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Item 1.01
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Entry into a Material Definitive Agreement.
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Termination of ShareRails, LLC and the Share
Exchange Agreement
On March 31, 2017, Grey
Cloak Tech Inc. (the “
Company
” also referred to herein as “
us
,” “
we
” and
“
our
”), entered into a Share Exchange Agreement, as previously reported on our Current Report on Form 8-K filed
on April 6, 2017, whereby ShareRails, LLC (“
ShareRails
’) was to become our wholly-owned subsidiary (the “
Exchange
”).
The Share Exchange Agreement
provided us the ability to rescind the Share Exchange Agreement if the ShareRails members were unable to provide us, within 10
days of the Exchange, a consent signed by all the members of ShareRails whereby the members agree to participate in the Exchange
and be bound by the Share Exchange Agreement. The ShareRails members failed to deliver this consent. Therefore, we elected to rescind
the Share Exchange Agreement and terminate the Exchange.
On May 19, 2017, we entered
into a Termination Agreement and Acknowledgement by and among the Company, ShareRails, Joseph Nejman, Dmitry Chourpo, Joseph Nejman,
in his capacity as the “Selling Members’ Representative,” William Bossung, Fred Covely, Dimicho Pty. Ltd. and
Covely Information Systems (the “
Termination Agreement
”). The Termination Agreement terminates the Share Exchange
Agreement and rescinds the Exchange.
The Termination Agreement
also rescinds the following agreements:
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a.
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Employment Agreement by and between the Buyer and William Bossung, dated March 31, 2017;
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b.
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Employment Agreement by and between the Buyer and Joseph Nejman, dated March 31, 2017;
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c.
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Development Services Agreement by and between the Buyer and Covely Information Systems, dated March
31, 2017;
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d.
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Development Services Agreement by and between the Buyer and Dimicho Pty. Ltd., dated March 31,
2017;
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e.
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Shareholders Agreement by and between the Buyer, Covely, Bossung, Nejman and Chourpo, dated March
31, 2017;
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f.
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Amended and Restated Limited Liability Company Operating Agreement of ShareRails, LLC, dated March
31, 2017;
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g.
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Exchange Agreement by and between the Buyer and Bossung, dated March 31, 2017;
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h.
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Exchange Agreement by and between the Buyer and Covely, dated March 31, 2017;
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i.
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Exchange Agreement by and between the Buyer and Chourpo, dated March 31, 2017; and
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j.
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Exchange Agreement by and between the Buyer and Nejman, dated March 31, 2017.
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Reference is made to the
full text of the Termination Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Convertible Promissory Note
On May 19, 2017, in connection
with the Termination Agreement, ShareRails issued a convertible promissory note, in the principal amount of $100,000 (the “
Note
”).
Pursuant to the Note, ShareRails will repay funds advanced, or to be advanced, to ShareRails by the Company. The Note accrues interest
at a rate of 4% from July 1, 2017 and matures on April 30, 2022.
The Note is convertible
into membership interests of ShareRails upon ShareRails receiving a private equity financing of at least $1,000,000 or on the maturity
date at the option of ShareRails. The conversion price is 85% of the price per membership unit issued in the private equity financing
or as agreed upon by us and ShareRails.
Reference is made to the
full text of the Note, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.