Attached files
| file | filename |
|---|---|
| 10-Q - Vu1 CORP | v167349_10q.htm |
| EX-31.1 - Vu1 CORP | v167349_ex31-1.htm |
| EX-10.1 - Vu1 CORP | v167349_ex10-1.htm |
| EX-32.1 - Vu1 CORP | v167349_ex32-1.htm |
| EX-31.2 - Vu1 CORP | v167349_ex31-2.htm |
| EX-10.3 - Vu1 CORP | v167349_ex10-3.htm |
THIS
PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE
WITH RULE 144 UNDER SUCH ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
SECURED CONVERTIBLE GRID
PROMISSORY NOTE
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Original
Issue Date: November 19, 2009
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Seattle,
Washington
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FOR VALUE
RECEIVED, Vu1 Corporation, a California corporation with its principal offices
located at 557 Roy Street, Suite 125, Seattle, WA 98109 (the “Company”), unconditionally
promises to pay to the order of SAM Special Opportunity Fund, LP, a Delaware
limited partnership, with its principal offices located at 111 Broadway, Suite
808, New York, NY 10006, or its registered assigns or successors in
interest (“Holder”), the
principal sum of the lesser of (a) $7,000,000 or (b) the principal
amount outstanding hereunder, as conclusively evidenced on Schedule A
attached hereto as “Advances and Payments of Principal,” together with interest
at the rate, and payable on the other terms and conditions, set forth
below.
In
connection with this Note, the Company is amending and restating a secured
convertible grid promissory note with like terms (the “Other Note”) issued to Full
Spectrum Capital, LLC (collectively with Holder, the “Holders”). The
obligations due under this Note and the Other Note are secured by the Amended
and Restated Security Agreement dated of even date herewith (the “Security Agreement”) executed
by the Company for the benefit of the Holders. Additional rights of
the Holders are set forth in the Security Agreement.
1. Advances;
Schedule A. The total loans in the aggregate under this
Note shall not exceed $7,000,000, and the total principal amount that has been
advanced to the Company as of the date of this Note is set forth on
Schedule A. The amount of total advances under this Note is in
the sole discretion of the Holder. The Holder may make one or more
advances to the Company under this Note at any time on or prior to December 31,
2009, in such amounts and at such times as it determines. Upon
amounts being advanced to the Company hereunder and upon receipt of written or
telephonic instructions of an authorized agent of the Company, the Holder may
make entries on Schedule A to
reflect the additional principal amount of such advance. Upon the
Company making any payment of principal hereunder, the Holder shall and is
authorized to enter and record on Schedule A the
amount of each payment of principal. The aggregate “Principal Amount
Outstanding” shown on Schedule A shall
be prima facie evidence of the principal amount owing and unpaid on this
Note. The failure to record the date and amount of any advance on
Schedule A shall not, however, limit or otherwise affect the obligations of
the Company under this Note to repay the principal amount of the advance
together with all interest accruing thereon.
2. Interest.
(a) Interest
Rate. All outstanding principal under Note shall bear interest
at an interest rate of 18.0% per annum, calculated on a 365/6-day basis and the
actual number of days elapsed. Upon and during the occurrence of an
Event of Default, the outstanding principal on this Note shall bear interest at
a default rate of interest of 24% per annum (the “Default
Rate”). Interest shall never exceed the maximum lawful rate of
interest applicable to this Note.
(b) Quarterly Payments of
Interest. The Company shall make quarterly payments of accrued
and unpaid interest only, beginning on February 1, 2010, and on the first
business day of each consecutive three-month period thereafter.
(c) Interest
Deposit. Upon each advance under this Note, the Holder will
retain an amount equal to one quarterly payment of interest on such advance (the
“Deposit”). The
Deposit will be applied by the Holder as follows: (i) to the
final quarterly interest payment on this Note, (ii) to the interest amount
payable upon prepayment of the Loan by the Company pursuant to
Section 3(b), or (iii) upon an Event of Default, as a payment on any
accrued and unpaid interest or as a reduction in principal. Upon full
or partial conversion of any principal into common stock, the amount of the
Deposit associated with the converted principal shall automatically be applied
(A) as payment on any accrued and unpaid interest outstanding on the
converted principal amount, and (B) thereafter, any remaining unapplied
amount of the Deposit shall be paid by the Holder to the Company.
3. Payments
(a) Maturity
Date. Unless earlier paid in full or converted pursuant to the
terms of this Note, the entire unpaid principal sum of this Note, together with
accrued and unpaid interest thereon, shall become immediately due and payable on
(i) June 30, 2011 or (ii) such later date as determined by mutual
agreement of the Company and Holder (the “Maturity Date”).
(b) Payment and Option of
Conversion upon Qualified Financing. In the event that the
Company issues and sells shares of its Equity Securities in one transaction or
series of related transactions on or before the Maturity Date in a bona-fide
arm’s length financing transaction with total gross proceeds of not less than
$25,000,000, then the outstanding principal balance of this Note and all
outstanding and unpaid interest shall, at the sole discretion and written
election of Holder, automatically accelerate and become due and fully payable
upon such closing. For purposes of this Note, the term “Equity Securities” shall mean
any preferred stock, common stock or other stock or similar securities of the
Company or any security convertible into or exchangeable for preferred stock,
common stock or other stock or similar securities of the
Company.
(c) Payment upon Change in
Control. In the event that the Company enters into an
agreement pertaining to (i) a sale, lease or other disposition of all or
substantially all of its assets, or (ii) a consolidation or merger of the
Company with or into any other corporation or other entity or person, or any
other corporate reorganization, in which one person or a group of related
persons acquires more than 50% of the voting stock of the Company (other than
the current principal shareholders or the Company’s current senior management or
trusts created for the benefit of the families of either the current principal
shareholders or the current senior management), a Change of Control will have
been deemed to have occurred. The Company will give Holder 30 days
notice prior to any Change in Control. Upon notification of a Change of Control,
but before such Change takes place, the Holder may, in its sole discretion,
declare all principal and accrued and unpaid interest under this Note to be
immediately due and fully payable, plus an amount equal to the interest that
would have accrued on the then-outstanding principal amount from the repayment
date through the Maturity Date but that has not yet been paid to or retained by
the Holder.
(d) Prepayments. The
Company may prepay all or any part of the principal amount hereunder at any time
or from time to time, without prior notice to or the consent of
Holder. Any such prepayment of principal shall include an amount
equal to the interest that would have accrued on such prepaid principal amount
from the prepayment date through the Maturity Date but that has not yet been
paid to or retained by the Holder.
(e) Lawful
Funds. All payments on this Note shall be in lawful money of
the United States of America in immediately available funds. All
payments made on this Note shall be applied first against accrued and unpaid
interest and then against principal. Whenever any payment to be made
hereunder is due on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day, and such extension of time will be included
in the computation of interest due hereunder. “Business Day” means any day
that is not a Saturday, a Sunday or any other day on which banking institutions
in the State of Washington are authorized or required by law or other government
action to close.
4. Conversion
Right.
(a) Conversion
Right. The Holder shall have the right, but not the
obligation, from time to time and at any time, to convert all or any portion of
the then aggregate outstanding principal amount of this Note (plus, with the
consent of the Company, accrued and unpaid interest) into fully-paid and
non-assessable shares of common stock of the Company, at a conversion rate equal
to the lesser of (i) $0.40 per share or (ii), if the Company completes an
equity or convertible debt financing approved by the Board, the Holder shall
have the right to convert on the same terms.
(b) Mechanics of
Conversion. To exercise the Conversion Right, the Holder shall
deliver to the Company, at its principal office or at such other place as is
designated in writing by the Company, a notice (the "Conversion Notice") stating
that the Holder is exercising the Conversion Right and the name or names in
which the Holder wishes the certificates for shares of common stock to be
issued. The Conversion Notice, once given, shall be
irrevocable.
(c) Issuance of Certificates for
Stock. As soon as practicable after conversion of this Note,
the Company, at its expense, will cause to be issued in the name of and
delivered to the Holder, a certificate or certificates for the number of shares
of common stock to which the Holder shall be entitled upon such conversion,
which certificates shall include legends restricting transfer under the federal
and state securities laws. The Company shall not be required to issue
and deliver any certificate in a name other than that of the Holder unless the
Holder shall have provided evidence satisfactory to the Company that such
issuance is permitted under applicable laws, including the securities
laws. No fractional shares will be issued upon conversion of this
Note. If, upon conversion of this Note, a fraction of a share
results, the Company will pay the cash value of that fractional share,
calculated on the basis of the conversion price then in effect.
(d) Reduction in
Principal. Upon any conversion of principal owing under this
Note, Holder shall make an appropriate entry on Schedule A to
reflect the principal amount being converted, and this Note shall continue in
effect with respect to any remaining principal balance.
(e) Adjustments. The
conversion price is subject to adjustment from time to time upon the occurrence
of certain corporate events affecting the common stock. If the
Company shall issue any shares of common stock as a stock dividend or subdivide
the number of outstanding shares of common stock into a greater number of
shares, then, in either of such cases, the conversion price in effect at the
time of such action shall be proportionately reduced; and, conversely, in the
event the Company shall reduce the number of outstanding shares of common stock
by combining such shares into a smaller number of shares, then, in such case,
the conversion price shall be proportionately increased. In addition,
if the Company 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, the conversion right in this Section 4 shall thereafter be deemed
to apply to 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. Any
calculations of adjustments shall be made to the nearest cent, as the case may
be.
(f) No Shareholder
Rights. The Holder shall not have, solely on account of his
status as a note holder, any voting rights or any other rights of a stockholder
of the Company, either at law or in equity, or any right to any notice of
meetings of stockholders or of any other proceedings of the Company, except
following issuance of stock to Holder upon proper conversion of this
Note.
(g) Reservation of
Shares. The Company shall at all times reserve and keep
available out of its authorized and unissued common stock, solely for the
purpose of providing for the exercise of the Conversion Right, such number of
shares of common stock as shall, from time to time, be sufficient for the
exercise of the Conversion Right in full.
5. Events of
Default.
(a) Each
of the events specified in this Section 5 shall constitute an event of
default (the “Event of
Default”):
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(i)
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failure
to pay (A) any required principal repayment on this Note or the Other
Note when due or (B) any interest on this Note or the Other Note
within 30 days of the date upon which such interest payment is
due;
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(ii)
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failure
to pay, or any default in the payment of, any principal of or any interest
on any indebtedness of the Company for borrowed money (other than for
money borrowed under this Note or the Other Note, which is covered by (i)
above), which remains uncured or unwaived for a period of 30
days;
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(iii)
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any
material breach of representations, warranties or covenants made by the
Company to the Holder in the Note, Warrant or Security Agreement, which
remains uncured for a period of 30 days after written notice of the breach
is provided by the Holder to the
Company;
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(iv)
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the
institution of proceedings by or against (which has not been stayed or
dismissed within 90 days following the filing of such petition) the
Company under any provisions of the federal Bankruptcy Act or any other
applicable federal or state law to be adjudicated as bankrupt or
insolvent; the appointment of a receiver, liquidator or trustee; an
assignment for the benefit of creditors of the Company; the Company files
any petition or action for relief under any bankruptcy, reorganization,
insolvency or moratorium law or any other law for the relief of, or
relating to, debtors, now or hereafter in effect; or the taking of
corporate action by the Company in furtherance of any such
action;
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(v)
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if
any final judgment, writ or warrant of attachment in an amount greater
than $1,000,000 is filed against the Company or its assets and remains
unbonded, uninsured or unstayed for 120
days;
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(b) Upon
the occurrence of and during the continuance of an Event of Default, the
Holders, pursuant to a written notice executed by the Holders and delivered to
the Company, may, in their sole and absolute discretion, declare the outstanding
principal amount and accrued but unpaid interest immediately due and payable,
and thereafter the Holders may exercise any and all remedies available under the
Security Agreement or available at law or in equity. In the case of
any Event of Default under this Note by the Company which is continuing and has
not been waived in writing by Holder, this Note will bear interest at the
Default Rate.
6.
Representations and Warranties of the
Company. The Company hereby represents and warrants
that:
(a) Corporate
Power. The Company has all requisite power and authority to
execute and deliver this Note and to carry out and perform its obligations under
the terms of this Note.
(b) Authorization. All
corporate action on the part of the Company, its directors and its stockholders
necessary for the authorization, execution, issuance, delivery and performance
of this Note by the Company and the performance of the Company’s obligations
hereunder, including the issuance and delivery of the Warrant and the
reservation and registration under the Securities Act of 1933, as amended, of
the common stock issuable upon conversion of the Note or exercise of the Warrant
has been taken or, with respect to the reservation and registration of the
equity securities issuable upon conversion of the Note or exercise of the
Warrant, will be taken prior to the issuance of such equity
securities. The Note and the Warrant, when executed and delivered by
the Company, shall constitute valid and binding obligations of the Company
enforceable in accordance with their terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of
debtors. The common stock of the Company, when issued in compliance
with the provisions of the Note or the Warrant, will be validly issued, fully
paid and nonassessable and free of any liens or encumbrances.
(c) Governmental
Consents. All consents, approvals, orders, or authorizations
of, or registrations, qualifications, designations, declarations, or filings
with, any governmental authority, required on the part of the Company in
connection with the offer, sale or issuance of the Note, the Warrant and the
equity securities issuable upon conversion of the Note, exercise of the Warrant
or the consummation of any other transaction contemplated hereby shall have been
obtained and will be effective as of the date hereof or, in respect of the
Warrant, prior to the issuance of the Warrant, except for notices required or
permitted to be filed with certain state and federal securities commissions,
which notices will be filed on a timely basis.
(d) No
Violations. The execution, delivery and performance by the
Company of this Note and the compliance with the provisions hereof and thereof
by the Company does not violate, conflict with or constitute or result in a
breach or default under (or an event which with notice of passage of time or
both would constitute a default) or give rise to any right of termination,
cancellation or acceleration under, or result in the creation of any Encumbrance
(as defined below) upon any properties or assets of the Company under (i) the
Articles of Incorporation or bylaws of the Company, (ii) applicable law,
statute, rule or regulation, or any ruling, writ, injunction, order, judgment or
decree of any court, arbitrator, administrative agency or other governmental
body applicable to the Company or any of its properties or assets or (iii) any
contract or agreement affecting the Company, except, with respect to clauses
(ii) and (iii), in each case, where such violation, conflict, breach, default,
termination, cancellation, acceleration or Encumbrance would not, individually
or in the aggregate, have a material adverse effect on the
Company. As used herein, the term “Encumbrance” shall mean any lien,
charge, encumbrance, equity, claim, option, proxy, pledge, security interest, or
other similar right of any nature other than statutory liens securing payments
not yet due and payable or due but not yet delinquent.
7.
Representations and Warranties of
Holder. Holder hereby represents and warrants
that:
(a) Holder
understands and agrees that none of the Note, the Warrant or the common stock
into which they are convertible or exercisable (collectively, the “Securities”) have been
registered under the Securities Act of 1933, as amended (the “Securities Act”), and are
being offered and sold by the Company to Holder in reliance upon an exemption
from registration provided by Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.
(b) Holder
is an “accredited investor” within the meaning of Rule 501(a) of Regulation D
under the Securities Act, as set forth below, and is purchasing the Securities
for its own account for investment and not with a view to any resale,
distribution or other disposition of the Securities or any part thereof in any
transaction that would be in violation of the securities laws of the U.S. or any
state thereof.
(c) Holder
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of the investment and is able to bear
the economic risk of loss of the investment. Holder is aware of the
Company’s financial condition, and has reviewed the Company’s public filings
with the Securities and Exchange Commission, including the risk factors
contained therein. Holder has received all information from the
Company that it has considered necessary in connection with its decision to
invest in the Securities.
(d) Holder
will not offer, sell or otherwise transfer any of the Securities directly or
indirectly, unless: (i) the sale is to the Company;
(ii) the sale is made pursuant to an effective registration statement; or
(iii) the Securities are sold in a transaction that does not require
registration under the Securities Act (including, without limitation, in
compliance with the exemption from the registration requirements under the
Securities Act provided by Rule 144, Rule 145 or Rule 144A thereunder) or any
applicable U.S. state laws and regulations governing the offer and sale of
securities and it has prior to such sale furnished to the Company an opinion of
counsel reasonably satisfactory to the Company;
8.
Secured
Obligations. This Note shall be secured by a security interest
on all of the assets of the Company, which lien shall be created by the Security
Agreement and evidenced by the appropriate Uniform Commercial Code filing(s) as
applicable. The Holder shall have recourse to the assets to satisfy
the Company’s obligations hereunder. Such security interest shall
terminate upon payment or conversion in full of the debt owed under this
Note.
9.
Registration Rights.
(a) If
the Holders advance a total of $3,000,000 dollars to the Company under this Note
and the Other Note on or prior to December 31, 2009, as soon as reasonably
practicable thereafter the Company shall prepare and file with the Securities
and Exchange Commission (“SEC”) a registration statement
on Form SB-2 or such other form as may be required or available (the “Registration Statement”),
relating to the offer and sale by Holders of all the shares of Common Stock
underlying the Note and the Other Note and the Warrants (the “Shares”). The
Company shall use its reasonable best efforts to have the Registration Statement
declared effective as promptly as practicable (with such date on which the
Registration Statement becomes effective referred to as the “Registration Effective
Date”). The Company shall advise Holders in writing of the
receipt by the Company of any stop order from the SEC suspending the
effectiveness of the Registration Statement, and if at any time there shall be a
stop order suspending the effectiveness of the Registration Statement, the
Company shall use its reasonable best efforts to obtain promptly the withdrawal
of such order. The Company shall advise the Holders promptly in
writing of the existence of any fact and the happening of any event that makes
any statement of a material fact made in the Registration Statement or
Prospectus untrue, or that requires the making of any additions to or changes in
the Registration Statement or Prospectus in order to make the statements therein
not misleading and in such event the Company shall prepare and file with the
SEC, as soon as reasonably practicable, an amendment to such Registration
Statement or an amendment or supplement to such Prospectus so that, as so
amended or supplemented, such Registration Statement and such Prospectus will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances then existing, not misleading. Upon
receipt of such written advice, Holders shall discontinue and refrain from
making any sales of Shares, until such time as the Company advises the
undersigned that such Registration Statement or such Prospectus no longer
contains an untrue statement or omission of a material fact.
(b) Holder
shall furnish to the Company such information regarding Holder and the
distribution of the Shares as the Company may from time to time reasonably
request in writing in order to comply with applicable securities
laws. Holder shall notify the Company as promptly as practicable of
any inaccuracy or change in information previously furnished by Holder to the
Company or of the happening of any event in either case as a result of which any
Prospectus relating to the Registration Statement contains an untrue statement
of a material fact regarding such party or the distribution of such Shares, or
omits to state any material fact regarding such party or the distribution of
such Shares required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and to
furnish promptly to the Company any additional information required to correct
or update any previously furnished information or required so that such
Prospectus shall not contain, with respect to Holder or the distribution of such
Shares an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing.
(c) In
connection with the Registration Statement, the Company shall take all actions
necessary to permit the resale of the Shares under the blue sky laws of the
several states, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this Section be
obligated to be so qualified, subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction.
(d) All
expenses incident to the Company’s performance of or compliance with this
Section will be borne by the Company, including, without limitation, all: (i)
registration and filing fees and expenses; (ii) expenses of printing; and (iii)
fees and expenses of counsel for the Company.
(e) The
obligations of the Company set forth in this Section 9 shall terminate upon the
earlier of (i) the date on which all Shares covered by the Registration
Statement have been disposed of by Holder and its Members, (ii) the third
anniversary of the date that an aggregate of $3,000,000 has been advanced by the
Holders to the Company pursuant to this Note and the Other Note, and
(iii) the date on which all of the Shares are freely tradable under Rule
144 without restriction. The rights set forth in this Section will
survive repayment or conversion of the Note.
10.
Warrant
Coverage. Upon each advance to
the Company made pursuant to this Note, the Company agrees to promptly issue to
Holder a warrant (each a “Warrant” and collectively, the
“Warrants”) in form and
substance acceptable to Holder and the Company in their reasonable discretion,
which Warrant will be exercisable for the number of shares of common stock of
the Company equal to 50% multiplied by the principal balance of such advance,
divided by $0.40. The exercise price for the Warrants shall be $0.75
per share. The Company and Holder, as a result of arm’s length bargaining, agree
that: (i) neither Holder nor any affiliated company has rendered any services to
the Company in connection with the Note or the Warrants, and (ii) the Warrants
are not being issued as compensation.
11.
[Intentionally
Deleted]
12.
[Intentionally
Deleted]
13.
Transfer of Note;
Restrictions on Transfer. This Note, and the rights and
obligations provided herein, may not be transferred or assigned by Holder, by
operation of law or otherwise, without the prior written consent of the Company
in its sole discretion. Any transfer of this Note must be in
compliance with applicable federal and state securities laws and only upon
surrender of the original Note for registration of transfer, duly endorsed, or
accompanied by a duly executed written instrument of transfer in form reasonably
satisfactory to the Company. A new Note for like principal amount and
interest will be issued to, and registered in the name of, the
transferee. Interest and principal are payable only to the registered
holder of the Note. The Holder agrees, by accepting this Note, to
provide a Form W-9 to the Company upon request.
14.
Miscellaneous.
(a) Holder as
Owner. The Company may deem and treat the holder of record of
this Note as the absolute owner for all purposes regardless of any notice to the
contrary from third parties.
(b) Notices. Unless
otherwise provided, any notice under this Note shall be given in writing and
shall be deemed effectively delivered (i) upon personal delivery to the
party to be notified, (ii) upon confirmation of receipt by fax by the party
to be notified, (iii) one business day after deposit with a reputable
overnight courier, prepaid for overnight delivery, or (iv) three days after
deposit with the United States Post Office, postage prepaid, registered or
certified with return receipt requested. The address for any such
party shall be the principal office of such party as set forth in the first
paragraph of this Note or at such other address as such party may designate by
ten days advance written notice to the other party given in the foregoing
manner.
(c) Amendments and
Waivers. Any term of this Note may be amended and the
observance of any term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Company and the Holder.
(d) Severability. If
one or more provisions of this Note are held to be unenforceable under
applicable law, such provision shall be excluded from this Note, and the balance
of this Note shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
(e) Successors and
Assigns. The terms and conditions of this Note shall inure to
the benefit of and be binding on the respective successors and permitted assigns
of the parties.
(f) Waivers. The
Company waives presentment, demand, protest and notice of
dishonor. No single or partial exercise by Holder, or delay or
omission in the exercise by Holder of any right or remedy under this Note or the
Security Agreement shall preclude, waive or limit any other or further exercise
thereof or the exercise of any other right or remedy.
(g) Collection Expenses;
Attorney’s Fees. Upon any default by the Company hereunder,
the Holder may employ an attorney to enforce the Holder’s rights and remedies
and the Company hereby agrees to pay to the Holder its reasonable attorneys
fees, plus all other reasonable expenses incurred by the Holder in exercising
any of the Holder’s rights and remedies upon default.
(h) Expenses. Each
of the Company and Holder shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of Note, the
Warrant, the Security Agreement and related agreements.
(i) Governing Law; Jurisdiction;
Venue. This Note shall be governed by and construed under the
laws of the state of Washington without regard to principles of conflict of
laws. The parties irrevocably consent to the jurisdiction and venue
of the federal courts located in King County, Washington in connection with any
action relating to this Note.
[Remainder
of Page Intentionally Left Blank; Signature Page Follows]
ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING PAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
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COMPANY:
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VU1
CORPORATION
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By:
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/s/ Richard Herring
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Name:
Richard Herring
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Title: Chief
Technology Officer
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HOLDER:
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SAM
SPECIAL OPPORTUNITY FUND, LP
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By:
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/s/ William B. Smith
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Name:
William B. Smith
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Title: Managing
Member
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