SHARES FOR DEBT AGREEMENT
This SHARES FOR DEBT AGREEMENT (this "Agreement") is made and entered into
as of November 2, 2004, by and between ENTREMETRIX CORPORATION, a Nevada
corporation (the "Company"), and XXXXXX XXXXXXX, an individual whose address is
____________________________________ ("XxXxxxx"), with reference to the
following facts:
RECITALS
WHEREAS, XxXxxxx is the duly appointed and acting Treasurer of the
Company;
WHEREAS, for services rendered or to be rendered by XxXxxxx to the Company
during the period from October 1, 2004 through December 31, 2004, the Company is
indebted to XxXxxxx in amount of U.S. $60,000 (the "Debt Amount"); and
WHEREAS, the Company has agreed to issue to XxXxxxx and XxXxxxx has agreed
to accept 6,000,000 restricted shares of the Company's common stock as complete
settlement of the Debt Amount;
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, and for valuable consideration, the receipt and sufficiency of
which are hereby mutually acknowledged, the parties to this Agreement
(collectively "parties" and individually a "party") agree as follows:
AGREEMENT
1. The Company agrees to issue to XxXxxxx and XxXxxxx agrees to accept,
6,000,000 restricted shares of the Company's common stock (the "Shares") as
complete payment and settlement of the Debt Amount and any and all other amounts
due or accrued to XxXxxxx for the compensation period from October 1, 2004
through December 31, 2004.
2. Upon issuance of the Shares, XxXxxxx hereby, for himself and his past
and present agents, executors, administrators, trustees, partners,
representatives, controlled entities and affiliates, successors and assigns,
forever discharges and releases the Company and each of its past and present
employees, agents, representatives, controlled entities and affiliates,
successors and assigns from any and all claims, damages, actions, judgments,
obligations, attorneys' fees, indemnities, subrogations, duties, demands,
controversies and liabilities of every nature at law or in equity, liquidated,
or unliquidated, known or unknown, matured or unmatured, foreseeable or
unforeseeable, which XxXxxxx had or has arising out of the Debt Amount.
3. This Agreement shall in all respects be interpreted, enforced and
governed under the laws of the State of California. The language and all parts
of this Agreement shall be in all cases construed as a whole according to its
very meaning and not strictly for or against any individual party.
4. Solely for establishing that the issuance of the Shares to XxXxxxx is
exempt from the registration requirements of Section 5 of the Securities Act of
1933 (as amended, the "Securities Act") and comparable provisions of state
blue-sky laws, XxXxxxx represents and warrants to the Company as follows:
(a) XxXxxxx is an "Accredited Investor" as that term is defined in
Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended (the "Securities Act").
(b) XxXxxxx understands that the Shares may not be sold, transferred
or otherwise disposed of without registration under the Securities Act or an
exemption therefrom.
(c) XxXxxxx understands and agrees that the certificate evidencing
the Shares shall be endorsed with the legend in substantially the form set forth
below:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY
THAT AN EXEMPTION THEREFROM IS AVAILABLE."
(d) In addition to the foregoing, XxXxxxx hereby makes all of the
investment representations set forth on Exhibit A attached hereto, which are
incorporated by reference herein.
5. This Agreement memorializes and constitutes the entire agreement and
understanding among the parties regarding the subject matter hereof, and
supersedes all prior negotiations, proposed agreements and agreements, whether
written or unwritten. The parties acknowledge that no other party, nor any agent
or attorney of any other party, has made any promises, representations, or
warranties whatsoever, expressly or impliedly, which are not expressly contained
in this Agreement, and the parties further acknowledge that they have not
executed this Agreement in reliance upon any collateral promise, representation,
warranty, or in reliance upon any belief as to any fact or matter not expressly
recited in this Agreement.
6. The parties shall hereafter execute all documents and do all that is
necessary, convenient or desirable in the reasonable opinion of the other party
to effect the provisions of this Agreement.
7. For the convenience of the parties to this Agreement, this document may
be executed by facsimile signatures and in counterparts which shall together
constitute the agreement of the parties as one and the same instrument. It is
the intent of the parties that a copy of this Agreement signed by any party
shall be fully enforceable against that party.
8. Should any provision of this Agreement be declared or determined by any
court to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby and, in lieu of such illegal or invalid
provision, there shall be added a provision as similar in terms and amount to
such illegal or invalid provision as may be possible and, if such illegal or
invalid provision cannot be so modified, then it shall be deemed not to be a
part of this Agreement.
[SIGNATURES FOLLOW]
IN WITNESS WHEREOF the parties have executed this Shares for Debt
Agreement as of the date first above written.
ENTREMETRIX CORPORATION
By:
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Xxxxx Xxxxxx
Its: President
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Xxxxxx XxXxxxx
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
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In connection with the purchase of Shares, I, the undersigned, represent
to the Company as follows:
1. The Company May Rely on These Representations. I understand that the
Company's sale of the shares to me has not been registered under the
Securities Act of 1933, as amended, because the Company believes, relying
in part on my representations in this document, that an exemption from
such registration requirement is available for such sale. I understand
that the availability of this exemption depends upon the representations I
am making to the Company in this document being true and correct.
2. I am Purchasing for Investment. I am purchasing the shares solely for
investment purposes, and not for further distribution. My entire legal and
beneficial ownership interest in the shares is being purchased and shall
be held solely for my account, except to the extent I intend to hold the
shares jointly with my spouse. I am not a party to, and do not presently
intend to enter into, any contract or other arrangement with any other
person or entity involving the resale, transfer, grant of participation
with respect to or other distribution of any of the shares. My investment
intent is not limited to my present intention to hold the shares for the
minimum capital gains period specified under any applicable tax law, for a
deferred sale, for a specified increase or decrease in the market price of
the shares, or for any other fixed period in the future.
3. I Can Protect My Own Interests. I can properly evaluate the merits and
risks of an investment in the shares and can protect my own interests in
this regard, whether by reason of my own business and financial expertise,
the business and financial expertise of certain professional advisors
unaffiliated with the Company with whom I have consulted, or my
preexisting business or personal relationship with the Company or any of
its officers, directors or controlling persons.
4. I am Informed About the Company. I am sufficiently aware of the Company's
business affairs and financial condition to reach an informed and
knowledgeable decision to acquire the shares. I have had opportunity to
discuss the plans, operations and financial condition of the Company with
its officers, directors or controlling persons, and have received all
information I deem appropriate for assessing the risk of an investment in
the shares.
5. I Recognize My Economic Risk. I realize that the purchase of the shares
involves a high degree of risk, and that the Company's future prospects
are uncertain. I am able to hold the shares indefinitely if required, and
am able to bear the loss of my entire investment in the shares.
6. I am Familiar With Rule 144. I am familiar with Rule 144 adopted under the
Securities Act, which in some circumstances permits limited public resales
of "restricted securities" like the shares acquired from an issuer in a
non-public offering. I understand that my ability to sell the shares under
Rule 144 in the future is uncertain, and will depend upon, among other
things: (i) the availability of certain current public information about
the Company; (ii) the resale occurring more than one year after my
purchase and full payment (within the meaning of Rule 144) for the shares;
and (iii) if I am an affiliate of the Company, or a non-affiliate who has
held the shares less than two years after my purchase and full payment:
(A) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker, as said term
is defined under the Securities Exchange Act of 1934, as amended, (B) the
amount of shares being sold during any three month period not exceeding
the specified limitations stated in Rule 144, and (C) timely filing of a
notice of proposed sale on Form 144, if applicable.
7. I Know Rule 144 May Never be Available. I understand that the requirements
of Rule 144 may never be met, and that the shares may never be saleable. I
further understand that at the time I wish to sell the shares, there may
be no public market for the Company's stock upon which to make such a
sale, or the current public information requirements of Rule 144 may not
be satisfied, either of which would preclude me from selling the shares
under Rule 144 even if the one-year minimum holding period had been
satisfied.
8. I Know I am Subject to Further Restrictions on Resale. I understand that
in the event Rule 144 is not available to me, any future proposed sale of
any of the shares by me will not be possible without prior registration
under the Securities Act, compliance with some other registration
exemption (which may or may not be available), or each of the following:
(i) my written notice to the Company containing detailed information
regarding the proposed sale, (ii) my providing an opinion of my counsel to
the effect that such sale will not require registration, and (iii) the
Company notifying me in writing that its counsel concurs in such opinion.
I understand that neither the Company nor its counsel is obligated to
provide me with any such opinion. I understand that although Rule 144 is
not exclusive, the Staff of the SEC has stated that persons proposing to
sell private placement securities other than in a registered offering or
pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such
offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
9. I Know I May Have Tax Liability Due to the Uncertain Value of the Shares.
I understand that the Board of Directors believes its valuation of the
shares represents a fair appraisal of their worth, but that it remains
possible that, with the benefit of hindsight, the Internal Revenue Service
may successfully assert that the value of the shares on the date of my
purchase is substantially greater than the Board's appraisal. I understand
that any additional value ascribed to the shares by such an IRS
determination may constitute ordinary income to me as of the purchase
date, and that any additional taxes and interest due as a result will be
my sole responsibility payable only by me, and that the Company need not
and will not reimburse me for that tax liability.
10. Agreement. By signing below, I acknowledge my agreement with each of the
statements contained in this Investment Representation Statement as of the
date first set forth above, and my intent for the Company to rely on such
statements in issuing the shares to me.
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Xxxxxx XxXxxxx
