Document:

FIRST
AMENDMENT TO

AGREEMENT AND PLAN OF MERGER

 

This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this
“Amendment”) is entered into effective as of April 30, 2012 by and among Smart Kids Group, Inc., a Florida corporation
(“Parent”), SKGI Acquisition Corp., a Nevada corporation and a wholly-owned subsidiary of Parent (“Acquisition
Corp.”), and WMX Group, Inc., a Nevada corporation (the “Company”).

 

RECITALS

 

WHEREAS, the parties are parties to that certain Agreement
and Plan of Merger dated April 30, 2012 (the “Original Agreement”);

 

WHEREAS, the Parties desire and believe it is in their best
interests to amend and restate Section 3.1of the Original Agreement as set forth herein, effective as of the date of the Original
Agreement, April 30, 2012.

 

NOW, THEREFORE, for good and adequate consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

AGREEMENT

 

1.  Section 3.1 of the Original Agreement is hereby
amended and restated in its entirety as follows:

 

Section 3.1
Manner and Basis of Converting and Exchanging Capital Stock. At the Effective Time, by virtue of the Merger and without
any action on the part of the Company, Parent or Acquisition Corp. or the holders of any outstanding shares of capital stock or
other securities of the Company, Parent or Acquisition Corp.:

(a)                
Acquisition Corp. Stock. Each share of common stock, par value $0.001
per share, of Acquisition Corp. issued and outstanding immediately prior to the Effective Time shall be converted into and become
one validly issued, fully paid and non-assessable share of capital stock, $0.001 par value per share, of the Surviving Corporation,
such that Parent shall be the holder of all of the issued and outstanding shares of capital stock of the Surviving Corporation
following the Merger.

(b)                
Company Common Stock. Shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be exchanged for the right to receive a pro-rata portion of a total of 106,084,609
shares of Parent Common Stock.

(c)                
Treasury Stock. Notwithstanding any provision of this Agreement to the
contrary, each share of Company Capital Stock held in the treasury of the Company and each share of Company Capital Stock, if any,
owned by Parent or any direct or indirect wholly-owned subsidiary of Parent immediately prior to the Effective Time shall be canceled
in the Merger and shall not be converted or exchanged into the right to receive any shares of capital stock or other securities
of Parent.

(d)                
No Fractional Shares. No fractional shares of Parent Common Stock shall
be issued in, or as a result of, the Merger. Any fractional shares of Parent Common Stock that a holder of record of Company Capital
Stock would otherwise be entitled to receive as a result of the Merger shall be aggregated. If a fractional share of Parent Common
Stock results from such aggregation, the number of shares required to be issued to such record holder shall be rounded to the nearest
whole number of shares of Parent Common Stock. 

(e)                
Anti-Dilution Clause. The Parent will ensure that following the Effective
Time, Mr. Thomas Guerriero will have a 95% non-dilutive equity interest and Mr. Richard Shergold will have a 1% non-dilutive equity
interest in the Parent. 

    	 

    	 

    

2.Other than as set forth herein, the terms and conditions
of the Original Agreement shall remain in full force and effect.

 

IN WITNESS WHEREOF, the Parties have
duly executed this Amendment as May 22, 2012.

 

	COMPANY:
	
	WMX Group, Inc.
	
	
	By:	
        /s/ Thomas Guerriero

	Name:	Thomas Guerriero
	Title:	CEO
	
	
	PARENT:
	
	Smart Kids Group, Inc.
	
	
	By:	
         /s/ Thomas Guerriero 

	Name:	Thomas Guerriero
	Title:	CEO
	
	
	ACQUISITION CORP.:
	
	SKGI Acquisition Corp.

	
	
	By:	
        /s/ Richard Shergold

	Name:	Richard Shergold
	Title:	President & CEO
	 	 	 

 

    	2EX-10.2

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

	 	 	 
	THE HUFF ALTERNATIVE FUND, L.P., and THE HUFF ALTERNATIVE PARALLEL FUND, L.P.

derivatively on behalf of CIRCLE ENTERTAINMENT INC., formerly known as FX REAL

ESTATE AND ENTERTAINMENT INC.,

Plaintiffs,

-against-

PAUL C. KANAVOS, HARVEY SILVERMAN, MICHAEL J. MEYER, JOHN D. MILLER, ROBERT

SUDACK, ROBERT F.X. SILLERMAN, BRETT TORINO, MITCHELL J. NELSON, LIRA PROPERTY

OWNER, LLC, LIRA LLC, BPS PARTNERS, LLC and BPS PARENT, LLC,

Defendants.

and

CIRCLE ENTERTAINMENT INC., formerly known as FX REAL ESTATE AND ENTERTAINMENT

INC.,

	 	Index No. 650338/2010E

Hon. Eileen Bransten

	Nominal

	 	

	Defenda

nt.

	 	

	 

	 	

NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF

SHAREHOLDER DERIVATIVE LITIGATION

TO: ALL PERSONS WHO OWN SHARES OF CIRCLE ENTERTAINMENT INC., FORMERLY KNOWN AS FX REAL ESTATE AND
ENTERTAINMENT INC. (“FXRE” OR “THE COMPANY”) COMMON STOCK AS OF JULY 12, 2012 AND CONTINUE TO OWN
SUCH SHARES.

The purpose of this Notice is to inform you about: (i) the pendency of the above-captioned
shareholder derivative lawsuit (the “Litigation”), which was brought by certain FXRE shareholders
on behalf of and for the benefit of FXRE in the Supreme Court of the State of New York, County of
New York (the “Court”); (ii) a proposed settlement of the Litigation (the “Settlement”), subject to
Court approval, as provided in a Stipulation and Settlement Agreement (the “Agreement”) that was
filed with the Court and is available for review as indicated at paragraph 28 below; (iii) the
hearing that the Court will hold on October 18, 2012 to determine whether to approve the
Settlement; and (iii) current shareholders’ rights with respect to the proposed
Settlement.1

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.

YOUR RIGHTS WILL BE AFFECTED BY THIS LITIGATION.

The Agreement was entered into as of July 12, 2012, between and among: (i) The Huff
Alternative Fund, L.P. and The Huff Alternative Parallel Fund, L.P. (collectively, “Huff” or the
“Plaintiffs”), the plaintiffs in the above captioned litigation (the “Litigation” or “Action”);
(ii) Paul C. Kanavos, Harvey Silverman, Michael J. Meyer, John D. Miller, Robert Sudack, Robert
F.X. Sillerman, Brett Torino, Mitchell J. Nelson, Lira Property Owner, LLC, Lira LLC, BPS Partners,
LLC and BPS Parent, LLC (collectively, “Defendants”); and (iii) nominal defendant Circle
Entertainment Inc., formerly known as FX Real Estate and Entertainment Inc. (“FXRE” or “the
Company”) (i-iii collectively, the “Settling Parties”), subject to the approval of the Court
pursuant to New York Business Corporation Law (“BCL”) §§ 626(d) and (e).

Because this Litigation was brought as a derivative action on behalf of and for the benefit of
FXRE, the benefits from the Settlement will go to FXRE. Individual FXRE shareholders will not
receive any direct payment from the Settlement except $950,000 to Plaintiffs as payment for part of
the costs and expenses, including attorneys’ fees, incurred by Plaintiffs in connection with
matters relating to this Action and the results achieved in this Action.

The following description of the Litigation and Settlement does not constitute findings of the
Court. It is based on statements of the parties and should not be understood as an expression of
any opinion of the Court as to the merits of any of the claims or defenses raised by any of the
parties. The Court has not yet approved the Settlement.

	 
	WHAT IS THE PURPOSE OF THIS NOTICE?

	 

1. The purpose of this Notice is to explain the Litigation, the terms of the proposed
Settlement, and how the proposed Settlement affects FXRE shareholders’ legal rights.

2. In a derivative action, one or more people and/or entities who are current shareholders of
a corporation sue on behalf of and for the benefit of the corporation, seeking to enforce the
corporation’s legal rights.

3. As described more fully below, current shareholders have the right to object to the
proposed Settlement. They have the right to appear and be heard at the Settlement Hearing, which
will be held on October 18, 2012, at 11: 30 a.m., before the Honorable Eileen Bransten, at the
Supreme Court of the State of New York, 60 Centre Street, New York, NY 10007. At the Settlement
Hearing, the Court will determine:

	(i)	 	whether the Settlement should be approved; and

	(ii)	 	whether the Released Plaintiff Claims against Defendants should be dismissed with prejudice
as set forth in the Agreement

	 
	WHAT IS THIS CASE ABOUT? WHAT HAS HAPPENED SO FAR?

	 

4. On April 28, 2010, Plaintiffs filed a Verified Shareholder Derivative Complaint (the
“Original Complaint”) in the Court against Paul C. Kanavos, Harvey Silverman, Michael J. Meyer,
John D. Miller, Robert Sudack, Robert F.X. Sillerman, Brett Torino (collectively, the “Original
Defendants”) and FXRE as nominal defendant. The Original Complaint alleged that a group of FXRE’s
officers, directors, and controlling shareholders breached their fiduciary duties to FXRE by
engaging in a self-serving scheme to misappropriate business opportunities and wrongfully compete
against the Company. The Original Complaint also asserted, among other things, claims for unjust
enrichment, conversion and fraud.

5. The Original Defendants moved to dismiss the derivative action on July 16, 2010.
Plaintiffs opposed the Original Defendants’ motion on September 3, 2010. Defendants replied to
Plaintiffs’ motion on October 4, 2010.

6. On May 25, 2011, the Court entered a Decision and Order in which it (i) denied Defendant
Kanavos’s motion to dismiss the usurpation of corporate opportunity claim against him; (ii)
dismissed without leave to replead the usurpation of corporate opportunity claim against Torino;
and (iii) dismissed with leave to replead the remaining breach of fiduciary duty claims against the
Original Defendants.

7. Plaintiffs filed a Notice of Appeal appealing dismissal of the usurpation of corporate
opportunity claim against Torino on June 27, 2011. Also on June 27, 2011, Plaintiffs filed a
Verified Amended Complaint (the “Amended Complaint”), in which it asserted both derivative claims
on behalf of the Company and direct claims against the Original Defendants in addition to
defendants Mitchell J. Nelson, Lira Property Owner, LC, Lira LLC, BPS Partners, LLC, and BPS
Parent, LLC for, among other things, breach of fiduciary duty, aiding and abetting breach of
fiduciary duty, unjust enrichment, conversion, fraud and imposition of a constructive trust.

8. For over a year, Plaintiffs’ and Defendants’ counsel have engaged in periodic settlement
discussions. On multiple occasions, the parties have conferred with the Special Master of the New
York State Supreme Court, First Department, assigned to this case. Additionally, on five separate
occasions, Plaintiffs have stipulated with Defendants for an extension of time for Defendants to
respond to the Amended Complaint in order to allow the parties time to continue negotiations in an
effort to reach a settlement.

9. The parties entered into the formal Agreement on July 12, 2012 and on September 10, 2012,
the Court preliminarily approved the Settlement and scheduled the Settlement Hearing to consider
whether to grant final approval to the Settlement.

10. The Defendants have denied and continue to deny each and all of the claims and contentions
of wrongdoing alleged by Plaintiffs herein. The Defendants have denied and continue to deny that
they violated any duties to FXRE in this Litigation and have asserted that they acted at all times
in good faith and consistent with their fiduciary duties to FXRE and its shareholders. Defendants
have nonetheless concluded that it is desirable to settle this Litigation in the manner and upon
the terms set forth in the Settlement.

	 
	WHAT ARE THE TERMS OF THE SETTLEMENT?

	 

11. As consideration for the Settlement, Defendants agree to elect to the Company’s board of
directors an additional independent director (the “Independent Director”). The Company is
prohibited from decreasing the number of directors for at least three years from the date the
settlement agreement becomes effective.

12. Defendants have also agreed to deliver the sum of $950,000 to Plaintiffs as payment for
part of the costs and expenses, including attorneys’ fees, incurred by Plaintiffs in connection
with matters relating to the Litigation and the results achieved by the Settlement.

	 
	WHAT ARE THE PLAINTIFFS’ REASONS FOR THE SETTLEMENT?

	 

13. Plaintiffs believe that the claims asserted against the Defendants have merit. Plaintiffs
recognize, however, the expense and length of continued proceedings necessary to pursue their
claims against the Defendants through trial and appeals. Plaintiffs have considered issues that
would have been decided by a jury in the event of a trial of the Litigation.

14. In light of the significant corporate governance measures created by the Settlement,
Plaintiffs believe that the proposed Settlement is fair, reasonable, adequate, and in the best
interests of FXRE. The Settlement provides substantial immediate benefits to FXRE without the risk
that continued litigation could result in obtaining similar or lesser relief for FXRE after
continued extensive and expensive litigation, including trial and the appeals that were likely to
follow. In particular, the election of the Independent Director is expected to create a
significant enhancement to FXRE’s Board’s competence and compliance with their fiduciary duties,
ensuring that there is no misconduct and that every director acts in the best interests of the
Company. It is uncertain that any final judgment after trial would result in an award of relief
comparable to the relief provided under the Settlement.

15. The Defendants have denied the claims asserted against them and disclaim any liability or
damages or having engaged in any wrongdoing or violation of law of any kind whatsoever.
Accordingly, the Settlement may not be construed as an admission of the Defendants’ wrongdoing, nor
construed or deemed to be evidence of or an admission or concession on the part of any Defendant
with respect to the merits of any claim, nor of any infirmity in the defenses that the Defendants
have, or could have, asserted in this Litigation. Likewise, the Settlement shall in no event be
construed or deemed to be evidence of or an admission or concession on the part of any Plaintiff of
any infirmity in the claims that Plaintiffs have, or could have, asserted.

	 
	WHAT MIGHT HAPPEN IF THERE WERE NO SETTLEMENT?

	 

16. If there were no Settlement and Plaintiffs failed to establish any essential legal or
factual element of their claims, FXRE would not receive any of the benefits of the Settlement
created to prevent the reoccurrence of the wrongdoing alleged in the Litigation.

	 
	WHAT CLAIMS WILL THE SETTLEMENT RELEASE?

	 

17. If the Settlement is approved, the Court will enter a judgment (the “Judgment”). Pursuant
to the Judgment, the following releases will occur upon the Effective Date of the Settlement.

Release of Claims by Plaintiffs and FXRE: Upon the Effective Date, Huff, the Company, and each
and every Company shareholder, on behalf of themselves, their heirs, executors, administrators,
predecessors, successors and assigns, shall be deemed by operation of law to have fully, finally
and forever released, waived, discharged and dismissed each and every Released Plaintiff Claim
against the Released Defendant Parties and their insurers, and shall forever be enjoined from
prosecuting any or all Released Plaintiff Claims against any and all Released Defendant Parties
and their insurers.

“Released Plaintiff Claims” means any and all claims, demands, rights, actions,
potential actions, causes of action, liabilities, damages, losses, obligations, judgments,
duties, suits, agreements, costs, expenses, debts, interest, penalties, sanctions, fees,
attorneys’ fees, judgments, decrees, matters, issues, and controversies of any kind, nature or
description whatsoever, whether based on federal, state, local, statutory or common law or any
other law, rule or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or
un-liquidated, at law or in equity, matured or un-matured, disclosed or un-disclosed, apparent
or un-apparent, including known claims and Unknown Claims (as defined below), which were or
could have been alleged or asserted in this Litigation or any other litigation by any of the
Released Plaintiff Parties against any of the Released Defendant Parties and their insurers;
provided, however, Released Plaintiff Claims do not include any claim that Plaintiffs may have
against any of the Torino Parties relating to or arising out of the Torino Stock Transaction, or
any other claims Plaintiffs may have against any person or entity other than the Released
Defendant Parties. Released Plaintiff Claims also do not include any claims relating to the
enforcement of this Settlement.

“Released Defendant Parties” means the Defendants and their respective estates, heirs,
beneficiaries, administrators, successors, assigns, subsidiaries, affiliates, agents and
counsel, and each of their respective current and former directors, officers, employees,
trustees, managers, governors, members of management committee or management board or equivalent
positions.

Release of Claims by Defendants: Upon the Effective Date, each of the Defendants and the other
Released Defendant Parties, on behalf of themselves, their heirs, executors, administrators,
predecessors, successors and assigns, shall be deemed by operation of law to have fully, finally
and forever released, waived, discharged and dismissed each and every of the Released Defendant
Claims against the Released Plaintiff Parties and their insurers, and shall forever be enjoined
from prosecuting any or all of the Released Defendant Claims against any and all Released
Plaintiff Parties and their insurers.

“Released Defendant Claims” means any and all claims, demands, rights, actions,
potential actions, causes of action, liabilities, damages, losses, obligations, judgments,
duties, suits, agreements, costs, expenses, debts, interest, penalties, sanctions, fees,
attorneys’ fees, judgments, decrees, matters, issues, and controversies of any kind, nature or
description whatsoever, whether based on federal, state, local, statutory or common law or any
other law, rule or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or
un-liquidated, at law or in equity, matured or un-matured, disclosed or un-disclosed, apparent
or un-apparent, including known claims and Unknown Claims (as defined below), which were or
could have been alleged or asserted in this Litigation or any other litigation by any of the
Released Defendant Parties against any of the Released Plaintiff Parties and their insurers;
provided, however, Released Defendant Claims do not include any claims relating to the
enforcement of this Settlement.

“Released Plaintiff Parties” means Plaintiffs and their respective estates, heirs,
beneficiaries, administrators, successors, assigns, subsidiaries, affiliates, agents and
counsel, and each of their respective current and former directors, officers, employees,
trustees, managers, governors, members of management committee or management board or equivalent
positions.

“Unknown Claims” means (i) any and all claims that FXRE, Plaintiffs or any other FXRE
shareholder does not know or suspect to exist in his, her or its favor at the time of the
release of the Released Defendant Parties, which if known, could have been alleged or asserted
in this Litigation or any other litigation; and (ii) any and all claims that any Defendant of
any other Released Defendant Party does not know or suspect to exist in his, her or its favor at
the time of the release of the Released Plaintiff Parties, which if known, could have been
alleged or asserted in this Litigation, or any other litigation.

18. If the Settlement is approved and the Effective Date occurs, since FXRE will have released
the Released Plaintiff Claims described above that it could have asserted against any of the other
Released Defendant Parties, no FXRE shareholder will be able to bring another action asserting
those claims against those persons on behalf of the Company.

19. The Settlement does not, however, settle or compromise any claim that Plaintiffs may have
against any of the Torino Parties relating to or arising out of the Torino Stock Transaction,
whether for breach of contract, tort, estoppel, or otherwise.

	 
	HOW WERE THE ATTORNEYS PAID?

	 

20. Plaintiffs have paid Plaintiffs’ Counsel for their services in pursuing the claims against
Defendants in the Litigation for the benefit of other FXRE shareholders. These costs exceed the
$950,000 Defendants are required to pay to Plaintiffs.

	 
	WHEN AND WHERE WILL THE COURT RULE ON APPROVAL OF THE SETTLEMENT? DO I HAVE TO

COME TO THE HEARING? MAY I SPEAK AT THE HEARING?

	 

21. If you owned FXRE common stock as of July 12, 2012 and continue to own such stock through
October 18, 2012, the date of the Settlement Hearing (“Current Shareholder”), you may, if you wish
to do so, comment to the Court on the proposed Settlement. Current Shareholders who do not wish to
object in person to the proposed Settlement do not need to attend the Settlement Hearing. You can
object to the Settlement without attending.

22. The Settlement Hearing will be held on October 18, 2012, at 11:30 a.m., before the
Honorable Eileen Bransten, at the Supreme Court of the State of New York, 60 Centre Street, New
York, NY 10007. The Court reserves the right to approve the Settlement at or after the Settlement
Hearing without further notice to Current Shareholders.

23. Any Current Shareholder may object to the Settlement. Objections or oppositions must be
in writing and must be filed together with proof that you owned shares of FXRE common stock as of
July 12, 2012 and continue to own such shares, with the Clerk’s Office at the address set forth
below on or before September 27, 2012. You must also serve the papers on Plaintiffs’ Counsel and
Defendants’ Counsel at the addresses set forth below so that the papers are received on or before
September 27, 2012.

	 	 	 	 	 
	Clerk’s Office	 	Plaintiffs’ Counsel
	NEW YORK STATE SUPREME COURT
	 	CADWALADER, WICKERSHAM
	COMMERCIAL DIVISION
	 	& TAFT LLP
	Lorraine Meletiche, Clerk of the Court
	 	Hal S. Shaftel, Esq.
	60 Centre Street, Room 442
	 	One World Financial Center
	New York, New York 10007
	 	New York, New York  10281
	Counsel for Non-Torino Defendants
	 	Counsel for Defendant Torino
	 
	 	 	 	 
	KRAMER LEVIN NAFTALIS & FRANKEL LLP
	 	KAYE SCHOLER LLP
	David S. Frankel, Esq.
	 	Vincent A. Sama, Esq.
	1177 Avenue of the Americas
	 	425 Park Avenue
	New York, New York 10036
	 	New York, New York  10022
	 

24. Current Shareholders may file a written objection without having to appear at the
Settlement Hearing. A Current Shareholder may not appear at the Settlement Hearing to present his,
her or its objection, however, unless he, she or it first filed and served a written objection in
accordance with the procedures described above, unless the Court orders otherwise.

25. A Current Shareholder who or which wishes to be heard orally at the hearing in opposition
to the approval of the Settlement and has filed and served a timely written objection as described
above, also must notify the above counsel on or before September 27, 2012 concerning his, her or
its intention to appear. Persons who intend to object and desire to present evidence at the
Settlement Hearing must include in their written objections the identity of any witnesses they may
call to testify and exhibits they intend to introduce into evidence at the hearing.

26. The Settlement Hearing may be adjourned by the Court without further written notice to
Current Shareholders. If you intend to attend the Settlement Hearing, you should confirm the date
and time with Plaintiffs’ Counsel.

27. Unless the Court orders otherwise, any Current Shareholder who does not object in the
manner described above will be deemed to have waived any objection and shall be forever foreclosed
from making any objection to the proposed Settlement. Current Shareholders do not need to appear
at the hearing or take any other action to indicate their approval.

	 
	CAN I SEE THE COURT FILE? WHOM SHOULD I CONTACT IF I HAVE

QUESTIONS?

	 

28. This Notice contains only a summary of the terms of the proposed Settlement. More
detailed information about the Litigation is available at http://fxle.client.shareholder.com/
including, among other documents, the Amended Complaint and the Stipulation and Settlement
Agreement. You or your attorney may examine the Court files for The Huff Alternative Fund, L.P. v.
Kanavos, No. 650338/2010E during regular business hours at the Supreme Court of the State of New
York, County of New York. Questions about the Settlement or about this Notice in general should be
directed to:

CADWALADER, WICKERSHAM

& TAFT LLP

Hal S. Shaftel, Esq.

One World Financial Center

New York, New York 10281

(212) 504-6000

Plaintiffs’ Counsel

DO NOT CALL OR WRITE THE COURT OR THE OFFICE OF THE CLERK OF COURT REGARDING THIS NOTICE.

	 	 	Dated: September 10, 2012

By order of the Clerk of Court

Supreme Court of the State of New York

County of New York

	 	1	 	All capitalized terms not otherwise defined
in this Notice shall have the meaning provided in the Agreement.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}]]