Exhibit 10.1
EXCHANGE OF STOCK FOR ASSETS
AGREEMENT
between
CIRALIGHT GLOBAL, INC.
a Nevada corporation
and
GEORGE ADAMS, SR.
DATED: April 1, 2009
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THIS AGREEMENT is made and entered into this 1st day of April 2009, by and
between CIRALIGHT GLOBAL, INC., a Nevada corporation ("CIRALIGHT GLOBAL"), and
GEORGE ADAMS, SR. an individual ("ADAMS"). The effective date of this agreement
shall be April 1, 2009.
RECITALS
WHEREAS, ADAMS is the sole owner of a certain assets including but not
limited to patents, artwork, trademarks, equipment, furniture, trade fixtures,
databases, technical drawings, promotional materials, trade names and inventory
parts related to the Suntracker One, Suntracker Two and other daylighting
products previously distributed through Ciralight, Inc. a Utah corporation,
which ADAMS secured through' a legal foreclosure against Ciralight Inc.
WHEREAS, ADAMS is the sole owner of the rights to manufacture the
Suntracker One, Suntracker Two and other daylighting products and technology
previously distributed through Ciralight Inc.,
WHEREAS, CIRALIGHT GLOBAL is a legally formed corporation with the ability
to offer and transfer common stock and preferred stock in exchange for the
assets and rights owned by ADAMS;
WHEREAS, CIRALIGHT GLOBAL and its shareholders are willing and desirous of
acquiring the assets and rights of ADAMS, in exchange for CIRALIGHT GLOBAL
shares of common and preferred stock and other consideration to be issued to
ADAMS for the purpose of conducting the business of manufacturing, distributing
and selling the Suntracker One, Suntracker Two and other daylighting products,
upon the terms and conditions as set forth herein;
WHEREAS, ADAMS is willing and desirous to sell and transfer to CIRALIGHT
GLOBAL, all of his right, title, and interest in and to all of the assets and
rights obtained from Ciralight, Inc. (excluding the title to the patents) at the
time of closing in exchange for certain shares of CIRALIGHT GLOBAL common stock,
preferred stock and other consideration described herein;
WHEREAS, ADAMS is willing and desirous to transfer the title to the patents
owned by ADAMS to CIRALIGHT GLOBAL at such time as the company becomes a
publicly traded company in exchange for additional stock and consideration from
CIRALIGHT GLOBAL as described herein;
AGREEMENT
NOW THEREFORE, in consideration of the covenants and agreements contained
herein and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
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1. CONSIDERATION, SALE, EXCHANGE OF SHARES
1. At the closing herein;
a) CIRALIGHT GLOBAL agrees to sell, assign, transfer and convey to
ADAMS the following;
i) Issue to ADAMS 3,200,000 common stock shares (Common Shares)
of its common stock;
ii) Issue to ADAMS 1,000,000 shares of its Series A Preferred
Stock (Preferred Shares) in accordance with the following
terms;
(1) Preferred stock Voting Rights: At any given time ADAMS,
as the holder of these Series A Preferred Stock shall
have the right to vote that number of shares (when
added to ADAMS 3,200,000 shares of common stock)
necessary to provide ADAMS with the right to vote 51%
of the total votes necessary for the election of
directors and for any acquisition or merger
transaction.
(2) Restrictions on Issuing Preferred Stock: CIRALIGHT
GLOBAL agrees that no other shares of Series A
preferred stock shall be issued by the Company that
would grant the holder(s) equal or superior right to
the Series A preferred Stock prior to such time that
ADAMS sells or transfers these preferred shares to a
third party or these preferred shares are redeemed by
the Company as provided herein.
(3) Redemption Rights: The Company will have the right to
redeem shares of the Series A Preferred Stock issued to
ADAMS hereunder, by paying ADAMS $1.00 per share. Such
partial or full redemption may occur any time the
Company has money legally available for such
redemption.
(4) Key-man Insurance: The Company shall endeavor to secure
Key-man insurance on the Directors and officers of the
Company, including ADAMS. The insurance proceeds may be
used to redeem the Preferred Shares in the event, god
forbid anything were to happen to ADAMS. In the event
the company is unable to secure Key-man Insurance at an
affordable fee, then in such instance, should anything
happen to ADAMS the company would have a nine month
period for the then officers and directors to redeem or
purchase these Series A Preferred Shares.
iii) CIRALIGHT GLOBAL agrees to pay to ADAMS a royalty fee of
$20.00 for each Suntracker One and Suntracker Two unit or
any future unit that are based on the patents transferred by
ADAMS to CIRALIGHT GLOBAL under this agreement and sold by
CIRALIGHT GLOBAL for a period of 30 years ending on April
30, 2029. The Royalty Fees shall be paid to ADAMS no later
than 15 calendar days after the end of each calendar
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quarter. The maximum royalty fees payable under this
agreement is $2,000,000.
b) At the closing herein, ADAMS agrees to sell, assign, transfer and
convey, exclusively to CIRALIGHT GLOBAL, all of ADAMS right,
title, and interest, in and to the following assets ("Assets"):
i) All artwork, trademarks, equipment, furniture, trade
fixtures, databases, technical drawings, documents, research
materials and studies, promotional items, files, websites,
images, trade names, displays, samples, and inventory parts
previously owned by Ciralight, Inc. (excluding the patents),
which ADAMS secured through' a legal foreclosure against
Ciralight, Inc. plus inventory parts for the Ciralight
products subsequently purchased by ADAMS.
c) At the closing herein, ADAMS agrees to sell, assign, transfer and
convey exclusively to CIRALIGHT GLOBAL, the following rights
("Rights"):
i) ADAMS rights to manufacture and distribute the products
previously manufactured and distributed by Ciralight, Inc. that
were transferred to ADAMS by the Board of Directors and Officers
of Ciralight, Inc. or obtained through the foreclosure process
against Ciralight, Inc. that are covered by the patents owned by
ADAMS as well as products that may have been under development by
Ciralight Inc. which are not patented. ADAMS shall retain title
to the Patents under this agreement until such time as the
company becomes a publicly traded company at which time as
provided herein the Title shall be transferred to Ciralight
Global, Inc. under the terms of paragraph 2 below.
2. At the time the Company becomes Public;
a) Effective on the date the CIRALIGHT GLOBAL registration statement
is effective with the Securities and Exchange Commission (the
company becomes a publically traded company) or prior to with the
written consent of ADAMS, the title to the patents owned by ADAMS
as related to the Ciralight Products secured through the
foreclosure process or obtained subsequently will be transferred
and conveyed exclusively to CIRALIGHT GLOBAL and in exchange
CIRALIGHT GLOBAL shall issue to ADAMS an additional 400,000
shares of common stock and execute a Promissory Note in the
Amount of $250,000 with terms described herein;.
i) The promissory note shall be in favor of George Adams Sr.
with interest at the prime rate plus 2%, all due and payable
no later than three years from the date issued. The
Promissory Note may be paid all or in part any time the
Company has money legally available for such payments.
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2. CLOSING DATE
1. The closing ("Closing") of this transaction shall occur on April 10,
2009.
At Closing:
a) ADAMS will execute and deliver such further agreements or
documents as may be necessary in order to sell, assign, convey,
and deliver to CIRALIGHT GLOBAL all of ADAMS right, title, and
interest in and to the Assets and Rights defined above;
b) CIRALIGHT GLOBAL will deliver to ADAMS the CIRALIGHT shares of
Stock defined above and execute and deliver such further
agreements or documents as may be necessary in order to sell,
assign, convey to ADAMS the shares of Stock and Royalty Fee
provided for herein.
3. REPRESENTATIONS AND WARRANTIES OF CIRALIGHT GLOBAL
CIRALIGHT GLOBAL represents and warrants that:
a) It is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada, United States of
America.
b) CIRALIGHT GLOBAL has all necessary corporate power and authority
under the laws of Nevada and all other applicable provisions of
law to own its properties and other assets now owned by it, to
carry on its business as now being conducted, and to execute,
deliver and carry out the provisions of this Agreement.
c) All corporate action on the part of CIRALIGHT GLOBAL required for
the lawful execution and delivery of this Agreement and the
issuance, execution and delivery of the Shares of Stock to ADAMS
has been duly and effectively taken. Upon execution and delivery,
this Agreement will constitute a valid and binding obligation of
CIRALIGHT GLOBAL, enforceable in accordance with its terms
d) CIRALIGHT GLOBAL is authorized to issue 50,000,000 shares of
common stock, $.001 par value per share and 10,000,000 shares of
Series A preferred Stock, $.001 par value per share. After the
closing there will be 4,800,000 total shares of Common Stock
issued and 1,000,000 total shares of Series A Preferred Stock
issued.
e) At the time of closing, CIRALIGHT GLOBAL represents to ADAMS that
the total number of outstanding shares of common stock issued by
the company shall be 4,800,000 shares of which ADAMS will own
3,200,000 shares. The balance of the common stock is owned by
Frederick Feck (400,000 shares), Randall Letcavage (400,000
shares), Jeff Brain (320,000 shares), iCapital Finance, Inc.
(240,000 shares) and David E. Wise (240,000 shares).
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f) At the time of closing CIRALIGHT GLOBAL represents to ADAMS the
total number of outstanding shares of Series A Preferred Stock
issued by the company shall be 1,000,000 shares of which ADAMS
will own all 1,000,000 shares.
g) CIRALIGHT GLOBAL has advised ADAMS and ADAMS hereby approves and
authorizes CIRALIGHT GLOBAL and its officers and Board of
Directors to raise up to $800,000 in working capital (before
fees) through a Private Placement Offering that will result in
the issuance of up to 3,200,000 shares of additional common stock
to new investors at which time ADAMS will own 3,200,000 shares of
common stock and the total issued shares of common stock shall be
as much as 8,000,000 shares.
h) CIRALIGHT GLOBAL has advised ADAMS and ADAMS hereby approves and
authorizes CIRALIGHT GLOBAL and its officers and Board of
Directors to undertake the process of taking the company public
which would result in a dilution of the percentage of ownership
each shareholder holds including ADAMS.
4. REPRESENTATION AND WARRANTIES OF ADAMS
1) ADAMS represents and warrants that:
a) ADAMS has all of the authority necessary to enter into this
agreement and be bound by the terms and covenants of performance
herein.
b) ADAMS will be acquiring the CIRALIGHT GLOBAL Shares for his own
account and not with a view to any distribution within the
meaning of the Securities Act of 1933, as amended (the "Act"). As
a "purchaser", ADAMS acknowledges and is aware that there are
substantial restrictions on the transferability of the Shares.
ADAMS acknowledges that he will be granted certain registration
rights and that the Shares may not be sold or transferred until
such Shares are registered with the SEC and a trading market for
such Shares develops, unless such sale is exempt from
registration under any other state or other jurisdiction's
securities
c) ADAMS has received all of the information it considers necessary
or appropriate for determining whether to acquire the CIRALIGHT
GLOBAL Shares pursuant to this Agreement. ADAMS is familiar with
the business, affairs, risks and properties of CIRALIGHT GLOBAL.
ADAMS has had an opportunity to ask questions of and receive
answers from CIRALIGHT GLOBAL and its officers, directors and
other representatives regarding CIRALIGHT GLOBAL and the terms
and conditions of the offering of the CIRALIGHT GLOBAL Shares.
ADAMS has had the opportunity to obtain any additional
information CIRALIGHT GLOBAL possesses or could acquire without
unreasonable effort or expense, necessary to verify the accuracy
of the information furnished.
d) ADAMS has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of
an investment in the Company and the suitability of the Shares as
an investment and that he is able to bear the economic risk of an
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investment in the Shares. ADAMS understands there may be no
market for the CIRALIGHT GLOBAL Shares.
e) ADAMS is relying solely upon his own due diligence, or upon
independent consultation with his professional, legal, tax and
accounting advisors or such others as ADAMS deems to be
appropriate in acquiring the CIRALIGHT GLOBAL Shares and entering
into this agreement;
f) ADAMS has been advised to, and has consulted with, their
professional tax and legal advisors with respect to any tax
consequences of acquiring the CIRALIGHT GLOBAL Shares.
g) Without in any way limiting the representation set forth above,
ADAMS further agrees not to make any disposition of all or any
portion of the Shares unless and until:
i) There is then in effect a registration statement under the
Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
ii) ADAMS shall have notified CIRALIGHT GLOBAL of the proposed
disposition and shall have furnished CIRALIGHT GLOBAL with a
detailed statement of the circumstances surrounding the
proposed disposition, and if requested by CIRALIGHT GLOBAL,
ADAMS shall have furnished CIRALIGHT GLOBAL with an opinion
of counsel, reasonably satisfactory to CIRALIGHT GLOBAL and
its counsel, that such disposition will not require
registration under the Act.
iii) That in the event of a proposed sale of the common or
preferred shares to a third party, the then existing
shareholders shall be notified and shall have a 15 day
period to agree to purchase the shares under the same terms
and conditions of the third party, with agreement to close
the transaction within 60 days thereafter.
h) ADAMS confers authority upon CIRALIGHT GLOBAL to affix the same
legend affixed to the same class of stock issued to other
Shareholders for the Stock certificate or certificates
representing the CIRALIGHT GLOBAL Shares;
i) CIRALIGHT GLOBAL and ADAMS are aware and acknowledge that
Ciralight, Inc. owed creditors for products and services, some of
which may have been derived from their purchase of the assets
later secured by ADAMS through his foreclosure process. It is the
mutual position of CIRALIGHT GLOBAL and ADAMS that neither party
is under any financial obligated to pay the Ciralight, Inc.
debts, accounts payables, other liabilities or take
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responsibility for the warranty work of former Ciralight, Inc.
sales. Yet it is possible that the former Ciralight, Inc.
creditors, customers or shareholders may file a claim or legal
action against one or both parties. Or it may be decided by one
or both parties to be appropriate for business reasons to pay one
or more former Ciralight, Inc. obligations if it is deemed to be
in their respective best interest or CIRALIGHT GLOBAL's business
objectives. As such, aside from the potential action by former
Ciralight, Inc. creditors, the assets and rights covered by this
agreement and being transferred by ADAMS to CIRALIGHT GLOBAL
shall be free and clear of all other liens, charges or
encumbrances.
5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations, warranties and covenants made respectively by CIRALIGHT
GLOBAL and ADAMS in this Agreement shall survive the closing and the exchange of
the CIRALIGHT GLOBAL Common Stock, Preferred Stock, Royalty Payments, Assets and
Rights called for hereunder.
6. TAX-FREE EXCHANGE
Insofar as possible, the parties agree that the exchange of shares for assets
called for hereunder shall be a tax-free exchange under the tax laws and the
Internal Revenue Code (as amended) of the United States, and not a purchase of
assets.
7. NOTICES
All notices provided by this Agreement shall be in writing and shall be given by
facsimile or registered mail, postage prepaid, or by personal delivery, by one
party to the other, addressed to such other Party at the applicable address set
forth below, or to such other addresses as may be given for such purpose by such
other party by notice duly given hereunder. Notice shall be deemed properly
given on the date of a confirmed facsimile transmission, three (3) days after
the date mailed if given by first class mail. or on the date of delivery, which
ever applies:
To CIRALIGHT GLOBAL: Ciralight Global, Inc.
2603 Main Street, Suite 1150
Irvine, CA 92614
Attention Randall Letcavage, CEO
Fax No: (888) 584-9082
To ADAMS: George Adams, Sr.
3200 E. Frontera St.
Anaheim, CA 92806
Fax No: (714) 630-5836
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8. GENERAL PROVISIONS
The following miscellaneous provisions, standard to commercial contracts of this
nature, are made part hereof:
a) In the event any one or more of the provisions contained in this
Agreement are for any reason held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement. This Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
b) This Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, legal representatives, successors
and permitted assigns. The parties may not transfer or assign all or
any part of their rights or obligations except to the extent expressly
permitted by this Agreement.
c) This Agreement constitutes the entire agreement and understanding
between the parties, and may not be modified or amended except in
writing signed by both parties. With respect to the terms and
provisions of this agreement, time is of the essence.
d) This agreement may be executed in one or more counterparts, including
electronic mail or facsimile, each of which may be considered an
original copy hereof.
e) No term or condition of this Agreement shall be deemed to have been
waived nor there any estoppels to enforce any provision of this
Agreement except by written instrument of the party charged with such
waiver or estoppels.
f) COSTS AND ATTORNEY FEES. If a claim for amounts owed by either party
is asserted in any judicial proceeding or appeal thereof, or if either
party is required to enforce this Agreement in any judicial proceeding
or appeal thereof, the party prevailing in such proceeding shall be
entitled to reimbursement of its reasonable costs and expenses,
including reasonable accounting and legal fees, whether incurred prior
to, in preparation for, or in contemplation of the filing of any
written demand, claim, action, hearing or proceeding to enforce the
obligations of this Agreement. The parties hereunder, waive to the
fullest extent permitted by law any right to or claim for any punitive
or exemplary damages against the other and agree that, in the event of
a dispute between them, the party making a claim shall be limited to
recovery of any actual damages it sustains.
g) GOVERNING LAW. Except to the extent governed by the United States
Trademark Act of 1946 (Lanham Act, 15 U.S.C. ss.ss. 1051 ET SEQ.) or
other federal law, this Agreement, and the relationship shall be
governed by the laws of the State of California.
(m) HEADINGS. The headings of the several sections and paragraphs hereof
are for convenience only and do not define, limit or construe the
contents of such sections or paragraphs.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
GEORGE ADAMS, SR. CIRALIGHT GLOBAL, INC.
By: /s/ George Adams, Sr. By: /s/ Randall Letcavage
-------------------------------- --------------------------------
George Adams, Sr. Randall Letcavage, CEO
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