PLAN OF EXCHANGE BY WHICH
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BY
WHICH
XXXXXXXXXX
REAL ESTATE SERVICE INC.
(a
Nevada corporation)
SHALL
ACQUIRE
FRONT
STREET FIRST
CORP.
(a
Nevada corporation)
This
Plan of Exchange (the
“Agreement”
or
“Plan
of Exchange”)
is made and dated as of this 31st day of December, 2007, and is intended
to supersede all previous oral or written agreements, if any, between the
parties, with respect to its subject matter. This Agreement anticipates that
extensive due diligence shall have been performed by both parties. All due
diligence shall have been completed by the Parties no later than December 31,
2007.
I.
RECITALS
1.
The Parties to this Agreement:
(1.1)
Xxxxxxxxxx Real Estate Service Inc.
("Xxxxxxxxxx"), a Nevada corporation.
(1.2)
Front
Street First
Corp. ("Front
Street"),
a Nevada
corporation.
(1.3)
Northeast
Nominee
Trust ("Northeast"),
a trust
incorporated in Massachusetts.
2.
The Capital of the Parties:
(2.1)
The Capital of Xxxxxxxxxx
consists of 275,000,000
authorized shares of
Common Stock, par value $.001, of which 30,356,200 shares are issued and
outstanding, and 25,000,000 authorized shares of Convertible Preferred Stock,
par value $.001, of which none is issued and outstanding. Each share of
Convertible Preferred Stock shall be convertible, at the option of the holder
thereof, at any time after one year from the date of issuance (the “Conversion
Date”) into ten (10) shares of fully paid and non-assessable shares of Common
Stock of Xxxxxxxxxx.
(2.2)
The Capital of Front
Street
consists of 12,500,000
authorized shares of
Common Stock, par value $.001, of which $1,000
shares
are
issued and outstanding, which for the purposes of this Agreement, is referred
to
as “common stock” or “capital stock”.
(2.3)
Northeast holds 22,000,000
shares of Common Stock of Xxxxxxxxxx, represents a majority, or 72.4%, of the
issued and outstanding voting power of Xxxxxxxxxx.
3.
Transaction Descriptive Summary:
Xxxxxxxxxx desires to acquire Front Street and the shareholders
of Front Street (the “Front
Street Shareholders”)
desire that Front Street be
acquired by Xxxxxxxxxx. Xxxxxxxxxx would acquire 100% of the capital stock
of
Front Street in exchange
for the issuance by Xxxxxxxxxx of 1,400,000 new shares of Preferred Stock to
Front Street, which are
convertible into 14,000,000 shares of Common Stock of Xxxxxxxxxx at the option
of the holder thereof, at any time after one year from the date of issuance. In
addition, Northeast will retire
the total 22,000,000 shares of
Common Stock of Xxxxxxxxxx
back to the treasury in
exchange of the issuance by Xxxxxxxxxx
of 2,200,000 new shares of Preferred
Stock of Xxxxxxxxxx. The transaction will immediately close upon the
approval of Board of Directors of Xxxxxxxxxx and Front Street, respectively. Upon
closing, Front Street would become a wholly-owned subsidiary of Xxxxxxxxxx.
The
parties intend that the transactions qualify and meet the Internal Revenue
Code
requirements for a tax free reorganization, in which there is no corporate
gain
or loss recognized by the parties, with reference to Internal Revenue Code
(IRC)
sections 354 and 368.
4.
"Pinksheets - Other OTC" quotation
market compliance. Xxxxxxxxxx will make all appropriate shareholder
notifications in connection with the acquisition. Xxxxxxxxxx shall cause the
filing with "Pinksheets - Other OTC" quotation market, if deemed applicable.
5. Nevada compliance. Articles
of Exchange are
required
to be filed by Nevada law
as the last act to make the
plan of exchange
final
and effective under
Nevada law.
6. Audited
Financial Statements.
In connection with Xxxxxxxxxx’x filing with "Pinksheets - Other OTC" quotation
market, as it relates to this transaction, audited financial statements of
Front Street will not be
required.
II.
PLAN OF EXCHANGE
1.
Conditions Precedent to Closing.
The
obligation of the parties to consummate the transactions contemplated herein
are
subject to the fulfillment or waiver prior to the closing of the following
conditions precedent:
(1.1)
Shareholder Approval.Front Street
and Xxxxxxxxxx shall have
secured their shareholder approvals for this transaction, if required, in
accordance with the laws of its place of incorporation and its constituent
documents.
(1.2)
Board of Directors. The
Boards of Directors of each of Front Street and Xxxxxxxxxx shall
have approved the transaction and this agreement, in accordance with the laws
of
its place of incorporation and its constituent documents.
(1.3)
Due Diligence Investigation.
Each party shall have furnished to the other party all corporate and financial
information which is customary and reasonable, to conduct its respective due
diligence, normal for this kind of transaction. If either party determines
that
there is a reason not to complete the Plan of Exchange as a result of their
due
diligence examination, then they must give written notice to the other party
prior to the expiration of the due diligence examination period. The due
diligence period, for purposes of this paragraph, shall have expired on December
31, 2007. The Closing Date shall be three days after the satisfaction
or waiver of all of the conditions precedent to closing set forth in this Plan
of Exchange, unless extended to a later date by mutual agreement of the
parties.
(1.4)
The rights of dissenting
shareholders, if any, of each party shall have been satisfied and the
Board of Directors of each party shall have determined to proceed with the
Plan
of exchange.
(1.5)
All of the terms, covenants and
conditions of the Plan of exchange to be complied with or performed by
each party before Closing shall have been complied with, performed or waived
in
writing.
2.
Conditions Concurrent and Subsequent to Closing.
(2.1)
Delivery of Registered Capital of
Front
Street. Immediately
upon
or within 30 days from the date of this agreement, Xxxxxxxxxx shall have 100%
of
the beneficial interest of Front Street First Corp.
(2.2)
Acquisition Share Issuance and
Purchase of Common Stock. Immediately upon the Closing, Xxxxxxxxxx shall
issue to the Front Street
Shareholders 1,400,000 new investment shares of Preferred Stock of Xxxxxxxxxx
in
exchange for 100% of the capital stock of Front Street, which are
convertible into 14,000,000 shares of Common Stock of Xxxxxxxxxx at the option
of the holder thereof, at any time after one year from the date of issuance.
(2.3)
Exchange from Common Stock to
Preferred Stock. Immediately upon the Closing, Northeast will retire
the total
22,000,000 shares of Common Stock of Xxxxxxxxxx back to the treasury in exchange
of the issuance by Xxxxxxxxxx of 2,200,000
new shares of
Preferred Stock of Xxxxxxxxxx to Northeast.
(3.1)
Exchange and Reorganization:
Xxxxxxxxxx and Front
Street shall be hereby
reorganized, such that Xxxxxxxxxx shall acquire 100% the capital stock of Xxxxx Xxxxxx, xxx Xxxxx
Xxxxxx shall become a
wholly-owned subsidiary of Xxxxxxxxxx.
(3.2)
Issuance of Preferred
Stock: Within 60 days upon the effective date of the Plan, Xxxxxxxxxx
shall issue 1,400,000 new investment shares of Preferred Stock of Xxxxxxxxxx
to
or for the Front Street
Shareholders, and issued 2,200,000 new investment shares of Preferred Stock
of
Xxxxxxxxxx to Northeast.
(3.3)
Closing/Effective Date:
The Plan of exchange shall become effective immediately upon approval and
adoption by the parties hereto, in the manner provided by the law of the places
of incorporation and constituent corporate documents, and upon compliance with
governmental filing requirements, such as, without limitation, the filing of
Articles of Exchange, if applicable under State Law. Closing shall occur upon
the approval by the Board of Directors of the parties hereto or are waived by the
parties.
(3.4)
Surviving Corporations:
Both corporations shall survive the exchange and reorganization herein
contemplated and shall continue to be governed by the laws of its respective
jurisdiction of incorporation.
(3.5)
Rights of Dissenting
Shareholders: Each Party is the entity responsible for the rights of its
own dissenting shareholders, if any.
(3.6)
Service of
Process and Address:Each
corporation shall continue to be amenable to service of process in its own
jurisdiction, exactly as before this acquisition. The address of
Xxxxxxxxxx is 1st
/ fl, 000
Xxxxxxxx
Xx.,
Xxxxxxxxxxx,
XX 00000.
The address of Front Street First
Corp. is XX Xxx 000, Xxxxxxx Xxxx, XX 00000.
(3.7)
Surviving Articles of
Incorporation: the Articles of Incorporation of each Corporation shall
remain in full force and effect, unchanged.
(3.8)
Surviving By-Laws: the
By-Laws of each Corporation shall remain in full force and effect,
unchanged.
(3.9)
Further Assurance, Good Faith and
Fair Dealing: the Directors of each Company shall and will execute and
deliver any and all necessary documents, acknowledgments and assurances and
do
all things proper to confirm or acknowledge any and all rights, titles and
interests created or confirmed herein; and both companies covenant expressly
hereby to deal fairly and in good faith with each other and each others
shareholders. In furtherance of the parties desire, as so expressed, and to
encourage timely, effective and businesslike resolution the parties agree that
any dispute arising between them, capable of resolution by arbitration, shall
be
submitted to binding arbitration. As a further incentive to private resolution
of any dispute, the parties agree that each party shall bear its own costs
of
dispute resolution and shall not recover such costs from any other
party.
(3.10)
General Mutual Representations
and Warranties. The purpose and general import of the Mutual
Representations and Warranties, are that each party has made appropriate full
disclosure to the others, that no material information has been withheld, and
that the information exchanged is accurate, true and correct. These warranties
and representations are made by each party to the other, unless otherwise
provided in this agreement, and they speak and shall be true immediately before
Closing.
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(3.10.1)
Organization and
Qualification. Each corporation is duly organized and in good
standing, and is duly qualified to conduct any business it may be
conducting, as required by law or local ordinance.
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(3.10.2)
Corporate Authority.
Each corporation has corporate authority, under the laws of its
jurisdiction and its constituent documents, to do each and every
element
of performance to which it has agreed, and which is reasonably necessary,
appropriate and lawful, to carry out this Agreement in good faith.
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(3.10.3)
Ownership of Assets and
Property. Each corporation has lawful title and ownership of it
property as reported to the other, and as disclosed in its financial
statements.
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(3.10.4)
Absence of Certain Changes or
Events. Each corporation has not had any material changes of
circumstances or events which have not been fully disclosed to the
other
party, and which, if different than previously disclosed in writing,
have
been disclosed in writing as currently as is reasonably
practicable. Specifically, and without limitation:
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(3.10.4-a)
the
business of each
corporation shall be conducted only in the ordinary and usual course
and
consistent with its past practice, and neither party shall purchase
or
sell (or enter into any agreement to so purchase or sell) any properties
or assets or make any other changes in its operations, respectively,
taken
as a whole, or provide for the issuance of, agreement to issue or
grant of
options to acquire any shares, whether common, redeemable common
or
convertible preferred, in connection therewith;
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(3.10.4-b)
Except
as set forth in
this Plan of Exchange, neither corporation shall (i) amend its Articles
of
Incorporation or By-Laws, (ii) change the number of authorized or
outstanding shares of its capital stock, or (iii) declare, set aside
or
pay any dividend or other distribution or payment in cash, stock
or
property to the extent that which might contradict or
not comply with any clause or condition set forth in this Plan
of Exchange, LOI or Escrow Agreement;
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(3.10.4-c)
Neither
corporation
shall (i) issue, grant or pledge or agree or propose to issue, grant,
sell
or pledge any shares of, or rights of any kind to acquire any shares
of,
its capital stock, (ii) incur any indebtedness other than in the
ordinary
course of business, (iii) acquire directly or indirectly by redemption
or
otherwise any shares of its capital stock of any class or (iv) enter
into
or modify any contact, agreement, commitment or arrangement with
respect
to any of the foregoing;
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(3.10.4-d)
Except
in the ordinary
course of business, neither party shall (i) increase the compensation
payable or to become payable by it to any of its officers or directors;
(ii) make any payment or provision with respect to any bonus, profit
sharing, stock option, stock purchase, employee stock ownership,
pension,
retirement, deferred compensation, employment or other payment plan,
agreement or arrangement for the benefit of its employees (iii) grant
any
stock options or stock appreciation rights or permit the exercise
of any
stock appreciation right where the exercise of such right is subject
to
its discretion (iv) make any change in the compensation to be received
by
any of its officers; or adopt, or amend to increase compensation
or
benefits payable under, any collective bargaining, bonus, profit
sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment, termination or severance or other plan, agreement, trust,
fund
or arrangement for the benefit of employees, (v) enter into any agreement
with respect to termination or severance pay, or any employment agreement
or other contract or arrangement with any officer or director or
employee,
respectively, with respect to the performance or personal services
that is
not terminable without liability by it on thirty days notice or less,
(vi)
increase benefits payable under its current severance or termination,
pay
agreements or policies or (vii) make any loan or advance to, or enter
into
any written contract, lease or commitment with, any of its officers
or
directors;
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(3.10.4-e)
Neither
party shall
assume, guarantee, endorse or otherwise become responsible for the
obligations of any other individual, firm or corporation or make
any loans
or advances to any individual, firm or corporation, other than obligations
and liabilities expressly assumed by the other that party;
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(3.10.4-f)
Neither
party shall
make any investment of a capital nature either by purchase of stock
or
securities, contributions to capital, property transfers or otherwise,
or
by the purchase of any property or assets of any other individual,
firm or
corporation.
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(3.10.5)
Absence of Undisclosed
Liabilities. Each corporation has, and has no reason to anticipate
having, any material liabilities which have not been disclosed to
the
other, in the financial statements or otherwise in writing.
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(3.10.6)
Legal Compliance. Each
corporation shall comply in all material respects with all Federal,
state,
local and other governmental (domestic or foreign) laws, statutes,
ordinances, rules, regulations (including all applicable securities
laws),
orders, writs, injunctions, decrees, awards or other requirements
of any
court or other governmental or other authority applicable to each
of them
or their respective assets or to the conduct of their respective
businesses, and use their best efforts to perform all obligations
under
all contracts, agreements, licenses, permits and undertaking without
default.
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(3.10.7)
Legal Proceedings.
Each corporation has no legal proceedings, administrative or regulatory
proceeding, pending or suspected, which have not been fully disclosed
in
writing to the other.
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(3.10.8)
No Breach of Other
Agreements. This Agreement, and the faithful performance
of this agreement, will not cause any breach of any other existing
agreement, or any covenant, consent decree, or undertaking by either,
not
disclosed to the other.
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(3.10.9)
Capital Stock. The
issued and outstanding shares and all shares of capital stock of
each
corporation is as detailed herein, that all such shares are in fact
issued
and outstanding, duly and validly issued, were issued as and are
fully
paid and non-assessable shares, and that, other than as represented
in
writing, there are no other securities, options, warrants or rights
outstanding, to acquire further shares of such corporation.
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(3.10.10)
Brokers' or Finder's
Fees. Each corporation is not aware of any claims for brokers'
fees, or finders' fees, or other commissions or fees, by any person
not
disclosed to the other, which would become, if valid, an obligation
of
either company.
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(3.11)
Miscellaneous
Provisions
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(3.11.1)
Except
as required by
law, no party shall provide any information concerning any aspect
of the
transactions contemplated by this Agreement to anyone other than
their
respective officers, employees and representatives without the prior
written consent of the other parties hereto. The aforesaid obligations
shall terminate on the earlier to occur of (a) the Closing, or (b)
the
date by which any party is required under its articles or bylaws
or as
required by law, to provide specific disclosure of such transactions
to
its shareholders, governmental agencies or other third parties. In
the
event that the transaction does not close, each party will return
all
confidential information furnished in confidence to the
other. In addition, all parties shall consult with each other
concerning the timing and content of any press release or news release
to
be issued by any of them.
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(3.11.2)
This
Agreement may be
executed simultaneously in two or more counterpart originals. The
parties
can and may rely upon facsimile signatures as binding under this
Agreement, however, the parties agree to forward original signatures
to
the other parties as soon as practicable after the facsimile signatures
have been delivered.
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(3.11.3)
The
Parties to this
agreement have no wish to engage in costly or lengthy litigation
with each
other. Accordingly, any and all disputes which the parties cannot
resolve
by agreement or mediation, shall be submitted to binding arbitration
under
the rules and auspices of the American Arbitration Association. As
a
further incentive to avoid disputes, each party shall bear its own
costs,
with respect thereto, and with respect to any proceedings in any
court
brought to enforce or overturn any arbitration award. This provision
is
expressly intended to discourage litigation and to encourage orderly,
timely and economical resolution of any disputes which may occur.
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(3.11.4)
If
any provision of
this Agreement or the application thereof to any person or situation
shall
be held invalid or unenforceable, the remainder of the Agreement
and the
application of such provision to other persons or situations shall
not be
effected thereby but shall continue valid and enforceable to the
fullest
extent permitted by law.
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(3.11.5)
No
waiver by any party
of any occurrence or provision hereof shall be deemed a waiver of
any
other occurrence or provision.
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(3.11.6)
The
parties
acknowledge that both they and their counsel have been provided ample
opportunity to review and revise this agreement and that the normal
rule
of construction shall not be applied to cause the resolution of any
ambiguities against any party presumptively. The Agreement shall
be
governed by and construed in accordance with the laws of the State
of
Nevada.
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4.
Termination. The Plan of
exchange may be terminated by written notice, at any time prior to closing,
(i)
by mutual consent, (ii) by either party during the due diligence phase, (iii)
by
either party, in the event that the transaction represented by the anticipated
Plan of exchange has not been implemented and approved by the proper
governmental authorities 60 days from the date of this Agreement, or (v) by
either party in the event that a condition of closing is not met by December
31,
2007. In the event that termination of the Plan of exchange by either or both,
as provided above, the Plan of exchange shall forthwith become void and there
shall be no liability on the part of either party or their respective officers
and directors.
5.
Closing. The
parties hereto contemplate that the closing of this Plan of Exchange shall
occur
no more than three days after all of the conditions precedent have been met
or
waived. The closing deliveries will be made pursuant to this
Agreement. In addition, within 60 days of signing the Plan of Exchange, Montgomery shall issue
1,400,000 new investment shares of
Preferred Stock of Xxxxxxxxxx, to the Front
Street
shareholders and Xxxxxxxxxx shall acquire
100% of the capital stock of
Front
Street. In addition, Xxxxxxxxxx shall issue
2,200,000
new investment shares of
Preferred Stock of Xxxxxxxxxx to Northeast and Xxxxxxxxxx shall retire
22,000,000 shares of Common
Stock of Xxxxxxxxxx, which are acquired from Northeast.
6. Merger
Clause. This Plan of Exchange constitute the entire agreement
of the parties hereto with respect to the subject matter hereof, and such
document supersedes all prior understandings or agreements between the parties
hereto, whether oral or written, with respect to the subject matter hereof,
all
of which are hereby superceded, merged and rendered null and void.
IN
WITNESS
WHEREOF, The parties hereto, intending to be bound, hereby sign this Plan
of Exchange below as of the date first written above.
XXXXXXXXXX
REAL ESTATE SERVICE INC.
By:
/s/
Xxxxx Xxxxxxx,
President
Xxxxx
Xxxxxxx, President
FRONTSTREET
FIRST CORP.
By:
/s/
Xxxxx Xxxxxxx,
President
Xxxxx
Xxxxxxx, President
NORTHEAST
NOMINEE
TRUST
By: /s/ Xxxxx
Xxxxxxx,
President
Xxxxx
Xxxxxxx, President
