Amended and Restated Secured Promissory Note

Section 1.01                                  Principal and Interest.  For value received, the Company hereby promises to pay to the order of the Holder, in lawful money of the United States of America and in immediately available funds the principal sum of ___________________________, or the outstanding principal amount advanced hereunder, whichever is the lesser, and accrued but unpaid interest on the earliest of (i) September 17, 2009 (the “Maturity Date”), or (ii) the occurrence of an Event of Default (as defined in Section 3.01) or (iii) the occurrence of a Redemption Event (as defined in

Section 1.02                                  Redemption.  Upon the closing of (i) any debt financing of $13,000,000 or more either by the Company or its subsidiaries or the last of any such debt financings which taken together equal $13,000,000 or more either by the Company or its subsidiaries, or (ii) any equity financing of $10,000,000 or more by the Company or its subsidiaries or the last of any such equity financings which taken together equal $10,000,000 or more either by the Company or its subsidiaries, or (iii) the last of any combination of debt financings and equity financings either by the Company or its subsidiaries which taken together equal $10,000,000.00 or more (a “Redemption Event”), the Company shall pay in full all of the principal and interest under then accrued and unpaid on this Note.  Upon the closing of an equity financing (or a series of equity financings) less than $10,000,000 by the Company or its subsidiaries (a “Partial Redemption Event”), the Company shall pay an amount equal to 25% of the proceeds of the financing or series of financings and such amount shall be applied first to accrued interest then unpaid and next to principal of this Note.  The foregoing notwithstanding, the closing of $10,000,000 or less in equity that occurs on or before December 31, 2008, shall not result in a Redemption Event or Partial Redemption Event and shall not be aggregated with subsequent equity financings for purposes of calculating a Partial Redemption Event.

 

Section 1.03                                  Absolute Obligation/Ranking.  Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct debt obligation of the Company.  This Note ranks pari passu with all other Notes now or hereinafter issued by the Company pursuant to the provisions of the Loan Agreement, upon the same terms and conditions of this Note (the “Other Notes”).

 

Section 1.04                                  Different Denominations.  This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same.  No service charge will be made for such registration of transfer or exchange.

(b) the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act.  The Holder agrees not to sell, hypothecate or otherwise transfer the Holder’s securities unless such securities are registered under the federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such law is available.

 

(c) Accredited Investor Qualifications.  The Holder (i) if a natural person, represents that the Holder has reached the age of 21 and has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Note, such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Note, the execution and delivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Holder is executing this Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant to this Agreement and make an investment in the Company, and represents that this Agreement constitutes a legal, valid and binding obligation of such entity.  The execution and delivery of this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Holder is a party or by which it is bound;

 

(d) Solicitation.  The Holder is unaware of, is in no way relying on, and did not become aware of the offering of the Note through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the offering and sale of the Note and is not subscribing for the Notes and did not become aware of the offering of the Note through or as a result of any seminar or meeting to which the Holder was invited by, or any solicitation of a subscription by, a person not previously known to the Holder in connection with investments in securities generally;

 

(e) Holder Liquidity.  Holder has adequate means of providing for Holder’s current financial needs and foreseeable contingencies and has no need for liquidity of its investment in the Note for an indefinite period of time and is aware that an investment in the Note involves a number of significant risks.

(f) Reliance on Exemptions.  Holder understands that the Note is being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Holder set forth herein in order to determine the availability of such exemptions and the eligibility of such Holder to acquire such securities.

 

(g) Information.  Holder and its advisors, if applicable, have been furnished with all materials relating to the business, finances and operations of the Company and information it deemed material to making an informed investment decision regarding its purchase of the Note and Bridge Shares.  Holder and its advisors, if applicable, have been afforded the opportunity to review the reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities and Exchange Act of 1934.  Holder and its advisors, if applicable, have been afforded the opportunity to ask questions of the Company and its management.  Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Note and Bridge Shares.

 

(h) No Other Representations or Information.  In evaluating the suitability of an investment in the Note, the Holder has not relied upon any representation or information (oral or written) other than as stated in this Note and in the Loan Agreement and other Loan Documents (as defined in the Loan Agreement).  No oral or written representations have been made, or oral or written information furnished, to the Holder or its advisors, if any, in connection with the offering of the Notes which are in any way inconsistent with the information contained in this Agreement.

 

(i) Transfer or Resale.  Holder understands that the Note has not been and is not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred except in compliance with applicable securities laws.

 

Section 1.06                                  Reliance on Note Register.  Prior to due presentment to the Company for transfer or conversion of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

Section 1.07                                  In addition to the rights and remedies given it by this Note, the Loan Agreement and the other Loan Documents, the Holder shall have all those rights and remedies allowed by applicable laws.  The rights and remedies of the Holder are cumulative and recourse to one or more right or remedy shall not constitute a waiver of the others.

Section 3.02                                  If any Event of Default occurs, the full principal amount and accrued interest of this Note then remaining unpaid, together with any other amounts owing in respect thereof to the date of acceleration shall become, at the Holder’s election, immediately due and payable in cash.  This Note shall bear interest at the Default Rate as provided in the Loan Agreement.  The Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under the Loan Agreement, the other Loan Documents, and applicable law.  Such declaration may be rescinded and annulled by the Holder at any time prior to payment hereunder and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Note shall have been received by it.  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 4.01                                  Security.  Payment of this Note is secured by, and this Note is entitled to the benefits of, all security agreements, collateral assignments, deeds of trust, mortgages and lien instruments executed by the Company (or other similar instruments, or any guaranties, endorsements or other agreements, executed by any other party) (collectively, the "Security Documents"), to secure, guarantee or otherwise provide for payment hereof, in favor of or for the benefit of the Holder, including those which have been previously executed or are executed concurrently herewith or subsequently hereto.

 

Section 4.02                                  General Waivers.  The Company waives presentment for payment, demand, notice of intent to accelerate, notice of acceleration, protest and notice of protest, and of dishonor and diligence in collecting and the bringing of suit against any other party, and agrees to all renewals, extensions, partial payments, releases, subordinations and substitutions of security, in whole or in part, with or without notice, before or after maturity.  The failure by the Holder to exercise any of its rights, remedies, recourses, or powers upon the occurrence of one or more Events of Default shall not constitute a waiver of the right to exercise the same or any other right, remedy, recourse, or power at any subsequent time in respect to the same or any other Event of Default.  The acceptance by the Holder of any payment hereunder which is less than payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the Holder's rights, remedies, recourses, or powers at that time, or any subsequent time, or nullify any prior exercise of any such right, remedy, recourse or power without the written consent of the Holder, except as and to the extent otherwise required by applicable law.

Section 5.02                                  Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of Utah, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of Salt Lake, Salt Lake County, Utah (the “Utah Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Utah Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such Utah Courts are improper or inconvenient venue for such proceeding; provided, however, that any suit to foreclose any lien which secures the payment hereof may be brought by the Holder in the jurisdiction where the property subject to such lien is located.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

Section 5.03                                  Reduction in Interest.  It is the intention of the Company and the Holder to conform strictly to the applicable laws of usury.  All agreements and transactions between the Holder and the Company, whether now existing or hereafter arising, whether contained herein or in any other instrument, and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of the maturity hereof, late payment, prepayment, demand for prepayment or otherwise, shall the amount contracted for, charged or received by the Holder from the Company for the use, forbearance, or detention of the principal indebtedness or interest hereof, which remains unpaid from time to time, exceed the Maximum Lawful Amount.  Any interest payable hereunder or under any other instrument relating to the loan evidenced hereby that is in excess of the Maximum Lawful Amount, shall, in

Section 5.04                                  WAIVER OF JURY TRIAL.  THE COMPANY AND THE HOLDER HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED BY THE TERMS OF THE LOAN AGREEMENT OR THE ACTIONS OF THE HOLDER IN THE ENFORCEMENT HEREOF OR THEREOF.

 

Section 5.05                                  Severability.  The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other provisions of this Note, which shall remain in full force and effect.

 

Section 5.06                                  Entire Agreement and Amendments.  This Note, the Loan Agreement and the other Loan Documents reflect the entire understandings and agreements of the Company and the Holder with respect to the subject matter of the Loan Documents.  Any and all prior understandings and agreements and any and all contemporaneous understandings and agreements are incorporated in the Loan Documents.  Except as specifically set forth in the Loan Documents, there are no understandings or agreements, express or implied, with respect to the subject matter of the Loan Documents.  The Company understands that the Holder has made no commitment to renew, refinance, extend or rearrange the Loan, nor to advance additional funds to or on behalf of the Company.  The Company represents and warrants to the Holder that no officer, employee, representative of, or attorney for, the Holder has made any oral commitments or representations which are not incorporated in the Loan Documents.  This Note may be amended only by an instrument in writing executed by the parties hereto.