STATMON TECHNOLOGIES CORP. EXCHANGE AGREEMENT (Exchange of Notes for Common Stock)
(Exchange
of Notes for Common Stock)
0000
Xxxxxxxx Xxxxx
Xxxxx
000
Xxxxx
Xxxxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
The
undersigned (the “Subscriber”) is the holder of a promissory note (the “Note”)
issued to the Subscriber by STATMON TECHNOLOGIES CORP., a Nevada corporation
(the “Company”), in connection with a loan made by the Subscriber to the
Company. Subscriber subscribes to shares of common stock of the Company (the
“Shares”) at the rate of $1.00 per Share. Hereby agrees to exchange the
principal amount of his Note and accrued interest thereon for Shares through
this Exchange Agreement, as provided herein. The Shares issuable upon the
exchange of the Note are referred to in this Agreement as the “Underlying
Securities.”
1. Representations
and Warranties. By
executing this Exchange Agreement, Subscriber represents and warrants as
follows:
1.1 Subscriber
is a holder of the Note and as such understands the nature of this investment,
is fully aware of and familiar with the business operations of the Company,
and
is able to evaluate the merits and risks of an investment in the Shares.
Subscriber understands that by exchanging his Note for Shares, he will no longer
be a creditor of the Company and will lose any and all rights he has as a
creditor.
1.2 Subscriber
has reviewed the Disclosure Statement to which this Agreement is attached as
an
Exhibit, including the Company’s most recent 10-QSB and 10-KSB as filed with the
Securities and Exchange Commission (the “SEC Filings”), in connection with his
exchange of the Note for Shares as the Subscriber has deemed necessary. As
a
Noteholder, Subscriber is familiar with the Company’s business objectives and
the financial arrangements in connection therewith. Subscriber believes that
the
Shares he is receiving in exchange for the Note are the kind of securities
that
he wishes to hold for investment and that the nature of the Shares is consistent
with his investment program. Subscriber and his advisor(s) have had a
reasonable opportunity to ask questions of and receive answers from the officers
and directors of the Company concerning the Company and the Shares. All such
questions have been answered to Subscriber’s satisfaction. Subscriber or his
representatives have made such investigation of the facts and circumstances
set
forth in the Disclosure Statement supplied with the Exchange Offer Term Sheet
to
which this Agreement is attached as an Exhibit as Subscriber has deemed
necessary in connection with any exchange of the Note for Shares. No
representations have been made or information furnished to Subscriber or his
advisor(s) relating to the Company or the Shares that are in any way
inconsistent with the SEC Filings.
1.3 Subscriber
has been advised and understands that this investment is, by its nature, very
speculative. Subscriber understands that by exchanging his Note for Shares
he is
losing his rights as a creditor, which would be senior to those of an equity
holder in the event of a liquidation of the Company.
1.4 Subscriber
is able to bear the economic risks of an investment in the Shares, including,
without limiting the generality of the foregoing, the risk of losing all or
part
of the investment and probable inability to sell or transfer the Shares for
an
indefinite period of time.
1.5 Subscriber
has acquired the Shares for investment and without a view to any distribution
of
the Shares.
1.6 Subscriber
acknowledges that the Company is offering and exchanging the securities in
reliance upon an exemption from registration under the provisions of Section
4(2) of the Securities Act of 1933, as amended (the “1933
Act”).
The
Subscriber understands that the Shares have not been registered under the 1933
Act or any state securities laws, are “restricted securities” in the hands of
the Subscriber within the meaning of the 1933 Act and any future sale of the
Shares will be regulated by the Act and applicable state securities
laws.
1.7 Subscriber
will not sell or otherwise transfer or dispose of the Shares (i) except in
strict compliance with (A) the provisions of this Exchange Agreement and (B)
the
restrictions on transfer described herein and (ii) unless the Shares are (X)
registered under the 1933 Act, and any applicable state securities laws or
(Y)
the undersigned represents that the Shares may be sold in reliance on an
exemption from such registration requirements.
1.8 The
investment in the Shares has been privately proposed to the undersigned without
the use of general solicitation or advertising.
1.9 No
federal or state agency, including the Securities and Exchange Commission or
the
securities regulatory agency of any state, has approved or disapproved the
Shares, passed upon or endorsed the merits of the Shares, or made any finding
or
determination as to the fairness of the Shares for private
investment.
1.10 The
investment in the Shares is being made in reliance on specific exemptions from
the registration requirements of federal and state securities laws, and the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings set forth herein
in
order to establish such exemptions.
2. I
certify
that I am an Accredited Investor because I fall within one of the following
categories:
(PLEASE
CHECK APPROPRIATE CATEGORY)
a._____
$1,000,000
Net Worth Natural Person.
A
natural
person whose individual net worth, or joint net worth with that person's spouse,
at the time of his purchase exceeds $1,000,000.
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b._____
$200,000
Income Natural Person.
A
natural
person who had "Individual Income" in excess of $200,000 in each of the two
most
recent years or joint income with that person's spouse in excess of $300,000
in
each of those years and has a reasonable expectation of reaching the same income
level in the current year.
c._____
Company,
Corporate or Other Entity Investors.
The
investor is a partnership, corporation or unincorporated association and all
of
the equity owners of that entity qualify as Accredited Investors under
subparagraph (a) or (b) above. Investors that check this subparagraph (c)
must furnish a separate copy of this Subscription Agreement for each equity
owner with items 1 through 7B completed and executed on the Member Signature
Page by such equity owner.
3. Restrictive
Legend. Subscriber
acknowledges and consents to the placement of the following restrictive legend
on the certificate(s) and other documents(s) representing the
Shares:
THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY
NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT UPON
DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL, SATISFACTORY TO THE BOARD
OF
DIRECTORS, THAT AN EXEMPTION FROM SUCH REGISTRA-TION IS AVAILABLE AND THAT
SUCH
TRANSFER WILL NOT RESULT IN ANY VIOLATION OF THE LAW.
4. Indemnification.
Subscriber agrees to indemnify and hold harmless the Company, its officers
and
directors from and against all damages, losses, costs and expenses (including
reasonable attorney’s fees) which they may incur by reason of Subscriber’s
failure to fulfill any of the terms or conditions of this Exchange Agreement,
or
by reason of any untrue statement made herein or any breach of the
representations and warranties made herein or in any document that Subscriber
has provided to the Company.
5. Miscellaneous.
5.1 Subscriber
agrees that he may not cancel, terminate or revoke this Exchange Agreement
or
any covenant hereunder and that this Exchange Agreement shall survive his death
or disability and shall be binding upon his heirs, executors, administrators,
successors and assigns.
5.2 This
Exchange Agreement shall be enforced, governed and construed in all respects
in
accordance with the laws of the state of Nevada.
5.3 Within
five days after receipt of a written request from the Company, Subscriber agrees
to provide such information and to execute and deliver such documents as may
reasonably be necessary to comply with any and all laws and ordinances to which
the Company is subject.
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6. Note
Exchange Election.
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______
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Subscriber
hereby exchanges principal amount of his Note and all interest thereon
of
$_____________ for ____________ Shares at $1.00 per Share. Upon issuance
of the Shares and completion of the exchange, the principal amount
of the
Note and accrued interest thereon will be deemed paid in
full.
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7. Warrant
Exchange Election. (Available
only if Subscriber has elected to exchange all principal and interest for their
Note for Shares in Paragraph 5 above.)
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______
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Subscriber
hereby elects to exchange ___________ currently exercisable common
stock
purchase warrants he now holds for ___________ Shares (one Share
for every
three warrants). Upon issuance of the Shares and completion of the
exchange, the warrants will be deemed to be
extinguished.
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8. Election
Not to Exchange Note for Shares (Available
only if Paragraphs 5 and 6 not chosen).
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______
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Subscriber
does not elect to exchange his Note for Shares and Subscriber accepts
the
Company’s offer to amend his Note by entering into the Note Extension
Agreement which will be provided by the Company.
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9. Registration.
Mr./Mrs./Ms.___________________________________________________________________
(Please
Print Name(s) in which the Shares are to be registered hereunder.)
______________________________________________________________________________
(Please
Print the Social Security or Taxpayer ID Number of each
shareholder)
Form
of Ownership (check one)
____ (a) Individual
Ownership
____ (b) Joint
tenants with right of survivorship (both or all parties’ signatures
required)
____ (c) Community
Property (one signature required if the Underlying Securities are held in one
name; two if held in both names)
____ (d) Tenants
in Common (all parties’ signatures required)
____ (e) Company*
____ (f) Corporation*
____ (g) Partnership*
____ (h) Other*
(Trust, etc.) (please specify)
*IF
(e),
(f), (g), or (h) ARE CHECKED, DOCUMENTS, INCLUDING PARTNERSHIP OR CORPORATE
RESOLUTION, AUTHORIZING SUBSCRIBER TO MAKE INVESTMENT MUST ACCOMPANY
EXCHANGE.
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IN
WITNESS WHEREOF, the Subscriber has executed this Exchange
Agreement.
Dated
as
of _____________, 2007.
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SUBSCRIBER
Name:_____________________________
Address:___________________________
__________________________________
__________________________________
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Mail
or Deliver Exchange Agreement to:
0000
Xxxxxxxx Xxxxx
Xxxxx
000
Xxxxx
Xxxxxxxxxxx,
XX 00000
Attn:
Xxxxxxxx X. Xxxxxx
Agreed
to
and accepted by:
STATMON
TECHNOLOGIES CORP.,
a
Nevada corporation
By:____________________________________
Name:_________________________________
Its:____________________________________
Date:__________________________________
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