Document:

PURCHASE AGREEMENT AND
DEBENTURE AMENDMENT AGREEMENT

     

    This PURCHASE AGREEMENT AND DEBENTURE
AMENDMENT AGREEMENT (the “Agreement”), dated as
of April 15, 2010, is between Statmon Technologies Corp., a Nevada corporation
(the “Company”), with its
principal place of business at 3000 Lakeside Drive, Suite 300 South,
Bannockburn, Illinois 60015, Gemini Master Fund, Ltd. (“Gemini”), Harborview
Master Fund LP (“Harborview”) and
Monarch Capital Fund Ltd. (“Monarch” and,
collectively with Gemini and Harborview, “Purchasers”).

     

    WHEREAS, pursuant to the Securities
Purchase Agreement, dated as of March 5, 2008, between the Company and the
Purchasers (the “Purchase Agreement”),
the Purchasers purchased from the Company an aggregate of $1,500,000 in
principal amount of Original Issue Discount Senior Secured Convertible
Debentures due March 5, 2010 (“Debentures”), an
aggregate of 1,526,874 warrants (“Warrants”) to
purchase common stock, $0.01 par value per share, of the Company (the “Common Stock”)
pursuant to Section 4(2) of the Securities Act of 1933, as amended (“Securities Act”) and
Rule 506 promulgated thereunder.  In the same transaction, the
Purchasers also purchased Additional Investment Rights to purchase up to an
aggregate of $1,500,000 in principal amount of Debentures and 1,526,874 Warrants
(the “Additional
Investment Rights”) but the Additional Investment Rights have
subsequently terminated in accordance with their terms;

     

    WHEREAS, as of the date hereof, Gemini
holds Debentures with a principal amount of $150,000, Harborview holds
Debentures with a principal amount of $800,000 and Monarch holds Debentures with
a principal amount of $200,000;

     

    WHEREAS,
pursuant to the terms and conditions of this Agreement, the Company and the
Purchasers wish to amend the maturity date of the Debentures from March 5, 2010
to May 31, 2010 (the “Extension”) and to
amend certain definitions in the Purchase Agreement; and

     

    WHEREAS,
as consideration for the Extension, the Company wishes to issue to the
Purchasers an aggregate number of shares of Common Stock equal to the sum of (i)
the aggregate principal amount of the Debentures outstanding on the date hereof
multiplied by twenty-five percent (25%), the product of which is then divided by
the Consideration Conversion Price (as defined herein) and (ii) an aggregate
number of shares of Common Stock equal to 191,165 (such shares, the “Consideration Shares”
and such number of Consideration Shares, the “Consideration Share
Number”) pursuant to Section 4(2) of the Securities Act and Rule 506
promulgated thereunder.

     

    NOW, THEREFORE, in consideration of the
mutual promises set forth herein and other valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto agree as
follows:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    1.           Definitions. All
initially capitalized, undefined terms used herein shall have the meanings
ascribed to such terms in the Purchase Agreement.  For purposes of
this Agreement, the “Consideration Conversion
Price” means $0.25.

     

    2.           Amendment to
Debentures.  The Company and the Purchasers hereby agree to
amend the definition of Maturity Date in the second paragraph of the Preamble of
the Debentures by deleting in entirety “March 5, 2010” and inserting in its
place “May 31, 2010” (the “Debenture
Amendment”).

     

    3.           Amendment to Purchase
Agreement.  The Company and the Purchasers hereby agree (i) to
amend the definition of Securities in Section 1.1 of the Purchase Agreement by
inserting immediately following “Underlying Shares” the words “and the
Consideration Shares” and (ii) to amend the definition of Transaction Documents
in Section 1.1 of the Purchase Agreement by inserting immediately following
“Subsidiary Guarantee,” the words “Purchase Agreement and Debenture Amendment
Agreement,”.

     

    4.           Issuance of
Shares.  In consideration for the Debenture Amendment, the
Company shall issue and deliver to each Purchaser a Consideration Share Number
equal to the sum of (i) the outstanding principal amount of such Purchaser’s
Debenture multiplied by twenty-five percent (25%), the product of which is then
divided by the Consideration Conversion Price and (ii) such Purchaser’s pro-rata
portion of 191,165 shares of Common Stock based on the outstanding principal
amount of such Purchaser’s Debenture, as such Consideration Share Number shall
be set forth on Exhibit A attached
hereto.

     

    5.           Transfer
Restrictions.  The Consideration Shares may only be disposed of
in compliance with state and federal securities laws.  In connection
with any transfer of Consideration Shares other than pursuant to an effective
registration statement or Rule 144, to the Company or to an Affiliate of a
Purchaser, the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Consideration Shares under the
Securities Act. The Purchasers agree to the imprinting of a legend on the stock
certificates evidencing the Consideration Shares in the following
form:

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933. AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM REGISTRATION.  THE COMPANY
MAY REFUSE TO AUTHORIZE ANY TRANSFER OF THE SECURITIES IN RELIANCE ON AN
EXEMPTION FROM REGISTRATION UNTIL IT HAS RECEIVED AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.

    
      
         

      

      
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    Certificates
evidencing the Consideration Shares shall not contain any legend (including the
legend set forth in this Section 5), (i) while a registration statement covering
the resale of such security is effective under the Securities Act, (ii)
following any sale of such Consideration Shares pursuant to Rule 144, (iii) if
such Consideration Shares are eligible for sale under Rule 144, without the
requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such Consideration Shares and without
volume or manner-of-sale restrictions, or (iv) if such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
Commission).  The Company shall cause its counsel to issue a legal
opinion to the Transfer Agent promptly after any event in (i)-(iv) herein if
required by the Transfer Agent to effect the removal of the legend
hereunder.  The Company may not make any notation on its records or
give instructions to the Transfer Agent that enlarge the restrictions on
transfer set forth in this Section 5.  Consideration Share
Certificates (as defined below) subject to legend removal hereunder shall be
transmitted by the Transfer Agent to the Purchaser by crediting the account of
the Purchaser’s prime broker with the Depository Trust Company System as
directed by such Purchaser.

     

    6.           Furnishing of Information;
Public Information.  As long as any Purchaser holds any
Consideration Shares, the Company covenants to maintain the registration of the
Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then subject to the
reporting requirements of the Exchange Act.  As long as any Purchaser
holds any Consideration Shares, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Consideration Shares, including without
limitation, under Rule 144.  The Company further covenants that it
will take such further action as any Purchaser may reasonably request, to the
extent required from time to time to enable such Purchaser to sell such
Consideration Shares without registration under the Securities Act, including
without limitation, within the requirements of the exemption provided by Rule
144.

    
      
         

      

      
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    7.          Closing.  This
Agreement, including, without limitation, the Debenture Amendment, shall be
effective as of the Closing Date.  For purposes herein, “Closing Date” means
the Trading Day on which the Company delivers share certificates evidencing the
Consideration Shares (such certificates, the “Consideration Share
Certificates”) to each Purchaser, in the respective share amounts set
forth on Exhibit
A attached hereto, in accordance with the delivery instructions provided
to the Company by each Purchaser.  The Company shall use commercially
reasonable efforts to deliver the Consideration Shares to each Purchaser within
three Trading Days of the date of this Agreement.

     

    8.          Securities Law Disclosure;
Form D and Blue Sky Filings.  The Company shall, by 8:30 a.m.
(New York City time) on the Trading Day immediately following the date hereof,
issue a Current Report on Form 8-K disclosing the material terms of the
transactions contemplated herein, and including this Agreement as an exhibit
thereto.  The Company agrees to timely file a Form D with respect to
the Securities as required under Regulation D and to provide a copy thereof,
promptly upon request of any Purchaser. The Company shall take such action as
the Company shall reasonably determine is necessary in order to obtain an
exemption for, or to qualify the Consideration Shares for sale to the Purchasers
at the Closing under applicable securities or “Blue Sky” laws of the states of
the United States, and shall provide evidence of such actions promptly upon
request of any Purchaser.

     

    9.          Representations and
Warranties of the Company.  The Company hereby makes the
following representations and warranties set forth below to the Purchasers as of
the date of this Agreement:

     

     
(a)           Authorization;
Enforcement.  The Company has the requisite power and authority
to enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of such Company and no
further action is required by such Company, its board of directors or its
stockholders in connection therewith.  This Agreement has been duly
executed by the Company and, when delivered in accordance with the terms hereof
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

    
      
         

      

      
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    (b)           No
Conflicts.  The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of the Company’s certificate or articles of incorporation, bylaws or
other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any lien upon any of the properties or
assets of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any material agreement, credit facility, debt or other material instrument
(evidencing Company debt or otherwise) or other material understanding to which
the Company is a party or by which any property or asset of the Company is bound
or affected, or (iii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected.

     

    (c)           Issuance of Consideration
Shares.  When issued in accordance with the terms of this
Agreement, the Consideration Shares shall be duly authorized, validly issued,
fully paid and nonassessable, and free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction
Documents.  The Company has reserved from its duly authorized capital
a number of shares of Common Stock for issuance equal to the number of
Consideration Shares to be issued pursuant to this Agreement.

     

    (d)           Other Representations,
Warranties and Covenants.  Except as disclosed in the SEC
Reports, the Company hereby makes the representations, warranties and covenants
set forth in the Purchase Agreement as though fully set forth herein as of the
date hereof, and all such representations, warranties and obligations are
incorporated herein by reference.

     

    10.          Representations and
Warranties of the Purchasers.  Each Purchaser hereby, for
itself and for no other Purchaser, represents and warrants as of the date hereof
to the Company as follows:

     

    (a)           Authority. The
execution, delivery and performance by such Purchaser of this Agreement have
been duly authorized by all necessary corporate or similar action on the part of
such Purchaser.  This Agreement has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

    
      
         

      

      
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    (b)           Own
Account.  Such Purchaser understands that the Consideration
Shares are “restricted securities” and have not been registered under the
Securities Act or any applicable state securities law and is acquiring the
Consideration Shares as principal for its own account and not with a view to or
for distributing or reselling such Consideration Shares or any part thereof in
violation of the Securities Act or any applicable state securities law, has no
present intention of distributing any of such Consideration Shares in violation
of the Securities Act or any applicable state securities law and has no
arrangement or understanding with any other persons regarding the distribution
of such Consideration Shares (this representation and warranty not limiting such
Purchaser’s right to sell the Consideration Shares pursuant to a registration
statement or otherwise in compliance with applicable federal and state
securities laws) in violation of the Securities Act or any applicable state
securities law.  Such Purchaser is acquiring the Consideration Shares
hereunder in the ordinary course of its business. Such Purchaser does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Consideration Shares.

     

    (c)           Purchaser
Status.  Such Purchaser is an “accredited investor” as defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act.  Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

     

    (d)           Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Consideration Shares, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Consideration Shares and, at the present time, is
able to afford a complete loss of such investment. Each Purchaser represents
that, if it deems legal representation necessary, it has retained its own legal
counsel separate and apart from any other Purchaser.

     

    (e)           General
Solicitation.  Such Purchaser is not acquiring the
Consideration Shares as a result of any advertisement, article, notice or other
communication regarding the Consideration Shares published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general
advertisement.

     

    (f)           Affirmation of Prior
Representations and Warranties.  Such Purchaser hereby
represents and warrants to the Company that its representations and warranties
listed in Section 3.2 of the Purchase Agreement are true and correct as of the
date hereof.

     

    11.           Amendments and
Waivers.  The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and each
Purchaser.

    
      
         

      

      
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    12.           Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the applicable Purchase
Agreement.

     

    13.           Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties and shall inure to
the benefit of each Purchaser. The Company may not assign (except by merger) its
rights or obligations hereunder without the prior written consent of all of the
Purchasers. Each Purchaser may assign their respective rights hereunder in the
manner and to the Persons as permitted under Section 5.7 of the applicable
Purchase Agreement.

     

    14.           Execution and
Counterparts. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

     

    15.           Governing
Law.  This Amendment and the rights and obligations of the
parties hereunder shall be construed in accordance with and governed pursuant to
the internal laws of the State of New York in accordance with Section 5.9 of the
Purchase Agreement.

     

    16.           Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

    
      
         

      

      
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    17.           Effect on Transaction
Documents.  Except as expressly set forth herein, all of the
terms and conditions of the Purchase Agreement, the Debentures, the Warrants,
the Security Agreement and the other Transaction Documents shall continue in
full force and effect after the execution of this Amendment, and shall not be in
any way changed, modified or superseded by the terms set forth herein and the
provisions of this Agreement, if not expressly set forth herein, shall otherwise
be subject to the provisions of the Purchase Agreement and other Transaction
Documents.

     

    18.           Independent Nature of
Holders’ Obligations and Rights.  The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under this
Agreement.  Nothing contained herein or in this Agreement, and no
action taken by any Purchaser pursuant thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement.  Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.  Each Purchaser has been represented by
its own separate legal counsel in their review and negotiation of this
Agreement.  For reasons of administrative convenience only, Purchasers
and their respective counsel have chosen to communicate with the Company through
Weinstein Smith LLP (“WS”).  WS
does not represent all of the Purchasers but only Harborview.  The
Company has elected to provide all Purchasers with the same terms under this
Agreement for the convenience of the Company and not because it was required or
requested to do so by the Purchasers.

     

    [Remainder
of Page Intentionally Blank]

    
      
         

      

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

     

    
      	 
      	
              STATMON
      TECHNOLOGIES CORP.

            
	 
      	 
      
	 
      	
              By:
      __________________________

            
	 
      	
              Name:

            
	 
      	
              Title:

            
	 
      	 
      
	 
      	
              GEMINI
      MASTER FUND, LTD.

            
	 
      	 
      
	 
      	
              By:
      __________________________

            
	 
      	
              Name:

            
	 
      	
              Title:

            
	 
      	 
      
	 
      	
              HARBORVIEW
      MASTER FUND LP

            
	 
      	 
      
	 
      	
              By:
      __________________________

            
	 
      	
              Name:

            
	 
      	
              Title:

            
	 
      	 
      
	 
      	
              MONARCH
      CAPITAL FUND LTD.

            
	 
      	 
      
	 
      	
              By:
      __________________________

            
	 
      	
              Name:

            
	 
      	
              Title:

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Exhibit
A

     

    Issuance of Consideration
Shares of Common Stock as Extension Fee

     

    
      
        
          
            
              
                
                  
                    	 
      	 	
                            OID

                            Principal

                            Amount

                            of

                            Debenture

                          	 	 	
                            Multiply

                            (a) by

                            25%

                          	 	 	
                            Divide

                            (b) by

                            $0.25

                          	 	 	
                            Consideration

                            Shares on

                            Principal

                            Amount of

                            Debenture

                          	 	 	
                            Additional

                            Number of

                            Consideration

                            Shares (pro-

                            rata portion

                            of 191,165

                            shares)

                          	 	 	
                            Total

                            Consideration

                            Shares

                          	 	
                            Issue

                            Date

                          
	
                            Tranche
      I Purchaser

                          	 	
                            (a)

                          	 	 	
                            (b)

                          	 	 	
                            (c)

                          	 	 	
                            (d)

                          	 	 	
                            (e)

                          	 	 	
                            (f)

                          	 	
                            (g)

                          
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
      
	
                            Harborview
      Master Fund

                          	 	$	800,000	 	 	 	200,000	 	 	 	800,000	 	 	 	800,000	 	 	 	133,332	 	 	 	933,332	 	
                            April
      15, 2010

                          
	
                            Gemini
      Master Fund

                          	 	$	150,000	 	 	 	37,500	 	 	 	150,000	 	 	 	150,000	 	 	 	25,000	 	 	 	175,000	 	
                            April
      15, 2010

                          
	
                            Monarch
      Capital Fund Ltd.

                          	 	$	200,000	 	 	 	50,000	 	 	 	200,000	 	 	 	200,000	 	 	 	33,333	 	 	 	233,333	 	
                            April
      15,
2010

                          

                  

                

              

            

          

        

      

    

    
      
         

      

      
        10HARBORVIEW
CAPITAL MANAGEMENT, LLC

    850 Third
Avenue, Suite 1801

    New York,
NY  10022

    Tel:
(646) 218-1400

    

    April 15,
2010

    

    Geoffrey
Talbot

    Chief
Executive Officer

    Statmon
Technologies Corp.

    3000
Lakeside Drive, Suite 300S

    Bannockburn,
Illinois 60015

    

    
      	
               
      

            	
              RE:

            	
              Financial Advisor and
      Consulting Agreement for

            

    

    Statmon Technologies
Corp.

    

    Dear Mr.
Talbot:

    

    This
letter confirms our understanding that Harborview Capital Management, LLC (“HCM”) has been engaged to
act as a non-exclusive financial advisor and consultant in connection with
strategic planning and a capital raise (“Private Placement”) to meet
current and ongoing capital needs of Statmon Technologies Corp. (“the Company”).  HCM
in this capacity will work with management and review and advise the Company on
strategic issues as reasonably requested by the Company and help identify
funding opportunities for a period of twelve months (the “Term”) from the date
of this Agreement. Upon the Company’s acceptance, this letter agreement (“Agreement”) will confirm the
terms of the engagement agreed to between HCM and the Company on the terms set
forth herein.  The terms of HCM’s engagement are as
follows:

    

    1.           
Relationship of Parties.  Nothing contained in this Agreement
shall be construed to place HCM and the Company in the relationship of partners
or joint ventures.  Neither HCM nor the Company shall represent itself
as the representative or legal representative of the other for any purpose
whatsoever nor shall either have the power to obligate or bind the other in any
manner whatsoever.  The Company’s engagement of HCM is not intended to
confer rights upon any person not a party hereto (including shareholders,
directors, officers, employees or creditors of the Company) as against HCM or
its affiliates, or their respective directors, officers, employees or
representatives, successors or assigns.  HCM, in performing its
services hereunder, shall at all times be an independent
contractor.  No promises or representations have been made, except as
expressly set forth in this Agreement, and the parties have not relied on any
promises or representations except as expressly set forth in this
Agreement.  Nothing contained herein should be construed as creating
any fiduciary duties between the parties, or between HCM and the
Company.

     

    2.           Terms of
the Transaction(s).  It is the sole discretion of the Company
to accept or reject the terms of any proposed transaction.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.           Compensation.  As
compensation for services rendered and to be rendered hereunder by HCM, the
Company agrees to pay HCM as follows:

     

    (a)           One
million and eight hundred thousand (1,800,000)restricted shares of common stock
of the Company; and

     

    (b)           The
Company will reimburse HCM in a timely manner for all out-of-pocket expenses
relating to activities under this Agreement, including without limitation,
travel and other related expenses as well as the legal fees incurred by HCM and
its members, provided that HCM obtains the Company’s prior written consent for
such proposed expenditures.  Such reimbursements shall be made
promptly upon submission by HCM.

     

    4.           .Private Placement
Fee.  To the extent permitted by law, as compensation for its
services in connection with a Private Placement, the Company shall pay to HCM or
its designee a cash placement fee equal to ten percent (10%) of the aggregate
purchase price paid by each purchaser of securities placed in the Private
Placement (the “Placement
Agent’s Fee”) that occurs through HCM’s services under this Agreement at
each closing (“Placement
Closing”).  The Placement Agent’s Fee will be deducted from the
gross proceeds of the securities sold at each Placement Closing.  The
Company will deduct from the Placement Agent’s Fee any amounts it owes to any
other party (the “Additional
Placement Agents”) in the way of commissions or similar fees in
connection with the Private Placement.

     

    Warrants. In addition to the
Placement Agent’s Fee, upon the closing of the sale of securities in connection
with the offering, the Company shall issue to HCM or its designee warrants to
purchase a number of shares of the Company’s common stock equal to ten percent
(10%) of the gross proceeds of the sale of securities (the “PA Warrants”).  The
PA Warrants shall be exercisable at 100% of the offering price of the securities
sold.  The PA Warrants shall expire five (5) years from the date of
issuance.  The PA Warrants shall be in the same form, including,
without limitation, the same registration rights and anti-dilution provisions,
as the securities sold in the offering; provided, however, the PA Warrants shall
include a “net issuance” cashless exercise feature.  The Company shall
reduce the number of PA Warrants to be issued to HCM by the number of warrants
that the Company owes and issues to the Additional Placement
Agents.

     

    Fee Tail.  HCM or
its designee shall be entitled to a Placement Agent’s Fee, calculated in the
manner provided in this Paragraph 4, with respect to any securities purchased in
any subsequent offering (“Subsequent Offering”) by
investors whom HCM or its designee had introduced to the Company during the Term
if such Subsequent Offering is consummated at any time within (i) the 12-month
period following the consummation of the offering and (ii) if no offering shall
have been consummated during the Term, the 12-month period following the
expiration or termination of this Agreement.  All investors introduced
by HCM or its designee during the Term shall be set forth on Schedule A annexed
hereto and made a part hereof.  Subsequent to the date of this
Agreement and immediately upon the introduction of an Investor to the Company,
HCM shall amend Schedule A to include each additional Investor and deliver such
amended Schedule A to the Company within ten (10) days of such
introduction.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.           Compliance
With Applicable Law.  In the execution of this Agreement, both
the Company and HCM each agrees to comply in all material respects with
applicable provisions of the Securities Act of 1933 (“Act”) and any regulations
thereunder and any applicable state laws and requirements.

     

    The Company acknowledges and agrees
that HCM has been retained solely to provide the advice or services set forth in
this Agreement. HCM is not licensed as a broker-dealer or investment advisor
under applicable federal or state securities laws, and both HCM and the Company
acknowledges and agree that the advisory services to be performed hereunder
shall not include any activity for which HCM would be required to be licensed as
a broker-dealer or investment advisor.  To the extent that HCM’s
activities do require such licenses, the Company shall not be obligated to pay
any amounts or issue any securities to HCM.  The Company further
acknowledges that HCM is not being retained to provide or render any formal
opinion to the Company or its shareholders on the appropriateness or fairness of
any transaction.

     

    6.           Indemnification.  The
Company agrees to indemnify HCM in accordance with the indemnification and other
provisions attached to this Agreement as Exhibit A (the “Indemnification Provisions”),
which provisions are incorporated herein by reference and shall survive the
termination or expiration of this Agreement.  Notwithstanding any
provision of this engagement letter to the contrary, the Company agrees that
neither HCM  nor its affiliates, and the respective officers,
directors, employees, representatives and each other person, if any, controlling
HCM  or any of its affiliates, shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the Company for or in
connection with the engagement and transaction described herein except for
liability imposed by applicable law in connection with their actions/omissions
as representative for the transaction(s).

     

    7.           Termination;
Survival of Provisions.  This Agreement may be terminated by
HCM, or the Company at any time upon ninety (90) days prior written notice to
the other party (the “Termination Date”); provided, however, that: (a)
any termination or completion of HCM ’s engagement hereunder shall not affect
the Company’s obligation to indemnify HCM  as provided in the
Indemnification Provisions and (b) any termination by HCM and the Company’s
engagement hereunder shall not affect the Company’s obligation to pay fees as
provided for in Section 3 herein; and (c) any termination by the Company of
HCM’s engagement hereunder shall not affect the Company’s obligation to pay fees
and reimburse the expenses accruing prior to such termination to the extent
provided for herein.  All such fees and reimbursements due shall be
paid to HCM on or before the Termination Date (in the event such fees and
reimbursements are earned or owed as of the Termination Date) or upon the
closing of the Transaction(s) or any applicable portion thereof (in the event
such fees are due pursuant to the terms of Section 3 hereof).  The
provisions of Sections 1,3,4,6 and 10 shall survive any termination of this
Agreement.

     

    8.           Information.  In
connection with HCM’s activities hereunder, the Company will furnish or use its
best efforts to cause the Company to furnish HCM with all materials and
information regarding the business and financial condition of the Company
necessary to provide the services described herein (the “Information”). The Company
acknowledges and agrees that HCM shall rely upon such Information in providing
the services and advice required hereunder, and that such services and advice
are nessarily limited by the accuracy and completeness of the Information
provided to HCM.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.           Entire
Agreement; Amendments; Headings.  This Agreement, including the
exhibits hereto, constitutes the entire understanding of the parties with
respect to the subject matter hereof and supersedes any prior oral or written
agreements or understandings of the parties.  This Agreement may not
be modified or amended except in writing duly executed by the parties
hereto.  The section headings in this Agreement have been inserted as
a matter of convenience of reference and are not part of this
Agreement.

     

    10.         Nondisclosure
of Confidential Information.  HCM and the Company mutually
agree that they will not disclose any confidential information received from the
other party to others except with the written permission of the other party or
as such disclosure may be required by law.  HCM has been retained
under this Agreement as an independent contractor with duties owed solely to the
Company.  The advice, written or oral, rendered by HCM pursuant to
this Agreement is intended solely for the benefit and use of the Company in
considering the matters to which this Agreement relates, and the Company agrees
that such advice may not be relied upon by any other person, used for any other
purpose, reproduced, disseminated, or referred to at any time, in any manner or
for any purpose, nor shall any public references to HCM be made by the Company,
without the prior written consent of HCM, which consent shall not be
unreasonably withheld.

     

    11.         Successors
and Assigns.  The benefits of this Agreement shall inure to the
parities hereto, their respective successors and assigns and to the indemnified
parties hereunder and their respective successors and assigns, and the
obligations and liabilities assumed in this Agreement shall be binding upon the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained herein to the contrary, neither HCM nor the Company shall
assign to an unaffiliated third party any of its obligations
hereunder.

     

    12.         Press
Announcements.  The Company agrees that HCM shall, upon a
successful transaction, have the right to place advertisements in financial and
other newspapers and journals at its own expense describing its services to the
Company hereunder, provided that HCM shall submit a copy of any such
advertisement to the Company for its approval, such approval not to be
unreasonably withheld.

     

    13.         Counterparts.  For
the convenience of the parties, this Agreement may be executed in any number of
counterparts, each of which shall be, and shall be deemed to be, an original
instrument, but all of which taken together shall constitute one and the same
Agreement.  Such counterparts may be delivered by one party to the
other by facsimile or other electronic transmission, and such counterparts shall
be valid for all purposes.

     

    If the
terms of our engagement as set forth in this letter are satisfactory to you,
please sign and date the enclosed copy of this letter and submit it back to
us.

     

    The
Company’s signature below shall constitute its agreement to the terms
hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  Very
      truly yours,

                
	 
      	 
      
	 
      	
                  Harborview
      Capital Management, LLC

                
	 
      	 
      
	 
      	
                  By:

                	
                    

                
	 
      	 
      	
                  Richard
      Rosenblum

                
	 
      	 
      	
                  Principal

                
	 
      	 
      
	
                  ACCEPTED AND AGREED TO:
      as of the date first written above:

                
	 
      	 
      
	 
      	
                  Statmon
      Technologies Corp.

                
	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Geoffrey
      Talbot

                
	 
      	 
      	
                  Chief
      Executive Officer

                

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit
A

    

    INDEMNIFICATION
PROVISIONS

    

    Capitalized
terms used in this Exhibit shall have the meanings ascribed to such terms in the
Agreement to which this Exhibit is attached.

     

    The
Company agrees to indemnify and hold harmless HCM  and each of the
other Indemnified Parties (as hereinafter defined) from and against any and all
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements, and any and all actions, suits, proceedings
and investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise (including, without limitation, the costs,
expenses and disbursements, as and when incurred, of investigating, preparing,
pursing or defending any such action, suit, proceeding or investigation (whether
or not in connection with litigation in which any Indemnified Party is a party)
(collectively, “Losses”), directly or
indirectly, caused by, relating to, based upon, arising out of, or in connection
with, HCM’s acceptance of or the performance or non-performance of its
obligations under the Agreement between the Company and
HCM  (including without limitation HCM or its designees as the
Company’s observer on the board of directors of the Company) to which these
indemnification provisions are attached and form a part, any breach by the
Company of any representation, warranty, covenant or agreement contained in the
Agreement (or in any instrument, document or agreement relating thereto,
including any agency agreement), or the enforcement by HCM of its rights under
the Agreement or these indemnification provisions, except to the extent that any
such Losses are found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from the
negligence or willful misconduct of the Indemnified Party seeking
indemnification hereunder. The Company also agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with the engagement of HCM by the
Company or for any other reason, except to the extent that any such liability is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) to have resulted primarily and directly from such Indemnified
Party’s negligence or willful misconduct.

     

    These
Indemnification Provisions shall extend to the following persons (collectively,
the “Indemnified
Parties”):  HCM, its present and former affiliated entities,
managers, members, officers, employees, legal counsel, representatives and
controlling persons (within the meaning of the federal securities laws), and the
officers, directors, partners, stockholders, members, managers, employees, legal
counsel, representatives and controlling persons of any of
them.  These indemnification provisions shall be in addition to any
liability which the Company may otherwise have to any Indemnified
Party.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If any
action, suit, proceeding or investigation is commenced, as to which an
Indemnified Party proposes to demand indemnification, it shall notify the
Company with reasonable promptness; provided, however, that any
failure by an Indemnified Party to notify the Company shall not relieve the
Company from its obligations hereunder, except insofar as the Company shall have
been materially prejudiced by such delay.  Indemnified Party shall
have the right to retain counsel of its own choice to represent it, and the
reasonable fees, expenses and disbursements of such counsel shall be borne by
the Company.  Any such counsel shall, to the extent consistent with
its professional responsibilities, cooperate with the Company and the Company
counsel.  The Indemnified Parties shall cooperate with the Company in
any defense, except such matters in respect of which the Indemnified Parties
counsel shall advise the Indemnified Parties that such cooperation would impair
a defense available to the Indemnified Parties that is unavailable to the
Company.  The Company shall be liable for any settlement of any claim
against any Indemnified Party made with the Company’s written
consent.  The Company shall not, without the prior written consent of
HCM, settle or compromise any claim, or permit a default or consent to the entry
of any judgment in respect thereof, unless such settlement, compromise or
consent: (i) includes, as an unconditional term thereof, the giving by the
claimant to all of the Indemnified Parties of an unconditional release from all
liability in respect of such claim, and (ii) does not contain any factual or
legal admission by or with respect to an Indemnified Party or an adverse
statement with respect to the character, professionalism, expertise or
reputation of any Indemnified Party or any action or inaction of any Indemnified
Party.

     

    In order
to provide for just and equitable contribution, if a claim for indemnification
pursuant to these indemnification provisions is made but it is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification may not be enforced in such case, even though the
express provisions hereof provide for indemnification in such case, then the
Company shall contribute to the Losses to which any Indemnified Party may be
subject: (i) in accordance with the relative benefits received by the Company
and its stockholders, subsidiaries and affiliates, on the one hand, and the
Indemnified Party, on the other hand, and (ii) if (and only if) the allocation
provided in clause (i) of this sentence is not permitted by applicable law, in
such proportion as to reflect not only the relative benefits, but also the
relative fault of the Company, on the one hand, and the Indemnified Party, on
the other hand, in connection with the statements, acts or omissions which
resulted in such Losses as well as any relevant equitable
considerations.  No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person who is not
also found liable for fraudulent misrepresentation.  The relative
benefits received (or anticipated to be received) by the Company and it
stockholders, subsidiaries and affiliates shall be deemed to be equal to the
aggregate consideration payable or receivable by such parties in connection with
the transaction or transactions to which the Agreement relates relative to the
amount of fees actually received by HCM in connection with such transaction or
transactions.  Notwithstanding the foregoing, in no event shall the
amount contributed by all Indemnified Parties exceed the amount of fees
previously received by HCM pursuant to the Agreement.

     

    Neither
termination nor completion of the Agreement shall affect these Indemnification
Provisions which shall remain operative and in full force and effect for a
period of two years after such termination or completion.  The
Indemnification Provisions shall be binding upon the Company and its successors
and assigns and shall inure to the benefit of the Indemnified Parties and their
respective successors, assigns, heirs and personal
representatives.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
A

     

    Investors

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