Legal Memorandum of Understanding and Note

LEGAL MEMORANDUM OF UNDERSTANDING AND NOTE

This Memorandum of Understanding and Note ("Agreement") is made as of by and between Party A: , located at , and Party B: , located at .

RECITALS

WHEREAS, Party A and Party B desire to set forth certain understandings regarding a loan and related obligations, including the principal amount, interest, and security, as further described in this Agreement; and

WHEREAS, the parties intend this instrument to operate as both a memorandum of understanding as to negotiated commercial terms and, with respect to the note provisions set forth below, as a binding promissory note enforceable at law; and

WHEREAS, the parties further intend to record certain binding representations, warranties, covenants and remedies in connection with the note.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

In this Agreement, unless the context otherwise requires, the following terms shall have the meanings set forth below: "Note" means the promissory note created by Section 3; "Principal" means the unpaid principal amount of the Note; "Default" has the meaning set forth in Section 7.

2. MEMORANDUM STATUS

The parties acknowledge that this document serves as a Memorial of Understanding with respect to general commercial terms. Except as expressly provided herein, this memorandum is intended to guide negotiation and does not create obligations to enter into any other separate agreement. Notwithstanding the foregoing, the Note provisions set forth in Section 3, the Representations and Warranties in Section 5, the Default and Remedies in Section 7, and the Notices provision in Section 8 are intended to be binding and enforceable.

3. PROMISSORY NOTE

For value received, Party A promises to pay to Party B the principal sum of (the "Principal"), together with interest on the unpaid Principal at a rate of per annum, computed on a 365/365 basis, until paid in full.

Principal and accrued interest shall be due and payable in full on or before (the "Maturity Date"). Payments shall be made in lawful currency to the address for Notices set forth in Section 8 or to such other address as Party B may designate in writing.

Prepayment: The Principal may be prepaid in whole or in part without penalty unless otherwise specified in writing. If no prepayment penalty is applicable, amounts prepaid shall reduce Principal in inverse order of maturity.

Default Interest: Upon the occurrence and during the continuance of an Event of Default, the interest rate on outstanding amounts shall increase by per annum, until such default is cured or amounts are paid in full.

4. SECURITY

This Note is to be: Secured Unsecured. If Secured is selected, the parties agree that Party A grants Party B a security interest in the collateral described below and shall execute such financing statements, pledges, mortgages or other instruments reasonably requested by Party B to perfect and maintain Party B's security interest.

5. REPRESENTATIONS AND WARRANTIES

Each party represents and warrants to the other that: (a) it has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate or other action; and (c) this Agreement is a legal, valid and binding obligation enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights generally.

6. COVENANTS

Party A covenants to pay Principal and interest in accordance with Section 3, to maintain the collateral in good order and condition (if applicable), and to execute such further instruments as may be reasonably necessary to effectuate the purposes of this Agreement. Party B covenants to provide timely billing notices and to apply payments in accordance with this Agreement.

7. EVENTS OF DEFAULT; REMEDIES

The following shall constitute an Event of Default: (a) failure by Party A to pay any Principal or interest when due and such failure continues for ten (10) days after written notice; (b) insolvency or bankruptcy of either party; (c) material breach of any representation, warranty or covenant contained in this Agreement that is not cured within thirty (30) days after written notice. Upon an Event of Default, Party B may declare the entire unpaid Principal and accrued interest immediately due and payable, exercise rights against collateral, and pursue any other remedies available at law or in equity. The prevailing party in any action to enforce this Agreement shall be entitled to recover reasonable attorneys' fees, costs and expenses.

8. NOTICES

All notices, demands or other communications required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by nationally recognized overnight courier, or sent by certified mail, return receipt requested, to the addresses set forth below (or to such other address as either party may designate in writing).

9. AMENDMENT; WAIVER

This Agreement may be amended only by a written instrument signed by both parties. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom enforcement is sought. A waiver on one occasion shall not be construed as a waiver on any other occasion.

10. GOVERNING LAW

This Agreement and any dispute arising out of or related to this Agreement shall be governed by and construed in accordance with the laws of the state of , without regard to principles of conflicts of law.

11. ENTIRE AGREEMENT

This Agreement, including any exhibits or schedules attached hereto, constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written.

12. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired thereby, and the parties shall negotiate in good faith to replace the invalid provision with a valid provision that comes closest to the economic effect of the invalid provision.

13. COUNTERPARTS; ELECTRONIC SIGNATURES

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures delivered by facsimile, PDF or other electronic means shall be binding for all purposes.

14. MISCELLANEOUS

Costs: Each party shall bear its own costs and expenses incurred in connection with the negotiation, preparation and execution of this Agreement, except that the non-prevailing party in any enforcement action shall reimburse the prevailing party for reasonable attorneys' fees and costs as provided in Section 7.

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