Exhibit 10.19
PROMISSORY NOTE EXTENSION AGREEMENT
THIS PROMISSORY NOTE EXTENSION AGREEMENT (the "Agreement") is entered into on
this second day of December 2002, by and between Statmon Technologies, Corp., a
Nevada corporation located at 000 X. Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx,
Xxxxxxxxxx, 00000 ("Statmon") and Xxxx X. Xxxx ("Holder"), an individual
residing at 0000 Xxxx Xxxx Xxxxx, Xxxxx Xxxxx, XX 00000.
RECITALS
A. WHEREAS, Statmon is the obligor pursuant to a Promissory Note between
Statmon and Holder dated September 8, 2000 (the "Note") which was executed
contemporaneously with a Note Purchase and Shareholder Rights Agreement and a
Trademark Security Agreement dated September 3, 2002, which has since twice been
amended (collectively, the "Note Agreements");
B. WHEREAS, the original maturity date of the Note (the "Maturity Date")
was one year after execution, or September 8, 2001;
C. WHEREAS, the Maturity Date of the Note has been extended by mutual
agreement of Statmon and Holder to May 8, 2002, and August 8, 2002, respectively
and is currently in default;
D. WHEREAS, Statmon and Holder desire to again extend the Maturity Date of
the Note in exchange for certain additional obligations undertaken by Statmon as
set forth herein;
E. WHEREAS, Statmon is currently negotiating a separate Agreement for
Purchase and Sale of Remote Monitoring Products with Xxxxxx Corporation
("Xxxxxx"), (the "Xxxxxx Distribution Agreement").
F. WHEREAS, Holder has agreed to subrogate any interest securing the Note
and provided for by the Note Agreements to the rights of Xxxxxx, subject to
Holders written consent to the Xxxxxx Distribution Agreement, which consent
shall not be unreasonably withheld.
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth, and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
AGREEMENT
1. EXTENSION OF MATURITY DATE. Pursuant to the terms and conditions
precedent and subsequently detailed in this Agreement, Holder agrees to extend
the Maturity Date of the Note up to and including May 31, 2003.
2. RESTATEMENT OF OUTSTANDING PRINCIPAL AND INTEREST. The parties agree
that the outstanding principal amount owed by Statmon, together with interest at
the rate stated in the original Note, is $336,655.72 as at November 30, 2002
(the "Outstanding Balance").
3. REVISED PAYMENT SCHEDULE. Notwithstanding any other payment
arrangements set forth in the Note Agreements, Statmon agrees to make the
following payments until the Outstanding Balance is paid down to a zero balance:
(a) To consummate this agreement Statmon will make an initial
payment to Holder of $25,000 on December 2, 2002;
(b) For each month subsequent thereto, commencing January, 2003, and
payable over the course of the month and no later than the last calendar day of
each such month, Statmon will pay Holder a minimum of $20,000 per month (the
"Minimum Payment"), beginning with payments made to the Holder on a weekly basis
of twenty percent (20%) of each Statmon invoice remitted of cleared funds and
received by Statmon, up to the amount of the Minimum Payment. The balance of
invoice receipts shall be applied to pay off any deficit in the Minimum Payment
and for any other expenditure as per the approved operating budget and payment
schedule.
(c) If the Outstanding Balance, which the parties agree continues to
accrue interest per the terms contained in the Note Agreements and any
amendments thereto, has not been paid down to a zero balance by May 3l, 2003, or
if Statmon defaults on the payment obligations set forth in paragraphs 3(a) and
3(b) in any two consecutive months between January, 2003 and May 31, 2003, then
for each subsequent calendar month thereafter, the Minimum Payment shall be
fifty percent (50%) of each invoice payment received by Statmon, and such amount
shall be remitted to Holder on a weekly basis.
(d) Statmon may at any time pay off the entire Outstanding Balance
of the Note, again which the parties agree continues to accrue interest per the
terms contained in the Note Agreements and any amendments thereto, without any
prepayment penalties.
(e) Statmon agrees to make its best efforts to formalize a
non-exclusive Sales and Marketing arrangement with SDS LLC, to Holders'
reasonable satisfaction prior to January 31, 2003 (the "SDS Agreement").
(f) In the event Statmon defaults as per 3(c) above and Statmon does
not have a qualified software distributor in place for the broadcast industry,
Statmon, in consultation with the Holder, shall use its best endeavors to
renegotiate the non-exclusive SDS Agreement within 14 days.
4. SUBROGATION OF SECURITY INTEREST. Notwithstanding any provision
contained within the Note Agreements relating to a security interest in any of
the assets of Statmon including, but not limited to, the intellectual property
of the company and/or any of its trademarks, Holder hereby agrees to subrogate
its security interest to Xxxxxx Corporation as set forth more fully in the
Security Interest Subrogation Agreement entered into by Statmon, Holder, Thieme
Securities, Inc. and Xxxxxx Corporation concurrently with the execution of this
Agreement.
5. ADDITIONAL CONSIDERATION. In addition to the terms and conditions set
forth above, Statmon agrees to the following:
(a) Stamon will provide Holder with a deal-point summary, business
plan and forecasts of the Xxxxxx Corporation transaction related to the Xxxxxx
Distribution Agreement as soon as the information is available from Xxxxxx.
(b) Statmon will provide weekly financial transaction reports
submitted via e-mail on Monday of each week.
(c) Statmon confirms it has instructed its transfer agent to
immediately issue all outstanding penalty share certificates due the Holder
pursuant to the terms of the Note Agreements, as amended up to and including
November 30, 2002;
(d) Statmon undertakes to include all the Holders' shares of Common
stock in its first Securities and Exchange Commission ("SEC") SB-2 registration
statement filing. The timetable for the first SB-2 registration statement filing
shall not be later than December 31, 2003. As an affiliate of the Company,
Holder agrees to enter a lock-up agreement pursuant to an offering or placement
of Statmon shares on the same terms as the other affiliate shareholders.
(e) Statmon shall provide Holder with a patenting plan and budget
from a patent attorney for the Statmon Axess released software and the filing
deadlines prior to December 1, 2002.
(f) Statmon shall keep a current version of the Axess released
software in a jointly controlled safety deposit box at Bank America in West Los
Angeles, California.
6. MISCELLANEOUS.
(a) APPLICABLE LAW. This Agreement shall be construed in accordance
with, and any dispute arising in connection with, shall be governed by the laws
of the State of California.
(b) ASSIGNMENT. Except for an assignment or delegation that may
occur or be deemed to have occurred as a result of a merger, sale of assets or
other business combination in which the surviving party specifically assumes the
obligation of the other, no right, interest or obligation in the Agreement shall
be assigned or delegated.
(c) SECTION HEADINGS. The heading of the Sections are inserted for
reference only and are not intended to be part of nor affect the meaning or
interpretation of this Agreement.
(d) SEVERABILITY. If any term of this Agreement or portion of any
term of this Agreement is held as invalid or unenforceable, the remainder shall
not be affected, and each term and provision shall be valid and enforced to the
fullest extent permitted by law.
(e) WAIVER. A waiver by either party of any of the terms and
conditions or covenants to be performed by the other shall not be construed to
be a waiver of any succeeding breach, nor of any other term, condition or
covenant contained in this Agreement.
(f) ARBITRATION. Any dispute arising under this Agreement shall
first be submitted to mediation and then, if the matter has still not been
resolved, shall be resolved through arbitration in accordance with the rules of
the American Arbitration Association.
(g) ATTORNEYS' FEES. If it becomes necessary to bring suit to
enforce any provision of this Agreement, the prevailing party shall be entitled
to its reasonable attorneys' fees and costs of suit.
(h) ENTIRE AGREEMENT. This Agreement, together with the Note
Agreements, as amended, and the Security Interest Subrogation Agreement entered
into by the parties concurrently herewith, contain the entire understanding
between the parties and may not be altered, varied, revised or amended except by
as agreed in writing by both parties and signed by both parties. To the degree
there is any inconsistency between the terms of this Agreement and prior Note
Agreements, as amended, the terms of this Agreement shall control.
IN WITNESS WHEREOF, the parties have each executed and delivered this
Agreement as of the day and year first above written.
STATMON TECHNOLOGIES CORP. XXXX X. XXXX
By: /s/ Xxxxxxxx Xxxxxx By: /s/ Xxxx X. Xxxx
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Its: CEO
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