SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(AMENDMENT NO. 1)

THE X-CHANGE CORPORATION

(Name of Issuer)

COMMON STOCK, $0.001 PAR VALUE

(Title of Class of Securities)

98371P109

(CUSIP Number)

Annabel M. Jones

Assistant General Counsel – Corporate Affairs

Samson Investment Company

Two West Second Street

Tulsa, Oklahoma 74103

(918) 591-1006

(Name, address and telephone number of person

authorized to receive notices and communications)

With a copy to:

R. Scott Cohen

Weil, Gotshal & Manges LLP

200 Crescent Court, Suite 300

Dallas, TX 75201

July 10, 2008

(Date of event which requires filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 98371P109 13D Page 2

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Samson Investment Company
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Nevada
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 35,151,7871*
		8	SHARED VOTING POWER -0-
		9	SOLE DISPOSITIVE POWER 35,151,787*
		10	SHARED DISPOSITIVE POWER -0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 35,151,787*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES                                                                                        o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 52.7%2*
14	TYPE OF REPORTING PERSON CO

_________________________

¹  (a) 3,875,000 shares of common stock of The X-Change Corporation into which Samson Investment Company has the right to convert a Tranche A Convertible Note, dated December 4, 2007 (as amended and restated on July 10, 2008), in the principal amount of $775,000, excluding interest convertible into common stock, (b) a Tranche A Warrant (as amended and restated on July 10, 2008), dated December 4, 2007, to purchase 1,937,500 shares of common stock of The X-Change Corporation, (c) 11,071,429 shares of common stock of The X-Change Corporation into which Samson Investment Company has the right to convert a Tranche B Convertible Note, dated July 10, 2008, in the principal amount of $775,000, excluding interest convertible into common stock, (d) a Tranche B Warrant, dated July 10, 2008, to purchase 11,071,429 shares of common stock of The X-Change Corporation and (e) 7,196,429 shares Samson Investment Company acquired pursuant to the Securities Purchase Agreement, dated December 4, 2007, as amended by Amendment No. 1 to the Securities Purchase Agreement, dated July 10, 2008.

²  Based on 31,589,501 shares of The X-Change Corporation common stock outstanding as of April 30, 2008, as reported in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 20, 2008.

*  Samson expressly disclaims (i) the existence of any group or (ii) beneficial ownership with respect to any shares of common stock covered by the Voting Agreement, dated July 10, 2008, by and between Samson Investment Company and the shareholders of Issuer named therein.

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Item 1. Security and Issuer

This amendment (the “Amendment”) amends and supplements the statements on Schedule 13D relating to the common stock, par value $0.001 per share (the “Common Stock”), of The X-Change Corporation, a Nevada corporation (the “Issuer”), whose principal executive offices are located at 710 Century Parkway, Allen, Texas 75013, filed with the Securities and

Exchange Commission on December 12, 2007 (the “Initial Schedule 13D”).

Item 2. Identity and Background

Item 2 of the Initial Schedule 13D is hereby amended and restated in its entirety as follows:

(a) – (c) This Statement is being filed by Samson Investment Company, a Nevada corporation (“Samson”), with its principal place of business and principal office located at Two West Second Street, Tulsa, Oklahoma  74103. Samson is a holding company which, among other things, engages in the exploration and development of oil and gas through its subsidiaries. Stacy Schusterman, as trustee of various family trusts, holds voting and investment power over 100% of the issued and outstanding capital stock of Samson.

The name, business address and present principal occupation or employment of each executive officer and director of Samson are set forth on Schedule A hereto and incorporated herein by reference.

(d)       During the last five years, neither Samson nor, to the knowledge of Samson, any person named on Schedule A has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)       During the last five years, neither Samson nor, to the knowledge of Samson, any person named on Schedule A has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)        The citizenship of each executive officer and director of Samson is set forth on Schedule A.

Item 3. Source and Amount of Funds or Other Consideration

Item 3 of the Initial Schedule 13D is hereby amended and restated in its entirety as follows:

On December 4, 2007, pursuant to a Securities Purchase Agreement, dated December 4, 2007, among the Issuer, Samson and certain other purchasers (the “Securities Purchase Agreement” as amended by Amendment No. 1 (defined below), the “Amended Securities Purchase Agreement”), Samson acquired from the Issuer a Senior Secured Convertible Term Note in the original principal amount of $775,000 (the “Original Tranche A Convertible Note”) and (ii) a warrant to purchase 1,937,500 shares of Common Stock (the “Original Tranche A Warrant”). On July 10, 2008, (i) the Securities Purchase Agreement was amended by Amendment No. 1 to the Securities Purchase Agreement (“Amendment No. 1”), (ii) Samson exchanged the Original

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Tranche A Convertible Note for a Senior Secured Convertible Term Note (the “Tranche A Convertible Note”), (iii) Samson exchanged the Original Tranche A Warrant for an Amended and Restated Tranche A Warrant (the “Tranche A Warrant”), (iv) Samson acquired from the Issuer a Senior Secured Convertible Term Note in the original principal amount of $775,000 (the “Tranche B Convertible Note,” and together with the Tranche A Convertible Note, collectively, the “Convertible Notes”) and (v) a warrant to purchase 11,071,429 shares of Common Stock (the “Tranche B Warrant,” and together with the Tranche A Warrant, collectively, the “Warrants”). Pursuant to the Amended Securities Purchase Agreement, Samson was also issued 7,196,429 shares of Common Stock on July 10, 2008. A more detailed description of the Amended Securities Purchase Agreement, the Convertible Notes, the Warrants and related agreements are set forth in Item 6 below.

The funds used to purchase the Convertible Notes and Warrants were obtained from Samson’s working capital.

Item 4. Purpose of Transaction

Item 4 of the Initial Schedule 13D is hereby amended and restated in its entirety as follows:

The Convertible Notes and Warrants were acquired for investment purposes. Consistent with such purpose, Samson has had, and may have in the future, discussions with management and the Board of Directors of the Issuer regarding the Issuer’s operations, prospects, business and financial strategies and other matters as Samson deems relevant to its investment in the Convertible Notes, Warrants and any other securities of the Company.

Pursuant to the terms of the Amended Securities Purchase Agreement, Samson and the other purchasers named therein have the right to propose up to three (3) director nominees for the Issuer’s Board of Directors and the Issuer is obligated to take all lawful action to solicit proxies from its shareholders and recommend that such shareholders elect such director nominees to the Issuer’s Board of Directors. The Amended Securities Purchase Agreement also allows Samson and the other purchasers to send one non-voting observer to the meetings of the Issuer’s Board of Directors and the purchasers have the preemptive right to purchase such number of shares of capital stock of the Issuer to maintain their respective fully diluted percentage ownership in the Issuer. The Issuer is also required to call a special meeting of its shareholders to amend its charter to increase the number of authorized shares of the Issuer’s Common Stock, so the Issuer will have an adequate reserve from its duly authorized shares of Common Stock to comply with its obligations under the Convertible Notes and Warrants.

Samson will continue to evaluate its investment position in the Issuer and may, depending on the Issuer’s performance and market and other conditions, increase or decrease its investment position in the Convertible Notes, Warrants and other securities of the Issuer. Samson reserves the right to determine in the future whether to change the purpose or purposes described above or whether to adopt plans or proposals regarding the Issuer or any of its securities.

Except as referenced above, neither Samson nor, to the knowledge of Samson, any of the persons named on Schedule A hereto has any plans or proposals that would relate to or result in

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any of the matters referenced in clauses (a) through (c), (f), or (h) through (j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of Issuer

Item 5 of the Initial Schedule 13D is hereby amended and restated in its entirety as follows:

(a)       As of the close of business on July 10, 2008, Samson may be deemed to beneficially own an aggregate of 35,151,787 shares of Common Stock, representing 52.7% of the outstanding shares of Common Stock (based on 31,589,501 shares of Common Stock outstanding as of April 30, 2008, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 20, 2008). 

(b)       Samson has the sole power to vote, direct the voting of, dispose of and direct the disposition of the Shares, Convertible Notes, Warrants and the shares of Common Stock issued or issuable upon conversion of the Convertible Notes and upon exercise of the Warrants. Samson expressly disclaims beneficial ownership, or shared power to vote or dispose of any of the shares of Common Stock covered by the Voting Agreement, dated July 10, 2008, by and between Samson and the shareholders of Issuer named therein.

(c)       Except as set forth in Item 6 below, there have been no transactions effected with respect to the Common Stock by Samson during the sixty (60) day period prior to the date hereof.

(d)       No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities covered by this Schedule 13D.

(e) Not applicable.

Item 6.Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

Item 6 of the Initial Schedule 13D is hereby amended and restated in its entirety as follows:

Purchase of Convertible Notes and Warrants.

Pursuant to the terms of the Securities Purchase Agreement (the form of which is attached hereto as Exhibit A and is incorporated herein by reference in response to this Item 6), on December 4, 2007, Samson purchased from the Issuer (i) the Original Tranche A Convertible Note (the form of which is attached hereto as Exhibit B and is incorporated herein by reference in response to this Item 6) in the original principal amount of $775,000 and (ii) the Original Tranche A Warrant (a form of which is attached hereto as Exhibit C and is incorporated herein by reference in response to this Item 6), to purchase up to 1,937,500 shares of Common Stock. In addition, pursuant to the terms of the Securities Purchase Agreement as amended by Amendment No. 1 (the form of which is attached hereto as Exhibit D and is incorporated herein by reference in response to this Item 6), on July 10, 2008, Samson (i) exchanged with the Issuer (y) the Original Tranche A Convertible Note for the Tranche A Convertible Note (the form of which is attached hereto as Exhibit E and is incorporated herein by reference in response to this Item 6) and (z) the Original

Page 5

Tranche A Warrant for the Tranche A Warrant (the form of which is attached hereto as Exhibit F and is incorporated herein by reference in response to this Item 6) and (ii) purchased from the Issuer (x) the Tranche B Convertible Note (the form of which is attached hereto as Exhibit G and is incorporated herein by reference in response to this Item 6) in the original principal amount of $775,000, (y) the Tranche B Warrant (a form of which is attached hereto as Exhibit H and is incorporated herein by reference in response to this Item 6) to purchase up to 11,071,429 shares of Common Stock and (z) 7,196,429 shares of Common Stock.

Under the Convertible Notes, interest is payable quarterly, at the option of the Issuer, in cash or by increase in the principal amount of the Convertible Note, at a rate equal to eight percent (8%) per annum from the date of issuance. The maturity date of the Tranche A Convertible Note and the Tranche B Convertible Note is December 4, 2012 and July 10, 2013, respectively. The Tranche A Convertible Note is initially convertible into Common Stock at a conversion price of $0.20 per share of Common Stock, and the Tranche B Convertible Note is convertible into Common Stock at a conversion price of $0.07 per share of Common Stock. The Convertible Notes are subject to certain anti-dilution adjustments and may be converted into Common Stock at any time prior to maturity, in whole or in part, at the election of Samson, and are automatically converted into Common Stock upon the occurrence of certain events. Samson has the right to require that the Issuer redeem the Convertible Notes following an event of default under the Convertible Notes or if there is a change of control of the Issuer, in each case at a premium over the principal amount of the Convertible Note.

The Tranche A Warrant is initially exercisable for 1,937,500 shares of Common Stock at an exercise price of $0.50 per share, and the Tranche B Warrant is initially exercisable for 11,071,429 shares of Common Stock at an exercise price of $0.17 per share. The Tranche A Warrant and the Tranche B Warrant is exercisable at the option of Samson at any time prior to December 4, 2012 and July 10, 2013, respectively. The Warrants are also subject to certain anti-dilution adjustments.

Guaranty and Security Agreement.

The Issuer’s obligations under the Convertible Notes are fully and unconditionally guaranteed by AirGATE Technologies, Inc. (“AirGATE”), a subsidiary of the Issuer, under the terms of a Guaranty Agreement dated December 4, 2007, executed by AirGate in favor of Samson, as collateral agent (in the form attached hereto as Exhibit I and incorporated herein by reference in response to this Item 6).

The Issuer’s obligations under the Convertible Notes are additionally secured by liens and security interests in all of the assets of AirGATE under the terms of a Security Agreement, dated December 4, 2007, among AirGATE, Samson, as collateral agent, and the purchasers under the Amended Securities Purchase Agreement, in the form attached hereto as Exhibit J and incorporated herein by reference in response to this Item 6.

Registration Rights Agreement.

The Issuer entered into a Registration Rights Agreement, dated December 4, 2007 (the “Original Registration Rights Agreement”, in the form attached hereto as Exhibit K and

Page 6

incorporated herein by reference in response to this Item 6), as amended by Amendment No. 1 to the Registration Rights Agreement (the form of which is attached hereto as Exhibit L and incorporated herein by reference in response to this Item 6), dated July 10, 2008 (“Amendment No. 1 to the Registration Rights Agreement”) for the benefit of Samson and each of the other purchasers under the Amended Securities Purchase Agreement (each a “Requesting Party”). Pursuant to the terms of the Registration Rights Agreement, as amended by Amendment No. 1 to the Registration Rights Agreement (the “Amended Registration Rights Agreement”), if the Issuer receives, at any time after January 1, 2009, a request from a Requesting Party to effect a registration statement, the Issuer is required to file within 60 days after such request, a registration statement covering the shares of Common Stock issued or issuable upon conversion of the Convertible Notes or exercise of the Warrants, to ensure that the registration statement enters into effect within 180 days thereafter, and to maintain the effectiveness of the registration. Samson and the other Requesting Parties have the right to require that the Issuer file up to four registrations, subject to certain requirements. In addition, the Requesting Parties are entitled to piggyback registration rights with respect to the shares of Common Stock issued or issuable upon conversion of the Convertible Notes or upon the exercise of the Warrants such that these shares may be registered with any other shares of Common Stock registered by the Issuer. In the event that the Issuer fails to fulfill its obligation to file or effect a registration statement pursuant to the terms of the Amended Registration Rights Agreement, the Issuer has agreed to pay Samson and the other Requesting Parties liquidated damages in the amount of $1,000 per day until such failure has been cured. Such liquidated damages, in the aggregate, shall not exceed $150,000.

Voting Agreement.

In order to facilitate the consummation of the transactions contemplated by the Amended Securities Purchase Agreement and in consideration thereof, Samson entered into a Voting Agreement dated July 10, 2008 (the “Voting Agreement”, in the form attached hereto as Exhibit M and incorporated herein by reference in response to this Item 6) with certain shareholders of Issuer whereby the shareholders agreed to vote all of their shares of the Issuer’s Common Stock to (i) approve the amendment to the Issuer’s charter to increase the number of authorized shares so the Issuer will have an adequate reserve from its duly authorized shares to comply with its obligations under the Convertible Notes and Warrants and (ii) the shareholders will not take any action that is inconsistent with the obligations of such shareholders under the Voting Agreement, or prevent or materially delay the approvals contemplated by the Amended Securities Purchase Agreement. In addition, the shareholders granted an irrevocable proxy in favor of Samson and the other purchasers to approve the amendment of the Issuer’s charter to increase the number of authorized shares of the Issuer.

Other than the Amended Securities Purchase Agreement, the Securities Agreement, the Guaranty Agreement, the Amended Registration Rights Agreement and any other agreements executed in connection therewith, neither Samson, nor to the knowledge of Samson, has any of the persons named on Schedule A hereto executed any contract, arrangement, understanding or relationship with any person with respect to any securities of the Issuer.

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Item 7. Material To Be Filed As Exhibits

Item 7 of the Initial Schedule 13D is hereby amended and restated in its entirety as follows:

The Exhibit Index is incorporated herein by reference.

Page 8

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: July 10, 2008

SAMSON INVESTMENT COMPANY

By:	/s/  Michael Daniel
Name:	Michael Daniel
Title:	Vice President - General Counsel

SCHEDULE A

Set forth below is a list of the executive officers and directors of Samson, setting forth the present principal occupation or employment of each such person. The present business address of each such person is Two West Second Street, Tulsa, Oklahoma  74103. Each of such persons is a United States citizen.

Name	Present Principal Occupation
Executive Officers:	Stacy Schusterman, Chief Executive Officer
	C. Philip Tholen, Executive Vice President
	Dennis R. Neill, Senior Vice President-Technology and Administrative Services
	John Snively, Vice President-Operational Accounting Scott Rowland, Vice President-Business Development
	Drew S. Phillips, Vice President-Tax Accounting
	Ron Gober, Vice President-Production Marketing
	Craig Loseke, Vice President-Financial Accounting and Operation Reporting
	Darrell Mayfield, Vice President-Human Resources
	Mike Daniel, Vice President-General Counsel
	Annabel M. Jones, Secretary
	Jeremy Rabinowitz, Treasurer
Directors:	Stacy Schusterman, Chairman
	C. Philip Tholen
	Sam D. Parker
	David Adams

EXHIBIT INDEX

A.        Securities Purchase Agreement, dated December 4, 2007, by and among the Issuer, Samson and the other parties thereto (incorporated by reference to Exhibit 4.1 to Issuer’s Form 8-K filed on December 10, 2007).

B.        Form of the Senior Secured Convertible Term Note — Tranche A, dated December 4, 2007, issued by the Issuer to Samson (incorporated by reference to Exhibit 4.2 to Issuer’s Form 8-K filed on December 10, 2007).

C.        Form of Tranche A Warrant, dated December 4, 2007, issued by the Issuer to Samson (incorporated by reference to Exhibit 10.1 to Issuer’s Form 8-K filed on December 10, 2007).

D.        Amendment No. 1 to the Securities Purchase Agreement, dated July 10, 2008, as amended July 10, 2008, by and among the Issuer, Samson and the other parties thereto.^**

E.        Form of the Amended and Restated Senior Secured Convertible Term Note — Tranche A, dated July 10, 2008, issued by the Issuer to Samson. ^**

F.        Form of Amended and Restated Tranche A Warrant, dated July 10, 2008, issued by the Issuer to Samson. ^**

G.        Form of Senior Secured Convertible Term Note — Tranche B, dated July 10, 2008, issued by the Issuer to Samson. ^**G.

H. Form of Tranche B Warrant, dated July 10, 2008, issued by the Issuer to Samson. ^**

I.         Guaranty Agreement, dated December 4, 2007, by and among the Issuer and Samson, as the collateral agent (incorporated by reference to Exhibit 10.4 to Issuer’s Form 8-K filed on December 10, 2007).

J.         Security Agreement, dated December 4, 2007, by and among the Issuer, Samson and the other parties thereto (incorporated by reference to Exhibit 10.3 to Issuer’s Form 8-K filed on December 10, 2007).

K.        Registration Rights Agreement, dated December 4, 2007, by and among the Issuer, Samson and the other parties thereto (incorporated by reference to Exhibit 10.2 to Issuer’s Form 8-K filed on December 10, 2007).

L.        Amendment No. 1 to the Registration Rights Agreement, dated July 10, 2008, by and among the Issuer, Samson and the other parties thereto. ^**

M.       Voting Agreement, dated July 10, 2008, by and among Samson and the shareholders of the Issuer party thereto. ^**

^{** Filed herewith}

EX-99

EXHIBIT D

AMENDMENT NO. 1

TO

SECURITIES PURCHASE AGREEMENT

THIS AMENDMENT NO. 1 to the Securities Purchase Agreement (this "Amendment") is entered into as of this 10th day of July, 2008, by and among The X-Change Corporation, a Nevada corporation (the "Company"), and AirGATE Technologies, Inc., a Texas corporation ("AirGATE"), and Samson Investment Company, a Nevada corporation, Ironman PI Fund (QP), L.P., a Texas limited partnership, and John Thomas Bridge and Opportunity Fund, LP, a Delaware limited partnership (each a "Purchaser" and collectively, the "Purchasers"). The Company, AirGATE and the Purchasers may be referred to herein each as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, the Parties have previously entered into that certain Securities Purchase Agreement, dated as of December 4, 2007 (the "Purchase Agreement");

WHEREAS, pursuant to Section 9.5 of the Purchase Agreement, such Purchase Agreement may be amended by a written instrument executed by the Parties; and

WHEREAS, in connection with the Second Closing Date (as defined in the Purchase Agreement) the Parties wish to amend the Purchase Agreement to, among other things, (i) amend and restate each Tranche A Note (as defined in the Purchase Agreement) and (ii) amend the terms of applicable to the Tranche B Note and the Tranche B Warrant (each as defined in the Purchase Agreement).

TERMS OF AGREEMENT

In consideration of the premises and the mutual covenants and agreements hereinafter contained, the Parties hereby agree as follows:

SECTION 1. Amendments to the Purchase Agreement.

(1)       The first and second recital paragraphs appearing in the Purchase Agreement are hereby amended in their entirety to read as follows:

"WHEREAS, the Company desires to sell to the Purchasers (a) an aggregate principal amount of $1,800,000 of the Company’s Senior Secured Convertible Term Notes bearing an annual interest rate of 8% with a maturity date of five (5) years from the date of issuance (as amended, restated, amended and restated, modified or supplemented from time to time, the "Tranche A Notes"), in the form attached hereto as Exhibit A, which are convertible into shares of the Company’s common stock, $0.001 par value per share (the "Common Stock"), and (b) warrants, in the form attached hereto as Exhibit B, to purchase 4,500,000 shares of the Company’s Common Stock (as amended, restated,

amended and restated, modified or supplemented from time to time, each such warrant a "Tranche A Warrant" and, collectively, the "Tranche A Warrants"); and

WHEREAS, the Company desires to sell to the Purchasers (a) an aggregate principal amount of $1,800,000 of the Company’s Senior Secured Convertible Term Notes bearing an annual interest rate of 8% with a maturity date of five (5) years from the date of issuance (as amended, restated, amended and restated, modified or supplemented from time to time, the "Tranche B Notes" and, together with the Tranche A Notes, the "Notes"), in the form attached hereto as Exhibit C, which are convertible into shares of the Company’s Common Stock, (b) a warrant, in the form attached hereto as Exhibit D, to purchase up to 25,714,286 shares of the Company’s Common Stock (as amended, restated, amended and restated, modified or supplemented from time to time, each such warrant a "Tranche B Warrant" and, collectively, the "Tranche B Warrants" and, together with the Tranche A Warrants, the "Warrants") and (c) 16,714,286 shares of the Company’s Common Stock (the "Tranche B Shares"); and"

(2)       Section 1(b) of the Purchase Agreement is hereby amended in its entirety to read as follows:

"(b) on the Second Closing (as defined herein), (i) a Tranche B Note in the principal amount as is set forth opposite such Purchaser’s name on Exhibit E attached hereto, (ii) a Tranche B Warrant to purchase the number of shares of Common Stock set forth opposite such Purchaser’s name on Exhibit E attached hereto and (iii) the Tranche B Shares in the amounts set forth opposite such Purchaser’s name on Exhibit E attached hereto."

(3)      The first two sentences of the last paragraph of Section 1 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"The purchase and sale of the Notes, Warrants and Tranche B Shares, as set forth in Section 2 hereof, are referred to herein as the "Offering." Collectively, the Notes, the Warrants, the Tranche B Shares and the Common Stock issuable upon conversion of the Notes and upon exercise of the Warrants are referred to as the "Securities"."

(4)      Section 2.1(b) of the Purchase Agreement is hereby amended in its entirety to read as follows:

"Second Closing. The purchase and sale of the Tranche B Notes, the Tranche B Warrants and the Tranche B Shares pursuant to this Agreement (the "Second Closing") shall take place on June [__], 2008, at 10:00 a.m. Dallas, Texas time at the offices of the Company’s counsel, Strasburger & Price, LLP, 901 Main Street, Suite 4400, Dallas, Texas 75202, or at such other time or place as the Company and the Purchasers may mutually agree (the date on which the Second Closing occurs, the "Second Closing Date")."

(5)       Section 2.2(b) of the Purchase Agreement is hereby amended by deleting the phrase "The Notes and the Warrants shall be" and replacing such phrase with "The Notes, Warrants and the Tranche B Shares shall be".

(6)       Section 2.3(j) of the Purchase Agreement is hereby amended by deleting the phrase "shall not exceed $80,000" and replacing such phrase with "on the First Closing Date shall not exceed $80,000":

(7)       Section 2.5 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"2.5     Company’s Second Closing Deliverables. At the Second Closing, the Company shall deliver to each such Purchaser the following:

(a)    an executed amended and restated Tranche A Note in such principal amount as is set forth opposite such Purchaser’s name on Exhibit E;

(b)    an executed amended and restated Tranche A Warrant to purchase the number of shares of Company Common Stock set forth opposite such Purchaser’s name on Exhibit E;

(c)    an executed Tranche B Note in such principal amount as is set forth opposite such Purchaser’s name on Exhibit E;

(d)    an executed Tranche B Warrant to purchase the number of shares of Company Common Stock set forth opposite such Purchaser’s name on Exhibit E;

(e)    certificates representing the Tranche B Shares set forth opposite such Purchaser’s name on Exhibit E;

(f)     certificates of good standing dated not more than five Business Days prior to the Second Closing Date with respect to (i) the Company issued by the Secretary of State of the State of Nevada and (ii) AirGATE issued by the Secretary of State of the State of Texas;

(g)    by wire transfer of immediately available funds to the account or accounts specified by the Purchasers or in such other form of payment as requested by the Purchasers $50,000, which represents the reasonable out-of-pocket expenses incurred by the Purchasers in connection with the preparation and negotiation of, and consummation of the transactions contemplated by, the Transaction Documents, including but not limited to legal fees and consultants;

(h)    a legal opinion of Company Counsel to the Purchasers in the form attached as Exhibit J;

(i)     an executed original of Amendment No. 1 to the Registration Rights Agreement dated as of even date herewith between the Company, Tejas Securities

Group, Inc. and each Purchaser substantially in the form of Exhibit K (as amended, modified or supplemented from time to time, the "Amendment No. 1 to the Registration Rights Agreement");

(j)     an executed original of the Voting Agreement dated as of even date herewith between each Purchaser and Michael L Sheriff, Sheriff Family LP, Ivan Chow and Kathleen Hanafan substantially in the form of Exhibit L (as amended, modified or supplemented from time to time, the "Voting Agreement");

(k)    an executed original of the engagement agreement of Marathon Advisors LLC dated as of even date herewith between the Company and Marathon Advisors LLC substantially in the form of Exhibit M;

(l) updated Schedules to the Agreement as of the Second Closing Date;

(m)   a certificate executed by the Chief Executive Officer or Chief Financial Officer of the Company confirming the satisfaction as of the Second Closing Date of each of the conditions precedent set forth in Section 2.7 hereof; and

(n) such other documents as the Purchasers shall reasonably request."

(8)       Section 2.6 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"2.6     Purchasers’ Second Closing Deliverables. At the Second Closing, each Purchaser shall deliver to the Company the following:

(a)    by wire transfer of immediately available funds to such bank account or accounts as the Company may request in writing at least two (2) Business Days prior to the Second Closing Date an amount equal to the principal amount of the Tranche B Note set forth opposite such Purchaser’s name on Exhibit E;

(b)    the Tranche A Note delivered to such Purchaser on the First Closing Date in such principal amount as is set forth opposite such Purchaser’s name on Exhibit E;

(c)    the Tranche A Warrant delivered to such Purchaser on the First Closing Date to purchase the number of shares of Company Common Stock set forth opposite such Purchaser’s name on Exhibit E;

(d)    an executed original of Amendment No. 1 to the Registration Rights Agreement; and

(e) an executed original of the Voting Agreement.

(9)       Section 2.7(b) of the Purchase Agreement is hereby amended by deleting the phrase "the Tranche B Notes and Tranche B Warrants" and replacing such phrase with "the Tranche B Notes, the Tranche B Warrants and the Tranche B Shares".

(10)     Section 3.1 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"3.1     Organization, Good Standing and Qualification. Each of the Company and AirGATE is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has the corporate power and authority (A) to own and operate its properties and assets, (B) to execute and deliver (i) this Agreement, (ii) the Notes and the Warrants, (iii) the Security Agreement dated as of even date herewith between the Company, AirGATE and each Purchaser substantially in the form of Exhibit F (as amended, modified or supplemented from time to time, the "Security Agreement"), (iv) the Registration Rights Agreement relating to the Securities dated as of even date herewith between the Company and each Purchaser substantially in the form of Exhibit G (as amended, modified or supplemented from time to time, the "Registration Rights Agreement"), (v) the Guaranty Agreement dated as of even date herewith between the Company, AirGATE and each Purchaser substantially in the form of Exhibit H (as amended, modified or supplemented from time to time, the "Guaranty Agreement"), and (vi) all other agreements, documents, certificates or instruments contemplated hereunder or delivered pursuant hereto (preceding clauses (iii)-(vi), collectively, the "Related Agreements"), except as set forth on Schedule 3.1, to issue and sell the Notes and the shares of Common Stock issuable upon conversion of the Notes (the "Note Shares"), (C) except as set forth on Schedule 3.1, to issue and sell the Warrant and the shares of Common Stock issuable upon exercise of the Warrants (the "Warrant Shares,"), (D) to issue and sell the Tranche B Shares, and (E) to carry out the provisions of this Agreement and the Related Agreements and to carry on its respective business as presently conducted. Each of the Company and AirGATE is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which it conducts its business, except for those jurisdictions in which the failure to be so qualified and authorized has not had, or could not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, condition (financial or otherwise), properties, operations or prospects of the Company and AirGATE, taken individually and as a whole (a "Material Adverse Effect")."

(11)     Section 3.3(a) of the Purchase Agreement is hereby amended by inserting immediately following the last sentence of Section 3.3(a), the following:

"The authorized capital stock of the Company, as of the Second Closing Date, consists of 100,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock, par value $0.001 per share ("Preferred Stock"). As of the Second Closing Date, 31,589,501 shares of Common Stock were issued and outstanding, and no shares of Preferred Stock had been issued or were outstanding. Set forth on Schedule 3.3(a)(iii) is the Fully-Diluted Common Stock of the Company immediately before the Second Closing. Set forth on Schedule 3.3(a)(iv) is the Fully-Diluted Common Stock of the Company immediately after the Second Closing."

(12)     The first sentence of Section 3.3(b) of the Purchase Agreement is hereby amended by deleting the phrase "Company’s Certificate of Incorporation" and replacing such phrase with "Company’s Articles of Incorporation."

(13)     The second sentence of Section 3.3(b) of the Purchase Agreement is hereby amended by deleting the phrase "the issuance of the Note Shares or Warrant Shares" and replacing such phrase with "the issuance of the Note Shares, Warrant Shares or the Tranche B Shares."

(14)     The third sentence of Section 3.3(b) of the Purchase Agreement is hereby amended by deleting the phrase "The sale of the Notes and the Warrants" and replacing such phrase with "The sale of the Notes, the Warrants and the Tranche B Shares."

(15)     The second sentence of Section 3.3(d) of the Purchase Agreement is hereby amended by deleting the phrase "The Note Shares or Warrant Shares" and replacing such phrase with "Subject to Section 5.18(a), the Note Shares and the Warrant Shares."

(16)     Section 3.4 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"3.4     Authorization; Binding Obligations. All corporate action on the part of the Company, AirGATE, their officers and directors necessary for the valid authorization of the Transaction Documents, and the performance of all obligations of the Company or AirGATE hereunder and thereunder (including, without limitation, the issuance of the Notes, the Warrants and the Tranche B Shares and the issuance and reservation for issuance of the Note Shares and Warrant Shares), has been taken. The Transaction Documents have been (or upon delivery will have been) duly executed by the Company and when delivered in accordance with the terms hereof, will be valid and binding obligations of the Company enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (ii) general principles of equity that restrict the availability of equitable or legal remedies. Each of the Securities have been duly and validly authorized for issuance by the Company and, when executed and delivered, will be valid and binding obligations of the Company enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (ii) general principles of equity that restrict the availability of equitable or legal remedies. Except as set forth on Schedule 3.4, no approval of the stockholders of the Company is required for the Company to issue and deliver to the Purchasers the Securities contemplated by the Transaction Documents."

(17)     Section 3.5 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"3.5 Liabilities.

(a)       Other than as disclosed in the Company’s Quarterly Report on Form 10-QSB for its fiscal quarter ended September 30, 2007, as of the First Closing Date, neither the Company nor AirGATE has any material liabilities (contingent or otherwise), except current liabilities incurred in the ordinary course of business consistent with past practices subsequent to September 30, 2007.

(b)       Other than as disclosed in the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended March 31, 2008, as of the Second Closing Date, neither the Company nor AirGATE has any material liabilities (contingent or otherwise), except current liabilities incurred in the ordinary course of business consistent with past practices subsequent to March 31, 2008."

(18)     Section 3.11 of the Purchase Agreement is hereby amended by inserting the phrase "except as set forth on Schedule 3.4," immediately prior to the phrase "the Charter, Bylaws or other organizational documents."

(19)     The second sentence of Section 3.14 of the Purchase Agreement is hereby amended by inserting the phrase "other than pursuant to the Voting Agreement," immediately after to the phrase "To the Company’s or AirGATE’s knowledge,".

(20)     The second sentence of Section 3.15 is hereby amended by (i) inserting the phrase "Except as set forth on Schedule 3.4," immediately prior to the words "No governmental orders" and (ii) making the foregoing word "No" lower case.

(21)     The second sentence of Section 3.19 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"The Company has furnished the Purchasers with, or has otherwise made available to the Purchasers, copies of: (i) its Annual Reports on Form 10-KSB for its fiscal year ended December 31, 2006 and December 31, 2007, (ii) its Quarterly Reports on Form 10-QSB for its fiscal quarters ended March 31, 2007, June 30, 2007 and September 30, 2007, (iii) its Quarterly Report on Form 10-Q for its fiscal quarter ended March 31, 2008 and (iv) its Form 8-K filings made during fiscal year 2007 and 2008 to date (collectively, the "SEC Reports")."

(22)     The second sentence of Section 4.3 of the Purchase Agreement is hereby amended by deleting the phrase "investment decision with respect to the Notes and Warrants" and replacing such phrase with "investment decision with respect to the Notes, Warrants and the Tranche B Shares."

(23)     The first sentence of Section 4.5 of the Purchase Agreement is hereby amended by deleting the phrase "Such Purchaser is acquiring the Notes and Warrants and any Note Shares or Warrant Shares" and replacing such phrase with "Such Purchaser is acquiring the Notes, Warrants and the Tranche B Shares and any Note Shares, Warrant Shares or Tranche B Shares."

(24)     The first sentence of Section 4.9(b) of the Purchase Agreement is hereby amended by deleting the phrase "The Note Shares and the Warrant Shares" and replacing such phrase with "The Note Shares, the Warrant Shares and the Tranche B Shares."

(25)     The first sentence of Article 5 of the Purchase Agreement is hereby amended by inserting the phrase "(unless otherwise noted)" immediately after the phrase "as of each of the First Closing and the Second Closing."

(26)     The first sentence of Section 5.8 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"If the Company proposes to issue any shares of its capital stock for cash in a transaction other than the issuance of the Tranche B Shares and other than a transaction in which shares of the Common Stock are issued (i) in connection with an acquisition (x) of all of the capital stock (or equivalent form of ownership) of a third party or (y) of all or substantially all of the operating assets (whether tangible or intangible) of a third party, (ii) to any officers, directors or employees under any stock option plan or other incentive plan approved by the Company’s board of directors, (iii) in connection with an offering of the Company’s shares by a nationally recognized underwriter such that the Company’s aggregate net proceeds are at least $20,000,000 and the imputed market capitalization of the Company, pre-sale, is at least $100,000,000 (a "Qualified Offering"), or (iv) in connection with the conversion or exercise of any options, warrants, or similar rights to purchase or acquire Common Stock or other equity securities convertible or exchangeable, with or without consideration, into or for Common Stock outstanding as of the Second Closing Date, including the Warrants, then the Company shall, subject to the Company’s preexisting obligations as of the date hereof to offer all of such shares to a previous investor or investors in the Company, offer to sell such number of shares to each Purchaser equal to such Purchaser’s fully diluted percentage ownership in the Company, on the terms and conditions the Company proposes to offer such shares to third parties."

(27)     The last sentence of Section 5.8 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"For purposes of this Section 5.8, the term "fully diluted percentage ownership" shall mean (i) the sum of (A) that number of shares of Common Stock that would be held by each Purchaser upon conversion of all Notes and Warrants held by such Purchaser and (B) the Tranche B Shares held by such Purchaser divided by (ii) the total number of shares of Common Stock owned by all stockholders of the Company (including such

Purchaser) after giving effect to all conversions or exercises into Common Stock of all derivative securities held by all such stockholders."

(28)     Section 5.9 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"5.9 Board Rights and Observer Rights.

(a)       The Board of Directors of the Company (the "Board") shall be comprised of at least four (4) directors. The Required Purchasers shall have the right to propose up to three (3) director nominees (the "Required Purchasers’ Director Nominees") for the vote of the Company’s shareholders. As soon as practicable after receipt by the Company of written notice from the Required Purchasers of their election to propose any such director nominees (the "Director Appointment Notice"), and subject to applicable law, the Company shall take or cause to be taken all necessary actions to appoint or elect to the Board, and at each annual meeting of the shareholders of the Company following receipt by the Company of the Director Appointment Notice for so long as Purchasers own, in the aggregate, not less than the principal amount of $500,000 of the Notes the Company shall nominate or cause to be nominated, the Required Purchasers’ Director Nominees. If any of such Required Purchasers’ Director Nominees are unable or unwilling at any time to serve on the Board, then the Required Purchasers may provide the Company with written notice containing the name or names of a proposed successor nominee. The Required Purchasers shall provide the Company with all information required Regulation 14A and Schedule 14A under the Exchange Act with respect to their director nominees. The provisions of this Section 5.9 are in addition to and shall not limit any rights that Purchasers or any of their Affiliates may have as a holder or beneficial owner of the Company’s Common Stock as a matter of Law with respect to the election of directors or otherwise.

(b)       Subject to applicable law, and for so long as Purchasers own, in the aggregate, not less than the principal amount of $500,000 of the Notes, the Company shall use its reasonable efforts to cause the election of the Required Purchasers’ Director Nominees to the Board at the next meeting of the Company’s shareholders at which directors are to be elected, and the Company shall use its reasonable efforts to cause the reelection of the Required Purchasers’ Director Nominees at each meeting of the Company’s shareholders at which any Required Purchasers’ Director Nominee’s term as a director will expire. Reasonable efforts under this clause (b) shall include the solicitation of proxies in favor of the election of each Required Purchasers’ Director Nominee, it being understood that efforts consistent with those used for other members of the slate of nominees recommended by the Board shall be deemed reasonable.

(c)       The Required Purchasers shall take all actions necessary to cause their director nominees then serving as members of the Board to resign immediately at such time as Purchasers own, in the aggregate, less than the principal amount of $500,000 of the Notes.

(d)       With respect to each of the Company’s Subsidiaries, the Required Purchasers shall have the right to send one non-voting observer (the "Non-Voting Observer") to all meetings of any Subsidiary’s board of directors or other applicable governing body of such entity, provided (i) the Non-Voting Observer shall enter into an appropriate confidentiality agreement regarding all confidential information so received, and (ii) that the Company reserves the right to exclude the Non-Voting Observer from access to any of such materials or meetings or portions thereof if (A) the Company reasonably considers any such material or portion thereof to be a trade secret or similar confidential information, (B) the Company believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client privilege, (C) in the judgment of a majority of any such board, such access would materially impair the due consideration by the Board of any matter, or (D) in the judgment of such board or upon advice of counsel such access will disclose to the Non-Voting Observer material non-public information. Each of the Company’s Subsidiaries shall use its reasonable best efforts to provide the Purchasers with notice of all meetings of its respective board of directors or other applicable governing body of such entity consistent with that provided to the official members of board of directors or other applicable governing body of such entity; provided, however, that the failure to give such notice shall not invalidate any action taken by the board of directors or other applicable governing body of such entity at the meeting. The foregoing notwithstanding, at such time as the Purchasers or their Affiliates own, in the aggregate, less than the principal amount of $500,000 of the Notes, the Purchasers shall lose their right to have the Non-Voting Observer."

(29)     Section 5.11 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"The Company agrees that it will use the proceeds of the sale of the Notes, Warrants and the Tranche B Shares to continue development and commercialization of the drill pipe RFID tagging project and for general working capital purposes only. Attached hereto as Exhibit N is a spreadsheet which reflects the Company’s estimated cash flow and use of the proceeds from the sale of the Tranche B Notes, the Tranche B Warrants and the Tranche B Shares."

(30)     Section 5.18 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"5.18 Increase and Reservation of Shares.

(a)       The Company shall take all lawful action to (i) cause a special meeting of its shareholders to be duly called and held as soon as practicable after the Second Closing Date for the purpose of voting on the approval of the amendment to the Company’s Charter to increase the number of authorized shares of the Company’s Common Stock so that the Company will have an adequate reserve from its duly authorized shares of Common Stock to comply with its obligations under the Notes and Warrants and (ii) subject to applicable law, solicit proxies from its stockholders to obtain the requisite approval of such amendment to the Company’s Charter. The Board of the Company

shall recommend such approval by the Company’s stockholders and shall not withdraw, amend or modify, in a manner adverse to the Purchasers, such recommendation (or announce publicly its intention to do so). The Company will, as promptly as practicable, prepare and file with the SEC a proxy statement in connection with the vote of the stockholders of the Company in respect of the approval of such amendment to the Company’s Charter. The Company will provide the Purchasers and their counsel with a reasonable opportunity to review and comment on the proxy statement and any amendment or supplement thereto prior to filing the same with the SEC and will provide the Purchasers with a copy of all such filings with the SEC. The Company shall, as promptly as practicable after the receipt thereof, provide to the Purchasers and their counsel copies of any written comments, and advise the Buyers and their counsel of any oral comments, in respect of the proxy statement received from the staff of the SEC. The Company will promptly respond to all such SEC comments and will use its reasonable best efforts to cause the proxy statement to be mailed to its stockholders at the earliest practicable date.

(b)       The Company shall maintain a reserve from its duly authorized shares of Common Stock to comply with its obligations under the Notes and the Warrants."

(31)     The notice address in Section 9.7 of the Purchase Agreement applicable to Ironman PI Fund (QP), LP is hereby amended in its entirety to read as follows:

"Ironman PI Fund (QP), L.P.

c/o Ironman Energy Capital, LP

2211 Norfolk, Suite 611

Houston, Texas 77098

Attention: G. Bryan Dutt & Lisa Reisack

Facsimile: 713-218-6946"

(32)     The second sentence of Section 9.11 of the Purchase Agreement is hereby amended in its entirety to read as follows:

"The foregoing notwithstanding, the maximum amount to be reimbursed by the Company to the Purchasers pursuant to this Section 9.11 shall not exceed on the First Closing Date and the Second Closing Date $130,000 in the aggregate

(33)     Exhibit A of the Purchase Agreement is hereby amended in its entirety to read as set forth on Annex A attached to this Amendment.

(34)     Exhibit B of the Purchase Agreement is hereby amended in its entirety to read as set forth on Annex B attached to this Amendment.

(35)     Exhibit C of the Purchase Agreement is hereby amended in its entirety to read as set forth on Annex C attached to this Amendment.

(36)     Exhibit D of the Purchase Agreement is hereby amended in its entirety to read as set forth on Annex D attached to this Amendment.

(37)     Exhibit E of the Purchase Agreement is hereby amended in its entirety to read as set forth on Annex E attached to this Amendment.

(38)     The Purchase Agreement is hereby supplemented by adding a new Exhibit J to the Purchase Agreement in the form attached as Annex F attached to this Amendment.

(39)     The Purchase Agreement is hereby supplemented by adding a new Exhibit K to the Purchase Agreement in the form attached as Annex G attached to this Amendment.

(40)     The Purchase Agreement is hereby supplemented by adding a new Exhibit L to the Purchase Agreement in the form attached as Annex H attached to this Amendment.

(41)     The Purchase Agreement is hereby supplemented by adding a new Exhibit M to the Purchase Agreement in the form attached as Annex I attached to this Amendment.

(42)     The Purchase Agreement is hereby supplemented by adding a new Exhibit N to the Purchase Agreement in the form attached as Annex J attached to this Amendment.

SECTION 2.   Disclosure Schedules. Effective as of the Second Closing Date (as defined in the Purchase Agreement), all references in the Purchase Agreement to any particular Schedule shall mean, to the extent applicable, each such Schedule as updated and delivered to Purchasers as of the Second Closing Date.

SECTION 3. No Implied Amendments. Except as herein provided, the Purchase Agreement shall remain in full force and effect and is ratified in all respects. On and after the effectiveness of this Amendment, each reference in the Purchase Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like import, and each reference to the Purchase Agreement in any other agreements, documents or instruments executed and delivered pursuant to the Purchase Agreement shall mean and be a reference to the Purchase Agreement, as amended by this Amendment.

SECTION 4. Counterparts. This Amendment may be executed by the parties hereto in several counterparts, including without limitation delivery by facsimile or electronic transmission, each of which shall be deemed an original, but all of which together shall constitute execution and delivery of one and the same instrument.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment effective as of the date first written above.

THE COMPANY AND ITS SUBSIDIARY:

The X-Change Corporation

By:_____________________

Name: __________________

Its: _____________________

AirGATE Technologies, Inc.

By:_____________________

Name: __________________

Its: _____________________

PURCHASERS:

Samson Investment Company

By:_____________________

Name: __________________

Its: _____________________

Ironman PI Fund (QP), L.P.

By: Ironman Energy Partners, L.P.,

its general partner

By: Ironman Capital Management, LLC,

its general partner

By: _________________________

Name: G. Bryan Dutt

Its: President

John Thomas Bridge and Opportunity Fund, LP

By:_____________________

Name: __________________

Its: _____________________

EX-99

EXHIBIT E

THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE X-CHANGE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

Corporation: The X-Change Corporation

Holder: [Insert name of Holder]

Principal: [Insert principal amount of Note]

Interest Rate: 8% per annum

Date of Issuance: December 4, 2007

Date Amended: July __, 2008

Maturity Date: December 4, 2012

AMENDED AND RESTATED SENIOR SECURED CONVERTIBLE TERM NOTE—TRANCHE A

This Amended and Restated Senior Secured Convertible Term Note—Tranche A (this “Note”) amends and restates the Senior Secured Convertible Term Note—Tranche A issued in connection with the transactions described in that certain Securities Purchase Agreement by and among The X-Change Corporation, a Nevada corporation (the “Corporation”), and _______________________ (the “Holder”), among others, dated December 4, 2007, as amended, modified or supplemented from time to time (the “Purchase Agreement”). This Note is one of the notes referred to as the “Tranche A Notes” in the Purchase Agreement. All capitalized terms used but not defined herein shall have the meaning ascribed to each such term in the Purchase Agreement.

The authorization, sale, issuance and delivery of the Note have been approved by all requisite corporate action of the Corporation. The sale of the Note and the subsequent conversion of the Note into shares of Common Stock are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with at or prior to Closing of the Purchase Agreement.

The following is a statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof, by the acceptance of this Note, agrees:

1. Principal and Interest.

a.         For value received, the Corporation hereby promises to pay to the order of the Holder in lawful money of the United States at the address of the Holder as set forth in Section 10 below, the amount set out above as the Principal (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”), together with interest

on the remaining unpaid Principal balance, computed from the Date of Issuance until maturity at the rate set out above as the Interest Rate (as adjusted pursuant to the terms hereof, the “Interest Rate”); provided, however, that in the event such interest rate should ever exceed the maximum interest rate permissible under applicable Texas or federal Law, then the Interest Rate on this Note shall be adjusted to the maximum interest rate then permitted by such Laws. Interest shall accrue on the unpaid Principal of this Note (including, once capitalized as provided below, payments of interest made by increasing the outstanding Principal of this Note) at the Interest Rate quarterly in arrears on March 31, June 30, September 30 and December 31 in each year (each such date, an “Interest Payment Date”), commencing on the date set out above as the Date of Issuance (the “Date of Issuance”). Interest payable hereunder shall accrue daily and be computed based on a 360-day year for the number of days elapsed during the relevant interest period. Except as otherwise provided in Section 3 below, all accrued and unpaid interest as of any Interest Payment Date that is not paid in cash to the Purchasers on such Interest Payment Date shall automatically (and without further action by the Corporation or the Purchasers) be added to the outstanding principal amount of this Note, and thereafter all calculations of interest payable under this Note shall include such increased amount. The Corporation’s election to accrue interest and allow such to be added to the outstanding principal amount of this Note shall not constitute an Event of Default as set forth on Section 4(a)(i). From and after the occurrence of an Event of Default, the Interest Rate shall be increased to 10.00%. In the event that such Event of Default is subsequently cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure; provided that the interest as calculated at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of cure of such Event of Default. Principal and any accrued but unpaid interest on this Note shall be due and payable on the date set out above as the Maturity Date or such earlier date as this Note is required to be repaid as provided hereunder (the “Maturity Date”), unless the Note is earlier converted into Common Stock by the Purchaser or the Corporation pursuant to the terms hereof.

b.         Upon payment in full of all Principal and interest payable hereunder, this Note shall be surrendered to the Corporation for cancellation.

2. Security; Seniority; Indebtedness; Liens; Payments.

a.         Security. This Note shall be secured by all of the assets of the Corporation’s wholly-owned subsidiary, AirGATE Technologies, Inc., a Texas corporation (“AirGATE”), whether such assets are now or hereafter existing, in accordance with the terms of that certain Security Agreement dated as of December 4, 2007 among the Corporation, AirGATE and the holders of the Notes (as defined in the Purchase Agreement).

b.         Seniority. The obligations, rights and preferences under this Note, including payments of Principal and interest and other payment under this Note, (i) shall be pari passu with (x) the other Tranche A Notes and Tranche B Notes (as defined in the Purchase Agreement) and (y) the obligations of the Corporation to Melissa 364 CR, Ltd. under the terms of that certain Promissory Note, dated August 15, 2006, between the Corporation and Melissa 364 CR, Ltd. (the “Melissa Note”) and (ii) shall rank senior to all other Indebtedness incurred by the Corporation or any of its Subsidiaries, including AirGATE.

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c.         Incurrence of Indebtedness. So long as this Note is outstanding, the Corporation shall not, and the Corporation shall not permit any Subsidiary to, directly or indirectly, issue, incur, guarantee, assume or suffer to exist any Indebtedness or Disqualified Stock other than the Melissa Note, the Tranche A Notes, the Tranche B Notes and Permitted Subordinated Indebtedness.

d.         Existence of Liens. The Corporation shall not, and the Corporation shall not permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Corporation or any of its Subsidiaries other than (i) the existing pledge of the common stock of AirGATE to secure the Melissa Note, (ii) pursuant to the Security Agreement and (iii) Permitted Liens (as defined in the Purchase Agreement).

e.         Restricted Payments. The Corporation shall not, and the Corporation shall not permit any of its Subsidiaries to, directly or indirectly, pay any dividend or distribution in respect of capital stock or redeem, defease, repurchase, repay or otherwise acquire (whether by way of open market purchases, tender offers, private transactions or otherwise) any capital stock or Permitted Subordinated Indebtedness (including the establishment of any sinking fund therefor).

3. Conversion.

a. Conversion Procedure.

i.          The Holder may, at any time after the Date of Issuance and at the option of the Holder, convert all or any portion of the Principal and all accrued interest on this Note into fully paid and nonassessable shares of Common Stock in accordance with this Section 3 and at a price per share of Common Stock equal to the Conversion Price then in effect. The Corporation covenants that it will reserve and keep available out of its authorized and unissued Common Stock for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as provided herein.

ii.        Each conversion of this Note shall be deemed to have been effected as of the close of business on the date on which this Note, together with proper Notice of Conversion in the form of Exhibit A attached hereto, has been delivered to the Corporation. At the time such conversion has been effected, the person or persons in whose name or names any certificate or certificates for shares of Common Stock are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented by such certificate or certificates.

iii.       As soon as possible after a conversion has been effected (but in any event within five (5) Business Days), the Corporation shall deliver to the converting Holder:

A.        a certificate or certificates representing the number of shares of Common Stock issuable by reason of such conversion in such name or

 

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names and such denomination or denominations as the converting Holder has specified;

B.        if applicable, a new note in the face amount of principal and interest representing that portion of the Note and accrued but unpaid interest thereon not converted; and

C. cash in lieu of any fractional share as provided for herein.

iv.        The issuance of certificates for shares of Common Stock upon conversion of the Note shall be made without charge to the Holder for any issuance tax in respect of such issuance (including documentary, stamp or similar tax) or other cost incurred by the Corporation in connection with such conversion and the related issuance of shares of Common Stock, other than any transfer taxes resulting from the transfer of converted shares to a person or persons other than the converting Holder. Upon conversion of the Note, the Corporation shall take all such actions as are necessary in order to insure that the Common Stock issuable with respect to such conversion shall be validly issued, fully paid, and nonassessable.

b. Conversion Price.

i.          The Conversion Price shall be $0.20 per share of Common Stock, subject to adjustment from time to time in accordance with this Section 3 (the “Conversion Price”).

ii.        If and whenever, on or after the Date of Issuance, the Corporation issues or sells, or is deemed to have issued or sold, any shares of its Common Stock for consideration per share less than the Conversion Price in effect immediately prior to the time of such issuance or sale (an “Additional Stock Issuance”), then immediately upon such Additional Stock Issuance, the Conversion Price shall (except as otherwise provided in this Section 3) be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Conversion Price in effect immediately prior to such Additional Stock Issuance by a fraction, the numerator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to be issued pursuant to Section 3(c)(i) or Section 3(c)(ii) hereof) immediately prior to such Additional Stock Issuance plus (b) the number of shares of Common Stock that the aggregate consideration received by the Corporation for such Additional Stock Issuance would purchase at the Conversion Price in effect immediately prior to such Additional Stock Issuance, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to be issued pursuant to Section 3(c)(i) or Section 3(c)(ii) hereof) immediately prior to such Additional Stock Issuance plus (b) the number of shares of Common Stock issued in such Additional Stock Issuance.

iii.       Notwithstanding the foregoing, the Corporation shall not be required to make any adjustment to the Conversion Price as a result of an Additional Stock Issuance when such issuance is (a) in a transaction described in Section 3(d) and for which an adjustment has been made pursuant to Section 3(d); (b) any conversion of

 

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the Notes; (c) as a distribution on the Notes; (d) pursuant to any stock option plan or other incentive plan of the Corporation; (e) upon conversion or exercise of any Options or Convertible Securities outstanding as of the date of the amendment and restatement of this Note (i.e., the Date Amended on the first page of this Note); (f) made pursuant to the exercise of any of the Warrants; or (g) the issuance of the Tranche B Shares.

iv.        If any of the Cancelled Shares (as defined below) are treated as issued and outstanding or given comparable legal effect (a “Cancelled Share Effectiveness”), then immediately upon such Cancelled Share Effectiveness, the Conversion Price shall (except as otherwise provided in this Section 3) be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Conversion Price in effect immediately prior to such Cancelled Share Effectiveness by a fraction, the numerator of which is equal to the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness plus (b) the number of shares of Cancelled Shares treated as issued and outstanding or given comparable legal effect. To the extent that any Cancelled Share Effectiveness occurs after all or a portion of this Note has been converted into shares of Common Stock, the Corporation shall immediately distribute to the Holder the number of shares of Common Stock that the Holder would have received had such Cancelled Share Effectiveness occurred prior to such conversion. “Cancelled Shares” shall mean the Common Stock issued by the Corporation in connection with (i) the acquisition of WEBiX Inc., which was subsequently rescinded on March 13, 2003, (ii) the acquisition of the business, operations and prospects of Kolt Oil and Gas, which was subsequently rescinded, (iii) the acquisition of furniture under a note with RHC and (iv) any other issuance of Common Stock prior to the date hereof that would cause the Corporation to have more than 31,589,501 shares of Common Stock outstanding as of the date hereof (other than shares deemed to be issued pursuant to Section 3(c)(i) or Section 3(c)(ii) hereof) if such shares are treated as issued and outstanding or given comparable legal effect.

c.         Effect on Conversion Price of Certain Events. For purposes of determining the adjusted Conversion Price under this Section 3, the following shall be applicable:

i.          If the Corporation in any manner issues or grants any options, warrants, or similar rights (“Options”) to purchase or acquire Common Stock or other equity securities convertible or exchangeable, with or without consideration, into or for Common Stock (“Convertible Securities”), and the price per share for which Common Stock is issuable upon the exercise of such Options or upon conversion or exchange of such Convertible Securities is less than the Conversion Price in effect immediately prior to the time of the granting of such Options, then the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such Options shall be deemed to be outstanding and to have been issued and sold by the Corporation for such price per share. For purposes of this Section, the “price per share for which Common Stock is issuable” shall be determined by dividing (a) the

 

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total amount, if any, received or receivable by the Corporation as consideration for the granting of such Options, plus the minimum aggregate amount of additional consideration payable to the Corporation upon exercise of all such Options, plus, in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the issuance or sale of such Convertible Securities and the conversion or exchange of such Convertible Securities, by (b) the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such Options. No further adjustment of the Conversion Price shall be made when Convertible Securities are actually issued upon the exercise of such Options or when Common Stock is actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

ii.        If the Corporation in any manner issues or sells any Convertible Securities and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price in effect immediately prior to the time of such issue or sale, then the maximum number of shares of Common Stock issuable upon conversion or exchange of such Convertible Securities shall be deemed to be outstanding and to have been issued and sold by the Corporation for such price per share. For the purposes of this Section, the “price per share for which Common Stock is issuable” shall be determined by dividing (a) the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion or exchange of such Convertible Securities, by (b) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment of the Conversion Price shall be made when Common Stock is actually issued upon the conversion or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustments of the Conversion Price had been or are to be made pursuant to other provisions of this Section 3, no further adjustment of the Conversion Price shall be made by reason of such issue or sale.

iii.       If the purchase price provided for in any Options or the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities or the rate at which any Convertible Securities are convertible into or exchangeable for Common Stock changes at any time, the Conversion Price in effect at the time of such change shall be readjusted to the Conversion Price that would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such changed purchase price, additional consideration, or changed conversion rate, as the case may be, at the time initially granted, issued, or sold. Notwithstanding the foregoing, no readjustment pursuant to this Section 3(c)(iii) shall have the effect of increasing the Conversion Price to an amount which exceeds the lower of (i) the Conversion Price in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (ii) the Conversion Price that would have resulted from any Additional Stock Issuances (other than deemed

 

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Additional Stock Issuances as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.

iv.        Upon the expiration of any Option or the termination of any right to convert or exchange any Convertible Security which resulted in an adjustment to the Conversion Price, the Conversion Price then in effect under this Note shall be adjusted to the Conversion Price that would have been in effect at the time of such expiration or termination had such Option or Convertible Security, to the extent outstanding immediately prior to such expiration or termination, never been issued.

v.         If any Common Stock, Option, or Convertible Security is issued or sold or deemed to have been issued or sold for cash, the consideration received for such Common Stock, Option, or Convertible Security shall be deemed to be the amount received by the Corporation for such Common Stock, Option, or Convertible Security. In case any Common Stock, Options, or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Corporation shall be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Corporation will be the Closing Sale Price, or in the absence of a Closing Sale Price, the Closing Bid Price of such securities as of the date of receipt. If any Common Stock, Option, or Convertible Security is issued in connection with any merger in which the Corporation is the surviving corporation, the amount of consideration for such Common Stock, Option, or Convertible Security shall be deemed to be the fair market value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options, or Convertible Securities, as the case may be. The fair market value of any consideration other than cash will be determined jointly by the Corporation and the Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair market value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly selected by the Corporation and the Required Holders. The determination of such appraiser shall be deemed binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Corporation.

vi.        In case any Option is issued in connection with the issue or sale of other securities of the Corporation, together comprising one integrated transaction in which no specific consideration is allocated to such Option by the parties to such transaction, the Option shall be deemed to have been issued for a consideration of $0.001.

vii.      The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or for the account of the Corporation or any Subsidiary of the Corporation, and the disposition of any shares so owned or held shall be considered an issue or sale of Common Stock.

viii.     No adjustment in the Conversion Price for the Note need be made if such adjustment would result in a change in the Conversion Price of less than $0.001. Any adjustment of less than $0.001 that is not made shall be carried forward and shall be

 

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made at the time of and together with any subsequent adjustment that, on a cumulative basis, amounts to an adjustment of $0.001 or more in the Conversion Price.

ix.        If the Corporation takes a record of the holders of Common Stock for the purpose of entitling them (a) to receive a dividend or other distribution payable in Common Stock, Options, or Convertible Securities or (b) to subscribe for or purchase Common Stock, Options, or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or upon the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be; provided that if, after the occurrence of the record date, the Corporation increases or reduces the number of shares of Common Stock issued or deemed issued or fails to consummate the actual or deemed issuance that was the subject of the record date, the Conversion Price will thereafter be readjusted up or down to reflect the actual number of shares of Common Stock issued or deemed issued in connection with such record date.

d.         Subdivision or Combination of Common Stock. If the Corporation at any time subdivides (by any stock split, stock dividend, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision shall be proportionately reduced, and if the Corporation at any time combines (by reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall be proportionately increased.

e.         Other Corporate Events. If at any time or from time to time there shall be a capital reorganization of the Common Stock (other than a subdivision or combination of shares provided for elsewhere in this Agreement) or a spin-off, merger or consolidation of the Corporation with or into another corporation where the Corporation is not the surviving corporation, or the sale, lease, or transfer of all or substantially all of the Corporation’s properties and assets to any other person (collectively, a “Corporate Event”), then, as a part of such Corporate Event, provision shall be made so that the Holder of the Note shall, after such Corporate Event, be entitled to receive upon conversion of the Note, the number of shares of stock or other securities or property of the Corporation (including cash), or of the successor corporation resulting from such Corporate Event, to which a holder of Common Stock deliverable upon conversion would have been entitled on such Corporate Event. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 3 with respect to the rights of the Holder, or any later Holder, of the Note after the Corporate Event to the effect that the provisions of this Section 3 (including adjustment of the Conversion Price and the number of shares purchasable upon conversion of Note) shall be applicable after that event as nearly equivalent as may be practicable.

f. Rights Upon Change of Control.

i.          Change of Control. Each of the following events shall constitute a “Change of Control”:

A.        the consolidation, merger or other business combination (including, without limitation, a reorganization or recapitalization) of the

 

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Corporation with or into another Person (other than (1) a consolidation, merger or other business combination (including, without limitation, reorganization or recapitalization) in which holders of the Corporation’s voting power immediately prior to the transaction continue after the transaction to hold, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (2) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Corporation);

B.        the sale or transfer of all or substantially all of the Corporation’s assets; or

C.        a purchase, tender or exchange offer made to and accepted by the holders of more than the 50% of the outstanding shares of Common Stock.

ii.        No sooner than fifteen (15) days nor later than ten (10) days prior to the consummation of a Change of Control, but not prior to the public announcement of such Change of Control, the Corporation shall deliver written notice thereof via facsimile and overnight courier to the Holder (a “Change of Control Notice”).

iii.       Assumption. Prior to the consummation of any Change of Control, the Corporation will secure from any Person purchasing the Corporation’s assets or Common Stock or any successor resulting from such Change of Control (in each case, an “Acquiring Entity”) a written agreement (in form and substance satisfactory to the Required Holders) to deliver to each Holder of the Tranche A Notes and/or Tranche B Notes in exchange for such Tranche A Notes and/or Tranche B Notes, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to the Tranche A Notes and Tranche B Notes, including, without limitation, having a principal amount and interest rate equal to the principal amounts and the interest rates of the Tranche A Notes and Tranche B Notes held by such Holder, and satisfactory to the Required Holders. In the event that an Acquiring Entity is directly or indirectly controlled by a company or entity whose common stock or similar equity interest is listed, designated or quoted on a securities exchange or trading market, the Required Holders may elect to treat such Person as the Acquiring Entity for purposes of this Section 3(f).

iv.        Holder Redemption Right. At any time during the period beginning after the Holder’s receipt of a Change of Control Notice and ending on the date of the consummation of such Change of Control (or, in the event a Change of Control Notice is not delivered at least ten (10) days prior to a Change of Control, at any time on or after the date which is ten (10) days prior to a Change of Control and ending ten (10) days after the consummation of such Change of Control), the Holder may require the Corporation to redeem all or any portion of this Note by delivering written notice thereof (“Change of Control Redemption Notice”) to the Corporation, which Change of Control Redemption Notice shall indicate the Conversion Amount the Holder is electing to require the Corporation to redeem. The portion of this Note subject to redemption pursuant to this Section 3(f)(iv) shall be redeemed by the Corporation at a price equal to

 

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120% of the greater of (i) the product of (x) the Conversion Amount being redeemed and (y) the quotient determined by dividing (A) the Closing Sale Price of the Common Stock, or in the absence of a Closing Sale Price, the Closing Bid Price, on the Trading Day immediately preceding consummation of such Change of Control by (B) the Conversion Price and (ii) the Conversion Amount being redeemed (the “Change of Control Redemption Price”). Redemptions required by this Section 3(f)(iv) shall be made in accordance with the provisions of Section 6 and, to the extent permitted by applicable Law, shall have priority to payments by the Corporation or the Acquiring Entity, as applicable, to the shareholders of the Corporation in connection with a Change of Control. Notwithstanding anything to the contrary in this Section 3, until the Change of Control Redemption Price is paid in full, the Conversion Amount submitted for redemption under this Section 3(f)(iv) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3.

g.         Other Events. If any event occurs of the type contemplated by the provisions of this Section 3 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Corporation’s Board of Directors will make an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder under this Note; provided that no such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section 3.

h. Notices.

i.          As soon as practicable, upon any adjustment of the Conversion Price, the Corporation shall give written notice of such adjustment to the then Holder of the Note, and furnish the Holder with a certificate of its Chief Financial Officer setting forth in reasonable detail such adjustment and the facts upon which such adjustment is based. The Corporation shall, upon written request, furnish the Holder a certificate setting forth the Conversion Price in effect upon the date thereof and the series of adjustments leading to such Conversion Price.

ii.        The Corporation shall give written notice to the Holder of the Note at least twenty (20) Business Days prior to the date on which the Corporation closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, or issuance or granting of rights, options or warrants or (B) with respect to any pro rata subscription offer to holders of Common Stock.

iii.       The Corporation shall give written notice to the Holder at least thirty (30) Business Days prior to the effective date of any proposed liquidation, dissolution or winding up of the Corporation; provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

i.          Automatic Conversion. The Note, and all accrued and unpaid interest hereon, shall be automatically converted (the “Automatic Conversion”) into Common Stock at the Conversion Price then in effect upon the earliest to occur of the following:

 

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i.          the sale by the Corporation of a minimum of $25,000,000 of equity, in one sale or a related series of sales, without regard to the class of equity sold,

ii. a Qualified Public Offering, or

iii.        the occurrence of (x) receipt by the Corporation or AirGATE of revenue of not less than (1) $1,000,000 from Hexion Specialty Chemicals, Inc. (“Hexion”), or its customers, as a result of services rendered by Hexion to its one or more of its customers in connection with the use of the Pioneer Downhole Tool in the oil and gas industry, and as further described herein, or (2) $500,000 of revenues from the sale of RFID tags that withstand downhole pressure, and related equipment and services, and (y) an average Closing Sale Price of the Common Stock of at least $0.75 per share for the thirty (30) day trading period preceding the receipt of such revenues.

j.          Effect of Automatic Conversion. Upon the Automatic Conversion of this Note, the Corporation shall not be obligated to issue certificates evidencing the Common Stock unless such Note is either delivered to the Corporation or its transfer agent, or the Holder notifies the Corporation or its transfer agent that such Note has been lost, stolen or destroyed and executes an affidavit of loss and an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such Note. The Corporation shall, as soon as practicable after such delivery, or such agreement and indemnification, cause its transfer agent to issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and with any fractional share resulting from such calculation rounded up to the nearest whole share. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of closing of the transaction causing the Automatic Conversion. The person or persons entitled to receive securities issuable upon such Automatic Conversion shall be treated for all purposes as the record holder or holders of such securities on such date.

k.         Issuance of Common Stock. Upon the conversion of the Note, the Corporation shall, at the request of the Holder, execute and deliver (at the Corporation’s expense) a certificate or certificates in exchange for the Note representing in the aggregate the number of shares of Common Stock to be delivered to the Holder pursuant to such conversion. Each such certificate shall be registered in such name as is requested by the Holder.

l.          Replacement. Upon receipt of evidence reasonably satisfactory to the Corporation of the ownership and the loss, theft, destruction, or mutilation of the Note, and, in the case of any such loss, theft, or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation or, in the case of any mutilation, upon surrender of such Note, the Corporation shall (at its expense) execute and deliver in lieu of such Note a new Note of like kind in such principal amount as represented by such lost, stolen, destroyed, or mutilated Note.

m.        Reissuance of Note. Upon any partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Corporation to the Holder for the Principal balance of this Note and all accrued but unpaid interest which shall not have been converted. The Corporation shall (at its expense) execute and deliver such new Note.

 

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n.         Legend. If the shares of Common Stock issued pursuant to the conversion of the Note are not subject to an effective registration statement under the Act, the certificates evidencing shares of Common Stock issued upon conversion of the Note shall bear the following restrictive legend or a substantially similar legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE X-CHANGE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”

4. Events of Default.

a.         The occurrence of any of the following events constitutes an “Event of Default” hereunder:

i.          any failure by the Corporation to pay the Holder any amounts of Principal, interest or other amounts when and as due under this Note or any other Transaction Document (as defined in the Purchase Agreement);

ii.        any breach by the Corporation or any of its Subsidiaries of any covenant or other term or condition of this Note, the Purchase Agreement, any Related Agreement, the Tranche A Notes or the Tranche B Notes in any material respect, except, in the case of a breach of a covenant which is curable, only if such breach continues for a period of at least fifteen (15) consecutive days after the earlier to occur of (i) any executive officer of the Corporation becoming aware of such breach and (ii) the receipt of written notice from any Holder of the Tranche A Notes or Tranche B Notes of such breach;

iii.       any breach by the Corporation or any of its Subsidiaries of any representation or warranty of the Corporation or any of its subsidiaries made herein, in the Purchase Agreement, in any Related Agreement, the Tranche A Notes or the Tranche B Notes or any representation or warranty made by the Corporation or any of its subsidiaries made herein, in the Purchase Agreement, in any Related Agreement, the Tranche A Notes or the Tranche B Notes that was false or misleading in any material respect on the date that such representation or warranty was made or deemed made;

iv.        if the Corporation or any of its Subsidiaries makes an assignment for the benefit of creditors, or applies for or consents to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed;

 

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v.         if any money judgment, writ or similar final process shall be entered or filed against the Corporation, any of its Subsidiaries or any of its property or other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days;

vi.        if bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy Law or any Law for the relief of debtors shall be instituted by or against the Corporation or any of its Subsidiaries;

vii.      if an SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a Principal Market;

viii.     if it becomes unlawful for the Corporation or any of its Subsidiaries to perform or comply with its respective obligations under this Note, the Purchase Agreement, in any Related Agreement, the Tranche A Notes or the Tranche B Notes;

ix.        if the Corporation shall fail to timely file all reports required to be filed by it with the SEC (as defined in the Purchase Agreement) pursuant to Section 13 or 15(d) of the Exchange Act (as defined in the Purchase Agreement), or otherwise required by the Exchange Act;

x.         any Event of Default (as defined in the other Tranche A Notes and Tranche B Notes) occurs with respect to any Tranche A Notes or Tranche B Notes; or

xi.        if the Corporation fails (i) to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, if such failure to timely deliver Common Stock shall not be cured within two (2) Business Days or (ii) to deliver a replacement Note to Holder within seven (7) Business Days following the required date of such issuance pursuant to this Note.

b.         Redemption Right Upon Event of Default. Promptly after the occurrence of an Event of Default with respect to this Note or any other Tranche A Note or Tranche B Note, the Corporation shall deliver written notice thereof via facsimile and overnight courier (an “Event of Default Notice”) to the Holder and the Holders of the Tranche A Notes and Tranche B Notes. At any time after the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default and until the Event of Default is cured, the Holder may require the Corporation to redeem all or any portion of the Notes by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Corporation, which Event of Default Redemption Notice shall indicate the portion of the Notes that the Holder is electing to cause to be redeemed. The portion of this Note subject to redemption by the Corporation pursuant to this Section 4(b) shall be redeemed by the Corporation at a price equal to the greater of (i) the product of (x) the Conversion Amount to be redeemed plus accrued and unpaid interest and (y) 120% and (ii) the product of (A) the Conversion Rate with respect to such Conversion Amount in effect at such time as the Holder delivers an Event of Default

 

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Redemption Notice, (B) the Closing Sale Price, or in the absence of a Closing Sale Price, the Closing Bid Price, of the Common Stock on the date immediately preceding such Event of Default and (C) 120% (the “Event of Default Redemption Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 6. For purposes of this Section 4(b), “Conversion Rate” shall mean the number of shares of Common Stock equal to the amount determined by dividing (i) the Conversion Amount by (ii) the Conversion Price.

5. Transfer.

a.         Transfer Restricted. This Note, and any rights hereunder, may not be assigned or transferred, except as provided in the legend hereon and in accordance with and subject to provisions of (i) all applicable state securities Laws and (ii) the Act, and the rules and regulations promulgated thereunder. Any purported transfer or assignment made other than in accordance with this Section 5 shall be null and void and of no force and effect.

b.         Assignment. Any assignment permitted hereunder shall be made by surrender of this Note to the Corporation at its principal place of business as set forth above with a Form of Assignment in substantially the form attached hereto as Exhibit B, duly completed and executed and funds sufficient to pay any transfer tax, if any. In such event, the Corporation shall, without charge, execute and deliver a new note in the name of the assignee named in such instrument of assignment in the amount so assigned and this Note shall be promptly canceled; provided, however, that in the event that the Holder hereof shall assign or transfer less than the full amount of this Note, a new note evidencing the remaining portion of this Note not so assigned or transferred shall be issued in the name of the Holder.

6. Redemptions.

a.         Mechanics. In the event that the Holder has sent a Redemption Notice to the Corporation pursuant to Section 3(f)(iv) or Section 4(b), the Holder shall promptly submit this Note to the Corporation in accordance with this Section 6. The Corporation shall deliver the applicable Event of Default Redemption Price to the Holder within seven (7) Business Days after the Corporation’s receipt of the Holder’s Event of Default Redemption Notice and thereafter the Holder shall promptly deliver this Note to the Corporation. If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 3(f)(iv), the Corporation shall deliver to the Holder the Change of Control Redemption Price concurrently with the consummation of such Change of Control if such Change of Control Redemption Notice is received by the Corporation prior to the consummation of such Change of Control and within seven (7) Business Days after the Corporation’s receipt of such Change of Control Redemption Notice otherwise. In the event of a redemption of less than all of the Conversion Amount of this Note, the Corporation shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 3(m)) representing the outstanding Principal which has not been redeemed. In the event that the Corporation does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter and until the Corporation pays such unpaid Redemption Price in full, the Holder shall have the option to, in lieu of redemption, require the Corporation to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption Price has not been paid. One (1) day after the Corporation’s receipt of such notice, if the Corporation has not cured such failure, (x) the Redemption Notice shall be

 

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null and void with respect to such Conversion Amount, (y) the Corporation shall immediately return this Note, or issue a new Note (in accordance with Section 3(m)) to the Holder representing such Conversion Amount and (z) the Conversion Price of this Note or such new Notes shall be adjusted to the lesser of (A) the Conversion Price as in effect on the date on which the Redemption Notice is voided and (B) the lowest Closing Bid Price of the Common Stock during the period beginning on and including the date on which the Redemption Notice is delivered to the Corporation and ending on and including the date on which the Redemption Notice is voided.

b.         Redemption by Other Holders. Upon the Corporation’s receipt of notice from any of the holders of the Other Notes for redemption or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b) or Section 3(f)(iv) (each, an “Other Redemption Notice”), the Corporation shall immediately forward to the Holder by facsimile a copy of such notice. If the Corporation receives a Redemption Notice and one or more Other Redemption Notices during the period beginning on the day the Corporation receives the first of such Redemption Notice or Other Redemption Notice and ending on the date which is five (5) Business Days after the Corporation forwards the first such notice (“Redemption Period”) and the Corporation is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during such Redemption Period, then the Corporation shall redeem a pro rata amount from each holder of the Tranche A Notes and the Tranche B Notes (including the Holder) based on the aggregate principal amount of the Tranche A Notes and the Tranche B Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received or delivered by the Corporation during such Redemption Period.

7.          Noncircumvention. The Corporationhereby covenants and agrees that the Corporationwill not, by amendment of 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 Note, and will at all times carry out all of the provisions of this Note.

8.          Vote to issue, or change the terms of, the Tranche A Notes and Tranche B Notes. The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the Required Holders, shall be required for any change or amendment to this Note, the Tranche A Notes or the Tranche B Notes, all of which shall be amended in like manner; provided, however, that no such amendment as applied to any particular Holder of Tranche A Notes or Tranche B Notes, shall, without the consent of that particular Holder, extend the maturity of the Tranche A Note or the Tranche B Note, reduce the interest rate, extend the time of payment of interest thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable on redemption or repurchase thereof or affect any amounts due to any Holder.

9. Definitions

a.         “Acquiring Entity” has the meaning set forth in Section 3(f)(iii) of this Note.

b. “Act” has the meaning set forth in the legend of this Note.

 

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c.         “Additional Stock Issuance” has the meaning set forth in Section 3(b)(ii) of this Note.

d. “AirGATE” has the meaning set forth in Section 2(a) of this Note.

e.         “Automatic Conversion” has the meaning set forth in Section 3(i) of this Note.

f. “Bloomberg” means Bloomberg Financial Markets.

g.         “Business Day” means any day except Saturday, Sunday and any day that is a federal legal holiday or a day on which banking institutions in the State of Texas are authorized or required by Law or other governmental action to close.

h.         “Cancelled Share Effectiveness” has the meaning set forth in Section 3(b)(iv) of this Note.

i.          “Cancelled Shares” has the meaning set forth in Section 3(b)(iv) of this Note.

j.          “Change of Control” has the meaning set forth in Section 3(f)(i) of this Note.

k.         “Change of Control Notice” has the meaning set forth in Section 3(f)(ii) of this Note.

l.          “Change of Control Redemption Notice” has the meaning set forth in Section 3(f)(iv) of this Note.

m.        “Change of Control Redemption Price” has the meaning set forth in Section 3(f)(iv) of this Note.

n.         “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00 p.m., New York City Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the

 

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Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Corporation and the Required Holders. If the Corporation and the Holders are unable to agree upon the fair market value of such security, then such dispute shall be resolved by an independent, reputable appraiser jointly selected by the Corporation and the Required Holders. The determination of such appraiser shall be deemed binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Corporation. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction that proportionately decreases or increases the Common Stock during the applicable calculation period.

o.         “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

p.         “Conversion Amount” means the sum of (A) the portion of the outstanding Principal to be converted, redeemed or otherwise with respect to which this determination is being made and (B) accrued and unpaid Interest with respect to such Principal.

q.         “Conversion Price” has the meaning set forth in Section 3(b)(i) of this Note.

r. “Conversion Rate” has the meaning set forth in Section 4(b) of this Note.

s.         “Convertible Securities” has the meaning set forth in Section 3(c)(i) of this Note.

t. “Corporate Event” has the meaning set forth in Section 3(e) of this Note.

u. “Corporation” has the meaning set forth in the preamble of this Note.

v. “Date of Issuance” has the meaning set forth in Section 1(a) of this Note.

w.        "Disqualified Stock" means any capital stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, in each case at the option of the holder of the capital stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the capital stock, in whole or in part, on or prior to the date thatis91 days after the date on which the Notes mature.

x. “Event of Default” has the meaning set forth in Section 4(a) of this Note.

y.         “Event of Default Notice” has the meaning set forth in Section 4(b) of this Note.

 

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z.         “Event of Default Redemption Notice” has the meaning set forth in Section 4(b) of this Note.

aa.       “Event of Default Redemption Price” has the meaning set forth in Section 4(b) of this Note.

bb.       “GAAP” means the generally accepted accounting principles in the United States.

cc. “Hexion” has the meaning set forth in Section 3(i)(iii) of this Note.

dd. “Holder” has the meaning set forth in the preamble of this Note.

ee.       “Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease, (vii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii) above.

ff. “Interest Rate” has the meaning set forth in Section 1(a) of this Note.

gg.       “Law” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law, rule or regulation.

hh. “Maturity Date” has the meaning set forth in Section 1(a) of this Note.

ii. “Note” has the meaning set forth in the preamble of this Note.

jj. “Options” has the meaning set forth in Section 3(c)(i) of this Note.

kk.       “Other Notes” means the Tranche A Notes and the Tranche B Notes, other than this Note.

ll.        “Other Redemption Notice” has the meaning set forth in Section 6(b) of this Note.

 

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mm.    “Permitted Subordinated Indebtedness” means Indebtedness of Corporation, and not any Subsidiary, that (i) is made expressly subordinate in right of payment to the Indebtedness evidenced by this Note, the Tranche A Notes and the Tranche B Notes on terms and pursuant to an agreement reasonably satisfactory to the Required Holders and, in the event that interest is payable, directly or indirectly, prior to 91 days after the Maturity Date, provides for interest that is no greater than market rate interest, and (ii) does not provide at any time for the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until at least 91 days after the Maturity Date.

nn.       “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

oo. “Principal” has the meaning set forth in Section 1(a) of this Note.

pp.       “Principal Market” means the New York Stock Exchange, American Stock Exchange, NASDAQ Global Select Market, NASDAQ Global Market, NASDAQ Capital Market, or OTC Bulletin Board (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock or other security in question).

qq.       “Purchase Agreement” has the meaning set forth in the preamble of this Note.

rr.        “Qualified Public Offering” means a public offering of the Common Stock by a nationally recognized underwriter such that the Corporation’s aggregate net proceeds from such offering are at least $20,000,000, and the imputed market capitalization of the Corporation, pre-offering, is at least $100,000,000.

ss.        “Redemption Notice” means any of an Event of Default Redemption Notice or Change of Control Redemption Notice.

tt.        “Redemption Period” has the meaning set forth in Section 6(b) of this Note.

uu.       “Redemption Price” means any of an Event of Default Redemption Price or Change of Control Redemption Price.

vv.       “Required Holders” means one or more Holders of Tranche A Notes and Tranche B Notes representing greater than seventy-five percent (75%) of the aggregate principal amount of all Tranche A Notes and Tranche B Notes then outstanding.

ww. “SEC” means the United States Securities and Exchange Commission.

xx.       “Security Agreement” shall have the meaning assigned to such term in the Purchase Agreement.

yy.       “Subsidiary” means (i) a corporation or other entity whose shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of such corporation, are owned, directly or indirectly, by the Corporation or (ii) a corporation or

 

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other entity in which the Corporation owns, directly or indirectly, more than fifty (50%) of the equity interests.

zz.       “Trading Day” means any day on which the Common Stock or other applicable security is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock or other applicable security, then on the principal securities exchange or securities market on which the Common Stock or other applicable security is then traded; provided that “Trading Day” shall not include any day on which the Common Stock or other applicable security is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock or other applicable security is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., New York City Time).

aaa.     “Tranche A Notes” shall have the meaning assigned to such term in the Purchase Agreement.

bbb.     “Tranche B Notes” shall have the meaning assigned to such term in the Purchase Agreement.

ccc.     “Tranche B Shares” shall have the meaning assigned to such term in the Purchase Agreement.

ddd.     “Valuation Event” has the meaning set forth in Section 3(c)(v) of this Note.

eee.     “Warrants” shall have the meaning assigned to such term in the Purchase Agreement.

10. Miscellaneous.

a.         Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

b.         Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given:

A. upon personal delivery to the party to be notified;

B.        when sent by confirmed facsimile if sent during normal business hours of the recipient, or if delivered after normal business hours, then on the next Business Day;

C.        three (3) Business Days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or

 

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D.        one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.

All communications shall be sent as follows:

If to the Corporation, to:

The X-Change Corporation

710 Century Parkway

Allen, Texas 75013

Attention: George DeCourcy, Chief Financial Officer

Facsimile: 972-359-6334

with a copy (which shall not constitute notice) to:

Strasburger & Price, LLP

901 Main Street, Suite 4400

Dallas, Texas 75202

Attention: Kevin Woltjen, Esq.

Facsimile: 214-659-4025

If to Holder, to ________

________________________

________________________

________________________

Facsimile: ________________

with a copy (which shall not constitute notice) to:

Weil, Gotshal & Manges LLP

200 Crescent Court, Suite 300

Dallas, Texas 75201

Attention: R. Scott Cohen, Esq.

Facsimile: 214-746-7777

or at such other address as the Corporation or Holder may designate by written notice given in accordance with this Section 10(b).

c.         Amendment Provision. The term “Note” and all references thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued, as such may be amended or supplemented.

d.         Assignability. This Note shall be binding upon the Holder and the Corporation and their respective successors and assigns, and shall inure to the benefit of the Holder and the Corporation and their respective successors and assigns, and may be assigned by

 

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the Holder in accordance with the requirements of the Purchase Agreement. This Note shall not be assigned by the Corporation without the prior written consent of the Holder.

e.         Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES OR PRINCIPLES THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SERVING DALLAS COUNTY, TEXAS, FOR THE PURPOSES OF ANY ACTION ARISING OUT OF THIS NOTE, OR THE SUBJECT MATTER HEREOF. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION (A) THAT SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, (B) THAT THE ACTION IS BROUGHT IN AN INCONVENIENT FORUM, (C) THAT IT IS IMMUNE FROM ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ITS PROPERTY, (D) THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR (E) THAT THIS NOTE, OR THE SUBJECT MATTER HEREOF, MAY NOT BE ENFORCED IN OR BY SUCH COURTS. IN THE EVENT THAT ANY PROVISION OF THIS NOTE IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM TO SUCH STATUTE OR RULE OF LAW SO LONG AS THE ECONOMIC OR LEGAL SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY IS NOT AFFECTED IN ANY MANNER MATERIALLY ADVERSE TO ANY PARTY. ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS NOTE, WHICH SHALL REMAIN ENFORCEABLE IN ACCORDANCE WITH ITS RESPECTIVE TERMS.

f.         Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable Law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such Law, any payments in excess of such maximum shall be credited against amounts owed by the Corporation to the Holder and thus refunded to the Corporation.

g.         Construction. Each party acknowledges that its legal counsel participated in the preparation of this Note and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Note to favor any party against the other.

h.         Cost of Collection. If default is made in the payment of this Note, the Corporation shall pay to Holder reasonable costs of collection, including reasonable attorney’s fees.

 

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            IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Senior Secured Convertible Term Note—Tranche A to be signed in its name effective as of the 4th day of December, 2007.

The X-CHANGE CORPORATION

By:________________________________

Name:______________________________

Title:_______________________________

WITNESS:

_______________________________

 

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Exhibit A

Notice of Conversion

(To be executed by the Holder in order to convert all or part of the Note into Common Stock)

Name of Holder: __________________

Address: ______________________________

_____________________________

_____________________________

Holder hereby elects to convert into the Common Stock of The X-Change Corporation $_______ of the Principal and/or accrued but unpaid interest under the terms of the Amended and Restated Senior Secured Convertible Term Note—Tranche A issued by The X-Change Corporation dated December 4, 2007, and amended and restated on July __, 2008, on and subject to the conditions set forth in such Amended and Restated Senior Secured Convertible Term Note—Tranche A.

1. Date of Conversion: _________________________

2. Shares To Be Delivered: ______________________

______________________________

(Please print name of Holder)

By: _____________________________

Name: _________________________

Title: ___________________________

Exhibit B

ASSIGNMENT FORM

(To assign the foregoing Note, execute this form and supply required information.

Do not use this form to exercise the Note)

FOR VALUE RECEIVED, ____________________________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Note with respect to the number of shares of Common Stock of The X-Change Corporation covered thereby set forth below, unto:

Name of Assignee Address No. of Shares

By:____________________________________

Name: _________________________________

Title: __________________________________

Signature Guaranteed:

By: ____________________________________

The signature should be guaranteed by an eligible guarantor institution pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.

EX-99

EXHIBIT F

AMENDED AND RESTATED TRANCHE A WARRANT

THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE X-CHANGE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

Issuer: The X-Change Corporation

Class of Stock: Common Stock

Issue Date: December 4, 2007

Date Amended: July __, 2008

Expiration Date: December 4, 2012

Warrant No. ____________

This Amended and Restated Tranche A Warrant (this “Warrant”) amends and restates the Tranche A Warrant issued pursuant to that certain Securities Purchase Agreement dated December 4, 2007, as amended, modified or supplemented from time to time (the “Purchase Agreement”) by and among The X-Change Corporation, a Nevada corporation (the “Company”), and, among others, ________________ [Name of Purchaser] (the “Holder”). The Company and the Holder may hereinafter be referred to individually as a “Party” or collectively as the “Parties.” All capitalized terms used but not defined herein shall have the meaning ascribed to such term in the Purchase Agreement.

This Warrant is one of the Tranche A Warrants and Tranche B Warrants (each as defined in the Purchase Agreement) issued for shares of Common Stock of the Company pursuant to the Purchase Agreement (collectively, the“Warrant Series”).

1.          Number of Shares. In connection with the purchase by Purchaser of a Tranche A Note (as defined in the Purchase Agreement) pursuant to the Purchase Agreement, the Company hereby grants to the Holder, pursuant to this Warrant, subject to the terms and condition set forth herein, the right to purchase __________ shares of the Company’s Common Stock, as adjusted pursuant to Section 6 (the “Shares”) at a price per share equal to the Exercise Price set forth in Section 2 below.

2.          Exercise Price. The exercise price for the Shares shall be $0.50 per Share, as adjusted pursuant to Section 6 (the “Exercise Price”).

3.          Exercise Period. The Warrant may be exercised (the “Exercise Period”) commencing on the date set forth above as the Issue Date (the “Issue Date”) set forth above and ending on the date set forth above as the Expiration Date (the “Expiration Date”).

4.          Method of Exercise. This Warrant may be exercised in whole or in part, at any time or from time to time during the Exercise Period, by surrender of this Warrant and delivery of a completed Exercise Form attached hereto as Schedule A, duly executed and directed to the Company at its principal place of business, accompanied by certified funds payable to the Company in the amount of the appropriate Exercise Price. Upon receipt of the Exercise Form and the Exercise Price, the Company shall make prompt delivery (in any event within three (3) Business Days (as defined in the Purchase Agreement) of receipt of the Exercise Form and Exercise Price) of a certificate evidencing the number of whole Shares to which the Holder may be entitled, and pay to the Holder, in lieu of issuing any fractional Share, cash in an amount equal to the amount of any fraction associated with any such fractional Share multiplied by the then effective Exercise Price. In case of the purchase of less than all the Shares purchasable under this Warrant, the Company shall cancel this Warrant upon surrender hereof and shall execute and deliver a new Warrant of like tenor and date for the balance of the Shares purchasable hereunder.

5.          Rights as Stockholder. The Holder shall have no rights as a stockholder of the Company with respect to any shares of Common Stock subject to the Warrant prior to the exercise of this Warrant, and then only with respect to those shares of Common Stock actually acquired upon such due and proper exercise.

6.          Adjustment of Exercise Price and Number of Shares. The Exercise Price and the number of shares of Common Stock (or amount of other securities or property) purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 6.

(a)          Subdivision or Combination of Stock. If the Company shall effect a stock dividend or stock split or subdivide its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such stock dividend, stock split or subdivision shall be proportionately reduced, and conversely, if the Company shall effect a reverse stock split or combine its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such reverse stock split or combination shall be proportionately increased. Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment.

(b)          Dividends in Common Stock, Other Stock, Property, Reclassification. If the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefor,

(i)          Common Stock or any shares of stock or other securities that are directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution (other than shares of Common

 

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Stock issued as a stock dividend, stock split or subdivision, adjustments in respect of which shall be covered by the terms of Section 6(a) above),

(ii)          any cash or property paid or payable otherwise than as a cash dividend (other than a liquidation or dissolution, which shall be covered by the terms of Section 6(e) below), or

(iii)          additional shares of Common Stock or additional stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, recapitalization, reorganization, combination of shares or similar corporate rearrangement (other than shares of Common Stock issued as a stock dividend, stock split or subdivision, adjustments in respect of which shall be covered by the terms of Section 6(a) above),

then, and in each such case, the Holder hereof shall, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable upon such exercise, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to in clauses (ii) and (iii) above) which such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property.

(c)          Reorganization, Reclassification, Consolidation, Merger or Sale. If any reclassification, recapitalization or reorganization, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets or other similar transaction, shall be effected in such a way that holders of Common Stock shall be entitled to receive, with respect to or in exchange for their shares of Common Stock, securities or other assets or property (an “Organic Change”) and the Company is the resulting or surviving corporation of such Organic Change, then, as a condition of such Organic Change, provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of the Common Stock of the Company purchasable and receivable upon the exercise of this Warrant immediately prior to such Organic Change) such shares of stock, securities or other assets or property as may be issued or payable in connection with such Organic Change with respect to or in exchange for the number of outstanding shares of such Common Stock purchasable and receivable upon the exercise of this Warrant immediately prior to such Organic Change. In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares (or amount of stock, other securities or property) purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or property thereafter deliverable upon the exercise hereof. In the event of any Organic Change pursuant to which the Company is not the surviving or resulting corporation, prior to the consummation thereof, the corporation resulting from such Organic Change or the corporation purchasing such assets shall assume by written

 

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instrument the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase.

(d)          Cancelled Shares. If any of the Cancelled Shares (as defined below) are treated as issued and outstanding or given comparable legal effect (a “Cancelled Share Effectiveness”), then immediately upon such Cancelled Share Effectiveness, the Exercise Price shall be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Exercise Price in effect immediately prior to such Cancelled Share Effectiveness by a fraction, the numerator of which is equal to the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness plus (b) the number of shares of Cancelled Shares treated as issued and outstanding or given comparable legal effect. Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment. To the extent that any Cancelled Share Effectiveness occurs after all or a portion of this Warrant has been exercised for shares of Common Stock, the Corporation shall immediately distribute to the Holder the number of shares of Common Stock that the Holder would have received had such Cancelled Share Effectiveness occurred prior to such exercise. “Cancelled Shares” shall mean the Common Stock issued by the Company in connection with (i) the acquisition of WEBiX Inc., which was subsequently rescinded on March 13, 2003, (ii) the acquisition of the business, operations and prospects of Kolt Oil and Gas, which was subsequently rescinded, (iii) the acquisition of furniture under a note with RHC and (iv) any other issuance of Common Stock prior to the date hereof that would cause the Company to have more than 31,589,501 shares of Common Stock outstanding as of the date hereof if such shares are treated as issued and outstanding or given comparable legal effect.

(e)          Certain Events. If any change in the outstanding Common Stock of the Company or any other event occurs as to which the other provisions of this Section 6 are not strictly applicable or if strictly applicable would not fairly protect the purchase rights of the Holder of the Warrant in accordance with such provisions, then the Board of Directors of the Company shall make an adjustment in the number and class of shares or other securities or property available under the Warrant, the Exercise Price or the application of such provisions, so as to protect such purchase rights as aforesaid. The adjustment shall be such as will give the Holder of the Warrant upon exercise for the same aggregate Exercise Price the total number, class and kind of shares or other securities or property as the Holder have owned had the Warrant been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring adjustment.

(f)          No Impairment. The Company shall not, by amendment of its articles or certificate of incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or

 

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seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times assist in carrying out all of the provisions of this Warrant and in taking all such action as may be reasonably necessary or appropriate to protect the Holder's rights hereunder against impairment. If the Company takes any action affecting its Common Stock other than as described above that adversely affects the Holder's rights under this Warrant, the Exercise Price shall be adjusted downward and the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted upward in such a manner that the aggregate Exercise Price of this Warrant is unchanged.

(g) Notices of Change.

(i)          Immediately upon any adjustment in the number or class of shares subject to this Warrant and of the Exercise Price, the Company shall give written notice thereof to the Holder, and furnish the Holder with a certificate of its Chief Financial Officer setting forth in reasonable detail such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish the Holder a certificate setting forth the Exercise Price in effect upon the date thereof and the series of adjustments leading to such Exercise Price,

(ii)         The Company shall give written notice to the Holder at least twenty (20) Business Days prior to the date on which the Company closes its books or takes a record for determining rights to receive any dividends or distributions,

(iii)        The Company shall also give written notice to the Holder at least twenty (20) Business Days prior to the date on which an Organic Change shall take place, and

(iv)        The Company shall give written notice to the Holder at least thirty (30) Business Days prior to the effective date of any proposed liquidation, or dissolution or winding up of the Company.

(h)          Calculations. All calculations under this Section 6 shall be made to the nearest 1/10th of a cent or the nearest 1/100^th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(i)          Adjustments. Notwithstanding any provision of this Section 6, no adjustment of the Exercise Price shall be required if such adjustment is less than $0.001; provided, however, that any adjustments that by reason of this Section 6(i) are not required to be made shall be carried forward and taken into account for purposes of any subsequent adjustment.

7. Investment Representations.

(a)          The Holder represents and warrants to the Company that the Holder is acquiring the Warrant and the Shares issuable upon exercise of the Warrant for the

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Holder’s own account for the purpose of investment and not with a view toward resale or other distribution thereof in violation of the Act. The Holder acknowledges that the effect of the representations and warranties is that the economic risk of the investment in the Warrant must be borne by the Holder. These representations and warranties shall be deemed to be continuing representations and warranties and shall be in full force and effect upon such exercise of the Warrant granted hereby. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.

(b)          In order to enable the Company to comply with the Act and any relevant state Law (as defined in the Purchase Agreement), the Company may require the Holder, as a condition of the exercising of the Warrant granted hereunder, to give written assurance satisfactory to the Company that the shares of Common Stock subject to the Warrant are being acquired for its own account, for investment only, with no view to the distribution of same, and that any subsequent resale of any such shares of Common Stock either shall be made pursuant to a registration statement under the Act, which shall become effective and is current with regard to the shares of Common Stock being sold, or shall be made pursuant to an exemption from registration under the Act. If the shares of Common Stock purchased pursuant to the exercise of the Warrant are not subject to an effective registration statement under the Act, the certificates evidencing shares of Common Stock purchased upon exercise of the Warrant shall bear the following restrictive legend or a substantially similar legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE X-CHANGE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”

(c)          The Holder represents and warrants that the Holder is an “accredited investor” within the meaning of Rule 501(a) of Regulation D of the Act.

8. Transfer.

(a)          Transfer Restricted. This Warrant, and any rights hereunder, may not be assigned or transferred, except as provided in the legend hereon and in accordance with and subject to provisions of (i) all applicable state securities Laws and (ii) the Act, and the rules and regulations promulgated thereunder. Any purported transfer or assignment made other than in accordance with this Section 8 shall be null and void and of no force and effect.

 

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(b)          Assignment. Any assignment permitted hereunder shall be made by surrender of this Warrant to the Company at its principal place of business as set forth below with a Form of Assignment in substantially the form attached hereto as Exhibit B, duly completed and executed and funds sufficient to pay any transfer tax, if any. In such event, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment in the amount so assigned and this Warrant shall be promptly canceled; provided, however, that in the event that the Holder hereof shall assign or transfer less than the full amount of this Warrant, a new Warrant evidencing the remaining portion of this Warrant not so assigned or transferred shall be issued in the name of the Holder, at the sole expense of the Company.

9.          Loss, etc. of Warrant. Upon (i) receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of the Warrant, (ii) receipt of indemnity reasonably satisfactory to the Company, if the Warrant is lost, stolen, or destroyed, (iii) placement of a bond (if required by the Company) and indemnity satisfactory in form and substance to the Company, and (iv) surrender and cancellation of the Warrant, if mutilated, the Company shall execute and deliver to the Holder a new Warrant of like date, tenor and denomination.

10.        Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock shall be made without charge to the Holder for any issuance tax in respect of such issuance (including documentary, stamp or similar tax) or other cost incurred by the Company in connection with such conversion and the related issuance of shares of Common Stock, other than any transfer taxes resulting from the transfer of converted shares to a person or persons other than the converting holder. Upon exercise of this Warrant, the Company shall take all such actions as are necessary in order to insure that the Common Stock issuable with respect to such conversion shall be validly issued, fully paid, and nonassessable.

11.        Due Authorization; Compliance. The authorization, sale, issuance and delivery of the Warrant have been approved by all requisite corporate action of the Company. The exercise of the Warrant into shares of Common Stock are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with at or prior to Closing of the Purchase Agreement.

12.        Governing Law; Venue. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS OF LAWS RULES OR PRINCIPLES THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SERVING DALLAS COUNTY, TEXAS, FOR THE PURPOSES OF ANY ACTION ARISING OUT OF THIS WARRANT, OR THE SUBJECT MATTER HEREOF. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION (A) THAT SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, (B) THAT THE ACTION IS BROUGHT IN AN INCONVENIENT FORUM, (C) THAT IT IS IMMUNE FROM ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ITS PROPERTY, (D) THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR (E) THAT THIS WARRANT, OR THE SUBJECT MATTER HEREOF, MAY NOT BE ENFORCED IN OR BY SUCH COURTS.

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IN THE EVENT THAT ANY PROVISION OF THIS WARRANT DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM TO SUCH STATUTE OR RULE OF LAW SO LONG AS THE ECONOMIC OR LEGAL SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY IS NOT AFFECTED IN ANY MANNER MATERIALLY ADVERSE TO ANY PARTY. ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS WARRANT, WHICH SHALL REMAIN ENFORCEABLE IN ACCORDANCE WITH ITS RESPECTIVE TERMS.

13.        Reservation of Shares; Issuance of Shares. The Company has reserved and will keep available, out of the authorized and unissued shares of Common Stock, the full number of Shares sufficient to provide for the exercise of the rights of the Holder hereunder. The Company covenants and agrees that, in accordance with the terms herein, all shares of Common Stock that may be delivered upon the appropriate exercise of the Warrant will, upon delivery, be duly paid and non-assessable and shall be free from all taxes, liens and charges with respect to the purchase thereof hereunder.

14.        Successors. All the covenants and provisions of this Warrant by or for the benefit of the Company or the Holder shall bind and inure to the benefit of their respective successors and permitted assigns.

15.        Amendments. Any term of this Warrant may be amended with the written consent of the Company and the holders of Warrants constituting the Warrant Series representing not less than seventy-five percent (75%) of the shares of Common Stock issuable upon exercise of any and all outstanding Warrants constituting the Warrant Series, even without the consent of the Holder. Any amendment effected in accordance with this Section 15 shall be binding upon each holder of any of the Warrants constituting the Warrant Series, each future holder of all such Warrants, and the Company; provided, however, that no special consideration or inducement may be given to any such holder in connection with such consent that is not given ratably to all such holders, and that such amendment must apply to all such holders equally and ratably in accordance with the number of shares of Common Stock issuable upon exercise of their Warrants. The Company shall promptly give notice to all holders of the Warrants constituting the Warrant Series of any amendment effected in accordance with this Section 15.

16.        Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given and sent as follows:

(a) upon personal delivery to the party to be notified;

(b)       when sent by confirmed facsimile if sent during normal business hours of the recipient, or if delivered after normal business hours, then on the next Business Day;

(c)       three (3) Business Days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or

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(d)       one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.

If to the Company, to:

The X-Change Corporation

710 Century Parkway

Allen, Texas 75013

Attention: George DeCourcy, Chief Financial Officer

Facsimile: 972-359-6334

with a copy (which shall not constitute notice) to:

Strasburger & Price, LLP

901 Main Street, Suite 4400

Dallas, Texas 75202

Attention: Kevin Woltjen, Esq.

Facsimile: 214-659-4025

If to the Holder, to:

________________________

________________________

________________________

with a copy (which shall not constitute notice) to:

Weil, Gotshal & Manges LLP

200 Crescent Court, Suite 300

Dallas, Texas 75201

Attention: R. Scott Cohen, Esq.

Facsimile: 214-746-7777

or at such other address as the Company or the Holder may designate by written notice to the other in accordance with this Section 16.

17.        Attorneys Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys fees.

18.        Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transactions hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Warrant, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Warrant and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

 

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19.        Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

20.        Counterparts. This Warrant may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

[Remainder of Page Intentionally Left Blank. Signature Page Follows.]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed in its name effective as of the 4th day of December 2007.

The X-Change Corporation

By: _______________________________

Name: _____________________________

Its: _______________________________

 

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SCHEDULE A

EXERCISE FORM

(To be Executed by the Registered Holder to Exercise

the Rights to Purchase Common Shares Evidenced by the Warrant)

The X-Change Corporation

710 Century Parkway

Allen, Texas 75013

The undersigned, _________________, hereby irrevocably subscribes for _________ shares of The X-Change Corporation’s Common Stock pursuant to and in accordance with the terms and conditions of the Amended and Restated Tranche A Warrant dated as of December 4, 2007, and amended and restated on July __, 2008, and herewith makes payment of $__________ therefore, and requests that a certificate for such shares be issued in the name of the undersigned and be delivered to the undersigned at the address stated below. The undersigned makes the representations and warranties set forth in Section 7 of the Amended and Restated Tranche A Warrant.

As provided for in the Amended and Restated Tranche A Warrant, the undersigned further requests that, in the event the number of shares subscribed for herein shall not be all of the shares of The X-Change Corporation’s Common Stock purchasable under the Amended and Restated Tranche A Warrant, a new Warrant of like tenor for the balance of the warrant not exercised be delivered to the undersigned.

Name: _______________________________

Signed: ______________________________

Address: _____________________________

____________________________

____________________________

Date: ________________________________

SCHEDULE B

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information.

Do not use this form to exercise the Warrant)

FOR VALUE RECEIVED, _________________________________________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant with respect to the number of shares of Common Stock covered thereby set forth below, unto:

Name of Assignee Address No. of Shares

By:____________________________________

Name: ______________________________

Title: _______________________________

Signature Guaranteed:

By:___________________________________

The signature should be guaranteed by an eligible guarantor institution pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.

EX-99

EXHIBIT G

THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE X-CHANGE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

Corporation: The X-Change Corporation

Holder: [Insert name of Holder]

Principal: [Insert principal amount of Note]

Interest Rate: 8% per annum

Date of Issuance: _______________, 200_

Maturity Date: _______________, 20__

SENIOR SECURED CONVERTIBLE TERM NOTE—TRANCHE B

This Senior Secured Convertible Term Note—Tranche B (this “Note”) is issued in connection with the transactions described in that certain Securities Purchase Agreement by and among The X-Change Corporation, a Nevada corporation (the “Corporation”), and _________________ (the “Holder”), among others, dated December 4, 2007, as amended, modified or supplemented from time to time (the “Purchase Agreement”). This Note is one of the notes referred to as the “Tranche B Notes” in the Purchase Agreement. All capitalized terms used but not defined herein shall have the meaning ascribed to each such term in the Purchase Agreement.

The authorization, sale, issuance and delivery of the Note have been approved by all requisite corporate action of the Corporation. The sale of the Note and the subsequent conversion of the Note into shares of Common Stock are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with at or prior to Closing of the Purchase Agreement.

The following is a statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof, by the acceptance of this Note, agrees:

1. Principal and Interest.

a.         For value received, the Corporation hereby promises to pay to the order of the Holder in lawful money of the United States at the address of the Holder as set forth in Section 10 below, the amount set out above as the Principal (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”), together with interest on the remaining unpaid Principal balance, computed from the date hereof until maturity at the rate set out above as the Interest Rate (as adjusted pursuant to the terms hereof, the “Interest Rate”); provided, however, that in the event such interest rate should ever exceed the maximum

interest rate permissible under applicable Texas or federal Law, then the Interest Rate on this Note shall be adjusted to the maximum interest rate then permitted by such Laws. Interest shall accrue on the unpaid Principal of this Note (including, once capitalized as provided below, payments of interest made by increasing the outstanding Principal of this Note) at the Interest Rate quarterly in arrears on March 31, June 30, September 30 and December 31 in each year (each such date, an “Interest Payment Date”), commencing on the date set out above as the Date of Issuance (the “Date of Issuance”). Interest payable hereunder shall accrue daily and be computed based on a 360-day year for the number of days elapsed during the relevant interest period. Except as otherwise provided in Section 3 below, all accrued and unpaid interest as of any Interest Payment Date that is not paid in cash to the Purchasers on such Interest Payment Date shall automatically (and without further action by the Corporation or the Purchasers) be added to the outstanding principal amount of this Note, and thereafter all calculations of interest payable under this Note shall include such increased amount. The Corporation’s election to accrue interest and allow such to be added to the outstanding principal amount of this Note shall not constitute an Event of Default as set forth on Section 4(a)(i). From and after the occurrence of an Event of Default, the Interest Rate shall be increased to 10.00%. In the event that such Event of Default is subsequently cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure; provided that the interest as calculated at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of cure of such Event of Default. Principal and any accrued but unpaid interest on this Note shall be due and payable on the date set out above as the Maturity Date or such earlier date as this Note is required to be repaid as provided hereunder (the “Maturity Date”), unless the Note is earlier converted into Common Stock by the Purchaser or the Corporation pursuant to the terms hereof.

b.         Upon payment in full of all Principal and interest payable hereunder, this Note shall be surrendered to the Corporation for cancellation.

2. Security; Seniority; Indebtedness; Liens; Payments.

a.         Security. This Note shall be secured by all of the assets of the Corporation’s wholly-owned subsidiary, AirGATE Technologies, Inc., a Texas corporation (“AirGATE”), whether such assets are now or hereafter existing, in accordance with the terms of that certain Security Agreement dated as of even date herewith, as amended, modified or supplemented from time to time, among the Corporation, AirGATE and the holders of the Notes (as defined in the Purchase Agreement).

b.         Seniority. The obligations, rights and preferences under this Note, including payments of Principal and interest and other payment under this Note, (i) shall be pari passu with (x) the Tranche A Notes and the other Tranche B Notes (as defined in the Purchase Agreement) and (y) the obligations of the Corporation to Melissa 364 CR, Ltd. under the terms of that certain Promissory Note, dated August 15, 2006, between the Corporation and Melissa 364 CR, Ltd. (the “Melissa Note”) and (ii) shall rank senior to all other Indebtedness incurred by the Corporation or any of its Subsidiaries, including AirGATE.

c.         Incurrence of Indebtedness. So long as this Note is outstanding, the Corporation shall not, and the Corporation shall not permit any Subsidiary to, directly or

 

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indirectly, issue, incur, guarantee, assume or suffer to exist any Indebtedness or Disqualified Stock other than the Melissa Note, the Tranche A Notes, the Tranche B Notes and Permitted Subordinated Indebtedness.

d.         Existence of Liens. The Corporation shall not, and the Corporation shall not permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Corporation or any of its Subsidiaries other than (i) the existing pledge of the common stock of AirGATE to secure the Melissa Note, (ii) pursuant to the Security Agreement and (iii) Permitted Liens (as defined in the Purchase Agreement).

e.         Restricted Payments. The Corporation shall not, and the Corporation shall not permit any of its Subsidiaries to, directly or indirectly, pay any dividend or distribution in respect of capital stock or redeem, defease, repurchase, repay or otherwise acquire (whether by way of open market purchases, tender offers, private transactions or otherwise) any capital stock or Permitted Subordinated Indebtedness (including the establishment of any sinking fund therefor).

3. Conversion.

a. Conversion Procedure.

i.          The Holder may, at any time after the Date of Issuance and at the option of the Holder, convert all or any portion of the Principal and all accrued interest on this Note into fully paid and nonassessable shares of Common Stock in accordance with this Section 3 and at a price per share of Common Stock equal to the Conversion Price then in effect. The Corporation covenants that it will reserve and keep available out of its authorized and unissued Common Stock for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as provided herein.

ii.        Each conversion of this Note shall be deemed to have been effected as of the close of business on the date on which this Note, together with proper Notice of Conversion in the form of Exhibit A attached hereto, has been delivered to the Corporation. At the time such conversion has been effected, the person or persons in whose name or names any certificate or certificates for shares of Common Stock are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented by such certificate or certificates.

iii.       As soon as possible after a conversion has been effected (but in any event within five (5) Business Days), the Corporation shall deliver to the converting Holder:

A.        a certificate or certificates representing the number of shares of Common Stock issuable by reason of such conversion in such name or names and such denomination or denominations as the converting Holder has specified;

 

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B.        if applicable, a new note in the face amount of principal and interest representing that portion of the Note and accrued but unpaid interest thereon not converted; and

C. cash in lieu of any fractional share as provided for herein.

iv.        The issuance of certificates for shares of Common Stock upon conversion of the Note shall be made without charge to the Holder for any issuance tax in respect of such issuance (including documentary, stamp or similar tax) or other cost incurred by the Corporation in connection with such conversion and the related issuance of shares of Common Stock, other than any transfer taxes resulting from the transfer of converted shares to a person or persons other than the converting Holder. Upon conversion of the Note, the Corporation shall take all such actions as are necessary in order to insure that the Common Stock issuable with respect to such conversion shall be validly issued, fully paid, and nonassessable.

b. Conversion Price.

i.          The Conversion Price shall be $0.07 per share of Common Stock, subject to adjustment from time to time in accordance with this Section 3 (the “Conversion Price”).

ii.        If and whenever, on or after the Date of Issuance, the Corporation issues or sells, or is deemed to have issued or sold, any shares of its Common Stock for consideration per share less than the Conversion Price in effect immediately prior to the time of such issuance or sale (an “Additional Stock Issuance”), then immediately upon such Additional Stock Issuance, the Conversion Price shall (except as otherwise provided in this Section 3) be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Conversion Price in effect immediately prior to such Additional Stock Issuance by a fraction, the numerator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to be issued pursuant to Section 3(c)(i) or Section 3(c)(ii) hereof) immediately prior to such Additional Stock Issuance plus (b) the number of shares of Common Stock that the aggregate consideration received by the Corporation for such Additional Stock Issuance would purchase at the Conversion Price in effect immediately prior to such Additional Stock Issuance, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to be issued pursuant to Section 3(c)(i) or Section 3(c)(ii) hereof) immediately prior to such Additional Stock Issuance plus (b) the number of shares of Common Stock issued in such Additional Stock Issuance.

iii.       Notwithstanding the foregoing, the Corporation shall not be required to make any adjustment to the Conversion Price as a result of an Additional Stock Issuance when such issuance is (a) in a transaction described in Section 3(d) and for which an adjustment has been made pursuant to Section 3(d); (b) any conversion of the Notes; (c) as a distribution on the Notes; (d) pursuant to any stock option plan or other incentive plan of the Corporation; (e) upon conversion or exercise of any Options or

 

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Convertible Securities outstanding as of the date hereof; or (f) made pursuant to the exercise of any of the Warrants.

iv.        If any of the Cancelled Shares (as defined below) are treated as issued and outstanding or given comparable legal effect (a “Cancelled Share Effectiveness”), then immediately upon such Cancelled Share Effectiveness, the Conversion Price shall (except as otherwise provided in this Section 3) be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Conversion Price in effect immediately prior to such Cancelled Share Effectiveness by a fraction, the numerator of which is equal to the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness plus (b) the number of shares of Cancelled Shares treated as issued and outstanding or given comparable legal effect. To the extent that any Cancelled Share Effectiveness occurs after all or a portion of this Note has been converted into shares of Common Stock, the Corporation shall immediately distribute to the Holder the number of shares of Common Stock that the Holder would have received had such Cancelled Share Effectiveness occurred prior to such conversion. “Cancelled Shares” shall mean the Common Stock issued by the Corporation in connection with (i) the acquisition of WEBiX Inc., which was subsequently rescinded on March 13, 2003, (ii) the acquisition of the business, operations and prospects of Kolt Oil and Gas, which was subsequently rescinded, (iii) the acquisition of furniture under a note with RHC and (iv) any other issuance of Common Stock prior to the date hereof that would cause the Corporation to have more than 31,589,501 shares of Common Stock outstanding as of the date hereof (other than shares deemed to be issued pursuant to Section 3(c)(i) or Section 3(c)(ii) hereof) if such shares are treated as issued and outstanding or given comparable legal effect.

c.         Effect on Conversion Price of Certain Events. For purposes of determining the adjusted Conversion Price under this Section 3, the following shall be applicable:

i.          If the Corporation in any manner issues or grants any options, warrants, or similar rights (“Options”) to purchase or acquire Common Stock or other equity securities convertible or exchangeable, with or without consideration, into or for Common Stock (“Convertible Securities”), and the price per share for which Common Stock is issuable upon the exercise of such Options or upon conversion or exchange of such Convertible Securities is less than the Conversion Price in effect immediately prior to the time of the granting of such Options, then the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such Options shall be deemed to be outstanding and to have been issued and sold by the Corporation for such price per share. For purposes of this Section, the “price per share for which Common Stock is issuable” shall be determined by dividing (a) the total amount, if any, received or receivable by the Corporation as consideration for the granting of such Options, plus the minimum aggregate amount of additional consideration payable to the Corporation upon exercise of all such Options, plus, in the

 

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case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the issuance or sale of such Convertible Securities and the conversion or exchange of such Convertible Securities, by (b) the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such Options. No further adjustment of the Conversion Price shall be made when Convertible Securities are actually issued upon the exercise of such Options or when Common Stock is actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

ii.        If the Corporation in any manner issues or sells any Convertible Securities and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price in effect immediately prior to the time of such issue or sale, then the maximum number of shares of Common Stock issuable upon conversion or exchange of such Convertible Securities shall be deemed to be outstanding and to have been issued and sold by the Corporation for such price per share. For the purposes of this Section, the “price per share for which Common Stock is issuable” shall be determined by dividing (a) the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion or exchange of such Convertible Securities, by (b) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment of the Conversion Price shall be made when Common Stock is actually issued upon the conversion or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustments of the Conversion Price had been or are to be made pursuant to other provisions of this Section 3, no further adjustment of the Conversion Price shall be made by reason of such issue or sale.

iii.       If the purchase price provided for in any Options or the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities or the rate at which any Convertible Securities are convertible into or exchangeable for Common Stock changes at any time, the Conversion Price in effect at the time of such change shall be readjusted to the Conversion Price that would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such changed purchase price, additional consideration, or changed conversion rate, as the case may be, at the time initially granted, issued, or sold. Notwithstanding the foregoing, no readjustment pursuant to this Section 3(c)(iii) shall have the effect of increasing the Conversion Price to an amount which exceeds the lower of (i) the Conversion Price in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (ii) the Conversion Price that would have resulted from any Additional Stock Issuances (other than deemed Additional Stock Issuances as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.

 

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iv.        Upon the expiration of any Option or the termination of any right to convert or exchange any Convertible Security which resulted in an adjustment to the Conversion Price, the Conversion Price then in effect under this Note shall be adjusted to the Conversion Price that would have been in effect at the time of such expiration or termination had such Option or Convertible Security, to the extent outstanding immediately prior to such expiration or termination, never been issued.

v.         If any Common Stock, Option, or Convertible Security is issued or sold or deemed to have been issued or sold for cash, the consideration received for such Common Stock, Option, or Convertible Security shall be deemed to be the amount received by the Corporation for such Common Stock, Option, or Convertible Security. In case any Common Stock, Options, or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Corporation shall be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Corporation will be the Closing Sale Price, or in the absence of a Closing Sale Price, the Closing Bid Price of such securities as of the date of receipt. If any Common Stock, Option, or Convertible Security is issued in connection with any merger in which the Corporation is the surviving corporation, the amount of consideration for such Common Stock, Option, or Convertible Security shall be deemed to be the fair market value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options, or Convertible Securities, as the case may be. The fair market value of any consideration other than cash will be determined jointly by the Corporation and the Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair market value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser jointly selected by the Corporation and the Required Holders. The determination of such appraiser shall be deemed binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Corporation.

vi.        In case any Option is issued in connection with the issue or sale of other securities of the Corporation, together comprising one integrated transaction in which no specific consideration is allocated to such Option by the parties to such transaction, the Option shall be deemed to have been issued for a consideration of $0.001.

vii.      The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or for the account of the Corporation or any Subsidiary of the Corporation, and the disposition of any shares so owned or held shall be considered an issue or sale of Common Stock.

viii.     No adjustment in the Conversion Price for the Note need be made if such adjustment would result in a change in the Conversion Price of less than $0.001. Any adjustment of less than $0.001 that is not made shall be carried forward and shall be made at the time of and together with any subsequent adjustment that, on a cumulative basis, amounts to an adjustment of $0.001 or more in the Conversion Price.

 

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ix.        If the Corporation takes a record of the holders of Common Stock for the purpose of entitling them (a) to receive a dividend or other distribution payable in Common Stock, Options, or Convertible Securities or (b) to subscribe for or purchase Common Stock, Options, or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or upon the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be; provided that if, after the occurrence of the record date, the Corporation increases or reduces the number of shares of Common Stock issued or deemed issued or fails to consummate the actual or deemed issuance that was the subject of the record date, the Conversion Price will thereafter be readjusted up or down to reflect the actual number of shares of Common Stock issued or deemed issued in connection with such record date.

d.         Subdivision or Combination of Common Stock. If the Corporation at any time subdivides (by any stock split, stock dividend, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision shall be proportionately reduced, and if the Corporation at any time combines (by reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall be proportionately increased.

e.         Other Corporate Events. If at any time or from time to time there shall be a capital reorganization of the Common Stock (other than a subdivision or combination of shares provided for elsewhere in this Agreement) or a spin-off, merger or consolidation of the Corporation with or into another corporation where the Corporation is not the surviving corporation, or the sale, lease, or transfer of all or substantially all of the Corporation’s properties and assets to any other person (collectively, a “Corporate Event”), then, as a part of such Corporate Event, provision shall be made so that the Holder of the Note shall, after such Corporate Event, be entitled to receive upon conversion of the Note, the number of shares of stock or other securities or property of the Corporation (including cash), or of the successor corporation resulting from such Corporate Event, to which a holder of Common Stock deliverable upon conversion would have been entitled on such Corporate Event. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 3 with respect to the rights of the Holder, or any later Holder, of the Note after the Corporate Event to the effect that the provisions of this Section 3 (including adjustment of the Conversion Price and the number of shares purchasable upon conversion of Note) shall be applicable after that event as nearly equivalent as may be practicable.

f. Rights Upon Change of Control.

i.          Change of Control. Each of the following events shall constitute a “Change of Control”:

A.        the consolidation, merger or other business combination (including, without limitation, a reorganization or recapitalization) of the Corporation with or into another Person (other than (1) a consolidation, merger or other business combination (including, without limitation, reorganization or recapitalization) in which holders of the Corporation’s voting power immediately

 

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prior to the transaction continue after the transaction to hold, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (2) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Corporation);

B.        the sale or transfer of all or substantially all of the Corporation’s assets; or

C.        a purchase, tender or exchange offer made to and accepted by the holders of more than the 50% of the outstanding shares of Common Stock.

ii.        No sooner than fifteen (15) days nor later than ten (10) days prior to the consummation of a Change of Control, but not prior to the public announcement of such Change of Control, the Corporation shall deliver written notice thereof via facsimile and overnight courier to the Holder (a “Change of Control Notice”).

iii.       Assumption. Prior to the consummation of any Change of Control, the Corporation will secure from any Person purchasing the Corporation’s assets or Common Stock or any successor resulting from such Change of Control (in each case, an “Acquiring Entity”) a written agreement (in form and substance satisfactory to the Required Holders) to deliver to each Holder of the Tranche A Notes and/or Tranche B Notes in exchange for such Tranche A Notes and/or Tranche B Notes, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to the Tranche A Notes and Tranche B Notes, including, without limitation, having a principal amount and interest rate equal to the principal amounts and the interest rates of the Tranche A Notes and Tranche B Notes held by such Holder, and satisfactory to the Required Holders. In the event that an Acquiring Entity is directly or indirectly controlled by a company or entity whose common stock or similar equity interest is listed, designated or quoted on a securities exchange or trading market, the Required Holders may elect to treat such Person as the Acquiring Entity for purposes of this Section 3(f).

iv.        Holder Redemption Right. At any time during the period beginning after the Holder’s receipt of a Change of Control Notice and ending on the date of the consummation of such Change of Control (or, in the event a Change of Control Notice is not delivered at least ten (10) days prior to a Change of Control, at any time on or after the date which is ten (10) days prior to a Change of Control and ending ten (10) days after the consummation of such Change of Control), the Holder may require the Corporation to redeem all or any portion of this Note by delivering written notice thereof (“Change of Control Redemption Notice”) to the Corporation, which Change of Control Redemption Notice shall indicate the Conversion Amount the Holder is electing to require the Corporation to redeem. The portion of this Note subject to redemption pursuant to this Section 3(f)(iv) shall be redeemed by the Corporation at a price equal to 120% of the greater of (i) the product of (x) the Conversion Amount being redeemed and (y) the quotient determined by dividing (A) the Closing Sale Price of the Common Stock, or in the absence of a Closing Sale Price, the Closing Bid Price, on the Trading Day

 

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immediately preceding consummation of such Change of Control by (B) the Conversion Price and (ii) the Conversion Amount being redeemed (the “Change of Control Redemption Price”). Redemptions required by this Section 3(f)(iv) shall be made in accordance with the provisions of Section 6 and, to the extent permitted by applicable Law, shall have priority to payments by the Corporation or the Acquiring Entity, as applicable, to the shareholders of the Corporation in connection with a Change of Control. Notwithstanding anything to the contrary in this Section 3, until the Change of Control Redemption Price is paid in full, the Conversion Amount submitted for redemption under this Section 3(f)(iv) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3.

g.         Other Events. If any event occurs of the type contemplated by the provisions of this Section 3 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Corporation’s Board of Directors will make an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder under this Note; provided that no such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section 3.

h. Notices.

i.          As soon as practicable, upon any adjustment of the Conversion Price, the Corporation shall give written notice of such adjustment to the then Holder of the Note, and furnish the Holder with a certificate of its Chief Financial Officer setting forth in reasonable detail such adjustment and the facts upon which such adjustment is based. The Corporation shall, upon written request, furnish the Holder a certificate setting forth the Conversion Price in effect upon the date thereof and the series of adjustments leading to such Conversion Price.

ii.        The Corporation shall give written notice to the Holder of the Note at least twenty (20) Business Days prior to the date on which the Corporation closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, or issuance or granting of rights, options or warrants or (B) with respect to any pro rata subscription offer to holders of Common Stock.

iii.       The Corporation shall give written notice to the Holder at least thirty (30) Business Days prior to the effective date of any proposed liquidation, dissolution or winding up of the Corporation; provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

i.          Automatic Conversion. The Note, and all accrued and unpaid interest hereon, shall be automatically converted (the “Automatic Conversion”) into Common Stock at the Conversion Price then in effect upon the earliest to occur of the following:

i.          the sale by the Corporation of a minimum of $25,000,000 of equity, in one sale or a related series of sales, without regard to the class of equity sold,

 

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ii. a Qualified Public Offering, or

iii.       the occurrence of (x) receipt by the Corporation or AirGATE of revenue of not less than (1) $1,000,000 from Hexion Specialty Chemicals, Inc. (“Hexion”), or its customers, as a result of services rendered by Hexion to its one or more of its customers in connection with the use of the Pioneer Downhole Tool in the oil and gas industry, and as further described herein, or (2) $500,000 of revenues from the sale of RFID tags that withstand downhole pressure, and related equipment and services, and (y) an average Closing Sale Price of the Common Stock of at least $0.75 per share for the thirty (30) day trading period preceding the receipt of such revenues.

j.          Effect of Automatic Conversion. Upon the Automatic Conversion of this Note, the Corporation shall not be obligated to issue certificates evidencing the Common Stock unless such Note is either delivered to the Corporation or its transfer agent, or the Holder notifies the Corporation or its transfer agent that such Note has been lost, stolen or destroyed and executes an affidavit of loss and an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such Note. The Corporation shall, as soon as practicable after such delivery, or such agreement and indemnification, cause its transfer agent to issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and with any fractional share resulting from such calculation rounded up to the nearest whole share. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of closing of the transaction causing the Automatic Conversion. The person or persons entitled to receive securities issuable upon such Automatic Conversion shall be treated for all purposes as the record holder or holders of such securities on such date.

k.         Issuance of Common Stock. Upon the conversion of the Note, the Corporation shall, at the request of the Holder, execute and deliver (at the Corporation’s expense) a certificate or certificates in exchange for the Note representing in the aggregate the number of shares of Common Stock to be delivered to the Holder pursuant to such conversion. Each such certificate shall be registered in such name as is requested by the Holder.

l.          Replacement. Upon receipt of evidence reasonably satisfactory to the Corporation of the ownership and the loss, theft, destruction, or mutilation of the Note, and, in the case of any such loss, theft, or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation or, in the case of any mutilation, upon surrender of such Note, the Corporation shall (at its expense) execute and deliver in lieu of such Note a new Note of like kind in such principal amount as represented by such lost, stolen, destroyed, or mutilated Note.

m.        Reissuance of Note. Upon any partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Corporation to the Holder for the Principal balance of this Note and all accrued but unpaid interest which shall not have been converted. The Corporation shall (at its expense) execute and deliver such new Note.

n.         Legend. If the shares of Common Stock issued pursuant to the conversion of the Note are not subject to an effective registration statement under the Act, the certificates

 

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evidencing shares of Common Stock issued upon conversion of the Note shall bear the following restrictive legend or a substantially similar legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE X-CHANGE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”

4. Events of Default.

a.         The occurrence of any of the following events constitutes an “Event of Default” hereunder:

i.          any failure by the Corporation to pay the Holder any amounts of Principal, interest or other amounts when and as due under this Note or any other Transaction Document (as defined in the Purchase Agreement);

ii.        any breach by the Corporation or any of its Subsidiaries of any covenant or other term or condition of this Note, the Purchase Agreement, any Related Agreement, the Tranche A Notes or the Tranche B Notes in any material respect, except, in the case of a breach of a covenant which is curable, only if such breach continues for a period of at least fifteen (15) consecutive days after the earlier to occur of (i) any executive officer of the Corporation becoming aware of such breach and (ii) the receipt of written notice from any Holder of the Tranche A Notes or Tranche B Notes of such breach;

iii.       any breach by the Corporation or any of its Subsidiaries of any representation or warranty of the Corporation or any of its subsidiaries made herein, in the Purchase Agreement, in any Related Agreement, the Tranche A Notes or the Tranche B Notes or any representation or warranty made by the Corporation or any of its subsidiaries made herein, in the Purchase Agreement, in any Related Agreement, the Tranche A Notes or the Tranche B Notes that was false or misleading in any material respect on the date that such representation or warranty was made or deemed made;

iv.        if the Corporation or any of its Subsidiaries makes an assignment for the benefit of creditors, or applies for or consents to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed;

v.         if any money judgment, writ or similar final process shall be entered or filed against the Corporation, any of its Subsidiaries or any of its property or

 

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other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days;

vi.        if bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy Law or any Law for the relief of debtors shall be instituted by or against the Corporation or any of its Subsidiaries;

vii.      if an SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a Principal Market;

viii.     if it becomes unlawful for the Corporation or any of its Subsidiaries to perform or comply with its respective obligations under this Note, the Purchase Agreement, in any Related Agreement, the Tranche A Notes or the Tranche B Notes;

ix.        if the Corporation shall fail to timely file all reports required to be filed by it with the SEC (as defined in the Purchase Agreement) pursuant to Section 13 or 15(d) of the Exchange Act (as defined in the Purchase Agreement), or otherwise required by the Exchange Act;

x.         any Event of Default (as defined in the Tranche A Notes and Tranche B Notes) occurs with respect to any Tranche A Notes or Tranche B Notes; or

xi.        if the Corporation fails (i) to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, if such failure to timely deliver Common Stock shall not be cured within two (2) Business Days or (ii) to deliver a replacement Note to Holder within seven (7) Business Days following the required date of such issuance pursuant to this Note.

b.         Redemption Right Upon Event of Default. Promptly after the occurrence of an Event of Default with respect to this Note or any Tranche A Note or other Tranche B Note, the Corporation shall deliver written notice thereof via facsimile and overnight courier (an “Event of Default Notice”) to the Holder and the Holders of the Tranche A Notes and Tranche B Notes. At any time after the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default and until the Event of Default is cured, the Holder may require the Corporation to redeem all or any portion of the Notes by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Corporation, which Event of Default Redemption Notice shall indicate the portion of the Notes that the Holder is electing to cause to be redeemed. The portion of this Note subject to redemption by the Corporation pursuant to this Section 4(b) shall be redeemed by the Corporation at a price equal to the greater of (i) the product of (x) the Conversion Amount to be redeemed plus accrued and unpaid interest and (y) 120% and (ii) the product of (A) the Conversion Rate with respect to such Conversion Amount in effect at such time as the Holder delivers an Event of Default Redemption Notice, (B) the Closing Sale Price, or in the absence of a Closing Sale Price, the Closing Bid Price, of the Common Stock on the date immediately preceding such Event of

 

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Default and (C) 120% (the “Event of Default Redemption Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 6. For purposes of this Section 4(b), “Conversion Rate” shall mean the number of shares of Common Stock equal to the amount determined by dividing (i) the Conversion Amount by (ii) the Conversion Price.

5. Transfer.

a.         Transfer Restricted. This Note, and any rights hereunder, may not be assigned or transferred, except as provided in the legend hereon and in accordance with and subject to provisions of (i) all applicable state securities Laws and (ii) the Act, and the rules and regulations promulgated thereunder. Any purported transfer or assignment made other than in accordance with this Section 5 shall be null and void and of no force and effect.

b.         Assignment. Any assignment permitted hereunder shall be made by surrender of this Note to the Corporation at its principal place of business as set forth above with a Form of Assignment in substantially the form attached hereto as Exhibit B, duly completed and executed and funds sufficient to pay any transfer tax, if any. In such event, the Corporation shall, without charge, execute and deliver a new note in the name of the assignee named in such instrument of assignment in the amount so assigned and this Note shall be promptly canceled; provided, however, that in the event that the Holder hereof shall assign or transfer less than the full amount of this Note, a new note evidencing the remaining portion of this Note not so assigned or transferred shall be issued in the name of the Holder.

6. Redemptions.

a.         Mechanics. In the event that the Holder has sent a Redemption Notice to the Corporation pursuant to Section 3(f)(iv) or Section 4(b), the Holder shall promptly submit this Note to the Corporation in accordance with this Section 6. The Corporation shall deliver the applicable Event of Default Redemption Price to the Holder within seven (7) Business Days after the Corporation’s receipt of the Holder’s Event of Default Redemption Notice and thereafter the Holder shall promptly deliver this Note to the Corporation. If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 3(f)(iv), the Corporation shall deliver to the Holder the Change of Control Redemption Price concurrently with the consummation of such Change of Control if such Change of Control Redemption Notice is received by the Corporation prior to the consummation of such Change of Control and within seven (7) Business Days after the Corporation’s receipt of such Change of Control Redemption Notice otherwise. In the event of a redemption of less than all of the Conversion Amount of this Note, the Corporation shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 3(m)) representing the outstanding Principal which has not been redeemed. In the event that the Corporation does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter and until the Corporation pays such unpaid Redemption Price in full, the Holder shall have the option to, in lieu of redemption, require the Corporation to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption Price has not been paid. One (1) day after the Corporation’s receipt of such notice, if the Corporation has not cured such failure, (x) the Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Corporation shall immediately return this Note, or issue a new Note (in accordance with Section 3(m)) to the Holder

 

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representing such Conversion Amount and (z) the Conversion Price of this Note or such new Notes shall be adjusted to the lesser of (A) the Conversion Price as in effect on the date on which the Redemption Notice is voided and (B) the lowest Closing Bid Price of the Common Stock during the period beginning on and including the date on which the Redemption Notice is delivered to the Corporation and ending on and including the date on which the Redemption Notice is voided.

b.         Redemption by Other Holders. Upon the Corporation’s receipt of notice from any of the holders of the Other Notes for redemption or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b) or Section 3(f)(iv) (each, an “Other Redemption Notice”), the Corporation shall immediately forward to the Holder by facsimile a copy of such notice. If the Corporation receives a Redemption Notice and one or more Other Redemption Notices during the period beginning on the day the Corporation receives the first of such Redemption Notice or Other Redemption Notice and ending on the date which is five (5) Business Days after the Corporation forwards the first such notice (“Redemption Period”) and the Corporation is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during such Redemption Period, then the Corporation shall redeem a pro rata amount from each holder of the Tranche A Notes and the Tranche B Notes (including the Holder) based on the aggregate principal amount of the Tranche A Notes and the Tranche B Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received or delivered by the Corporation during such Redemption Period.

7.          Noncircumvention. The Corporationhereby covenants and agrees that the Corporationwill not, by amendment of 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 Note, and will at all times carry out all of the provisions of this Note.

8.          Vote to issue, or change the terms of, the Tranche A Notes and Tranche B Notes. The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the Required Holders, shall be required for any change or amendment to this Note, the Tranche A Notes or the Tranche B Notes, all of which shall be amended in like manner; provided, however, that no such amendment as applied to any particular Holder of Tranche A Notes or Tranche B Notes, shall, without the consent of that particular Holder, extend the maturity of the Tranche A Note or the Tranche B Note, reduce the interest rate, extend the time of payment of interest thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable on redemption or repurchase thereof or affect any amounts due to any Holder.

9. Definitions

a.         “Acquiring Entity” has the meaning set forth in Section 3(f)(iii) of this Note.

b. “Act” has the meaning set forth in the legend of this Note.

 

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c.         “Additional Stock Issuance” has the meaning set forth in Section 3(b)(ii) of this Note.

d. “AirGATE” has the meaning set forth in Section 2(a) of this Note.

e.         “Automatic Conversion” has the meaning set forth in Section 3(i) of this Note.

f. “Bloomberg” means Bloomberg Financial Markets.

g.         “Business Day” means any day except Saturday, Sunday and any day that is a federal legal holiday or a day on which banking institutions in the State of Texas are authorized or required by Law or other governmental action to close.

h.         “Cancelled Share Effectiveness” has the meaning set forth in Section 3(b)(iv) of this Note.

i.          “Cancelled Shares” has the meaning set forth in Section 3(b)(iv) of this Note.

j.          “Change of Control” has the meaning set forth in Section 3(f)(i) of this Note.

k.         “Change of Control Notice” has the meaning set forth in Section 3(f)(ii) of this Note.

l.          “Change of Control Redemption Notice” has the meaning set forth in Section 3(f)(iv) of this Note.

m.        “Change of Control Redemption Price” has the meaning set forth in Section 3(f)(iv) of this Note.

n.         “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00 p.m., New York City Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the

 

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Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Corporation and the Required Holders. If the Corporation and the Holders are unable to agree upon the fair market value of such security, then such dispute shall be resolved by an independent, reputable appraiser jointly selected by the Corporation and the Required Holders. The determination of such appraiser shall be deemed binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Corporation. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction that proportionately decreases or increases the Common Stock during the applicable calculation period.

o.         “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

p.         “Conversion Amount” means the sum of (A) the portion of the outstanding Principal to be converted, redeemed or otherwise with respect to which this determination is being made and (B) accrued and unpaid Interest with respect to such Principal.

q.         “Conversion Price” has the meaning set forth in Section 3(b)(i) of this Note.

r. “Conversion Rate” has the meaning set forth in Section 4(b) of this Note.

s.         “Convertible Securities” has the meaning set forth in Section 3(c)(i) of this Note.

t. “Corporate Event” has the meaning set forth in Section 3(e) of this Note.

u. “Corporation” has the meaning set forth in the preamble of this Note.

v. “Date of Issuance” has the meaning set forth in Section 1(a) of this Note.

w.        "Disqualified Stock" means any capital stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, in each case at the option of the holder of the capital stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the capital stock, in whole or in part, on or prior to the date thatis91 days after the date on which the Notes mature.

x. “Event of Default” has the meaning set forth in Section 4(a) of this Note.

y.         “Event of Default Notice” has the meaning set forth in Section 4(b) of this Note.

 

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z.         “Event of Default Redemption Notice” has the meaning set forth in Section 4(b) of this Note.

aa.       “Event of Default Redemption Price” has the meaning set forth in Section 4(b) of this Note.

bb.       “GAAP” means the generally accepted accounting principles in the United States.

cc. “Hexion” has the meaning set forth in Section 3(i)(iii) of this Note.

dd. “Holder” has the meaning set forth in the preamble of this Note.

ee.       “Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease, (vii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii) above.

ff. “Interest Rate” has the meaning set forth in Section 1(a) of this Note.

gg.       “Law” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law, rule or regulation.

hh. “Maturity Date” has the meaning set forth in Section 1(a) of this Note.

ii. “Note” has the meaning set forth in the preamble of this Note.

jj. “Options” has the meaning set forth in Section 3(c)(i) of this Note.

kk.       “Other Notes” means the Tranche A Notes and the Tranche B Notes, other than this Note.

ll.        “Other Redemption Notice” has the meaning set forth in Section 6(b) of this Note.

 

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mm.    “Permitted Subordinated Indebtedness” means Indebtedness of Corporation, and not any Subsidiary, that (i) is made expressly subordinate in right of payment to the Indebtedness evidenced by this Note, the Tranche A Notes and the Tranche B Notes on terms and pursuant to an agreement reasonably satisfactory to the Required Holders and, in the event that interest is payable, directly or indirectly, prior to 91 days after the Maturity Date, provides for interest that is no greater than market rate interest, and (ii) does not provide at any time for the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until at least 91 days after the Maturity Date.

nn.       “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

oo. “Principal” has the meaning set forth in Section 1(a) of this Note.

pp.       “Principal Market” means the New York Stock Exchange, American Stock Exchange, NASDAQ Global Select Market, NASDAQ Global Market, NASDAQ Capital Market, or OTC Bulletin Board (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock or other security in question).

qq.       “Purchase Agreement” has the meaning set forth in the preamble of this Note.

rr.        “Qualified Public Offering” means a public offering of the Common Stock by a nationally recognized underwriter such that the Corporation’s aggregate net proceeds from such offering are at least $20,000,000, and the imputed market capitalization of the Corporation, pre-offering, is at least $100,000,000.

ss.        “Redemption Notice” means any of an Event of Default Redemption Notice or Change of Control Redemption Notice.

tt.        “Redemption Period” has the meaning set forth in Section 6(b) of this Note.

uu.       “Redemption Price” means any of an Event of Default Redemption Price or Change of Control Redemption Price.

vv.       “Required Holders” means one or more Holders of Tranche A Notes and Tranche B Notes representing greater than seventy-five percent (75%) of the aggregate principal amount of all Tranche A Notes and Tranche B Notes then outstanding.

ww. “SEC” means the United States Securities and Exchange Commission.

xx.       “Security Agreement” shall have the meaning assigned to such term in the Purchase Agreement.

yy.       “Subsidiary” means (i) a corporation or other entity whose shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of such corporation, are owned, directly or indirectly, by the Corporation or (ii) a corporation or

 

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other entity in which the Corporation owns, directly or indirectly, more than fifty (50%) of the equity interests.

zz.       “Trading Day” means any day on which the Common Stock or other applicable security is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock or other applicable security, then on the principal securities exchange or securities market on which the Common Stock or other applicable security is then traded; provided that “Trading Day” shall not include any day on which the Common Stock or other applicable security is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock or other applicable security is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., New York City Time).

aaa.     “Tranche A Notes” shall have the meaning assigned to such term in the Purchase Agreement.

bbb.     “Tranche B Notes” shall have the meaning assigned to such term in the Purchase Agreement.

ccc.     “Valuation Event” has the meaning set forth in Section 3(c)(v) of this Note.

ddd.     “Warrants” shall have the meaning assigned to such term in the Purchase Agreement.

10. Miscellaneous.

a.         Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

b.         Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given:

A. upon personal delivery to the party to be notified;

B.        when sent by confirmed facsimile if sent during normal business hours of the recipient, or if delivered after normal business hours, then on the next Business Day;

C.        three (3) Business Days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or

 

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D.        one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.

All communications shall be sent as follows:

If to the Corporation, to:

The X-Change Corporation

710 Century Parkway

Allen, Texas 75013

Attention: George DeCourcy, Chief Financial Officer

Facsimile: 972-359-6334

with a copy (which shall not constitute notice) to:

Strasburger & Price, LLP

901 Main Street, Suite 4400

Dallas, Texas 75202

Attention: Kevin Woltjen, Esq.

Facsimile: 214-659-4025

If to Holder, to________

________________________

________________________

________________________

Facsimile: ________________

with a copy (which shall not constitute notice) to:

Weil, Gotshal & Manges LLP

200 Crescent Court, Suite 300

Dallas, Texas 75201

Attention: R. Scott Cohen, Esq.

Facsimile: 214-746-7777

or at such other address as the Corporation or Holder may designate by written notice given in accordance with this Section 10(b).

c.         Amendment Provision. The term “Note” and all references thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued, as such may be amended or supplemented.

d.         Assignability. This Note shall be binding upon the Holder and the Corporation and their respective successors and assigns, and shall inure to the benefit of the Holder and the Corporation and their respective successors and assigns, and may be assigned by

 

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the Holder in accordance with the requirements of the Purchase Agreement. This Note shall not be assigned by the Corporation without the prior written consent of the Holder.

e.         Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES OR PRINCIPLES THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SERVING DALLAS COUNTY, TEXAS, FOR THE PURPOSES OF ANY ACTION ARISING OUT OF THIS NOTE, OR THE SUBJECT MATTER HEREOF. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION (A) THAT SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, (B) THAT THE ACTION IS BROUGHT IN AN INCONVENIENT FORUM, (C) THAT IT IS IMMUNE FROM ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ITS PROPERTY, (D) THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR (E) THAT THIS NOTE, OR THE SUBJECT MATTER HEREOF, MAY NOT BE ENFORCED IN OR BY SUCH COURTS. IN THE EVENT THAT ANY PROVISION OF THIS NOTE IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM TO SUCH STATUTE OR RULE OF LAW SO LONG AS THE ECONOMIC OR LEGAL SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY IS NOT AFFECTED IN ANY MANNER MATERIALLY ADVERSE TO ANY PARTY. ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS NOTE, WHICH SHALL REMAIN ENFORCEABLE IN ACCORDANCE WITH ITS RESPECTIVE TERMS.

f.         Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable Law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such Law, any payments in excess of such maximum shall be credited against amounts owed by the Corporation to the Holder and thus refunded to the Corporation.

g.         Construction. Each party acknowledges that its legal counsel participated in the preparation of this Note and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Note to favor any party against the other.

h.         Cost of Collection. If default is made in the payment of this Note, the Corporation shall pay to Holder reasonable costs of collection, including reasonable attorney’s fees.

 

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                        IN WITNESS WHEREOF, the Corporation has caused this Senior Secured Convertible Term Note—Tranche B to be signed in its name effective as of this ___ day of July, 2008.

The X-CHANGE CORPORATION

By:________________________________

Name:______________________________

Title:_______________________________

WITNESS:

_______________________________

 

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Exhibit A

Notice of Conversion

(To be executed by the Holder in order to convert all or part of the Note into Common Stock)

Name of Holder: ________________________

Address: _____________________________

____________________________

____________________________

Holder hereby elects to convert into the Common Stock of The X-Change Corporation $_______ of the Principal and/or accrued but unpaid interest under the terms of the Senior Secured Convertible Term Note—Tranche B issued by The X-Change Corporation dated July __, 2008 on and subject to the conditions set forth in such Senior Secured Convertible Term Note—Tranche B.

1. Date of Conversion: _________________________

2. Shares To Be Delivered:______________________

______________________________

(Please print name of Holder)

By: ____________________________

Name:__________________________

Title: __________________________

Exhibit B

ASSIGNMENT FORM

(To assign the foregoing Note, execute this form and supply required information.

Do not use this form to exercise the Note)

FOR VALUE RECEIVED, ______________________________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Note with respect to the number of shares of Common Stock of The X-Change Corporation covered thereby set forth below, unto:

Name of Assignee Address No. of Shares

By:___________________________________

Name: ________________________________

Title: _________________________________

Signature Guaranteed:

By: __________________________________

The signature should be guaranteed by an eligible guarantor institution pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.

EX-99

EXHIBIT H

TRANCHE B WARRANT

THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE X-CHANGE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

Issuer: The X-Change Corporation

Class of Stock: Common Stock

Issue Date: [Insert date of sale]

Expiration Date: [Date five (5) years from date of sale]

Warrant No. ______________

This Tranche B Warrant (this “Warrant”) is being issued pursuant to that certain Securities Purchase Agreement dated as of December 4, 2007, as amended, modified or supplemented from time to time (the “Purchase Agreement”) by and among The X-Change Corporation, a Nevada corporation (the “Company”), and, among others, ______________ [Name of Purchaser] (the “Holder”). The Company and the Holder may hereinafter be referred to individually as a “Party” or collectively as the “Parties.” All capitalized terms used but not defined herein shall have the meaning ascribed to such term in the Purchase Agreement.

This Warrant is one of the Tranche A Warrants and Tranche B Warrants (each as defined in the Purchase Agreement) issued for shares of Common Stock of the Company pursuant to the Purchase Agreement (collectively, the“Warrant Series”).

1.          Number of Shares. In connection with the purchase by Purchaser of a Tranche B Note (as defined in the Purchase Agreement) pursuant to the Purchase Agreement, the Company hereby grants to the Holder, pursuant to this Warrant, subject to the terms and condition set forth herein, the right to purchase __________ shares of the Company’s Common Stock, as adjusted pursuant to Section 6 (the “Shares”) at a price per share equal to the Exercise Price set forth in Section 2 below.

2.          Exercise Price. The exercise price for the Shares shall be $0.17 per Share, as adjusted pursuant to Section 6 (the “Exercise Price”).

3.          Exercise Period. The Warrant may be exercised (the “Exercise Period”) commencing on the date set forth above as the Issue Date (the “Issue Date”) set forth above and ending on the date set forth above as the Expiration Date (the “Expiration Date”).

4.          Method of Exercise. This Warrant may be exercised in whole or in part, at any time or from time to time during the Exercise Period, by surrender of this Warrant and delivery

 of a completed Exercise Form attached hereto as Schedule A, duly executed and directed to the Company at its principal place of business, accompanied by certified funds payable to the Company in the amount of the appropriate Exercise Price. Upon receipt of the Exercise Form and the Exercise Price, the Company shall make prompt delivery (in any event within three (3) Business Days (as defined in the Purchase Agreement) of receipt of the Exercise Form and Exercise Price) of a certificate evidencing the number of whole Shares to which the Holder may be entitled, and pay to the Holder, in lieu of issuing any fractional Share, cash in an amount equal to the amount of any fraction associated with any such fractional Share multiplied by the then effective Exercise Price. In case of the purchase of less than all the Shares purchasable under this Warrant, the Company shall cancel this Warrant upon surrender hereof and shall execute and deliver a new Warrant of like tenor and date for the balance of the Shares purchasable hereunder.

5.          Rights as Stockholder. The Holder shall have no rights as a stockholder of the Company with respect to any shares of Common Stock subject to the Warrant prior to the exercise of this Warrant, and then only with respect to those shares of Common Stock actually acquired upon such due and proper exercise.

6.          Adjustment of Exercise Price and Number of Shares. The Exercise Price and the number of shares of Common Stock (or amount of other securities or property) purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 6.

(a)          Subdivision or Combination of Stock. If the Company shall effect a stock dividend or stock split or subdivide its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such stock dividend, stock split or subdivision shall be proportionately reduced, and conversely, if the Company shall effect a reverse stock split or combine its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such reverse stock split or combination shall be proportionately increased. Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment.

(b)          Dividends in Common Stock, Other Stock, Property, Reclassification. If the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefor,

(i)          Common Stock or any shares of stock or other securities that are directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution (other than shares of Common Stock issued as a stock dividend, stock split or subdivision, adjustments in respect of which shall be covered by the terms of Section 6(a) above), 

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(ii)         any cash or property paid or payable otherwise than as a cash dividend (other than a liquidation or dissolution, which shall be covered by the terms of Section 6(e) below), or

(iii)        additional shares of Common Stock or additional stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, recapitalization, reorganization, combination of shares or similar corporate rearrangement (other than shares of Common Stock issued as a stock dividend, stock split or subdivision, adjustments in respect of which shall be covered by the terms of Section 6(a) above),

then, and in each such case, the Holder hereof shall, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable upon such exercise, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to in clauses (ii) and (iii) above) which such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property.

(c)          Reorganization, Reclassification, Consolidation, Merger or Sale. If any reclassification, recapitalization or reorganization, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets or other similar transaction, shall be effected in such a way that holders of Common Stock shall be entitled to receive, with respect to or in exchange for their shares of Common Stock, securities or other assets or property (an “Organic Change”) and the Company is the resulting or surviving corporation of such Organic Change, then, as a condition of such Organic Change, provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of the Common Stock of the Company purchasable and receivable upon the exercise of this Warrant immediately prior to such Organic Change) such shares of stock, securities or other assets or property as may be issued or payable in connection with such Organic Change with respect to or in exchange for the number of outstanding shares of such Common Stock purchasable and receivable upon the exercise of this Warrant immediately prior to such Organic Change. In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares (or amount of stock, other securities or property) purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or property thereafter deliverable upon the exercise hereof. In the event of any Organic Change pursuant to which the Company is not the surviving or resulting corporation, prior to the consummation thereof, the corporation resulting from such Organic Change or the corporation purchasing such assets shall assume by written instrument the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase.

 

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(d)          Cancelled Shares. If any of the Cancelled Shares (as defined below) are treated as issued and outstanding or given comparable legal effect (a “Cancelled Share Effectiveness”), then immediately upon such Cancelled Share Effectiveness, the Exercise Price shall be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Exercise Price in effect immediately prior to such Cancelled Share Effectiveness by a fraction, the numerator of which is equal to the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness plus (b) the number of shares of Cancelled Shares treated as issued and outstanding or given comparable legal effect. Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment. To the extent that any Cancelled Share Effectiveness occurs after all or a portion of this Warrant has been exercised for shares of Common Stock, the Corporation shall immediately distribute to the Holder the number of shares of Common Stock that the Holder would have received had such Cancelled Share Effectiveness occurred prior to such exercise. “Cancelled Shares” shall mean the Common Stock issued by the Company in connection with (i) the acquisition of WEBiX Inc., which was subsequently rescinded on March 13, 2003, (ii) the acquisition of the business, operations and prospects of Kolt Oil and Gas, which was subsequently rescinded, (iii) the acquisition of furniture under a note with RHC and (iv) any other issuance of Common Stock prior to the date hereof that would cause the Company to have more than 31,589,501 shares of Common Stock outstanding as of the date hereof if such shares are treated as issued and outstanding or given comparable legal effect.

(e)          Certain Events. If any change in the outstanding Common Stock of the Company or any other event occurs as to which the other provisions of this Section 6 are not strictly applicable or if strictly applicable would not fairly protect the purchase rights of the Holder of the Warrant in accordance with such provisions, then the Board of Directors of the Company shall make an adjustment in the number and class of shares or other securities or property available under the Warrant, the Exercise Price or the application of such provisions, so as to protect such purchase rights as aforesaid. The adjustment shall be such as will give the Holder of the Warrant upon exercise for the same aggregate Exercise Price the total number, class and kind of shares or other securities or property as the Holder have owned had the Warrant been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring adjustment.

(f)          No Impairment. The Company shall not, by amendment of its articles or certificate of incorporation or through a 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 to be observed or performed under this Warrant by the Company, but shall at all times assist in carrying out all of the provisions of this Warrant and in taking all such action as may be reasonably

 

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necessary or appropriate to protect the Holder's rights hereunder against impairment. If the Company takes any action affecting its Common Stock other than as described above that adversely affects the Holder's rights under this Warrant, the Exercise Price shall be adjusted downward and the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted upward in such a manner that the aggregate Exercise Price of this Warrant is unchanged.

(g) Notices of Change.

(i)          Immediately upon any adjustment in the number or class of shares subject to this Warrant and of the Exercise Price, the Company shall give written notice thereof to the Holder, and furnish the Holder with a certificate of its Chief Financial Officer setting forth in reasonable detail such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish the Holder a certificate setting forth the Exercise Price in effect upon the date thereof and the series of adjustments leading to such Exercise Price,

(ii)         The Company shall give written notice to the Holder at least twenty (20) Business Days prior to the date on which the Company closes its books or takes a record for determining rights to receive any dividends or distributions,

(iii)        The Company shall also give written notice to the Holder at least twenty (20) Business Days prior to the date on which an Organic Change shall take place, and

(iv)         The Company shall give written notice to the Holder at least thirty (30) Business Days prior to the effective date of any proposed liquidation, or dissolution or winding up of the Company.

(h)          Calculations. All calculations under this Section 6 shall be made to the nearest 1/10th of a cent or the nearest 1/100^th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(i)          Adjustments. Notwithstanding any provision of this Section 6, no adjustment of the Exercise Price shall be required if such adjustment is less than $0.001; provided, however, that any adjustments that by reason of this Section 6(i) are not required to be made shall be carried forward and taken into account for purposes of any subsequent adjustment.

7. Investment Representations.

(a)          The Holder represents and warrants to the Company that the Holder is acquiring the Warrant and the Shares issuable upon exercise of the Warrant for the Holder’s own account for the purpose of investment and not with a view toward resale or other distribution thereof in violation of the Act. The Holder acknowledges that the effect of the representations and warranties is that the economic risk of the investment in the

5

Warrant must be borne by the Holder. These representations and warranties shall be deemed to be continuing representations and warranties and shall be in full force and effect upon such exercise of the Warrant granted hereby. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.

(b)          In order to enable the Company to comply with the Act and any relevant state Law (as defined in the Purchase Agreement), the Company may require the Holder, as a condition of the exercising of the Warrant granted hereunder, to give written assurance satisfactory to the Company that the shares of Common Stock subject to the Warrant are being acquired for its own account, for investment only, with no view to the distribution of same, and that any subsequent resale of any such shares of Common Stock either shall be made pursuant to a registration statement under the Act, which shall become effective and is current with regard to the shares of Common Stock being sold, or shall be made pursuant to an exemption from registration under the Act. If the shares of Common Stock purchased pursuant to the exercise of the Warrant are not subject to an effective registration statement under the Act, the certificates evidencing shares of Common Stock purchased upon exercise of the Warrant shall bear the following restrictive legend or a substantially similar legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE X-CHANGE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”

(c)          The Holder represents and warrants that the Holder is an “accredited investor” within the meaning of Rule 501(a) of Regulation D of the Act.

8. Transfer.

(a)          Transfer Restricted. This Warrant, and any rights hereunder, may not be assigned or transferred, except as provided in the legend hereon and in accordance with and subject to provisions of (i) all applicable state securities Laws and (ii) the Act, and the rules and regulations promulgated thereunder. Any purported transfer or assignment made other than in accordance with this Section 8 shall be null and void and of no force and effect.

(b)          Assignment. Any assignment permitted hereunder shall be made by surrender of this Warrant to the Company at its principal place of business as set forth below with a Form of Assignment in substantially the form attached hereto as Exhibit B, duly completed and executed and funds sufficient to pay any transfer tax, if any.

 

6

In such event, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment in the amount so assigned and this Warrant shall be promptly canceled; provided, however, that in the event that the Holder hereof shall assign or transfer less than the full amount of this Warrant, a new Warrant evidencing the remaining portion of this Warrant not so assigned or transferred shall be issued in the name of the Holder, at the sole expense of the Company.

9.          Loss, etc. of Warrant. Upon (i) receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of the Warrant, (ii) receipt of indemnity reasonably satisfactory to the Company, if the Warrant is lost, stolen, or destroyed, (iii) placement of a bond (if required by the Company) and indemnity satisfactory in form and substance to the Company, and (iv) surrender and cancellation of the Warrant, if mutilated, the Company shall execute and deliver to the Holder a new Warrant of like date, tenor and denomination.

10.        Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock shall be made without charge to the Holder for any issuance tax in respect of such issuance (including documentary, stamp or similar tax) or other cost incurred by the Company in connection with such conversion and the related issuance of shares of Common Stock, other than any transfer taxes resulting from the transfer of converted shares to a person or persons other than the converting holder. Upon exercise of this Warrant, the Company shall take all such actions as are necessary in order to insure that the Common Stock issuable with respect to such conversion shall be validly issued, fully paid, and nonassessable.

11.          Due Authorization; Compliance. The authorization, sale, issuance and delivery of the Warrant have been approved by all requisite corporate action of the Company. The exercise of the Warrant into shares of Common Stock are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with at or prior to Closing of the Purchase Agreement.

12.          Governing Law; Venue. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS OF LAWS RULES OR PRINCIPLES THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SERVING DALLAS COUNTY, TEXAS, FOR THE PURPOSES OF ANY ACTION ARISING OUT OF THIS WARRANT, OR THE SUBJECT MATTER HEREOF. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION (A) THAT SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, (B) THAT THE ACTION IS BROUGHT IN AN INCONVENIENT FORUM, (C) THAT IT IS IMMUNE FROM ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ITS PROPERTY, (D) THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR (E) THAT THIS WARRANT, OR THE SUBJECT MATTER HEREOF, MAY NOT BE ENFORCED IN OR BY SUCH COURTS. IN THE EVENT THAT ANY PROVISION OF THIS WARRANT DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED

 

7

MODIFIED TO CONFORM TO SUCH STATUTE OR RULE OF LAW SO LONG AS THE ECONOMIC OR LEGAL SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY IS NOT AFFECTED IN ANY MANNER MATERIALLY ADVERSE TO ANY PARTY. ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS WARRANT, WHICH SHALL REMAIN ENFORCEABLE IN ACCORDANCE WITH ITS RESPECTIVE TERMS.

13.          Reservation of Shares; Issuance of Shares. Subject to Section 5.18(a) of the Purchase Agreement, the Company has reserved and will keep available, out of the authorized and unissued shares of Common Stock, the full number of Shares sufficient to provide for the exercise of the rights of the Holder hereunder. The Company covenants and agrees that, in accordance with the terms herein, all shares of Common Stock that may be delivered upon the appropriate exercise of the Warrant will, upon delivery, be duly paid and non-assessable and shall be free from all taxes, liens and charges with respect to the purchase thereof hereunder.

14.          Successors. All the covenants and provisions of this Warrant by or for the benefit of the Company or the Holder shall bind and inure to the benefit of their respective successors and permitted assigns.

15.          Amendments. Any term of this Warrant may be amended with the written consent of the Company and the holders of Warrants constituting the Warrant Series representing not less than seventy-five percent (75%) of the shares of Common Stock issuable upon exercise of any and all outstanding Warrants constituting the Warrant Series, even without the consent of the Holder. Any amendment effected in accordance with this Section 15 shall be binding upon each holder of any of the Warrants constituting the Warrant Series, each future holder of all such Warrants, and the Company; provided, however, that no special consideration or inducement may be given to any such holder in connection with such consent that is not given ratably to all such holders, and that such amendment must apply to all such holders equally and ratably in accordance with the number of shares of Common Stock issuable upon exercise of their Warrants. The Company shall promptly give notice to all holders of the Warrants constituting the Warrant Series of any amendment effected in accordance with this Section 15.

16.          Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given and sent as follows:

(a) upon personal delivery to the party to be notified;

(b)          when sent by confirmed facsimile if sent during normal business hours of the recipient, or if delivered after normal business hours, then on the next Business Day;

(c)          three (3) Business Days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or

(d)          one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.

 

8

If to the Company, to:

The X-Change Corporation

710 Century Parkway

Allen, Texas 75013

Attention: George DeCourcy, Chief Financial Officer

Facsimile: 972-359-6334

with a copy (which shall not constitute notice) to:

Strasburger & Price, LLP

901 Main Street, Suite 4400

Dallas, Texas 75202

Attention: Kevin Woltjen, Esq.

Facsimile: 214-659-4025

If to the Holder, to:

________________________

________________________

________________________

with a copy (which shall not constitute notice) to:

Weil, Gotshal & Manges LLP

200 Crescent Court, Suite 300

Dallas, Texas 75201

Attention: R. Scott Cohen, Esq.

Facsimile: 214-746-7777

or at such other address as the Company or the Holder may designate by written notice to the other in accordance with this Section 16.

17.          Attorneys Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys fees.

18.          Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transactions hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Warrant, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Warrant and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

19.          Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or

 

9

partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

20.          Counterparts. This Warrant may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

[Remainder of Page Intentionally Left Blank. Signature Page Follows.]

 

10

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on the ___ day of July 2008.

The X-Change Corporation

By: ___________________________

Name: _________________________

Its: ___________________________

 

11

SCHEDULE A

EXERCISE FORM

(To be Executed by the Registered Holder to Exercise

the Rights to Purchase Common Shares Evidenced by the Warrant)

The X-Change Corporation

710 Century Parkway

Allen, Texas 75013

The undersigned, _________________, hereby irrevocably subscribes for _________ shares of The X-Change Corporation’s Common Stock pursuant to and in accordance with the terms and conditions of the Tranche B Warrant dated as of July ___, 2008, and herewith makes payment of $__________ therefore, and requests that a certificate for such shares be issued in the name of the undersigned and be delivered to the undersigned at the address stated below. The undersigned makes the representations and warranties set forth in Section 7 of the Tranche B Warrant.

As provided for in the Tranche B Warrant, the undersigned further requests that, in the event the number of shares subscribed for herein shall not be all of the shares of The X-Change Corporation’s Common Stock purchasable under the Tranche B Warrant, a new Warrant of like tenor for the balance of the warrant not exercised be delivered to the undersigned.

Name: _______________________________

Signed: _______________________________

Address: _______________________________

______________________________

______________________________

Date: _________________________________

SCHEDULE B

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information.

Do not use this form to exercise the Warrant)

FOR VALUE RECEIVED, _____________________________________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant with respect to the number of shares of Common Stock covered thereby set forth below, unto:

Name of Assignee Address No. of Shares

By: ____________________________________

Name: ______________________________

Title: _______________________________

Signature Guaranteed:

By: ____________________________________

The signature should be guaranteed by an eligible guarantor institution pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.

EX-99

EXHIBIT L

AMENDMENT NO. 1

TO

REGISTRATION RIGHTS AGREEMENT

THIS AMENDMENT NO. 1 to the Registration Rights Agreement (this “Amendment”) is entered into as of this 10th day of July, 2008, by and among The X-Change Corporation, a Nevada corporation (the “Company”), and the initial Holders named on the signature pages hereto, and Tejas Securities Group, Inc. (“Tejas”). The Company, the initial Holders and Tejas may be referred to herein each as a “Party” and collectively as the “Parties.” Capitalized terms used but not defined herein shall have the meanings specified in the Registration Rights Agreement (as defined below).

RECITALS

WHEREAS, the Parties have previously entered into that certain Registration Rights Agreement, dated as of December 4, 2007, as amended, supplemented or modified from time to time (the “Registration Rights Agreement”);

WHEREAS, pursuant to Section 17(h)(i) of the Registration Rights Agreement, such Registration Rights Agreement may be amended by a written instrument executed by the Parties; and

WHEREAS, the Parties wish to amend the Registration Rights Agreement.

TERMS OF AGREEMENT

In consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

SECTION 1. Amendments to the Registration Rights Agreement.

(1)       The first paragraph appearing in the Registration Rights Agreement is hereby amended in its entirety to read as follows:

“This Registration Rights Agreement (this “Agreement”) is made and entered into as of December 4, 2007, by and among The X-Change Corporation, a Nevada corporation (the “Company”), and the initial Holders named on the signature pages hereto, and Tejas Securities Group, Inc. (“Tejas”). The initial Holders have agreed to purchase from the Company, pursuant to the Purchase Agreement (as defined below), the Notes (as defined below) convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), Warrants (as defined below) and the Tranche B Shares (as defined in the Purchase Agreement).”

(2)       The second paragraph appearing in the Registration Rights Agreement is hereby amended in its entirety to read as follows:

“This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof (as amended, restated, amended and restated, supplemented or modified from time to time, the “Purchase Agreement”), by and among the Company, AirGATE Technologies, Inc., a Texas corporation, and the initial Holders. In order to induce the initial Holders to purchase the Notes, Warrants and the Tranche B Shares, and for the benefit of the Holders from time to time of the Registrable Securities (as defined below), the Company has agreed to provide the registration rights set forth in this Agreement.”

(3)       The definition of Registrable Securities appearing in Section 1(a) of the Registration Rights Agreement is hereby amended in its entirety to read as follows:

““Registrable Securities” mean (i) all the shares of Common Stock issued or issuable upon the conversion of the Notes, (ii) all the shares of Common Stock issued or issuable upon the exercise of the Warrants, (iii) any shares of Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the Notes or the Common Stock described in clause (i) or clause (ii) above and (iv) all the Tranche B Shares; excluding, in all cases, any securities sold by a person in a transaction in which rights under this Agreement are not assigned in accordance with this Agreement or any securities sold in a registered public offering under the Securities Act or sold pursuant to Rule 144 promulgated under the Securities Act.”

(4)       The definition of Notes appearing in Section 1(a) of the Registration Rights Agreement is hereby amended in its entirety to read as follows:

““Notes” mean, collectively, all of the Amended and Restated Senior Secured Convertible Term Notes—Tranche A and Senior Secured Convertible Term Notes—Tranche B sold pursuant to the Purchase Agreement.”

(5)       The second sentence of Section 14 of the Registration Rights Agreement is hereby amended by deleting the phrase “(in accordance with their pro rata ownership of the Notes and Warrants)” and replacing such phrase with “(in accordance with their pro rata ownership of the Registrable Securities).”

SECTION 2. No Implied Amendments. Except as herein provided, the Registration Rights Agreement shall remain in full force and effect and is ratified in all respects. On and after the effectiveness of this Amendment, each reference in the Registration Rights Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import, and each reference to the Registration Rights Agreement in any other agreements, documents or instruments executed and delivered pursuant to the Registration Rights Agreement shall mean and be a reference to the Registration Rights Agreement, as amended by this Amendment.

SECTION 3. Counterparts. This Amendment may be executed by the parties hereto in several counterparts, including without limitation delivery by facsimile or electronic transmission, each of which shall be deemed an original, but all of which together shall constitute execution and delivery of one and the same instrument.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment effective as of the date first written above.

COMPANY:

THE X-CHANGE CORPORATION

By:

Name:

Its:

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT]

TEJAS:

TEJAS SECURITIES GROUP, INC.

By:

Name:

Its:

[SIGNATURE PAGE TO AMENDMENT NO

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT]

HOLDERS:

SAMSON INVESTMENT COMPANY

By:

Name:

Its:

[SIGNATURE PAGE TO AMENDMENT NO

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT]

IRONMAN PI FUND (QP), L.P.

By: IRONMAN ENERGY PARTNERS, L.P.,

its general partner

By: IRONMAN CAPITAL MANAGEMENT, LLC, its general partner

By:

Name:

Its:

[SIGNATURE PAGE TO AMENDMENT NO

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT]

JOHN THOMAS BRIDGE AND OPPORTUNITY FUND, LP

By:

Name:

Its:

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT]

EX-99

EXHIBIT M

VOTING AGREEMENT

VOTING AGREEMENT dated as of July 10, 2008, by and among the undersigned holders (each, a “Shareholder”) of shares of common stock of The X-Change Corporation (the “Company Common Stock”) for the benefit of Samson Investment Company, a Nevada corporation, Ironman PI Fund (QP), L.P., a Texas limited partnership, and John Thomas Bridge and Opportunity Fund, LP, a Delaware limited partnership (each a “Purchaser” and collectively, the “Purchasers”) as follows:

WHEREAS, on December 4, 2007, pursuant to that certain Securities Purchase Agreement by and among the Purchasers, the Company and AirGATE Technologies, Inc. (as amended, modified or supplemented from time to time, the “Purchase Agreement”) the Company sold to the Purchasers (i) an aggregate principal amount of $1,800,000 of the Company’s Senior Secured Convertible Term Notes bearing an annual interest rate of 8% with a maturity date of five (5) years from the date of issuance (as amended, restated, amended and restated, modified or supplemented from time to time the “Tranche A Notes”), which are convertible into shares of the Company Common Stock and (ii) warrants to purchase 4,500,000 shares of the Company Common Stock (collectively, the “Tranche A Warrants”); and

WHEREAS, pursuant to the Purchase Agreement, the Company desires to sell to the Purchasers (i) an aggregate principal amount of $1,800,000 of the Company’s Senior Secured Convertible Term Notes bearing an annual interest rate of 8% with a maturity date of five (5) years from the date of issuance (the “Tranche B Notes” and, together with the Tranche A Notes, the “Notes”), which are convertible into shares of the Company Common Stock, (ii) warrants to purchase up to 25,714,286 shares of the Company Common Stock (collectively, the “Tranche B Warrants” and, together with the Tranche A Warrants, the “Warrants”), and (iii) 16,714,286 shares of the Company Common Stock (the “Tranche B Shares”); and

WHEREAS, there are currently insufficient shares of the Company Common Stock authorized under the Company’s Articles of Incorporation for the Company to comply with its obligations to issue shares of Company Common Stock upon conversion of the Notes and exercise of the Warrants; and

WHEREAS, the Purchase Agreement provides that the Company will promptly call a special meeting of its stockholders for the purpose of voting to amend the Company’s Articles of Incorporation to increase the number of authorized shares of the Company Common Stock so that the Company will have an adequate reserve from its duly authorized shares of Company Common Stock to comply with its obligations to issue shares of Company Common Stock upon conversion of the Notes and exercise of the Warrants; and

WHEREAS, as a material inducement to the purchase by the Purchasers of the Tranche B Notes, the Tranche B Warrants, and the Tranche B Shares, the Shareholders wish to evidence their obligation to vote all shares of Company Common Stock that the Shareholders own or are otherwise entitled to vote to approve the amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of the Company Common Stock so that the Company will have an adequate reserve from its duly authorized shares of Company Common Stock to comply with its obligations under the Notes and Warrants.

NOW, THEREFORE, the Shareholders agree as follows:

1.         Each Shareholder hereby agrees to vote the shares of Company Common Stock set forth opposite its name in Schedule A hereto (the “Schedule A Securities”) to approve the amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of the Company Common Stock so that the Company will have an adequate reserve from its duly authorized shares of Company Common Stock to comply with its obligations under the Notes and Warrants and any actions directly and reasonably related thereto at any meeting or meetings of the shareholders of the Company, and at any adjournment thereof or pursuant to action by written consent, at or by which such matters are submitted for the consideration and vote of the shareholders of the Company. Upon approval by the Shareholders of an amendment to the Company’s Articles of Incorporation in accordance with this paragraph, this Voting Agreement shall terminate.

2.         Each Shareholder hereby agrees that such Shareholder shall not enter into any voting agreement or grant a proxy or power of attorney with respect to the Schedule A Securities in any manner inconsistent with the obligations of such Shareholder under this Agreement or take any other action that is inconsistent with the obligations of such Shareholder under this Voting Agreement, including any action that would prevent, or materially delay, the receipt of the approvals contemplated by the Purchase Agreement.

3.         Each Shareholder hereby irrevocably appoints the Purchasers, or any of them, as proxy for and on behalf of such Shareholder to vote (including, without limitation, the taking of action by written consent) such Shareholder’s Schedule A Securities, for and in the name, place and stead of such Shareholder for the matters and in the manner contemplated in Section 1 hereof. The Purchasers shall vote the Schedule A Securities to approve the amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of the Company Common Stock so that the Company will have an adequate reserve from its duly authorized shares of Company Common Stock to comply with its obligations under the Notes and Warrants.

4.         Each Shareholder hereby represents and warrants to the Purchasers that as of the date hereof:

(a)       Such Shareholder (i) owns beneficially all of the shares of Company Common Stock set forth opposite the Shareholder’s name in Schedule A hereto, (ii) has the full and unrestricted legal power, authority and right to enter into, execute and deliver this Voting Agreement without the consent or approval of any other person, and (iii) has not entered into any voting agreement or other similar agreement with or granted any person any proxy (revocable or irrevocable) in respect of such shares; and

(b)       This Voting Agreement is the valid and binding agreement of such Shareholder.

5.         If any provision of this Voting Agreement shall be invalid or unenforceable under applicable law, such provision shall be ineffective to the extent of such invalidity or

2

unenforceability only, without in any way affecting the remaining provisions of this Voting Agreement.

6.         This Voting Agreement may be executed in two or more counterparts each of which shall be an original with the same effect as if the signatures hereto and thereto were upon the same instrument.

7.         The parties hereto agree that if for any reason any party hereto shall have failed to perform its obligations under this Voting Agreement, then the party seeking to enforce this Voting Agreement against such non-performing party shall be entitled to specific performance and injunctive and other equitable relief, and the parties hereto further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive relief. This provision is without prejudice to any other rights or remedies, whether at law or in equity, that any party hereto may have against any other party hereto for any failure to perform its obligations under this Voting Agreement.

8.         This Voting Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

9.         Each Shareholder will, upon request, execute and deliver any additional documents deemed by the Purchasers to be necessary or desirable to complete and effectuate the covenants contained herein.

10.       No Shareholder shall sell, assign, transfer, or otherwise dispose of, or enter into any contract, option or other arrangement or understanding in respect of the direct or indirect sale, assignment, transfer, or other disposition of, any Schedule A Securities at any time prior to the grant of the approval contemplated by Section 1 hereof unless any such transferee enters into a binding agreement to vote such shares and otherwise act in respect thereof in accordance with the obligations imposed on the Shareholder hereunder.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

3

IN WITNESS WHEREOF, the parties hereto have executed this Voting Agreement as of the date first set forth above.

SHAREHOLDERS:

Michael L Sheriff:

______________________________

Sheriff Family Limited Partnership:

______________________________

By: Michael L. Sheriff – General Partner

Ivan Chow:

______________________________

4

[Signature Page to Voting Agreement]

Kathleen Hanafan:

______________________________

5

PURCHASERS:

Samson Investment Company

By:___________________________

Name: ________________________

Its: ___________________________

6

Ironman PI Fund (QP), L.P.

By: Ironman Energy Partners, L.P.,

its general partner

By: Ironman Capital Management, LLC,

its general partner

By:______________________________

Name: G. Bryan Dutt

Its: President

7

John Thomas Bridge and Opportunity Fund, LP

By: ______________________________

Name: ____________________________

Its: _______________________________

8

Schedule A

Individual/Entity	Number of Shares of Company Common Stock
Michael L. Sheriff	5,450,000
Ivan Chow	950,000
Kathleen Hanafan	100,000
Sheriff Family LP	1,200,000