Attached files
EXHIBIT 10.1
October 17, 2010
SHARE EXCHANGE AGREEMENT
Dated October 17, 2010
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By and Between
GoIP Global, Inc.
and
Malcolm Myers
and Add-On Exchange, Inc.
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October 17, 2010
SHARE EXCHANGE AGREEMENT, made as of the 17th day of October 2010, by and
between Add-On Exchange, Inc. ("Add-On") and Malcolm Myers, ("Myers" or the
"Add-On Exchange Shareholder") both with principal offices at 410 Park Avenue,
15th Floor, New York, NY 10022, and GoIP Global, Inc., with principal offices at
475 Park Avenue South, Suite 3001, New York, NY 10016, hereinafter referred to
as "GOIG," all hereinafter referred to individually as a "Party" and
collectively as the "Parties."
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Whereas, GOIG is a public company incorporated in the State of Nevada and
the common stock of GOIG is traded on the Pink Sheets market under the stock
symbol "GOIG." and
Whereas, Add-On Exchange is a company registered under the Securities and
Exchange Act of 1934, incorporated in the State of Delaware and has Two Hundred
Million (200,000,000) shares authorized and One Hundred Million (100,000,000)
shares of common stock, par value $0.001 per share, issued and outstanding, and
Whereas, GOIG and Add-On Exchange and the Add-On Exchange Shareholder have
mutually agreed that GOIG shall issue and sell to the Add-On Shareholder (as
hereinafter defined) the GOIG Shares (as hereinafter defined) in exchange for
the Add-On Shares (as hereinafter defined), which said Add-On Shares shall
constitute Thirty Five Percent (35%) all of the issued and outstanding Add-On
Exchange Common Stock and also in exchange for the Add-On Note (as hereinafter
defined) upon the terms and subject to the conditions set out in this Agreement,
and
Whereas, as additional consideration from GOIG, GOIG shall provide a
minimum of Fifteen Thousand Dollars ($15,000) during each calendar month for a
period of twelve months from the date of Closing, all such advances (the
"Advances") to be secured by a convertible note (the "Convertible Note")
convertible into Add-On Common Stock at a company valuation for Add-On of Two
Million Dollars ($2,000,000), and secured by the assets of Add-On, and
Whereas, GOIG wishes to appoint one of the three directors of Add-On to
further secure its investment, and the Add-On Exchange Shareholder and Add -On
Board of Directors concurs in such appointment, and
Whereas, to induce GOIG's investment, Add-On Exchange and the Add-On
Exchange Shareholder have made certain representations to GOIG,
Now, Therefore, in consideration for the mutual representations and
covenants contained here, and other good and valuable consideration, the receipt
of which is hereby acknowledged, the Parties agree as follows:
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October 17, 2010
ARTICLE I
INTERPRETATION
Section 1.1 Definitions. In this Agreement where the context so admits the
following words and expressions shall have the following meanings:
"Add-On Exchange Directors" shall have the meaning defined in Section 3.1.
"Add-On Exchange Disclosure Documents" shall mean the Add-On Exchange Business
Plan, and the filings of Add-On Exchange with the Securities and Exchange
Commission and accompanying corporate documents and financial statements along
with any and all other information provided by Add-On and/or the Add-On Exchange
Shareholder to GOIG.
"Add-On Exchange Shareholder" shall mean Malcolm Myers, the current owner of
Forty Six Million Two Hundred and Fifty Thousand (46,250,000) shares of Common
Stock of Add-On Exchange, Inc., being 46.25% of the outstanding shares of Common
Stock of Add-On Exchange.
"Add-On Exchange Shares" The Thirty Five Million (35,000,000) shares of common
stock, par value US $0.001, of Add-On Exchange now owned by the Add-On Exchange
Shareholder, Malcolm Myers, to be given to GoIP Global, Inc. on Closing by
Malcolm Myers, such shares constituting Thirty Five Percent (35%) of the then
outstanding Common Stock, par value $0.001 of Add-On Exchange.
"Add-On Exchange Warranties" The representations, warranties and undertakings
under Article 7;
"Add-On Exchange Plans" shall have the meaning defined in Section 8.14.
"Add-On Shareholder" The majority shareholder of Add-On Exchange Shareholder,
being at this time Malcolm Myers.
"Add-On Exchange Shareholder Warranties" the representations, warranties and
undertakings under Article 8;
"Add-On Exchange Warranties" the representations, warranties and undertakings
under Article 7;
"Add-On Note" shall mean the Note owed by Add-On to Malcolm Myers in the amount
of Five Hundred Thousand Dollars ($500,000) a copy of which is attached hereto
and Incorporated by reference as Exhibit 2.2.
"Advances" shall mean the funds of $300,000 to be loaned over a period of the
next 12 months to Add-on Exchange by GOIG, to be advanced and loaned under a
convertible, secured note (the "Convertible Note"), secured by the assets of
Add-On Exchange. Monthly advances will be a minimum of $15,000 to cover agreed
to overhead.
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"Business" shall mean the operations of the company.
"Business Day" a day on which banks are generally open for business in New York
City;"
"Closing" Closing of the transaction contemplated herein pursuant to Article 5;
"Closing Date" The date of Closing as agreed to by the Parties.
"Conditions" the conditions set out in Section 4.1;
"GOIG's Attorneys" The Law Offices of Bradley E. Essman, Esq.;
"GOIG Shares" are the One Hundred Million (100,000,000) shares of GOIG Common
Stock to be issued in connection with this transaction as provided below.
"GOIG Warranties" the representations, warranties and undertakings under Article
9;
"Material Adverse Effect" shall have the meaning given in Section 7.1(a).
"Material Contract" shall mean any contract, undertaking, agreement, or
commitment in fact or at law which would have a material impact on the assets or
earnings of the company."
"Parties" Persons named parties to this Agreement, and "Party" means either of
them;
"Pink Sheets" shall mean the OTC Pink Sheet Market in the United States.
Section 1.2 Article or Section References. A reference to any given Article
or Section is to the Article or Section of this Agreement with the corresponding
numerical or other designation.
Section 1.3 Successors and Assigns. The expressions "Add-On Exchange,"
"Add-On Exchange Shareholder," and "GOIG" shall, where the context permits,
include their respective successors and permitted assigns.
ARTICLE II
PURCHASE OF SHARES
Section 2.1 The Purchase. Subject to satisfaction of the Conditions, on
Closing, (a) GOIG agrees to purchase, and the Add-On Exchange Shareholder agree
to sell to GOIG, the Add-On Exchange Shares, and (b) the Add-On Exchange
Shareholder agrees to accept the GOIG Shares as the purchase consideration for
their Add-On Exchange Shares. The Add-On Exchange Shareholder is Malcolm Myers
only.
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October 17, 2010
Section 2.2 Further Consideration. As further consideration for the Share
Purchase given in Section 2.1 above, Malcolm Myers shall assign to GOIG a Note
owned by him in the face and outstanding amount of Five Hundred Thousand Dollars
($500,000.00) owed by Add-On Exchange, Inc. to Malcolm Myers and bearing
interest at the rate of Percent (10 %). A copy of the Note and the assignment to
GOIG is attached hereto as Exhibit 2.2. and incorporated herein by reference.
ARTICLE III
FURTHER CONSIDERATION, CONDITIONS AND AGREEMENTS
Section 3.1 Directors of Add-On. Before Closing, Add-On will have no more
than two directors, John Rafuse and John Parkinson, who will serve for a one
year term terminating on October 14, 2011, and at closing Add-On will cause to
be elected to its Board of Directors, one director nominated by GOIG, Mr. Isaac
H. Sutton. At Closing, and after Closing, and as long as GOIG is a shareholder
of Add-On, with the addition of this one director nominated by GOIG, Add-On
Exchange shall have no more than three directors. GOIG will have the right to
appoint at least one director as long as their interest in Add-On at least
35,000,000 shares.
Section 3.2. Advances by GOIG to Add-On. As further consideration from GOIG
to Add-On Exchange and the Add-On Exchange Shareholder, GOIG shall provide a
minimum of $300,000 over the next twelve months, all such advances (the
"Advances") to be secured by a convertible note (the "Convertible Note"),
convertible into Add-On Common Stock at a current company valuation for Add-On
of Two Million Dollars ($2,000,000) or Two Cents ($0.02) Per Share , and secured
by the assets of Add-On. Such Convertible Note, lien and security agreement
therefore are attached hereto and incorporated by reference as Exhibit 3.2.
ARTICLE IV
CONDITIONS
Section 4.1 Closing Conditions. Closing shall be conditional on the
fulfilment of each of the following conditions:
(a) the GOIG Warranties having remained true and accurate and not misleading at
all times up to and as at Closing (except to the extent that a GOIG Warranty was
by its terms made as of a specific date, in which case Closing shall be
conditional on such GOIG Warranty having been true at such date);
(b) the performance of, or compliance with, all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by GOIG and all the approvals and consents necessary to complete
the share exchange described herein (including any consents of governmental or
regulatory authorities and any requisite approvals from the shareholders of GOIG
and Add-On Exchange, if applicable, with respect to the allotment and issuance
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of the GOIG Shares by GOIG and the purchase of the Add-On Exchange Shares by the
Add-On Exchange Shareholder) having been obtained;
(c) the delivery by GOIG to Add-On Exchange of a certificate executed by an
executive officer of GOIG, dated the Closing Date, to the effect that the
Conditions specified in Sections 4.1 (b) and (c) have been satisfied;
(d) the Add-On Exchange Warranties having remained true and accurate and not
misleading at all times up to and as at Closing (except to the extent that a
Add-On Exchange Warranty was by its terms made as of a specific date, in which
case Closing shall be conditional on such Add-On Exchange Warranty having been
true at such date);
(e) the performance of, or compliance with, all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by Add-On Exchange and all the approvals and consents necessary to
complete the share exchange described herein (including any consents of
governmental or regulatory authorities) having been obtained by Add-On Exchange;
and
(f) the delivery by Add-On Exchange to GOIG of a certificate executed by an
executive officer of Add-On Exchange, dated the Closing Date, to the effect that
the Conditions specified in Sections 4.1 (d) and (e) have been satisfied;
Section 4.2 GOIG Waiver of Conditions. GOIG may waive all or any of the
Conditions set out in Section 4.1at any time by notice in writing to Add-On
Exchange.
Section 4.3 Add-On Exchange Waiver of Conditions. Add-On Exchange may waive
all or any of the Conditions set out in Section 4.1at any time by notice in
writing to GOIG.
Section 4.4 Notice of Fulfilment of Conditions. GOIG shall inform Add-On
Exchange of the fulfilment of all the Conditions set out in Section 4.1 within
one (1) Business Day of the fulfilment of the last of such Conditions, and
Add-On Exchange shall inform GOIG of the fulfilment of all the Conditions set
out in Section 4.1 within one (1) Business Day of the fulfilment of the last of
such Conditions.
Section 4.5 Termination. This Agreement may be terminated by written
consent of both Parties, or if any of the Conditions set out in Section 4.1 is
not fulfilled (or waived by GOIG in accordance with Section 4.2 or waived by
Add-On Exchange in accordance with Section 4.3) on or before the Closing. In the
event of a termination, this Agreement (except for Articles X, XI, and XII and
this Section 4) will terminate and become null and void and the Parties hereto
will be released from all their respective obligations hereunder (except for
Articles X, XI, and XII and this Section 4), except for the liabilities for any
antecedent breaches hereof.
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ARTICLE V
CLOSING
Section 5.1 Location. Closing shall take place at the offices of GOIG or
such other place as the Parties may agree on or before the Closing Date.
Section 5.2 Closing Actions. Subject to Article 4, Closing of this
Agreement shall take place at 12:00 noon on the Closing Date at which:
(a) Add-On Exchange and the Add-On Exchange Shareholder shall:
(i) transfer the Add-On Shares to GOIG fully paid and without liens, claims, and
restrictions of any kind; along with the Add-On Note;
(ii) deliver or caused to be delivered to GOIG;
(aa) certified copies of Board resolutions of the Add-On Exchange Board of
Directors approving and authorizing the execution and Closing of this Agreement
and the sale of the Add-On Exchange Shares to GOIG and transfer of the Add-On
Note to GOIG ;
(ab) certified copies of the Board resolutions of the Add-On Exchange Directors
and Shareholder removing two of the four current directors of Add-On Exchange
and appointing the one nominee of GOIG as directors of Add-On Exchange;
(ac) duly issued stock certificate(s) in the name of GOIG in respect of the
Add-On Exchange Shares;
(ad) a receipt for the GOIG Shares received by Add-On Exchange at Closing;
(ae) all other documents required to be delivered by Add-On Exchange at or prior
to Closing;
(af) Certificates of the Add-On Exchange Shareholder and Add-On Exchange Board
of Directors certifying and evidencing the ownership of the Add-On Patents by
Add-On free and clear of all liens, claims and encumbrances;
(ag) The executed Add-On Exchange Convertible Note along with the lien and
security agreement securing payment of the Add-On Exchange Convertible Note, and
duly executed resolutions of the Board of Directors of Add-On Exchange and the
Add-On Exchange Shareholder authorizing the issuance and terms of said Add-On
Exchange Convertible Note.
(ah) The duly executed Consulting Agreements of John Rafuse, John Parkinson and
Aaron Greengrass.
(ai) the Add-On Note and the Add-On Note Assignment transferring ownership of
the Add-On Note from the Add-On Shareholder to GOIG free and clear of all liens,
claims and encumbrances; and
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(aj) Certification of the Add-On Exchange and the Add-On Exchange Board of
Directors that the representations and warranties contained herein and the
Add-On Exchange Disclosure Documents are true, correct and complete.
(b) GOIG shall:
(i) allot and issue the GOIG Shares to the Add-On Exchange Shareholder
credited as fully paid; and
(ii) deliver or cause to be delivered to Add-On Exchange:
(aa) certified copies of resolutions of the GOIG Board of Directors approving
and authorizing the execution and Closing of this Agreement and the allotment
and issuance of the GOIG Shares to Add-On Exchange (or such other persons as
Add-On Exchange may nominate);
(ab) duly issued share certificates in the name of the Add-On Shareholder in
respect of the GOIG Shares;
(ac) a receipt for the Add-On Exchange Shares and Add-On Exchange Note received
by GOIG at Closing; and
(ae) all other documents required to be delivered by GOIG at or prior to
Closing.
ARTICLE VI
FURTHER OBLIGATIONS OF THE PARTIES
Section 6.1 Cooperation. Each of the Parties shall use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other Party in doing, all things
necessary, proper or advisable to consummate, as promptly as possible, the
transactions contemplated by this Agreement, including, without limitation,
that:
(a) Add-On Exchange shall use its reasonable best efforts to assist GOIG in all
its negotiations and exchanges of correspondence in relation to the transactions
referred to herein with the Pink Sheets or other relevant authorities;
(b) Add-On Exchange shall use its reasonable best efforts to provide GOIG with
such information as the Pink Sheets may require for the purpose of obtaining
their clearance of any announcement or information required in connection with
this Agreement;
(c) GOIG shall use its reasonable best efforts to prepare all necessary
documentation and to convene all necessary meetings of directors (with
recommendations in favor as appropriate) in connection with obtaining the
approval of directors to the allotment and issuance of the GOIG Shares and the
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purchase of the Add-On Exchange Shares by GOIG in accordance with all necessary
legal and Pink Sheets requirements;
(d) Add-On Exchange shall cooperate with and provide GOIG with all documents,
signatures and other information and actions necessary or convenient to the
preparation of a statement of Adequate Current Information for the Pink Sheets
and any other securities market, information source or regulator.
Section 6.2 Confidentiality. Each Party agrees that for a period of three
years after receipt of the information (a) all information received by it
pursuant to Section 6.4 and (b) any other information that is disclosed by the
other Party to it and is identified by the other Party as being confidential or
proprietary, shall be considered confidential information. Each Party further
agrees that it shall hold all such confidential information in confidence and
shall not disclose any such confidential information to any third party except
as required by law, regulation (including the Pink Sheet rules) or applicable
process, provided that to the extent possible the other Party shall have been
provided with reasonable notice and the opportunity to seek a protective order
to the extent possible prior to such disclosure, other than its counsel or
accountants nor shall it use such confidential information for any purpose other
than its investment in the other Party; provided, however, that the foregoing
obligation to hold in confidence and not to disclose confidential information
shall not apply to any information that (1) was known to the public prior to
disclosure by the other Party, (2) becomes known to the public through no fault
of such Party, (3) is disclosed to such Party on a non-confidential basis by a
third party having a legal right to make such disclosure or (4) is independently
developed by such Party.
Section 6.3 Tax Information. From and after the Closing Date, Add-On
Exchange shall promptly provide Add-On Exchange with any information reasonably
requested by GOIG to enable GOIG or any of its affiliates to prepare its tax
returns (including the making of any elections) and make any determinations with
respect to taxes.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF ADD-ON EXCHANGE
AND THE ADD-ON EXCHANGE SHAREHOLDER
Section 7.1 Warranties. Add-On Exchange and the Add-On Exchange Shareholder
hereby represent, warrant and undertakes to GOIG (to the intent that the
provisions of this Section shall continue to have full force and effect
notwithstanding Closing) as follows:
(a) Organization, Good Standing and Qualification. Add-On Exchange is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Add-On Exchange has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, to issue, transfer, sell and deliver the Add-On Exchange Shares,
to carry out the provisions of this Agreement and to carry on its business as
presently conducted and as presently proposed to be conducted. Add-On Exchange
is duly qualified and is authorized to do business and is in good standing as a
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foreign corporation in all jurisdictions in which the nature of its activities
and of its properties (both owned and leased) makes such qualification
necessary, except for those jurisdictions in which failure to do so could not
have, individually or in the aggregate, a Material Adverse Effect (as defined
herein) on Add-On Exchange. For purposes of this Agreement, with respect to
either Party, a "Material Adverse Effect" shall mean a material adverse effect
on the business, assets, financial condition or operations of the Party and its
subsidiaries, taken as a whole.
(b) Subsidiaries. Set forth on Exhibit 7.1(b) hereto and incorporated by
reference, is a list of all entities in which Add-On Exchange beneficially owns,
directly or indirectly, 50% or more of the outstanding stock or other equity
interests (collectively, the "Add-On Exchange Subsidiaries") as of June 30, 2010
Each Add-On Exchange Subsidiary has been duly organized and is validly existing
under the laws of its jurisdiction of organization, is not in liquidation or
receivership, and has the power and authority (corporate or other) to own its
properties and conduct its business as described in the SEC Documents (as
defined below); and each Add-On Exchange Subsidiary is duly qualified to do
business as a foreign corporation in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification, other than where the failure to be so qualified would not
individually or in the aggregate have a Material Adverse Effect on Add-On
Exchange. All of the issued and outstanding capital stock of each Add-On
Exchange Subsidiary has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock or equity interests of each Add-On
Exchange Subsidiary owned by Add-On Exchange, directly or through subsidiaries,
is owned free from liens, encumbrances and defects other than as set forth in
the SEC Documents or which would not have a Material Adverse Effect on Add-On
Exchange.
(c) Validly Issued Shares. When issued in compliance with the provisions of this
Agreement, the Add-On Exchange Shares will be validly issued, fully paid and
nonassessable, and will constitute Thirty Five Percent (35%) of the existing
issued common stock, par value $0.001 (the "Common Stock"), of Add-On Exchange
and will be free of any restrictions, limits, claims, liens or other
encumbrances; provided, however, that the Add-On Exchange Shares may be subject
to restrictions on transfer under state and/or federal securities laws as set
forth herein or as otherwise required by such laws at the time a transfer is
proposed.
(d) Authorization; Binding Obligations. All actions on the part of Add-On
Exchange and its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of Add-On Exchange hereunder and the authorization, sale, issuance
and delivery of the Add-On Exchange Shares pursuant hereto have been taken or
will be taken prior to Closing. This Agreement has been duly executed and
delivered by Add-On Exchange, and (assuming the due authorization, execution and
delivery hereof by GOIG) this Agreement is a valid and binding obligation of
Add-On Exchange enforceable in accordance with its terms, except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors' rights and (b)
general principles of equity that restrict the availability of equitable
remedies. The sale of the Add-On Exchange Shares is not subject to any
preemptive or similar rights or rights of first refusal that have not been
properly waived or complied with.
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(e) Capitalization. The authorized capital stock of Add-On Exchange consists of
200,000,000 (Two Hundred Million) Shares of Common Stock having a par value of
$0.001; and 50,000,000 (Fifty Million) Shares of Preferred Stock having a par
value of $0.001 per share (the "Preferred Stock"). As of the close of business
the date hereof, One Hundred Million (100,000,000) shares of Common Stock were
issued and outstanding, 46.25% of which are owned by Malcolm Myers, and no
shares of Preferred Stock were issued and outstanding. All outstanding shares of
Common Stock are duly authorized, validly issued, fully paid and nonassessable.
Except as disclosed to GOIG, as set forth above, as of the date hereof there
were no outstanding rights (including without limitation, preemptive rights)
warrants or options to acquire, or instruments convertible into or exchangeable
for, any material number of shares of common stock or any other class of shares
or equity interest in Add-On Exchange or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of an kind
relating to the issuance of any material number of shares of common stock of
Add-On Exchange or any subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options.
(f) Consents and Approvals; No Violations. Except for the filings, permits,
authorizations, consents and approvals as may be required under federal and/or
state securities laws, applicable stock exchange regulations and, if applicable,
none of the execution, delivery or performance of this Agreement by Add-On
Exchange, the consummation by Add-On Exchange of the transactions contemplated
hereby or compliance by Add-On Exchange with any of the provisions hereof will
(a) conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws of Add-On Exchange, (b) require any filing with, or
permit, authorization, consent or approval of, any governmental entity, (c)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Add-On Exchange or any of its material
subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound, or (d) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Add-On Exchange, any of its
material subsidiaries or any of their properties or assets, excluding from the
foregoing Sections (b), (c) and (d) such violations, breaches or defaults which
would not, individually or in the aggregate, have a material adverse effect on
Add-On Exchange' ability to consummate the transactions.
(g) Add-On Exchange Information. Add-On Exchange has furnished or made available
to GOIG, prior to the date hereof, copies of its Add-On Exchange Business Plan
and corporate and financial statements for the year of 2010 and through the date
hereof (the Add-On Exchange Disclosure Documents"). Unless filed with the
Securities and Exchange Commission, the Add-On Exchange Disclosure Documents are
given in Exhibit 7.1(g) attached hereto and incorporated by reference. Each of
these documents, as of its respective date (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing),
did not, and each of the documents filed by Add-On Exchange with the Securities
and Exchange Commission after the date hereof and prior to the Closing will not,
as of the date thereof (or if amended or superseded by a filing prior to the
date of the Closing, then on the date of such filing), contain any untrue
statement of a material fact or omit to state a material fact necessary in order
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to make the statements made therein, in light of the circumstances under which
they were made, not misleading. Add-On Exchange is not a party to any material
contract, agreement or other arrangement which has not been given to GOIG.
(h) Financial Statements. Add-On Exchange has furnished or made available to
GOIG copies of its unaudited financial statements (the "Financial Statements")
for the period ended June 30, 2010, (the "Balance Sheet Date"). Since the
Balance Sheet Date, Add-On Exchange has suffered no material adverse changes.
The financial statements of Add-On Exchange given to GOIG prior to the date
hereof or filed with the Securities and Exchange fairly present, in conformity
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of Add-On Exchange and its consolidated
subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject to normal year end
audit adjustments in the case of unaudited interim financial statements).
(i) Absence of Certain Changes. Since the Balance Sheet Date and other than in
the ordinary course, there has not been: (i) any declaration, setting aside or
payment of any dividend or other distribution of the assets of Add-On Exchange
with respect to any shares of capital stock of Add-On Exchange or any
repurchase, redemption or other acquisition by Add-On Exchange or any Add-On
Exchange Subsidiary of a material number of the outstanding shares of Add-On
Exchange' capital stock; (ii) any damage, destruction or loss, whether or not
covered by insurance, except for such occurrences that have not resulted, and
are not expected to result in a Material Adverse Effect on Add-On Exchange;
(iii) any waiver by Add-On Exchange or any Add-On Exchange Subsidiary of a
valuable right or of a material debt owed to it, except for such waivers that
have not resulted and are not expected to result, in a Material Adverse Effect
on Add-On Exchange; (iv) any material change or amendment to, or any waiver of
any material rights under a material contract or arrangement by which Add-On
Exchange or any Add-On Exchange Subsidiary or any of their, respective, assets
or properties is bound or subject, except for changes, amendments, or waivers
that are expressly provided for or disclosed in this Agreement or that have not
resulted, and are not expected to result, in a Material Adverse Effect on Add-On
Exchange; (v) any material change by Add-On Exchange in its accounting
principles, methods or practices or in the manner it keeps its accounting books
and records, except any such change required by a change in GAAP; or (vi) any
other event or condition of any character, except for such events and conditions
that have not resulted, and are not expected to result, either individually or
collectively, in a Material Adverse Effect on Add-On Exchange.
(j) Legends. The Add-On Exchange Shareholder agrees that the certificates for
the GOIG Shares shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR WITH ANY STATE SECURITIES COMMISSION, AND MAY NOT BE
TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION
STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO THE TIME SET FOR
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TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE SECURITIES ACT
OF 1933 AND OTHER APPLICABLE STATE LAWS AND RULES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER CONTAINED IN THE SHARE EXCHANGE AGREEMENT DATED OCTOBER __, 2010,
BETWEEN THE COMPANY AND THE HOLDER, A COPY OF WHICH IS ON FILE WITH THE COMPANY.
(k) Ownership of Patents. Add-On Exchange owns full title and control to the
Patents given in Exhibit 7.1(k).
(l) No Debt. Add-On Exchange has no debt of any kind, except for the Add-On
Exchange Note.
(m) Consulting Agreements. The Add-On officers John Rafuse, John Parkinson, and
Aaron Greenstreet have signed and are subject to the Consulting Agreements given
in Exhibit 7.1(m) and such Consulting Agreements are in full force and effect.
ARTICLE VIII
WARRANTIES OF ADD-ON EXCHANGE SHAREHOLDER
The Add-On Exchange Shareholder warrant as follows:
Section 8.1 Clear Title. At Closing the Add-On Exchange Shareholder have
free and clear title of the Add-On Exchange Stock, free of all Encumbrances and
whose ownership therein has been properly perfected in accordance with all
security laws and regulations of all financial regulators who oversee the
conduct of the Add-On Exchange, and all other legal requirements of relevant
jurisdictions;
Section 8.2 Organization and Related Matters. The Add-On Exchange
Shareholder is a natural person. The Add-On Exchange Shareholder has all
necessary personal or company capacity, power and authority to execute, deliver
and perform its obligations under this Agreement. Exhibit 8.2(a) sets forth, as
of the Closing, the ownership of the Add-On Exchange Shareholder. Exhibit 2.2(b)
sets forth, as of the Closing, the current directors and executive officers of
Add-On Exchange.
Section 8.3. Condition of the Add-On Exchange. To the best of the knowledge
and belief of the Add-On Exchange Shareholder, as of the Closing:
(a) Add-On Exchange is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation.
(b) Add-On Exchange has all necessary corporate power and authority to own or
lease its respective properties and assets, as applicable, and to carry on its
businesses as now conducted and are duly qualified or licensed to do business as
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foreign corporations in good standing in all jurisdictions, except where the
failure to be so qualified or licensed is not material to the Business.
Section 8.4 Stock.
(a) The Add-On Exchange Shareholder beneficially and of record own the shares of
capital stock of Add-On Exchange given in Exhibit 2.2. All of such Equity
Securities of Add-On Exchange are owned free and clear of any Encumbrances. At
the Closing, GOIG will acquire good and marketable title to and complete
ownership of all of the capital stock of Add-On Exchange outstanding on the
Closing Date, free and clear of any Encumbrances.
(b) There are no outstanding Contracts or other rights to subscribe for or
purchase, or Contracts or other obligations to issue or grant any rights to
acquire, any Equity Securities of Add-On Exchange, or to restructure or
recapitalize Add-On Exchange.
(c) There are no outstanding Contracts of the Add-On Exchange Shareholder or
Add-On Exchange to repurchase, redeem or otherwise acquire any Equity Securities
of Add-On Exchange.
(d) There are no Add-On Exchange Stock Option Plans or any outstanding options
or warrants or other contracts or agreements to purchase shares of Add-On
Exchange common stock.
(e) All outstanding Equity Securities of Add-On Exchange are duly authorized,
validly issued and outstanding and are fully paid and nonassessable, and were
issued in conformity with applicable Laws.
(f) There are no preemptive rights in respect of any Equity Securities of Add-On
Exchange.
(g) As of the Closing, there has been no material change in the Add-On Exchange
Financial Statements and Business Plans submitted to GOIG and attached hereto as
Exhibit 7.1(g) and incorporated by reference.
(h) Except as set forth on Exhibit 8.4(h), whether or not in the ordinary course
of business, there has not been, occurred or arisen any change in or event
affecting Add-On Exchange that has or would have a material adverse effect on
the Business (other than matters of general applicability to Add-On Exchange'
industry and matters arising in connection with this Agreement).
(i) Add-On Exchange has no liabilities of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, probable of assertion
or not, except liabilities that (i) are reflected or disclosed in the Financial
Statements described in Sections (a) and (g) above, (ii) are reflected in the
notes to the balance sheet included in the most recent of the Financial
Statements, (iii) are obligations set forth in any Contracts listed in the
Exhibits to this Agreement or in Contracts not required to be listed in such
Exhibits, (iv) are disclosed in any of the Exhibits to this Agreement, (v) were
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incurred in the ordinary course of business, and (vi) except as set forth in
Exhibit 8.4(i), do not exceed $100 individually or $500 in the aggregate. As of
the date of Closing, all the Add-On Exchange' liabilities in the aggregate,
including contingent liabilities, existing or inchoate, shall not exceed $500.
Section 8.5 Taxes. All federal, tax returns and all material province,
state, local and foreign tax returns that are required to be filed by or with
respect to Add-On Exchange on or before the Closing Date have been or prior to
the Closing will be duly filed, and all Taxes shown as due on such Tax Returns
have been paid or will be paid in full. No issues relating to Add-On Exchange,
that have been raised by any other taxing authority in connection with the
examination of any of such tax returns, are currently pending. The sale of the
stock contemplated in this Agreement, and the assumption, removal or payment of
the liabilities of Add-On Exchange contemplated in this Agreement, will not
create any province, local, state, foreign or federal tax liabilities.
Section 8.6 Material Contracts. Exhibit 2.5 lists each Contract which is a
Material Contract, including, but not limited to, real property and equipment
leases and loan arrangements, of Add-On Exchange that will exist as of the
Closing. As of the date of Closing and thereafter, Add-On Exchange may summarily
and unconditionally cancel or terminate such contract without penalty or charge.
Each Material Contract is valid and subsisting, Add-On Exchange has duly
performed all its obligations under each Material Contract to which Add-On
Exchange is a party to the extent that such obligations to perform have accrued,
and no breach or default (or, to the Add-On Shareholder's knowledge, alleged
breach or default) or event which would (with the passage of time, notice or
both) constitute a breach or default or loss of rights or benefits by
Neither Add-On Exchange or, to the Add-On Shareholder's knowledge, any
other party or obligor with respect thereto, has occurred or, assuming that the
requisite approvals and permits set forth on Exhibit 8.9 are sought and
obtained, as a result of the execution, delivery and performance of this
Agreement will occur, except for such, as individually or in the aggregate, as
would not have a material adverse effect on Add-On Exchange. True, correct and
complete copies of all material agreements identified in Exhibit 8.6, including
all amendments and supplements, have been delivered to GOIG.
Section 8.7 Changes. Since the execution of the last Letter of Intent
concerning these transactions, there has not been: (a) excluding any changes
which may occur after the date of this Agreement as a result of the transactions
contemplated by this Agreement, any change (other than changes affecting Add-On
Exchange' industry generally) that has or would have a material adverse effect
on the Business, except (i) changes resulting from the sale of all of the assets
and assumptions of the liabilities contemplated in this Agreement, (ii) changes
in the ordinary course of business, which have not been, individually or in the
aggregate, materially adverse to Add-On Exchange.
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(b) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the assets, properties, financial condition,
cash flows or operating results of Add-On Exchange, taken as a whole;
(c) any waiver by Add-On Exchange of a valuable right or of a debt owed to it,
except for such as have not been, individually or in the aggregate materially
adverse to the Business;
(d) any satisfaction or discharge of any lien, claim of encumbrance or payment
of any obligation by Add-On Exchange, except in the ordinary course of business
and that is not material to the assets, properties, financial condition,
operating results or Business (as such Business is presently conducted);
(e) any change in the outstanding capital stock of Add-On Exchange;
(f) any loan, guaranty or other extension of credit to any Person;
(g) any material change in any compensation arrangement or agreement with any
key employee; or
(h) other than dispositions of surplus equipment, furniture and fixtures and
dispositions of inventory in the ordinary course of business, any sale,
disposition, transfer or encumbrance of any material property owned by Add-On
Exchange, or any termination, modification or amendment of any material lease of
property to which Add-On Exchange was a party.
Section 8.8 Properties. As of the Closing, Add-On Exchange shall not have
any operating assets and all liabilities shall have been assumed by the
purchaser of such operating assets or paid in full.
Section 8.9 Authorization; No Conflicts. The execution, delivery and
performance of this Agreement by the Add-On Exchange Shareholder has been duly
and validly authorized the Add-On Exchange Shareholder and by all other
necessary corporate or company action on the part of the Add-On Exchange
Shareholder. This Agreement constitutes the legally valid and binding obligation
of the Add-On Exchange Shareholder, enforceable against the Add-On Exchange
Shareholder in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws and equitable principles relating to or limiting creditors' rights
generally. The execution, delivery and performance of this Agreement by the
Add-On Exchange Shareholder will not directly or indirectly (a) contravene,
conflict with, violate, or constitute a breach or default (whether upon lapse of
time and/or the occurrence of any act or event or otherwise) under any provision
of the charter documents or by-laws of the Add-On Exchange Shareholder, Add-On
Exchange or any resolution adopted by the managers or board of directors or
stockholders of the Add-On Exchange Shareholder or Add-On Exchange, (b) result
in the imposition of any encumbrance against any material asset or property
owned, licensed or leased by Add-On Exchange, or (c) contravene, conflict with
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or result in a violation of any Law or Order to which Add-On Exchange or any of
the assets owned licensed or leased by any of them are subject, except, in each
of Sections (b) through (c), for such contraventions, conflicts, impositions and
violations, which, individually or in the aggregate, do not have a material
adverse effect on the Business. Exhibit 8.9 lists, as of the date hereof, all
Approvals and Permits required to be obtained by the Add-On Exchange Shareholder
or Add-On Exchange to consummate the transactions contemplated by this Agreement
and to permit GOIG to operate the Add-On Exchange without loss of material
rights, other than those which have been previously obtained. Except for the
Approvals and Permits identified on Exhibit 8.9 as requiring that certain
actions be taken by or with respect to a third party or governmental entity, the
execution, delivery and performance of this Agreement by the Add-On Exchange
Shareholder will not require any material filing or registration with, or the
issuance of any material Approval or Permit by, any third party or Governmental
Entity.
Section 8.10 Legal Proceedings and Certain Labor Matters. Except as set
forth in Exhibit 8.10, there is no order or action pending, or, to the Add-On
Exchange Shareholder' knowledge, threatened, against Add-On Exchange or any of
their respective properties or assets that individually or when aggregated with
one or more other such orders or actions has, or, if determined adversely to the
interests of the Add-On Exchange Shareholder, Add-On Exchange or GOIG can be
reasonably expected to have, a material adverse effect on the Business or the
Add-On Exchange Shareholder' ability to perform its obligations under this
Agreement. There is no organized labor strike, dispute, slowdown or stoppage, or
collective bargaining or unfair labor practice claim pending or, to the Add-On
Exchange Shareholder' knowledge, threatened, against or affecting Add-On
Exchange. Exhibit 8.10 lists, each pending order and each action that involves a
claim or potential claim of aggregate liability in excess of $25,000 against, or
that enjoins or seeks to enjoin any activity of Add-On Exchange.
Section 8.11 Compliance with Law. Add-On Exchange has conducted the
Business in all material respects in accordance with applicable Law (including
the receipt of all Permits material to the conduct of the Business). No
suspension, cancellation or termination of any material Permits is pending or,
to the Add-On Exchange Shareholder' knowledge, threatened.
Section 8.12 Environmental Compliance. Add-On Exchange' properties are, in
all material respects, in compliance with all applicable Environmental Laws, and
Add-On Exchange has no knowledge and has received no notice of any material
unresolved violation or alleged violation of any Environmental Laws in its
conduct of the Business.
Section 8.13 Dividends and Other Distributions. There has been no dividend
or other distribution of assets or securities by Add-On Exchange, whether
consisting of money, property or any other thing of value, declared, issued or
paid subsequent to the date of the latest financial statements of the Add-On
Exchange.
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October 17, 2010
Section 8.14 Employee Benefits. There are no Employee Pension Benefit
Plans, Employee Welfare Benefit Plans or any other significant employee benefit
arrangements maintained by Add-On Exchange or to which Add-On Exchange
contribute or to which Add-On Exchange would have any liability or obligation
(collectively, the "Add-On Exchange Plans"). With respect to each Add-On
Exchange Plan: (a) such Add-On Exchange Plan has been administered in all
material respects in accordance with its terms and, to the extent it is subject
to any requirements under applicable laws and regulations, complies in all
material respects therewith; (b) all contributions payable by the Add-On
Exchange Shareholder, Add-On Exchange, or any of their respective Affiliates
which are due, if any, to such Add-On Exchange Plan have been paid in full; (c)
the Add-On Exchange Shareholder has delivered to GOIG complete copies of the
current plan documents with respect to the Add-On Exchange Plans, together with
copies of any and all amendments thereof adopted through the date hereof; (d)
there is no pending or threatened legal action, proceeding or investigation
against such Add-On Exchange Plan or the assets of any of the trusts under such
Add-On Exchange Plan that is reasonably likely to have a material adverse effect
on the Business; and (e) there have been no non-exempt prohibited transactions
or breaches of fiduciary duty with respect to such Add-On Exchange Plan that are
reasonably likely to have a material adverse effect on the Business.
Section 8.15 Bank Accounts, Powers, etc. Exhibit 8.15 lists, each bank,
trust company, savings institution, brokerage firm, mutual fund or other
financial institution with which Add-On Exchange has an account or safe deposit
box and the names and identification of all Persons authorized to draw thereon
or to have access thereto.
Section 8.16 No Brokers or Finders. No agent, broker, finder, or investment
or commercial banker, or other Person or firm engaged by or acting on behalf of
the Add-On Exchange Shareholder, Add-On Exchange or any of their respective
affiliates in connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is or will be
entitled to any brokerage or finder's or similar fee or other commission as a
result of this Agreement or such transactions.
Section 8.17 Certain Interests. No controlled Affiliate of the Add-On
Exchange Shareholder, Add-On Exchange, nor any officer, director or Affiliate
thereof, has any material interest in any property used in or pertaining to the
Business or, to the Add-On Exchange Shareholder' knowledge, any customer or
supplier doing business with Add-On Exchange.
Section 8.18 Disclaimer of Representations and Warranties. The Add-On
Exchange Shareholder acknowledge and agree that the purchase and sale of the
GOIG Shares hereunder shall be without representation or warranty by GOIG,
express or implied, except as specifically set forth in Article IX.
Section 8.19 Product Liabilities. The Add-On Exchange is not subject to any
claims, liabilities or penalties for product liability, including but not
limited liabilities arising in tort or under the provisions of, among other
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laws, the Federal Hazardous Substances Act and the Federal Consumer Products
Safety Act or any present or future action by the Consumer Products Safety
Commission (the "CPSC") or other federal, provincial or state agency.
Section 8.20 Product Returns. The Add-On Exchange is not and will not be
liable for any claims, present or future, in connection with product returns.
Section 8.21. Intellectual Property Claims. The Add-On Exchange is not and
will not be liable for any claims, present or future, with respect to
intellectual property, in connection with copyrights, trademarks, patents,
licenses, royalties, or otherwise, including claims for infringement, libel,
slander, defamation, misrepresentation or fraud.
Section 8.22. Employees; Employee Compensation; Stock Grants. At time of
Closing, Add-On Exchange will not have any employees, be liable for any past,
present or future employee compensation of any kind and the Add-On Exchange is
not and will not be obligated to make nor be liable for any stock grants to
employees.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF GOIG
Section 9.1 Warranties of GOIG. GOIG hereby represents, warrants and
undertakes to Add-On Exchange (to the intent that the provisions of this Section
shall continue to have full force and effect notwithstanding Closing) that:
(a) Organization, Good Standing and Qualification. GOIG is a corporation duly
organized and validly existing under the laws of Nevada and is not in
liquidation or receivership. GOIG has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, to allot and issue the GOIG Shares subject to the terms and
conditions of this Agreement, to carry out the provisions of this Agreement and
to carry on its business as presently conducted and as presently proposed to be
conducted. The articles of incorporation of GOIG comply with the requirements of
applicable Nevada law and are in full force and effect. GOIG is duly qualified
and is authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so could not have a
Material Adverse Effect on GOIG.
(b) Subsidiaries. GOIG does not beneficially own, directly or indirectly, any
interest in any subsidiary of GOIG.
(c) Validly Issued Shares. When issued in compliance with the provisions of this
Agreement, the GOIG Shares will be validly issued and credited as fully paid,
will rank pari passu in all respects with all existing issued common shares of
GOIG and will be free of any restrictions, limits, claims, liens or other
encumbrances; provided, however, that the GOIG Shares may be subject to
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October 17, 2010
restrictions on transfer under United States securities laws or regulations as
set forth herein or as otherwise required by such laws at the time a transfer is
proposed.
(d) Authorization; Binding Obligations. All actions on the part of GOIG and its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the performance of all obligations of GOIG
hereunder and the authorization, allotment and issuance and delivery of the GOIG
Shares pursuant hereto has been taken or will be taken prior to Closing. This
Agreement has been duly executed and delivered by GOIG, and (assuming the due
authorization, execution and delivery hereof by Add-On Exchange) this Agreement
is a valid and binding obligation of GOIG enforceable in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights and (b) general principles of equity that
restrict the availability of equitable remedies. The issuance of the GOIG Shares
is not subject to any preemptive or similar rights or rights of first refusal
that have not been properly waived or complied with.
(e) Capitalization. The issued share capital of GOIG as of the date of the
Adequate Current Information is as set forth in the Adequate Current Information
under the headings "Capitalization" and "Description of Common shares". The
shares constituting the issued share capital of GOIG have been duly authorized
and validly issued, are credited as fully paid and are not subject to preemptive
or similar rights. As of the date of the Adequate Current Information and except
as described or expressly contemplated by the Letter of Intent concerning these
transactions, Agreement and the Adequate Current Information (including
footnotes to the financial statements and tables contained therein) referred to
in the Adequate Current Information, there are no outstanding rights (including
without limitation, preemptive rights) warrants or options to acquire, or
instruments convertible into or exchangeable for, any material number of common
shares or any other class of shares or equity interest in GOIG or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any material number of
shares of GOIG or any subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options.
(f) Consents and Approvals; No Violations. Except for the filings, permits,
authorizations, consents and approvals as may be required under relevant
securities laws and regulations, if applicable, and applicable Pink Sheet
regulations, including without limitation the requisite approval by the
shareholders of GOIG, if applicable, of the transactions contemplated hereby,
none of the execution, delivery or performance of this Agreement by GOIG, the
consummation by GOIG of the transactions contemplated hereby or compliance by
GOIG with any of the provisions hereof will (a) conflict with or result in any
breach of any provision of the certificate of incorporation or memorandum and
articles of association of GOIG, (b) require any filing with, or permit,
authorization, consent or approval of, any governmental entity, (c) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which GOIG or any of its material subsidiaries is a
party or by which any of them or any of their respective properties or assets
may be bound, or (d) violate any order, writ, injunction, decree, statute, rule
or regulations applicable to GOIG, any of its material subsidiaries or any of
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October 17, 2010
their properties or assets, excluding from the foregoing Sections (b), (c) and
(d) such violations, breaches or defaults which would not, individually or in
the aggregate, have a material adverse effect on GOIG's ability to consummate
the transactions.
(g) The Adequate Current Information. The Adequate Current Information of GOIG,
as at June 30, 2010 (the "Adequate Current Information"), a copy of which has
been provided to Add-On Exchange by GOIG, did not as of the date thereof contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) Financial Statements. The historical consolidated financial statements
included in the Adequate Current Information present fairly the financial
position of and GOIG and their subsidiaries, have been prepared in conformity
with the generally accepted accounting principles applied on a consistent basis
and fairly present the combined financial condition and results of operations of
GOIG at the dates and for the periods presented; and the assumptions used in
preparing the pro forma financial statements included in the Adequate Current
Information provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those assumptions, and
the pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical or pro forma financial statement
amounts.
(i) Absence of Certain Changes. Since the date of the Adequate Current
Information and other than in connection with acquisitions in the ordinary
course of business, neither GOIG nor any of its subsidiaries has (i) entered
into or assumed any material contract, (ii) incurred, assumed or acquired any
material liability (including contingent liability) or other obligation or (iii)
acquired or disposed of or agreed to acquire or dispose of any business or any
other material asset that are not described in the Adequate Current Information.
Except as disclosed in the Adequate Current Information and other than in
connection with acquisitions in the ordinary course of business, since the date
thereof, there has not been any change that would have a material adverse effect
on the business, assets, financial condition or operations of GOIG and its
subsidiaries, taken as a whole, and, except as disclosed in or contemplated by
the Adequate Current Information, there has been no dividend or distribution of
any kind declared, paid or made by GOIG on any class of its capital stock.
(j) Withholding Taxes. Except as disclosed in the Adequate Current Information,
under current laws and regulations of any relevant jurisdiction and any
political subdivision thereof, all dividends and other distributions declared
and payable on the GOIG Shares may be paid by GOIG to the holder thereof in
United States dollars that may be converted into foreign currency and freely
transferred any jurisdiction and all such payments made to holders thereof who
are non-residents of any relevant jurisdiction will not be subject to income,
withholding or other taxes under laws and regulations of any relevant
jurisdiction or any political subdivision or taxing authority thereof or therein
and will otherwise be free and clear of any other tax, duty, withholding or
deduction in any relevant jurisdiction or any political subdivision or taxing
authority thereof or therein and without the necessity of obtaining any
governmental authorization in any relevant jurisdiction or any political
subdivision or taxing authority thereof or therein.
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October 17, 2010
(k) No Liability. Upon issuance of the GOIG Shares to Add-On Exchange, Add-On
Exchange shall not be subject to any liability in respect of any liability of
GOIG by virtue only of its holding of any such GOIG Shares.
(l) Approval for Listing. On or prior to Closing, the GOIG Shares shall have
been approved for listing and are trading on the Pink Sheets.
(m) Purchase for Own Account. The Add-On Exchange Shares are being acquired for
investment for GOIG's own account, not as a nominee or agent, and not with a
view to the public resale or distribution thereof within the meaning of the
Securities Act, and GOIG has no present intention of selling, granting any
participation in, or otherwise distributing the same. GOIG also represents that
it has not been formed for the specific purpose of acquiring the Add-On Exchange
Shares.
(n) Investment Experience. GOIG understands that the purchase of the Add-On
Exchange Shares involves substantial risk. GOIG has experience as an investor in
securities of companies and acknowledges that it is able to fend for itself, can
bear the economic risk of its investment in the Add-On Exchange Shares and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of this investment in the Add-On
Exchange Shares and protecting its own interests in connection with this
investment.
(o) Restricted Securities. GOIG hereby acknowledges and agrees with Add-On
Exchange that the Add-On Exchange Shares have not been registered under the
Securities Act and may not be offered or sold except pursuant to registration
statement or to an exemption from the registration requirements of the
Securities Act, GOIG further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Add-On Exchange Shares..
(p) Legends. GOIG agrees that the certificates for the Add-On Exchange Shares
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR WITH ANY STATE SECURITIES COMMISSION, AND MAY NOT BE
TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION
STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO THE TIME SET FOR
TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE SECURITIES ACT
OF 1933 AND OTHER APPLICABLE STATE LAWS AND RULES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER CONTAINED IN THE SHARE EXCHANGE AGREEMENT DATED OCTOBER 14, 2010,
BETWEEN THE COMPANY AND THE HOLDER, A COPY OF WHICH IS ON FILE WITH THE COMPANY.
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October 17, 2010
In addition, GOIG agrees that in the event Add-On Exchange reasonably believes
that GOIG has failed to comply with the terms of this Agreement or the
requirements of the Securities Act, Add-On Exchange may place stop transfer
orders with its transfer agents with respect to such certificates. The
appropriate portion of the legend and the stop transfer orders will be removed
promptly upon delivery to Add-On Exchange of such satisfactory evidence as
reasonably may be required by Add-On Exchange, that such legend or stop orders
are not required to ensure compliance with the Securities Act.
ARTICLE X
RESTRICTION ON ANNOUNCEMENTS AND DISCLOSURE
Section 10.1 Announcements. Subject as provided in Section 10.2, neither
Party shall make any public announcement in relation to the transactions
contemplated hereby without having consulted with the other Party.
Section 10.2 Pink Sheet Announcements. This Section shall not apply to any
announcement required to be made pursuant to the rules of the Pink Sheets as to
the contents of which the Party making the same shall have consulted with the
other Party and obtained approval from the Pink Sheets as may be required.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Costs. Each Party shall pay its own costs and expenses
incurred in connection with the preparation, negotiation and settlement of this
Agreement.
Section 11.2 Fees for Issuing Shares. All fees and duties (if any) relating
to the issue of the Add-On Exchange Shares shall be borne by Add-On Exchange.
Capital duty and all other fees and duties (if any) relating to the issue of the
GOIG Shares shall be borne by GOIG.
Section 11.3 Expenses of Sale. To the extent and only to the extent paid
prior to the Closing or accrued on the Closing Balance Sheet, the Add-On
Exchange Shareholder shall be responsible for the following extraordinary
out-of-pocket expenses actually incurred by the Add-On Exchange Shareholder or
Add-On Exchange in connection with the sale of the Stock hereunder: (a)
pre-Closing fees, expenses and disbursements of legal counsel, accountants,
consultants and other advisors, (b) pre-Closing expenses relating to
arrangements for due diligence investigations of Add-On Exchange and the
Business by prospective buyers, including, but not limited to, expenses to
secure premises, equipment, personnel and other services, and (c) the other sale
expenses set forth on Exhibit 5.6.
Section 11.4 Notices. Any notice, demand or other communication given or
made under this Agreement shall be in writing and delivered or sent to the
relevant Party at its address or facsimile number set out below (or such other
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October 17, 2010
address or facsimile number as the addressee has by five (5) days' prior written
notice specified to the other Party):
To: GoIP Global, Inc.
475 Park Avenue South
Suite 3001
New York, NY 10016
With copies to:
Bradley E. Essman, Esq.
[REDACTED]
To: Malcolm Myers
[REDACTED]
To: Add-On Exchange, Inc.
Attn: John Rafuse, CEO
[REDACTED]
To: Add-On Exchange, Inc.
410 Park Avenue, 15th Floor
New York, NY 10022
Any notice, demand or other communication so addressed to the relevant Party
shall be deemed to have been delivered: (a) if given or made by letter, when
actually delivered to the relevant address; and (b) if given or made by
facsimile, when transmitted, subject to machine-printed confirmation of receipt
being received by the sender.
Section 11.5 Further Assurances. Each Party undertakes to the other Party
to execute or procure to be executed all such documents and to do or procure to
be done all such other acts and things as may be reasonable and necessary to
give both Parties the full benefit of this Agreement.
Section 11.6 Effect of Agreement. This Agreement shall be binding on and
inure solely to the benefit of Add-On Exchange and GOIG and their respective
successors and assigns. Neither Party shall assign any of its rights hereunder
without the prior consent of the other Party, which consent shall not be
unreasonably withheld.
Section 11.7 Waiver. The exercise of or failure to exercise any right or
remedy of any reach of this Agreement shall not, except as provided herein,
constitute a waiver by such Party of any other right or remedy it may have in
respect of that breach.
Section 11.8 Rights Upon Breach. Any right or remedy conferred by this
Agreement on any Party for breach of this Agreement by the other Party
(including without limitation the breach of any representations and warranties)
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October 17, 2010
shall be in addition and without prejudice to all other rights and remedies
available to it in respect of that breach.
Section 11.9 Undertakings After Closing. Any provision of this Agreement
which is capable of being performed after Closing but which has not been fully
and completely performed at or before Closing and all representations and
warranties and other undertakings contained in or entered into pursuant to this
Agreement shall remain in full force and effect notwithstanding Closing.
Section 11.10 Entire Agreement. This Agreement constitutes the entire
agreement between the Parties with respect to its subject matter (neither Party
having relied on any representation or warranty made by the other Party which is
not contained in this Agreement) and no variation of this Agreement shall be
effective unless made in writing and signed by all of the Parties.
Section 11.11 Effect of Previous Agreements. This Agreement supersedes all
and any previous agreements, arrangements or understanding between the Parties
relating to the matters referred to in this Agreement and all such previous
agreements, arrangements or understanding (if any) shall cease to have any
effect from the date hereof.
Section 11.12 Survival of Terms. If at any time any provision of this
Agreement is or becomes illegal, void or unenforceable in any respect, the
remaining provisions hereof shall in no way be affected or impaired thereby.
ARTICLE XII
GENERAL
Section 12.1 Amendments; Waivers. This Agreement and any Exhibit or Exhibit
attached hereto may be amended only by an agreement in writing executed on
behalf of both GOIG and the Add-On Exchange Shareholder. No waiver of any
provision nor consent to any exception to the terms of this Agreement shall be
effective unless in writing and signed by the Party to be bound and then only to
the specific purpose, extent and instance so provided.
Section 12.2 Exhibits and Exhibits; Integration. Each Exhibit delivered
pursuant to the terms of this Agreement shall be in writing and shall constitute
a part of this Agreement, although such Exhibits need not be attached to each
copy of this Agreement. This Agreement, together with such Exhibits and the
letters between the Parties of even date herewith, constitutes the entire
agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings of the Parties in connection
therewith, including the Letter of Intent last executed by the Parties.
Section 12.3 Reasonable Efforts. Each Party will use its commercially
reasonable efforts to cause all conditions to its and the other Party's
obligations hereunder to be timely satisfied, to the end that the transactions
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October 17, 2010
contemplated by this Agreement shall be effected substantially in accordance
with its terms as soon as reasonably practicable.
Section 12.4 Further Assurances. (a) Subject to the terms and conditions
herein provided, each of the Parties hereto agrees to use its commercially
reasonable efforts to take or cause to be taken, all action, and to do or cause
to be done, all things necessary, proper or advisable, whether under applicable
laws and regulations or otherwise, to remove any injunctions or other
impediments or delays, legal or otherwise, in order to consummate and make
effective the transactions contemplated by this Agreement. (b) Notwithstanding
the foregoing, or anything to the contrary contained in this Agreement, neither
Party nor any of its affiliates shall be required to divest themselves of any
significant assets or properties or agree to limit the ownership or operation of
a Party or any of its affiliates, of any significant assets or properties,
including without limitation the assets to be acquired under this Agreement
except as provided herein, in order to perform its obligations under this
Agreement.
Section 12.5 Governing Law. This Agreement, the legal relations between the
Parties and any Action, whether contractual or non-contractual, instituted by
any Party with respect to matters arising under or growing out of or in
connection with or in respect of this Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and performed in such State and without regard to conflicts of
law doctrines.
Section 12.6 No Assignment. Neither this Agreement nor any rights or
obligations under it are assignable, except that GOIG may assign its rights, but
not its obligations, hereunder to any wholly owned subsidiary of GOIG. Subject
to the foregoing sentence, this Agreement is binding upon and inures to the
benefit of and is enforceable by the Parties hereto and their respective
successors and permitted assigns.
Section 12.7 Headings. The descriptive headings of the Articles, Sections
and subsections of this Agreement are for convenience only and do not constitute
a part of this Agreement.
Section 12.8 Counterparts. This Agreement and any amendment hereto or any
other agreement or document delivered pursuant hereto may be executed in one or
more counterparts and by different Parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement or other document and
shall become effective unless otherwise provided therein when one or more
counterparts have been signed by each Party and delivered to the other Party.
Section 12.9 Parties in Interest. Except as expressly provided herein,
nothing in this Agreement, express or implied, is intended to confer upon any
other person any rights or remedies of any nature whatsoever under or by reason
of this Agreement.
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October 17, 2010
Section 12.10 Attorneys' Fees. In the event of any Action by any Party
arising under or out of, in connection with or in respect of this Agreement,
including any participation in bankruptcy proceedings to enforce against a Party
a right or claim in such proceedings, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and expenses incurred in such Action.
Attorneys' fees incurred in enforcing any judgement in respect of this Agreement
are recoverable as a separate item. The Parties intend that the preceding
sentence be severable from the other provisions of this Agreement, survive any
judgement and, to the maximum extent permitted by law, not be deemed merged into
such judgement.
Section 12.11 Representation By Counsel; Interpretation. The Add-On
Exchange Shareholder, Add-On Exchange and GOIG each acknowledge that each Party
to this Agreement has been represented by counsel in connection with this
Agreement and the transactions contemplated by this Agreement. Accordingly, any
rule of Law or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement against the Party that drafted it has no
application and is expressly waived. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the intent of GOIG and the Add-On
Exchange Shareholder.
Section 12.12 Severability. If any provision of this Agreement is
determined to be invalid, illegal or unenforceable by any governmental entity,
the remaining provisions of this Agreement shall remain in full force and effect
provided that the essential terms and conditions of this Agreement for both
Parties remain valid, binding and enforceable. To the extent permitted by Law,
the Parties hereby to the same extent waive any provision of Law that renders
any provision hereof prohibited or unenforceable in any respect.
Section 12.13 Dispute Resolution; Agreement to Arbitrate. Except to the
extent that any specific Dispute resolution mechanism has been otherwise
provided for in this Agreement (or such mechanism has been pursued to its
conclusion and either the Dispute (as defined below) in question remains
unresolved or the resolution reached by such process has not been honored), in
the event that any Dispute arises between or among GOIG, Add-On Exchange and the
Add-On Exchange Shareholder with respect to this Agreement or the transactions
contemplated hereby, the following procedures shall apply. (a) The Parties will
attempt in good faith to resolve any dispute, controversy or claim under,
arising out of, relating to or in connection with this Agreement, including, but
not limited to, the negotiation, execution, interpretation, construction,
performance, non-performance, breach, termination, validity, scope, coverage or
enforceability of this Agreement or any alleged fraud in connection therewith (a
"Dispute"), promptly by negotiations between appropriate senior officers of the
Parties. If any such Dispute should arise, appropriate senior officers of GOIG
and Add-on Exchange and the Add-On Exchange Shareholder will meet at least once
within 20 days after notice of such Dispute is given by a Party and will attempt
to resolve the matter. Nothing herein, however, shall prohibit a Party from
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October 17, 2010
initiating arbitration proceedings pursuant to this Agreement if such Party
reasonably believes it would be substantially prejudiced by a 50-day delay in
commencing arbitration proceedings; provided, however, that the initiation of
arbitration proceedings shall not relieve the Parties of their obligations to
mediate Disputes pursuant to this Agreement. Either representative may request
the other to meet again within 14 days thereafter, at a mutually agreed time and
place. (b) If the matter has not been resolved within 30 days after the first
meeting of the representatives (which period may be extended by mutual
agreement), the Parties will attempt in good faith to resolve the controversy or
claim in accordance with the Center for Public Resources Model Procedure for
Mediation of Business Disputes as in effect at such time. The costs of mediation
shall be shared equally by the Parties. Any settlement reached by mediation
shall be resolved in writing, signed by the Parties and binding on the Parties.
The place of any such mediation shall be New York, New York. (c) If the matter
has not been resolved pursuant to the foregoing procedures within 60 days after
the first meeting (which period may be extended by mutual agreement), the matter
shall be resolved, at the request of either Party, by arbitration conducted in
accordance with the provisions of the Federal Arbitration Act (9 U.S.C.
(S)(S)1-16) and in accordance with the Center for Public Resources Rules for
Non-Administered Arbitration of Business Disputes as then in effect, by three
neutral arbitrators selected by the Parties as follows. Each Party shall select
a neutral arbitrator, subject to objection of the other Party, and the two
neutral arbitrators chosen by the Parties shall select a third neutral
arbitrator. If the two neutral arbitrators selected by the Parties are unable to
agree on the selection of the third arbitrator, they shall select an arbitrator
according to the procedures established by the Center for Public Resources Rules
for Non-Administered Arbitration of Business Disputes as then in effect. The
arbitration of such issues, including the determination of any amount of damages
suffered by any Party hereto by reason of the acts or omissions of any Party,
shall be final and binding upon the Parties, except that the arbitrator shall
not be authorized to award punitive damages with respect to any such claim,
dispute or controversy. The arbitrators shall have the power to decide all
questions of arbitrability and of such arbitrators' jurisdiction. No Party shall
seek any punitive damages relating to any matters under, arising out of, in
connection with or relating to this Agreement. Equitable remedies shall be
available in any such arbitration. The Parties intend that this agreement to
arbitrate be valid, binding, enforceable and irrevocable. The substantive and
procedural law of the State of New York shall apply to any such arbitration
proceedings. The place of any such arbitration shall be New York, New York.
Judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. (d) Notwithstanding the provisions of this Section
12.13, either Party may seek injunctive or other equitable relief to maintain
the status quo before any court of competent jurisdiction in connection with any
claim, dispute or controversy arising out of this Agreement, without breach of
this Section 12.13 or abridgement of the powers of the arbitrators.
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October 17, 2010
ARTICLE XIII
TERMINATION OF OBLIGATIONS; SURVIVAL
Section 13.1 Termination of Agreement. Anything herein to the contrary
notwithstanding, this Agreement and the transactions contemplated by this
Agreement shall automatically terminate, without any notice, demand or action by
either party, if the Closing does not occur on or before the close of business
on December 31, 2010 unless extended by mutual, written consent of the Parties
and otherwise may be terminated at any time before the Closing as follows and in
no other manner:
(a) Mutual Consent. By mutual written consent of the Parties.
(b) Conditions to GOIG's Performance Not Met. By the Add-On Exchange
Shareholder by written notice to GOIG if any event occurs or condition exists
which would render impossible the satisfaction of one or more conditions to the
obligations of GOIG to consummate the transactions contemplated by this
Agreement.
(c) Conditions to Add-On Exchange' Performance Not Met. By GOIG by written
notice to Add-On Exchange if any event occurs or condition exists which would
render impossible the satisfaction of one or more conditions to the obligation
of Add-On Exchange to consummate the transactions contemplated by this
Agreement.
(d) Material Breach. By GOIG or Add-On Exchange if there has been a
material misrepresentation or other material breach by the other Party in its
representations, warranties and covenants set forth herein; provided, however,
that the breaching party shall have 20 business days after receipt of notice
from the other Party of its intention to terminate this Agreement if such breach
continues, in which to cure such breach.
Section 13.2 Effect of Termination. In the event that this Agreement shall
be terminated pursuant to Section 13.1, all further obligations of the parties
under this Agreement shall terminate; provided that the obligations of the
parties contained in Articles XI, XII and this Articles XIII shall survive any
such termination, and that a termination under Section 13.1 shall not relieve
either Party of any liability for a breach of, or for any misrepresentation
under, this Agreement, or be deemed to constitute a waiver of any available
remedy (including specific performance if available) for any such breach or
misrepresentation.
Section 13.3 Notice of Known Unsatisfied Conditions or Breached
Representations, Warranties or Covenants. Prior to the Closing, each of the
Parties agrees to promptly inform the other Party of any failure to be satisfied
of any condition in its favor or the breach of any representation, warranty or
covenant by the other of which such party becomes aware.
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October 17, 2010
Section 13.4 Material Defect; Cure. If, subsequent to the closing of this
Agreement, either Party determines that there is a material defect existing at
the time of closing which contravenes any rules, laws or regulations of any
statutory, legal or regulatory body to which either Party reports, or materially
impairs the ability of either Party to conduct business in the normal course of
affairs or become unable to execute its obligations under all legal, statutory
or regulatory bodies to which it reports, the Parties shall take any and all
actions necessary to cure the defect within 20 days of receipt of written notice
that such a defect exists (the "cure period").
Section 13.5 Rescission. If the "cure period" elapses and the responsible
Party has failed to cure the defect, the other Party shall, at its sole
discretion, have the right to demand that this Agreement be rescinded forthwith,
and the offending Party shall be required to enter into a Rescission Agreement
with the demanding Party without delay.
In Witness Whereof, the Parties have signed this Agreement as of the 17th
day of October 2010.
GoIP Global, Inc.
By: /s/ Isaac Sutton
-------------------------------
Isaac H. Sutton
CEO
Add-On Exchange, Inc.
By: /s/ John Rafuse /s/ John Parkinson
------------------------------- -------------------------------
John Rafuse Witness
CEO
Malcolm Myers
/s/ Malcolm Myers
-------------------------------
Malcolm Myers, Shareholder
Page 30 of 59
October 17, 2010
EXHIBITS
NO. EXHIBIT PAGE
--- ------- ----
2.1 Add-On Exchange Shareholders List 33
2.2. Add-On Exchange Note and Assignment 35
7.1(b) Add-On Exchange Subsidiaries 49
7.1(g) Add-On Exchange Disclosure Documents 50
7.1(i) Excess Liabilities 51
7.1(k) Patents Owned 52
7.1.(m) Consulting Agreements 53
8.2 Current Directors and Officers of Add-On Exchange 54
8.4(h) Material Adverse Changes 55
8.4(i) Material Liabilities 56
Page 31 of 59
October 17, 2010
8.6 Material Agreements 57
8.9 Approvals and Permits 58
8.10 Legal Proceedings 59
8.15 Bank Accounts 60
Page 32 of 59
October 17, 2010
EXHIBIT 2.1
ADD-ON EXCHANGE, INC. SHAREHOLDERS LIST
One Hundred Million (100,000,000) Shares of Common Stock, $0.001 par value.
LIST OF SHAREHOLDERS SHARES
[REDACTED]
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October 17, 2010
EXHIBIT 2.2
ADD-ON EXCHANGE, INC. NOTE AND ASSIGNMENT
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
ADD-ON EXCHANGE, INC.
CONVERTIBLE, ASSIGNABLE NOTE
Principal Amount: $500,000.00 Interest Rate: Ten Percent (10%)
Due Date: October 31, 2013 Convertible at $0.02 per Share into
Assignable Common Stock
THE NOTE.
FOR VALUE RECEIVED, the undersigned, Add-On Exchange, Inc. ("Add-On Exchange") a
Delaware corporation, the "Maker," hereby promises to pay to the order of
Malcolm Myers, the "Payee" or the "Holder", the principal sum of Five Hundred
Page 34 of 59
October 17, 2010
Thousand and 00/100 Dollars ($500,000.00), plus interest at the rate specified
below.
The unpaid principal balance outstanding from time to time shall bear interest
prior to maturity at an annual rate of interest of Ten Percent (10%).
The Maker hereby agrees to pay the entire amount due hereunder, including
principal and interest, on or before October 31, 2013 ("Maturity Date"), on
which date all unpaid principal and interest due hereunder shall be paid in
full. All payments shall be applied first to interest on the unpaid balance and
the remainder to principal.
Interest hereon shall be calculated on the basis of a 360-day year prior to the
actual number of days elapsed until all accrued and unpaid interest is paid in
full. All payments of principal and interest hereunder shall be payable in
lawful currency of the United States.
If payment in full of the principal balance and accrued interest is not actually
received by the Payee on or before the Maturity Date, the Maker agrees to pay
Payee a late charge equal to the above specified interest rate plus two percent
(2%) per annum on that delinquent amount until paid. All interest due and
payable hereunder which is not paid when due for any reason shall be cumulated
and accrue interest at the rate hereunder.
This Convertible Note is given in consideration of a loan by Payee to Maker in
the principal amount of the Convertible Note.
The holder of this Convertible Note and all assignees and successors thereof
shall have all the rights of a holder in due course as provided by the laws of
the state of New York.
Maker hereby waives demand, presentment, protest, notice or protest and/or
dishonor and all other notices or requirements that might otherwise be required
by law. The Maker promises to pay on demand all costs of collection, including
reasonable attorney's fees and court costs, paid or incurred by Payee in
enforcing this Convertible Note upon an Event of Default (as that term is
defined below) hereunder.
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October 17, 2010
The occurrence of any of the following shall constitute an "Event of Default"
under this Convertible Note:
a. The failure of the Maker to make any payment when due under this
Convertible Note;
b. The institution of legal proceedings by or against the Maker under any
state insolvency laws, federal bankruptcy law, or similar debtor
relief laws then in effect.
c. A breach of any of the terms of this Note or the Subscription
Agreement between the parties of even date.
Upon an Event of Default, Payee may, at Payee's option, without notice, declare
all principal and interest due under this Convertible Note to be due and payable
immediately, and may exercise his conversion options. Payee may waive any Event
of Default before or after it occurs and may restore this Convertible Note in
full effect without impairing the right to declare it due for a subsequent
default.
This Note is assignable at the option of the Holder.
CONVERSION INTO COMMON STOCK
At any time prior to the Maturity Date, Payee shall have the option to convert
the unpaid principal balance of this Convertible Note or any part thereof,
together with all accrued interest, into that number of shares of the Common
Stock (the "Shares") of the Maker equal to the unpaid principal balance of the
Convertible Note or the amount being converted, divided by Two Cents ($0.02) per
share (the "Conversion Rate").
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October 17, 2010
Adjustments to Conversion Rate The Conversion Rate is subject to adjustment from
time to time in the event of (i) the issuance of Common Stock as a dividend or
distribution on any class of the Company's capital stock; (ii) the combination,
subdivision or reclassification of the Common Stock; (iii) the distribution to
all holders of Common Stock of cash dividends or distributions; (iv) the split
or reverse split of the Company's Com mon stock; and/or (v) the sale of Common
Stock at a price, or the issuance of options, warrants or convertible securities
with an exercise or conversion price per share, less than the lower of the then
current Conversion Rate equivalent price or the then current market price of the
Common Stock (except upon exercise of options outstanding on the date of this
certificate or options thereafter granted to employees, officers, directors,
stockholders or consultants pursuant to existing stock plans). No adjustment in
the Conversion Rate will be required until cumulative adjustments require an
adjustment of at least 5% in the Conversion Rate. No fractional shares will be
issued upon conversion, but any fractions will be adjusted in cash on the basis
of the then current market price of the Common Stock.
Exercise In order to exercise this conversion right, the Payee shall surrender
this Convertible Note to the Maker, accompanied by written notice of his
intention to exercise this conversion right, which notice shall set forth the
principal amount of this Convertible Note to be converted ("Notice of
Conversion"). Within ten (10) business days of Maker's receipt of the Notice of
Conversion and this Convertible Note, the Maker shall deliver or cause to be
delivered to the Payee, written confirmation that the Common Stock has been
issued in the name of the Payee.
MECHANICS OF EXERCISE.
Exercise of the purchase rights represented by this Convertible Note may be
made, in whole or in part, at any time or times on or after the Initial Exercise
Date and on or before the Due Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise Form annexed hereto (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of the Holder appearing on the books of the
Company). Notwithstanding anything herein to the contrary, the Holder shall not
be required to physically surrender this Convertible Note to the Company until
the Holder has converted all of the Note available by conversion hereunder and
the Note has been exercised in full, in which case, the Holder shall surrender
this Note to the Company for cancellation within three Trading Days of the date
the final Notice of Exercise is delivered to the Company. The Holder and the
Company shall maintain records showing the number of shares of Common Stock
received on conversion and the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise Form within ten Business Days of receipt
of such notice. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error.
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October 17, 2010
Delivery of Certificates Upon Exercise. Certificates for Common Stock shares to
be received hereunder shall be transmitted by the transfer agent of the Company
to the Holder by physical delivery to the address specified by the Holder in the
Notice of Exercise after delivery to the Company of the Notice of Exercise Form,
surrender of this Convertible Note (if required). This Convertible Note shall be
deemed to have been exercised on the date the Notice of Exercise is received by
the Company. The shares of Common Stock shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Convertible Note has been exercised by Notice of Exercise.
Delivery of New Convertible Note Upon Exercise. If this Convertible Note shall
have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Convertible Note certificate, at the time of delivery of
the certificate or certificates representing Common Shares, deliver to Holder a
new Convertible Note evidencing the rights of Holder to purchase the unconverted
shares of Common Stock called for by this Convertible Note, which new
Convertible Note shall in all other respects be identical with this Convertible
Note.
No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Convertible Note. As
to any fraction of a share which Holder would otherwise be entitled to purchase
upon such exercise, the Company shall at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the conversion price or round up to the next whole share.
Charges, Taxes and Expenses. Issuance of certificates for Common Stock shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the event certificates for Common Stock
are to be issued in a name other than the name of the Holder, this Convertible
Note when surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the Holder; and the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto.
CERTAIN ADJUSTMENTS.
Stock Dividends and Splits. If the Company, at any time while this Convertible
Note is outstanding: (A) pays a stock dividend or otherwise make a distribution
or distributions on shares of any Common Stock or any other equity or equity
equivalent securities payable in shares of any Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Page 38 of 59
October 17, 2010
Company upon exercise of this Convertible Note), (B) subdivides outstanding
shares of any Common Stock into a larger number of shares, (C) combines
(including by way of reverse stock split) any shares of Common Stock into a
smaller number of shares, or (D) issues by reclassification of shares any Common
Stock or any shares of capital stock of the Company, then in each case the
Exercise Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if any)
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event
and the number of shares issuable upon exercise of this Convertible Note shall
be proportionately adjusted such that the aggregate Exercise Price of this
Convertible Note shall remain unchanged. Any adjustment made pursuant to this
Section 3(a) shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
TRANSFER OF CONVERTIBLE NOTE.
Transferability. Subject to compliance with any applicable securities laws and
the conditions set forth in Section 3(d) hereof, this Convertible Note and all
rights hereunder (including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Convertible Note at
the principal office of the Company or its designated agent, together with a
written assignment of this Convertible Note substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute and deliver
a new Convertible Note or Convertible Notes in the name of the assignee or
assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Convertible Note evidencing
the portion of this Convertible Note not so assigned, and this Convertible Note
shall promptly be canceled. A Convertible Note, if properly assigned, may be
exercised by a new holder for the purchase of Common Stock without having a new
Convertible Note issued.
New Convertible Notes. This Convertible Note may be divided or combined with
other Convertible Notes upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations
in which new Convertible Notes are to be issued, signed by the Holder or its
agent or attorney. Subject to compliance with Section 4(a), as to any transfer
that may be involved in such division or combination, the Company shall execute
and deliver a new Convertible Note or Convertible Notes in exchange for the
Convertible Note or Convertible Notes to be divided or combined in accordance
with such notice. All Convertible Notes issued on transfers or exchanges shall
be dated the original Issue Date and shall be identical with this Convertible
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October 17, 2010
Note except as to the number of Convertible Note Shares, said Convertible Note
Shares being that Common Stock that may be issued upon conversion of this
Convertible Note, issuable pursuant thereto.
Convertible Note Register. The Company shall register this Convertible Note,
upon records to be maintained by the Company for that purpose (the "Convertible
Note Register"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Convertible Note as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.
Transfer Restrictions. If, at the time of the surrender of this Convertible Note
in connection with any transfer of this Convertible Note, the transfer of this
Convertible Note shall not be registered pursuant to an effective registration
statement under the Securities Act and under applicable state securities or blue
sky laws, the Company may require, as a condition of allowing such transfer,
that the Holder or transferee of this Convertible Note, as the case may be,
comply with the provisions of the securities laws and regulations.
MISCELLANEOUS.
No Rights as Shareholder Until Exercise. This Convertible Note does not entitle
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof.
Loss, Theft, Destruction or Mutilation of Convertible Note. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Convertible Note or
any stock certificate relating to the Convertible Note Shares, and in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
it (which, in the case of the Convertible Note, shall not include the posting of
any bond), and upon surrender and cancellation of such Convertible Note or stock
certificate, if mutilated, the Company will make and deliver a new Convertible
Note or stock certificate of like tenor and dated as of such cancellation, in
lieu of such Convertible Note or stock certificate.
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.
AUTHORIZED SHARES.
The Company covenants that during the period the Convertible Note is
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Convertible Note
Shares upon the exercise of any purchase rights under this Convertible Note. The
Page 40 of 59
October 17, 2010
Company further covenants that its issuance of this Convertible Note shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Convertible Note Shares upon the exercise of the conversion rights under
this Convertible Note. The Company will take all such reasonable action as may
be necessary to assure that such Convertible Note Shares may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be listed.
The Company covenants that all Convertible Note Shares which may be issued upon
the exercise of the purchase rights represented by this Convertible Note will,
upon exercise of the conversion rights represented by this Convertible Note, be
duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with
such issue).
Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Convertible Note, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such actions as
may be necessary or appropriate to protect the rights of Holder as set forth in
this Convertible Note against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any Convertible
Note Shares above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Convertible Note Shares upon the exercise of this
Convertible Note, and (c) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Convertible Note.
Before taking any action that would result in an adjustment in the number of
Convertible Note Shares for which this Convertible Note is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
Jurisdiction. All questions concerning the construction, validity, enforcement
and interpretation of this Convertible Note shall be determined in accordance
with the provisions of this Note in and under the laws of the State of New York.
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October 17, 2010
Restrictions. The Holder acknowledges that the Convertible Note Shares acquired
upon the exercise of this Convertible Note, if not registered, may have
restrictions upon resale imposed by state and federal securities laws.
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise
any right hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any provision
of this Convertible Note, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
Notices. Any notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered by certified mail.
Limitation of Liability. No provision hereof, in the absence of any affirmative
action by Holder to exercise this Convertible Note to purchase Convertible Note
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
Remedies. Holder, in addition to being entitled to exercise all rights granted
by law, including recovery of damages, will be entitled to specific performance
of its rights under this Convertible Note. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Convertible Note and hereby agrees to
waive and not to assert the defense in any action for specific performance that
a remedy at law would be adequate.
Successors and Assigns. Subject to applicable securities laws, this Convertible
Note and the rights and obligations evidenced hereby shall inure to the benefit
of and be binding upon the successors of the Company and the successors and
permitted assigns of Holder. The provisions of this Convertible Note are
intended to be for the benefit of all Holders from time to time of this
Convertible Note and shall be enforceable by the Holder or holder of Convertible
Note Shares.
Amendment. This Convertible Note may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Holder.
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October 17, 2010
Severability. Wherever possible, each provision of this Convertible Note shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Convertible Note shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Convertible Note.
Headings. The headings used in this Convertible Note are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this
Convertible Note.
IN WITNESS WHEREOF, the Company has caused this Convertible Note to be
executed by its officer thereunto duly authorized as of the date first above
indicated.
MAKER:
Add-On Exchange, Inc.
Date: October 17th, 2010
Signature: /s/ John Rafuse
---------------------------------
John Rafuse, CEO
PAYEE:
Malcolm Myers
Date: October 17th, 2010
Signature: /s/ Malcolm Myers
---------------------------------
Page 43 of 59
October 17, 2010
NOTICE OF EXERCISE
TO: Add-On Exchange, Inc.
(1) The undersigned hereby elects to convert into Common Stock of the Company
pursuant to the terms of the attached Convertible Note (only if exercised in
full), and tenders herewith said Convertible Note, together with all applicable
transfer taxes, if any.
(2) Please issue a certificate or certificates representing said Common Stock
shares in the name of the undersigned or in such other name as is specified
below:
The Common Stock shares shall be delivered by physical delivery of a certificate
to:
--------------------------------
[SIGNATURE OF HOLDER]
Name of Investing
Entity:
-------------------------------------------------------------------------
Signature of Authorized Signatory of
Investing Entity:
---------------------------------------------------------------
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October 17, 2010
Name of Authorized
Signatory:
----------------------------------------------------------------------
Title of Authorized
Signatory:
----------------------------------------------------------------------
Date:
---------------------------------------------------------------------------
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October 17, 2010
ASSIGNMENT FORM
(To assign the foregoing Note, execute this form and supply required
information. Do not use this form to convert the Note.)
FOR VALUE RECEIVED, [ ] all of or [ ] amount of the foregoing
Convertible Note and all rights evidenced thereby are hereby assigned to
whose address is
------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Dated: ,
------------ ----------
Holder's
Signature:
------------------------------------
Holder's Address:
------------------------------------
------------------------------------
Signature
Guaranteed:
-------------------------------------------------------
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October 17, 2010
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Convertible Note, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Convertible Note.
Page 47 of 59
October 17, 2010
EXHIBIT 7.1.(B)
ADD-ON EXCHANGE SUBSIDIARIES
None.
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October 17, 2010
EXHIBIT 7.1(G)
ADD-ON EXCHANGE DISCLOSURE DOCUMENTS
Balance Sheet as of 9/30/2010
Page 49 of 59
October 17, 2010
EXHIBIT 7.1(I)
EXCESS LIABILITIES
Accounts Payable
Notes Payable
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October 17, 2010
EXHIBIT 7.1(K)
PATENTS OWNED BY ADD-ON EXCHANGE
Application 20070180055 Patent number 11656055 dated 1/22/07
Application 20070174143 Patent number 11770068
Page 51 of 59
October 17, 2010
EXHIBIT 7.1(M)
CONSULTING AGREEMENTS
A. John Rafuse, CEO, Director
B. John Parkinson, CFO, Director
C. Aaron Greengrass
D. Malcolm Myers
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October 17, 2010
EXHIBIT 8.2
CURRENT OFFICERS AND DIRECTORS OF ADD-ON EXCHANGE
DIRECTORS
Isaac H. Sutton - as of 10/17/10
John Rafuse
John Parkinson
Aaron Greengrass (resigned as of 10/17/10)
Iser Steinmetz (resigned as of 10/17/10)
OFFICERS
John Rafuse, CEO
John Parkinson, CFO
Aaron Greengrass, CTO
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October 17, 2010
EXHIBIT 8.4(H)
MATERIAL ADVERSE CHANGES
None.
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October 17, 2010
EXHIBIT 8.4(I)
MATERIAL LIABILITIES
Notes Payable
Interest Payable
Accounts Payable
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October 17, 2010
EXHIBIT 8.6
MATERIAL AGREEMENTS
None.
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October 17, 2010
EXHIBIT 8.9
APPROVALS AND PERMITS
None.
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October 17, 2010
EXHIBIT 8.10
LEGAL PROCEEDINGS
None.
Page 58 of 59
October 17, 2010
EXHIBIT 8.15
BANK ACCOUNTS
[REDACTED]
Page 59 of 5
