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Callable Secured Convertible Note

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Title:

Callable Secured Convertible Note

Entities:

Rome Bancorp, Inc.

Date:

2007

Size:

Preview shows 7KB of 76KB total

Price:

$54

ID:

#2770166

► Financing ► Notes ► Convertible ► Secured ► Callable Secured Convertible Notes
► Financial ► S&Ls/Savings Banks

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT.

CALLABLE SECURED CONVERTIBLE NOTE

Los Angeles, California
_________, 200_	$_____

FOR VALUE RECEIVED, BANYAN CORPORATION, an Oregon corporation (hereinafter called the Borrower), hereby promises to pay to the order of AJW PARTNERS, LLC or registered assigns (the Holder) the sum of ___________), on ________, 20__ (the Maturity Date), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the Interest Rate) per annum from _______, 20__ (the Issue Date) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of fifteen percent (15%) per annum from the due date thereof until the same is paid (Default Interest). Interest shall commence accruing on the Issue Date, shall be computed on the basis of a 365-day year and the actual number of days elapsed and shall be payable quarterly in arrears on the fifth day of the following the end of a calendar quarter. All payments due hereunder (to the extent not converted into common stock, no par value per share (the Common Stock) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term business day shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement

dated ________, pursuant to which this Note was originally issued (the Purchase Agreement).

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof. The obligations of the Borrower under this Note shall be secured by that certain Security Agreement and Intellectual Property Security Agreement, each dated _________by and between the Borrower and the Holder.

The following terms shall apply to this Note:

ARTICLE I. OPTIONAL PREPAYMENT OF MONTHLY AMOUNT

1.1 Payment of Monthly Amount in Cash. Subject to the terms hereof, if the average of the Average Daily Prices (as defined herein) for the five (5) Trading Days (as defined herein) preceding the Notice Date (as defined herein) is less than the Initial Market Price (as defined herein), the Borrower shall have the option to pay the Monthly Amount (as defined herein) on the first day of a month (the Repayment Date). In order to exercise this option, on the fifth (5th) business day prior to each Repayment Date (the Notice Date), the Borrower shall deliver to Holder a written notice in the form of Exhibit B attached hereto electing to pay the Monthly Amount on the Repayment Date. The Monthly Amount shall be an amount equal to the sum of (x) 1/36^th of the original principal amount plus (y) interest on the remaining amount outstanding calculated at the rate of 12% per annum. The Initial Market Price shall mean $.005. Average Daily Price means, for any security as of any date, the price based on the VWAP. VWAP shall mean the daily volume weighted average price of the Common Stock on the principal trading market for such security as reported by Bloomberg, L.P. using the VWAP function. If the Average Daily Price cannot be calculated for such security on such date in the manner provided above, the Average Daily Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Average Daily Price is required in order to determine the Conversion Price of such Notes. Trading Day shall mean any day on which the Common Stock is traded for any period on the Over-the-Counter Bulletin Board (OTCBB), or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

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