ex41.htm


    EXHIBIT
4.1

    


    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE BORROWER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

    


                                                     
Principal Amount: $
_____________                                                                                                           Issue
Date: March __, 2009

    


    12% CONVERTIBLE PROMISSORY
NOTE

    


    FOR VALUE
RECEIVED, SHRINK NANOTECHNOLOGIES, INC., a Delaware corporation (hereinafter
called “Borrower”),
hereby promises to pay to __________________________________, (the “Holder”) or its registered
assigns or successors in interest or order, without demand, the sum of
________________________________________ ($_____________)  (“Principal Amount”), with
interest compounded quarterly at the annual rate of twelve percent (12%) payable
on the Maturity Date (as hereinafter define), if not sooner paid or converted in
accordance with the terms hereof.

    


    This Note
has been entered into pursuant to the terms of a Securities Purchase Agreement
between the Borrower, the Holder and certain other investors in Notes and Class
A Warrants dated of even date herewith (the “Purchase Agreement”), and
shall be governed by the terms of such 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 Purchase Agreement. The
following terms shall apply to this Note:

    


    ARTICLE
I

    


    PRINCIPAL
AND INTEREST REPAYMENT

    


                          1.1.                    Maturity Date; Early
Redemption.

    


    (a)         The
Principal Amount of this Note and any and all interest shall become payable in
full on the date that is the earliest to occur of (i) {insert date that
is the one year anniversary of the issuance date  of Notes pursuant to
the Purchase Agreement} and (ii), in the event of a Qualified Financing
(as hereinafter defined), the date set for repayment pursuant to the Redemption
Notice sent by the Borrower (the “Maturity Date”) as provided in
Section 4.9 below, and (iii) an Event of Default which has not been
cured.

    


    (b)           If,
at any time prior to the Maturity Date, the Borrower enters into any binding
agreement for, or is about to consummate, any financing with net proceeds of not
less than $6,000,000 (a “Qualified Financing”), then
Borrower shall provide no less than 10 business days advance written
notification of the contemplated closing of said Qualified Financing to the
Holder (the  “Qualified Financing Notice”),
stating the that a Qualified Financing is contemplated to occur, the estimated
date of closing thereof, and further providing the opportunity (but not
obligation) to Holder to either convert at the Conversion Price or request
repayment in cash in whole or in part (with interest payable in cash or stock at
the conversion price, at the discretion of the Borrower).  The Holder
hereby agrees to keep any Qualified Financing Notice or information relating
thereto strictly confidential until the same may be publicly reported by the
Borrower and understands that any public dissemination of information relating
to a Qualified Financing, if any, could result in regulatory violations to
Holder and others and jeopardize any financing.  For avoidance of
doubt, to the extent a Holder demands repayment in the event of a Qualified
Financing, each Holder shall retain all of their respective rights under any
unexercised Series A Warrants remaining held by them.  In the event
that a Qualified Financing occurs after the Maturity Date, then the same
procedures shall apply, however, at the revised Conversion Price then in effect
as provided below.

    


    1.2           Interest
Rate.   Interest on this Note shall accrue at a rate of
12% per year and be payable in full upon the Maturity Date or redemption,
whichever is earlier.  Interest (whether default interest or
otherwise) will be payable in cash, or at the election of the Borrower, and
subject to Section 2.2, with shares of Common Stock at a per share value equal
to the Conversion Price then in effect as set forth in Section 2.1.

    


    1.3           Default Interest
Rate.  Following the occurrence and during the continuance of
an Event of Default, which, if susceptible to cure is not cured within the cure
periods (if any) set forth in Article II, otherwise
then from the first date of such occurrence until cured, the annual interest
rate on this Note shall (subject to Section 4.7) be fourteen percent (14%), and
be due on demand with interest then becoming payable within 5 business days
after the end of each calendar quarter in cash or stock, at the discretion of
the Borrower pursuant to Section 1.2 above; provided, however, that
demand may not be made once the Borrower has provided notice of a Borrower
Mandated Conversion, as hereinafter defined.

    


    ARTICLE
II

    


    CONVERSION
RIGHTS

    


               2.1.           Holder’s Conversion
Rights.   Subject to Section 2.2, for so long as this Note
remains outstanding and not fully paid, the Holder shall have the right, but not
the obligation, to convert all or any portion of the then aggregate outstanding
Principal Amount of this Note, together with interest, into shares of Common
Stock, subject to the terms and conditions set forth in this Article II, at the
rate of $0.50 per
share of Common Stock (“Conversion Price”), as the
same may be adjusted pursuant to this Note and, specifically, Section 2.4 in the
event of a Borrower Mandated Conversion.  The Holder may exercise such
right by delivery to the Borrower of a written Notice of Conversion pursuant to
Section 2.3.

    


               2.2.           Conversion
Limitation.   Neither Holder nor the Borrower may convert
on any date that amount of the Note Principal or interest in connection with
that number of shares of Common Stock which would be in excess of the sum of (i)
the number of shares of Common Stock beneficially owned by the Holder and its
affiliates on a Conversion Date, (ii) any Common Stock issuable in connection
with the unconverted portion of the Note, and (iii) the number of shares of
Common Stock issuable upon the conversion of the Note with respect to which the
determination of this provision is being made, which would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock of the Borrower on such Conversion Date.  For
the purposes of the provision to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder.  Subject to the foregoing, the Holder shall not be limited
to aggregate conversions of only 4.99% and aggregate conversion by the Holder
may exceed 4.99%.  The Holder shall have the authority and obligation
to determine whether the restriction contained in this Section 2.2 will limit
any conversion hereunder and to the extent that the Holder determines that the
limitation contained in this Section applies, the determination of which portion
of the Notes are convertible shall be the responsibility and obligation of the
Holder.  The Holder may waive the conversion limitation described in
this Section 2.2, in whole or in part, upon and effective after 61 days prior
written notice to the Borrower to increase such percentage to up to
9.99%.  Once a Holder has waived this limitation, the same shall be
deemed waived for all other future conversions, warrant exercises, or share
issuances by the Holder.

    


               2.3.           Mechanics of Holder’s
Conversion.

    


                          (a)           In
the event that the Holder elects to convert any amounts outstanding under this
Note into Common Stock, the Holder shall give notice of such election by
delivering an executed and completed notice of conversion (a “Notice of Conversion”) to the
Borrower, which Notice of Conversion shall provide a breakdown in reasonable
detail of the Principal Amount, accrued interest and amounts being
converted.  The original Note is not required to be surrendered to the
Borrower until all sums due under the Note have been paid.  On each
Conversion Date (as hereinafter defined) and in accordance with its Notice of
Conversion, the Holder shall make the appropriate reduction to the Principal
Amount, accrued interest and fees as entered in its records.  Each
date on which a Notice of Conversion is delivered or telecopied to the Borrower
in accordance with the provisions hereof shall be deemed a “Conversion
Date.”  A form of Notice of Conversion to be employed by the Holder is
annexed hereto as Exhibit
A.

    


                          (b)           Pursuant
to the terms of a Notice of Conversion, the Borrower will issue instructions to
the transfer agent accompanied by an opinion of counsel (if so required by the
Borrower’s transfer agent), and, except as otherwise provided below, shall cause
the transfer agent to transmit the certificates representing the Conversion
Shares to the Holder by crediting the account of the Holder’s designated broker
with the Depository Trust Corporation (“DTC”) through its Deposit
Withdrawal Agent Commission (“DWAC”) system within fourteen (14) business days
after receipt by the Borrower of the Notice of Conversion (the “Delivery Date”).  In
the case of the exercise of the conversion rights set forth herein, the
conversion privilege shall be deemed to have been exercised and the Conversion
Shares issuable upon such conversion shall be deemed to have been issued upon
the date of receipt by the Borrower of the Notice of Conversion. The Holder
shall be treated for all purposes as the beneficial holder of such shares of
Common Stock, or, in the case that Borrower delivers physical certificates as
set forth below, the record holder of such shares of Common Stock, unless the
Holder provides the Borrower written instructions to the contrary or unless the
same is subject to a limitation as provided in Section 2.2, which has not been
waived. Notwithstanding
the foregoing to the contrary, the Borrower or its transfer agent shall only be
obligated to issue and deliver the shares to the DTC on the Holder’s behalf via
DWAC (or certificates free of restrictive legends) provided the Holder has
complied with all applicable securities laws in connection with the sale of the
Common Stock, including, if applicable, prospectus delivery requirements and has
provided representations accordingly.  In the event that Conversion
Shares cannot be delivered to the Holder via DWAC, the Borrower shall deliver
physical certificates representing the Conversion Shares by the Delivery Date to
an address designated by Holder.

    


               2.4.           Adjustments to Conversion
Price.

    


                          (a)           The
number of shares of Common Stock to be issued upon each conversion of this Note
pursuant to this Article II shall be
determined by dividing that portion of the Principal Amount and interest and
fees to be converted, if any, by the then applicable Conversion
Price.

    


    (b)           The
Conversion Price and number and kind of shares or other securities to be issued
upon conversion shall be subject to adjustment from time to time as described in
the Purchase Agreement and upon the happening of certain events while this
conversion right remains outstanding, as follows:

    


    (i)           Merger, Sale of Assets,
etc.  If (A) the Borrower effects any merger
or  consolidation of the Borrower with or into another entity, (B) the
Borrower effects any sale of all or substantially all of its assets in one or a
series of related transactions,  (C) any tender offer or exchange
offer (whether by the Borrower or another entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, (D) the Borrower consummates a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one
or more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any "person" or "group" (as these terms are
used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall
become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate Common Stock of the Borrower
(other than through open market purchases), or (F) the Borrower effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a
"Fundamental  Transaction"), this Note, as to the unpaid principal
portion thereof and accrued interest thereon, shall thereafter be deemed to
evidence the right to convert into such number and kind of shares or other
securities and property as would have been issuable or distributable on account
of such Fundamental Transaction, upon or with respect to the securities subject
to the conversion right immediately prior to such Fundamental
Transaction.  The foregoing provision shall similarly apply to
successive Fundamental 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 Fundamental Transaction.

    


    (ii)           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, this Note, as to the unpaid principal
portion hereof and accrued interest hereon, shall thereafter be deemed to
evidence the right to convert into 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.

    


    (iii)           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.

    


    (c)           Whenever
the Conversion Price is adjusted pursuant to Section 2.4(b) above, the Borrower
shall promptly mail to the Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a statement of the facts requiring such
adjustment.

    


    (d)           At
any time after the Maturity Date, the Borrower may call all or a portion of the
Principal Amount of Notes for conversion (“Borrower Mandated Conversion”)
by providing no less than 10 business days’ notice to the Holder of the Note
(the “Borrower Mandated
Conversion Notice”) of Borrower’s intent to cause conversion of the Note,
and the conversion date set therefore, at which date the Principal Amount of
Note and any and all outstanding interest thereon, shall be deemed converted at
a price equal to 80% of the Conversion Price then in effect (i.e. initially $.40
presuming that the $.50 Conversion Price is not reduced in accordance with the
preceding paragraphs) and, the Note shall no longer be deemed
outstanding.  The Holder shall provide delivery instructions for any
Conversion Shares promptly upon receipt of a Borrower Mandated Conversion
Notice.

    


    2.5.           Reservation.   During
the period the conversion right exists, Borrower will make best efforts, to
reserve from its authorized and unissued Common Stock not less than one
hundred percent 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.

    


    2.6           Issuance of Replacement
Note.  Upon any partial conversion of this Note, a replacement
Note containing the same date and provisions of this Note shall, at the written
request of the Holder, be issued by the Borrower to the Holder for the
outstanding Principal Amount of this Note and accrued interest which shall not
have been converted or paid, provided Holder has surrendered an original Note to
the Borrower.  In the event that the Holder elects not to surrender a
Note for reissuance upon partial payment or conversion, the Holder hereby
indemnifies 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 the Borrower is hereby expressly authorized to offset any such amounts
mutually agreed upon by Borrower and Holder or pursuant to a judgment in
Borrower’s favor against amounts then due under the Note.

    


    ARTICLE
III

     EVENTS
OF DEFAULT

    


    The
occurrence of any of the following events of default (“Event of Default”) shall, at
the option of the Holder hereof, make all sums of principal and interest then
remaining unpaid hereon and all other amounts payable hereunder immediately due
and payable, upon demand, without presentment, or grace period, all of which
hereby are expressly waived, except as set forth below:

    


    3.1           Failure to Pay Principal or
Interest.  The Borrower fails to pay any installment of
Principal Amount, interest or other sum due under this Note when due and such
failure continues for a period of five (5) business days after the due
date.

    


    3.2           Breach of
Covenant.  The Borrower breaches any material covenant or other
term or condition of the Securities Purchase Agreement in any material respect
and such breach, if subject to cure, continues for a period of ten (10) business
days after written notice to the Borrower from the Holder.

    


    3.3           Breach of Representations
and Warranties.  Any material representation or warranty of the
Borrower made herein or in the Purchase Agreement or in any agreement, statement
or certificate given in writing pursuant hereto or in connection herewith or
therewith shall be false or misleading in any material respect as of the date
made and the Closing Date.

    


    3.4           Receiver or
Trustee.  The Borrower shall make an assignment for the benefit
of creditors, or apply for or consent to the appointment of a receiver or
trustee for them or for a substantial part of their property or business; or
such a receiver or trustee shall otherwise be appointed.

    


    3.5           Judgments.  Any
money judgment, writ or similar final process shall be entered or filed against
Borrower or any subsidiary of Borrower in the United States or any of their
property or other assets in the United States for more than $750,000, and shall
remain unvacated, unbonded, unappealed, unsatisfied, or unstayed for a period of
forty-five (45) days.

    


    3.6           Non-Payment.   A
default by the Borrower under any one or more obligations in an aggregate
monetary amount in excess of $750,000 for more than twenty (20) days after the
due date, unless the Borrower is contesting the validity of such obligation in
good faith and has segregated cash funds equal to not less than one-half of the
contested amount.

    


    3.7           Bankruptcy.  Bankruptcy,
insolvency, reorganization, or liquidation proceedings or other proceedings or
relief under any bankruptcy law or any law, or the issuance of any notice in
relation to such event, for the relief of debtors shall be instituted by or
against the Borrower or any Subsidiary of Borrower and if instituted against
them are not dismissed within forty-five (45) days of initiation.

    


    3.8           Failure to Deliver Common
Stock or Replacement Note.  Borrower’s failure to timely
deliver Common Stock to the Holder pursuant to and in the form required by this
Note or the Purchase Agreement, or if required, a replacement Note.

    


    3.9           Cross Default. A
default by the Borrower of a material term, covenant, warranty or undertaking of
any Transaction Document which is not cured after any required notice and/or
cure period.

    


    3.10           Reservation
Default.   Failure by the Borrower to have reserved for
issuance upon conversion of the Note the amount of Common Stock as set forth in
this Note and the Purchase Agreement.  Notwithstanding the foregoing,
in the event that the provisions of Section 2.2 wherein the Borrower does not
have sufficient number of shares available for issuance pursuant to its Articles
of Incorporation, as amended, then the default shall be deemed cured at the time
of the initial filing of a preliminary information statement or proxy statement,
provided, that the Borrower makes best efforts to obtain effectiveness of the
same and complete the filing of any Amendment to the Articles of Incorporation
(or amended and restated Articles of Incorporation) within 45 days
thereafter.

    


    ARTICLE
IV

    


      MISCELLANEOUS

    


    4.1           Failure or Indulgence Not
Waiver.  No failure or delay on the part of Holder hereof in
the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

    


               4.2           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 reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, or email with
confirmation, 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 express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur.  The addresses for such communications
shall be: (i) if to the Borrower to: Shrink Nanotechnologies, 2038 Corte del
Nogal, Suite 110, Carlsbad, CA 92011 Attn: Mark L. Baum, Esq. or current
President, fax: 760-804-8845, with a copy by facsimile only to: Levy
International Law, LLC, 22 W. 48 Street, Suite 601, New York, New York 10013,
Attn: Ronniel Levy, Esq., and (ii) if to the Holder, to the name, address and
facsimile number set forth on the front page of this Note or email address set
forth in the Purchase Agreement (provided that such notice is with
confirmation).

    


    4.3           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.

    


    4.4           Assignees.  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.

    


    4.5           Cost of
Collection.  If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees.

    


    4.6           Governing
Law.  This Note shall be governed by and construed in
accordance with the laws of the State of California, including, but not limited to,
California statutes of limitations.  Any action brought by
either party against the other concerning the transactions contemplated by the
Securities Purchase Agreement or this Note shall be brought only in the civil or
state courts of California or in the federal courts located in the State of
California, county of San Diego.  Both parties 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.

    


    4.7           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.  In the event that
the rate of interest required to be paid or other charges hereunder exceed the
maximum permitted by such law, any payments in excess of such maximum shall be
credited against amounts owed by the Borrower to the Holder and thus refunded to
the Borrower.

    


    4.8.           Construction.   Each
party acknowledges that its legal counsel participated in the preparation of
this Note and, therefore, stipulates that the rule of construction that
ambiguities, including confusion surrounding headings or uses of written
emphasis (such as bolding or underlining text), are to be resolved against the
drafting party and shall not be applied in the interpretation of this Note to
favor any one party against the other.

    


    4.9           Redemption.  This
Note may not be redeemed, repaid early or called at any time and in whole or in
part, without the consent of the Holder at any time subsequent to the first
Closing Date absent either a Qualified Financing Event or a Borrower Mandated
Conversion.

    


    4.10           Shareholder
Status.  The Holder shall not have rights as a shareholder of
the Borrower with respect to unconverted portions of this
Note.  However, the Holder will have the rights of a shareholder of
the Borrower with respect to the Shares of Common Stock to be received after
delivery by the Holder of a Conversion Notice to the Borrower.

    


    4.11           Non-Business
Days.   Whenever any payment or any action to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due or action shall be required on the
next succeeding business day and, for such payment, such next succeeding day
shall be included in the calculation of the amount of accrued interest payable
on such date.

     

    [Signature
Page Follows]

     

     


    [Signature
Page to 12% Convertible Promissory Note]

    


    N WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by an authorized officer as of the
____ day of November, 2009.

    


    SHRINK
NANOTECHNOLOGIES, INC.

    


    


    


    By:________________________________

               Name:

               Title:
President

    


    WITNESS:

    


    


    


    ______________________________________

    [Print
Name]

    Chief
Financial Officer

     

    
 

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    NOTICE OF
CONVERSION

    


    (To be
executed by the Registered Holder in order to convert the Note)

    


    


    The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the 12% Convertible Note issued by Shrink
Nanotechnologies, Inc. (the “Borrower”) on [March] __, 2010 into Shares of
Common Stock of the Borrower according to the conditions set forth in such Note,
as of the date written below.

    


    


    


    Date of
Conversion:____________________________________________________________________

    


    


    Conversion
Price:______________________________________________________________________

    


    


    Number
of Shares of Common Stock Beneficially Owned on the Conversion Date:
Less than 5% of the outstanding Common Stock of Shrink Nanotechnologies,
Inc.

    


    


    Shares To
Be
Delivered:_________________________________________________________________

    


    


    Signature:____________________________________________________________________________

    


    


    Print
Name:__________________________________________________________________________

    


    


    Address:_____________________________________________________________________________

    


       ____________________________________________________________________________

    
      	
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