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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 ce
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