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BRIDGE NOTE # BN_____
NEITHER
THIS SECURED CONVERTIBLE PROMISSORY NOTE NOR THE SECURITIES TO
BE ISSUED UPON ITS CONVERSION HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS (I) PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT OR (II) IN COMPLIANCE WITH AN EXEMPTION
THEREFROM AND ACCOMPANIED, IF REQUESTED BY THE COMPANY, WITH
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH TRANSFER IS IN COMPLIANCE WITH AN EXEMPTION
THEREFROM.
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Principal
Amount: $____________
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_______
__, 2008
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WHERIFY WIRELESS, INC.
SENIOR SECURED CONVERTIBLE PROMISSORY BRIDGE
NOTE
(the
“
Bridge Note ”)
FOR VALUE RECEIVED ,
the undersigned, Wherify Wireless, Inc., a Delaware corporation
(the “
Company ”),
hereby promises to pay to ______________ (the “
Holder ,”
and, together with the Company, the “
Parties ”),
in the manner and at the place hereinafter provided, the principal
sum of $[______].00 (__________________ Dollars) (the
“
Principal Amount
”) .
From and after the date hereof, interest shall accrue on the unpaid
principal balance and be payable to the Holder as set forth
in
Section 1 .
This
Bridge Note is being issued pursuant to the Bridge Note and
Warrant Purchase Agreement by and between, the Company, the
Holder and other purchasers of Bridge Notes (the
“
BWPA ”).
1.
Interest. Interest
shall be paid monthly in arrears in cash on the outstanding unpaid
Principal Amount commencing on the date hereof, through and
including the date of full repayment of the Principal Amount at the
rate of twelve and one-half percent (12.5%) per annum (the
“
Interest ”);
provided ,
however ,
in the event that the Company shall elect to extend the Maturity
Date (as defined below) of the Bridge Note as provided for
in
Section 2 below
(or the Principal Amount and all accrued but unpaid Interest is not
paid in full or converted pursuant to and in accordance with
Section 4 of
this Agreement on the Maturity Date), the rate of Interest will
automatically and without any action by any person, increase on
such date and continue until full repayment of the Principal Amount
and Interest (on the Maturity Date) to seventeen and one-half
percent (17.5%) (the “
Extension Period Interest
”).
All Interest on the Bridge Note shall be computed on the basis of a
year of 360 days for the actual number of days
elapsed.
2.
Maturity Date/Prepayment.
(a)
Maturity Date. The
entire unpaid Principal Amount of this Note, together with all fees
and expenses (if any), and accrued, but unpaid, Interest thereon,
shall be immediately due and payable at 12:01 p.m. on August 31,
2008 (the “
Maturity Date ”),
provided ,
however ,
that the Company at its option may extend the Maturity Date until
September 30, 2008 (the “
Extended Maturity Date ”).
In the event that the Maturity Date or the Extended Maturity Date
falls on a Saturday, Sunday or a holiday on which banks in the
State of New York are closed, the Maturity Date or the Extended
Maturity Date, as the case may be, shall be the first business day
occurring immediately after such date.
(b)
Prepayment. The
Company may at any time and from time to time prepay the
outstanding Principal Amount of the Bridge Note (plus all accrued
but unpaid interest thereon through the date of such prepayment)
without premium.
3.
Manner of Payment
. Principal,
interest, and all other amounts due under this Note shall be
payable, in lawful money of the United States of America, to Holder
at such address as designated from time to time by Holder in
writing to Company or by electronic wire funds transfer of
immediately available funds pursuant to written instructions
provided to Company by Holder. All amounts due from Company to
Holder under this Note shall be made without benefit of any setoff,
counterclaim or other defense. All payments on this Note shall be
applied first to the payment of fees and expenses, if any, then to
accrued but unpaid Interest and then to the payment of the
Principal Amount.
4.
Conversion .
(a)
Optional Conversion. Not
applicable.
(b)
Mandatory Conversion. The
Company may require the Holder to convert the Bridge Note in the
event that the investors providing the Recapitalization Financing,
as such term is defined in the BWPA, shall fail to permit proceeds
from that financing to be used to payoff the Bridge Notes in their
entirety. In that event, upon delivery by the Company of a
Mandatory Conversion Notice to the Holder (the “
Conversion Notice ”),
all then remaining unpaid Principal Amount
plus any
then accrued and unpaid Interest thereon (the “
Mandatory Conversion Amount ”)
shall be converted into that principal amount of the securities
issued in the Recapitalization Financing (the “
Conversion Securities ”)
which is equal to 125% of the Mandatory Conversion
Amount.
5.
Delivery of Note . Upon
receipt of a Conversion Notice, the Holder shall provide notice to
the Company of the name or names in which the certificate or
certificates for Conversion Securities are to be issued (the
“
Issuance Notice ”),
and the Holder shall surrender this Bridge Note (or a certificate
of lost Bridge Note) at the office of the Company at such time that
the Holder delivers the Issuance Notice to the Company
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