Share Exchange Agreement

Share Exchange Agreement

THIS AGREEMENT (the “Agreement” and/or the “Share Exchange”) is entered into between PAWS Pet Corporation an Illinois corporation having its registered office at 777 E. Atlantic Avenue C2-264, Delray Beach, Florida 33483, PAWS and the Shareholders of Impact Social Networking Inc., accompany incorporated in Georgia with an official address of 1373 Louis Ave, Elk Grove Village, IL 60007 here after referred to as the “Shareholder”. Together the “Shareholders” and “PAWS” constitute the “Parties”.

Recitals

AGREEMENT

NOW, THEREFORE, the Parties here to agree as follows:

1.   Share Exchange

The Shareholders shall exchange its shareholding in Impact Social Networking Inc detailed in Annex 1 into shares of PAWS in accordance with the terms and conditions of this Agreement.

PAWS shall deliver, or cause to be delivered, to the Shareholders a value in PAWS common stock, no par value per share (the “PAWS Shares”), set out in Annex 1, where for the purposes of the exchange the value of each share of PAWS common stock is also set out in Annex 1. The calculation of the number of shares of PAWS exchanged for Impact Social Networking shares as set out in Annex 1 shall be rounded down to the nearest whole number and no fractional PAWS shares shall be issued. The number of shares issued to the Shareholders will be adjusted for additional stock issuances made by PAWS following the date of this agreement until $2.0 Million in new capital has been raised by PAWS except stock issued in lieu of interest on PAWS convertible notes as at the date of this agreement and issuances of stock under the PAWS stock option plan.

2.   Execution

This transaction shall have deemed to have been executed when the agreement has been signed and authorized on behalf of PAWS. The date on which the agreement is signed by PAWS shall be considered as the Effective Time of the Share Exchange and the following events shall take place:

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE 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 SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

The Shareholder and PAWS shall take, or cause to be taken, all actions or do, or cause to be done, all things necessary, proper or advisable under all applicable laws to consummate and make effective the Share Exchange and to transfer full and unencumbered title to the other Party, including without limitation the filing of a notification with Securities and Exchange Commission.

Each Party shall be entitled to benefit from all rights connected to the shares transferred and exchanged under this Agreement.

3.   Representations and Warranties

PAWS represents and warrants to the Shareholder that:

The Shareholder represents and warrants to PAWS that

4.  Miscellaneous Provisions

4.1 Amendments

No modifications, amendments or alternations of this S hare Exchange Agreement may be made except in writing (containing a specific reference to this Agreement) and signed by a duly authorized officer of representative of each of the Parties to this Agreement.

4.2 Notices

Any notices, request or other communication with respect to this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, sent by reputable international overnight courier, facsimile or e-mail (with return or delivery receipt obtained) or five (5) Business Days after sent by registered or certified mail, return or delivery receipt requested, postage repaid to the Parties at their respective addresses set forth in Annex 1 and on the first page of this Agreement.

4.3 Confidentiality

The Parties under take to keep the contents of this Agreement strictly confidential. PAWS shall, however, been titled to make any announcement or filling required by law or regulations, including, but not limited to securities laws of the United States and the regulations of the Securities and Exchange Commission that are applicable.

4.4 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of New York.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on 23 February, 2012

For PAWS:

______________________________ 

Daniel Wiesel, Chairman and CEO

The PAWS Pet Company, Inc.

For:  _________________________

(Name of Shareholder)

Name:

Date:

For:  _________________________

Name:

Date:

For:  _________________________

Name:

Date:

Annex 1 – Share Exchange Calculation

PAWS Pet Company

INITIAL SHARE EXCHANGE: 1 Share of ISN = 7,394 Shares of PAWS

Initial Share Transfer PAWS

Additional Shares to be issued for reaching the following milestones

On sales of products or services by PAWS that utilizes the technology or intellectual property acquired as part of this share exchange agreement where sales achieving cumulative revenues of :

$  2.5 Million   1,386,305

$17.5 Million   4,621,285

$22.5 Million 11,553,212

$27.5 Million 11,553,212

$32.5 Million 11,553,212

Annex 2 – Impact Social Networking owned technology and intellectual property