Exhibit 10.2 - Amendment No.1 to Agreement and Plan of Merger


    
      

      

    

    

      AMENDMENT
        NO. 1 to

      AGREEMENT
        AND PLAN OF MERGER

      


      THIS
        IS
        AMENDMENT NO. 1 to the AGREEMENT AND PLAN OF MERGER, dated March 1, 2007,
        by and
        among SFG Financial Corporation, a Delaware corporation ("SFG"), COESfx
        Acquisition Corp., a New York , corporation and wholly-owned subsidiary of
        SFG
        ("Merger Subsidiary"), and COESfx Holdings, Inc., a New York corporation
        ("COESfx") (the “Amendment Agreement”).

      


      


      


      RECITALS

      


      COESfx,
        SFG and Merger Subsidiary have previously entered into an Agreement and Plan
        of
        Merger (the “Merger Agreement”) and wish to change one of the provisions of the
        Merger Agreement. 

      


      NOW
        THEREFORE, in consideration of the mutual covenants and agreements hereinafter
        set forth, the receipt and sufficiency of which are hereby acknowledged,
        the
        Parties, intending to be legally bound, agree as follows:

      


      1.   Section
        1.3(b) of the Merger Agreement shall be amended to read in its entirety as
        follows:

      


      “(b)
        All
        stock options, warrants, convertible debt, other convertible securities or
        other
        rights to acquire COESfx Common Stock at an exercise or conversion, as
        applicable, price of no less than $0.20 per share (collectively, the “COES
        Convertible Securities”) and Non-Exempt COESfx Convertible Securities
        outstanding at the Effective Time, whether or not vested (all of which are
        listed on Schedule 1.3(b) hereto), shall remain outstanding following the
        Effective Time but shall be assumed by SFG. Non-Exempt COESfx Convertible
        Securities and COESfx Convertible Securities shall continue to have, and
        be
        subject to, the same terms and conditions as set forth in the documents
        underlying such Non-Exempt COESfx Convertible Securities and COESfx Convertible
        Securities. Non-Exempt COESfx Convertible Securities and COESfx Convertible
        Securities will be convertible into SFG Shares at the rate of 8.0808554 SFG
        Shares for each share of COESfx Common Stock to which they would otherwise
        be
        entitled, which shares shall be issued from a reserve set aside for such
        purpose
        from the Merger Consideration. COESfx Convertible Securities will be exercisable
        or convertible, as appropriate, as set forth in the underlying documents
        and
        shall be an obligation of SFG without regard to the reserve set aside from
        the
        Merger Consideration. Notwithstanding anything else contained in this Agreement,
        shares of COESfx Series A Participating Convertible Preferred Stock (the
        “Preferred Stock”) shall remain issued and outstanding and registered and owned
        by the holder thereof immediately prior to the Effective Time and shall not
        be
        considered “Non-Exempt COESfx Convertible Securities.”

      


      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      2.   Section
        1.4(e) of the Merger Agreement shall be amended to read in its entirety as
        follows:

      


      “(e)
        Immediately prior to the Effective Time, SFG will have no more than 5,513,856
        shares of SFG common stock outstanding. Immediately prior to the Closing,
        SFG
        will have no stocks, options, warrants, convertible debt, other convertible
        securities or other rights to acquire any equity of SFG shares outstanding
        other
        than rights granted to COESfx shareholders and Concord pursuant to this
        Agreement, rights to receive SFG Shares upon conversion of the Preferred
        Stock
        described in Section 6.2(m), the irrevocable rights to Concord in Section
        1.3(c), rights to Concord as described Section 6.2(m) upon completion of
        the
        Financing and warrants issued to Concord and SFG as described in Section
        6.2(n).
        Immediately after the Closing, there will be approximately 367,590,400 common
        shares of SFG Shares issued and outstanding (including shares to be issued
        under
        the Irrevocable Rights) and the Concord rights described in Section 1.3(c)
        exclusive of shares held in a reserve for issuance in connection with the
        exercise or conversion, as appropriate, of the COESfx Convertible Securities,
        the warrants issued pursuant to Section 6.2(n) and the Preferred Stock. In
        addition, upon the filing of the Amend COI, additional shares will be issued
        to
        Concord pursuant to Section 6.2(m).”

      


      3.   Section
        1.9 of the Merger Agreement shall be amended to read in its entirety as
        follows:

      


      “1.9
        Amendments to SFG’s Articles of Incorporation. As soon as practicable after the
        Effective Time, SFG shall amend its Articles of Incorporation to (i) change
        its
        name to XLFX Holdings Inc. (ii) increase its authorized capital stock from
        100,000,000 to 500,000,000 common shares; and (iii) approve a 1 for 7.351808
        reverse split of the issued and outstanding SFG shares outstanding immediately
        after the Effective Time (“Reverse Split”). The Articles of Amendment to be
        filed pursuant to this. Section 1.9 shall be substantially in the form of
        Exhibit B attached hereto (the “Amended COI”).”

      


      4.   Section
        3.6 of the Merger Agreement shall be amended to read in its entirety as
        follows:

      


      “3.6
        Best
        Efforts to Obtain Shareholder Approval. Each party shall promptly upon execution
        of this Merger Agreement use its best efforts, to the extent required by
        this
        Agreement, to prepare all documents and prepare all filings necessary to
        obtain
        the approval of its respective shareholders of the transactions contemplated
        by
        this Agreement and the approval of the Amended COI. SFG shall promptly AFTER
        THE
        Effective Time prepare and file with the United States Securities and Exchange
        Commission (“SEC”) a preliminary proxy statement with respect to seeking
        approval of the shareholders of SFG of the Amended COI. Each party will as
        soon
        as possible hold a shareholders’ meeting of its respective shareholders to
        approve the transactions and other requirements of each party contemplated
        by
        this Agreement.”

      


      5.   Section
        4.3 of the Merger Agreement shall be amended to read in its entirety as
        follows:

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      “4.3
        Capitalization. The authorized capital stock of COESfx consists of (i)
        100,000,000 shares of common stock, $0.001 par value, of which 43,478,874
        shares
        are issued and outstanding, and (ii) 5,071,816 shares to be issued upon the
        exercise of outstanding warrants and options. No shares of COESfx preferred
        stock have been issued. On or prior to the Closing Date it is anticipated
        that
        2,000 shares of Series A Participating Preferred Stock (“COESfx Preferred
        Stock”) shall be outstanding. All of the issued and outstanding shares of COESfx
        capital stock are duly authorized, validly issued, fully paid, non-assessable
        and free of preemptive rights. At the Effective Time, all of the issued and
        outstanding shares of COESfx Common Stock will be converted into the right
        to
        receive SFG Shares issued or issuable as part of the Merger Consideration.
        Shares of COESfx Preferred Stock shall remain outstanding. There are no voting
        trusts or any other agreements or understandings with respect to the voting
        of
        COESfx's capital stock except as contemplated in this Agreement.”

      


      6.   The
        Initial paragraph of Section 5.3 of the Merger Agreement shall be amended
        to
        read in its entirety as follows:

      


      5.3
        Capitalization. (a) SFG's authorized capital stock consists of 100,000,000
        shares of common stock, of which 5,513.856 shares are issued and outstanding.
        As
        soon as practicable after the Closing, SFG shall amend its Articles of
        Incorporation by the filing of the Amended COI subject to compliance with
        all
        applicable Legal Requirements. Immediately prior to the Effective Time, SFG
        will
        have no more than 5,513,856 shares of SFG common stock outstanding. Immediately
        prior to the Closing, SFG will have no stocks, options, warrants, convertible
        debt, other convertible securities or other rights to acquire any equity
        of SFG
        outstanding, other than rights granted to COESfx shareholders pursuant to
        this
        Agreement, rights to issue common stock upon conversion of the Preferred
        Stock
        described in Section 6.2(m), the irrevocable rights issued to Concord as
        described in Section 1.3(c), rights to Concord as described in Section 6.2(m)
        upon completion of the Financing and warrants issued to Concord and SFG as
        described in Section 6.2(n). Immediately after the Closing, there will be
        approximately 367,590,400 common shares of SFG issued and outstanding (including
        shares to be issued under the Irrevocable Rights, SFG Shares held in reserve
        for
        the exercise of Non-Exempt COES Convertible Securities and the Concord
        irrevocable rights described in Section 1.3(c), exclusive of shares issuable
        in
        connection with the exercise or conversion, as appropriate, of the COES
        Convertible Securities, the warrants issued pursuant to Section 6.2(n), the
        Ppreferred Stock and SFG Shares issuable to Concord pursuant to Section
        6.2(m).

      


      7.   Section
        5.3(c) of the Merger Agreement shall be amended to read in its entirety as
        follows:

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      “(c)
        Except for SFG Shares to be issued upon the Merger and SFG Shares to be issued
        on the filing of the Amended COI to COESfx shareholders, SFG Shares to be
        issued
        upon the exercise of the COESfx Convertible Securities, shares of common
        stock
        to be issued upon conversion of the Preferred Stock issued in the Financing
        described in Section 6.2(m), the irrevocable rights issued to Concord as
        described in Section 1.3(c) and warrants issued to Concord and SFG as described
        in Section 6.2(n), there are no outstanding or authorized options, rights,
        warrants, calls, convertible securities, rights to subscribe, conversion
        rights,
        or other agreements or commitments to which SFG is a party or which are binding
        upon SFG providing for the issuance or transfer by SFG of additional shares
        of
        SFG's capital stock and SFG has not reserved any shares of its capital stock
        for
        issuance, nor are there any outstanding stock option rights, phantom equity
        or
        similar rights, contracts, arrangements or commitments to issue capital stock
        of
        SFG. There are no voting trusts or any other agreements or understandings
        with
        respect to the voting of SFG's capital stock. There are no obligations of
        SFG to
        repurchase, redeem, or otherwise re-acquire any shares of its capital stock
        as
        of the Closing.”

      


      8.   Section
        6.1 (b) of the Merger Agreement shall be amended to read in its entirety
        as
        follows:

      


      


      “(b)
        At
        or prior to the Closing, the Financing shall have been successfully completed
        and COESfx shall receive proceeds from the Financing of no less than $1,800,000
        in net cash free and clear of any Encumbrance. 

      


      


      9.    Section
        6.2 (m) of the Merger Agreement shall be amended to read in its entirety
        as
        follows:

      


      


      “(m)
        The
        New Board will agree in writing that in the event that on or before the Closing
        Date, Concord and/or parties affiliated with them (“Concord Affiliates”) provide
        or arrange for the purchase of $2,000,000 of Preferred Stock of COESfx (on
        terms
        and conditions set forth in the form of Amendment to Certificate of
        Incorporation attached hereto as Exhibit D)(the “Financing”), Concord or parties
        designated by it, immediately after the filing of the Amended COI, will be
        issued post reverse split shares of SFG Common Stock in a number which when
        combined with the number of SFG Shares receivable upon conversion of the
        Preferred Stock equals a total of 14,666,322 and paid a maximum of $200,000
        in
        cash. If any funding is provided after the Termination Date (as defined below),
        the parties will mutually agree on the compensation to be paid to the Concord
        Affiliates. For purposes of this section, the “Termination Date” shall be
        defined as the date which is the earlier of (i) that date which is 60 days
        after
        the Closing or (ii) the closing date of any material non-recurring transaction
        (such as a business combination transaction, merger, acquisition and/or
        reorganization other than the Financing, but specifically excluding any internal
        efforts resulting in sales growth) that materially increases the assets,
        income
        and/or equity value of SFG and/or COESfx.”

      


      All
        other
        terms and conditions of the Merger Agreement remain in full force and effect,
        without addition, deletion or modification.

      


      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, SFG and COESfx have executed, or caused to be executed by
        their
        duly authorized representatives, this Agreement as of March , 2007.

      
         

        
          
            
              

                
                  	
                          SFG
                            FINANCIAL CORPORATION

                        	
                          COESFX
                            HOLDINGS, INC.

                        
	
                          A
                            Delaware corporation

                        	
                          A
                            New York corporation

                        
	 	 
	
                          By:
                            /s/ John A.
                            Dugan                       
                            

                        	
                          By:
                            /s/ Michael
                            Frey                      
                            

                        
	 	 
	
                          Title:
                            Chairman                                  

                        	
                          Title:
                            Chief Executive
                            Officer         
                            

                        


                

                 

                 

              

            

            
              COESFX
                ACQUISITION CORP.

              A
                to be
                Formed New York corporation

               

              By: 
                /s/ Michael
                Frey                         


               

              Title: 
                Chief Executive
                Officer