PLAN OF SHARE EXCHANGE AGREEMENT
This PLAN OF SHARE EXCHANGE AGREEMENT (the "Agreement"), is entered
into on September 30, 1999 by and between:
THE XXXXXXX GROUP, INC., a South Carolina corporation (hereinafter
referred to as "Group"; and
XXXXXXX INVESTMENT CORPORATION, a South Carolina Corporation
hereinafter referred to as "TIC"; and
XXXXXXX OPERATING COMPANY, a South Carolina corporation hereinafter
referred to as "TOC;" and
XXXXX X. XXXXXXX, an individual residing in Pageland, South Carolina,
hereinafter referred to as "Shareholder."
WHEREAS, Shareholder owns all of the issued and outstanding shares of
the common stock of TIC (the "TIC Stock") and the overwhelming majority of the
issued and outstanding voting common stock of Group; and
WHEREAS, TIC and its subsidiaries conduct consumer finance operations
substantially similar to the consumer finance operations of Group and its
subsidiaries; and
WHEREAS, Finova Capital Corporation, a Delaware corporation ("Finova"),
provides financing for TIC and Group; and
WHEREAS, the combination of TIC and Group will improve the overall
financial condition of the combined entity and facilitate the development of a
comprehensive financing arrangement with Finova; and
WHEREAS, in order to effectuate the combination of TIC and Group, Group
desires to acquire, and Shareholder desires to transfer, all of the issued and
outstanding shares of TIC Stock in exchange for a specified number of shares of
common stock of Group as contemplated herein (the "Share Exchange"); and
WHEREAS, in order to further advance the purposes herein stated, Group
desires to transfer, and TOC desires to acquire, all of the issued and
outstanding shares of common stock of Group's direct subsidiaries (the "Group
Consolidation") (the Share Exchange and the Group Consolidation collectively
referred to herein as the "Reorganization"); and
WHEREAS, Group has filed with the Securities and Exchange Commission
(the "SEC") a post-effective amendment to its registration statement on Form
SB-2, as amended (the "Amended Registration Statement"), which relates to the
registration of its continuous offering of subordinated notes; and
WHEREAS, immediately following the date and time at which the SEC
declares the Amended Registration Statement to be effective (the "Effective
Time"), amendments to Finova's facilities with TIC and Group shall become
effective.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
promises hereinafter set forth, the parties hereto agree as follows:
1. Share Exchange.
1.1 TIC Stock. On the Closing Date as defined in Section 8.1 below,
Shareholder shall transfer to Group all of his right, title and interest in all
shares of TIC common stock owned by him in proper form for transfer free and
clear of all liens, claims, equities and encumbrances of any nature whatsoever.
1.2 Group Stock. On the said Closing Date, Group shall issue to
Shareholder ownership of 3,223,000 shares of its common stock in proper form for
transfer free and clear of all liens, claims, equities and encumbrances of any
nature whatsoever.
1.3 Stock of Group's Direct Subsidiaries . On the said Closing Date,
Group shall transfer to TOC all of its right, title and interest in all issued
and outstanding shares of the common stock of each of its direct subsidiaries in
proper form for transfer free and clear of all liens, claims, equities and
encumbrances of any nature whatsoever.
2. Representations and Warranties of TIC and Shareholder. TIC and
Shareholder each represents and warrants to Group and TOC as follows:
2.1 Organization. TIC is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of South Carolina and
has full corporate power and authority to own all of its properties and assets
and to carry on its business as it is now being conducted.
2.2 Authority Relative to Agreement. TIC and Shareholder each have the
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. Without limiting the generality of the
foregoing, the board of directors of TIC and Shareholder have duly authorized
the execution, delivery and performance of this Agreement. No other action by
TIC or Shareholder is necessary for the due execution and delivery of this
Agreement by them and the consummation by them of the transactions contemplated
hereby or the performance of their obligations hereunder. This Agreement has
been duly executed and delivered by TIC and Shareholder and is a valid and
binding agreement by TIC and Shareholder enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency or
other similar laws relating to or affecting creditors' rights generally and by
general equity principles.
2.3 Non-Contravention. The execution and delivery of the Agreement by
TIC and Shareholder does not, and the consummation by them of the transactions
contemplated hereby and the performance by them of the obligations hereunder
will not, (a) violate any provision of the articles of incorporation or by-laws
of TIC (b) violate, or result in the termination of or the
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acceleration of, or entitle any party to accelerate any obligation or
indebtedness under, or result in the imposition of any lien upon or the creation
of a security interest in any of the shares of TIC Stock transferred consistent
with this agreement pursuant to, any mortgage, lien, lease, franchise, license,
permit, agreement, instrument, law, rule, regulation, order, arbitration award,
judgment or decree to which any or all of Shareholder, TIC or any of TIC's
direct subsidiaries is a party or by which Shareholder, TIC, any of TIC's direct
subsidiaries or any of TIC's other assets or properties is bound or affected or
(c) violate or conflict with any other restriction of any kind or character to
which Shareholder, TIC or any of TIC's direct subsidiaries is subject.
2.4 Consents, etc. Other than with respect to amending or otherwise
reflecting the change in control of TIC on any consumer finance or related
license issued to TIC or its subsidiaries by any state or federal agency, no
consent, authorization, order of approval of, or filing or registration with,
any governmental commission, board or other regulatory body which has not been
obtained or made is required (i) for or in connection with the execution and
delivery of this Agreement and the consummation by Shareholder or TIC of the
transactions contemplated hereby and thereby and the performance by Shareholder
and TIC of their obligations hereunder, or (ii) for the ongoing operations of
TIC as presently conducted.
2.5 Title to Shares. Shareholder is the direct owner of all of the
issued and outstanding shares of TIC Stock free and clear of all options, liens,
claims, charges or other encumbrances.
2.6 Capital Stock of TIC. 2500 shares of TIC Stock are issued and
outstanding as of the date hereof; and such shares are validly issued, fully
paid and nonassessable, There are no outstanding obligations, warrants, options
or other rights to subscribe for or purchase from TIC or Shareholder, or other
plans, contracts or commitments providing for the issuance of, or the granting
of rights to acquire, shares of stock of any class of TIC or any securities or
other instruments convertible into or exchangeable for shares of stock of any
class of TIC.
3. Representations and Warranties of Group. Group represents and warrants
to Shareholder, TOC and TIC as follows:
3.1 Organization. Group is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of South Carolina, and
Group has full corporate power and authority to own all of its properties and
assets and to carry on its business as it is now being conducted.
3.2 Authority Relative to Agreement. Group has the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated on the part of Group hereby. The execution and
delivery by Group of this Agreement and the consummation by Group of the
transactions contemplated hereby have been duly authorized by its board of
directors. Other than such approval, no other corporate proceedings on the part
of Group are necessary to authorize the execution and delivery of this Agreement
and the consummation by Group of the transactions contemplated hereby or the
performance of its obligations hereunder. This Agreement has been duly executed
and delivered by Group and is a valid and binding agreement of Group,
enforceable in accordance with its terms, except as such
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enforceability may be limited by bankruptcy, insolvency or other similar laws
relating to or affecting creditors rights generally and by general equity
principles.
3.3 Non-Contravention. The execution and delivery of the Agreement by
Group does not, and the consummation by Group of the transactions contemplated
hereby and the performance by Group of the transactions contemplated hereby and
the performance by Group of the obligations it is obligated to perform hereunder
will not, (a) violate any provision of the articles of incorporation or by-laws
of Group, (b) violate, or result in the violation of, any provision of, or
result in the termination of or the acceleration of, or entitle any party to
accelerate any obligation or indebtedness under, any mortgage, lien, lease,
franchise, license, permit, agreement, instrument, law, order, arbitration
award, judgment or decree to which Group is a party or by which Group or any of
its assets or property is bound or affected, or (c) violate or conflict with any
other restriction of any kind or character to which Group is subject, which
would prevent, or significantly restrict or delay, the consummation of the
transactions contemplated hereby.
3.4 Consents, etc. Other than obtaining the SEC's order of
effectiveness with respect to the Amended Registration Statement, no consent,
authorization, order or approval of, or filing or registration with, any
governmental commission, board or other regulatory body which has not been
obtained or made is required for or in connection with the execution and
delivery of this Agreement, and the consummation by Group of the transactions
contemplated hereby and the performance by Group hereunder.
3.5 Title to Shares. Group is the holder of all of the issued and
outstanding shares of common stock of each of its direct subsidiaries free and
clear of all options, liens, claims, charges or other encumbrances.
3.6 Capital Stock of Direct Subsidiaries. There are no outstanding
obligations, warrants, options or other rights to subscribe for or purchase from
Group, or other plans, contracts or commitments providing for the issuance of,
or the granting of rights to acquire, shares of stock of any class of any of
Group's direct subsidiaries or any securities or other instruments convertible
into or exchangeable for shares of stock of any class of Group's direct
subsidiaries.
4. Representations and Warranties of TOC. TOC represents and warrants to
Shareholder and TIC as follows:
4.1 Organization. TOC is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of South Carolina, and
Group has full corporate power and authority to own all of its properties and
assets and to carry on its business as it is now being conducted.
4.2 Authority Relative to Agreement. TOC has the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated on the part of TOC hereby. The execution and delivery
by TOC of this Agreement and the consummation by TOC of the transactions
contemplated hereby have been duly authorized by its board of
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directors. Other than such approval, no other corporate proceedings on the part
of TOC are necessary to authorize the execution and delivery of this Agreement
and the consummation by TOC of the transactions contemplated hereby or the
performance of its obligations hereunder. This Agreement has been duly executed
and delivered by TOC and is a valid and binding agreement of TOC, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting creditors
rights generally and by general equity principles.
4.3 Non-Contravention. The execution and delivery of the Agreement by
TOC does not, and the consummation by TOC of the transactions contemplated
hereby and the performance by TOC of the transactions contemplated hereby and
the performance by TOC of the obligations it is obligated to perform hereunder
will not, (a) violate any provision of the articles of incorporation or by-laws
of TOC, (b) violate, or result in the violation of, any provision of, or result
in the termination of or the acceleration of, or entitle any party to accelerate
any obligation or indebtedness under, any mortgage, lien, lease, franchise,
license, permit, agreement, instrument, law, order, arbitration award, judgment
or decree to which TOC is a party or by which TOC or any of its assets or
property is bound or affected, or (c) violate or conflict with any other
restriction of any kind or character to which TOC is subject, which would
prevent, or significantly restrict or delay, the consummation of the
transactions contemplated hereby.
4.4 Consents, etc. No consent, authorization, order or approval of, or
filing or registration with, any governmental commission, board or other
regulatory body which has not been obtained or made is required for or in
connection with the execution and delivery of this Agreement, and the
consummation by TOC of the transactions contemplated hereby and the performance
by TOC hereunder.
5. Additional Agreements. Each of the parties hereto agrees to use its
best efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable to carry out the purposes of
this Agreement, including, without limitation, Group's obtaining the SEC's order
of effectiveness with respect to the Amended Registration Statement. As soon as
reasonably practicable each party to this Agreement shall, or cause its or its
affiliates' proper officers and/or directors to, take all such necessary action.
6. Characterization. It is intended by all parties to this Agreement that
the transactions contemplated herein when consummated will together constitute a
tax free reorganization under the Internal Revenue Code and any other applicable
law of the United States and the similar laws of all pertinent states.
7. Conditions to Close. The obligations of each of the parties to this
Agreement to consummate the transactions provided for herein on the Closing Date
are subject to the fulfillment on or before the Closing Date of each of the
following conditions, except to the extent that a party to this Agreement may,
in its absolute discretion, waive one or more thereof in writing in whole or in
part:
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7.1 Representations and Warranties. The representations and warranties
of each party contained in this Agreement and in any schedule, certificate or
agreement furnished pursuant to this Agreement shall be true and correct in all
material respects as of the Closing Date with the same force and effect as if
made on and as of such date.
7.2 Covenants. Each of the parties to this Agreement shall have
performed and complied with all of its covenants hereunder in all material
respects through the Closing Date.
7.3 Effective Amended Registration Statement. Group shall have obtained
the SEC's order of effectiveness with respect to the Amended Registration
Statement.
7.4 Third Party Consents. Each of the parties to this Agreement shall
have obtained any and all necessary third party consents.
7.5 Litigation. No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
or (B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order
decree, ruling or charge shall be in effect).
7.6 Licenses. TIC shall have taken all action necessary to reflect its
change of control with respect to any consumer finance or related license issued
to it or any of its subsidiaries by any federal, state, local, or foreign
government or governmental agency.
7.7 Governmental Authorizations. Each of the parties to this Agreement
shall have received any and all other authorizations, consents, or approvals of
any federal, state, local, or foreign government or governmental agency.
8. Closing.
8.1 Closing Date. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been terminated, the closing
(the "Closing") of the transactions contemplated by this Agreement shall take
place immediately following the Effective Time. The date and time of such
Closing are herein referred to as the "Closing Date."
8.2 Articles of Share Exchange. As soon as practicable following the
Closing Date, Group shall execute Articles of Share Exchange relating to the
Share Exchange (the "Articles of Share Exchange") and cause the Articles of
Share Exchange to be delivered for filing and recordation with the Secretary of
State of the State of South Carolina in accordance with the South Carolina
Business Corporation Act ("SCBCA").
8.3 Effective Time. The Reorganization shall become effective at the
time set forth in the Articles of Share Exchange in accordance with the SCBCA.
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9. Miscellaneous Provisions
9.1 Gender/Number. Wherever used herein, the genders shall be
interchangeable. Wherever used herein, the singular shall include the plural,
and the plural shall include the singular.
9.2 Entire Agreement. This is the entire between the parties and all
prior negotiations have been merged herein.
9.3 Third Parties. This Agreement is not intended to confer upon any
person or entity who or which is not a party to this Agreement any rights or
remedies hereunder.
9.4 Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of South
Carolina without giving effect to the conflicts of law principles thereof. Each
of the parties submits to the jurisdiction of any federal court sitting in the
state of South Carolina in any proceeding arising out or relating to this
agreement or any of the transactions contemplated herein and agrees that all
claims in respect of the action or proceeding may be determined in any such
court. Each of the parties hereby waives the right to object to any such filing
on the basis of improper venue and waives any defense of inconvenient forum to
the maintenance of any action or proceeding so brought.
9.5 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this agreement. Wherever used herein to refer to section
numbers, the terms "section number" and "paragraph number" shall be
interchangeable.
9.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which will
constitute one and the same instrument.
9.7 Severability. The terms of this Agreement shall be severable and to
the extent a court of competent jurisdiction determines that any term and/or
provision and/or portion of this agreement is unenforceable, the remainder of
this agreement shall remain in full force and effect and shall be interpreted as
if said unenforceable term(s) and/or provision(s) and/or portion(s) of this
agreement had been excluded from this agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first above written.
ATTEST: XXXXXXX INVESTMENT CORPORATION
(ATTACH SEAL)
/s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------ -------------------------------
Secretary Xxxxx X. Xxxxxxx, President
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ATTEST: THE XXXXXXX GROUP, INC.
(ATTACH SEAL)
/s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------ -------------------------------
Secretary Xxxxx X. Xxxxxxx, President
ATTEST: XXXXXXX OPERATING COMPANY
(ATTACH SEAL)
/s/ Xxxxx X. Xxxx By:/s/ Xxxxx X. Xxxxxxx
------------------------------ -------------------------------
Secretary Xxxxx X. Xxxxxxx, President
SHAREHOLDER
(SEAL) /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx
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