Second Amendment to
AMENDED STOCK EXCHANGE AND PLAN OF MERGER AGREEMENT
THE STOCK EXCHANGE AND PLAN OF MERGER AGREEMENT (the "Agreement") entered into
on the 8th day of September 2006, by and among GALTECH SEMICONDUCTOR MATERIALS
CORPORATION, a Utah corporation ("GALTECH") and CBM GROUP, INC., a Nevada
corporation ("CBM"), along with the First Amendment to that AMENDED STOCK
EXCHANGE AND PLAN OF MERGER AGREEMENT executed on September 21, 2006, is hereby
further Amended as follows:
WITNESSETH
WHEREAS, after the execution of the AMENDED STOCK EXCHANGE AND PLAN OF MERGER
AGREEMENT executed on September 8, 2006, filed with the Security and Exchange
Commission ("SEC") on September 13, 2006, Xxxxx Fargo Bank, N.A., who alleges a
lien interest in the IP owned by CBM, and Xxxxx Xxxxxxx ("Xxxxxxx") an
individual who owns a minority shareholder interest in a company that owned a
company that owned a foreign company who sold Hydroscope(R) IP to CBM Group,
Inc. being the same individual who brought an action against CBM alleging its
purchase of Hydroscope IP was a fraudulent transfer, jointly filed a Temporary
Restraining Order ("TRO") in the Second Judicial District of the State of New
Mexico requesting that Court to stop the STOCK EXCHANGE AND PLAN OF MERGER
between Galtech and CBM; and
WHEREAS, the Second Judicial District Court ruled against "Xxxxxxx" at a TRO
hearing on the merits, stating Xxxxxxx was unlikely to succeed on his fraudulent
transfer claim brought against CBM for its acquisition of Hydroscope IP; and
WHEREAS, during the course of the TRO hearing CBM filed a response to the TRO
Motion setting forth the facts that Xxxxxxx had no standing to bring such an
Motion or file a lawsuit against CBM as Xxxxxxx has never been a creditor or
shareholder of CBM or a creditor or shareholder of the company that sold CBM the
Hydroscope IP; and
WHEREAS, the Second Judicial District Court decided the TRO Motion on the merits
and did not consider the "standing" response argument as filed by CBM's lawyers;
and
WHEREAS, CBM's lawyers will now turn "standing" response argument filed in the
TRO hearing into a Motion for Dismissal of claims brought against CBM by Xxxxxxx
in his failed but expensive attempt to stop GALTECH's acquisition of CBM; and
WHEREAS, Xxxxxxx and Xxxxx Fargo Bank, N.A., subsequent to the Second Judicial
District Court ruling against TRO relief and an injunction, both filed
"objections" in Federal Bankruptcy Court to a pending Motion for dismissal of
the Xxxx'x personal Chapter 11 petition, with Xxxxx Fargo Bank and Xxxxxxx both
stating in their objections to the Xxxx'x Dismissal that Xxxxxxx intended to
submit a "plan", a plan that may or may not attempt to gain control or ownership
of the Cooks' shares issued to the Cooks upon closing of the Agreement between
GALTECH and CBM, which makes the Cooks major shareholders in GALTECH; and
WHEREAS, in due diligence of CBM and the Hydroscope IP, GALTECH Directors became
aware of the litigious nature of Xxxxxxx and Xxxxxxx'x continuous interference
in the business of another company in which Xxxxxxx owned a minority shareholder
interest; and
WHEREAS, Directors of GALTECH see great value in acquiring CBM, notwithstanding
the meritless claims filed by Xxxxxxx and Xxxxx Fargo Bank, as Directors have a
high level of confidence all claims filed by Xxxxxxx against CBM can be
dismissed for lack of standing in the near future through a summary judgment
type motion, and should Xxxxx Fargo continue to asset their fraudulent lien
interest in Hydroscope IP after Agreement closing, Xxxxx Fargo is substantial
enough for shareholders of GALTECH/CBM to recover inflicted damages; and
WHEREAS, GALTECH Directors, notwithstanding the delays imposed by Xxxxx Fargo
Bank and Xxxxxxx, reassessed terms of the Agreement and have concluded, provided
shareholders of CBM vote and agree that any and all shares designated for
issuance to the Cooks' upon closing of the Agreement would all be Common shares
and actual issuance of any and all common shares to the Cooks individually would
be contingent upon the Cooks obtaining a dismissal of their personal Chapter 11
and or GALTECH Directors otherwise being assured all shares issued to the Cooks
individually would be controlled by the Cooks personally, GALTECH and CBM
Directors, who shall confirm acceptance by CBM shareholders, accept the modified
terms to issuance of any stock to the Cooks as no closing will take place that
could allow for Xxxxxxx or others to gain control of or otherwise own the Cooks'
major shareholder interest in GALTECH; and
WHEREAS, Directors of GALTECH and CBM all know that Xx. Xxxx is the key to the
success of GALTECH once it acquires CBM and that without a substantial interest
Xx. Xxxx is unlikely to have the incentive to remain as the new CEO; and
WHEREAS, Directors of GALTECH and CBM have definitively concluded that Xx.
Xxxxxxx would only bring "grief" to GALTECH if he obtained a significant
interest as Xx. Xxxxxxx has insufficient knowledge or industry experience to
bring increased value to shareholders.
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THEREFORE IT IS RESOLVED, the terms of the Agreement executed on
September 8, 2006 and as previously Amended, is further Amended in accordance
with the above statements and the Closing Date of the Agreement, as defined in
Article VII, shall be no later than forty-five (45) days after execution of this
Amendment of the Agreement, unless otherwise mutually extended, notwithstanding
a closing can take place as soon as all conditions are met by the respective
parties to the Agreement. If Closing does not take place within forty-five (45)
days from the date hereon, the Agreement as Amended shall be null and void and
shall have no further force or effect upon the parties.
PARTIES: Dated: October 5, 2006
CBM Group, Inc.
a Nevada Corporation
By /s/ Xxxxxx X. Xxxx
---------------------------------
Xxxxxx X. Xxxx, President
GALTECH SEMICONDUCTOR
MATERIALS CORPORATION
a Utah Corporation
By /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxx, President
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