Document:

BioElectronics Corporation - Exhibit 10.7 - Prepared By TNT Filings Inc.

 

Exhibit 10.7 

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND
THE COMMON SHARES ISSUABLE UPON CONVERSION OF 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 BIOELECTRONICS CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED. 

	Principal Amount
    $400,000.00	
    Issue Date: December 8, 2005

SECURED CONVERTIBLE PROMISSORY NOTE 

FOR VALUE RECEIVED, BIOELECTRONICS CORPORATION, a Maryland
corporation (hereinafter called "Borrower"), hereby promises to pay to ALPHA
CAPITAL AKTIENGESELLSCHAFT, Pradafant 7, 9490 Furstentums, Vaduz, Lichtenstein,
Fax: 011-42-32323196, (the "Holder") or its registered assigns or successors in
interest or order, without demand, the sum of Four Hundred Thousand Dollars
($400,000.000) ("Principal Amount"), on December 8, 2007 (the "Maturity Date"),
if not sooner paid. 

This Note has been entered into pursuant to the terms of a
subscription agreement between the Borrower, the Holder and certain other
holders (the "Other Holders") of convertible promissory notes (the "Other
Notes"), dated of even date herewith (the "Subscription Agreement"), and shall
be governed by the terms of such Subscription Agreement. Unless otherwise
separately defined herein, all capitalized terms used in this Note shall have
the same meaning as is set forth in the Subscription Agreement. The following
terms shall apply to this Note: 

ARTICLE I 

INTEREST; AMORTIZATION 

1.1 Interest Rate. Subject to Section 5.7 hereof, interest
payable on this Note shall accrue at a rate per annum (the "Interest Rate") of
eight percent (8%). Interest on the Principal Amount shall accrue from the date
of this Note shall be payable commencing six months from the date of this Note
and monthly thereafter and on the Maturity Date, whether by acceleration or
otherwise. 

1.2 Minimum Monthly Principal Payments. Amortizing payments of
the outstanding Principal Amount of this Note shall commence on the nine month
anniversary date of this Note and on the same day of each month thereafter (each
a "Repayment Date") until the Principal Amount has been repaid in full, whether
by the payment of cash or by the conversion of such 

Principal Amount and interest into Common Stock pursuant to
the terms hereof. Subject to Section 2.1 and Article 3 below, on each Repayment
Date, the Borrower shall make payments to the Holder in an amount equal to
one-sixteenth of the initial Principal Amount, and any other amounts which are
then owing under this Note that have not been paid (collectively, the "Monthly
Amount"). Amounts of conversions of Principal Amount made by the Holder or
Borrower pursuant to Section 2.1 or Article III and amounts redeemed pursuant to
Section 2.3 of this Note shall be applied first against outstanding fees and
damages, then to Monthly Amounts commencing with the Monthly Amount first
payable and then Monthly Amounts thereafter in chronological order. Any
Principal Amount and any other sum arising under this Note and the Subscription
Agreement that remains outstanding on the Maturity Date shall be due and payable
on the Maturity Date. 

1.3 Default Interest Rate. Following the occurrence and during
the continuance of an Event of Default (as defined in Article IV), which, if
susceptible to cure is not cured within twenty (20) days, otherwise then from
the first date of such occurrence, the annual interest rate on this Note shall
(subject to Section 5.7) be fifteen percent (15%). Such interest shall be due
and payable on the Maturity Date, accelerated or otherwise. 

ARTICLE II 

CONVERSION REPAYMENT 

2.1 Payment of Monthly Amount in Cash or Common Stock. Subject
to Section 3.2 hereof, the Borrower shall pay the Monthly Amount, at the
Borrower’s election, in either of the following manners: (i) in cash within
three (3) business days after the applicable Repayment Date, or (ii) in
registered Common Stock at an applied conversion rate equal to the lesser of (A)
the Fixed Conversion Price (as defined in Section 3.1 hereof), or (B)
eighty-five percent (85%) of the VWAP (as defined below) as reported by
Bloomberg L.P. for the Principal Market for the ten trading days preceding such
Repayment Date. Unless waived by the Holder, the Borrower may not elect to pay a
Monthly Amount due on a Repayment Date in Common Stock in an amount of shares of
Common Stock which would exceed in the aggregate of all Holders of Notes similar
to this Note, twenty-five percent (25%) of the aggregate daily trading volume
for the seven trading days preceding the Repayment Date as reported by Bloomberg
L.P. for the Principal Market multiplied by the VWAP for such seven day period.
Amounts paid with shares of Common Stock must be delivered to the Holder not
later than three (3) business days after the applicable Repayment Date. The
Borrower must send notice to the Holder by confirmed telecopier not later than
6:00 PM, New York City time on the fifth trading day preceding a Repayment Date
notifying Holder of Borrower’s election to pay the Monthly Redemption Amount in
cash or Common Stock. Elections by the Borrower must be made to all Other
Holders in proportion to the relative Note principal held by the Holder and the
Other Holders. If such notice is not timely sent or if the Monthly Redemption
Amount is not timely delivered, then Holder shall have the right, instead of the
Company, to elect at any time after the applicable Repayment Date whether to be
paid in cash or Common stock. Such Holder’s election shall not be construed to
be a waiver of any default by Borrower relating to non-timely compliance by
Borrower with any of its obligations under this Note. "VWAP" shall mean the sum
of the dollars traded for every purchase and sale of the Common Stock on the
Principal Market (determined as the price per share of Common Stock at which
such purchase and sale occurred multiplied by the 

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number of shares of Common Stock so purchased and sold)
divided by the total shares of Common Stock traded during the period. 

2.2 No Effective Registration. Notwithstanding anything to the
contrary herein, no amount payable hereunder may be paid in shares of Common
Stock by the Borrower without the Holder’s consent unless (a) either (i) an
effective current Registration Statement covering the shares of Common Stock to
be issued in satisfaction of such obligations exists, or (ii) an exemption from
registration of the resale of shares of Common Stock to be issued in
satisfaction of such obligations is available pursuant to Rule 144(k) of the
1933 Act, (b) no Event of Default hereunder (or an event that with the passage
of time or the giving of notice could become an Event of Default), has occurred
or is otherwise waived in writing by the Holder in whole or in part at the
Holder’s option, and (c) the Principal Market is either the OTC Bulletin Board,
American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National Market, or New
York Stock Exchange ("Listing Condition") from and after thirty (30) days prior
to a Repayment Date. 

2.3 Mandatory Conversion. Provided an Event of Default (or an
event that with the passage of time or the giving of notice could become an
Event of Default) has not occurred, then commencing after the date the
Registration Statement described in Section 11.1(iv) of the Subscription
Agreement has been declared effective ("Actual Effective Date"), the Borrower
will have the option by written notice to the Holder ("Notice of Mandatory
Conversion") of compelling the Holder to convert the outstanding and unpaid
principal of this Note into Common Stock at the Fixed Conversion Price then in
affect ("Mandatory Conversion"). The Notice of Mandatory Conversion may only be
given within three (3) business days following a consecutive ten (10) trading
period ("Lookback Period") during which the closing bid price for the Borrower’s
Common Stock as reported by Bloomberg, LP for the OTC Bulletin Board, American
Stock Exchange or Nasdaq SmallCap Market is more than $1.00 each day during the
Lookback Period. The date the Notice of Mandatory Conversion is given is the
"Mandatory Conversion Date." The Notice of Mandatory Conversion shall specify
the aggregate principal amount of the Note which is subject to Mandatory
Conversion. Mandatory Conversion Notices must be given proportionately to all
Holders of Notes who received Notes similar in terms and tenure as this Note.
The maximum aggregate amount for all Notices of Mandatory Conversion that may be
given for each Mandatory Conversion Date may not exceed 25% of the daily trading
volume for the seven (7) trading days preceding the Mandatory Conversion date
multiplied by the VWAP as reported by Bloomberg L.P. for the OTC Bulletin Board,
American Stock Exchange or Nasdaq SmallCap Market for such seven day trading
period. A notice of Mandatory Conversion may not be given unless the
Registration Statement (as defined in the Subscription Agreement) has been
effective for the unrestricted public resale of the Registrable Securities (as
defined in the Subscription Agreement) each day during the Lookback Period. The
Borrower shall reduce the amount of Note principal subject to a Notice of
Mandatory Conversion by the amount of Note Principal for which the Holder had
delivered a Notice of Conversion to the Borrower during the twenty (20) trading
days preceding the Mandatory Conversion Date. The amount of Note principal
included in a Mandatory Redemption Notice shall be further reduced to an amount
that would not cause the Holder to exceed the limitation described in Section
3.2 of this Note. A further Mandatory Conversion Notice may not be given until
thirty (30) trading days have elapsed from the preceding Mandatory Conversion
Date. Each Mandatory Conversion Date shall be a deemed Conversion Date and the
Borrower will be required to deliver the 

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Common Stock issuable pursuant to a Mandatory Conversion
Notice in the same manner and time period as described in Section 2.1 above.

ARTICLE III 

CONVERSION RIGHTS 

3.1 
Holder’s Conversion Rights.
Subject to Section 3.2, the Holder shall have the right, but not the obligation,
to convert all or any potion of the then aggregate outstanding Principal Amount
of this Note, together with interest and fees due hereon, and any sum arising
under the Subscription Agreement, and the Transaction Documents, including but
not limited to Liquidated Damages, into shares of Common Stock, subject to the
terms and conditions set forth in this Article III, at the rate of $0.25 per
share of Common Stock ("Fixed Conversion Price"), as the same may be adjusted
pursuant to this Note and the Subscription Agreement. The Holder may exercise
such right by delivery to the Borrower of a written Notice of Conversion
pursuant to Section 3.3. 

3.2 
Conversion Limitation. The
Holder shall not be entitled to convert on a Conversion Date that amount of the
Note 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 on a
Conversion Date, 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
3.2 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 3.2, in whole or in part, upon and
effective after 61 days prior written notice to the Borrower. The Holder may
decide whether to convert a Note or exercise Warrants to achieve an actual 4.99%
ownership position. 

3.3 
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
  complete 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 

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  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 three (3) 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. 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) if the registration statement
  providing for the resale of the shares of Common Stock issuable upon the
  conversion of this Note is effective and the Holder has complied with all
  applicable securities laws in connection with the sale of the Common Stock,
  including, without limitation, the 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 in the U.S. 

3.4 Conversion Mechanics. 

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

  (b) The Fixed 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 upon the happening of certain events while this
  conversion right remains outstanding, as follows: 

  
    (i) Merger, Sale of Assets, etc. If the Borrower at any
    time shall consolidate with or merge into or sell or convey all or
    substantially all its assets to any other corporation, 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 consolidation, merger, sale or
    conveyance, upon or with respect to the securities subject to the conversion
    right immediately prior to such consolidation, merger, sale, or conveyance.
    The 

  

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    foregoing provision shall similarly apply to successive
    transactions of a similar nature by any such successor or purchaser. Without
    limiting the generality of the foregoing, the anitdilution provisions of
    this Section shall apply to such securities of such successor or purchaser
    after any such consolidation, merger, sale, or conveyance. 

    (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. 

    (iv) Share Issuance. So long as this Note is outstanding,
    if the Borrower shall issue any Common Stock except for the Excepted
    Issuances (as defined in the Subscription Agreement), prior to the complete
    conversion or payment of this Note, for a consideration less than the Fixed
    Conversion Price that would be in effect at the time of such issue, then,
    and thereafter successively upon each such issuance, the Fixed Conversion
    Price shall be reduced to such other lower issue price. For purposes of this
    adjustment, the issuance of any security or debt instrument of the Borrower
    carrying the right to convert such security or debt instrument into Common
    Stock or of any warrant, right or option to purchase Common Stock shall
    result in an adjustment to the Fixed Conversion Price upon the issuance of
    the above-described security, debt instrument, warrant, right, or option and
    again upon the issuance of shares of Common Stock upon exercise of such
    conversion or purchase rights if such issuance is at a price lower than the
    then applicable Conversion Price. The reduction of the Fixed Conversion
    Price described in this paragraph is in addition to the other rights of the
    Holder described in the Subscription Agreement. 

  

  (c) Whenever the Conversion Price is adjusted pursuant to
  Section 3.4(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 adjustment. 

3.5 Reservation. During the period the conversion right
exists, Borrower will reserve from its authorized and unissued Common Stock not
less than on hundred seventy-five percent (175%) 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. Borrower agrees that its issuance of this
Note shall constitute full authority to its officers, agents, and transfer
agents who are charged with the duty 

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of executing and issuing stock certificates to execute and
issue the necessary certificates for shares of Common Stock upon the conversion
of this Note. 

3.6 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 IV 

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: 

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

4.2 Breach of Covenant. The Borrower breaches any material
covenant or other term or condition of the Subscription Agreement, this Note or
Transaction Document in any material respect and such breach, if subject to
cure, continues for a period of 15 business days after written notice to the
Borrower from the Holder. 

4.3 Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Subscription
Agreement, Transaction Document 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. 

4.4 Receiver or Trustee. The Borrower or any
Subsidiary of 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. 

4.5 Judgments. Any money judgment, writ or similar final
process shall be entered or filed against Borrower or any subsidiary of Borrower
or any of their property or other assets for more than $100,000, and shall
remain unvacated, unbonded, unappealed, unsatisfied, or unstayed for a period of
45 days. 

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4.6 Non-Payment. The Borrower shall have received a notice of
default, which remains uncured for a period of more than 30 business days beyond
any applicable grace period, on the payment of any one or more debts or
obligations aggregating in excess of $100,000. 

4.7 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
45 days of initiation. 

4.8 Delisting. Failure of the Common Stock to be quoted or
listed on the OTC Bulletin Board ("Bulletin Board") or other Principal for a
period of seven consecutive trading days commencing seven days after the Actual
Effective Date. 

4.9 Stop Trade. An SEC or judicial stop trade order or
Principal Market trading suspension with respect to Borrower’s Common Stock that
lasts for five or more consecutive trading days. 

4.10 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 Subscription Agreement, and, if
requested by Borrower, a replacement Note, and such failure continues for a
period of 20 business days after the due date. 

4.11 Non-Registration Event. The occurrence of a
Non-Registration Event as described in the Subscription Agreement. 

4.12 Reverse Splits. The Borrower effectuates a reverse split
of its Common Stock without twenty days prior written notice to the Holder.

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. 

ARTICLE V 

SECURITY INTEREST 

5.1 Security Interest/Waiver of Automatic Stay. This Note is
secured by a security interest granted to the Collateral Agent for the benefit
of the Holder pursuant to a Security Agreement, as delivered by Borrower to
Holder. The Borrower acknowledges and agrees that should a proceeding under any
bankruptcy or insolvency law be commenced by or against the Borrower, or if any
of the Collateral (as defined in the Security Agreement) should become the
subject of any bankruptcy or insolvency proceeding, then the Holder should be
entitled to, among other relief to which the Holder may be entitled under the
Transaction Documents and any other agreement to which the Borrower and Holder
are parties (collectively, "Loan Documents") and/or applicable law, an order
from the court granting immediate relief from the automatic stay pursuant to 11
U.S.C. Section 362 to permit the Holder to exercise all of its rights 

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and remedies pursuant to the Loan Documents and/or applicable
law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY
11 U.S.C. SECTION 362. FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND
AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE
BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION, 11
U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY
WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER
THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The Borrower hereby consents to any
motion for relief from stay that may be filed by the Holder in any bankruptcy or
insolvency proceeding initiated by or against the Borrower and, further, agrees
not to file any opposition to any motion for relief from stay filed by the
Holder. The Borrower represents, acknowledges and agrees that this provision is
a specific and material aspect of the Loan Documents, and that the Holder would
not agree to the terms of the Loan Documents if this waiver were not a part of
this Note. The Borrower further represents, acknowledges and agrees that this
waiver is knowingly, intelligently and voluntarily made, that neither the Holder
nor any person acting on behalf of the Holder has made any representations to
induce this waiver, that the Borrower has been represented (or has had the
opportunity to be represented) in the signing of this Note and the Loan
Documents and in the making of this waiver by independent legal counsel selected
by the Borrower and that the Borrower has discussed this waiver with counsel.

ARTICLE VI 

MISCELLANEOUS 

6.1 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. 

6.2 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, 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: BioElectronics
Corporation, 401 

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Rosemont Avenue, Rosenstock Hall, Third Floor, Frederick, MD
21701, Attn: Andrew J. Whelan, President, telecopier: (301) 874-0329, with a
copy by telecopier only to: Pryor Cashman Sherman & Flynn, LLP, 410 Park Avenue,
New York, NY 10022, Attn: Eric M. Hellige, Esq., telecopier: (212) 326-0806, and
(ii) if to the Holder, to the name, address and telecopy number set forth on the
front page of this Note, with a copy by telecopier only to Grushko & Mittman,
P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, telecopier number:
(212) 697-3575. 

6.3 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. 

6.4 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. 

6.5 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. 

6.6 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 transactions contemplated by this Agreement shall be 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 statue 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. Nothing contained herein shall be deemed or operate to preclude
the Holder from brining suite or taking other legal action against the Borrower
in any other jurisdiction to collect on the Borrower’s obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court in favor of the Holder. 

6.7 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. 

6.8 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 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. 

- 10 - 

6.9 Redemption. This Note may not be redeemed or called
without the consent of the Holder except as described in this Note or the
Subscription Agreement. 

6.10 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. 

- 11 - 

IN WITNESS WHEREOF,
Borrower has caused this Note to be signed in its name by an authorized officer
as of the 8 day of December, 2005. 

  	BIOELECTRONICS CORPORATION
	 
	 
	By: /s/ Andrew J. Whelan
	Name: Andrew J. Whelan
	Title: President
	 

WITNESS: 

- 12 - 

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 Note issued by
BioElectronics Corporation on December 8, 2005 into Shares of Common Stock of
BioElectronics Corporation (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 BioElectronics
Corporation 

Shares To Be Delivered: _____________________

Signature: _______________________________

Print Name: ______________________________

Address: ________________________________

- 13 -BioElectronics Corporation - Exhibit 10.8 - Prepared By TNT Filings Inc.

 

Exhibit 10.8 

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND
THE COMMON SHARES ISSUABLE UPON CONVERSION OF 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 BIOELECTRONICS CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED. 

	Principal Amount
    $100,000.00	
    Issue Date: December 8, 2005

SECURED CONVERTIBLE PROMISSORY NOTE 

FOR VALUE RECEIVED, BIOELECTRONICS CORPORATION, a Maryland
corporation (hereinafter called "Borrower"), hereby promises to pay to
HARBORVIEW MASTER FUND LP, 850 Third Avenue, Suite 1801, New York, NY 10022,
Fax: (646) 218-1401, (the "Holder") or its registered assigns or successors in
interest or order, without demand, the sum of One Hundred Thousand Dollars
($100,000.000) ("Principal Amount"), on December 8, 2007 (the "Maturity Date"),
if not sooner paid. 

This Note has been entered into pursuant to the terms of a
subscription agreement between the Borrower, the Holder and certain other
holders (the "Other Holders") of convertible promissory notes (the "Other
Notes"), dated of even date herewith (the "Subscription Agreement"), and shall
be governed by the terms of such Subscription Agreement. Unless otherwise
separately defined herein, all capitalized terms used in this Note shall have
the same meaning as is set forth in the Subscription Agreement. The following
terms shall apply to this Note: 

ARTICLE I 

INTEREST; AMORTIZATION 

1.1 Interest Rate. Subject to Section 5.7 hereof, interest
payable on this Note shall accrue at a rate per annum (the "Interest Rate") of
eight percent (8%). Interest on the Principal Amount shall accrue from the date
of this Note shall be payable commencing six months from the date of this Note
and monthly thereafter and on the Maturity Date, whether by acceleration or
otherwise. 

1.2 Minimum Monthly Principal Payments. Amortizing payments of
the outstanding Principal Amount of this Note shall commence on the nine month
anniversary date of this Note and on the same day of each month thereafter (each
a "Repayment Date") until the Principal Amount has been repaid in full, whether
by the payment of cash or by the conversion of such 

Principal Amount and interest into Common Stock pursuant to
the terms hereof. Subject to Section 2.1 and Article 3 below, on each Repayment
Date, the Borrower shall make payments to the Holder in an amount equal to
one-sixteenth of the initial Principal Amount, and any other amounts which are
then owing under this Note that have not been paid (collectively, the "Monthly
Amount"). Amounts of conversions of Principal Amount made by the Holder or
Borrower pursuant to Section 2.1 or Article III and amounts redeemed pursuant to
Section 2.3 of this Note shall be applied first against outstanding fees and
damages, then to Monthly Amounts commencing with the Monthly Amount first
payable and then Monthly Amounts thereafter in chronological order. Any
Principal Amount and any other sum arising under this Note and the Subscription
Agreement that remains outstanding on the Maturity Date shall be due and payable
on the Maturity Date. 

1.3 Default Interest Rate. Following the occurrence and during
the continuance of an Event of Default (as defined in Article IV), which, if
susceptible to cure is not cured within twenty (20) days, otherwise then from
the first date of such occurrence, the annual interest rate on this Note shall
(subject to Section 5.7) be fifteen percent (15%). Such interest shall be due
and payable on the Maturity Date, accelerated or otherwise. 

ARTICLE II 

CONVERSION REPAYMENT 

2.1 Payment of Monthly Amount in Cash or Common Stock. Subject
to Section 3.2 hereof, the Borrower shall pay the Monthly Amount, at the
Borrower’s election, in either of the following manners: (i) in cash within
three (3) business days after the applicable Repayment Date, or (ii) in
registered Common Stock at an applied conversion rate equal to the lesser of (A)
the Fixed Conversion Price (as defined in Section 3.1 hereof), or (B)
eighty-five percent (85%) of the VWAP (as defined below) as reported by
Bloomberg L.P. for the Principal Market for the ten trading days preceding such
Repayment Date. Unless waived by the Holder, the Borrower may not elect to pay a
Monthly Amount due on a Repayment Date in Common Stock in an amount of shares of
Common Stock which would exceed in the aggregate of all Holders of Notes similar
to this Note, twenty-five percent (25%) of the aggregate daily trading volume
for the seven trading days preceding the Repayment Date as reported by Bloomberg
L.P. for the Principal Market multiplied by the VWAP for such seven day period.
Amounts paid with shares of Common Stock must be delivered to the Holder not
later than three (3) business days after the applicable Repayment Date. The
Borrower must send notice to the Holder by confirmed telecopier not later than
6:00 PM, New York City time on the fifth trading day preceding a Repayment Date
notifying Holder of Borrower’s election to pay the Monthly Redemption Amount in
cash or Common Stock. Elections by the Borrower must be made to all Other
Holders in proportion to the relative Note principal held by the Holder and the
Other Holders. If such notice is not timely sent or if the Monthly Redemption
Amount is not timely delivered, then Holder shall have the right, instead of the
Company, to elect at any time after the applicable Repayment Date whether to be
paid in cash or Common stock. Such Holder’s election shall not be construed to
be a waiver of any default by Borrower relating to non-timely compliance by
Borrower with any of its obligations under this Note. "VWAP" shall mean the sum
of the dollars traded for every purchase and sale of the Common Stock on the
Principal Market (determined as the price per share of Common Stock at which
such purchase and sale occurred multiplied by the 

number of shares of Common Stock so purchased and sold)
divided by the total shares of Common Stock traded during the period. 

2.2 
No Effective Registration.
Notwithstanding anything to the contrary herein, no amount payable hereunder may
be paid in shares of Common Stock by the Borrower without the Holder’s consent
unless (a) either (i) an effective current Registration Statement covering the
shares of Common Stock to be issued in satisfaction of such obligations exists,
or (ii) an exemption from registration of the resale of shares of Common Stock
to be issued in satisfaction of such obligations is available pursuant to Rule
144(k) of the 1933 Act, (b) no Event of Default hereunder (or an event that with
the passage of time or the giving of notice could become an Event of Default),
has occurred or is otherwise waived in writing by the Holder in whole or in part
at the Holder’s option, and (c) the Principal Market is either the OTC Bulletin
Board, American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National Market,
or New York Stock Exchange ("Listing Condition") from and after thirty (30) days
prior to a Repayment Date. 

2.3 
Mandatory Conversion. Provided
an Event of Default (or an event that with the passage of time or the giving of
notice could become an Event of Default) has not occurred, then commencing after
the date the Registration Statement described in Section 11.1(iv) of the
Subscription Agreement has been declared effective ("Actual Effective Date"),
the Borrower will have the option by written notice to the Holder ("Notice of
Mandatory Conversion") of compelling the Holder to convert the outstanding and
unpaid principal of this Note into Common Stock at the Fixed Conversion Price
then in affect ("Mandatory Conversion"). The Notice of Mandatory Conversion may
only be given within three (3) business days following a consecutive ten (10)
trading period ("Lookback Period") during which the closing bid price for the
Borrower’s Common Stock as reported by Bloomberg, LP for the OTC Bulletin Board,
American Stock Exchange or Nasdaq SmallCap Market is more than $1.00 each day
during the Lookback Period. The date the Notice of Mandatory Conversion is given
is the "Mandatory Conversion Date." The Notice of Mandatory Conversion shall
specify the aggregate principal amount of the Note which is subject to Mandatory
Conversion. Mandatory Conversion Notices must be given proportionately to all
Holders of Notes who received Notes similar in terms and tenure as this Note.
The maximum aggregate amount for all Notices of Mandatory Conversion that may be
given for each Mandatory Conversion Date may not exceed 25% of the daily trading
volume for the seven (7) trading days preceding the Mandatory Conversion date
multiplied by the VWAP as reported by Bloomberg L.P. for the OTC Bulletin Board,
American Stock Exchange or Nasdaq SmallCap Market for such seven day trading
period. A notice of Mandatory Conversion may not be given unless the
Registration Statement (as defined in the Subscription Agreement) has been
effective for the unrestricted public resale of the Registrable Securities (as
defined in the Subscription Agreement) each day during the Lookback Period. The
Borrower shall reduce the amount of Note principal subject to a Notice of
Mandatory Conversion by the amount of Note Principal for which the Holder had
delivered a Notice of Conversion to the Borrower during the twenty (20) trading
days preceding the Mandatory Conversion Date. The amount of Note principal
included in a Mandatory Redemption Notice shall be further reduced to an amount
that would not cause the Holder to exceed the limitation described in Section
3.2 of this Note. A further Mandatory Conversion Notice may not be given until
thirty (30) trading days have elapsed from the preceding Mandatory Conversion
Date. Each Mandatory Conversion Date shall be a deemed Conversion Date and the
Borrower will be required to deliver the 

Common Stock issuable pursuant to a Mandatory Conversion
Notice in the same manner and time period as described in Section 2.1 above.

ARTICLE III 

CONVERSION RIGHTS 

3.1 Holder’s Conversion Rights. Subject to Section 3.2, the
Holder shall have the right, but not the obligation, to convert all or any
potion of the then aggregate outstanding Principal Amount of this Note, together
with interest and fees due hereon, and any sum arising under the Subscription
Agreement, and the Transaction Documents, including but not limited to
Liquidated Damages, into shares of Common Stock, subject to the terms and
conditions set forth in this Article III, at the rate of $0.25 per share of
Common Stock ("Fixed Conversion Price"), as the same may be adjusted pursuant to
this Note and the Subscription Agreement. The Holder may exercise such right by
delivery to the Borrower of a written Notice of Conversion pursuant to Section
3.3. 

3.2 Conversion Limitation. The Holder shall not be entitled to
convert on a Conversion Date that amount of the Note 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 on a Conversion Date, 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 3.2 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 3.2, in
whole or in part, upon and effective after 61 days prior written notice to the
Borrower. The Holder may decide whether to convert a Note or exercise Warrants
to achieve an actual 4.99% ownership position. 

3.3 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 complete 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 three (3) 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. 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) if the registration statement
  providing for the resale of the shares of Common Stock issuable upon the
  conversion of this Note is effective and the Holder has complied with all
  applicable securities laws in connection with the sale of the Common Stock,
  including, without limitation, the 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 in the U.S. 

3.4 Conversion Mechanics. 

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

  (b) The Fixed 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 upon the happening of certain events while this
  conversion right remains outstanding, as follows: 

  
    A. Merger, Sale of Assets, etc. If the Borrower at any
    time shall consolidate with or merge into or sell or convey all or
    substantially all its assets to any other corporation, 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 consolidation, merger, sale or
    conveyance, upon or with respect to the securities subject to the conversion
    right immediately prior to such consolidation, merger, sale, or conveyance.
    The 

  

  
    foregoing provision shall similarly apply to successive
    transactions of a similar nature by any such successor or purchaser. Without
    limiting the generality of the foregoing, the anitdilution provisions of
    this Section shall apply to such securities of such successor or purchaser
    after any such consolidation, merger, sale, or conveyance. 

    B. 
    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. 
    

    C. 
    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. 
    

    D. 
    Share Issuance. So long as
    this Note is outstanding, if the Borrower shall issue any Common Stock
    except for the Excepted Issuances (as defined in the Subscription
    Agreement), prior to the complete conversion or payment of this Note, for a
    consideration less than the Fixed Conversion Price that would be in effect
    at the time of such issue, then, and thereafter successively upon each such
    issuance, the Fixed Conversion Price shall be reduced to such other lower
    issue price. For purposes of this adjustment, the issuance of any security
    or debt instrument of the Borrower carrying the right to convert such
    security or debt instrument into Common Stock or of any warrant, right or
    option to purchase Common Stock shall result in an adjustment to the Fixed
    Conversion Price upon the issuance of the above-described security, debt
    instrument, warrant, right, or option and again upon the issuance of shares
    of Common Stock upon exercise of such conversion or purchase rights if such
    issuance is at a price lower than the then applicable Conversion Price. The
    reduction of the Fixed Conversion Price described in this paragraph is in
    addition to the other rights of the Holder described in the Subscription
    Agreement. 

  

  (c) 
  Whenever the Conversion Price
  is adjusted pursuant to Section 3.4(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 adjustment.
  

3.5 
Reservation. During the period
the conversion right exists, Borrower will reserve from its authorized and
unissued Common Stock not less than on hundred seventy-five percent (175%) 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. Borrower agrees
that its issuance of this Note shall constitute full authority to its officers,
agents, and transfer agents who are charged with the duty 

of executing and issuing stock certificates to execute and
issue the necessary certificates for shares of Common Stock upon the conversion
of this Note. 

3.6 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 IV 

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: 

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

4.2 Breach of Covenant. The Borrower breaches any material
covenant or other term or condition of the Subscription Agreement, this Note or
Transaction Document in any material respect and such breach, if subject to
cure, continues for a period of 15 business days after written notice to the
Borrower from the Holder. 

4.3 Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Subscription
Agreement, Transaction Document 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. 

4.4 Receiver or Trustee. The Borrower or any
Subsidiary of 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. 

4.5 Judgments. Any money judgment, writ or similar final
process shall be entered or filed against Borrower or any subsidiary of Borrower
or any of their property or other assets for more than $100,000, and shall
remain unvacated, unbonded, unappealed, unsatisfied, or unstayed for a period of
45 days. 

4.6 Non-Payment. The Borrower shall have received a notice of
default, which remains uncured for a period of more than 30 business days beyond
any applicable grace period, on the payment of any one or more debts or
obligations aggregating in excess of $100,000. 

4.7 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
45 days of initiation. 

4.8 Delisting. Failure of the Common Stock to be quoted or
listed on the OTC Bulletin Board ("Bulletin Board") or other Principal for a
period of seven consecutive trading days commencing seven days after the Actual
Effective Date. 

4.9 Stop Trade. An SEC or judicial stop trade order or
Principal Market trading suspension with respect to Borrower’s Common Stock that
lasts for five or more consecutive trading days. 

4.10 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 Subscription Agreement, and, if
requested by Borrower, a replacement Note, and such failure continues for a
period of 20 business days after the due date. 

4.11 Non-Registration Event. The occurrence of a
Non-Registration Event as described in the Subscription Agreement. 

4.12 Reverse Splits. The Borrower effectuates a reverse split
of its Common Stock without twenty days prior written notice to the Holder.

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. 

ARTICLE V 

SECURITY INTEREST 

5.1 Security Interest/Waiver of Automatic Stay. This Note is
secured by a security interest granted to the Collateral Agent for the benefit
of the Holder pursuant to a Security Agreement, as delivered by Borrower to
Holder. The Borrower acknowledges and agrees that should a proceeding under any
bankruptcy or insolvency law be commenced by or against the Borrower, or if any
of the Collateral (as defined in the Security Agreement) should become the
subject of any bankruptcy or insolvency proceeding, then the Holder should be
entitled to, among other relief to which the Holder may be entitled under the
Transaction Documents and any other agreement to which the Borrower and Holder
are parties (collectively, "Loan Documents") and/or applicable law, an order
from the court granting immediate relief from the automatic stay pursuant to 11
U.S.C. Section 362 to permit the Holder to exercise all of its rights 

and remedies pursuant to the Loan Documents and/or applicable
law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY
11 U.S.C. SECTION 362. FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND
AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE
BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION, 11
U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY
WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER
THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The Borrower hereby consents to any
motion for relief from stay that may be filed by the Holder in any bankruptcy or
insolvency proceeding initiated by or against the Borrower and, further, agrees
not to file any opposition to any motion for relief from stay filed by the
Holder. The Borrower represents, acknowledges and agrees that this provision is
a specific and material aspect of the Loan Documents, and that the Holder would
not agree to the terms of the Loan Documents if this waiver were not a part of
this Note. The Borrower further represents, acknowledges and agrees that this
waiver is knowingly, intelligently and voluntarily made, that neither the Holder
nor any person acting on behalf of the Holder has made any representations to
induce this waiver, that the Borrower has been represented (or has had the
opportunity to be represented) in the signing of this Note and the Loan
Documents and in the making of this waiver by independent legal counsel selected
by the Borrower and that the Borrower has discussed this waiver with counsel.

ARTICLE VI 

MISCELLANEOUS 

6.1 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. 

6.2 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, 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: BioElectronics
Corporation, 401 

Rosemont Avenue, Rosenstock Hall, Third Floor, Frederick, MD
21701, Attn: Andrew J. Whelan, President, telecopier: (301) 874-0329, with a
copy by telecopier only to: Pryor Cashman Sherman & Flynn, LLP, 410 Park Avenue,
New York, NY 10022, Attn: Eric M. Hellige, Esq., telecopier: (212) 326-0806, and
(ii) if to the Holder, to the name, address and telecopy number set forth on the
front page of this Note, with a copy by telecopier only to Grushko & Mittman,
P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, telecopier number:
(212) 697-3575. 

6.3 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. 

6.4 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. 

6.5 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. 

6.6 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 transactions contemplated by this Agreement shall be 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 statue 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. Nothing contained herein shall be deemed or operate to preclude
the Holder from brining suite or taking other legal action against the Borrower
in any other jurisdiction to collect on the Borrower’s obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court in favor of the Holder. 

6.7 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. 

6.8 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 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. 

6.9 Redemption. This Note may not be redeemed or called
without the consent of the Holder except as described in this Note or the
Subscription Agreement. 

6.10 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. 

IN WITNESS WHEREOF, Borrower has
caused this Note to be signed in its name by an authorized officer as of the 8
day of December, 2005. 

  	BIOELECTRONICS CORPORATION
	 
	 
	By: /s/ Andrew J. Whelan
	Name: Andrew J. Whelan
	Title: President
	 

WITNESS: 

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 Note issued by
BioElectronics Corporation on December 8, 2005 into Shares of Common Stock of
BioElectronics Corporation (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 BioElectronics
Corporation 

Shares To Be Delivered: ______________________

Signature: ________________________________

Print Name: _______________________________

Address: _________________________________

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