Document:

Unassociated Document

    Exhibit
      10.19

    

    MASTER
      LOAN AGREEMENT

    

    THIS
      MASTER LOAN AGREEMENT
      (the
“Agreement”) is made and entered into this 2nd
      day of
      November 2004 (the “Effective Date”), by and between ENER1
      GROUP, INC.,
      a
      Florida corporation (“Ener1”) and SPLINEX
      TECHNOLOGY INC.,
      a
      Delaware corporation, with principal place of business at 550 West Cypress
      Creek
      Rd., Suite 410, Ft. Lauderdale, Florida 33309 (“Splinex”).

    

    NOW,
      THEREFORE,
      in
      consideration of the following premises and for other good and valuable
      considerations, the parties hereby agree as follows:

    

    1.    Loan.
      Ener1
      agrees to make a series of loans to Splinex in accordance with the provisions
      hereof which shall be evidenced by the Note in the form attached hereto as
      Exhibit A
      (the
“Note”). This Agreement shall operate as a master loan agreement to facilitate
      the lending of additional funds, at Splinex’s request and in Ener1’s sole
      discretion.

    

    2.    Funding
      of Loan.
      Prior
      to funding any Funding Request, Splinex will deliver to Ener1 a Note in the
      form
      attached to this Loan Agreement in the amount of the funds to be advanced (each
      such Note, a “New Note” and the amount of such New Note, the “New Note Amount”
and the aggregate outstanding after issuance of any such New Note, the “Loan
      Amount”). This Agreement shall contain as Schedule I a schedule of all Notes
      issued pursuant to this Agreement and shall be revised at the time of any
      additional Funding Request as provided in Schedule I hereto, which shall be
      signed by a duly authorized officer of each party. 

    

    3.    Interest.
      The Loan
      Amount shall accrue interest at the rate of 5% per annum.

    

    4.    Loan
      Repayment.
      Splinex
      shall repay the Loan Amount and any accrued interest upon demand by Ener1.
      

    

    5.    Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Florida. 

    

    6.    Loan
      Security.
      The
      parties hereby acknowledge and agree that this Loan is an unsecured obligation
      of Splinex.

     

    7.    Notices. All
      notices, requests, demands, and other communications required or permitted
      hereunder shall be in writing and shall be deemed to have been duly given upon
      (a) a transmitter’s confirmation of a receipt of a facsimile transmission, (b)
      confirmed delivery of a standard overnight courier, (c) when delivered by hand,
      or (d) the expiration of five business days after the date mailed by certified
      or registered mail (return receipt requested), postage prepaid, to the parties
      at the following addresses:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a)    If
      to
      Ener1, to:

    

    Ener1
      Group, Inc.

    550
      West
      Cypress Creek Road, Suite 120

    Fort
      Lauderdale, FL 33309

    Attention:
      Mike Zoi, President

    Fax:
      (954)
      202-2884

    

    or
      to
      such other Person or address as Ener1 shall furnish by notice to the other
      parties in writing.

    

    (b)    If
      to
      Splinex, to:

    Splinex
      Technology Inc.

    550
      W.
      Cypress Creek Road, Suite 410

    Fort
      Lauderdale, FL 33309

    Attention:
      Gerard Herlihy, President

    Fax:
      (954) 660-6561

    

    8.    Attorneys
      Fees.
      In the
      event of a dispute between the parties, the prevailing party shall be entitle
      to
      all reasonable attorneys fees and costs incurred before any trial, arbitration,
      or other proceeding as well as all other relief granted in any suit or other
      proceeding.

    

    9.    U.S.
      Dollar Denominated.
      Except
      where specifically provided otherwise, all transactions herein shall be in
      U.S.
      dollars.

    

    10.         
      Entire
      Understanding.
      This
      Agreement contains the entire understanding between the parties hereto and
      supersedes any and all prior agreements, understandings, and arrangements
      relating to the subject matter hereof.

    

    11.         
      Counterparts.
      This
      Agreement may be executed in two counterparts, each of which shall be deemed
      an
      original and all of which together shall constitute the same
      agreement.

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement as of the day and year first above
      written.

     

     

    
      	
              ENER1 GROUP, INC.,

               

               

               

              ___________________________

              Name: Mike Zoi

              Title: President

            	
              SPLINEX TECHNOLOGY INC.

               

               

               

              ___________________________

              Name:
                Gerard Herlihy

              Title:
                President

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

        

    Exhibit
      A

    

    NOTE

     

     

    
      	$	
              ,
                2005

            

    

     

    FOR
      VALUE RECEIVED, SPLINEX TECHNOLOGY INC.,
      a
      Delaware corporation, (the “Company”) promises to pay to Ener1 Group, Inc., a
      Florida corporation (the “Holder”), or its successors and assigns, the principal
      sum of ___________________ Dollars ($________) or such lesser amount as shall
      then equal the outstanding principal amount hereof (the “Loan Amount”), together
      with interest from 60 days after the date of this Note on the unpaid principal
      balance at a rate equal to 5% per annum. Interest
      under this Note shall be calculated on the basis of a 365-day year for the
      actual number of days elapsed (i.e. 1/365’s of a full year’s interest shall
      accrue for each day any principal amount of this Note is outstanding beyond
      the
      date hereof).
      All
      capitalized terms not otherwise defined herein shall have the meaning so given
      in the Master Loan Agreement.

     

    1.    Term.
      The
      Company shall repay the Loan Amount, and any interest that has accrued, within
      five business days of a demand for such payment by the Holder.

     

    2.    Events
      of Default.
      The
      occurrence of any of the following shall constitute an “Event of Default” under
      this Note:

     

    (a)    Voluntary
      Bankruptcy or Insolvency Proceedings.
      The
      Company shall (i) apply for or consent to the appointment of a receiver,
      trustee, liquidator, or custodian of itself or of all or a substantial part
      of
      its property, (ii) admit in writing its inability, to pay its debts
      generally as they mature, (iii) make a general assignment for the benefit
      of any of its creditors, (iv) be dissolved or liquidated in full or in
      part, (v) commence a voluntary case or other proceeding seeking
      liquidation, reorganization or other relief with respect to itself or its debts
      under any bankruptcy, insolvency, or other similar law now or hereafter in
      effect or consent to any such relief or to the appointment of or taking
      possession of its property by any official in an involuntary case or other
      proceeding commenced against it, or (vi) take any action for the purpose of
      effecting any of the foregoing; or

     

    (b)    Involuntary
      Bankruptcy or Insolvency Proceedings.
      The
      Company seeks the appointment of a receiver, trustee, liquidator, or custodian
      of the Company or of all or a substantial part of the property thereof, or
      an
      involuntary case or other proceedings seeking liquidation, reorganization,
      or
      other relief with respect to the Company or the debts thereof under any
      bankruptcy, insolvency, or other similar law or hereafter in effect shall be
      commenced and an order for relief entered or such proceeding shall not be
      dismissed or discharged within sixty (60) days of commencement.

     

    3.    Rights
      of Holder Upon Default.
      Upon
      the occurrence or existence of any Event of Default and at any time thereafter
      during the continuance of such Event of Default, (a) interest on the unpaid
      balance of this Note shall accrue at 12% per annum until paid in full and (b)
      the Holder may declare all outstanding amounts payable by the Company hereunder
      to be immediately due and payable without presentment, demand, protest or any
      other notice of any kind, all of which are hereby expressly waived. In addition
      to the foregoing remedies, upon the occurrence or existence of any Event of
      Default, Holder may exercise any other right, power, or remedy granted to it
      or
      otherwise permitted to it by law, either by suit in equity or by action at
      law,
      or both.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.    Prepayment.
      This
      Note may be prepaid in whole or in part at any time by the Company without
      penalty or premium. Any such prepayment will be applied first to the payment
      of
      expenses due under this Note, second to interest accrued on this Note, and
      third, if the amount of prepayment exceeds the amount of all such expenses
      and
      accrued interest, to the payment of principal of this Note.

     

    5.    Taxes.
      All
      payments by the Company under this Note shall be made without setoff or
      counterclaim and in such amounts as may be necessary in order that all payments,
      after deduction or withholding for or on account of any present or future taxes,
      levies, imposts, duties, or other charges of whatsoever nature imposed by any
      government or any political subdivision or taxing authority thereof
      (collectively the “Taxes”), shall not be less than the amounts otherwise
      specified to be paid under this Note. Notwithstanding anything to the contrary
      contained in this paragraph, the Company shall not be liable for the payment
      of
      any tax on or measured by net income imposed on the Holder pursuant to the
      income tax laws of the United States. The Company shall further pay any present
      or future stamp or documentary taxes or any other excise or property taxes,
      charges, or similar levies which arise from any payment made hereunder or from
      the execution, delivery, or registration of, or otherwise with respect to this
      Note or any of the other documents evidencing this loan (herein referred to
      as
“Other Taxes”). The Company shall pay all Taxes and Other Taxes when due (and
      indemnify the Holder against any liability therefor) and shall promptly (and
      in
      any event not later than 30 days thereafter) furnish to the Holder any
      certificates, receipts, and other documents which may be required (in the
      reasonable judgment of the Holder) to establish any tax credit to which the
      Holder may be entitled. The Company shall indemnify the Holder for the full
      amount of Taxes and Other Taxes (including, without limitation, any Taxes and
      Other Taxes imposed by any jurisdiction on amounts payable under this paragraph)
      paid by the Holder or any liability (including interest and penalties) arising
      therefrom or with respect thereto, whether or not such Taxes or Other Taxes
      were
      correctly or legally asserted. Without prejudice to the survival of any other
      agreement of the Company hereunder, the obligations of the Company under this
      paragraph shall survive the termination of this Note and the repayment of the
      loan.

     

    6.    Successors
      and Assigns.
      This
      Note shall be binding upon and benefit the successors and permitted assigns
      of
      the parties.

     

    7.    Waiver
      and Amendment.
      Any
      provision of this Note may be amended, waived, or modified only upon the written
      consent of both the Company and the Holder. Any amendment or waiver effected
      in
      accordance with this Section 7 shall be binding upon the Company and the Holder
      of this Note.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.    Assignment
      by the Company.
      Neither
      this Note nor any of the rights, interests, or obligations hereunder may be
      assigned, by operation of law, or otherwise, in whole or in part, by the
      Company, without the prior written consent of the Holder.

     

    9.    Notices.
      Any
      notice, request, or other communication required or permitted hereunder shall
      be
      in writing and shall be deemed to have been duly given if personally delivered
      or mailed by registered or certified mail, postage prepaid, or by recognized
      overnight courier or personal delivery at the respective addresses of the
      parties as set forth in the records maintained by the Company. Any party hereto
      may by notice so given change its address for future notice hereunder. Notice
      shall conclusively be deemed to have been given when received.

     

    10.   Expenses;
      Waivers.
      The
      Company promises to pay all reasonable costs and expenses, including, without
      limitation, reasonable attorneys’ fees and costs, stamp taxes, and all other
      fees and expenses incurred in connection with enforcement of this Note. The
      Company hereby waives notice of default, presentment, or demand for payment,
      protest, or notice of nonpayment or dishonor and all other notices or demands
      relative to this instrument.

     

    11.   Governing
      Law.
      This
      Note and all actions arising out of or in connection with this Note shall be
      governed by and construed in accordance with the laws of the State of Florida,
      without regard to the conflicts of law provisions of the State of Florida or
      of
      any other state.

     

    12.   WAIVER
      OF JURY TRIAL.
      THE
      COMPANY HEREBY, AND THE HOLDER BY ITS ACCEPTANCE OF THIS NOTE, KNOWINGLY,
      VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY
      JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR
      IN
      CONNECTION WITH THIS NOTE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
      CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
      (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER PARTY. THIS PROVISION IS
      A
      MATERIAL INDUCEMENT FOR THE HOLDER MAKING THE LOAN EVIDENCED BY THIS
      NOTE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Note to be issued as of the date
      first written above.

     

    
      	 	 	
              Splinex
                Technology Inc., a Delaware corporation

               

              By:____________________________________

              Name:
                Gerard Herlihy

              Title:
                PresidentTHIS
      WARRANT AS WELL AS THE COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT
      HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED,
      ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT TO A
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE
      AND
      IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (ii) PURSUANT TO A SPECIFIC
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT BUT ONLY UPON THE HOLDER
      HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL WHICH OPINION IS
      REASONABLY ACCEPTABLE TO THE CORPORATION, THAT THE PROPOSED DISPOSITION IS
      CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS
      ANY
      APPLICABLE “BLUE SKY” OR SIMILAR SECURITIES LAW

    

    VOID
      AFTER 5.00 P.M. NEW YORK TIME, ON _____________________ (the “Termination
      Date”)

    

    

    WARRANT
      TO PURCHASE _________ SHARES OF THE COMMON STOCK OF 

    

    STATMON
      TECHNOLOGIES CORP.

    

    

    This
      is
      to certify that, FOR VALUE RECEIVED, ___________ (The
      “Holder”) is entitled to purchase, subject to the provisions of this Warrant,
      from STATMON
      TECHNOLOGIES CORP.,
      a
      Nevada corporation (the “Company”), ______________
      shares
      of
      the common stock of the Company, $.01 par value (the “Common Stock”), at a price
      of one dollar and fifty cents ($1.50)
      per
      share at any time or from time to time from the date hereof until 5:00 P.M.,
      New
      York City Time on the Termination Date. The number of shares to be received
      upon
      the exercise of this Warrant and the price to be paid for each such share shall
      be adjusted from time to time as hereinafter set forth. The shares deliverable
      upon such exercise, and as adjusted from time to time, are hereinafter sometimes
      referred to as “Warrant Shares” and the exercise price of this Warrant as in
      effect at any time as adjusted from time to time is hereinafter sometimes
      referred to as the “Exercise Price.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	SECTION
              1.	
              EXERCISE
                OF
                WARRANT.

            

    

    This
      Warrant may be exercised in whole or in part at any time or from time to time
      during the period commencing on the date hereof and terminating at
      5:00 P.M., New York City Time, on the Termination Date (the “Exercise
      Period”) provided, however, that (i) if the Termination Date is a day on which
      banking institutions in the State of New York are authorized by law to close,
      then on the next succeeding day which shall not be such a day, and (ii) in
      the
      event of any merger, consolidation or sale of substantially all the assets
      of
      the Company resulting in any distribution to the Company’s stockholders on or
      before the Termination Date, the Holder shall have the right to exercise this
      Warrant commencing at such time through the Termination Date which shall entitle
      the Holder to receive, in lieu of Warrant Shares, the kind and amount of
      securities and property (including cash) receivable by a holder of the number
      of
      shares into which this Warrant might have been exercisable immediately prior
      thereto. For purposes of this Warrant, the term “Warrant Shares” shall include
      such securities and property. This Warrant may be exercised by presentation
      and
      surrender hereof to the Company at its principal office, or at the office of
      its
      stock transfer agent, if any, with the Purchase Form annexed hereto duly
      executed and accompanied by payment of the Exercise Price for the number of
      Warrant Shares specified in such Purchase Form. Such payment may be made, at
      the
      option of the Holder, by check or wire transfer As soon as practicable after
      each such exercise of the Warrant, but not later than two business days from
      the
      date of such exercise, the Company shall issue and deliver to the Holder a
      certificate or certificates representing the Warrant Shares issuable upon such
      exercise, registered in the name of the Holder or the Holder’s designee. If this
      Warrant should be exercised in part only, the Company shall, upon surrender
      of
      this Warrant for cancellation, execute and deliver a new Warrant evidencing
      the
      rights of the Holder thereof to purchase the balance of the Warrant Shares
      purchasable hereunder. Upon receipt by the Company of this Warrant at its
      office, or by the stock transfer agent of the Company at its office, in proper
      form for exercise, the Holder shall be deemed to be the holder of record of
      the
      Warrant Shares issuable upon such exercise, notwithstanding that the stock
      transfer books of the Company shall then be closed or that certificates
      representing such shares shall not then be physically delivered to the
      Holder. 

    

    
      	SECTION
              2.	
              RESERVATION
                OF SHARES.

            

    

    

    The
      Company shall at all times reserve for issuance and/or delivery upon exercise
      of
      this Warrant such number of Warrant Shares as shall be required for issuance
      and
      delivery upon exercise of this Warrant.

    

    
      	SECTION
              3.	
              FRACTIONAL
                SHARES.

            

    

     

    No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. With respect to any fraction of a share called
      for
      upon any exercise hereof, the Company shall pay to the Holder an amount in
      cash
      equal to such fraction multiplied by the value of of a share determined as
      follows( the “Current Market Value”):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a) If
      the
      Common Stock is listed on a national securities exchange or admitted to unlisted
      trading privileges on such exchange or listed for trading on NASDAQ, the Current
      Market Value shall be the last reported sale price of the Common Stock on such
      exchange or system on the last business day prior to the date of exercise of
      this Warrant or if no such sale is made on such day, the average of the closing
      high bid and low asked prices for such day on such exchange or system;
      or

    (b) If
      the
      Common Stock is not so listed or admitted to unlisted trading privileges but
      bid
      and asked prices are reported by the National Quotation Bureau, Inc. or any
      successor thereto, the Current Market Value shall be the average of last
      reported high bid and low asked prices reported by the National Quotation
      Bureau, Inc. on the last business day prior to the date of the exercise of
      this
      Warrant; or

    

    (c) If
      the
      Common Stock is not so listed or admitted to unlisted trading privileges and
      bid
      and asked prices are not so reported, the Current Market Value shall be the
      book
      value of a share thereof as at the end of the fiscal quarter of the Company
      ending immediately prior to the date of the exercise of the Warrant determined
      in accordance with generally accepted accounting principles consistently
      applied.

    

    
      	SECTION
              4.	
              EXCHANGE,
                TRANSFER, ASSIGNMENT OR LOSS OF Warrant.
                

            

    

    

    This
      Warrant is exchangeable, without expense, at the option of the Holder, upon
      presentation and surrender hereof to the Company for other Warrants of different
      denominations entitling the Holder thereof to purchase in the aggregate the
      same
      number of shares of Common Stock purchasable hereunder. The term “Warrant” as
      used herein includes any Warrants into which this Warrant may be divided or
      exchanged. Upon receipt by the Company of evidence reasonably satisfactory
      to it
      of the loss, theft, destruction or mutilation of this Warrant, and (in the
      case
      of loss, theft or destruction) of reasonably satisfactory indemnification,
      and
      upon surrender and cancellation of this Warrant, if mutilated, the Company
      will
      execute and deliver a new Warrant of like tenor and date. Any such new Warrant
      executed and delivered shall constitute an additional contractual obligation
      on
      the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
      or mutilated shall be at any time enforceable by anyone.

    

    
      	SECTION
              5.	
              RIGHTS
                AND LIABILITIES OF THE
                HOLDER.

            

    

    

    The
      Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
      in the Company, either at law or equity, and the rights of the Holder are
      limited to those expressed in this Warrant and are not enforceable against
      the
      Company except to the extent set forth herein. No provision of this Warrant,
      in
      the absence of affirmative action by the Holder to purchase the Warrant Shares,
      and no mere enumeration herein of the rights or privileges of the Holder, shall
      give rise to any liability of the Holder for the Exercise Price or as a
      shareholder of the Company, whether such liability is asserted by the Company
      or
      by creditors of the Company.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      
        
          	SECTION
                  6.	
                  ADJUSTMENTS,
                    NOTICE PROVISIONS AND RESTRICTIONS ON ISSUANCE OF ADDITIONAL
                    SECURITIES.

                

        

         

      

    

    

    SECTION
      6.1 Adjustment
      of Exercise Price.
      The
      Exercise Price in effect from time to time shall be subject to adjustment,
      as
      follows:

    (a) In
      case
      the Company shall (i) declare a dividend or make a distribution on the
      outstanding shares of its capital stock that is payable in shares of its Common
      Stock, (ii) subdivide, split or reclassify the outstanding shares of its Common
      Stock into a greater number of shares, or (iii) combine or reclassify the
      outstanding shares of its Common Stock into a smaller number of shares, the
      Exercise Price in effect immediately after the record date for such dividend
      or
      distribution or the effective date of such subdivision, combination or
      reclassification shall be adjusted so that it shall equal the price determined
      by multiplying the Exercise Price in effect immediately prior thereto by a
      fraction, the numerator of which shall be the number of shares of Common Stock
      outstanding immediately before such dividend, distribution, split, subdivision,
      combination or reclassification, and the denominator of which shall be the
      number of shares of Common Stock outstanding immediately after such dividend,
      distribution, split, subdivision, combination or reclassification. Any shares
      of
      Common Stock issuable in payment of a dividend shall be deemed to have been
      issued immediately prior to the record date for such dividend for purposes
      of
      calculating the number of outstanding shares of Common Stock of the Company
      under this Section 6. Such adjustment shall be made successively upon the
      occurrence of each event specified above.

    

    (b) In
      case
      the Company fixes a record date for the issuance to holders of its Common Stock
      of rights, options, warrants or convertible or exchangeable securities generally
      entitling such holders to subscribe for or purchase shares of Common Stock
      at a
      price per share less than the Current Market Price (as such term is defined
      in
      Subsection 6.1(d) hereof) per share of Common Stock on such record date, the
      Exercise Price shall be adjusted immediately thereafter so that it shall equal
      the price determined by multiplying the Exercise Price in effect immediately
      prior thereto by a fraction, the numerator of which shall be the number of
      shares of Common Stock outstanding on such record date plus the number of shares
      of Common Stock which the aggregate offering price of the total number of shares
      of Common Stock so offered would purchase at the Current Market Price per share,
      and the denominator of which shall be the number of shares of Common Stock
      outstanding on such Record Date plus the number of additional shares of Common
      Stock offered for subscription or purchase. Such adjustment shall be made
      successively on each date whenever a record date is fixed.

    

    (c) In
      case
      the Company fixes a record date for the making of a distribution to all holders
      of shares of its Common Stock of (i) of shares of any class of capital stock
      other than its Common Stock or (ii) of evidences of its indebtedness or (iii)
      of
      assets (other than dividends or distributions referred to in Subsection 6.1(a)
      hereof) or (iv) of rights, options, warrants or convertible or exchangeable
      securities (excluding those rights, options, warrants or convertible or
      exchangeable securities referred to in Subsection 6.1(b) hereof), then in each
      such case the Exercise Price in effect immediately thereafter shall be
      determined by multiplying the Exercise Price in effect immediately prior thereto
      by a fraction, of which the numerator shall be the total number of shares of
      Common Stock outstanding on such record date multiplied by the Current Market
      Price (as such term is defined in Subsection 6.1(d) hereof) per share on such
      record date, less the aggregate fair value as determined in good faith by the
      Board of Directors of the Company of said shares or evidences of indebtedness
      or
      assets or rights, options, warrants or convertible or exchangeable securities
      so
      distributed, and of which the denominator shall be the total number of shares
      of
      Common Stock outstanding on such record date multiplied by such Current market
      Price per share. Such adjustment shall be made successively each time such
      a
      record date is fixed. In the event that such distribution is not so made, the
      Exercise Price then in effect shall be readjusted to the Exercise Price which
      would then be in effect if such record date had not been fixed.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (d) For
      the
      purpose of any computation under Subsection 6.1(a), 6.1(b) or 6.1(c)
      hereof, the “Current Market Price” per share at any date (the “Computation
      Date”) shall be deemed to be the average of the daily Current Market Value over
      twenty consecutive trading days ending the trading day before such date;
provided,
      however,
      upon the
      occurrence, prior to the Computation Date, of any event described in Subsections
      6.1(a), 6.1(b) or 6.1(c) which shall have become effective with respect to
      market transactions at any time (the “Market-Effect Date”) on or after the
      beginning of such 20-day period, the Current Market Value for each trading
      day
      preceding the Market-Effect Date shall be adjusted, for purposes of calculating
      such average, by multiplying such closing price by a fraction the numerator
      of
      which is the Exercise Price as in effect immediately after the Market-Effect
      Date and the denominator of which is the Exercise Price immediately prior to
      the
      Market-Effect Date, it being understood that the purpose of this proviso is
      to
      ensure that the effect of such event on the market price of the Common Stock
      shall, as nearly as possible, be eliminated in order that the distortion in
      the
      calculation of the Current Market Price may be minimized.

    

    (e) All
      calculations under this Section 6.1 shall be made to the nearest
      cent.

    

    SECTION
      6.2 Adjustment
      of Number of Shares.
      Upon
      each adjustment of the Exercise Price pursuant to Section 6.1, this Warrant
      shall thereupon evidence the right to purchase, in addition to any other
      securities to which the Holder is entitled to purchase, that number of Warrant
      Shares (calculated to the nearest one-hundred thousandth of a share) obtained
      by
      multiplying the number of shares of Common Stock purchasable upon exercise
      of
      the Warrant immediately prior to such adjustment by the Exercise Price in effect
      immediately prior to such adjustment and dividing the product so obtained by
      the
      Exercise Price in effect immediately after such adjustment.

    

    SECTION
      6.3 Verification
      of Computations.
      The
      Company shall select a firm of independent public accountants, which may be
      the
      Company’s independent auditors, and which selection may be changed from time to
      time, to verify the computations made in accordance with this Section 6. The
      certificate, report of other written statement of any such firm shall be
      conclusive evidence of the correctness of any computation made under this
      Section 6. Promptly upon its receipt of such certificate, report or statement
      from such firm of independent public accountants, the Company shall deliver
      a
      copy thereof to the Holder.

    

    SECTION
      6.4 Warrant
      Certificate Amendments.
      Irrespective of any adjustments pursuant to this Section 6, Warrant Certificates
      theretofore or thereafter issued need not be amended or replaced, but Warrant
      Certificates thereafter issued shall bear an appropriate legend or other notice
      of any adjustments and which legend and/or notice has been provided by the
      Company to the Holder, provided
      the
      Company may, at its option, issue new Warrant Certificates evidencing Warrants
      in the form attached hereto to reflect any adjustment in the Exercise Price
      and
      the number of Warrant Shares evidenced by such Warrant Certificates and deliver
      the same to the Holder in substitution for existing Warrant Certificates.
 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	SECTION
              7.	
              OFFICER’S
                CERTIFICATE.

            

 

    Whenever
      the Exercise Price, the number of Warrant Shares underlying this Warrant or
      either of them shall be adjusted as required by the provisions of the foregoing
      Section, the Company shall forthwith file in the custody of its Secretary or
      an
      Assistant Secretary at its principal office and with its stock transfer agent,
      if any, an officer’s certificate showing the adjusted Exercise Price and number
      of Warrant shares determined as herein provided, setting forth in reasonable
      detail the facts requiring such adjustment, including a statement of the number
      of additional shares of Common Stock, if any, and such other facts as shall
      be
      necessary to show the reason for and the manner of computing such adjustment.
      Each such officer’s certificate shall be made available at all reasonable times
      for inspection by the Holder or any subsequent holder of this Warrant executed
      and delivered pursuant to Section 1 hereof and the Company shall, forthwith
      after each such adjustment, mail a copy by certified mail of such certificate
      to
      the Holder or any such subsequent holder.

    

    
      	SECTION
              8.	
              NOTICES
                TO THE
                HOLDER

            

    

    So
      long
      as this Warrant shall be outstanding, (a) if the Company shall pay any dividend
      or make any distribution upon the Common Stock, (b) if the Company shall offer
      to holders of its Common Stock rights to subscribe for, purchase, or exchange
      property for any shares of any class of stock, or any other rights or Warrants
      or (c) if any capital reorganization of the Company, reclassification of
      the capital stock of the Company, consolidation or merger of the Company with
      or
      into another corporation, sale, lease or transfer of all or substantially all
      of
      the property and assets of the Company to another corporation, or voluntary
      or
      involuntary dissolution, liquidation or winding up of the Company shall be
      effected, then in any such case, the Company shall cause to be sent by overnight
      mail or courier service to the Holder, at least fifteen days prior to the date
      specified in (x) or (y) below, as the case may be, a notice containing a brief
      description of the proposed action and stating the date on which (x) a record
      is
      to be taken for the purpose of such dividend, distribution or subscription
      rights, or (y) such reclassification, reorganization, consolidation, merger,
      conveyance, lease, dissolution, liquidation or winding up is to take place
      and
      the date, if any is to be fixed, as of which holders of Common Stock or other
      securities shall receive cash or other property deliverable upon such
      reclassification, reorganization, consolidation, merger, conveyance,
      dissolution, liquidation or winding up.

    

    
      	SECTION
              9.	
              RECLASSIFICATION,
                REORGANIZATION OR
                MERGER.

            

    In
      case
      of any reclassification, capital reorganization or other change of outstanding
      shares of Common Stock of the Company, or in case of any consolidation or merger
      of the Company with or into another corporation (other than a merger with a
      subsidiary in which merger the Company is the continuing corporation and which
      does not result in any reclassification, capital reorganization or other change
      of outstanding shares of Common Stock of the class issuable upon exercise of
      this Warrant) or in case of any sale, lease or conveyance to another corporation
      of the property of the Company as an entirety (collectively such actions being
      hereinafter referred to as “Reorganizations”), the Company shall, as a condition
      precedent to such Reorganization transaction, cause effective provisions to
      be
      made so that the Holder shall have the right thereafter by exercising this
      Warrant at any time prior to the expiration of the Warrant, to receive in lieu
      of the amount of securities otherwise deliverable, the kind and amount of shares
      of stock and other securities and property receivable upon such Reorganization
      by a holder of the number of shares of Common Stock which might have been
      purchased upon exercise of this Warrant immediately prior to such
      Reorganization. Any such provision shall include provision for adjustments
      which
      shall be as nearly equivalent as may be practicable to the adjustments provided
      for in this Warrant. The foregoing provisions of this Section 9 shall
      similarly apply to successive Reorganizations.

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	SECTION
              10.	
              ISSUE
                TAX.

            

   

    The
      issuance of certificates representing the Warrant Shares upon the exercise
      of
      this Warrant as well as securities underlying the Share Warrants shall be made
      without charge to the Holder for any issuance tax in respect
      thereof.

    

    
      	SECTION
              11.	
              EXCHANGE
                PROVISIONS

            

    

    SECTION
      11.1        
      For purposes of this Section 11, this Warrant shall be deemed to represent
      the
      same number of Warrants as there are Warrant Shares underlying this Warrant.
      For
      example, if there are 100,000 Warrant Shares underlying this Warrant, then
      for
      purposes of this Section 11 the Holder shall be deemed to hold 100,000
      Warrants.

    

    SECTION
      11.2           For
      purposes of this Section 11, the following terms shall have the following
      meanings:

    

    (a) “Current
      Market Value ” of a Warrant Share shall be such value as determined under
      Section 3 hereof except that the time of the determination thereof shall be
      the
      last business day prior to the day the Company receives a notice from the Holder
      under this Section 11.

    

    (b) “Warrant
      Value” shall mean the Current Market Value of a Warrant Share underlying each
      Warrant minus the Exercise Price of such Warrant as of the close of business
      on
      the last business day prior to the day the Company receives a notice from the
      Holder under this Section 11.

    

    SECTION
      11.3          The
      Holder shall have the right to exchange, in a cashless transaction, all or
      part
      of its Warrants at any time not later than 5:00
      P.M., New York City Time
      on the Termination Date by providing written notice (the “Notice”) to the
      Company. The Notice shall set forth the number of Warrants that the Holder
      elects to exchange for Warrant Shares.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    SECTION
      11.4         Within
      three business days after receipt of the Notice by the Company, the Company
      shall issue the number of Warrant Shares to the Holder which shall be determined
      by dividing the Warrant Value of the Warrants being exchanged by the Exercise
      Price as of the date the Notice is received by the Company. Notwithstanding
      the
      foregoing, the number of Warrant Shares to be so issued to the Holder shall
      not
      exceed the maximum number of Warrant Shares that the Holder would have been
      entitled to receive had it paid the Exercise Price in cash on the day the
      Company receives the Notice.

    

    SECTION
      11.5          The
      Holder shall surrender the Warrant that the Holder is exchanging for Warrant
      Shares upon receipt of such Warrant Shares. If the entire Warrant is being
      exchanged by the Holder for Warrant Shares, the Company shall cancel the entire
      Warrant. If less than the entire Warrant is being exchanged for Warrant Shares,
      the Company shall issue a new Warrant to the Holder representing the portion
      of
      this Warrant which was not exchanged for Warrant Shares.

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    
      	SECTION
              12.	
              GOVERNING
                LAW, JURISDICTION AND
                VENUE.

            

          

    This
      Warrant shall be governed by and construed and enforced in accordance with
      the
      laws of the State of New York. The Company hereby consents to the exclusive
      jurisdiction and venue of the courts of the State of New York located in New
      York County, New York or the Unites States Federal District Court for the
      Southern District of New York with respect to any matter relating to this
      Warrant and the performance of the Company’s obligations hereunder and the
      Company hereto hereby further consents to the personal jurisdiction of such
      courts. Any action suit or proceeding brought by or on behalf of the Company
      relating to such matters shall be commenced, pursued, defended and resolved
      only
      in such courts and any appropriate appellate court having jurisdiction to hear
      an appeal from any judgment entered in such courts.

     

    
      	STATMON
              TECHNOLOGIES CORP. 	 	 
	 	 	 
	 	 
	By	 
 	 
 
	Geoffrey
              P.
              Talbot	 	 
	Chairman/CEO	
            
	 	 
	Dated: 	 
	 	 
	Attest:	 
	 	 
	 	 
	Secretary 	 

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    PURCHASE
      FORM

    

    
      
        	 	
                 Dated __________,

              

      

    

     

    The
      undersigned hereby irrevocably elects to exercise the within Warrant to the
      extent of purchasing ______________ Warrant Shares and hereby makes payment
      of
      ______________ in payment of the actual exercise price thereof.

     

    INSTRUCTIONS
      FOR REGISTRATION OF STOCK

     

    
      	 	 	 
	Name	 
	
               (Please
                typewrite or print in block letters)
 

            	 
 	 
 
	Address	  	 
	 	
            
	Signature
              	 

    

    
       

      
        
        

      

      
        -10-

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