AMENDMENT TO SHARE EXCHANGE AND ACQUISITION AGREEMENT BY AND AMONG PURCHASE POINT MEDIA CORP. AND POWER SPORTS FACTORY, Inc.
EXHIBIT
10(h)
AMENDMENT
TO
BY
AND
AMONG
AND
POWER
SPORTS FACTORY, Inc.
THIS
AMENDMENT, dated as of August 31, 2007 (“this Amendment”), amends the Share
Exchange and Acquisition Agreement, made and entered into as of April 24, 2007
(the “Agreement”), by and among Purchase Point Media Corp., a Minnesota
corporation ("PPMC"), and Power Sports Factory, Inc., a Delaware corporation
("PSF"), and Xxxxxxxxx Xxxxxx, the sole shareholder of PSF (the "PSF
SHAREHOLDER"). Unless otherwise provided in this Amendment, defined
terms used herein shall have the same meaning as provided in the
Agreement.
RECITALS
A. The
Agreement provides that PPMC shall acquire from the PSF SHAREHOLDER all of
the
PSF Shares owned by such shareholder on the Closing Date in exchange for the
issuance and delivery by PPMC of one share of Common Stock, no par value, of
PPMC ("Common Stock"), for each common share of PSF (the "Exchange Ratio"),
on
the terms and conditions set forth in the Agreement (the "Exchange");
and
B. It
is intended that, for federal income tax purposes, the Exchange shall qualify
as
an exchange described in Section 351 of the of the Internal Revenue Code of
1986, as amended (the "Code") and a reorganization described in Section 368
of
the Code.
C. The
Agreement provides that prior to Closing (1) a 1:20 reverse split of the
outstanding Common Stock of PPMC shall take place, pursuant to which PPMC will
have no more than 7,620,000 shares of Common Stock outstanding (the “Reverse
Split”), and (2) that the current business of PPMC shall be spun off to
stockholders of record on May 2, 2007, in a dividend (the “PPMC
Dividend”).
D. On
May 4 and May 14, 2007, PPMC filed Preliminary and Definitive Information
Statements (collectively, the “Information Statement”) with the Securities and
Exchange Commission (“SEC”), with regards to the Reverse Split, the PPMC
Dividend and the change of PPMC’s name to Power Sports Factory, Inc., and has
received a letter of comments on the Information Statement, dated May 31, 2007,
from the SEC.
E. On
May 22, 2007, an investor advanced $200,000 to PPMC for the benefit of PSF,
pursuant to a Six Percent (6%) note due August 15, 2007 (the “Loan”), the funds
for which were advanced to PSF by PPMC.
F. Whereas,
on May 14, 2007, PPMC issued 60,000,000 shares of Common Stock to the PSF
SHAREHOLDER (the “Control Shares”), and prior to Closing, the PSF SHAREHOLDER
transferred certain of the shares of PSF owned by him to certain other persons
(collectively the PSF SHAREHOLDER and such other PSF shareholders are
collectively referred to herein as the “PSF SHAREHOLDERS”).
G. The
parties hereto desire to amend the Agreement to take into account the issuance
of Control Shares, the transfer of shares of PSF by the PSF SHAREHOLDER, and
to
provide for an earlier Closing under the Agreement, at which shares of a series
of preferred stock of PPMC would be issued to the PSF SHAREHOLDERS and to
provide for the preferences, relative and conversion rights for the terms of
such shares, and providing for actions to take place subsequent to the amended
Closing Date.
NOW,
THEREFORE, in consideration of the foregoing premises and representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. Article
I of the Agreement is hereby amended to read in its entirety as
follows:
“ARTICLE
I EXCHANGE
OF SECURITIES
Section
1.1 The Exchange.
On
the
terms and subject to the conditions of this Agreement, on the Closing Date,
(a)
PPMC shall issue and deliver to the PSF SHAREHOLDERS an aggregate
of 1,650,000 shares of Series B preferred stock, no par value, of
PPMC (the “Preferred Stock”), as set forth on the signature page hereof, each
such share of Preferred Stock to be convertible into ten (10) shares of Common
Stock on and after the effective date of the Reverse Split and to have the
relative rights and preferences as set forth in Exhibit I to this Amndment;
and
(b) the PSF SHAREHOLDERS shall sell, transfer and deliver to PPMC a certificate
or certificates representing an aggregate of 1,500 shares of common stock,
par
value $.001 per share, of PSF, said PSF shares constituting all of the issued
and outstanding shares of stock of PSF, together with a duly executed share
assignment or assignments endorsed in favour of PPMC.
Section
1.2 Exchange Ratio.
(a)
Prior
to the Closing, PPMC will have no more than 100,000,000 shares of Common Stock
outstanding, of which 60,000,000 shares are owned by the PSF SHAREHOLDER. In
connection with the Closing, it is intended that, the PSF SHAREHOLDERS would,
through the issuance of the Preferred Stock, receive an aggregate of 16,500,000
additional shares of PPMC Common Stock upon conversion of the Preferred Stock
following effectiveness of the Reverse Split.”
2. Article
II, Section 2.1, of the Agreement is hereby amended to read in its entirety
as
follows:
“ARTICLE
II THE
CLOSING
Section
2.1 Closing Date.
The
closing of the Exchange and the other transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of PSF, which address
is 0000 Xxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000, at 11:00 AM on September 5,
2007,
or at such other location, date and time as PPMC and PSF may agree. The time
and
date upon which the Closing actually occurs being referred to herein as the
"Closing Date").”
Article
II, Section 2.2, paragraph
(a)(vii), of the Agreement is amended to read in its entirety as
follows:
“(vii)
Resignation and release letters in the form attached as Exhibit B hereto from
each of the current officers and directors of PPMC, together with (i) signed
minutes or a unanimous written consent of the Board of Directors of PPMC
electing and Xxxxxx Xxxxxxxxx as Chief Executive Officer and Acting Secretary,
and Xxxxxxxxx Xxxxxx as President and Acting Chief Financial Officer, of PPMC,
effective the Closing Date, and (ii) an instruction letter to PPMC’s Xxxxx
Xxxxxx as President transfer agent, to be delivered to such transfer agent
on
the Closing Date, instructing such transfer agent that the authorized
signatories for PPMC as regards instructions to and review of PPMC legal matters
for such transfer agent are the newly elected President and Secretary of PPMC
listed above and counsel for PSF;”
3.
Article VI, section 6.10, of the Agreement is hereby amended to read in its
entirety as follows:
“ARTICLE
VI CERTAIN COVENANTS
. . .
Section
6.10 Disposition of Assets and Liabilities.
Following
the Closing, PPMC shall take all action required in order to dispose of all
of
PPMC's Assets (other than cash, cash equivalents and marketable securities)
pursuant to the PPMC Dividend, and otherwise as appropriate, and satisfy all
of
its Liabilities in accordance with any and all applicable laws and regulations.
PPMC shall indemnify and hold PSF and the PSF SHAREHOLDERS, or any of them,
harmless from and/or against any and all demands, claims, actions or causes
of
action, judgments, assessments, losses, liabilities (including tax liabilities),
damages or penalties and reasonable attorneys' fees and related disbursements
suffered by PSF, the PSF SHAREHOLDERS, or any of them, and/or PPMC resulting
from or arising out of or in connection with any such Assets and/or Liabilities
of PPMC. Following the Closing, PPMC shall use all reasonable efforts
(1) to obtain SEC clearance for and to transmit to its stockholders a Definitive
Information Statement with regard to required stockholder action for the Reverse
Split and (2) to file a Form 10 with the SEC with regard to the PPMC Dividend,
respond promptly to the SEC’s comments on such Form 10 so as to have such Form
10 declared effective by the SEC as soon as practicable, and proceed to
distribute to stockholders shares of stock representing the PPMC
Dividend.
. . .
"
4. Article
VII is amended in Section 7.1, paragraph (k), to read as follows:
“ARTICLE
VII
CONDITIONS
TO CONSUMMATION OF THE EXCHANGE
Section
7.1 Conditions to Obligations of PSF.
The
obligations of PSF and PSF SHAREHOLDERS to consummate the Exchange shall be
subject to the fulfillment, or written waiver by PSF, at or prior to the
Closing, of each of the following conditions:
. . .
(k)
The outstanding shares of Common Stock of PPMC prior to the Closing shall not
exceed 100,000,000 shares.
. . .
"
5. Miscellaneous.
Section
5.1 Entire Agreement.
This
Amendment and the Agreement, and the Schedules and Exhibits hereto, contain
the
entire agreement between the parties and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to
the
subject matter hereof.
Section
5.2 Amendment and Modifications.
This
Amendment may not be further amended, modified or supplemented except by an
instrument or instruments in writing signed by the party against whom
enforcement of any such amendment, modification or supplement is
sought.
Section
5.3 Extensions and Waivers.
At
any
time prior to the Closing, the parties hereto entitled to the benefits of a
term
or provision may (a) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (b) waive any inaccuracies
in
the representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto, or (c) waive compliance with
any obligation, covenant, agreement or condition contained herein. Any agreement
on the part of a party to any such extension or waiver shall be valid only
if
set forth in an instrument or instruments in writing signed by the party against
whom enforcement of any such extension or waiver is sought. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement.
Section
5.4 Successors and Assigns.
This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided, however, that no party
hereto may assign its rights or delegate its obligations under this Amendment
without the express prior written consent of the other party hereto. Except
as
provided in Article VIII of the Agreement, nothing in this Amendment is intended
to confer upon any person not a party hereto (and their successors and assigns)
any rights, remedies, obligations or liabilities under or by reason of this
Amendment.
Section
5.5 Headings; Definitions.
The
Section and Article headings contained in this Amendment are inserted for
convenience of reference only and will not affect the meaning or interpretation
of this Amendment. All references to Sections or Articles contained herein
mean
Sections or Articles of the Agreement unless otherwise stated. All capitalized
terms defined herein are equally applicable to both the singular and plural
forms of such terms.
Section
5.6 Severability.
If
any
provision of this Amendment or the application thereof to any Person or
circumstance is held to be invalid or unenforceable to any extent, the remainder
of this Amendment shall remain in full force and effect and shall be reformed
to
render the Amendment valid and enforceable while reflecting to the greatest
extent permissible the intent of the parties.
Section
5.7 Counterparts.
This
Amendment may be executed in one or more counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one and
the
same agreement.
IN
WITNESS WHEREOF, each of the parties have caused this Amendment to the Agreement
to be signed by their respective officers hereunto duly authorized, all as
of
the date first written above.
By: /s/
Xxxxxx Xxxxxx
Name:Xxxxxx
Xxxxxx,
Title:
Chairman and President
POWER
SPORTS FACTORY, INC.
By:
/s/ Xxxxx Xxxxxx
Name:Xxxxxxxxx
Xxxxxx,
Title:
President
PSF
SHAREHOLDERS’ COUNTERPART SIGNATURE PAGE
|
Name
|
No.
of Shs. Of PPMC Preferred
|
|
|
/s/
Xxxxxxxxx Xxxxxx
|
||
|
Xxxxxxxxx
Xxxxxxx
|
402,800
|
|
|
/s/
Xxxxx Xxxxxxxx
|
||
|
Xxxxx
Xxxxxxxx
|
219,433.40
|
|
|
/s/
Xxxxxx X. Xxxxxxxxx
|
||
|
Xxxxxx
X. Xxxxxxxxx
|
185,833.30
|
|
|
/s/
Xxxxxxx Xxxxxxx
|
||
|
Xxxxxxx
Xxxxxxx
|
189,433.30
|
|
|
/s/
Xxxxx Xxxxx
|
||
|
Xxxxx
X. Xxxxx
|
100,000
|
|
|
/s/
Xxxx Xxxxxxxx
|
||
|
Xxxx
Xxxxxxxx
|
62,500
|
|
|
INCUBADORA
DEL FUTURO S.L.
|
||
| /s/Xxxx Xxxx | ||
|
Xxxx
Xxxx
|
100,000 | |
|
/s/
Xxxxxxxx Xxxxxx
|
||
|
Xxxxxxxx
Xxxxxx
|
30,000
|
|
|
/s/
Xxxxxx Xxxxxxxxx
|
||
|
Xxxxxx
Xxxxxxxxx
|
40,000
|
|
|
/s/
Xxxxx Xxxxxxxxx
|
||
|
Xxxxx
Xxxxxxxxx
|
40,000
|
|
|
/s/
Xxxx Xxxxx
|
||
|
Xxxx
Xxxxx
|
40,000
|
|
|
/s/
Xxxx Xxxxxxxxx
|
||
|
Xxxx
Xxxxxxxxx
|
40,000
|
|
|
/s/
Xxxxxx Xxxxxxx
|
||
|
Xxxxxx
Xxxxxxx
|
25,000
|
|
|
/s/
Xxxxx Xxxxxxx
|
||
|
Xxxxx
Xxxxxxx
|
50,000
|
|
|
/s/
Xxxxxx Xxxxxxx
|
||
|
Xxxxxx
Xxxxxxx
|
125,000
|
EXHIBIT
I
PURCHASE
POINT MEDIA CORPORATION
STATEMENT
OF DESIGNATIONS, PREFERENCES,
AND
RIGHTS OF
CONVERTIBLE
PREFERRED STOCK,
SERIES
B
Purchase
Point Media Corporation, a corporation organized and existing under the laws
of
the State of Minnesota (this "Corporation"), hereby certifies that pursuant
to
the authority vested in its Board of Directors in Article V of its Articles
of
Incorporation, and in accordance with the provisions of Chapter 302A.401, of
the
Minnesota Statutes 2006, the Board of Directors adopted the following resolution
creating a series of its preferred stock, no par value, designated as
Convertible Preferred Stock, Series B:
RESOLVED,
that a series of the class of authorized preferred stock of this Corporation
be
hereby created, and that the designation and initial number thereof and the
voting powers, preferences and other special rights and restrictions of the
shares of such series are as follows:
Section
1
Designation
and Initial Number
The
shares of preferred stock hereby classified shall be designated the Convertible
Preferred Stock, Series B (the "Preferred Stock"). The number of
shares of the Preferred Stock shall be 3,000,000.
Section
2
Dividends
The
holder ("Holder") of the Preferred Stock shall be entitled to receive cash
dividends in any fiscal year only if, and to the extent that, a cash dividend
or
cash distribution is declared by the Board of Directors and is legally payable
on the Preferred Stock under the provisions of the Minnesota Business
Corporations Act.
Section
3
Voting
Rights
(A) The
shares of the Preferred Stock shall be voting. Each share of
Preferred Stock shall have the number of votes represented by the number of
shares of the Corporation’s Common Stock, no par value (“Common Stock”), into
which such share of Preferred Stock is convertible following effectiveness
of
the Reverse Split. For any voting rights as provided under the
Minnesota Business Corporations Act, such shares shall be voted equally with
the
shares of every other series of preferred stock of this Corporation then
outstanding on matters requiring a vote of all holders of preferred stock voting
as holders of preferred stock.
(B) So
long as any shares of Preferred Stock shall be outstanding, in addition to
any
other vote or consent required in the Articles of Incorporation or by law,
the
consent of the holders of at least 66 2/3% of the shares of the Preferred Stock
at the time outstanding, voting as one class, in person or by proxy, either
in
writing without a meeting or by a vote at any meeting called for the purpose,
shall be necessary for effecting or validating any amendment, alteration, or
repeal of any provision of the Articles of Incorporation, or of the By-Laws
of
this Corporation, which increases the number of authorized shares of any class
of this Corporation’s stock, which affects adversely the voting powers,
preferences, or other special rights or qualifications, limitations, or
restrictions of the Preferred Stock, or which authorizes the issuance of any
additional class or series of Preferred Stock which is prior to or equal in
right of liquidation preference, voting or dividends to the Preferred
Stock. The filing of a Statement of Designations, Preferences and
Rights for another series of preferred stock of this Corporation shall be deemed
to be an amendment of the Articles of Incorporation for purposes of this
subsection (B).
Section
4
Liquidation
Rights
(A) Upon
the dissolution, liquidation or winding up of this Corporation, whether
voluntary or involuntary, the Holder shall be entitled to participate ratably,
based on the number of shares of Common Stock into which the Preferred Stock
is
convertible following effectiveness of the Reverse Split, in the distribution
of
the assets of this Corporation. For purposes of this Section 4, the
merger or consolidation of this Corporation or the sale, lease or conveyance
of
all or a substantial part of this Corporation's assets shall not be deemed
to be
a liquidation, dissolution or winding up of this Corporation. After
the payment to the Holder of the full Per Share Liquidation Value provided
for
in this Section 4, the Holder as such shall have no right or claim to any of
the
remaining assets of this Corporation.
(B) In
the event of any voluntary or involuntary liquidation, dissolution or winding
up
of this Corporation which will involve the distribution of assets other than
cash, this Corporation shall promptly engage competent independent appraisers
to
determine the value of the assets to be distributed. This Corporation
shall, upon receipt of such appraiser's valuation give prompt written notice
to
the Holder of the appraiser's valuation.
Section
5
Conversion
(A) At
the option of the Holder, each share of Preferred Stock shall be convertible
into Ten (10) Shares of Common Stock at any time on and after the effectiveness
of a one-for-twenty (1:20) reverse split of the outstanding stock of this
Corporation to take place following the closing at which the Preferred Stock
is
issued (the “Reverse Split”), pursuant to the provisions of the Share Exchange
and Acquisition Agreement, by and among this Corporation and Power Sports
Factory, Inc., dated April 24, 2007, as amended.
(B) The
Preferred Stock shall be automatically converted, without any action on the
part
of the Holder, into Common Stock of this Corporation, on the basis of one (1)
share of Preferred Stock for ten (10) shares of Common Stock, upon the
effectiveness of the Reverse Split.
(C) With
the exception of the adjustment to the outstanding stock of this Corporation
to
be effected by the Reverse Split, in case at any time this Corporation shall
subdivide its outstanding shares of Common Stock into a greater number of shares
or issue shares of Common Stock as a dividend on the outstanding shares of
Common Stock, the number of shares into which each share of Preferred Stock
is
convertible shall be proportionately increased, and conversely, in case this
Corporation shall combine its outstanding shares of Common Stock into a smaller
number of shares, the number of shares into which each share of Preferred Stock
is convertible shall be proportionately decreased.
(D) The
Preferred Stock shall not have a sinking fund for the redemption or purchase
of
shares of Preferred Stock.
IN
WITNESS WHEREOF, the undersigned have executed this Certificate on August 28,
2007.
__________________________________
Xxxxxx
Xxxxxx, President
