FIRST AMENDMENT
TO THE
MERGER AGREEMENT
BY AND AMONG
AFRICAN AMERICAN MEDICAL NETWORK, INC.;
AFMN, INC.; MEDICAL MEDIA TELEVISION, INC.;
AND AAMN ACQUISITION SUB, INC.
This First Amendment to the Merger Agreement (the "Amendment") dated
November 16, 2005, is by and among African American Medical Network, Inc., a
company duly organized and existing under the laws of the State of Florida,
having a place of business located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Target Company"); AFMN,
Inc., a company duly organized and existing under the laws of the State of
Delaware, having a place of business located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as AFMN); Medical
Media Television, Inc. f/k/a PetCARE Television Network, Inc., a company duly
organized and existing under the laws of the State of Florida, having a place of
business located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as "Medical Media"); and AAMN Acquisition Sub, Inc., a
company duly organized and existing under the laws of the State of Florida,
having a place of business located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Acquisition Sub").
BACKGROUND INFORMATION
The parties to this Amendment entered into a Merger Agreement effective
May 11, 2005 (the "Merger Agreement"). The parties now wish to amend that
agreement, retroactive to the date the Merger Agreement was consummated.
Capitalized terms used herein shall have the meaning ascribed to them in the
Merger Agreement unless otherwise set forth herein. Accordingly, in
consideration of the promises contained herein, the parties agree as follows:
OPERATIVE PROVISIONS
1. Amendment to Recitals. The Recitals are amended by deleting the present
form of the Recitals in their entirety and by substituting, in lieu thereof, the
following:
"WHEREAS, Medical Media desires to acquire one hundred percent
(100%) of the capital stock of Target Company by issuing 19,415,626 shares
of the common stock of Medical Media to AFMN;
WHEREAS, in order to accomplish the above and enable AFMN to receive
the shares of Medical Media without having to recognize income for federal
income tax purposes, the acquisition of Target Company is being structured
as a "reverse triangular merger," intended to qualify as a tax-free
reorganization within the meaning of Section 368(a)(2)(E) of the Internal
Revenue Code of 1986, as amended (the "Code");
WHEREAS, the respective Boards of Directors of Medical Media,
Acquisition Sub, and Target Company have determined that it is in the best
interests of their respective companies and stockholders that Acquisition
Sub merge with and into Target Company (the "Merger") with Target Company
being the surviving corporation;
WHEREAS, Medical Media, as the sole stockholder of Acquisition Sub,
and AFMN, as the sole stockholder of Target Company, have approved this
Agreement, the Merger and the transactions contemplated by this Agreement
pursuant to action taken by written consent in accordance with the
requirements of the Florida Business Corporation Act ("FBCA") and the
requirements of Delaware General Corporation Law ("DGCL");
WHEREAS, pursuant to the terms and conditions set forth herein,
Acquisition Sub will be merged with and into Target Company, and AFMN will
receive 19,415,626 shares of the common stock of Medical Media in exchange
for all of AFMN's shares of the capital stock of Target Company.
NOW THEREFORE, the parties hereto hereby agree as follows:"
2. Amendment to Article 2, Section 2.1. Article 2, Section 2.1 is amended
by deleting the present form of Article 2, Section 2.1 in its entirety and by
substituting, in lieu thereof, the following:
"The Merger Consideration. As of the Effective Date (as defined in Section
3.2 below) and as a result of the Merger and without any other action on
the part of the stockholders, AFMN shall receive 19,415,626 shares of the
authorized, but previously unissued, common capital stock of Medical Media
(the "Medical Media Shares") in exchange for all of the issued and
outstanding capital stock of Target Company. Additionally, as of the
Effective Date of the Merger, (i) all issued and outstanding convertible
securities of AFMN as set forth on Schedule 2.1(i) shall be exchanged for
equivalent convertible securities of Medical Media on a one for one basis
and (ii) all issued and outstanding warrants to purchase AFMN common stock
set forth on Schedule 2.1(i) shall be exchanged for equivalent Medical
Media warrants on a one for one basis. All convertible securities and
warrants exchanged pursuant to this Section 2.1 shall be governed by the
same terms and conditions as were applicable to the securities prior to
the Effective Date of the Merger."
3. Amendment to Article 3, Section 3.1. Article 3, Section 3.1 is amended
by deleting the present form of Article 3, Section 3.1 in its entirety and by
substituting, in lieu thereof, the following:
"Closing. The closing contemplated by Sections 1.1 and 2.1 above (the
"Closing") shall be held at the offices of Medical Media, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇; on the 16 day of November, 2005 at 10:00
a.m., unless another place or time is agreed upon in writing by the
parties (the "Closing Date")."
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4. Amendment to Article 3, Section 3.2. Article 3, Section 3.2 is amended
by deleting the present form of Article 3, Section 3.2 in its entirety and by
substituting, in lieu thereof, the following:
"Effective Date of Merger. After the Closing, the Articles of Merger
executed by the parties on the Closing Date shall be immediately submitted
for filing with the Secretary of State of the State of Florida. The date
of such filing shall be the effective date of the Merger (the "Effective
Date")."
5. Amendment to Article 4, Section 4.1. Article 4, Section 4.1 is amended
by deleting the present form of Article 4, Section 4.1 in its entirety and by
substituting, in lieu thereof, the following:
"Registration Statement. Medical Media hereby agrees to file, as soon as
practicable after the execution of this Agreement, an appropriate
registration statement ("Registration Statement") with the Securities and
Exchange Commission registering for sale the Medical Media Shares. AFMN
hereby agrees that, as soon as practicable after the effectiveness of the
Registration Statement, AFMN will distribute the Medical Media Shares to
the AFMN shareholders of record as of the Effective Date on a pro-rata
basis pursuant to the Capital Stock Escrow and Disposition Agreement
attached as Schedule 4.1; provided, however, the Medical Media Shares
distributed by AFMN will have the same characteristics as the shares held
by the AFMN shareholders as of the Closing Date of this Agreement, i.e.,
if a shareholder has restricted shares of AFMN then such shareholder will
receive restricted shares of Medical Media (regardless of registration),
and likewise if a shareholder has unrestricted shares of AFMN then such
shareholder will receive unrestricted shares of Medical Media. AFMN hereby
acknowledges that, at Medical Media's option, shares underlying
convertible preferred shares, convertible debentures, warrants, or options
outstanding as of the Closing Date also will be registered pursuant to the
Registration Statement. AFMN further agrees that, prior to the
effectiveness of the Registration Statement, all voting and consensual
rights with respect to the Medical Media Shares shall vest with ▇▇▇▇▇▇ ▇.
▇▇▇▇▇."
6. Amendment to Article 4, Section 4.2. Article 4, Section 4.2 is amended
by deleting the present form of Article 4, Section 4.2 in its entirety and by
substituting, in lieu thereof, the following:
"Board of Directors of Medical Media; Target Company and Newco.
(a) On the Closing Date, shareholders of Medical Media will execute
a Written Action in Lieu of Special Meeting of Shareholders to elect
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Chairman of the Board), ▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to serve
as members of its Board of Directors until December 31, 2006.
(b) On the Closing Date, shareholders of Newco (as defined in
Section 4.4(a) hereof) will execute a Written Action in Lieu of Special
Meeting of Shareholders to elect ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Chairman of the Board),
▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to serve as members of
its Board of Directors until December 31, 2006.
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(c) On the Closing Date, shareholders of Target Company will execute
a Written Action in Lieu of Special Meeting of Shareholders to elect
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Chairman of the Board), ▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ to serve as members of its Board of
Directors until December 31, 2006."
7. Amendment to Article 4, Section 4.4(c). Article 4, Section 4.4(c) is
amended by deleting the present form of Article 4, Section 4.4(c) in its
entirety and by substituting, in lieu thereof, the following:
"(c) Payment of Obligations. AFMN acknowledges the existence of the
following obligations and understands that Medical Media will satisfy
these liabilities as soon as practicable after the Closing Date:
(i) Promissory Note dated May 16, 2002 by and between PetCARE
Television Network, Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇▇ in the principal amount
of $100,000. The parties agree the current balance on this
obligation is $91,500.
(ii) Promissory Note dated June 7, 2002 by and between PetCARE
Television Network, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇ in the principal amount
of $25,000. The parties agree the current balance on this obligation
is $25,000.
(iii) Promissory Note dated June 5, 2002 by and between PetCARE
Television Network, Inc. and ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ in the principal
amount of $6,000. The parties agree the current balance on this
obligation is $6,000.
(iv) Promissory Note dated June 5, 2002 by and between PetCARE
Television Network, Inc. and ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ in the
principal amount of $5,000. The parties agree the current balance on
this obligation is $5,000."
8. Amendment to Article 5, Section 5.2. Article 5, Section 5.2 is amended
by deleting the present form of Article 5, Section 5.2 in its entirety and by
substituting, in lieu thereof, the following:
"Each of Target Company and AFMN has the requisite corporate power and
authority to enter into this Agreement and to carry out its respective
obligations hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized and approved by the Board of Directors of Target Company and
AFMN and the shareholder of Target Company; and no other corporate
proceedings on the part of Target Company or AFMN is necessary to approve
and adopt this Agreement or to approve the consummation of the Merger
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Target Company and AFMN and constitutes a valid and binding
agreement of Target Company and AFMN, enforceable in accordance with its
terms."
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9. Amendment to Schedule 5.9. Schedule 5.9 is amended by deleting the
present form of Schedule 5.9 in its entirety and by substituting, in lieu
thereof, the attached Schedule 5.9.
10. Amendment to Article 8, Section 8.2. Article 8, Section 8.2 is amended
by deleting the present form of Article 8, Section 8.2 in its entirety and by
substituting, in lieu thereof, the following:
"Obligation of Target Company and AFMN to Close. The obligation of Target
Company and AFMN to consummate the Merger contemplated by this Agreement
on the Closing Date shall be subject to the satisfaction of the following
conditions on or prior to the Closing Date:
(a) Representations and Warranties; Compliance with Agreement. The
representations and warranties of Medical Media and Acquisition Sub set
forth in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing Date as though made
on the Closing Date, and Medical Media and Acquisition Sub shall have
performed all covenants and agreements to be performed by it under this
Agreement on or prior to the Closing Date, and Medical Media and
Acquisition Sub shall have delivered to AFMN certificates to such effect
dated as of the Closing Date and signed by Medical Media and Acquisition
Sub.
(b) Litigation Affecting Closing. On the Closing Date, no proceeding
shall be pending or threatened before any court or governmental agency in
which it is sought to restrain or prohibit or to obtain damages or other
relief in connection with this Agreement or the consummation of the
transaction contemplated hereby, and no investigation that might eventuate
in any such suit, action or proceeding shall be pending or threatened."
11. Issuance of Convertible Debenture and Series A Warrant. On July 19,
2005, AFMN issued to Vicis Capital Master Fund that certain Series A Convertible
Debenture in the principal amount of Four Hundred Twelve Thousand and No/100
Dollars ($412,000) (the "Convertible Debenture"), the Series A Common Stock
Purchase Warrant (the "Series A Warrant"), and the Series B Common Stock
Purchase Warrant (the "Series B Warrant"). Medical Media does not object to the
issuance of the Convertible Debenture, the Series A Warrant, and the Series B
Warrant and herby consents to the amendment of Schedule 5.4 of the Merger
Agreement to reflect such issuance. A copy of Schedule 5.4, as amended, is
attached hereto.
12. Reconfirmation of Agreement. All other aspects of the Merger Agreement
and any document referenced therein shall remain in full force and effect.
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In witness whereof, the parties have executed this Amendment on the date
first above written.
Medical Media Television, Inc. f/k/a
PetCARE Television Network, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
AAMN Acquisition Sub, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
African American Medical Network, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
AFMN, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
[SIGNATURE PAGE FOR THE FIRST AMENDMENT TO THE MERGER AGREEMENT]
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SCHEDULE 2.1(i)
ISSUED AND OUTSTANDING CONVERTIBLE SECURITES OF AFMN, INC.
1. Interest Bearing Single-Payment Promissory Note dated December 15, 2004
for $200,000 issued to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇ Note") which is
convertible into 200,000 shares of AFMN's Common Stock.
2. Interest Bearing Single-Payment Promissory Note dated April 18, 2005 for
$100,000 issued to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇ Note") which is convertible
into 100,000 shares of AFMN's Common Stock.
3. Series A Convertible Debenture dated July 19, 2005 for $412,000 issued to
Vicis Capital Master Fund ("Series A Debenture") which is convertible into
AFMN's Common Stock at twenty cents ($0.20) per share, as well as the
accompanying (i) five-year Series A Common Stock Purchase Warrants to
purchase 1,030,000 shares at $0.40 per share, and (ii) five-year Series B
Common Stock Purchase Warrants to purchase 2,060,000 shares at $.030 per
share.
ISSUED AND OUTSTANDING OPTIONS AND WARRANTS OF AFMN, INC.
4. Debt Conversion Agreement under which the ▇▇▇▇▇▇▇▇▇ Note can be converted
into the 200,000 shares of AFMN's Common Stock mentioned in item 1 above
and three-year warrants to purchase 200,000 shares of common stock of AFMN
at $2.00 per share.
5. Debt Conversion Agreement under which the ▇▇▇▇▇▇▇ Note can be converted
into the 100,000 shares of AFMN's Common Stock mentioned in item 2 above
and three-year warrants to purchase 50,000 shares of common stock of AFMN
at $1.00 per share.
6. Series A Common Stock Purchase Warrant issued to Vicis Master Capital Fund
to purchase 1,030,000 shares of AFMN's Common Stock for five years at
$0.40 per share.
7. Series B Common Stock Purchase Warrant issued to Vicis Master Capital Fund
to purchase 2,060,000 shares of AFMN's Common Stock for five years at
$.0.30 per share.
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AMENDED SCHEDULE 5.4
CAPITALIZATION OF TARGET COMPANY
Common Shares Authorized: 25,000,000
Common Shares Outstanding: 1,000
Preferred Shares Authorized: 5,000,000
Preferred Shares Outstanding: 0
OUTSTANDING OPTIONS, WARRANTS, CONVERSION PRIVILEGES,
SUBSCRIPTIONS, CALLS, COMMITMENTS OR RIGHTS OF TARGET COMPANY
None.
SHAREHOLDERS OF TARGET COMPANY AS OF CLOSING DATE
The sole shareholder of the Target Company is AFMN, Inc. which owns 1,000
shares.
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AMENDED SCHEDULE 5.9
CERTAIN TAX LIABILITIES
Payroll taxes for African American Medical Network, Inc. $17,800.00
9