Document:

Unassociated Document

    EXHIBIT
      10.11

     

    SECOND
      AMENDED AND RESTATED IRREVOCABLE
      TRANSFER AGENT INSTRUCTIONS

     

    

    April
      24,
      2006

    

    

    

    Corporate
      Stock Transfer, Inc.

    3200
      Sherry Creek Drive South, Suite 430

    Denver,
      CO 80209

     

    RE: BSI2000,
      INC.

    

    Ladies
      and Gentlemen:

     

    Reference
      is made to that certain Second Amended and Restated Securities Purchase
      Agreement (the “Securities
      Purchase Agreement”)
      of
      even date herewith by and between BSI2000, Inc., a Delaware corporation
      (the “Company”),
      and
      the Buyers set forth on Schedule I attached thereto (collectively the
“Buyers”)
      and
      those certain Warrants of even date herewith, those certain Warrants dated
      February 10, 2006 and that certain Warrant dated November 3, 2005, each issued
      by the Company to the Buyers (collectively, the “Warrants”).
      Pursuant to the Securities Purchase Agreement, the Company shall sell to the
      Buyers, an the Buyers shall purchase from the Company, convertible debentures
      (collectively, the “Debentures”)
      in the
      aggregate principal amount of One Million Five Hundred Thousand Dollars
      ($1,500,000), plus accrued interest, which are convertible into shares of the
      Company’s common stock, par value $0.001 per share (the “Common
      Stock”),
      at
      the Buyers discretion. This Agreement shall amend and restate the Irrevocable
      Transfer Agent Instructions by and among the parties hereto dated February
      10,
      2006 and the Irrevocable Transfer Agent Instructions by and among the parties
      hereto dated November 3, 2005. These instructions relate to the following stock
      or proposed stock issuances or transfers:

     

    
      	 	
              1.

            	
              Upon
                increase of the Company’s authorized shares of Common Stock in accordance
                with the Securities Purchase Agreement, the Company has agreed to
                issue to
                the Buyers up to 268,000,000 shares of the Company’s Common Stock upon
                conversion of the Debentures (“Conversion
                Shares”)
                plus the shares of Common Stock to be issued to the Buyers upon conversion
                of accrued interest and liquidated damages into Common Stock (the
                “Interest
                Shares”).
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              2.

            	
              The
                Company has agreed to issue to the Buyers up to 101,250,000 shares
                (the
                “Warrant
                Shares”)
                of the Company’s Common Stock upon exercise of the Warrants.
                

            

    

     

    
      	 	
              3.

            	
              The
                Company has agreed to issue to the Buyers 5,000,000 shares of Common
                Stock
                pursuant to Section 4(g) of the Securities Purchase
                Agreement.

            

    

     

    This
      letter shall serve as our irrevocable authorization and direction to Corporate
      Stock Transfer, Inc. (the “Transfer
      Agent”)
      to do
      the following:

     

    
      	 	
              1.

            	
              Conversion
                Shares and Warrant Shares.
                

            

    

     

    
      	 	
              a.

            	
              Instructions
                Applicable to Transfer Agent.
                With respect to the Conversion Shares, Warrant Shares and the Interest
                Shares, the Transfer Agent shall issue the Conversion Shares, Warrant
                Shares and the Interest Shares to the Buyers from time to time upon
                delivery to the Transfer Agent of a properly completed and duly executed
                Conversion Notice (the “Conversion
                Notice”),
                in the form attached hereto as Exhibit I,
                or a properly completed Exercise Notice in the form attached to the
                Warrants as Exhibit A thereto (the “Exercise
                Notice”),
                delivered on behalf of the Company to the Transfer Agent by David
                Gonzalez, Esq., the Buyers’ Counsel. Upon receipt of a Conversion Notice
                or an Exercise Notice, the Transfer Agent shall within three (3)
                Trading
                Days thereafter (i) issue and surrender to a common carrier for overnight
                delivery to the address as specified in the Conversion Notice or
                the
                Exercise Notice, a certificate, registered in the name of the Buyers
                or
                their designees, for the number of shares of Common Stock to which
                the
                Buyers shall be entitled as set forth in the Conversion Notice or
                Exercise
                Notice or (ii) provided Transfer Agent are participating in The Depository
                Trust Company (“DTC”)
                Fast Automated Securities Transfer Program, upon the request of the
                Buyers, credit such aggregate number of shares of Common Stock to
                which
                the Buyers shall be entitled to the Buyers’ or their designees’ balance
                account with DTC through its Deposit Withdrawal At
                Custodian (“DWAC”)
                system provided the Buyers causes its bank or broker to initiate
                the DWAC
                transaction. For purposes hereof “Trading
                Day”
                shall mean any day on which the Nasdaq Market is open for customary
                trading.

            

    

     

    
      	 	
              b.

            	
              The
                Company hereby confirms to the Transfer Agent and the Buyers that
                certificates representing the Conversion Shares and Warrant Shares
                shall
                not bear any legend restricting transfer and should not be subject
                to any
                stop-transfer restrictions and shall otherwise be freely transferable
                on
                the books and records of the Company; provided
                that
                counsel to the Company delivers (i) the Notice of Effectiveness set
                forth
                in Exhibit
                II
                attached hereto and (ii) an opinion of counsel in the form set forth
                in
                Exhibit
                III
                attached hereto, and that if the Conversion Shares, Warrant Shares
                and the
                Interest Shares are not registered for sale under the Securities
                Act of
                1933, as amended, then the certificates for the Conversion Shares,
                Warrant
                Shares and Interest Shares shall bear the following
                legend:

            

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
      SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      OR
      APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY
      ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
      SAID
      ACT.”

     

     

    
      	 	
              c.

            	
              In
                the event that counsel to the Company fails or refuses to render
                an
                opinion as required to issue the Conversion Shares in accordance
                with the
                preceding paragraph (either with or without restrictive legends,
                as
                applicable), then the Company irrevocably and expressly authorizes
                counsel
                to the Buyers to render such opinion. The Transfer Agent shall accept
                and
                be entitled to rely on such opinion for the purposes of issuing the
                Conversion Shares. 

            

    

     

    
      	 	
              d.

            	
              Instructions
                Applicable to David Gonzalez.
                Upon David Gonzalez’s receipt of a properly completed conversion notice
                substantially in the form attached as an exhibit to the Debentures
                or
                instructions to exercise the Warrants, David Gonzalez shall, within
                one
                (1) Trading Day thereafter, send to the Transfer Agent a Conversion
                Notice
                in the form attached hereto as Exhibit
                I,
                or an Exercise Notice, which shall constitute an irrevocable instruction
                to the Transfer Agent to process such Conversion Notice or Exercise
                Notice
                in accordance with the terms of these
                instructions.

            

    

     

    
      	 	
              2.

            	
              All
                Shares.

            

    

     

    
      	 	
              a.

            	
              The
                Transfer Agent shall reserve for issuance to the Buyers the Conversion
                Shares and Warrant Shares. All such shares shall remain in reserve
                with
                the Transfer Agent until the Buyers provides the Transfer Agent
                instructions that the shares or any part of them shall be taken out
                of
                reserve and shall no longer be subject to the terms of these instructions.
                

            

    

     

    
      	 	
              b.

            	
              The
                Transfer Agent shall rely exclusively on the Conversion Notice or
                the
                Exercise Notice and shall have no liability for relying on such
                instructions. Any Conversion Notice or Exercise Notice delivered
                hereunder
                shall constitute an irrevocable instruction to the Transfer Agent
                to
                process such notice or notices in accordance with the terms thereof.
                Such
                notice or notices may be transmitted to the Transfer Agent by facsimile
                or
                any commercially reasonable method.

            

    

     

    
      	 	
              c.

            	
              The
                Company hereby confirms to the Transfer Agent and the Buyers that
                no
                instructions other than as contemplated herein will be given to Transfer
                Agent by the Company with respect to the matters referenced herein.
                The
                Company hereby authorizes the Transfer Agent, and the Transfer Agent
                shall
                be obligated, to disregard any contrary instructions received by
                or on
                behalf of the Company.

            

    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Certain
      Notice Regarding David Gonzalez.
      The
      Company and the Transfer Agent hereby acknowledge that David Gonzalez is general
      counsel to the Buyers, a partner of the general partner of the Buyers and
      counsel to the Buyers in connection with the transactions contemplated and
      referred herein. The Company and the Transfer Agent agree that in the event
      of
      any dispute arising in connection with this Agreement or otherwise in connection
      with any transaction or agreement contemplated and referred herein, David
      Gonzalez shall be permitted to continue to represent the Buyers and neither
      the
      Company nor the Transfer Agent will seek to disqualify such
      counsel.

     

    The
      Company hereby agrees that it shall not replace the Transfer Agent as the
      Company’s transfer agent without the prior written consent of the
      Buyers.

     

    Any
      attempt by Transfer Agent to resign as the Company’s transfer agent hereunder
      shall not be effective until such time as the Company provides to the Transfer
      Agent written notice that a suitable replacement has agreed to serve as transfer
      agent and to be bound by the terms and conditions of these Irrevocable Transfer
      Agent Instructions.

     

    The
      Company herby confirms and the Transfer Agent acknowledges that while any
      portion of the Debenture
      remains unpaid and unconverted with the exception Common Stock issuable to
      Cornell Capital Partners, the Company and the
      Transfer Agent
      shall
      not, without the prior consent of the Buyers, (i) issue any Common Stock or
      Preferred Stock without consideration or for a consideration per share less
      than
      its fair market value determined immediately prior to its issuance,
      (ii) issue any Preferred Stock, warrant, option, right, contract, call, or
      other security or instrument granting the holder thereof the right to acquire
      Common Stock without consideration or for a consideration per share less than
      such Common Stock’s fair market value determined immediately prior to its
      issuance, (iii)
      issue any S-8
      shares of the Company’s Common Stock.

     

     The
      Company and the Transfer Agent hereby acknowledge and confirm that complying
      with the terms of this Agreement does not and shall not prohibit the Transfer
      Agent from satisfying any and all fiduciary responsibilities and duties it
      may
      owe to the Company.

     

    The
      Company and the Transfer Agent acknowledge that the Buyers is relying on the
      representations and covenants made by the Company and the Transfer Agent
      hereunder and are a material inducement to the Buyers purchasing convertible
      debentures under the Securities Purchase Agreement. The Company and the Transfer
      Agent further acknowledge that without such representations and covenants of
      the
      Company and the Transfer Agent made hereunder, the Buyers would not purchase
      the
      Debentures.

     

    Each
      party hereto specifically acknowledges and agrees that in the event of a breach
      or threatened breach by a party hereto of any provision hereof, the Buyers
      will
      be irreparably damaged and that damages at law would be an inadequate remedy
      if
      these Irrevocable Transfer Agent Instructions were not specifically enforced.
      Therefore, in the event of a breach or threatened breach by a party hereto,
      including, without limitation, the attempted termination of the agency
      relationship created by this instrument, the Buyers shall be entitled, in
      addition to all other rights or remedies, to an injunction restraining such
      breach, without being required to show any actual damage or to post any bond
      or
      other security, and/or to a decree for specific performance of the provisions
      of
      these Irrevocable Transfer Agent Instructions.

     

     

    [SIGNATURE
      PAGE FOLLOWS; REMAINDER OF PAGE INTENTIONALLY BLANK]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties have caused this letter agreement regarding Second Amended and Restated
      Irrevocable Transfer Agent Instructions to be duly executed and delivered as
      of
      the date first written above.

     

    
      	 	
              COMPANY:

            
	 	 
	 	
              BSI2000,
                INC.

            
	 	 
	 	
              By:
                /s/ Jack Harper

            
	 	
              Name: Jack
                Harper

            
	 	
              Title: President
                & CEO

            
	 	 
	 	 
	 	
              /s/
                David Gonzalez

            
	 	
              David
                Gonzalez, Esq.

            
	 	 
	 	 

    

    

    CORPORATE
      STOCK TRANSFER, INC.

    

    By:______________________________________

    Name:____________________________________

    Title:_____________________________________

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      I

     

    SCHEDULE
      OF BUYERS

     

    
      	
              Name

            	 	
              Signature

            	 	
              Address/Facsimile
                

              Number
                of Buyers

            
	 	 	 	 	 
	
              Cornell
                Capital Partners, LP 

            	 	
              By: Yorkville
                Advisors, LLC

            	 	
              101
                Hudson Street - Suite 3700

            
	 	 	
              Its: General
                Partner

            	 	
              Jersey
                City, NJ 07303

            
	 	 	 	 	
              Facsimile:
                 (201)
                985-8266

            
	 	 	 	 	 
	 	 	
              By:
                /s/ Mark Angelo

            	 	 
	 	 	
              Name: Mark
                Angelo

            	 	 
	 	 	
              Its: Portfolio
                Manager

            	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

     

    
 

    
      
        
        

      

      
        SCHEDULE
          I-1

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      I

     

    TO
      IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

     

    FORM
      OF CONVERSION NOTICE

     

    Reference
      is made to the Securities Purchase Agreement (the “Securities
      Purchase Agreement”)
      between BSI2000, Inc., (the “Company”),
      and
      the Buyers set forth on Schedule I attached thereto dated April __, 2006. In
      accordance with and pursuant to the Securities Purchase Agreement, the
      undersigned hereby elects to convert convertible debentures into shares of
      common stock, par value $0.001 per share (the “Common
      Stock”),
      of
      the Company for the amount indicated below as of the date specified
      below.

     

    
      	
              Conversion
                Date:

            	
            	  

	 	 	 
	
              Amount
                to be converted:

            	
              $

            	  

	 	 	 
	
              Conversion
                Price:

            	
              $

            	  

	 	 	 
	
              Shares
                of Common Stock Issuable:

            	 	  

	 	 	 
	
              Amount
                of Debenture unconverted:

            	
              $

            	  

	 	 	 
	
              Amount
                of Interest Converted:

            	
              $

            	  

	 	 	 
	
              Conversion
                Price of Interest:

            	
              $

            	  

	 	 	 
	
              Shares
                of Common Stock Issuable:

            	 	  

	 	 	
            
	
              Amount
                of Liquidated Damages:

            	
              $

            	  

	 	 	 
	
              Conversion
                Price of Liquidated Damages:

            	
              $

            	  

	 	 	
            
	
              Shares
                of Common Stock Issuable:

            	 	  

	 	 	
            
	
              Total
                Number of shares of Common Stock to be issued:

            	 	  

	 	 	
            

    

     

     

    
      
        
        

      

      
        EXHIBIT
          I-1

        
          

        

      

      
        
        

      

    

    

    Please
      issue the shares of Common Stock in the following name and to the following
      address:

    

    
      	
              Issue
                to:

            	  

	 	 
	
              Authorized
                Signature:

            	  

	 	 
	
              Name:

            	  

	 	 
	
              Title:

            	  

	 	 
	
              Phone
                #:

            	  

	 	 
	
              Broker
                DTC Participant Code:

            	  

	 	 
	
              Account
                Number*:

            	  

	 	 

    

    

     

    *
      Note that receiving broker must initiate transaction on DWAC
      System.

     

    
      
        
        

      

      
        
          EXHIBIT
            I-2

        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      II

     

    TO
      IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

     

    FORM
      OF NOTICE OF EFFECTIVENESS

    OF
      REGISTRATION STATEMENT

     

    

    _________,
      2006

    

    

    ____________________

    ____________________

    Attention:
      ____________

    

    RE: BSI2000,
      INC.

    

    Ladies
      and Gentlemen:

    

    We
      are
      counsel to BSI2000, Inc., (the “Company”),
      and
      have represented the Company in connection with that certain Securities Purchase
      Agreement, dated as of April 24, 2006 (the “Securities
      Purchase Agreement”),
      entered into by and among the Company and the Buyers set forth on Schedule
      I
      attached thereto (collectively the “Buyers”)
      pursuant to which the Company has agreed to sell to the Buyers up to One Million
      Five Hundred Thousand Dollars ($1,500,000) of secured convertible debentures,
      which shall be convertible into shares (the “Conversion
      Shares”)
      of the
      Company’s common stock, par value $0.001 per share (the “Common
      Stock”),
      in
      accordance with the terms of the Securities Purchase Agreement. Pursuant to
      the
      Securities Purchase Agreement, the Company also has entered into a Second
      Amended and Restated Investor Registration Rights Agreement, dated as of April
      24, 2006, with the Buyers (the “Investor
      Registration Rights Agreement”)
      pursuant to which the Company agreed, among other things, to register the
      Conversion Shares under the Securities Act of 1933, as amended (the
“1933
      Act”).
      In
      connection with the Company’s obligations under the Securities Purchase
      Agreement and the Registration Rights Agreement, on _______, 2006, the Company
      filed a Registration Statement (File No. ___-_________) (the “Registration
      Statement”)
      with
      the Securities and Exchange Commission (the “SEC”)
      relating to the sale of the Conversion Shares.

     

    In
      connection with the foregoing, we advise the Transfer Agent that a member of
      the
      SEC’s staff has advised us by telephone that the SEC has entered an order
      declaring the Registration Statement effective under the 1933 Act at ____ P.M.
      on __________, 2006 and we have no knowledge, after telephonic inquiry of a
      member of the SEC’s staff, that any stop order suspending its effectiveness has
      been issued or that any proceedings for that purpose are pending before, or
      threatened by, the SEC and the Conversion Shares are available for sale under
      the 1933 Act pursuant to the Registration Statement.

     

    The
      Buyers has confirmed it shall comply with all securities laws and regulations
      applicable to it including applicable prospectus delivery requirements upon
      sale
      of the Conversion Shares.

     

    

    Very
      truly yours,

     

    By:__________________________________

    

     

    
      
        
        

      

      
        EXHIBIT
          II-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      III

     

    TO
      IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

     

    FORM
      OF OPINION

     

    

    ________________
      2006

    

    VIA
      FACSIMILE AND REGULAR MAIL

    

    ____________________

    ____________________

    ____________________

    

    Attention:
      ____________

    

    RE: BSI2000,
      INC.

    

    Ladies
      and Gentlemen:

     

    We
      have
      acted as special counsel to BSI2000, Inc. (the “Company”),
      in
      connection with the registration of ___________shares (the “Shares”)
      of its
      common stock with the Securities and Exchange Commission (the “SEC”).
      We
      have
      not acted as your counsel. This opinion is given at the request and with the
      consent of the Company.

     

    In
      rendering this opinion we have relied on the accuracy of the Company’s
      Registration Statement on Form SB-2, as amended (the “Registration
      Statement”),
      filed
      by the Company with the SEC on _________ ___, 2006. The Company filed the
      Registration Statement on behalf of certain selling stockholders (the
“Selling
      Stockholders”).
      This
      opinion relates solely
      to the
      Selling Shareholders listed on Exhibit
      “A”
      hereto
      and number of Shares set forth opposite such Selling Stockholders’ names. The
      SEC declared the Registration Statement effective on __________ ___,
      2006.

     

    We
      understand that the Selling Stockholders acquired the Shares in a private
      offering exempt from registration under the Securities Act of 1933, as amended.
      Information regarding the Shares to be sold by the Selling Shareholders is
      contained under the heading “Selling Stockholders” in the Registration
      Statement, which information is incorporated herein by reference. This opinion
      does not relate to the issuance of the Shares to the Selling Stockholders.
      The
      opinions set forth herein relate solely to the sale or transfer by the Selling
      Stockholders pursuant to the Registration Statement under the Federal laws
      of
      the United States of America. We do not express any opinion concerning any
      law
      of any state or other jurisdiction.

     

    In
      rendering this opinion we have relied upon the accuracy of the foregoing
      statements.

     

    
      
        
        

      

      
        EXHIBIT
          III-1

        
          

        

      

      
        
        

      

    

     

     

    Based
      on
      the foregoing, it is our opinion that the Shares have been registered with
      the
      Securities and Exchange Commission under the Securities Act of 1933, as amended,
      and that ________ may remove the restrictive legends contained on the Shares.
      This opinion relates solely
      to the
      number of Shares set forth opposite the Selling Stockholders listed on
Exhibit
      “A”
      hereto.

     

    This
      opinion is furnished to Transfer Agent specifically in connection with the
      issuance of the Shares, and solely for your information and benefit. This letter
      may not be relied upon by Transfer Agent in any other connection, and it may
      not
      be relied upon by any other person or entity for any purpose without our prior
      written consent. This opinion may not be assigned, quoted or used without our
      prior written consent. The opinions set forth herein are rendered as of the
      date
      hereof and we will not supplement this opinion with respect to changes in the
      law or factual matters subsequent to the date hereof.

     

    Very
      truly yours,

     

    
 

    
      
        
        

      

      
        EXHIBIT
          III-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “A”

     

    (LIST
      OF SELLING STOCKHOLDERS)

     

    
      	
              Name:

            	 	
              No.
                of Shares:

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

    

     

     

    
      
        
        

      

      EXHIBIT
        A-1SECURED
      PROMISSORY NOTE

    

    
      
        	$ 500,000.00	
                As
                  of May 1,
                  2006

              

      

    

     

    FOR
      VALUE
      RECEIVED, the undersigned, Patient Safety Technologies, Inc., a Delaware
      corporation (the “Maker”), with an office located at 1800 Century Park East,
      Suite 200, Los Angeles, California 90067, hereby promises to pay to the order
      of
      Herbert Langsam Irrevocable Trust, 5300 Wisteria Drive, Oklahoma City, Oklahoma
      73142 (the “Noteholder”), the principal sum of Five Hundred Thousand and
      zero/100 Dollars ($500,000.00) plus any accrued interest thereon in lawful
      money
      of the United States on November 1, 2006 (the “Maturity Date”).

    

    The
      following is a statement of the other terms and conditions to which this
      promissory note (the “Note”) is subject and
      to
      which the Noteholder by the acceptance of this Note agrees:

    

    This
      Note
      shall commence on the date hereof and shall continue until November 1, 2006,
      the
      Maturity Date. Maker, at its option, and provided Maker is not in default
      hereunder, may extend the Maturity Date by sixty (60) days. 

    

    Maker
      further promises to pay interest on the unpaid principal balance hereof, as
      funds are advanced, at the rate of twelve percent (12%) per annum, such interest
      to be paid monthly on the 30th
      day of
      each calendar month until principal and interest are paid in full, on the
      Maturity Date. Interest shall commence accruing on the issue date and on the
      date of each subsequent advance and shall be calculated on the basis of a
      365-day year and actual days elapsed. In no event shall the interest charged
      hereunder exceed the maximum permitted under the laws of the State of
      California.
      However,
      in the event of a breach or default of any provision of this Note or any
      provision of the Security Agreement that secures this Note (the “Security
      Agreement”), the interest rate shall increase to a per annum rate equal to
      sixteen percent (16%). 

    

      The
      Maker
      shall have the right, at any time, to prepay without penalty, in whole or in
      part, the unpaid principal and interest due on this Note as of the date of
      such
      prepayment. 

    

    All
      payments made pursuant to this Note shall first be applied to accrued but unpaid
      interest then outstanding, and then to principal, and interest shall thereupon
      cease to accrue upon the principal amount so paid. 

    

    The
      entire unpaid principal balance of this Note and interest accrued with respect
      thereto shall be immediately due and payable upon the occurrence of any of
      the
      following (each, an “Event of Default”):

    

    a.
       
The
      Maker
      filing for relief under any bankruptcy law;

    

    b. 
The
      filing of a lien, the issuance of a levy or execution, or the seizure,
      attachment or garnishment, or the entry of judgment on or against Maker or
      any
      of Maker’s property which shall not be released, satisfied of record or bonded
      within twenty (20) days thereafter, except liens which exist as of the date
      hereof or liens to which the Noteholder shall consent; 

    

    c. 
The
      Maker
      creates, incurs, assumes or suffers to exist any liability for borrowed money,
      except borrowings in existence or committed on the date hereof and indebtedness
      to trade creditors or financial institutions incurred in the ordinary course
      of
      business; 

    

    d. 
The
      Maker
      has failed to pay any installment of monthly interest payable hereunder, or
      has
      failed to pay the principal and any accrued and unpaid interest on the Maturity
      Date;

    

    e. 
Filing
      of
      any petition, or commencement of any proceeding, under the Bankruptcy Act,
      as
      amended, or under any other insolvency act or law, state or federal, against
      Debtor, or appointment of any receiver or trustee, now or hereafter existing,
      and the continuance thereof for sixty (60) days undismissed, unbonded, or
      undischarged;

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    f. 
Any
      representations or warranties made by Maker in this Note or in the Security
      Agreement that secures this Note are untrue in any material respect, or any
      schedule, statement, report, notice or writing furnished by Maker to Noteholder
      are untrue in any material respect on the date as of which the facts set forth
      are stated or certified; or 

    

    g. 
Breach
      or
      default of the terms and conditions of this Note or the Security Agreement.
      

    

    The
      obligations under this Note shall be secured by certain collateral of Maker
      in
      accordance with the terms and conditions set forth in the Security Agreement,
      a
      copy of which is attached hereto as Exhibit A, entered into on the date hereof.
      The terms of the Security Agreement are incorporated by reference herein.

    

    All
      rights and remedies available to the Noteholder pursuant to the provisions
      of
      applicable law and otherwise are cumulative, not exclusive and are enforceable
      alternatively, successively and/or concurrently after default by Maker pursuant
      to the provisions of this Note.

    

    The
      Maker
      waives demand, presentment, protest and notice of any kind and consents to
      the
      extension of time of payments, the release, surrender or substitution of any
      and
      all security or guarantees for the obligations evidenced hereby or other
      indulgence with respect to this Note, all without notice.

    

    This
      Note
      may not be changed, modified or terminated orally, but only by an agreement
      in
      writing, signed by the party to be charged. 

    

    Any
      transferee or transferees of this Note, by their acceptance hereof, agree to
      assume the obligations of the holder of this Note as set forth herein, and
      shall
      be deemed to be the “Noteholder” for all purposes hereunder.

    

    This
      Note
      contains the entire understanding between the Maker and the Noteholder with
      respect to this Note and supersedes any prior written or oral agreement between
      them respecting the subject matter hereof. 

    

    This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
      California and shall be binding upon the successors and assigns of the Maker
      and
      shall inure to the benefit of the Noteholder, its successors and assigns.

    

    In
      the
      event of any litigation with respect to the obligations evidenced by this Note,
      the Maker waives the right to a trial by jury and all rights of set-off and
      rights to interpose permissive counterclaims and cross-claims. In
      the
      event this Note shall be in default, and placed with an attorney for collection,
      then Maker agrees to pay all reasonable attorney fees and costs of collection
      of
      Noteholder with the enforcement of the Note and the Security Agreement, and
      Noteholder’s rights thereunder. 

    

    If
      any
      term or provision of this Note shall be held invalid, illegal or unenforceable,
      the validity of all other terms and provisions hereof shall in no way be
      affected thereby.

    

    PATIENT
      SAFETY TECHNOLOGIES, INC.  

     

    By:
      ______________________________ 

    Name:
      ____________________________

    Title:
      _____________________________

     

     

    
      
        -2-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]