 of the Stock Purchase Agreement, the
Company agreed to file a registration statement under the Securities Act of
1933, as amended, for the common stock into which the Preferred Stock is
convertible and the common stock underlying the Warrant (the "Registration
Statement") and to cause the Registration Statement to become effective no later
than August 1, 2000;
WHEREAS, pursuant to 7.2 of the Stock Purchase Agreement, the Company
agreed to pay to Purchaser $100,000 per month in common stock of the Company,
valued as provided in the Stock Purchase Agreement, in the event that the
Company did not cause the Registration Statement to become effective by August
1, 2000;
WHEREAS, it has not been practicable for the Company to cause the
Registration Statement to become effective by August 1, 2000 due to a number of
factors, including, but not limited to, demands upon the financial and human
resources of the Company in connection with the introduction of the Company's
new Internet browser for children, Internet Safari(TM), the change of the
Company's fiscal year from the period beginning April 1 and ending March 31 to
the period beginning July 1 and ending June 30, and proceedings involving the
Company before the Securities and Exchange Commission, which have now been
resolved;
WHEREAS, the parties desire to amend the Stock Purchase Agreement,
among other things, to release the Company from and to eliminate any and all
current and future liability that the Company might have to Purchaser under
Section 7.2 of the Stock Purchase Agreement in consideration of the issuance to
Purchaser additional shares of the Company's common stock as provided herein;
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NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Purchaser hereby
amend the Stock Purchase Agreement as follows:
1. Issuance of Common Stock. Subject to the terms and conditions hereof
and in reliance on the respective representations and warranties of the parties
herein, the Company agrees to issue to Purchaser, an additional three hundred
thousand (300,000) shares of common stock of the Company, $0.0005 par value, all
shares upon issuance and delivery to Purchaser to be duly authorized, validly
issued, fully paid and nonassessable.
2. Amendment of Stock Purchase Agreement.
(a) The first sentence of Section 7.1 shall be amended to read in
its entirety as follows:
7.1 Filing of Registration Statement. The Company will cause
to be prepared and filed a registration statement relating to
the Conversion Shares (as defined in Section 7.6) and the
common stock underlying the Warrants (as described in Section
2) and cause such registration statement to become effective
within a reasonable time after October 1, 2000.
(b) Section 7.2 titled "Penalty Upon Failure to Register by August
1, 2000" is hereby deleted in its entirety and shall be of no
force or effect. The Company and Purchaser agree that the
deletion of this Section relates back to the March 1, 2000
and, as a result, no penalty has accrued under this Section
and no penalties will accrue in the future under this Section.
3. Terms of the Stock Purchase Agreement to be Incorporated by
Reference. The following sections of the Stock Purchase Agreement are hereby
incorporated by reference to this Amendment and have the same effect upon the
parties with regards to the three hundred thousand (300,000) shares of the
Company's common stock and the transaction contemplated herein as if such
sections are a part of this agreement, except to the extent those sections are
specifically amended herein:
(a) 3.2 Organization and Good Standing;
(b) 3.4 Authorization and No Violation;
(c) 4. Representations and Warranties of the Purchaser;
(d) 7. Registration Under Securities Act of 1933;
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(e) 8. Listing;
(f) 9. Legend on Share Certificates; and
(g) 10. Notices.
4. Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the respective meanings ascribed to them in the Stock Purchase
Agreement.
5. Other Terms of Stock Purchase Agreement. Except for the amendments
set forth herein, all other provisions of the Stock Purchase Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each signed by different persons and all of said counterparts
together shall constitute one and the same instrument, and such instrument shall
be deemed to have been made, executed and delivered on the date first
hereinabove written, irrespective of the time or times when the same or any
counterparts thereof actually may have been executed and delivered a counterpart
thereof to the Company and Purchaser.
7. Law Governing. This Amendment shall be construed and interpreted in
accordance with and governed and enforced in all respects by the laws of the
State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
the Stock Purchase Agreement as of the date first stated above.
"Company"
HEARTSOFT, INC.
By: /s/ Benjamin P. Shell
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Benjamin P. Shell
Chief Executive Officer, President and
Chairman of the Board
"Purchaser"
HI-TEL GROUP, INC.
By: /s/ Steven Hirsch
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Steven Hirsch
President
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