AMENDMENT TO STOCK EXCHANGE AGREEMENT
This agreement is made and entered into this 21 day of October, 1998
by and between AMERI-CAP FINANCE GROUP, INC., a Florida corporation ("Buyer")
and FINANTRA CAPITAL, INC. (f/k/a Medley Credit Acceptance Corp.) ("Finantra")
and AMERITRUST HOLDINGS, INC., a Florida corporation ("Corporation").
WITNESSETH:
WHEREAS, the Buyer entered into a Stock Exchange Agreement with the
owners of all of the common stock of the Corporation on July 20, 1998, and
WHEREAS, Xxxxx Xxxxx as the owner of 200,000 shares of the
Corporation's common stock and Xxxxxxx Xxxxxxxx and Xxxx Xxxxxxxx, his wife,
the owners of 200,000 shares of the Corporation have entered into an agreement
with the Corporation whereby they have returned their shares of common stock to
the Corporation in exchange for the return of all of the authorized, issued and
outstanding common stock of Community Redevelopment Corp., a subsidiary of the
Corporation, and
WHEREAS, Finantra and the Buyer have agreed with the Corporation to
amend the Stock Exchange Agreement so as to delete the shares of the stock of
Finantra which would be exchanged for the common shares of the Corporation
owned by Toner and Barbakow and to further amend said agreement by modifying
the number of shares to be distributed at closing to the remaining sellers of
the common shares of the Corporation as well as adjust the earnings hurdles for
the distribution of common shares of Finantra subsequent to the initial
exchange of stock pursuant to the Stock Exchange Agreement, and
WHEREAS, the Corporation, Buyer and Finantra desire to document their
amendment into a written instrument.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. RECITALS: The above and foregoing recitals are true and correct and
are incorporated herein.
2. RELEASE OF BARBAKOW AND TONER FROM STOCK EXCHANGE AGREEMENT AND
APPROVAL OF DIVESTITURE OF COMMUNITY REDEVELOPMENT CORP. AS A SUBSIDIARY OF THE
CORPORATION: The Buyer and Finantra agree that the Corporation can return to
Toner and Barbakow all of the authorized, issued and outstanding common stock
owned by the Corporation in Community Redevelopment Corp. in exchange for the
return to the Corporation by Barbakow and Toner of their collective 400,000
shares of the common stock of the Corporation.
3. AMENDMENTS TO STOCK EXCHANGE AGREEMENT: The Buyer, Finantra and
the Corporation agree to the following amendment to the Stock Exchange
Agreement dated July 20, 1998:
3.1 The first WHEREAS clause shall be amended to provide as
follows:
WHEREAS, the Sellers collectively own 100% of the authorized,
issued and outstanding common shares of Ameritrust Holdings,
Inc., consisting of 1,095,000 common shares (the "Shares").
3.2 Section 2 is hereby amended as follows:
2. EXCHANGE AND TRANSFER OF SHARES: The Seller shall
transfer, and convey to the Buyer and the Buyer
shall acquire from the Seller 90% of the authorized,
issued, and outstanding common shares of the
Corporation consisting of 1,000,000 shares as
follows:
A. 504 Shares: The Buyer will exchange with
the Sellers owning the Corporation's Shares sold
pursuant to Section 504 of the Act ["504 Shares"]
one common share of Medley for each 504 Share owned
by the Sellers. The total number of 504 Shares
outstanding by the Corporation are 95,000 shares and
all outstanding 504 Shares owned by the Sellers
shall be exchanged on the closing date.
(1) Medley agrees with respect to the
Exchanged 504 Shares to file a
registration statement with the
Securities and Exchange Commission
within 30 days following the
closing date and diligently pursue
the registration of said shares,
including responding to comment
letters, if any, and to do its
best to have the registration
become effective.
B. Restricted Shares: The balance of the
outstanding
Shares of the Corporation owned by the Sellers are
not registered under the Act and shall hereafter be
referred to as the "Restricted Shares". The
Restricted Shares shall be exchanged as follows:
(1) At closing the Buyer shall
exchange 286,000 common shares of
Medley for 900,000 Restricted
Shares of the Corporation owned by
the Sellers. The Shares will be
exchanged on a pro rata basis with
each selling Shareholder based
upon the number of Shares owned by
the selling shareholder in the
Corporation. No fractional shares
shall be issued by Medley and the
Sellers agree to determine the pro
rata method of distribution prior
to closing and to deliver a
written letter of direction signed
by all Sellers setting forth the
distribution computation to the
Buyer.
(2) The Restricted Shares not
exchanged at the closing shall be
retained solely in the possession
of the Sellers and shall be
available for a future exchange
with the Buyer according to the
following:
(a) Period 1: The four
months ending December
31, 1998. If net earnings
before taxes (the
"earnings hurdle") of
Ameritrust exceed
$183,100, Sellers will
exchange 12,500 shares of
their Restricted Shares
for 89,250 shares of
Medley Common Stock.
(b) Period 2, 3 and 4:
The calendar years ending
1999, 2000, and 2001, the
earnings hurdle shall be
$366,200; $549,300;
$732,400 in each year
respectively. For each
year that the net
earnings before taxes of
Ameritrust exceed the
earnings hurdle in that
year, Sellers shall
exchange 25,000 shares of
their Restricted Shares
for 178,500 shares of the
Common Stock of Medley.
(c) Period 5: The six
months ending June 30,
2002, the earnings hurdle
shall be $900,000
annualized. If the net
earnings before taxes of
Ameritrust
exceed the earnings
hurdle, Sellers shall
exchange 125,000 shares
of their Restricted
Shares for 89,250 shares
of Common Stock of
Medley.
(d) Adjustment to Shares
to be Exchanged: If at
the end of each exchange
period as delineated in
(a), (b) or (c) above,
net earnings before taxes
is less than the earnings
hurdle, but greater than
80% of the then
applicable earnings
hurdle, Sellers shall
exchange their Restricted
Shares indicated for that
period with an amount of
Medley shares equal to
the actual net earnings
before taxes divided by
the earnings hurdle, with
that number multiplied by
the number of Medley
shares to be exchanged
pursuant to the above.
If the net earnings is
greater than 33% of the earnings hurdle but
less 80% of the than the earnings hurdle,
than no exchange of shares shall take
place. However, the date for the unachieved
earning hurdle shall be extended for an
additional one (1) calendar year or half
year as applicable.
If the net earnings is
equal to or below 33% of the earnings
hurdle then Sellers will deliver to Buyer
the applicable shares for the period for no
additional Medley Shares and forfeit that
period's exchange rights.
As of December 31, 2003,
any remaining Restricted Shares of
Ameritrust Common Stock not exchanged by
the Sellers due to the Company's failure to
achieve its earnings hurdle shall be
conveyed to Buyer or its assigns without
exchange of Medley Shares or consideration.
3.3 Paragraph 3.e. is hereby amended as follows:
e. The aggregate number of shares that the
Corporation is authorized to have outstanding as of the date
hereof is 7,500,000 shares of common stock of which 1,095,000
are presently issued and outstanding and held collectively in
the name of the Sellers.
4. That except for the amendments contained in this agreement all of
the terms, conditions and provisions contained in the Stock Exchange Agreement
dated July 20, 1998 are hereby ratified and confirmed and are in full force and
effect.
IN WITNESS WHEREOF, the Parties have hereunto set their hands and
seals this ___ day of October, 1998.
FINANTRA CAPITAL, INC.
By: /s/ Xxxxxx X. Press
-------------------------------
XXXXXX X. PRESS, President
AMERI-CAP FINANCE GROUP, INC.
By: /s/ Xxxxxx X. Press
-------------------------------
XXXXXX X. PRESS, President
AMERITRUST HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
XXXXX XXXXXXX, President
