EXHIBIT 10.2:
RESTRUCTURING AND RELEASE AGREEMENT
This Restructuring and Release Agreement ("Agreement") is made and
entered into between: Flexxtech Corporation, all parent corporations,
subsidiaries, trusts, shareholders, directors, officers, assigns, attorneys,
clients, employees and agents; Dutchess Advisors LLC, all parent corporations,
subsidiaries, trusts, shareholders, officers, assigns, attorneys, clients,
employees and agents; Dutchess Capital Management LLC, all parent corporations,
subsidiaries, trusts, shareholders, officers, assigns, attorneys, clients,
employees and agents; ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (an "Individual) and all family members,
and all corporations, subsidiaries, trusts, shareholders, officers, assigns,
attorneys, clients and agents he is associated with (Known hereinafter as the
"Restructuring and Releasing Parties") and Western Cottonwood Corporation,
Atlantis Partners, Inc., and all their parent corporations, subsidiaries,
trusts, shareholders, directors, officers, assigns, attorneys, clients,
employees and agents of Western Cottonwood and Atlantis Partners, Inc., and,
▇▇▇▇ ▇▇▇▇▇▇▇▇ (an "Individual") and all family members, and all corporations,
subsidiaries, trusts, shareholders, officers, assigns, attorneys, clients and
agents he is associated with (Known hereinafter as the "Released Parties") and
▇▇▇▇ ▇▇▇▇▇▇▇, (an "Individual") and all family members, and all corporations,
subsidiaries, trusts, shareholders, officers, assigns, attorneys, clients and
agents he is associated with, and VLK Capital Corp. all parent corporations,
subsidiaries, trusts, shareholders, directors, officers, assigns, attorneys,
clients, employees and agents of VLK Capital Corp. (Also, known hereinafter as
the "Released Parties"). Flexxtech Corporation ("Flexxtech"), ▇▇▇▇ ▇▇▇▇▇▇▇, VLK
Capital Corp., Dutchess Advisors LLC, Dutchess Capital Management LLC, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Western Cottonwood Corporation, Atlantis Partners, Inc. and ▇▇▇▇
▇▇▇▇▇▇▇▇ may be jointly referred to as the ("Parties") in this agreement.
RECITALS
A. The Parties mentioned above are all shareholders and/or creditors or
represent shareholders and/or creditors of Flexxtech. Flexxtech is in
need of capital and management restructuring in order to progress as a
public company. Flexxtech currently has 503,407 shares of common stock
("Stock") issued and outstanding. Series A Preferred Shares have been
authorized, pursuant to the W3M, Inc. (dba Paradigm Cabling Systems)
acquisition, but no shares have been delivered.
B. At this time, a dispute has arisen among the Parties and it is
anticipated that future disputes may arise. Therefore, it is the
intent of the Parties in entering this Agreement to set forth all
agreements between the Parties and resolve all pending matters among
the Parties.
Now therefore, in consideration of the promises and mutual agreements
hereinafter set forth, it is hereby agreed upon and among the Parties as
follows that upon the later of (i) the receipt by the Parties of a fully
executed document including any associated documents, (ii) or on or about
April 7, 2003 (the "Start Date"):
1. Obligations of Released Parties
1.1 Forgiveness of Notes. Western Cottonwood Corporation agrees to
forgive $1,984,849.99 in Notes receivable and interest
receivable as of December 31, 2002 and any interest to the
date of this Agreement from Flexxtech. The Notes shall be
forgiven on the Start Date.
1.2 Resignation of ▇▇▇▇ ▇▇▇▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ shall resign from
the Flexxtech board of directors ("Board") and as an officer
and employee of Flexxtech effective immediately upon the
filing of Flexxtech's 2002, Form 10K report with the SEC.
1.3 Immediate release of any and all claims to collateral,
security or title of any Flexxtech assets.
1.4 Full cooperation and assistance. Released parties full
cooperation and assistance regarding ongoing matters involving
Flexxtech's accounting, legal or other corporate issues is
critical to the future success of Flexxtech. Released parties
agree that they shall comply on a reasonable and timely basis
with all requests by the Restructuring and Releasing Parties
for related information.
1.5 ▇▇▇▇ ▇▇▇▇▇▇▇ shall cause the Board to appoint ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ effective
immediately following the execution of this Restructuring and
Release Agreement
1.6 ▇▇▇▇ ▇▇▇▇▇▇▇ shall immediately execute and cause the Board to
accept the Bridge Financing Offer, Agreements and Documents
between Flexxtech Corporation and Dutchess Private Equities
Fund, LP., immediately following the execution of this
Restructuring and Release Agreement.
1.7 ▇▇▇▇ ▇▇▇▇▇▇▇ shall immediately execute and cause the Board to
accept the Consulting Agreement between Flexxtech Corporation
and Dutchess Advisors, Ltd., immediately upon the execution of
this Restructuring and Release Agreement. Pursuant to the
Consulting Agreement Flexxtech shall issue Seven Hundred
Thousand (700,000) shares or common stock of the Company to
Dutchess Advisors, Ltd., bringing the total outstanding shares
to 1,203,407.
2. Obligations of Restructuring and Releasing Parties
2.1 Western Cottonwood and Atlantis Partners shall maintain a
combined ownership percentage of 4.9%. The percentage
ownership of 4.9% shall be non-dilutive through Flexxtech's
first merger or acquisition transaction ("Initial
Transaction") with a going concern following this Agreement
and non-dilutive to the total outstanding shares at the
completion of the Initial Transaction, at which point such
non-dilution rights shall be terminated. For example: In an
acquisition or merger transaction, Flexxtech issues Ten (10)
million shares of Stock in exchange of the going concern's
shares, then Western Cottonwood would be issued additional
shares of Stock of four hundred ninety thousand (490,000.)
This formula shall be used in a fully dilutive basis whether
any transaction contains Preferred Stock, Convertible
debentures or other types of securities, as if fully converted
on the closing date of the Initial Transaction. At the closing
date the Initial Transaction, Western Cottonwood would be
issued stock within 30 days of the closing representing an
amount which would cause Western Cottonwood to own a total of
4.9% of the total non-dilutive outstanding stock of Flexxtech.
2.2 ▇▇▇▇ ▇▇▇▇▇▇▇ shall maintain an ownership percentage of 2.0%.
His ownership percentage of 2.0% shall be non-dilutive through
Flexxtech's first merger or acquisition transaction ("Initial
Transaction") with a going concern following this Agreement
and non-dilutive to the total outstanding shares at the
completion of the Initial Transaction with a going concern
following this Agreement and non-dilutive to the total
outstanding shares at the completion of the Initial
Transaction at which point such non-dilution rights shall be
terminated. (For example: In an acquisition or merger
transaction, Flexxtech issues Ten (10) million shares in
exchange of the going concerns shares, then ▇▇▇▇ ▇▇▇▇▇▇▇ would
be issued additional shares of Stock of 200,000.) This formula
shall be used in a fully dilutive basis whether a transaction
contains Preferred Stock, Convertible debentures or other
types of securities, as if fully converted on the closing date
of the Initial Transaction. At the closing date of the Initial
Transaction, ▇▇▇▇ ▇▇▇▇▇▇▇ would be issued stock within 30 days
of the closing representing an amount which would cause ▇▇▇▇
▇▇▇▇▇▇▇ to own a total of 2% of the total non-dilutive
outstanding stock of Flexxtech.
2.3 Restrictions on Stock. All Stock issued to Released Parties
shall be restricted, issued pursuant to Rule 144 and shall
have no registration rights. Released parties also agree that
in addition to the rules governing resale pursuant to Rule
144, shares of Flexxtech Stock which have been issued to or
will be issued to Released Parties may not be sold either in
the public market nor in a private transaction for a period of
one year following the Start Date. The Released parties also
agree that they may not sell more than one twelfth (1/12) of
their entire ownership stake in any one month for a period
covering the thirteenth month through the twenty fourth month
following the Start Date ("Restricted Period"). The Stock is
not transferable and may not be hypothecated or loaned at any
time and under any circumstances, during the period beginning
with the Start Date and ending at the conclusion of the
Restricted Period
2.4 Subject to the terms of this Agreement the Restructuring and
Releasing Parties hereby releases, relinquishes and forever
discharges the Released Parties, their predecessors,
successors, assigns, agents, employees, attorneys and
representatives, family members of and from any and all
claims, demands, actions, and causes of action of any and
every kind or character, whether known or unknown, which the
Restructuring and Releasing Parties or any other party may
have against the Released Parties and their predecessors,
successors, assigns, agents, employees, attorneys and
representatives arising out of or with respect to any and all
transactions relating to Flexxtech and any and all
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transactions relating to the Restructuring and Releasing
Parties, any and all agreements, the Securities of Flexxtech
and any instrument signed in connection with any transaction
among the parties not specifically excluded from this release
by written agreement, including but not limited to any loss or
expense and/or detriment of any kind or character growing out
of or in any way connected with or in any way resulting from
the acts or omissions of the Released Parties and their
predecessors, successors, assigns, agents, employees,
attorneys and representatives and including, but not limited
to, any loss, cost or damage in connection with any usury,
breach of fiduciary duty, breach of any duty of fair dealing,
breach of confidence, breach of funding commitment, undue
influence, duress, economic coercion, conflict of interest,
negligence, bad faith, malpractice, violation of the RICO Act,
the intentional or negligent infliction of mental duress,
tortious interference with contractual relations, tortious
interference with corporate governance or prospective business
advantage, breach of contract, deceptive trade practices,
libel, slander or conspiracy. Flexxtech agrees to keep
indemnified the Released Parties from all claims, actions,
proceedings, investigations, demands, judgments, and awards
(together "Claims" which may be instituted, made, threatened,
or alleged against or which otherwise involve the Released
Parties and against all losses, liabilities, damages, costs,
charges and expenses (together "Losses") which may be suffered
or incurred by the Released Parties in connection with or
arising out of the Released Parties involvement with Flexxtech
and its subsidiaries.
3. General
3.1 Governing Law. Any controversy, claim or dispute arising from
the interpretation of this Agreement, or breach thereof, shall
settled by arbitration in the County of ▇▇▇▇▇, State of Nevada
in accordance with the rules of the American Arbitration
Association there in effect, except that the parties thereto
shall have any right to discovery as would permitted by the
Federal Rules of Civil Procedure. The decision of the
Arbitrator(s) shall be final.
3.2 Attorney's Fees. If any action at law or in equity, including
an action for declaratory relief, is brought to enforce or
interpret the provisions of this agreement, the prevailing
party shall be entitled to recover reasonable attorney's fees,
court costs, and other costs incurred in proceeding with the
action from the other party.
ACCEPTED AND AGREED TO BY:
FLEXXTECH CORPORATION
By: ___________________________
▇▇▇▇ ▇▇▇▇▇▇▇, President
Dated: ________________________
VLK CAPITAL CORP.
By: _________________________
▇▇▇▇ ▇▇▇▇▇▇▇, President
Dated: ________________________
▇▇▇▇ ▇▇▇▇▇▇▇
By: ___________________________
▇▇▇▇ ▇▇▇▇▇▇▇, An Individual
Dated: ________________________
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DUTCHESS ADVISOR LLC
By: __________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Senior Partner
Dated: _______________________
DUTCHESS CAPITAL MANAGEMENT LLC
By: __________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
A Managing Member
Dated: ________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: __________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
An Individual
Dated: ________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇
By: __________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇, An Individual
Dated: ________________________
WESTERN COTTONWOOD CORPORATION
By: __________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Date: ________________________
ATLANTIS PARTNERS, INC.
By: _________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Dated: ________________________
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