CONSENT AND WAIVER
This
Consent and Waiver Agreement is made as of the 3rd
day of
January, 2007 by and among bioMETRX, Inc., a Delaware corporation (the
“Company”) and the individuals and entities listed on Schedule A (collectively
referred to as “Holders” and individually as a “Holder”).
REFERENCE
is
hereby made to the $1,600,000 principal amount of Convertible Notes (“Notes”)
issued on or about June 29, 2006 and due 24 months thereafter of the Company,
to
the Holders.
WHEREAS,
in connection with the issuance of the Notes, the Company issued A and B
Warrants to the Holders and entered into a Securities Purchase Agreement and
Registration Rights Agreement with each Holder (collectively referred to as
the
“Transaction Documents”); and
WHEREAS,
the Company is in default under the terms of the Note and Transaction Documents;
and
WHEREAS,
the
Company’s ability to repay the Notes would be impaired if the Company is not
able to obtain additional financing; and
WHEREAS,
the Company has received a proposal from additional investors who have agreed
to
provide to the Company $1,500,000 of additional financing (the “New Financing”)
on the express condition that Holders waive all current defaults on the Notes
and forebear from exercise any of their existing rights of default until March
31, 2007.
WHEREAS,
the Holders are willing to waive the existing defaults (i) in exchange for
new
convertible notes in the amount(s) set forth next to the Holder’s name on
Schedule A to this document.
NOW
THEREFORE, the parties agree as follows:
1. The
Holders hereby waive any and all defaults relating to the Note and Transaction
Documents presently existing (“Existing Defaults”)and agree to forebear from
exercising any rights accruing upon default in the Transaction Documents
relating to any default until March 31, 2007. Notwithstanding the foregoing,
nothing contained in this Agreement shall constitute a waiver or forebearance
with respect to any future events of defaults under the Transaction Documents
which do not exist as of the date hereof.
2. The
Company agrees to issue to each Holder a Convertible Note (“Forbearance
Notes”)in the form annexed hereto as Exhibit A in the principal amount set forth
next to the Holder’s name on Schedule A in the aggregate principal amount of
$387,437.39 representing liquidated damages due under the Note and Transaction
Documents. The Company shall deliver original executed Forbearance Notes to
the
Holders within three (3) business days of the closing of the New
Financing.
3. The
Holder hereby consents to the Company entering into and consummating the New
Financing .
4. The
Holder hereby consents to the Company including for resale under the Securities
Act of 1933 in any future registration statement to be filed by the Company
any
and all shares of the Company’s common stock underlying the securities being
issued in the New Financing. The Company confirms to each Holder that nothing
contained in the terms of the New Financing prohibits or adversely affects
the
registration rights of the Holders and the Company further confirms to each
Holder its intention to satisfy its obligations to register for resale the
Holders shares of common stock for resale as soon as possible and not later
than
the date that the securities contained in the New Financing as registered in
accordance with the terms of the New Financing.
5. The
Holder hereby waives its rights under Paragraph 4.13 of the Securities Purchase
Agreement dated June 29, 2006, “Participation in Future Financing” for the
purposes of allowing the Company to consummate the New Financing.
6. The
Holder hereby consents that the Debentures being issued to the investors in
the
New Financing will be pari passu in seniority to the Notes issued to the
Holder.
7. The
foregoing waivers are given solely in respect of the New Financing. In addition,
Holders are only providing the foregoing waivers if the Company closes the
transactions contemplated by the New Financing on or before January 31, 2007.
If
the Company does not close the transactions contemplated by the New Financing
this Agreement shall be null and void.
8. Except
as
set forth herein, the Holders reserve all rights, remedies, powers, or
privileges available under the Transaction Documents and other documents and
agreements executed in connection therewith, at law or otherwise. This Consent
and Waiver Agreement shall not constitute a novation or satisfaction and accord
of the Notes or any other document, instrument and/or agreement executed or
delivered in connection therewith. Notwithstanding the foregoing, the terms
of
the Notes and transaction Documents are hereby deemed amended as
follows:
A. Section
4.13 of the Notes is hereby amended and restated to read as
follows:
4.13 Cross
Default.
A
default by the Borrower of a material term, covenant, warranty or undertaking
of
any Transaction Document or other agreement to which the Borrower and Holder
are
parties, or the occurrence of a material event of default under any such other
agreement which is not cured after any required notice and/or cure period,
and
any default of event of default under the terms or conditions of any agreements
entered into by the Company in connection with the new financing transaction
consummated in January, 2007 whereby the Company issues up to $1,500,000 of
new
notes.
B. The
definition of the “Securities” contained in the Transaction Documents,
specifically the Securities Purchase Agreement, is hereby amended and restated
to read:
“Securities”
means
the Notes, the Warrants, the Warrant Shares and the Underlying Shares, as well
as the Forbearance Notes and any underlying shares of common stock.
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C. The
definition of “Underlying Securities” contained in the Transaction Documents,
specifically the Securities Purchase Agreement, is hereby amended and restated
to read:
“Underlying
Securities”
means
the shares of Common Stock contained in the Transaction Documents, specifically
the Securities Purchase Agreement, is hereby amended and restated to read:,
upon
exercise of the Warrants and issued and issuable in lieu of the cash payment
of
interest on the Notes, as well as the shares of Common Stock issuable upon
conversion of the Forbearance Notes, if any..
D. A
new
definition shall be added to the definition section of the Securities
Agreement:
“New
Financing” shall mean the financing of up to $1,500,000 of promissory notes and
related securities entered into by the Company in January, 2007.
E. Section
4.14 of the Securities Purchase Agreement is hereby amended to add the following
new clause (d):
(d) In
the
event that the conversion or exercise terms of the securities issued in the
New
Financing are reduced or reset, whether by their terms or otherwise, such
reduction or reset shall be deemed a Subsequent Equity Sale within the meaning
of this Section 4.14.
9. The
holder acknowledges and agrees that in connection with the New Financing, the
warrants held by First Montauk Securities Corp. issued to it in connection
with
the original issuance of the Notes, shall be deemed amended to provide for
a
reduction in the exercise price to $1.00 per share.
This
Waiver and Consent has been duly authorized and approved by all requisite
corporate action by the Company and Holder and does not violate the respective
organizational documents.
Dated:
_________________________
BIOMETRX,
INC.
By:
______________________________
Name:
________________________
Title:
_________________________
HOLDER:
By:
______________________________
Name:
________________________
Title:
_________________________
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