PLAN OF EXCHANGE
EXHIBIT
2.3
THIS
PLAN OF EXCHANGE is
made
and entered into as of January 19, 2006 (this “Plan of Exchange”) by and between
Xxxxxxx Technologies Corporation, a Delaware corporation (the “Buyer”), and
Resilent LLC, a Nebraska limited liability company (the “Company”). Buyer and
the Company are collectively referred to as the “Parties.”
WHEREAS,
the Parties hereto desire to enter into a plan of exchange pursuant to which
the
Buyer shall acquire a majority of the issued and outstanding membership interest
units of the Company in exchange for shares of its capital stock and cash (the
“Exchange”) and further pursuant to that certain Securities Exchange Agreement
between the parties dated the same date as this Plan of Exchange.
WHEREAS,
the Board of Directors of the Company has adopted resolutions authorizing the
Company to enter into this Plan of Exchange, approved by a majority of the
percentage interests of the members and the manager.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein and other valuable consideration, the receipt and adequacy of which
are
hereby acknowledged, the parties do hereby covenant and agree as
follows:
| 1.0 | DEFINITIONS |
“Securities
Act” means
the
Securities Act of 1933, as amended, or any successor law, and regulations and
rules issued pursuant to thereto.
“Registration
Statement”
means a
registration statement of the Buyer under the Securities Act.
“Units”
means
units of membership Interest as such term is defined in the Company’s Operating
Agreement dated February 15, 2005 (“Operating Agreement”), which is attached
hereto as Exhibit “A” and incorporated herein by this reference. The Company’s
authorized capitalization consists of 25,000 Class A Units, 1,000 Class B Units,
and 10,000 Class C Units with each class having the rights as described in
the
Operating Agreement. As of the date of this Plan of Exchange, the Company’s
authorized, issued and outstanding Units consist of 11,867 Units comprised
of
8,788Class A Xxxxx, 000 Class B Units and 2,333 Class C Units.
Other
capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement between
the
Parties.
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| 2.0 | THE EXCHANGE |
2.1 Exhange
for Units.
At the
Effective Time of the Exchange (as such term is hereinafter defined), in
accordance with the provisions of applicable law and the terms of this Plan
of
Exchange, 11,868 Class A Membership Interest Units issued and outstanding
immediately prior thereto (“Purchased Units”) shall be exchanged for (a)
3,000,000 shares of Buyer’s common stock, par value $0.001 (“Buyer’s Shares”);
and (b) Buyer’s fully executed Promissory Note in the aggregate amount of
$2,000,000.00 cash to be paid to the Company on the schedule stated therein,
the
form of which is attached hereto as Exhibit “B” (the “Promissory
Note”).
Buyer’s
Shares, Warrants and Promissory Note are hereinafter collectively referred
to as
“Consideration”.
2.2 Buyer’s
Share Value.
For
purposes of valuation of the transaction contemplated herein, the value of
Buyer’s Shares shall be the per share price for Buyer’s common stock at the
close of trading for the Over The Counter (OTC) market on the day prior to
the
effective date of the exchange.
2.3 No
Other Consideration Buyer
hereby represents and warrants that the Buyer’s Consideration is the only
consideration it will issue in exchange for the Company’s Units and Buyer shall
not issue further stock or any options, warrants, subscriptions or any other
rights to its stock in exchange for any Units of the Company.
2.4 Effective
Time of the Exchange.
The
Exchange shall not become effective until, subject to the terms and conditions
of this Plan of Exchange, 5:00 o’clock p.m. Central Standard Time on the day on
which the following actions shall have in all respects been
completed:
a.
This
Plan
of Exchange shall have been approved by the respective board of directors of
each of the Parties in accordance with the requirements of the laws of the
states under which each Party is organized;
b.
This
Plan
of Exchange shall have been approved by the members of the Company in accordance
with the Company’s Operating Agreement and the Nebraska Limited Liability
Company Act.
The
date
and time when the Exchange shall become effective as aforesaid is herein
referred to as “Effective Time of the Exchange.”
| 3.0 | DIRECTORS |
Two
members of the Board of Directors of the Company shall be designated by Buyer
and appointed to the Company’s Board of Directors to hold his or her respective
offices from and after the Effective Time of the Exchange until his or her
successor shall have been elected and qualified or as otherwise provided in
the
Operating Agreement of the Company. One member of the Board of Directors of
the
Buyer shall be designated by the Company and appointed to the Buyer’s Board of
Directors to hold his or her respective office from and after the Effective
Time
of the Exchange until his or her successor shall have been elected and qualified
or as otherwise provided in the By-Laws of the Buyer. Unless otherwise approved
by the members of the Company, the Company’s Board of Directors shall consist of
five members. Unless otherwise approved by the shareholders of the Buyer,
Buyer’s Board of Directors shall consist of five directors.
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| 4.0 | OPERATION OF THE COMPANY |
From
and
after the Effective Time of the Exchange, the Company shall be operated as
a
subsidiary of the Buyer and the Buyer shall perform the accounting functions
for
the Company.
| 5.0 | CERTIFICATES AND DOCUMENTS REQUIRED AT THE EXCHANGE |
5.1 Buyer’s
Stock Certificates. At
the
Exchange, Buyer shall issue and deliver to the Company two certificates
each of
which represents 1,500,000 shares of Buyer’s common stock (collectively referred
to as “Buyer’s Stock Certificates).
a. Buyer’s
Stock Certificates will be inscribed with substantially the following
legend:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT THEN IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULES 144 AND 145 OF SUCH ACT.”
b. The
Company hereby acknowledges that it has been advised that the Buyer’s Shares
have not been registered under the Securities Act of 1933, as amended, or any
state securities act in reliance on exemptions therefrom.
5.3 Buyer’s
Promissory Note.
At the
Exchange, Buyer shall deliver the Promissory Note to the Company.
a. The
Promissory Note shall provide for payments to the Company on the schedule stated
therein.
b. The
Company hereby acknowledges receipt of the initial payment due under the
Promissory Note in the amount of $200,000.00, plus an additional payment in
the
amount of $45,000.00.
5.4 Voting
Proxy.
At the
Exchange, the Buyer shall deliver to the Company a fully executed Irrevocable
Voting Proxy, the form of which is attached hereto as Exhibit “C”.
5.5 The
Purchased Units Certificate. At
the
Exchange, the Company shall issue and deliver to Buyer two certificates
representing the Purchased Units, bearing the same or similar legend as
described in Section 5.1 (a) above: one certificate representing 7,091 Units
and
one certificate representing 4,727 Units. In addition, said certificates shall
bear the following legend:
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“THE
MEMBERSHIP INTEREST UNITS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
IRREVOCABLE PROXY GRANTED TO XX. XXXXXX X. XXXXXXX, A COPY OF WHICH IS ATTACHED
HERETO”
| 6.0 | FURTHER BUYER REPRESENTATIONS AND WARRANTIES |
6.1 Requisite
Power and Authority.
Buyer
hereby represents and warrants that it has been duly formed and is validly
existing and in good standing under the laws of the State of Delaware, with
full
power and authority to enter into the transactions contemplated in this Plan
of
Exchange.
6.2 Investment
Representations.
Buyer
understands that the Purchased Units have not been registered under the
Securities Act. Buyer further represents that it is an accredited investor
within the meaning of Regulation D under the Securities Act.
| 7.0 | FURTHER COMPANY REPRESENTATIONS AND WARRANTIES |
7.1 Requisite
Power and Authority.
Company
hereby represents and warrants that it has been duly formed and is validly
existing and in good standing under the laws of the State of Nebraska, with
full
power and authority to enter into the transactions contemplated in this Plan
of
Exchange.
7.2 Investment
Representations.
Company
understands that the Buyer’s Shares have not been registered under the
Securities Act. Company further represents that it is an accredited investor
within the meaning of Regulation D under the Securities Act.
7.3 Buyer’s
SEC Filings. The
Company hereby acknowledges that it has been provided with and has examined
each
of the following documents filed by Buyer with the Securities and Exchange
Commission (“Buyer’s SEC Filings”):
a. Buyer’s
annual report under Form 10-KSB for the period ending June 30,
2005;
b. Buyer’s
quarterly report under Form 10-QSB for the period ending September 30,
2005.
7.4 Additional
Representations. The
Company hereby also represents and warrants that:
a. The
Company’s Units are free and clear of all encumbrances.
b. In
order
to effect this Plan of Exchange, the Company’s Manager, with the consent of the
majority of the Percentage Interests (as such term is defined in the Operating
Agreement) of the members, duly authorized the issuance of 5,000 additional
Class A Units over and above the 20,000 Class A Units authorized in the
Operating Agreement.
c. No
governmental consents are required to be obtained and no registrations or
declarations are required to be filed in connection with the execution and
delivery of this Plan of Exchange by the Company and its acquisition of the
Buyer’s Shares.
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| 8.0 | REGISTRATION RIGHTS. |
8.1 “Piggyback”
Registration.
If
within 120 days after the Effective Date of Exchange (“Filing Period”), the
Buyer proposes to file with the Securities and Exchange Commission (the “SEC”) a
Registration Statement on Form X-0, X-0, or other appropriate form, with respect
to any of its securities, Buyer shall, at that time give Company at least thirty
(30) days prior written notice of its intention. The Registration Statement
filed hereunder, to the extent allowable under the Securities Act and the Rules
promulgated there-under (including Rule 416), shall state that such Registration
Statement also covers Buyer’s Shares. In the event such Registration Statement
is not filed within 120 days after the Effective Date of Exchange, the Buyer
shall separately file a Registration Statement for Buyer’s Shares within 60 days
after the Filing Period. The Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided to the Company and their counsel prior to its filing or other
submission
8.2 Exchanging
Shareholder Cooperation. The
Company shall use its best efforts to provide the Buyer with information
necessary to complete the Registration Statement in a timely
manner.
| 9.0 | RIGHT OF FIRST REFUSAL TO REPURCHASE UNITS |
Buyer
shall not sell the Units, or any part thereof, to any third party purchaser,
unless the Buyer shall have first made the offer to sell such Units back to
the
Company, and such offer shall not have been accepted, pursuant to the following
terms and provisions:
9.1 Offer
of Sale.
Prior to
acceptance of any subscription or agreement to acquire the Units, the Buyer
shall offer to sell the Units to the Company upon the same terms and conditions.
The Buyer shall make such an offer in writing to the Company, which offer shall
set forth (a) the name and address of the proposed third party purchaser; (b)
the number of Units, the purchase price, terms of payment and proposed closing
date in connection with such purchase; (c) evidence of the proposed purchaser’s
contractual commitment and financial ability to purchase the securities under
the applicable terms, and (d) such other documents and instruments as have
been
provided by the Buyer to the potential purchaser or received by the Buyer from
the potential purchaser, including but not limited to any applicable
subscription agreement (“Notice of Offer”).
9.2 Acceptance
of Offer.
Within
fifteen (15) days after receipt of a Notice of Offer, (“Acceptance Period”) the
Company may, at its option, elect to re-purchase all, but not less than all,
of
the Units proposed by the Buyer to be sold pursuant to the terms and provisions
of the Notice of Offer; provided,
however,
that
closing of such transaction may, at the election of the Company, be postponed
for a period not to exceed ten (10) days from the closing date set forth in
the
Notice of Offer. The Company shall exercise the foregoing right of first refusal
by written notice to the Buyer prior to expiration of the Acceptance Period
(“Notice of Acceptance”).
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9.3 Rejection
of Offer.
In the
event the Company shall fail to deliver a Notice of Acceptance to Buyer prior
to
expiration of the Acceptance Period, the Buyer may proceed to sell the Units
to
the proposed purchaser in accordance with the terms of the Notice of Offer;
provided, however, that in the event that such transaction is not closed within
thirty (30) days following expiration of the Acceptance Period, such transaction
shall again become subject to the terms and provisions of this Section
9.
| 10.0 | SHARES SUBJECT TO “CLAW-BACK” |
1,500,000
Buyer’s Shares exchanged for Units under this Plan of Exchange shall be
conditional upon the Company meeting or exceeding, on an audited basis, the
following pre-tax income target (“Target”) projected for the twelve (12)
calendar months period following its initial shipment of products (“Performance
Period”):
$1,000,000.00
Subject
to the provision in the Promissory Note for curing a default, in the event
the
Company’s actual pre-tax net income for the Performance Period is less than the
Target, the Company shall forfeit one half of one (0.5) Buyer’s Share for each
dollar the Company’s pre-tax net income for fiscal 2006 was less than the 2006
Target up to a maximum of 1,500,000 Buyer’s Shares and Buyer shall have the
right to cancel the stock certificate for 1,500,000 Buyer’s Shares issued to the
Company hereunder and replace the same for a substitute certificate representing
the number of Buyer’s Shares adjusted in accordance with this provision of the
Plan of Exchange.
| 11.0 | UNITS SUBJECT TO RETURN UPON DEFAULT |
4,747
Units exchanged for Buyer’s Shares under this Plan of Exchange shall be
conditional upon the Buyer meeting each and every payment date set forth in
the
Promissory Note (“Collateral Units”). Subject to the provision in the Promissory
Note for curing a default, in the event any single payment as set forth therein
is not made in full by its due date, the Buyer shall forfeit the same percentage
of Collateral Units as the unpaid balance remaining on the Promissory Note
is a
percentage of $2,000,000.00. The Company shall have the right to cancel the
Units certificate for the Collateral Units and replace the same for a substitute
certificate representing the number of Collateral Units less the number of
Units
forfeited by the Buyer in accordance with this provision of the Plan of
Exchange. The Buyer hereby appoints the Manager of the Company as Buyer’s
limited attorney-in-fact for the purpose of executing and delivering any
documentation required to cancel said Collateral Units in the event that Buyer
shall fail, refuse or neglect to execute and deliver same. In the event that
the
Buyer should fail, refuse or neglect to execute and delivery any of such
documents, notwithstanding the Company’s right to receive said Collateral Units
as provided herein, the Company may, at its election, cancel the Units
certificate for the Collateral Units in absentia and reissue a new certificate
representing the number of Collateral Units less the number of Units forfeited
by the Buyer in accordance with the terms of this Plan of Exchange without
further agreement or consent of the Buyer being required.
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IN
WITNESS WHEREOF, each of the Parties has caused this Plan of Exchange to be
executed as of the date first written above.
|
XXXXXXX
TECHNOLOGIES CORPORATION
/s/ Xxxxx
Xxxxxxxxx
Xxxxx
Xxxxxxxxx
President
and CEO
|
RESILENT
LLC
/s/ Xxxxxx X.
Xxxxxxx
Xxxxxx
X. Xxxxxxx
Manager
|
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