CONVERTIBLE
NOTE
FOR VALUE
RECEIVED, bioMETRX, Inc., a Delaware corporation (hereinafter
called "Borrower"), hereby promises to pay to _____________, with
an address at ______________________ __________________________(the
"Holder") or order, without demand, the sum of
_______________
________________________________________________
($_____________).
This Note is issued in lieu of the payment in
cash of liquidated damages due to Holder from Borrower for the
period of July 14, 2006 through March 31, 2007 (the
“Liquidated Damages”), under the terms of the
Subscription Agreement dated as of June 29, 2006 between the Holder
and the Borrower (the “Subscription Agreement”). The
Liquidated Damages shall be paid with shares of common stock
received upon conversion of this Note (the “Shares”),
such that the Liquidated Damages shall be deemed to be paid in full
when this Note is fully converted. The following terms shall apply
to this Note:
ARTICLE I
GENERAL PROVISIONS
The Holder shall have the right to convert the
principal due under this Note into Shares of the Borrower's Common
Stock, $.001 par value per share (“Common Stock”) as
set forth below.
1.1. Conversion into the Borrower's Common
Stock .
(a) The Holder shall have the right from and after
the date of the issuance of this Note and then at any time until
this Note is fully paid, to convert any outstanding and unpaid
principal portion of this Note, at the election of the Holder (the
date of giving of such notice of conversion being a "Conversion
Date") into fully paid and nonassessable shares of Common Stock as
such stock exists on the date of issuance of this Note, or any
shares of capital stock of Borrower into which such Common Stock
shall hereafter be changed or reclassified, at the conversion price
as defined in Section 1.1(b) hereof (the "Conversion Price"),
determined as provided herein. Upon delivery to the Borrower of a
completed Notice of Conversion, a form of which is annexed hereto,
Borrower shall issue and deliver to the Holder within three (3)
business days from the Conversion Date (such third day being the
“Delivery Date”) that number of shares of Common Stock
for the portion of the Note converted in accordance with the
foregoing. The number of shares of Common Stock to be issued upon
each conversion of this Note shall be determined by dividing that
portion of the principal of the Note to be converted, by the
Conversion Price.
(b) Subject to adjustment as provided in Section
1.1(c) hereof, the Conversion Price per share shall be
$1.00.
(c) The Conversion Price and number and kind of
shares or other securities to be issued upon conversion determined
pursuant to Section 1.1(a), shall be subject to adjustment from
time to time upon the happening of certain events while this
conversion right remains outstanding, as follows:
A. Merger, Sale of Assets, etc. If the Borrower at
any time shall consolidate with or merge into or sell or convey all
or substantially all its assets to any other corporation, this
Note, as to the unpaid principal portion thereof shall thereafter
be deemed to evidence the right to purchase such number and kind of
shares or other securities and property as would have been issuable
or distributable on account of such consolidation, merger, sale or
conveyance, upon or with respect to the securities subject to the
conversion or purchase right immediately prior to such
consolidation, merger, sale or conveyance. The foregoing provision
shall similarly apply to successive transactions of a similar
nature by any such successor or purchaser. Without limiting the
generality of the foregoing, the anti-dilution provisions of this
Section shall apply to such securities of such successor or
purchaser after any such consolidation, merger, sale or
conveyance.
B. Reclassification, etc. If the Borrower at any
time shall, by reclassification or otherwise, change the Common
Stock into the same or a different number of securities of any
class or classes that may be issued or outstanding, this Note, as
to the unpaid principal portion thereof shall thereafter be deemed
to evidence the right to purchase an adjusted number of such
securities and kind of securities as would have been issuable as
the result of such change with respect to the Common Stock
immediately prior to such reclassification or other
change.
C. Stock Splits, Combinations and Dividends. If
the shares of Common Stock are subdivided or combined into a
greater or smaller number of shares of Common Stock, or if a
dividend is paid on the Common Stock in shares of Common Stock, the
Conversion Price shall be proportionately reduced in case of
subdivision of shares or stock dividend or proportionately
increased in the case of combination of shares, in each such case
by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such
event..
D. Share Issuance. So long as this Note is
outstanding, if the Borrower shall offer, issue or agree to issue
any shares of Common Stock for a consideration less than the
Conversion Price in effect at the time of such issue, then, and
thereafter successively upon each such issue, the Conversion Price
shall be automatically reduced to such other lower issue price. For
purposes of this adjustment, the subsequent issuance of any
security carrying the right to convert such security into shares of
Common Stock or of any warrant, right or option to purchase Common
Stock shall result in an adjustment to the Conversion Price upon
the issuance of the above-described security and again upon the
issuance of shares of Common Stock upon exercise of such conversion
or purchase rights if such issuance is at a price lower than the
then applicable Conversion Price. The reduction of the Conversion
Price described in this paragraph is in addition to other rights of
the Holder described in this Note.
(d) Whenever the Conversion Price is adjusted
pursuant to Section 1.1(c) above, the Borrower shall promptly mail
or fax to the Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a statement of the facts
requiring such adjustment (the “Adjustment Notice”).
Notwithstanding the requirement of the Borrower to send the
Adjustment Notice, the adjusted Conversion Price shall be effective
immediately upon the issuance of Common Stock or securities
carrying the right to convert into or purchase common stock as
described in the immediately preceding paragraph regardless of
whether the Borrower complies with its requirement herein to send
the Adjustment Notice.
(e) During the period the conversion right exists,
Borrower will reserve from its authorized and unissued Common Stock
not less than one hundred percent (100%) of the number of shares to
provide for the issuance of Common Stock upon the full conversion
of this Note. Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non-assessable.
Borrower agrees that its issuance of this Note shall constitute
full authority to its officers, agents, and transfer agents who are
charged with the duty of executing and issuing stock certificates
to execute and issue the nec
