Exhibit 10.37
SECOND AMENDMENT TO
SHAREHOLDERS' AGREEMENT
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SECOND AMENDMENT TO SHAREHOLDERS' AGREEMENT, dated as of March __, 2000
(the "Second Amendment") by and among URBAN COOL NETWORK, INC., a Delaware
corporation ("UCN") having an office at 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx 00000,
XXXXXXX XXXXXXX ("Xxxxxxx") having an address at 0000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 and E-COMMERCE SOLUTIONS, INC., a New York Corporation (the
"Company") having an address at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (UCN and Xxxxxxx are hereinafter sometimes, collectively,
referred to as the "Shareholders" and, individually, as a "Shareholder.")
W I T N E S S E T H:
WHEREAS, UCN, Xxxxxxx and the Company (collectively, the "Parties") have
heretofore entered into a Shareholders' Agreement dated as of November 21, 1999
(the "Shareholders' Agreement"); and
WHEREAS, the Parties entered into an Amendment dated December 27, 1999,
(the "First Amendment") to the Shareholders' Agreement; and
WHEREAS, the Parties acknowledge that UCN has complied with its
obligations under Section 2(b) of the First Amendment; and
WHEREAS, two (2) shares of the no par value Common Stock of the Company
have been issued to UCN, and such shares are fully paid and non-assessable;
WHEREAS, the Parties acknowledge that under the Shareholders' Agreement,
as amended by the First Amendment, UCN is obligated to contribute to the Company
an additional $2,950,000 upon the consummation of a public offering of UCN's
securities; and
WHEREAS, the Parties desire to further amend and modify the Shareholders'
Agreement, as amended by the First Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the Parties hereby agree, as follows:
1. Section 1(a) of the Shareholders' Agreement is hereby amended by
deleting Section 1(a) in its entirety and inserting in lieu thereof a new
Section 1(a) to read in its entirety, as follows:
"1. Governance. (a) The Board of Directors of the Company shall consist of
two members. Each Shareholder agrees that during the term of this
Agreement each Shareholder shall vote for Xxxxx X. Xxxxx, III and Xxxxxxx
Xxxxxxx as the members of the Board of
Directors."
2. Section 1(b) of the Shareholders' Agreement is hereby modified to
delete any reference to Xxxxx X. Xxxxxx as Secretary and Treasurer of the
Company.
3. Section 3 of the Shareholders' Agreement is hereby amended by deleting
Section 3 in its entirety and inserting in lieu thereof a new Section 3 to read
in its entirety, as follows:
"3. Management of the Company. The Company and each Shareholder agree that
any action taken by the Shareholders shall require not less than the
affirmative votes of 70% of the outstanding shares of the Company for the
transaction of any business, including amendments to the certificate of
incorporation. The Company and each Shareholder agree that any action
taken by the Board of Directors shall require not less than the
affirmative votes of 70% of the directors shall be necessary for the
transaction of any business at any meeting of the Board of Directors.
Each of the Shareholders agree that they shall cause the By-laws of the
Company to be amended to provide for the creation of an Executive
Committee of the Board. The Executive Committee shall consist of one
member, and each of the Shareholders agree that during the term of this
Agreement, Xxxxxxx Xxxxxxx shall be the sole member of such Executive
Committee. The Executive Committee shall be vested with and granted the
power to exercise all the authority of the Board of Directors, provided,
however, that the power and authority of the Executive Committee shall not
include: (a) the submission to Shareholders of any action that needs
Shareholders' approval under the Business Corporation Law of the State of
New York; (b) the filling of vacancies in the Board of Directors or in any
committee; (c) the fixing of compensation of the Directors for serving on
the Board or any committee; (d) the amendment or repeal of the By-laws, or
the adoption of new Bylaws; (e) the amendment or repeal of any resolution
of the Board of Directors which by its terms shall not be so amendable or
repealable; (e) any amendment to or restatement of the certificate of
incorporation ; (f) any change to the number of directors of the Company;
(g) the liquidation or dissolution of the company; (h), any
recapitalization, restatement of assets, redemption of shares, reduction
of capital or other change in the capitalization of the Company; (i) the
authorization, issuance, reissuance or sale, or the entering into of any
material agreement providing for the issuance or sale (contingent or
otherwise) of any equity securities of the Company or the issuance, sale
or grant of any security, option,
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warrant or right to acquire, convert into or otherwise dispose of any
equity securities of the Company (collectively, the "Securities"), in any
case, whether or not authorized, issued or held in treasury; (j) the
direct or indirect redemption, purchase or sale or other acquisition or
disposition of any of the Company's Securities; (k) any change in the name
of the Company; (l) any change in the salary of Xxxxxxx or any amendment
to any employment agreement between the Company and Xxxxxxx; (m) the
declaration or payment of any dividends or distributions in excess of
$10,000 in cash, property, securities or otherwise, upon any of the
Company's Securities; and (n) any change in the Company's independent
certified accountant."
4. The sixty (60) day period referred to in Section 7(a) of the
Shareholders' Agreement and the thirty (30) day period referred to in Section
7(b) of the Shareholders' Agreement shall not apply to the fiscal year of the
Company ending December 31, 1999 or the quarter ending December 31, 1999. The
Company shall provide the Shareholders with the information, reports or other
documents required by Sections 7(a) and 7(b) of the Shareholders' Agreement as
soon as practicable.
5. Pursuant to Section 11 of the Shareholders' Agreement, notice is hereby
deemed to have been given that the Company's address for purposes of notice is
hereby changed to the address first set forth above with respect to the Company.
7. In the event that: (a) the public offering of UCN's securities is
consummated and UCN fails to make the additional contribution of $2,950,000 to
the Company as required by Section 2(a) of the First Amendment within three (3)
days after the receipt of the net proceeds from such consummated public
offering, or (b) the public offering of UCN's securities is not consummated on
or before July 1, 2000, then, pursuant to the provisions of Section 506(j) of
the Business Corporation Law of the State of New York, the Company shall have,
in addition to any other legal or equitable remedies it may have, the right to
cancel the shares of the common stock of the Company issued to UCN, retain the
$50,000 heretofore contributed to the Company by UCN and terminate the
Shareholders' Agreement, as amended by the First Amendment and this Second
Amendment.
8. Xxxxxxx and UCN hereby agree that they take such steps as are necessary
to cause the Certificate of Incorporation and the By-laws of the Company to be
amended to effectuate the terms and provisions of the Shareholders' Agreement,
as amended by the First Amendment and this Second Amendment. Xxxxxxx and UCN
further agree that they will vote in favor of such resolutions of the
Shareholders and the Board of Directors as are necessary to effectuate the terms
and provisions of the Shareholders' Agreement, as amended by the First Amendment
and this Second Amendment.
9. To the extent that this Second Amendment conflicts with the
Shareholders' Agreement or the First Amendment, this Second Amendment shall be
deemed superseding and
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controlling.
IN WITNESS WHEREOF, the Parties have executed this Second Amendment to
Shareholders' Agreement as of the day and year first above written.
URBAN COOL NETWORK, INC.
By
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Name: Xxxxx X. Xxxxx III
Title: Chief Executive Officer
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XXXXXXX XXXXXXX
E-COMMERCE SOLUTIONS, INC.
By
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Name: Xxxxxxx Xxxxxxx
Title: President and
Chief Executive Officer
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