Contract
THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS
NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO STRIKEFORCE TECHNOLOGIES, INC.
THAT SUCH REGISTRATION IS NOT REQUIRED.
Principal
Amount: $25,000.00 Issue
Date: July, 2006
12%
NOTE
FOR
VALUE
RECEIVED, StrikeForce Technologies, Inc. a New Jersey Corporation (the
“Borrower”),
hereby promises to pay to _____________________, __________________,
________________ (the “Holder”)
or its
registered assigns or successors in interest or order, without demand, the
sum
of Twenty Five Thousand Dollars ($25,000.00) (“Principal
Amount”),
with
simple and unpaid interest thereon, on January 10, 2007(said date, as may be
accelerated herein, is referred to herein as the “Maturity
Date”).
This
Note
(the “Note”) has been issued into pursuant to the terms of a Unit Purchase
Agreement (the “Unit
Purchase Agreement”)
between the Borrower, the Holder, and certain other holders (the “Other
Holders”)
of
Notes (the “Other
Notes”),
dated
of even date herewith, and shall be governed by the terms of such Unit Purchase
Agreement. Unless otherwise separately defined herein, all capitalized terms
used in this Note shall have the same meaning as is set forth in the Unit
Purchase Agreement. The following terms shall apply to this and all other
Notes:
1. INTEREST;
AMORTIZATION
1.1. Interest
Rate.
Subject
to Section 5.5 hereof, interest payable on this Note shall accrue at a rate
per
annum (the “Interest
Rate”)
equal
to twelve percent (12%). Interest shall be calculated on the basis of a 360-day
year. Interest on the Principal Amount shall accrue from the date of this Note
and be payable pursuant to Section 2.1 hereof and on the Maturity Date, whether
by acceleration or otherwise. The parties hereby acknowledge that Interest
for
the first six months on the Note has been pre-paid and that the Notes have
been
issued at an original issue discount of 6%.
1.2. Transfer.
Subject
to compliance with applicable securities laws, this Note, and the rights
evidenced hereby, may be transferred, sold,
pledged, hypothecated or otherwise granted as security
by any
registered holder hereof (a “Transferor”).
On
the surrender for exchange of this Note, with a duly executed Transferor’s
endorsement (the “Transferor
Endorsement Form”)
and
together with an executed Security Agreement, and an opinion of counsel
reasonably satisfactory to the Company that the transfer of this Note will
be in
compliance with applicable securities laws, the Company at the expense of the
Transferor, will issue and deliver to or on the order of the Transferor thereof
a new Note or Notes of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a
“Transferee”),
calling in the aggregate on the face or faces thereof for the Principal Amount
called for on the face or faces of the Note so surrendered by the Transferor.
No
such transfers shall result in a public distribution of the Note.
1.3. Replacement.
Upon
receipt of a duly executed, notarized and written statement (which shall include
(a) a covenant from the Holder to indemnify the Borrower against
any and all loss or damage attributable to a third-party claim in an amount
in
excess of the actual amount then due under the Note, and (b) an express
authorization that the
Borrower may offset any such amounts against amounts then due under the Note)
from the Holder with respect to the loss, theft or destruction of this Note
(or
any replacement hereof), or, in the case of a mutilation of this Note, upon
surrender and cancellation of such Note, the Maker shall issue a new Note,
of
like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated
Note.
2. REPAYMENT
2.1. Payment
of Interest.
The
Borrower shall prepay all interest due on this Note through January 10, 2007
in
the amount of $1,500 on the Closing Date. All remaining principal and interest
(to the extent not previously paid) shall be paid on the Maturity
Date.
2.2. Prepayment.
The
Borrower has the option of prepaying the outstanding Principal Amount of this
Note and any accrued interest (to the extent not previously paid) thereon,
in
whole or in part, at any time prior to the Maturity Date upon giving the Holder
hereof 60 days written notice. Any interest previously paid in excess of the
amount due through the Maturity Date may be deducted from the Principal Amount.
The parties acknowledge that any prepayment of the Note may only made upon
paying a pre-payment penalty of the original issue discount.
3. CONVERSION
RIGHTS
3.1 Conversion.
In the event that the Note is deemed unenforceable for any reason, or in the
event that Maker or any other person contests validity or enforceability of
the
Note for any reason, all principal and interest on the Note shall become
immediately convertible, in whole or in part and at the sole and absolute
discretion of Holder, at a conversion price of $.085 per share, in addition
to
any other remedies or enforcement actions that the Holder may take to enforce
collection of the Note.
4. EVENTS
OF DEFAULT.
4.1. The
occurrence of any of the following events, after written notice thereof by
the
Holder to the Borrower, shall be an “Event of Default” under this
Note:
4.1.1. the
Borrower shall fail to make the payment of any amount of principal or interest
outstanding the date such payment is due hereunder, which failure is not cured
within ten (10) business days of receipt of notice to the Borrower;
or
2
4.1.2. the
Borrower shall (i) apply for or consent to the appointment of, or the taking
of
possession by, a receiver, custodian, trustee or liquidator of itself or of
all
or a substantial part of its property or assets, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition
seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors’
rights generally, (v) acquiesce in writing to any petition filed against it
in
an involuntary case under United States Bankruptcy Code (as now or hereafter
in
effect) or under the comparable laws of any jurisdiction (foreign or domestic),
(vi) issue a notice of bankruptcy or winding down of its operations or issue
a
press release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing;
or
4.1.3. a
proceeding or case shall be commenced in respect of the Borrower, without its
application or consent, in any court of competent jurisdiction, seeking (i)
the
liquidation, reorganization, moratorium, dissolution, winding up, or composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of
its
assets in connection with the liquidation or dissolution of the Borrower or
(iii) similar relief in respect of it under any law providing for the relief
of
debtors, and such proceeding or case described in clause (i), (ii), or (iii)
shall continue undismissed, or unstayed and in effect, for a period of sixty
(60) days or any order for relief shall be entered in an involuntary case under
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against the Borrower
or action under the laws of any jurisdiction (foreign or domestic) analogous
to
any of the foregoing shall be taken with respect to the Borrower and shall
continue undismissed, or unstayed and in effect for a period of sixty (60)
days;
or
4.1.5 any
material breach of any representation, warranty or covenant of the Company
made
herein or in the Unit Purchase Agreement, the Registration Rights Agreement
or
any other transaction document or agreement, statement or certificate given
in
writing pursuant hereto or in connection herewith, which breach is not cured
within 20 business days of receipt of notice to the Borrower.; or
4.1.6 the
failure of the Borrower to instruct its transfer agent to remove any legends
from shares of Common Stock eligible to be sold under Rule 144 of the Securities
Act and issue such unlegended certificates to the Holder within ten (10)
business days of the Holder’s request so long as the Holder (and its broker) has
provided reasonable assurances to the Borrower that such shares of Common Stock
will be sold in compliance with Rule 144; or
4.1.7 except
as
otherwise set forth herein to the contrary, the failure of the Borrower to
pay
any amounts due to the Holder herein or in the Unit Purchase Agreement or the
Registration Rights Agreement within twenty (20) business days of receipt of
notice to the Borrower.
4.2. Remedies
Upon An Event of Default.
If an
Event of Default shall have occurred and shall be continuing, the Holder of
this
Note may at any time at its option, (a) declare the entire unpaid principal
balance of this Note, together with all interest accrued hereon, due and
payable, and thereupon, the same shall be accelerated and so due and
payable,
without presentment, demand, protest, or notice, all of which are hereby
expressly unconditionally and irrevocably waived by the Borrower;
provided, however, that upon the
3
occurrence
of an Event of Default described in Sections 4.1.1, 4.1.3 or 4.1.4, the
outstanding principal balance and accrued interest hereunder shall be
automatically due and payable, or (b) exercise or otherwise enforce any one
or
more of the Holder’s rights, powers, privileges, remedies and interests under
this Note, the Unit Purchase Agreement, other transaction document or applicable
law. No course of delay on the part of the Holder shall operate as a waiver
thereof or otherwise prejudice the right of the Holder. No remedy conferred
hereby shall be exclusive of any other remedy referred to herein or now or
hereafter available at law, in equity, by statute or otherwise.
5. MISCELLANEOUS
5.1. Notices.
All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by a nationally recognized overnight air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required
or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice
is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice
is
to be received) or (b) on the second business day following the date of mailing
by a nationally recognized overnight courier service, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first
occur or
(c)
three business days after deposited in the mail if delivered pursuant to
subsection (ii) above.
The
addresses for such communications shall be as follows
(i)
if to
the
Company:
StrikeForce
Technologies, Inc.
Suite
108
0000
Xxxx
Xxxxxx’x Xxxx Xxxx
Edison,
New Jersey 08837
Attn:
Xxxx X. Xxx
Chief
Executive Officer
Facsimile:
(000 )
000-0000
with
a
copy
(by
facsimile only)
to:
Xxxxxxxx
Xxxxx LLP
000
Xxxxx
Xxxxxx
Attn:
Xxxxx Xxxxxxxxx, Esq.
Facsimile:
(000) 000-0000
(ii)
if
to the
Holder: to
the
name, address, and facsimile number set forth in the on the books and records
of
the Company,
4
with
a
copy
| (by facsimile only) to: . | Wellfleet Partners, Inc |
|
One
Penn Plaza
|
|
|
Suite
2032
|
|
5.2. Amendment
Provision.
The
term “Note” and all reference thereto, as used throughout this instrument, shall
mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented.
5.3. Assignability.
This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and
assigns.
5.4. Governing
Law.
This
Note
shall be governed by and construed in accordance with the laws of the State
of
New York, without regard to conflicts
of laws
principles that would result in the application of the substantive laws of
another jurisdiction. Any
action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of
New
York or in the federal courts located in the state of New York. Both parties
and
the individual signing this Note on behalf of the Borrower agree to
submit
to the
jurisdiction of such courts. The prevailing party shall be entitled to recover
from the other party its reasonable attorney’s fees and costs. In the event that
any provision of this Note is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to
the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid
or
unenforceable under any law shall not affect the validity or unenforceability
of
any other provision of this Note.
5.5. Maximum
Payments.
Nothing
contained herein shall be deemed to establish or require the payment of a rate
of interest or other charges in excess of the maximum permitted by applicable
law.
5.6. Construction.
Each
party acknowledges that it has been afforded the opportunity to have its legal
counsel participated in the preparation of this Note and, therefore, stipulates
that the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Note to favor
any party
against
the other.
5.7. Stockholder
Status.
[Intentionally Omitted] Note
5.8. Remedies
Cumulative.
This Note shall be deemed an unconditional obligation of the Company for payment
of money only. In addition to any other remedies that the Holder may have,
or
actions that the Holder may take, the Holder (on its/his/her own or with one
or
more other Holders or through a representative) may enforce this Note by summary
or similar proceeding pursuant to New York CPLR 3213 or similar proceeding.
5
[SIGNATURE
PAGE FOLLOWS]
6
IN
WITNESS WHEREOF,
Xxxxxxxx has caused this Note to be signed in its name by an authorized officer
as of the ___th
day of
_____________, 2006.
| STRIKEFORCE TECHNOLOGIES, INC. | ||
| |
|
|
| By: | /s/ Xxxx Xxx | |
|
Xxxx Xxx |
||
| Chief Executive Officer | ||
WITNESS:
______________________________________
