EXCHANGE AGREEMENT
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED
FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS
EXCHANGE AGREEMENT, dated as of June __, 2006, is
made
by and between
bioMETRX, Inc., a Delaware corporation (“Company”), and each purchaser
identified on the signature pages hereto (each, including its successors and
assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS,
the Company recently completed a closing of a private placement offering (the
“Offering”) pursuant to which it issued and sold to the Purchasers 65,000 shares
of its Series A 5% Convertible Preferred Stock with a stated value of $10.00
per
share for an aggregate purchase price of $650,000 (“Preferred Stock”);
and
WHEREAS,
in connection with the issuance of the Preferred Stock, the Company issued
to
the Purchasers an aggregate of 216,666 A Warrants (“A Warrants”) exercisable at
$2.73 per share, and 216,666 B Warrants exercisable at $.10 per share (“B
Warrants”), and 21,667 shares of common stock as a prepayment of the first
year’s dividend; and
WHEREAS,
the Company has subsequently determined to amend the terms of the Offering
so as
to offer and sell 8% Convertible Notes (“Notes”), together with A Warrants
exercisable at $1.75 per share and B Warrants exercisable at $.10 per share;
and
WHEREAS,
the Company and the Purchasers wish to provide for the terms and conditions
pursuant to which (i) the Purchasers shall exchange the 65,000 shares of
Preferred Stock for $650,000 of 8% Convertible Notes (“Notes”), of the Company,
(ii) the 216,666 A Warrants shall be exchanged for 650,000 new A Warrants,
(iii)
the Company shall issue to the Purchasers an additional 108,334 B Warrants,
and
(iv) the Company shall issue to the Purchasers an additional 30,333 shares
of
common stock.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which the parties hereby acknowledge, the parties agree as
follows:
1. Exchange
of Preferred Stock for Notes.
The
Company and the Purchaser
hereby agree that the 650,000 shares of Preferred Stock shall be exchanged
for
$650,000 of Notes which are convertible into common stock at a conversion price
of $1.00 per share.
2. Exchange
Warrants.
The
Company and the Purchaser hereby agree that the 216,666 A Warrants shall be
exchanged for 650,000 new A Warrants with an exercise price of $1.75 per
share.
3. Issuance
of Additional B Warrants.
The
Company shall issue an additional 108,334 B Warrants to the
Purchasers.
4. Prepayment
of Interest.
The
Company and the Purchaser hereby agree that the Company shall issue an
additional 30,333 shares of common stock to the Purchasers as a prepayment
of
the first year’s interest.
5. Closing.
At the
Closing, the Purchaser shall deliver the Preferred Stock and the A Warrants
to
the Company, and the Company shall deliver the Notes, 650,000 new A Warrants,
108,334 additional B Warrants, and 30,333 additional shares of common stock
to
the Purchasers.
5. Further
Assurances.
In
connection with the exchange of the Preferred Stock
and
the A Warrant, the Purchasers, by entering into this Exchange Agreement, agree
to execute all agreements and other documents as reasonably requested by the
Company.
6. Company
Representations and Warranties and Covenants.
The
Company represents,
warrants and covenants to the Purchaser as follows:
a. Organization.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Delaware and has all requisite corporate power and authority
to own its properties and carry on its business as now being conducted.
b. Capitalization.
As of
the date of this Agreement, the authorized capital stock of the Company consists
of 25,000,000 shares of common stock, $.001 par value per share, 6,987,492
shares of which are validly issued and outstanding and 10,000,000 share of
preferred stock, $.01 par value per share, none of which are validly issued
and
outstanding.
c. Authority;
Enforceability.
The
Company has the requisite corporate power and authority to execute and deliver
this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as (a) enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, moratorium or similar laws from time to time
in
effect affecting creditors’ rights generally and (b) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
d. Third
Party Consents.
No
consent, authorization, order or approval of, or filing or registration with,
any governmental authority or other person is required for the execution and
delivery of this Agreement or the consummation by the Company of any of the
transactions contemplated hereby.
e. Common
Stock.
All
shares of the Company’s Common Stock to be issued pursuant to this Agreement
will be, when issued, free from liens, duly authorized, validly issued, fully
paid and non-assessable.
f. No
Other Representations or Warranties.
Except
as set forth above in this Section 4, no other representations or warranties,
express or implied, are made in this Agreement by the Company to the
Purchaser.
7. Purchaser
Representations and Warranties and Covenants.
The
Purchaser represents,
warrants and covenants to the Company as follows:
a. Investment
Representation.
Purchaser acknowledges
that the Notes are restricted securities, that Purchaser
is
acquiring the Notes, A Warrants and B Warrants for its own account with the
present intention of holding the Notes, A Warrants and B Warrants for purposes
of investment and not with a view to distribution within the meaning of the
Securities Act of 1933, as amended and that the Notes, A Warrants and B Warrants
will bear a legend to such effect. Purchaser has relied solely on its
independent investigation in making the decision to purchase the Notes, A
Warrants and B Warrants.
b. Registration
Rights.
The
Purchasers shall not accept, and the Company shall not pay, any payments that
may have been or may be required to be made by the Company to the Purchasers
under the terms of the certain Registration Rights Agreement between the Company
and the Purchasers, dated April 28, 2006, that arises from the failure of the
Company to file timely, or the Securities and Exchange Commission to declare
effective timely, any registration statement required to be filed by the Company
for the benefit of any Purchaser. Further, simultaneously with the execution
of
this Agreement, the parties are entering into and executing a new Registration
Rights Agreement pursuant to which the Company is undertaking to prepare and
file a registration statement covering the proposed resale of the securities
underlying the securities to be issued to the Purchasers hereunder.
c. No
Other Representations or Warranties.
Except
as set forth above in this Section 4, no other representations or warranties
of
any kind, express or implied, are made in this Agreement by Purchaser to the
Company.
8. Miscellaneous.
a. Survival
of Representations, Warranties and Agreements.
The
representations, warranties, covenants and agreements in this Agreement or
in
any instrument delivered pursuant to this Agreement shall survive the Closing
and shall not be limited or affected by any investigation by or on behalf of
any
party hereto.
b. Further
Assurances.
Each of
the Company and Purchaser will use its, as the case may be, best reasonable
efforts to take all action and to do all things necessary, proper or advisable
on order to consummate and make effective the transactions contemplated by
this
Agreement.
c. Entire
Agreement; No Third Party Beneficiaries.
This
Agreement (including the documents, exhibits and instruments referred to herein)
(a) constitutes the entire agreement and supersedes all prior agreements, and
understandings and communications, both written and oral, among the parties
with
respect to the subject matter hereof, and (b) is not intended to confer upon
any
person other than the parties hereto any rights or remedies
hereunder.
d. Governing
Law.
This
Agreement shall be governed and construed in accordance with the laws of the
State of New York without regard to any applicable principles of conflicts
of
law.
e. Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall constitute one and
the
same document.
f. Amendment
and Modification.
This
Agreement may not be amended or modified except by an instrument in writing
signed by each of the parties hereto.
IN WITNESS
WHEREOF, the parties have caused this Agreement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first
above
written.
BIOMETRX, INC. | ||
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