plan by Boxer47

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FENNEMORE CRAIG , P.C.
LAS V E G A S

FENNEMORE CRAIG, P.C. Laurel E. Davis (NV Bar No. 3005) Jon T. Pearson (NV Bar No. 10182) 300 South Fourth Street, Suite 1400 Las Vegas, Nevada 89101 Telephone: (702) 692-8000 Email: ldavis@fclaw.com Counsel for Debtor and Debtor in Possession

E-filed May 19, 2007

UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA In re XYIENCE INCORPORATED, a Nevada corporation, Debtor. Chapter 11 No. BK-S-08-10474-MKN

Date: Time: [Rule 3016 Motion to be Filed]

DEBTOR’S PLAN OF REORGANIZATION

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LAS V E G A S

TABLE OF CONTENTS 1. Page DEFINITIONS, RULES OF INTERPRETATION AND COMPUTATION OF TIME 1 1.1 Definitions................................................................................................... 1 1.1.1 Administrative Claim........................................................................ 1 1.1.2 Administrative Claim Bar Date......................................................... 2 1.1.3 Administrative Carve Out ................................................................. 2 1.1.4 Allowed Administrative Claim ......................................................... 2 1.1.5 Allowed Claim.................................................................................. 2 1.1.6 Assets ............................................................................................... 2 1.1.7 Available Cash.................................................................................. 3 1.1.8 Bankruptcy Code .............................................................................. 3 1.1.9 Bankruptcy Court ............................................................................. 3 1.1.10 Bankruptcy Rules ............................................................................. 3 1.1.11 Bar Date ........................................................................................... 3 1.1.12 Business Day .................................................................................... 3 1.1.13 Cash.................................................................................................. 3 1.1.14 Chapter 11 Case................................................................................ 3 1.1.15 Claim................................................................................................ 3 1.1.16 Claimant ........................................................................................... 3 1.1.17 Class ................................................................................................. 3 1.1.18 Confirmation .................................................................................... 3 1.1.19 Confirmation Date ............................................................................ 3 1.1.20 Confirmation Hearing ....................................................................... 4 1.1.21 Confirmation Order .......................................................................... 4 1.1.22 Contingent Claim.............................................................................. 4 1.1.23 Creditor ............................................................................................ 4 1.1.24 Darlis Claim ..................................................................................... 4 1.1.25 Debtor............................................................................................... 4 1.1.26 Disclosure Statement ........................................................................ 4 1.1.27 Disputed Claim ................................................................................. 4 1.1.28 Disputed Claims Reserve .................................................................. 4 1.1.29 Distribution....................................................................................... 5 1.1.30 Distribution Date .............................................................................. 5 1.1.31 Effective Date ................................................................................... 5 1.1.32 Equity Interests ................................................................................. 5 1.1.33 Estate................................................................................................ 5 1.1.34 Final Order ....................................................................................... 5 1.1.35 General Unsecured Claim ................................................................ 5 1.1.36 IRS ................................................................................................... 5 1.1.37 Key Management.............................................................................. 5 1.1.38 Key Management Secured Claim...................................................... 6 1.1.39 Key Management Unsecured Claim.................................................. 6 1.1.40 Final Distribution Date ..................................................................... 6 1.1.41 Initial Distribution Date .................................................................... 6 1.1.42 Lien .................................................................................................. 6 1.1.43 Liquidating Trust .............................................................................. 6 1.1.44 Liquidating Trust Agreement ............................................................ 6 1.1.45 Liquidating Trustee........................................................................... 6
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2.

3.

4.

5.

1.1.46 Litigation Claims .............................................................................. 6 1.1.47 Liquidation Proceeds ........................................................................ 7 1.1.48 Manchester ....................................................................................... 7 1.1.49 Manchester Sale Proceeds................................................................. 7 1.1.50 Objection Date.................................................................................. 7 1.1.51 Pacific Claim .................................................................................... 7 1.1.52 Permitted Investments....................................................................... 7 1.1.53 Person............................................................................................... 7 1.1.54 Petition Date ..................................................................................... 7 1.1.55 Plan .................................................................................................. 7 1.1.56 Priority Tax Claim ............................................................................ 7 1.1.57 Pro Rata............................................................................................ 8 1.1.58 Professional ...................................................................................... 8 1.1.59 Professional Fees .............................................................................. 8 1.1.60 Prosperity Claim .............................................................................. 8 1.1.61 Record Date...................................................................................... 8 1.1.62 Schedules.......................................................................................... 8 1.1.63 Secured Claim .................................................................................. 8 1.1.64 Statutory Committee ......................................................................... 8 1.1.65 Taxes ................................................................................................ 8 1.1.66 Zyen ................................................................................................. 8 1.1.67 Zyen Secured Claim.......................................................................... 8 1.1.68 Zyen Secured DIP Financing Claim.................................................. 9 1.1.69 Zuffa................................................................................................. 9 1.1.70 Zuffa Agreement Claim .................................................................... 9 1.2 Computation of Time................................................................................... 9 1.3 Rules of Interpretation ................................................................................. 9 TREATMENT OF UNCLASSIFIED CLAIMS ..................................................... 9 2.1 General........................................................................................................ 9 2.2 Treatment of Administrative Claims............................................................ 9 2.2.1 Generally .......................................................................................... 9 2.2.2 Requests for Payment ....................................................................... 9 2.2.3 Allowed Priority Tax Claims .......................................................... 10 DESIGNATION OF CLASSES OF CLAIMS AND EQUITY INTERESTS ....... 10 3.1 Summary of Classification......................................................................... 10 3.2. Specific Classification ............................................................................... 11 3.2.1 Class 1: Zyen Secured and DIP Financing Claims........................... 11 3.2.2 Class 2: Zuffa Agreement Claim..................................................... 11 3.2.3 Class 3: Key Management Secured Claim...................................... 11 3.2.4 Class 4: General Unsecured Claims ............................................... 11 3.2.5 Class 5: Equity Interests................................................................ 11 DESIGNATION OF AND PROVISIONS FOR TREATMENT OF CLASSES OF CLAIMS AND INTERESTS ......................................................................... 12 4.1 Class 1 – Zyen Secured Claim and Zyen Secured DIP Financing Claim .... 12 4.2 Class 2 – Zuffa Agreement Claim.............................................................. 12 4.3 Class 3 - Key Management Secured Claim ................................................ 12 4.4 Class 4 – General Unsecured Claims ......................................................... 12 4.5 Class 5 – Equity Interests .......................................................................... 12 MEANS FOR IMPLEMENTATION OF PLAN .................................................. 13 5.1 Plan Implementation Steps Occurring on Effective Date ........................... 13 5.2 Notice of Effectiveness.............................................................................. 13 - ii -

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6. 7.

8.

9. 10. 11.

5.3 No Corporate Action Required .................................................................. 13 5.4 Filing with Nevada Secretary of State........................................................ 13 REJECTION OF ALL EXECUTORY CONTRACTS AND UNEXPIRED LEASES............................................................................................................... 14 6.1 Rejection of All Executory Contracts and Unexpired Leases ..................... 14 MANNER OF DISTRIBUTION OF PROEPRTY UNDER THIS PLAN ............ 14 7.1 Status of the Liquidation Trust................................................................... 14 7.2 Authority ................................................................................................... 14 7.3. Objectives ................................................................................................. 15 7.4 Expenses ................................................................................................... 15 7.5. Distributions.............................................................................................. 15 7.6 No Recourse .............................................................................................. 15 7.7 Reserves .................................................................................................... 16 7.8 Statements ................................................................................................. 16 7.9 Further Authorization ................................................................................ 16 CONDITIONS PRECEDENT TO CONFIRMATION AND THE EFFECTIVE DATE ............................................................................................. 16 8.1 Vesting of Assets....................................................................................... 16 8.2 Preservation of Litigation Claims .............................................................. 16 8.3 Discharge .................................................................................................. 16 8.4 Injunction .................................................................................................. 16 8.5 Exculpation ............................................................................................... 17 RETENTION OF JURISDICTION ...................................................................... 17 9.1 Jurisdiction ................................................................................................ 17 MODIFICATION AND AMENDMENT OF THE PLAN ................................... 18 MISCELLANEOUS............................................................................................. 18 11.1 Filing of Objections to Claims ................................................................... 18 11.2 Resolution of Objections After Effective Date; Distributions..................... 19 11.3 Effectuating Documents; Further Transactions; Timing............................. 19 11.4 Exemption from Transfer Taxes ................................................................ 19 11.5 Revocation of Withdrawal of this Plan ...................................................... 20 11.6 Binding Effect ........................................................................................... 20 11.7 Governing Law.......................................................................................... 20 11.8 Modification of Payment Terms ................................................................ 20 11.9 Providing for Claims Payments ................................................................. 20 11.10 Set Offs ..................................................................................................... 21 11.11 Statutory Committee.................................................................................. 21 11.12 Severability ............................................................................................... 21 11.13 Withholding and Reporting Requirements ................................................. 21 11.14 Post Confirmation Reporting ..................................................................... 21 11.15 Cramdown................................................................................................. 21 11.16 Quarterly Fees to the United States Trustee ............................................... 22

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FENNEMORE CRAIG , P.C.
LAS V E G A S

Xyience Incorporated, Debtor and Debtor in Possession (“Debtor”), proposes this Plan of Reorganization (“Plan”) for the resolution of the Debtor’s outstanding Claims and Equity Interests (as these terms are defined herein). All creditors and other parties in interest should refer to the Disclosure Statement (defined herein) for a discussion of history, assets and historical financial data regarding the Debtor, and for a summary and analysis of this Plan and certain related matters. Subject to the restrictions on modifications set forth in section 1127 of the Bankruptcy Code (defined herein) and Rule 3019 of the Bankruptcy Rules (defined herein), and those restrictions on modifications set forth in Article 11 of this Plan, the Debtor expressly reserves its right to alter, amend, strike, withdraw or modify this Plan one or more times before substantial consummation of the Plan. All holders of Claims against the Debtor are encouraged to read this Plan, the Disclosure Statement and the related solicitation materials in their entirety before voting to accept or reject this Plan. Reading the summary of the Plan contained in the Disclosure Statement; however, is not a substitute for reading the Plan. As the provisions of the Plan control, all holders of Claims and Equity Interests are encouraged to carefully read the Plan. No solicitation materials other than the Disclosure Statement, the Exhibits to the Plan and Disclosure Statement and the related materials transmitted with the Plan and Disclosure Statement (after it has been approved by the Bankruptcy Court) have been approved by the Court for use in soliciting acceptances or rejections of the Plan. Holders of Equity Interests are deemed to have rejected the Plan. They will therefore not receive a ballot to vote to accept or reject the Plan. 1. DEFINITIONS, RULES OF INTERPRETATION AND COMPUTATION OF TIME

1.1 Definitions. For purposes of this Plan, except as expressly provided or unless the context otherwise requires, all capitalized terms not otherwise defined shall have the meanings ascribed to them in this Article 1. Any term used in this Plan that is not defined herein, but is defined in the Bankruptcy Code or the Bankruptcy Rules, shall have the meaning ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules, in that order of priority. Whenever the context requires, such terms shall include the plural as well as the singular, the masculine gender shall include the feminine, and the feminine gender shall include the masculine. As used in this Plan, the following terms shall have the meanings specified below: 1.1.1 Administrative Claim. A Claim for any cost or expense of administration of the Chapter 11 Cases allowed under Sections 503(b), 507(b) or 546(c)(2) of the Bankruptcy Code and entitled to priority under Section 507(a)(1) of the Bankruptcy Code, including, but not limited to: (a) fees payable pursuant to Section 1930 of Title 28 of the United States Code; (b) the actual and necessary costs and expenses incurred after the Petition Date of preserving the Estate, including wages, salaries or commissions for services rendered after the commencement of the Chapter 11 Case; or (c) all Professional Fees approved by the Bankruptcy Court pursuant to interim and final allowances. To the extent that a Claim is allowed as an Administrative Claim
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pursuant to Section 365(d)(3) of the Bankruptcy Code, such Claim shall also be deemed an "Administrative Claim" under this paragraph. 1.1.2 Administrative Claim Bar Date. The end of the first Business Day occurring on or after the sixtieth (60th) day after the Effective Date. 1.1.3 Administrative Carve Out. The $225,000 in Cash which includes the $75,000 postpetition retainer held by Fennemore Craig, P.C., and which has been segregated and designated for payment of Allowed Professional Fees. 1.1.4 Allowed Administrative Claim. Allowed Administrative Claim means an Administrative Claim: (a) as to which no objection has been filed or, if an objection has been filed, has been resolved by the allowance of such Administrative Claim by a Final Order of the Bankruptcy Court; or (b) which requires payment in the ordinary course and as to which there is no Final Order of the Bankruptcy Court in effect which prohibits any such payment. 1.1.5 Allowed Claim. Any Claim other than a Disputed Claim, or any portion thereof, other than an Administrative Claim, against the Debtor: (a) proof of which, requests for payment of which, or application for allowance of which, was filed or deemed to be filed on or before the Bar Date, as the case may be, for filing proofs of Claim or requests for payment for Claims of such type against the Debtor; or (b) if no proof of Claim is filed, which has been or hereafter is listed by the Debtor in the Schedules as liquidated in amount and not disputed or contingent; and, in either case, the portion of such Claim as to which either (x) no objection to the allowance thereof has been interposed within the applicable period of limitation fixed by this Plan, the Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court or (y) the Bankruptcy Court has entered a Final Order allowing such portion of such Claim. The term “Allowed” when used to modify a reference in this Plan to any Claim or Class of Claims, shall mean a Claim (or any Claim in any such Class) that is so allowed, e.g. “Allowed Secured Claim” is a Secured Claim. 1.1.6 Assets. This term shall mean: (a) all Litigation Claims, and any rights (including indemnification), setoffs, recoupment, claims and recoveries of Debtor against third parties arising out of or relating to events prior to April 16, 2008; (b) the formation documents of Debtor (including any corporate charter, bylaws or certificates of organization or formation), qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, transfer books, equity interest certificates, and other documents relating to the organization, maintenance, and existence of Debtor as a corporation; (c) the Books and Records of Debtor; (d) all claims of Debtor for refunds of Taxes, deposits and premiums; (e) all agreements, leases and contracts entered into by the Debtor; (f) all life insurance policies of officers, directors and other employees of the Debtor and all other insurance policies relating to the operation of the Business; and (g) the Two Hundred Twenty-Five Thousand Dollar ($225,000) “Carve Out” for payment of allowed administrative expenses.
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1.1.7 Available Cash. Available Cash means as of any date of determination, all Liquidation Proceeds, net of any Reserve being maintained under the Plan. 1.1.8 Bankruptcy Code. The Bankruptcy Reform Act of 1978, Title 11, United States Code, as applicable to the Chapter 11 Case, as now in effect or hereafter amended, 11 U.S.C. §§ 101 et seq. 1.1.9 Bankruptcy Court. The Bankruptcy Court of the United States District Court for the District of Nevada or such other court as may have jurisdiction over the Chapter 11 Case. For any Case or proceeding for which the reference is withdrawn, pursuant to 28 U.S.C § 157(d), the term Bankruptcy Court shall mean the United States District Court for the District of Nevada, or such other court to which such Case or proceeding has been transferred. 1.1.10 Bankruptcy Rules. Collectively, the Federal Rules of Bankruptcy Procedure and the local rules of the Bankruptcy Court as applicable to the Chapter 11 Case, as now in effect or hereinafter amended. 1.1.11 Bar Date. Other than for governmental units (as such term is defined in 11 U.S.C. § 101(27)), this term means May 27, 2008, the date established by the Bankruptcy Court for the filing of proofs of Claim for all Creditors, excepting therefrom, Administrative Claims and Claims for Professional Fees. For governmental units, the Bar Date means July 16, 2008, which is the date that is 180 days after the Petition Date. 1.1.12 Business Day. Any day other than a Saturday, Sunday or other day on which commercial banks in the State of Nevada are authorized or required by law to close. 1.1.13 Cash. Currency, checks, negotiable instruments and wire transfers of immediately available funds, and/ot, in context, amounts allocated to the Reserves. 1.1.14 Chapter 11 Case. The case under Chapter 11 of the Bankruptcy Code involving Debtor, including all adversary proceedings pending in connection therewith. 1.1.15 Claim. This term means a claim (as defined in section 101(5) of the Bankruptcy Code) against the Debtor, including, but not limited to: (a) any right to payment from the Debtor, whether or not such right is reduced to judgment, liquidated, unliquidated, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (b) any right to an equitable remedy for breach of performance, if such performance gives rise to a right of payment from the Debtor, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. 1.1.16 Claimant. The holder of any Allowed Claim. this Plan. Order. 1.1.17 Class. A category of holders of Claims and Equity Interests as classified in 1.1.18 Confirmation. The entry by the Bankruptcy Court of the Confirmation

1.1.19 Confirmation Date. The date upon which the Bankruptcy Court enters the Confirmation Order.
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1.1.20 Confirmation Hearing. The duly noticed initial hearing held by the Bankruptcy Court to confirm this Plan pursuant to Section 1128 of the Bankruptcy Code, and any subsequent hearing held by the Bankruptcy Court from time to time to which the initial hearing is adjourned without further notice other than the announcement of the adjourned dates at the Confirmation Hearing. 1.1.21 Confirmation Order. The order entered by the Bankruptcy Court confirming this Plan, and any clarifying, supplemental or amending orders as may be entered by the Bankruptcy Court. 1.1.22 Contingent Claim. A Claim that is contingent, unmatured or unliquidated on or immediately before the Confirmation Date. 1.1.23 Creditor. Allowed Claim. Any holder of a Claim, whether or not such Claim is an

1.1.24 Darlis Claim. Darlis Investments holds a Senior Convertible Note dated December 20, 2006, in the original principal amount of $6,000,000. The note bears interest at the rate of 15%. The Note is supported by a Security Agreement dated November 20, 2006, and a UCC-1 recorded with the Nevada Secretary of State on December 21, 2006. Pursuant to a UCC Financing Statement Amendment and letter agreements, Darlis Investments has agreed to subordinate its security interests to that of Zyen. 1.1.25 Debtor. Xyience Incorporated, a Nevada Corporation, in the Chapter 11 Case, pursuant to Sections 1107 and 1108 of the Bankruptcy Code. 1.1.26 Disclosure Statement. The written disclosure statement and any supplements thereto that relate to this Plan, as approved by the Bankruptcy Court pursuant to Section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017, as such disclosure statement may be amended, modified or supplemented from time to time. 1.1.27 Disputed Claim. A Claim which is: (a) subject to timely objection interposed by the Debtor, Liquidating Trust or any party in interest entitled to file and prosecute such objection in the Chapter 11 Case, if at such time such objection remains unresolved; (b) a Claim that is listed by the Debtor as disputed, unliquidated or contingent in the Schedules; or (c) if no objection has been timely filed, a Claim which has been asserted in a timely filed proof of Claim in an amount greater than or in a Class different than that listed by the Debtor in the Schedules as liquidated in amount and not disputed or contingent; provided, however, that the Bankruptcy Court may estimate a Disputed Claim for purposes of allowance pursuant to Section 502(c) of the Bankruptcy Code. The term "Disputed", when used to modify a reference in this Plan to any Claim or Class of Claims, shall mean a Claim (or any Claim in such Class) that is a Disputed Claim as defined herein. In the event there is a dispute as to classification or priority of a Claim, it shall be considered a Disputed Claim in its entirety. Until such time as a Contingent Claim becomes fixed and absolute, such Claim shall be treated as a Disputed Claim and not an Allowed Claim for purposes related to allocations and payments under this Plan. 1.1.28 Disputed Claims Reserve. This term means the amount of Assets determined by the Liquidating Trustee, in its sole reasonable discretion, as of the Effective Date, and from time to time thereafter, to be reasonably necessary (taking into account all reasonable contingencies) to pay Disputed Claims if, and when, such Claims become Allowed Claims. The Liquidating Trustee may, in its sole reasonable discretion, establish sub-reserves or more than one
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Disputed Claims Reserve (for example, for each Class and for unclassified Claims). The reserve (or each reserve or sub-reserve, as the case may be), may be in the form of an accounting entry, trust or any other form determined by the Liquidating Trustee, in its sole reasonable discretion, taking into account tax, accounting and other relevant considerations, and shall be invested in Permitted Investments, or not invested, at the sole reasonable discretion of the Liquidating Trustee, taking into account the timing and amount of Allowed Claims to be paid. If there are (or are projected to be by the Liquidating Trustee) insufficient funds in the Administrative Reserve, the Liquidating Trustee may, in its sole reasonable discretion, transfer funds as necessary from the Disputed Claims Reserve(s), or any of its sub-reserves into the Administrative Reserve in a manner giving effect to the payment entitlements and priorities accorded in this Plan. 1.1.29 Distribution. This term means the Cash to be distributed to the holders of Allowed Claims under this Plan. 1.1.30 Distribution Date. This term means the date or dates established by the Liquidating Trustee in the Liquidating Trustee’s sole reasonable discretion that is a date or dates (after the Initial Distribution Date) that the Liquidating Trustee establishes in one or more notices filed (on or before such date or dates) with the Bankruptcy Court for making distributions under this Plan to Allowed Claims. 1.1.31 Effective Date. The last to occur of: (a) the first Business Day that is at least eleven (11) days after the Confirmation Date and on which no stay of the Confirmation Order is in effect; and (b) the Business Day on which all of the conditions set forth in Article 9 of this Plan have been satisfied or waived. 1.1.32 Equity Interests. All holders of Xyience Incorporated Stock. 1.1.33 Estate. The estate created for the Debtor in the Chapter 11 Case pursuant to Section 541 of the Bankruptcy Code. 1.1.34 Final Order. This term means an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction with respect to the subject matter, which has not been reversed, stayed, modified or amended, and as to which the time to seek reconsideration, rehearing, appeal and certiorari has expired, and no request for reconsideration, rehearing, appeal or petition for certiorari has been timely taken, or as to which any reconsideration, rehearing, appeal that has been taken, or any petition for certiorari that has been, or may be filed, has been resolved by the court reconsidering its order, or the highest court to which the order or judgment was appealed, or from which certiorari was sought. 1.1.35 General Unsecured Claim. A Claim that is not secured by a charge against, Lien or interest in property in which the Estate has an interest and is not an Administrative Claim or Priority Tax Claim. General Unsecured Claims shall include all claims arising under Section 502(g). United States. 1.1.36 IRS. The Internal Revenue Service, Department of the Treasury of the

1.1.37 Key Management. Key Management holds the Brush Monroe, L.P. note in the original amount of $10,000,000 dated July 7, 2006, evidenced by a Revolving Loan Note (“Key Management Note”), with a non-default interest rate equal to twelve percent (12%) per annum and a default interest rate of fourteen percent (14%) and payable in full on the Maturity
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Date as provided for in the Note. Pursuant to a February 21, 2007 Agreement, Key Management received 6,750,000 shares of Xyience stock, 3,500,000 Xyience Warrants and agreed to accept $5,000,000 in full satisfaction of the unpaid principal and interest. The Key Management Note is secured by a Revolving Loan and Security Agreement dated July 7, 2006, and a UCC-1 recorded with the Secretary of State of Nevada on June 29, 2005. Pursuant to a UCC Financing Statement Amendment and letter agreement, Key Management has agreed to subordinate its security interest to that of Zyen. 1.1.38 Key Management Secured Claim. That portion of the Key Management Claim that is secured by the Manchester Sale Proceeds. 1.1.39 Key Management Unsecured Claim. That portion of the Key Management Claim that is not secured by the Manchester Sale Proceeds. 1.1.40 Final Distribution Date. Distribution is made. The Distribution Date on which the Final

1.1.41 Initial Distribution Date. The First Business Day after the Effective Date 1.1.42 Lien. This term shall have the meaning set forth in Section 101(37) of the Bankruptcy Code. 1.1.43 Liquidating Trust. The trust created on the Effective Date pursuant to Article 5 of this Plan. 1.1.44 Liquidating Trust Agreement. The agreement substantially in the form attached to the Disclosure Statement as Exhibit 2. 1.1.45 Liquidating Trustee. That person to be identified by the Debtor in a Supplement to this Plan to be served and filed no later than one week prior to the Objection Date, and any successor Liquidating Trustee appointed by the Court. 1.1.46 Litigation Claims. This term means, with respect to the Debtor, the Liquidating Trust and the Liquidating Trustee, all Claims, demands, rights, actions, rights of action and suits of the Estate of the Debtor or the Liquidating Trust against any other Person, of any kind or character, whatsoever, known or unknown, suspected or unsuspected, whether arising prior to, on or after the Petition Date, in contract or in tort, at law or in equity, or under any other theory of state or federal law, including (but not limited to): (a) rights of a setoff, counterclaim, recoupment, replevin or reclamation, and Claims on contracts or for breaches of duties imposed by law; (b) the right to object to or seek estimation of Claims or Equity Interests; (c) Claims pursuant to section 362 of the Bankruptcy Code; (d) Claims and defenses, such as misrepresentation, fraud, mistake, duress, and usury; and (e) all avoiding powers, rights to seek subordination, and all rights and remedies under sections 502(d), 506, 509, 510, 542, 543, 544, 545, 547, 548, 549, 550, 551, 552, 553 and/or 724 of the Bankruptcy Code, and any fraudulent conveyance, fraudulent transfer, or preferential transfer action under any applicable law or in equity. This term shall be construed broadly and inclusively, and shall include, without limitation, the shareholder derivative action presently pending as Adv. No. 08-1107, the Bergeron matter presently pending as Adv. No. 08-1082, the Committee Action presently pending as Adv. No. 081094, and any Claims against any of Debtor’s present or former Officers and Directors and/or any governmental entity.
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1.1.47 Liquidation Proceeds. Liquidation Proceeds means the net Cash available for Distribution after payment of the fees and costs necessary to such sale, collection or other disposition. 1.1.48 Manchester. Manchester Consolidated Corp., an Ontario corporation. 1.1.49 Manchester Sale Proceeds. The $200,000 in Cash held by Nevada Title Company resulting from the April 16, 2008 closing of the Asset Purchase Agreement between the Debtor, as Seller, and Manchester, as Buyer. 1.1.50 Objection Date. This term means the date for Objections to the Plan, as more particularly set forth in an order of the Bankruptcy Court requested by the Debtor, which order may be the order approving the Disclosure Statement. 1.1.51 Pacific Claim. Pacific Investment Network, LLC and Debtor are parties to a loan agreements dated as of July 19, 2005, as amended by that certain Option to Purchase or Retire Secured Convertible Loans dated April 26, 2007, secured by a November 9, 2005 UCC-1 filing. However, the Debtor does not have a security agreement which supports the UCC filing. This security interest has been voluntarily subordinated to the Zyen Prepetition Claim. 1.1.52 Permitted Investments. This term means: (a) direct obligations of, or obligations guaranteed by, the United States of America; (b) obligations of any agency or corporation, which is or may hereafter be created by or pursuant to an act of the Congress of the United States of America as an agency or instrumentality of the United States of America; (c) AAA rated tax-free securities issued by municipalities or state governments or agencies; or (d) any investments or deposits permitted under the Investment Order; and (e) any other obligations or instruments as may, from time to time, be approved for such deposits and/or investments by the Bankruptcy Court; provided, however, that the Liquidating Trustee, in its sole reasonable discretion may invest Cash in demand deposits (including money market funds and other deposits that are or are not insured by the Federal Deposit Insurance Corporation) at any bank, trust company or other financial institution which has, at the time of such deposit, a capital stock and surplus aggregating at least $100,000,000. Such investments shall mature in such amounts and, at such times as may be deemed necessary or advisable by the Liquidating Trustee, in its sole reasonable discretion, to provide funds when needed to make payments from the Assets for Administrative Claims, Professional Fees and Distributions. 1.1.53 Person. An individual, corporation, limited liability company, partnership, association, joint stock company, joint venture, estate, trust, unincorporated organization or government, governmental unit or any subdivision thereof or any other entity, as that term is defined in Section 101(15) of the Bankruptcy Code. 1.1.54 Petition Date. January 18, 2008, the date on which the Debtor filed its voluntary petition commencing the Chapter 11 Case. 1.1.55 Plan. This plan of reorganization, either in its present form or as it may be amended, supplemented or modified from time to time, including all exhibits and schedules annexed hereto or referenced herein. 1.1.56 Priority Tax Claim. Any Claim against the Debtor entitled to priority in payment under Section 507(a)(8) of the Bankruptcy Code.
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1.1.57 Pro Rata. The ratio of an Allowed Claim or Allowed Equity Interest in a particular Class to the aggregate amount of all such Allowed Claims or Allowed Equity Interests in any such Class. 1.1.58 Professional. This term means a Person: (a) employed pursuant to a Final Order in accordance with sections 327 and 1103 of the Bankruptcy Code, and to be compensated for services rendered prior to the Effective Date, pursuant to sections 327, 328, 329, 330 and 331 of the Bankruptcy Code; or (b) for which compensation and reimbursement has been allowed by the Bankruptcy Court, pursuant to sections 503(b)(2)-(6) and/or 1129(a)(4) of the Bankruptcy Code. 1.1.59 Professional Fees. The Administrative Claims for compensation and reimbursement to Professionals submitted pursuant to Sections 330, 331 or 503(b) of the Bankruptcy Code of Persons: (a) employed pursuant to an order of the Bankruptcy Court under Sections 327 or 1103 of the Bankruptcy Code; or (b) for whom compensation and reimbursement has been allowed by the Bankruptcy Court pursuant to Section 503(b) of the Bankruptcy Code or by other Final Order. 1.1.60 Prosperity Claim. Prosperity Investment Alliance, LLC and the Debtor are parties to a loan agreements dated as of July 19, 2005, as amended by that certain Option to Purchase or Retire Secured Convertible Loans dated April 26, 2007, secured by a November 9, 2005 UCC-1 filing. However, the Debtor does not have a security agreement which supports the UCC filing. This security interest has been voluntarily subordinated to the Zyen Prepetition Claim. 1.1.61 Record Date. The Confirmation Date for the purpose of determining the holders of Xyience Incorporated stock. 1.1.62 Schedules. The schedules of assets and liabilities and any amendments thereto filed by the Debtor with the Bankruptcy Court in accordance with Section 521(1) of the Bankruptcy Code. 1.1.63 Secured Claim. A Claim that is secured by a Lien against property of the Estate to the extent of the value of any interest in such property of the Estate securing such Claim or to the extent of the amount of such Claim subject to setoff in accordance with Section 553 of the Bankruptcy Code, in either case as determined pursuant to Section 506(a) of the Bankruptcy Code. 1.1.64 Statutory Committee. Collectively, any committee appointed pursuant to Section 1102 of the Bankruptcy Code. 1.1.65 Taxes. This term means any income, franchise, excise, sales, use, employment, withholding, property, payroll or other taxes, assessments, of governmental charges, together with any interest penalties, additions to tax, fines, and similar amounts relating thereto, imposed or collected by any federal, state, local or foreign governmental authority. 1.1.66 Zyen means Zyen, LLC, a Nevada LLC. 1.1.67 Zyen Secured Claim. The Secured Claim arising from the loan by Zyen to Xyience in the principal sum not to exceed $12,000,000 on October 4, 2007, evidenced by a Convertible Senior Secured Note, with a non-default interest rate equal to fifteen percent (15%) per annum and a default interest rate of eighteen percent (18%) and payable in full on the
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Maturity Date as provided for in the Note. Repayment of the Zyen Note is secured by a Security Agreement dated as of October 4, 2007, perfected by: (a) a UCC-1 recorded with the Secretary of State of Nevada on October 16, 2007; (b) a Restricted Account and Securities Account Control Agreement; and (c) a United States Patent and Trademark Office Notice of Recordation of Assignment Document recorded October 31, 2007. 1.1.68 Zyen Secured DIP Financing Claim. The secured Claim arising from the DIP Financing approved by the Bankruptcy Court pursuant to its Final Orders entered February 7, 2008 and March 3, 2008. 1.1.69 Zuffa means Zuffa Marketing, LLC, a Nevada LLC. 1.1.70 Zuffa Agreement Claim. The secured Claim and superpriority administrative Claim arising from the Agreement between the Debtor and Zuffa as approved by the Bankruptcy Court’s Final Orders entered February 7, 2008 and March 3, 2008. 1.2 Computation of Time. In computing any period of time prescribed or allowed by this Plan, unless otherwise expressly provided, the provisions of Bankruptcy Rule 9006(a) shall apply. 1.3 Rules of Interpretation. For purposes of this Plan only; (a) any reference in this Plan to a contract, instrument, release, indenture, or other agreement or documents being in particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions; (b) any reference in this Plan to an existing document or exhibit filed or to be filed means such document or exhibit as it may have been or may be amended, modified, or supplemented; (c) unless otherwise specified, all references in this Plan to Sections, Articles, Schedules and Exhibits are references to Sections, Articles, Schedules and Exhibits of or to this Plan; (d) the words "herein," "hereof," "hereto," and "hereunder" refer to this Plan in its entirety rather than to a particular portion of this Plan; (e) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of this Plan; and (f) the rules of construction and definitions set forth in Sections 101 and 102 of the Bankruptcy Code and in the Bankruptcy Rules shall apply unless otherwise expressly provided. 2. TREATMENT OF UNCLASSIFIED CLAIMS

2.1 General. Pursuant to Section 1123(a)(1) of the Bankruptcy Code, the Claims against the Debtor set forth in this Article 2 are not designated as Classes. The holders of such Claims are not entitled to vote on this Plan. The treatment of the Claims set forth below is consistent with the requirements of Section 1129(a)(9)(A) of the Bankruptcy Code. 2.2 Treatment of Administrative Claims.

2.2.1 Generally. Each Allowed Administrative Claim shall be paid by the Liquidation Trust (or otherwise satisfied in accordance with its terms) from Available Cash upon the latest of: (a) the Initial Distribution Date; (b) such date as may be fixed by the Bankruptcy Court, or as soon thereafter as practicable; (c) the tenth (10th) Business Day after such Claim is Allowed, or as soon thereafter as practicable; and (d) such date as the holder of such Claim and the Debtor or Liquidating Trustee shall agree upon. 2.2.2 Requests for Payment.
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Claims against Debtor and all final applications for allowance and disbursement of Professional Fees must be filed by the Administrative Claims Bar Date or the holders thereof shall be forever barred from asserting such Administrative Claims against the Debtor and the Liquidating Trust; provided, however, that with regard to any Administrative Claims arising as a result of assessments of any taxes due by Debtor for tax years up to and including the Effective Date, the Administrative Claims Bar Date shall be extended to that date provided for by the Internal Revenue Code and Regulations for the assessment of taxes due for such taxable years; provided further however, that in the event that Debtor or the Liquidating Trustee request a prompt assessment under Section 6501(d) of the Internal Revenue Code, the Administrative Claims Bar Date shall be the 30th day following the 18 month period provided under Section 6501(d) of the Internal Revenue Code. All Professional Fees applications must be in compliance with all of the terms and provisions of any applicable order of the Bankruptcy Court, including the Confirmation Order, and all other orders governing payment of Professional Fees. 2.2.3 Allowed Priority Tax Claims. Each Allowed Priority Tax Claim, if any, shall be paid by the Liquidation Trust from Available Cash on the later of: (a) the Distribution Date; (b) the tenth (10th) Business Day after the date on which an order allowing such Claim becomes a Final Order; (c) a date when such Allowed Priority Tax Claims become due and owing; and (d) such other time as is agreed to by the holder of such Claim and the Debtor prior to the Effective Date or the Liquidating Trustee after the Effective Date. From and after the Effective Date and until any Allowed Priority Tax Claim is paid in full, the unpaid balance, if any, of such Allowed Priority Tax Claim shall accrue interest fixed at the rate per annum equal to the rate provided for by Internal Revenue Code sections 6621 and 6622, in effect on the Effective Date. 3. DESIGNATION OF CLASSES OF CLAIMS AND EQUITY INTERESTS

Pursuant to this Plan and in accordance with Section 1123(a)(1) of the Bankruptcy Code, all Claims of Creditors and the holders of Equity Interests (except Administrative Claims, Priority Tax Claims and Priority Tenant Claims) are placed in the Classes described below. A Claim or Equity Interest is classified in a particular Class only to the extent that the Claim or Equity Interest qualifies within the description of that Class and is classified in other Classes only to the extent that any remainder of the Claim or Equity Interest qualifies within the description of such other Classes. A Claim is also classified in a particular Class only to the extent that such Claim is an Allowed Claim in that Class and has not been paid, released or otherwise satisfied prior to the Effective Date. With respect to Classes of Claims described as unimpaired under the Plan, except as otherwise provided under this Plan, nothing shall affect the rights and legal and equitable defenses of the Estate and Liquidating Trust regarding such Claims classified as unimpaired under this Plan, including but not limited to, all rights in respect of legal and equitable defenses to setoff or recoupment against such Claims. 3.1 Summary of Classification.

Class Class 1

Description
Zyen Secured Claim Zyen Secured DIP Financing Claim

Status
Unimpaired -solicitation not required -deemed to have voted yes

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Class Class 2

Description
Zuffa Agreement Claim

Status
Impaired -entitled to vote -solicitation required

Class 3

Key Management Secured Claim

Impaired -entitled to vote -solicitation required Impaired -entitled to vote -solicitation required Impaired -not entitled to vote -deemed to have voted no -solicitation not required

Class 4

General Unsecured Claims

Class 5

Equity Interest Holders

3.2.

Specific Classification.

3.2.1 Class 1: Zyen Secured and DIP Financing Claims. Class 2 consists of the Zyen Secured Claim and the Zyen Secured DIP Financing Claim. 3.2.2 Class 2: Zuffa Agreement Claim. Agreement Claims. Class 3 consists of the Zuffa

3.2.3 Class 3: Key Management Secured Claim. Class 3 consists of the Key Management Secured claim. 3.2.4 Class 4: General Unsecured Claims. Class 4 consists of all General Unsecured Claims against the Debtor. The Key Management Unsecured Claim, the Darlis Claim, the Pacific Claim and the Prosperity Claim are Class 5 General Unsecured Claims because the Manchester Sale Proceeds are not to sufficient to satisfy them. Additionally, the Key Management Secured Claim will also be included as a Class 5 General Unsecured Claim if the Bankruptcy Court approves the Debtor’s Section 506(c) surcharge of the Key Management Secured Claim to pay Administrative Claims. 3.2.5 Class 5: Equity Interests. Class 5 consists of all Xyience Incorporated Equity Interests.

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4.

DESIGNATION OF AND PROVISIONS FOR TREATMENT OF CLASSES OF CLAIMS AND INTERESTS

4.1 Class 1 – Zyen Secured Claim and Zyen Secured DIP Financing Claim. The Zyen Secured Claim and Zyen Secured DIP Financing Claim have been satisfied in full by the Manchester Sale Transaction, pursuant to which the Zyen Secured Claim and Zyen Secured DIP Financing Claim were assigned to Manchester based upon the Bankruptcy Court’s Final Orders. Class 1 has therefore been satisfied, it is unimpaired under this Plan, and it is not entitled to vote on this Plan. 4.2 Class 2 – Zuffa Agreement Claim. If the Court permits the Debtor to do so pursuant to this Plan, the Debtor will impose a Section 506(c) surcharge of the Manchester Sale Proceeds and pay the Allowed Zuffa Agreement Claim with an Initial Distribution in the amount of the Manchester Sale Proceeds on the Initial Distribution Date. The remaining Allowed Zuffa Agreement Claim (or the entire Zuffa Agreement Claim if the surcharge is not permitted) shall be paid from subsequent Distributions of Available Cash with priority over all administrative expenses of the kind specified in Section 503(b) or 507(b) to the extent of additional Available Funds on subsequent Distribution Dates. Class 2 is impaired under this Plan, and it is entitled to vote on this Plan. 4.3 Class 3 - Key Management Secured Claim. If the Bankruptcy Court permits the Debtor to do so pursuant to this Plan, the Key Management Secured Claim shall be surcharged pursuant to Section 506(c) to the extent of the Manchester Sale Proceeds. As a result, the Key Management Secured Claim would become a Class 5 General Unsecured Claim. Alternatively, if the Court does not approve the proposed surcharge of the Key Management Secured Claim, the Allowed Key Management Secured Claim will be satisfied by payment of the Manchester Sale Proceeds to Key Management. Class 3 is impaired under this Plan, and it is entitled to vote on this Plan. 4.4 Class 4 – General Unsecured Claims. Except to the extent that a Creditor with an Allowed Claim agrees to less favorable treatment, each Creditor with an Allowed Claim in Class 4 shall receive Distributions from the Liquidating Trustee as follows: (a) Initial Distribution. There is no Available Cash for an Initial Distribution to General Unsecured Claims, and there will be none. (b) Subsequent Distributions. On each Distribution Date after the Initial Distribution Date, to the extent of Available Cash after satisfaction of the Allowed Zuffa Agreement Claim, Administrative Claims and Priority Claims, the Liquidating Trustee shall distribute Available Cash on a Pro Rata basis to all Creditors with Allowed General Unsecured Claims. Class 4 is impaired under this Plan, and it is entitled to vote on this Plan. 4.5 Class 5 – Equity Interests. Each holder of record as of the Record Date of Xyience Incorporated stock shall receive nothing for their Class 5 Equity Interest under the Plan. Class 5 is deemed to have rejected this Plan and holders of Class 5 Equity Interests are not entitled to vote on this Plan.

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5.

MEANS FOR IMPLEMENTATION OF PLAN

5.1 Plan Implementation Steps Occurring on Effective Date. On the Effective Date, the following events shall occur in the following sequence: 5.1.1 From and after the Effective Date, the Liquidating Trust shall act in the place and stead of the Debtor, its directors, officers and employees. 5.1.2. Xyience Incorporated shall be dissolved pursuant to NRS 78.622 without action on the part of the Debtor’s directors, Debtor’s officers or holders of Xyience Incorporated Equity Interests; however, the Liquidating Trustee may delay that dissolution to the extent that it is necessary to do so to pursue Claims, continue or commence litigation. 5.1.3 All of the officers and directors of Xyience Incorporated shall be deemed to have resigned. 5.1.4 The Cash and other Assets shall be delivered to the Liquidating Trustee to be held and preserved pursuant to the Liquidating Trust Agreement as property of the Estate to be paid in accordance with this Plan. 5.1.5 The Liquidating Trust Agreement shall be executed and the Liquidation Trust shall be deemed effective. The Debtor shall settle the Liquidating Trust by irrevocably delivering, assigning and conveying all Assets to the Liquidation Trust, including all rights to prosecute Litigation Claims. 5.1.6 The Xyience Incorporated Equity Interests shall be deemed cancelled and extinguished without further act or action under any applicable agreement, law, regulation, order or rule. 5.1.7 All Assets received by the Liquidation Trust shall be applied and Distributed in accordance with the Liquidation Trust Agreement and this Plan. 5.2 Notice of Effectiveness. When all of the steps contemplated by Section 6.1 have been completed, the Debtor or Liquidating Trustee shall file with the Bankruptcy Court and serve upon all Creditors and all potential holders of Administrative Claims known to the Debtor (whether or not disputed), a Notice of Effective Date of Plan. The Notice of Effective Date of Plan shall include notice of the Administrative Claim Bar Date. 5.3 No Corporate Action Required. As of the Effective Date: (a) the adoption, execution, delivery and implementation or assignment of all contracts, leases, instruments, releases or other agreements related to or contemplated by this Plan; (b) the transfer of Assets provided for in Section 6.1 above; and (c) the other matters provided for under or in furtherance of this Plan involving corporate action to be taken by or required of Debtor shall be deemed to have occurred and be effective as provided herein, and shall be authorized and approved in all respects without further order of the Bankruptcy court or any requirement of further action by the stockholders, directors or officers of Debtor. 5.4 Filing with Nevada Secretary of State. In accordance with NRS 78.622, on a date to be determined by the Liquidating Trustee, a certified copy of the Plan and the Confirmation Order shall be filed with the Nevada Secretary of State. Debtor, from the Confirmation Date to the Effective Date, is authorized and directed to take any action or carry out
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any proceeding necessary to effectuate this Plan pursuant to NRS 78.622. 6. REJECTION OF ALL EXECUTORY LEASESError! Bookmark not defined. CONTRACTS AND UNEXPIRED

6.1 Rejection of All Executory Contracts and Unexpired Leases. All executory contracts and unexpired leases shall be rejected on the Effective Date without any further action on the part of the Debtor. 6.2 Bar Date. All proofs of Claim with respect to Claims arising from the rejection of any executory contract or unexpired lease shall be filed no later than thirty (30) days after the Effective Date. Any Claim not filed within such time shall be forever barred. 7. MANNER OF DISTRIBUTION OF PROEPRTY UNDER THIS PLAN

7.1 Status of the Liquidation Trust. The Liquidating Trust shall be organized pursuant to the terms of that certain Liquidating Trust Agreement attached to the Disclosure Statement as Exhibit 2. Effective on the Effective Date, the Liquidation Trustee shall be the representative of the Estate as that term is used in section 1124(b)(3)(B) of the Bankruptcy Code and shall have the rights and powers provided for in the Bankruptcy Code in addition to any rights and powers granted herein. In its capacity as the representative of the Estate, the Liquidation Trust shall be the successor-in-interest to Debtor with respect to any action commenced by or against Debtor or on behalf of Debtor prior to the Confirmation Date. All such actions and any and all other claims or interests constituting Assets, and all claims, rights and interest thereunder shall be retained and enforced by the Liquidating Trustee as the representative of the Estate pursuant to Section 1123(b)(3)(B) of the Bankruptcy Code. 7.2 Authority. Subject to the limitations contained herein, the Liquidation Trustee shall have the following powers, and authorities, and duties, by way of illustration and not of limitation: (a) Manage, sell and convert all or any portion of the Assets to Cash and distribute Liquidation Proceeds and Available Cash as specified in the Plan; (b) Release, convey or assign any right, title or interest in or about the Assets or any portion thereof; (c) Pay and discharge any cost, expense, fee or obligation deemed necessary to preserve or enhance the value of the Assets, discharge duties under the Plan or perform the purpose of the Plan; payment of such fees and expenses shall not require approval of the Bankruptcy Court; (d) Open and maintain bank accounts and deposit funds and draw checks and make disbursements in accordance with this Plan; (e) Engage and pay from Liquidation Proceeds such attorneys, including attorneys engaged pursuant to a contingent fee agreement, accountants, engineers, agents, tax specialists, financial advisors, appraisers, investment bankers, other professionals and clerical and stenographic assistance as may, in the discretion of the Liquidation Trustee, be deemed necessary; (f)
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Interests and seek to estimate them; (g) Enforce, waive or release rights, privileges or immunities of any kind; (h) In general, without in any manner limiting any of the foregoing, deal with the Assets or any part or parts thereof in all other ways as would be lawful for any person owning the same to deal therewith, whether similar to or different from the ways herein specified; (i) Institute or continue actions which were or otherwise could have been brought by the Estate, and prosecute or defend all appeals on behalf of the Estate and, when appropriate, settle such actions and claims with the approval of the Bankruptcy Court after hearing on notice; provided, however, that the Liquidation Trustee may settle actions and claims involving an original amount of less than $25,000 without Bankruptcy Court approval; (j) Act in the place and stead of Debtor and represent the Estate with regard to all matters for which the jurisdiction of the Bankruptcy Court is reserved under Section 10 of this Plan; (k) applicable Law; Oversee the dissolution and winding up of Debtor in accordance with

(l) As soon as is practicable after the Final Distribution Date, ask the Bankruptcy Court to enter the Final Decree; and (m) Without limitation, do any and all things necessary to accomplish the purposes of this Plan. 7.3. Objectives. In selling or otherwise liquidating the Assets, the Liquidation Trust shall use its best efforts to maximize the amount of proceeds derived therefrom. The Liquidation Trust shall cause all Assets to be liquidated by the fifth anniversary of the Effective Date; however, with the approval of the Bankruptcy Court this time limit may be extended. 7.4 Expenses. The Liquidation Trustee shall be authorized to pay obligations or expenses of or relating to the Assets or to Claims against the Estate when the Liquidation Trustee, in its reasonable discretion, deems to be in the best interest of the holders of Allowed General Unsecured Claims or necessary to effectuate the Plan. 7.5. Distributions. The Liquidation Trustee shall be responsible for making Distributions required by this Plan. The Liquidation Trustee may make such Distributions before the allowance of each Claim if the Liquidation Trustee has a good faith belief that the Disputed Claims Reserve is sufficient for Disputed Claims. 7.6 No Recourse. No recourse shall ever be had, directly or indirectly, against the Liquidating Trust or Liquidating Trustee or against any agent, attorney, accountant or other professional for the Liquidating Trust, by legal or equitable proceedings or by virtue of any statute or otherwise, nor upon any promise, contract, instrument, undertaking obligation, covenant or agreement whatsoever executed by the Liquidation Trust under the Plan, or by reason of the creation of any indebtedness by the Liquidation Trust under this Plan for any purpose authorized by this Plan, it being expressly understood and agreed that all such liabilities, covenants and agreements of the Liquidating Trust, whether in writing or otherwise, shall be enforceable only against and be satisfied only out of the Assets or such part thereof a shall under the terms of any such agreement be liable therefore or shall be evidence only of a right of payment out of the
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Assets. 7.7 Reserves. The Liquidating Trust shall establish and maintain any Reserve required by this Plan (which need not be in separate accounts). 7.8 Statements. The Liquidating Trust shall maintain a record of the names and addresses of the holders of General Unsecured Claims as of the Effective Date for the purpose of mailing Distributions to Allowed General Unsecured Claims and making objections to Claims. The Liquidating Trustee may rely on the name and address set forth in the Debtor’s Schedules and/or proofs of Claim for the holders of General Unsecured Claims and holders of Equity Interests as being true and correct unless and until notified in writing. The Liquidating Trust shall file all tax returns and other filings with governmental authorities on behalf of the Liquidating Trust and the assets it holds. 7.9 Further Authorization. The Liquidating Trust shall be entitled to seek such orders, judgments, injunctions and rulings as it deems necessary to carry out the intentions and purposes, and to give full effect to the provisions of, this Plan. 8. CONDITIONS PRECEDENT TO CONFIRMATION AND THE EFFECTIVE DATE

8.1 Vesting of Assets. Subject to the provisions of this Plan, the Assets shall vest and be automatically transferred to the Liquidation Trust on the Effective Date, pursuant to Section 5. As of the Effective Date, all such property shall be free and clear of all Liens, Claims and Equity Interests except as otherwise provided herein. 8.2 Preservation of Litigation Claims. In accordance with Section 1123(b)(3) of the Bankruptcy Code, and except as otherwise expressly provided herein, all Litigation Claims shall be assigned and transferred to the Liquidating Trust pursuant to Section 5. 8.3 Discharge. As a result of Debtor’s Assets being liquidated with the proceeds of liquidation distributed in this Plan, the Debtor will not receive a discharge. 8.4 Injunction. From and after the Effective Date, except for the shareholder derivative action presently pending as Adv. No. 08-1107, the Bergeron matter presently pending as Adv. No. 08-1082, the Committee Action presently pending as Adv. No. 08-1094, and except as provided in this Plan and the Confirmation Order, all entities that have held, currently hold or may hold a Claim or an Equity Interest or other right of a Equity Interest holder that is terminated pursuant to the terms of this Plan are permanently enjoined from taking any of the following actions on account of any such Claims or Equity Interests or rights: (a) commencing or continuing in any manner any action or other proceeding against the Liquidating Trust or its respective property; (b) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order against the Liquidating Trust or its respective property; (c) creating, perfecting or enforcing any Lien or encumbrance against the Liquidating Trust or its respective property; (d) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to the Liquidating Trust or its respective property; and (d) commencing or continuing any action, in any manner or any place, that does not comply with or is inconsistent with the provisions of this Plan or the Bankruptcy Code. Nothing in the Plan shall affect, release, enjoin or impact in any way the prosecution of the Claims of Creditors treated by this Plan or the Litigation Claims transferred to the Liquidating Trust pursuant to this Plan. The Debtor reserves its right to file all appropriate pleadings or actions that may be necessary to
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preserve its rights and protect the Estate’s interest in Claims or Litigation Claims. 8.5 Exculpation. From and after the Effective Date, the Debtor, the Liquidating Trust, the Liquidating Trustee, the Statutory Committee, the Professionals nor any of their respective present or former members, directors, officers, managers, employees, advisors, attorneys or agents, shall have or incur any liability to any holder of a Claim or Equity Interest or any other party-in-interest, or any of their respective agents, employees, representatives, financial advisors, attorneys or Affiliates, or any of their successors or assigns, for any act or omission in connection with, relating to, or arising out of (from the Petition Date forward), the Bankruptcy Case, Liquidating Trust, the pursuit of confirmation of this Plan or the consummation of this Plan, except for gross negligence and willful misconduct, and in all respects shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities under this Plan or in the context of the Case. 9. RETENTION OF JURISDICTION

9.1 Jurisdiction. Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter 11 Case and the Liquidating Trust after the Effective Date as is legally permissible, including jurisdiction to: (a) Allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim or Equity Interest or Disputed Claim or Disputed Equity Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the allowance or priority of Claims or Disputed Claims; (b) Grant or deny any applications for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or this Plan for periods ending on or before the Effective Date; (c) Resolve any matters related to the assumption, assignment or rejection of any executory contract or unexpired lease to which the Debtor or the Liquidating Trust is party, and to hear, determine and, if necessary, liquidate any Claims arising therefrom; (d) Ensure that distributions to holders of Allowed Claims are accomplished pursuant to the provisions of this Plan; (e) Decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any applications or motions involving Debtor, the Estate or the Liquidating Trust that may be pending on the Effective Date or commenced thereafter as provided for by this Plan; (f) Enter such orders as may be necessary or appropriate to implement or consummate the provisions of this Plan and all contracts, instruments, releases and other agreements or documents created in connection with this Plan or the Disclosure Statement or the Confirmation Order or the Liquidating Trust Agreement, except as otherwise provided herein; (g) Decide or resolve any cases, controversies, suits or disputes that may arise in connection with the consummation, interpretation or enforcement of any Final Order, this Plan, the Confirmation Order or any Person’s obligations incurred in connection with this Plan or the
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Confirmation Order or the Liquidating Trust Agreement; (h) Modify this Plan before or after the Effective Date pursuant to Section 1127 of the Bankruptcy Code and Section 11 of this Plan or modify any contract, instrument, release or other agreement or document created in connection with this Plan, the Disclosure Statement or the Confirmation Order or the Liquidating Trust; or remedy any defect or omission or reconcile any inconsistency in any Final Order, this Plan, the Confirmation Order, the Liquidating Trust, or any contract, instrument, release or other agreement or document created in connection with this Plan, the Disclosure Statement, the Confirmation Order or the Liquidating Trust, in such manner as may be necessary or appropriate to consummate this Plan, to the extent authorized by the Bankruptcy Code; (i) Issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any person with consummation, implementation or enforcement of any Final Order, this Plan or the Confirmation Order or the Liquidating Trust, except as otherwise provided herein; (j) Enter and implement such orders as are necessary or appropriate if a Final Order or the Confirmation Order is for any reason modified, stayed, reversed, revoked or vacated; (k) Determine any other matters that may arise in connection with or relate to this Plan, any Final Order, the Disclosure Statement, the Confirmation Order, the Liquidating Trust, or any contract, instrument, release or other agreement or document created in connection with this Plan, the Disclosure Statement, any Final Order or Confirmation Order or Liquidating Trust, except as otherwise provided herein; (l) Enter an order closing the Bankruptcy Case;

(m) Hear and decide Litigation Claims and continue to hear and decide pending Litigation Claims and any other claim or cause of action of Debtor and the Liquidating Trust; and (n) Decide or resolve any matter over which the Bankruptcy Court has jurisdiction pursuant to Section 505 of the Bankruptcy Code. 10. MODIFICATION AND AMENDMENT OF THE PLAN

Prior to Confirmation, Debtor may alter, amend or modify this Plan under Section 1127(a) of the Bankruptcy Code at any time. After the Confirmation Date and prior to substantial consummation of this Plan as defined in Section 1101(2) of the Bankruptcy Code, Debtor or Liquidating Trustee may, under Section 1127(b), (c) and (d) of the Bankruptcy Code, alter, amend or modify this Plan or institute proceedings in the Bankruptcy Court to remedy any defect or omission or reconcile any inconsistencies in this Plan, the Disclosure Statement or the Confirmation Order, to make appropriate adjustments and modifications to this Plan or the Confirmation Order as may be necessary to carry out the purposes and effects of this Plan so long as such proceedings do not materially adversely affect the treatment of holders of Claims under this Plan. 11. MISCELLANEOUS

11.1 Filing of Objections to Claims. After the Effective Date, objections to Claims shall be made and objections to Claims made previous thereto shall be pursued by the Liquidating
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Trustee or any other party properly entitled to do so after notice to the Liquidating Trustee and approval by the Bankruptcy Court. Any objections to Claims made after the Effective Date shall be filed and served not later than one hundred twenty (120) days after the Effective Date; provided, however, that such period may be extended by order of the Bankruptcy Court for good cause shown. 11.2 Resolution of Objections After Effective Date; Distributions

(a) Resolution of Objections. From and after the Effective Date, the Liquidating Trustee may litigate to judgment, propose settlements of, or withdraw objections to, all pending or filed Disputed Claims and may settle or compromise any Disputed Claim without notice and a hearing and without approval of the Bankruptcy Court. (b) Distributions. In order to facilitate Distributions to holders of Allowed Claims, and if and to the extent there are Disputed Claims in any Class, the Liquidating Trustee shall set aside in a Reserve account the payments or Distributions applicable to such Disputed Claims as if such Disputed Claims were Allowed Claims, pending the allowance or disallowance of such Disputed Claims. In the event that the Liquidating Trustee wishes to deposit or hold a lesser amount than required herein and is unable to reach an agreement with the holder of the Disputed Claim, on the amount to be deposited or held, the Bankruptcy Court shall fix the amount after notice and hearing. Upon Final Order with respect to a Disputed Claim, the holder of such Disputed Claim, to the extent it has been determined to be an Allowed, shall receive from the Liquidating Trustee that payment or Distribution to which it would have been entitled if the portion of the Claim so allowed had been allowed as of the Effective Date. Such payment or distribution shall be made as soon as practical after the order allowing the Claim has become a Final Order. (c) Late-Filed Claims. No Claim filed after the Bar Date or, as applicable, the Administrative Claim Bar Date or Bar Date established by Section 7.2 of this Plan, shall be allowed, and all such Claims are hereby disallowed in full. After the Bar Date or the Administrative Bar Date, as applicable, no Creditor shall be permitted to amend any claim to increase the claimed amount; and any such amendment shall be disallowed to the extent of the late-filed increase in the claimed amount. 11.3 Effectuating Documents; Further Transactions; Timing. The Liquidating Trust is authorized to execute, deliver, file or record such contracts, instruments, releases and other agreements or documents and to take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of this Plan and any securities issued, transferred or canceled pursuant to this Plan. All transactions that are required to occur on the Effective Date under the terms of this Plan shall be deemed to have occurred simultaneously. The Liquidating Trust is authorized and directed to do such acts and execute such documents as are necessary to implement this Plan. 11.4 Exemption from Transfer Taxes. Pursuant to Section 1146(a) of the Bankruptcy Code: (a) the issuance, distribution, transfer or exchange of Estate property; (b) the creation, modification, consolidation or recording of any deed of trust or other security interest, the securing of additional indebtedness by such means or by other means in furtherance of, or connection with this Plan or the Confirmation Order or the Liquidating Trust Agreement; (c) the making, assignment, modification or recording of any lease or sublease; or (d) the making, delivery or recording of a deed or other instrument of transfer under, in furtherance of, or in connection with, this Plan, the Confirmation Order or the Liquidating Trust or any transaction
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contemplated above, or any transactions arising out of, contemplated by or in any way related to the foregoing, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act or real estate transfer tax, mortgage recording tax or other similar tax or governmental assessment and the appropriate state or local government officials or agents shall be, and hereby are, directed to forego the collection of any such tax or assessment and to accept for filing or recordation any of the foregoing instruments or other documents without the payment of any such tax or assessment. 11.5 Revocation of Withdrawal of this Plan. Debtor reserves the right to revoke or withdraw this Plan at any time prior to the Confirmation Date. If this Plan is jointly withdrawn or revoked, then this Plan shall be deemed null and void and nothing contained herein shall be deemed to constitute a waiver or release of any Claims by or against Debtor or any other Person nor shall the withdrawal or revocation of this Plan prejudice in any manner the rights of Debtor or any Person in any further proceedings involving Debtor. In the event this Plan is withdrawn or revoked, nothing set forth herein shall be deemed an admission of any sort and this Plan and any transaction contemplated thereby shall be inadmissible into evidence in any proceeding. 11.6 Binding Effect. This Plan shall be binding upon, and shall inure to the benefit of, the Debtor, the Liquidating Trust, and the holders of all Claims and Equity Interests and their respective successors and assigns. 11.7 Governing Law. Except to the extent that the Bankruptcy Code or other federal law is applicable or as provided in any contract, instrument, release or other agreement entered into in connection with this Plan or in any document which remains unaltered by this Plan, the rights, duties and obligations of Debtor and any other Person arising under this Plan shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Nevada without giving effect to Nevada’s choice of law provisions. 11.8 Modification of Payment Terms. The Liquidating Trustee reserves the right to modify the treatment of any Allowed Claim in any manner adverse only to the holder of such Allowed Claim at any time after the Effective Date upon the prior written consent of the holder whose Allowed Claim treatment is being adversely affected. 11.9 Providing for Claims Payments. Distributions to holders of Allowed Claims shall be made by the Liquidating Trustee: (a) at the addresses set forth on the proofs of Claim filed by such holders (or at the last known addresses of such holders if no proof of Claim is filed or if Debtor or Liquidating Trustee has been notified of a change of address); (b) at the addresses set forth in any written notices of address changes delivered after the date of any related proof of Claim; or (c) at the addresses reflected in the Schedules if no proof of Claim has been filed and the Debtor or Liquidating Trustee has not received a written notice of a change of address. If any Claimant’s Distribution is returned as undeliverable, no further Distributions to such holder shall be made unless and until the Liquidating Trustee is notified of such holder’s then current address, at which time all missed distributions shall be made to such holder without interest. Amounts in respect of undeliverable Distributions shall be retained by the Liquidating Trustee until such Distributions are claimed. All claims for undeliverable Distributions shall be made on or before the second anniversary of the Effective Date. After such date, all unclaimed property shall revert to the Liquidating Trust and the Claim of any holder or successor to such holder with respect to such property shall be discharged and forever barred notwithstanding any federal or state escheat laws to the contrary. Nothing contained in this Plan shall require Debtor or the Liquidating Trustee to attempt to locate any holder of an Allowed Claim.
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11.10 Set Offs. Debtor and the Liquidating Trustee may, but shall not be required to, set off or recoup against any Claim and the payments or other Distributions to be made pursuant to this Plan in respect of such Claim (before any distribution is made on account of such Claim), claims of any nature whatsoever that the applicable Debtor or Liquidating Trustee may have against the holder of such Claim to the extent such Claims may be set off or recouped under applicable law, but neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by Debtor or the Liquidating Trustee of any such Claim that it may have against such holder.
11.11 Statutory Committee. The Committee shall terminate on the Effective Date and shall thereafter have no further responsibilities in respect of the Chapter 11 Case. 11.12 Severability. If any provision of this Plan is determined by the Bankruptcy Court to be invalid, illegal or unenforceable or this Plan is determined to be not confirmable pursuant to Section 1129 of the Bankruptcy Code, the Bankruptcy Court, at the request of Debtor or the Liquidating Trustee, shall have the power to alter and interpret such term to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions of this Plan shall remain in full force and effect and will in no way be affected, impaired or invalidated by such holding, alteration or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of this Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms. 11.13 Withholding and Reporting Requirements. In connection with this Plan and all instruments issued in connection therewith and Distributions thereon, the Liquidating Trustee shall comply with all withholding and reporting requirements imposed by any federal, state, local, or foreign taxing authority and all Distributions hereunder shall be subject to any such withholding and reporting requirements. The Liquidating Trustee shall be authorized to take any and all action that may be necessary to comply with such withholding and recording requirements. Notwithstanding any other provision of this Plan, each holder of an Allowed Claim or Allowed Equity Security that has received a distribution pursuant to this Plan shall have sole and exclusive responsibility for the satisfaction or payment of any tax obligation imposed by any governmental unit, including income, withholding and other tax obligation on account of such distribution. 11.14 Post Confirmation Reporting. Until the entry of the final decree closing the Case, the Liquidating Trustee shall comply with the post-confirmation reporting requirements found in Local Rule 3020. Additionally, to the extent required, the Liquidating Trustee shall file post-confirmation quarterly operating reports as required by the United States Trustee Guidelines, paragraph. 7.2. 11.15 Cramdown. In the event that any impaired Class is determined to have rejected this Plan in accordance with Section 1126 of the Bankruptcy Code, Debtor may invoke the provisions of Section 1129(b) of the Bankruptcy Code to satisfy the requirements for confirmation of this Plan. Debtor reserves the right to modify this Plan to the extent, if any, that Confirmation pursuant to Section 1129(b) of the Bankruptcy Code requires modification.

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11.16 Quarterly Fees to the United States Trustee. Prior to the Effective Date, Debtor, and after the Effective Date, the Liquidating Trustee, shall pay all quarterly fees payable to the Office of the United States Trustee for Debtor after confirmation, consistent with applicable provisions of the Bankruptcy Code and Bankruptcy Rules. Dated: this 18th day of May, 2008. XYIENCE INCORPORATED, a Nevada Corporation /s/ Omer Sattar By ______________________________ Omer Sattar, President

Prepared and submitted by: FENNEMORE CRAIG, P.C. /s/ Laurel E. Davis By______________________________ Laurel E. Davis Attorneys for Debtor

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