THIRD AMENDED AND RESTATED PROMISSORY NOTE
THIRD
AMENDED AND RESTATED PROMISSORY NOTE
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MAKER:
|
microHelix,
Inc.
X.X.
Xxx 0000
Xxxxxxxx,
Xxxxxx 00000
Xxxxx
Electronics, Inc.
X.X.
Xxx 0000
Xxxxxxxx,
Xxxxxx 00000
|
HOLDER:
|
MH
Financial Associates, LLC
c/o
Aequitas Capital Management, Inc.
0000
Xxxxxxx Xxxx, Xxxxx 000
Xxxx
Xxxxxx, Xxxxxx 00000
|
| Principal Amount: $977,742.96 | Date of Note: June 27, 2008 |
1. RELATED
AGREEMENT. This Third Amended and Restated Promissory Note
(the "Note")
evidences (a) the balance of obligations owed by Maker to Holder pursuant to the
Second Amended and Restated Promissory Note dated March 12, 2007 with an unpaid
balance of $477,742.96 including accrued and unpaid interest (the "Second Note"), and
(b) an additional loan in the amount of up to $500,000.00, each as referenced in
that certain Third Agreement Regarding Amendment of Promissory Note of even date
herewith (the "Agreement"). This
Note amends, supersedes and replaces the Second Note and the obligations
represented thereby in their entirety. Capitalized terms used in this
Note, if any, that are not defined herein have the meanings assigned to those
terms in the Agreement.
2. PROMISE TO
PAY. microHelix, Inc. and Xxxxx Electronics, Inc.
(together, "Maker") jointly and
severally promise to pay to the order of MH Financial Associates, LLC ("Holder") in lawful
money of the United States of America, the principal amount of $977,742.96, or
such other lesser amount as is advanced by Holder ("Advances"), together
with interest on the unpaid principal balance from the date hereof until paid in
full. Maker will pay Holder at Holder's address shown above or at
such other place as Holder may designate in writing.
3. ADVANCES;
RESTRICTIONS. The outstanding balance of Advances made under
this Note may fluctuate from time to time, to be increased by future Advances in
increments of $100,000 which may be made by Holder and to be decreased by
repayments made by Maker. Maker acknowledges and agrees that Holder
is under no obligation to make any Advance under this Note and any Advance will
be based upon Maker's cash budget as accepted by Holder in Holder's sole and
absolute discretion. As a condition to making any Advances under this
Note, Maker, its depository bank and Holder shall execute and deliver a
satisfactory account control agreement under which Holder shall be granted a
first priority lien on all funds deposited in Maker’s deposit
account.
4. INTEREST
RATE. Effective as of the date of this Note, interest will
accrue on the outstanding principal balance of this Note at the rate of 20% per
annum on the outstanding principal balance, calculated on the basis of a 365-day
year and actual days elapsed. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.
5. PAYMENT AND MATURITY;
APPLICATION OF PAYMENTS. Maker will pay all amounts
outstanding under this Note on the earliest of the
following: (a) December __, 2008; (b) the closing of a loan
or other financing provided to Maker by a senior lender or other source in an
amount sufficient to pay off this Note; (c) the closing of a private
investment in public equity financing and/or any other financing event with
gross proceeds to Maker in excess of $1,000,000 (each of (a) through (c) is
individually the "Maturity Date");
provided, however, that after the occurrence of an Event of Default, the
outstanding principal and all accrued interest will be payable on
demand. Unless otherwise agreed or required by applicable law,
payments will be applied first to expenses for which Maker is liable hereunder
(including unpaid collection costs and late charges), next to accrued and unpaid
interest, and the balance to principal. In addition, the outstanding
principal balance and all accrued and unpaid interest will be due and payable in
the event of (x) a sale of all or substantially all of the assets of Maker, or
(y) the transfer of ownership or beneficial interest, by merger or otherwise, of
50% or more of the stock of Maker.
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6. SECURITY. The
obligations of Maker under this Note are secured by the Security Agreement dated
April 8, 2005 made by Maker in favor of Xxxxx X. Xxxxx (the "Security Agreement"),
as amended, and the collateral described therein (the "Collateral"). The
right, title and interest of Xxxxx under the Security Agreement has been
assigned to Holder.
7. INTEREST AFTER
DEFAULT. Upon the occurrence of an Event of Default, including
failure to pay all amounts due upon the Maturity Date, Holder may, at its option
and if permitted by applicable law, increase the interest rate of this Note by
5% per annum.
8. DEFAULT. Each of
the following will constitute an event of default ("Event of Default")
under this Note:
8.1 Payment
Default. Maker fails to make any payment required by this Note
within 10 days after written notice from Holder that it is due.
8.2 Other
Defaults. Maker fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in the
Agreement or to comply with or to perform any term, obligation, covenant or
condition contained in any other related agreement between Holder and
Maker. If any failure, other than a failure to pay money, is curable,
it may be cured (and no Event of Default will have occurred) if Maker, after
delivery of written notice from Holder demanding cure of such failure: (a) cures
the failure within 15 days; or (b) if the cure requires more than 15 days,
immediately initiates steps sufficient to cure the failure and thereafter
continues and completes all reasonable and necessary steps sufficient to produce
compliance within 60 days after notice is sent.
8.3 Default in Favor of Third
Parties. Maker defaults under any loan, extension of credit,
security agreement, purchase or sale agreement, or any other agreement in favor
of any other creditor or person that may materially affect any of Maker's
property or Maker's ability to repay this Note or perform Maker's obligations
under this Note or any of the Related Documents.
8.4 False
Statements. Any warranty, representation or statement made or
furnished to Holder by Maker or on Maker's behalf under this Note or the
Agreement is false or misleading in any material respect.
8.5 Dissolution. The
dissolution of Maker (regardless of whether election to continue is made), or
any other termination of Maker's existence as a going business, the appointment
of a receiver for any part of Maker's property, any assignment for the benefit
of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against
Maker.
8.6 Creditor or Forfeiture
Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Maker or by any governmental agency against any
Collateral securing this Note.
8.7 Adverse Change. A
material adverse change occurs in Maker's financial condition, or Holder
believes the prospect of payment performance of this Note has been
impaired.
8.8 Insecurity. Holder
in good faith believes itself insecure.
9. REMEDIES. On and
after an Event of Default under this Note, Holder may exercise the following
remedies, which are cumulative and which may be exercised singularly or
concurrently:
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RESTATED PROMISSORY NOTE
9.1 Acceleration. Declare
the entire unpaid principal balance of the debt evidenced by this Note, and all
accrued interest thereon and all other costs and expenses evidenced by this
Note, to be immediately due and payable.
9.2Other
Remedies. Pursue any other right or remedy provided in this
Note, in the Security Agreement, or as otherwise allowed by
law. Holder may pursue any such rights or remedies singly, together
or successively. Exercise of any such right or remedy will not be
deemed an election of remedies. Failure to exercise any right or
remedy will not be deemed a waiver of any existing or subsequent default, nor a
waiver of any such right or remedy.
10. ATTORNEY FEES;
EXPENSES.
10.1 If
any suit or action is instituted to interpret, enforce or rescind this Note,
including without limitation any proceeding brought under the United States
Bankruptcy Code, the prevailing party on a claim will be entitled to recover
with respect to the claim, in addition to any other relief awarded, the
prevailing party's reasonable attorney fees and other fees, costs and expenses
of every kind, including without limitation costs and disbursements specified in
ORCP 68A(2), incurred in connection with the litigation, any appeal or petition
for review, the collection of any award, or the enforcement of any order, as
determined by the court.
10.2 If
an Event of Default under this Note occurs and Holder does not institute any
litigation, Maker will pay to Holder, upon Holder's demand, all reasonable costs
and expenses, including without limitation attorney fees and collection fees,
incurred by Holder in attempting to collect the indebtedness evidenced by this
Note.
11. ASSIGNMENTS. Maker
acknowledges that Holder may sell and assign its interest in this Note,
the payments due hereunder and the Security Agreement, in whole or in
part, to an assignee (the "Assignee") which may
be represented by a bank or trust company acting as a trustee of such
Assignee. MAKER ACKNOWLEDGES THAT ANY ASSIGNMENT OR TRANSFER BY
HOLDER OR ANY ASSIGNEE WILL NOT MATERIALLY CHANGE MAKER'S OBLIGATIONS UNDER THIS
NOTE. Any Assignee will be entitled to enforce all the rights so
assigned but will be under no obligation to Maker to perform any of Holder's
obligations under this Note, the sole remedy of Maker being against Holder with
Maker's right against Holder being unaffected except as provided
herein. Maker agrees that upon notice of assignment of this Note, it
will pay directly to the Assignee, unconditionally, all amounts which become due
hereunder. Upon Holder's request, Maker will acknowledge
to any Assignee receipt of Holder's notice of assignment.
12. JURY WAIVER. HOLDER AND
MAKER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER HOLDER OR MAKER AGAINST THE
OTHER.
13. GOVERNING LAW. This
Note will be governed by, construed and enforced in accordance with the laws of
the State of Oregon. This Note has been accepted by Holder in the
State of Oregon.
14. CHOICE OF VENUE. If
there is a lawsuit, Maker consents to personal jurisdiction in Oregon and agrees
that in any suit or action hereon venue will lie in Multnomah County,
Oregon.
15. SUCCESSOR
INTERESTS. The terms of this Note will be binding upon Maker
and Maker's heirs, personal representatives, successors and assigns, and will
inure to the benefit of Holder and its successors and assigns.
16. GENERAL
PROVISIONS. Holder may delay or forego enforcing any of its
rights or remedies under this Note without losing them. Maker and any
other person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment and notice of
dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker, holder or endorser, will be released from
liability. All such parties agree that Holder may renew or extend
(repeatedly and for any length of time) this Note or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Holder's
security interest in the Collateral and take any other action deemed necessary
by Holder without the consent of or notice to anyone. All such
parties also agree that Holder may modify this Note without the consent of or
notice to anyone other than the party with whom the modification is
made. This Note may be modified only by an instrument in writing
signed by Maker.
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RESTATED PROMISSORY NOTE
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MAKER:
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MICROHELIX, INC. | ||
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|
By:
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/s/ Xxxxx X. Xxxxxxxx | |
| Name: | Xxxxx X. Xxxxxxxx | ||
| Title: | President and CFO | ||
| XXXXX ELECTRONICS, INC. | |||
| By: | /s/ Xxxxx X. Xxxxxxxx | ||
| Name: | Xxxxx X. Xxxxxxxx | ||
| Title: | President and CFO | ||
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RESTATED PROMISSORY NOTE
