Exhibit 10.16 Exchange Agreement between us and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EXCHANGE AND CONVERSION AGREEMENT
BETWEEN
TELEMETRIX INC.
AND
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
THIS EXCHANGE AND CONVERSION AGREEMENT (hereinafter called this "Agreement")
made and entered into as of this 26 day of May, 2003 by and among TELEMETRIX
INC., a Delaware corporation with offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("the Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ an individual residing at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇").
WHEREAS, the Company has been organized as a Delaware corporation for the
primary purpose of engaging in the telecommunications business; and
WHEREAS, the Company and ▇▇▇▇▇▇ have entered into certain loan agreements
("notes"), a schedule of which is identified as Exhibit 1 and is attached to and
made a part of this agreement; and
WHEREAS, the Company has agreed upon the terms and conditions set forth herein,
to an exchange of the notes held by ▇▇▇▇▇▇ for shares of the common and
preferred capital stock of the Company; and
WHEREAS, the Company and ▇▇▇▇▇▇ mutually desire to set forth their agreements
and understandings with respect to such exchange of notes for shares of the
common capital stock of the Company and to provide for certain rights of ▇▇▇▇▇▇
in connection therewith;
NOW, THEREFORE, for and in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and the mutual benefits
derived therefrom, the parties hereto do covenant and agree as follows:
1. Capital Structure of the Company. The Company is a Delaware corporation
authorized by its Certificate of Incorporation, to issue 25,000,000 shares
of Common Stock ("Common Stock"), par value $.001 per share, of which
18,486,176 are outstanding and 5,000,000 shares of Preferred Stock, par
value of $.001 per share, of which 0 shares are outstanding.
2. Exchange of notes for Common Stock. As of the date of this agreement,
▇▇▇▇▇▇ shall surrender to the principal office of the Company (or such
other office or agency of the Company as the Company may designate by
notice in writing to the holder or holders of the Common Stock of the
Company) all certificates representing all shares of Common Stock which
have been issued by the Company to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, his heirs, successors
or assigns which correspond or were issued in connection or association
with the schedule of notes attached hereto as Exhibit 1, and shall exchange
without further cost all notes and shares of Common Stock issued as
consideration for any of the notes listed in Exhibit 1, as well as shares
issued on the date of reorganization as consideration and shares issued for
services for 886,380 shares of Common Stock of the Company and 25,114.1
shares of Preferred Stock. This agreement does not contemplate the
surrender of any shares of stock which are held by ▇▇▇▇▇▇ and which were
not a part of any transactions between ▇▇▇▇▇▇ and the Company, and which
shares are held by ▇▇▇▇▇▇ as either restricted or unrestricted shares of
Common Stock.
3. Authorization of Issuance of Preferred Stock. This exchange calls for the
issuance of Preferred Stock. The Company shall promptly take such steps as
may be necessary or appropriate under the laws of Delaware and the federal
securities laws to permit the issuance of the Preferred Stock. If the
authorization and issuance of such Preferred Stock requires an amendment to
the Company's Certificate of Incorporation and the adoption by the
stockholders of such amendment, the Company shall immediately initiate the
necessary and required documents and corporate meetings. The Preferred
Stock shall be non-voting stock.
4. Option of ▇▇▇▇▇▇ for Registration or Exchange of Stock. At any time, and
subject to the terms set forth in paragraph 5 of this document, ▇▇▇▇▇▇
shall have the right by providing written notice to the Company to have the
Company register in accordance with Paragraph 6 hereof all or any part of
the Common Stock owned by ▇▇▇▇▇▇. if any, held by ▇▇▇▇▇▇ on a registration
statement in compliance with the Securities Act of 1933 in order to permit
the sale or distribution of such stock.
5. Registration of Stock. If the Company shall receive from ▇▇▇▇▇▇ a written
request that the Company register Common Stock under a registration
statement in compliance with the Securities Act of 1933 as provided in
paragraph 6 hereof, in order to permit the sale or distribution of such
stock, the Company, as soon as practicable after giving written notice to
▇▇▇▇▇▇ (which notice shall be given by the Company within ten (10) days
after receipt of the written request for registration from ▇▇▇▇▇▇) that it
has elected to file a registration statement for the Common Stock held by
▇▇▇▇▇▇ pursuant to this paragraph, will use its best efforts to effect such
registration and qualify the Common Stock in such jurisdictions as may be
requested by ▇▇▇▇▇▇. Any such registration of shares requested by ▇▇▇▇▇▇
may include shares of Common Stock owned by other shareholders of the
Company. 100,000 (One Hundred Thousand) shares in the aggregate is the
minimum number of shares that may be included in any registration. Each
selling shareholder shall bear a pro rata portion of all costs and expenses
paid to third parties (other than those paid to any affiliate or subsidiary
of the Company or any shareholder thereof) for registration and filing
fees, printing expenses, fees and disbursements of counsel, and any
accounting fees incident to or required by the registration or
qualification. Underwriting discounts and commissions shall be the pro rata
expense of each selling shareholder. The Company shall keep effective and
maintain any such registration statement for such period and to the extent
as ▇▇▇▇▇▇ may deem necessary for the purpose of selling or disposing of the
shares, and from time to time during such period shall amend or supplement
the prospectus used in connection therewith to the extent necessary in
order to comply with the applicable law. The Company shall be required to
comply with the above registration provisions only once, except that if
▇▇▇▇▇▇ receives a Warrant which it is not entitled to exercise until after
the registration statement has become effective, then ▇▇▇▇▇▇ shall be
entitled to a second registration to cover Common Stock acquired by it upon
exercise of the Warrant an any other shares of Common Stock then still
owned by ▇▇▇▇▇▇.
Should the Company at any time seek to register all or any part of its
Common Stock under a registration statement in compliance with the
Securities Act of 1933, without having been requested to do so by ▇▇▇▇▇▇,
in accordance with this paragraph, ▇▇▇▇▇▇ may (in addition to its
registration rights set forth above) add any or all of such shares of the
Company as it may own to any such registration. The Company shall bear all
costs and expenses for registration and filing fees, printing expenses,
fees and disbursements of all counsel and any accounting fees, including
expenses of any special audit, incident to or required by any registration
not requested by ▇▇▇▇▇▇. Underwriting discounts and commissions shall be
the pro rata expense of such selling shareholder.
6. Indemnification. Prior to the effective date of any registration statement
relating to any of the shares of Common Stock owned by ▇▇▇▇▇▇, the Company
and ▇▇▇▇▇▇ shall enter into an agreement providing for reciprocal
indemnification against any losses, claims, damages or liabilities to which
the Company or ▇▇▇▇▇▇ (or controlling persons thereof) may become subject
under the Securities Act of 1933, as amended, or otherwise, in the form of
reciprocal indemnification provisions which customarily appear in
underwriting agreements used by reputable investment bankers.
7. Acquisition for investment. ▇▇▇▇▇▇ hereby agrees that the shares of Common
Stock are being acquired for its own account and not with a view to the
distribution or resale thereof and the same shall not be sold or
transferred in the absence of an effective registration statement under the
Securities Act of 1933 unless an exemption therefrom is available.
8. Agreements Relating to Rule 144. If and so long as the Company has
securities registered pursuant to the Securities Act of 1933, the Company
will (a) file reports in compliance with the Securities Exchange Act of
1934, and (b) at its expense, forthwith upon the request of ▇▇▇▇▇▇, deliver
to ▇▇▇▇▇▇ a certificate, signed by the Company's principal financial
officer, stating (i) Company's name, address and telephone number
(including area code), (ii) the Company's Securities and Exchange
identification number, (iii) the Company's Securities and Exchange
Commission file number, (iv) the number of shares of stock (and other
securities) outstanding as shown by the most recent report or statement
published by the Company and (v) whether the Company has filed the reports
required to be filed under the Securities Exchange Act of 1934 for a period
of at least ninety (90) days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed
thereunder. If at any time, subsequent to the exchange of ▇▇▇▇▇▇'▇ notes
for Common Stock, the Company is not required to file reports in compliance
with either Section 13 or Section 15(d) of the Securities Exchange Act of
1934, the Company, at its expense will, forthwith upon the written request
of ▇▇▇▇▇▇, make available adequate current public information with respect
to the Company within the meaning of paragraph (c)(2) of Rule 144 of the
General Rules and Regulations promulgated under the Securities Act of 1933.
9. Transfer of Common Stock by ▇▇▇▇▇▇. It is expected that ▇▇▇▇▇▇ shall and
▇▇▇▇▇▇ shall at any time be permitted without any approval, consent or
action of the Company to, sell, transfer or assign all or any part of the
Common Stock or other voting or non-voting equity securities of the Company
then owned by ▇▇▇▇▇▇ to other individuals, corporations or other entities;
provided, however, in the event of a sale, transfer or assignment by ▇▇▇▇▇▇
of any of its shares of Common Stock, ▇▇▇▇▇▇ shall, in the absence of an
effective registration statement under the Securities Act of 1933 covering
such shares, provide the Company with an opinion of counsel, satisfactory
in form and substance to the Company and its counsel, to the effect that
such sale, transfer or assignment will not require that such securities be
registered under the Securities Act of 1933. Any such assignee, in
proportion to its ownership of the Common Stock or other voting or
non-voting equity securities, shall be entitled to exercise or acquire all
of the rights or interests which may be exercised or acquired by ▇▇▇▇▇▇
pursuant to the terms of this Agreement; provided, however, that the right
to request mandatory registration under paragraph 5 shall be exercisable
only by the then owners of a majority interest of the Common Stock
previously held by ▇▇▇▇▇▇.
10. Notices and Addresses. All notices or other communications in connection
herewith shall be in writing and shall be mailed by first class or air
mail, postage prepaid to the following addresses and to the attention of
the party in question:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Or at such other addresses as may have been furnished to the other parties
in writing.
11. No additional Classes of Common Stock. The Company shall not create any
additional classes of common capital stock.
12. Termination of Agreement. This Agreement shall terminate only upon the
exercise by ▇▇▇▇▇▇ of all of its rights for registration or exchange of
stock as set forth in paragraphs 2, 4 and 5 hereof or by the mutual written
consent of the Company and ▇▇▇▇▇▇.
13. Amendments. This agreement may be amended only by written amendment signed
by ▇▇▇▇▇▇ and the Company.
14. Complete Agreement. This Agreement contains all of the Agreements and
understandings between the parties here-to relative to the transaction
contemplated herein.
15. Choice of Law. This agreement and all matters pertaining thereto shall be
construed under the laws of the State of Nebraska.
16. Signatures. This Agreement may be executed in counterparts, with each such
duly executed counterpart having the same validity, force and effect as the
original.
17. Facsimile. A facsimile copy of this document and any signatures shall be
considered for all purposes and intent as legal and binding originals.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.
Telemetrix Inc.
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Telemetrix Inc.
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
Board of Directors
Exhibit 1
Total 03/31/2003
Date of Interest Accrued Share price
Note # Loan Rate Principal Int. Total at $0.15
--------------------------------------------------------------------------------------------------
057 08/01/2001 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ 10.00% 55,500.00 11,655.00 67,155.00 447,700
Rollover
064 12/15/2001 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ 10.00% 343,488.87 72,132.66 415,621.53 2,770,810
Rollover
066 12/31/2001 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ 10.00% 165,375.00 34,728.75 200,103.75 1,334,025
Rollover
069 02/22/2002 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10.00% 100,000.00 21,000.00 121,000.00 806,667
139,516.41 803,880.28 5,359,202
Shares At Org. 550,000
Total Shares* 5,909,202
*This number is after adjustment to the conversion value of the notes,
reflecting an interest rate of 10% on all notes, interest computed on an
annually compounded basis through March 31, 2003.
