“Control” shall mean the possession, directly or indirectly, of the power to direct orcause the direction of the management or policies of a person, whether through the ownership ofvoting securities, by contract or otherwise, and the terms “Controlling” and“Controlled” (and the lower-case versions of the same) shall have meanings correlativethereto.“Convertible Securities” shall mean evidences of Debt, shares of stock or othersecurities or instruments which are convertible into or exchangeable for shares of common stock,either immediately or upon the arrival of a specified date or the occurrence of a specified event.“Debt” shall mean all liabilities, obligations and indebtedness of every kind andnature of any Person, including, without limitation: (1) indebtedness or liability for borrowedmoney, or for the deferred purchase price of property or services (including trade obligations);(2) obligations as lessee under any leases (including under any capital leases); (3) anyreimbursement or other obligations under any performance or surety bonds or any letters of creditissued for the account of such Person; (4) all net obligations in respect of any derivativeproducts; (5) all guaranties, endorsements (other than for collection or deposit in the ordinarycourse of business), and other contingent obligations to purchase, to provide funds for payment, tosupply funds to invest in any other Person, or otherwise to assure a creditor against loss; and (6)obligations secured by any Lien on property owned by such Person, whether or not the obligationshave been assumed.“GAAP” means generally accepted accounting principles in the United States,consistently applied.“Governmental Authority” shall mean any federal, state, local or other governmentaldepartment, commission, board, bureau, agency or other instrumentality or authority, domestic orforeign, exercising executive, legislative, judicial, regulatory or administrative authority orfunctions of or pertaining to government.“Lien” shall mean any security interest, mortgage, pledge, hypothecation, assignment,deposit arrangement, encumbrance, lien (statutory or other), claim or other priority orpreferential arrangement of any kind or nature whatsoever (other than a financing statement filedby a lessor in respect of an operating lease not intended as security).“Material Adverse Effect” shall mean event, matter, condition or circumstance which(i) has or would reasonably be expected to have a material adverse effect on the business,properties, results of operations, condition (financial or otherwise) or prospects of the Company;(ii) would materially impair the ability of the Company, or any other Person to perform or observeits obligations under or in respect of the Transaction Documents; or (iii) affects the legality,validity, binding effect or enforceability of any of the Transaction Documents or the perfection orpriority of any Lien granted to the Investor under any of the Collateral Documents.“Obligations” shall mean all obligations of the Company to Holder howsoever created,arising or evidenced, whether direct or indirect, joint or several, absolute or contingent, or nowor hereafter existing, or due or to become due, which arise out of or in connection with this Note,the Collateral Documents and each other related document including, without limitation, all costsand expenses incurred by Holder in connection with the enforcement of this Note or theCollateral Documents.
 
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“Options” shall mean any rights or options to subscribe for or to purchase commonstock or Convertible Securities.“Permitted Debt” shall mean the Obligations, trade accounts payable incurred in theordinary course which are due no later than 90 calendar days after invoice, other currentliabilities incurred in the ordinary course of business and not incurred through the borrowing ofmoney or the obtaining of credit, obligations under long-term real property leases incurred in theordinary course of business, short-term lease obligations of the Company in an amount per annum notexceeding $75,000 in the aggregate, Debt incurred to finance the cost of tangible personal property(which was acquired after the date hereof, and the cost of which, individually or in the aggregate,does not exceed $75,000), Debt in respect of taxes or other governmental charges which is not yetdue or which is being contested in good faith by appropriate proceedings, and any refinancing,extension or renewal of any existing Debt permitted hereunder not involving an increase in theprincipal amount thereof.“Permitted Liens” shall mean, as of any particular time, (a) Liens of taxes,assessments or other charges of an Governmental Authority not then delinquent or being contested asprovided below, (b) Liens created in favor of the Investor pursuant to the Collateral Documents,(c) any mechanic’s, worker’s, repairer’s, supplier’s, vendor’s or like Liens securing obligationsarising in the ordinary course of business that (i) are not mature and not overdue, or (ii) both(x) are being contested in good faith and (y) as to which adequate reserves have been establishedon the books of the Company in accordance with GAAP or (z) that do not materially impair the valueof value of the Collateral provided to the Investor pursuant to the Collateral Documents and couldnot result in an aggregate liability in excess of $75,000, (d) Liens upon tangible personalproperty (which was acquired after the date hereof, and the cost of which, individually or in theaggregate, does not exceed $75,000) granted by the Company, each of which Liens was created solelyto secure Debt incurred to finance the cost of such property (provided that no such Lien shallextend to cover any property other than the property so acquired), (e) Liens arising solely byvirtue of any statutory or common law provision relating to banker’s liens, rights of set-off orsimilar rights and remedies as to deposit accounts or other funds maintained with a creditordepository institution, provided that such deposit account is not a dedicated cashcollateral account, and (f) any Liens disclosed in writing to Holder and existing as of the date ofthe Initial Closing under the Agreement. A contest referred to in this definition shall bepermitted only if the execution or enforcement of the Lien being contested shall have been stayedas a result thereof and such contest could not be reasonably be expected to have a Material AdverseEffect.“Person” shall mean an individual, a partnership, a corporation, a limited liabilitycompany, an association, a joint stock company, a trust, a joint venture, an unincorporatedorganization and a governmental entity or any department, agency or political subdivision thereof.“Subsidiary” shall mean, with respect to any Person (herein referred to as the“parent”), any corporation, limited liability company, partnership, association or otherbusiness entity (a) of which securities of other ownership interests representing more than 50% ofthe equity or morethan 50% of the ordinary voting power or more than 50% of the general partnership interestsare, at the time any determination is being made, owned, Controlled or held by the parent, or (b)that is, at any time any determination is made, otherwise Controlled by, the parent or one or moreSubsidiaries of the parent and one or more Subsidiaries of the parent.
 
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2. Note and Warrant Purchase Agreement. This Note is issued pursuant to the terms ofthe Agreement.3. Principal; Drawdowns.(a) The principal of this Note shall equal the advances made by Holder to the Company fromtime to time. On the date of the Initial Closing, the Company shall receive an advance on thisNote of an amount equal to $1,223,625 (the “Initial Drawdown”). The Company may requestadditional drawdown advances (each, an “Additional Drawdown” and, together with the InitialDrawdown, a “Drawdown”) thereafter on this Note up to a maximum aggregate principal amountof $2,936,700 (including the $1,223,625 drawdown on the date of the Initial Closing). Holder may,in its sole discretion, determine whether to accept or reject such additional drawdown request fromthe Company.(b) The Company shall provide Holder at least ten Business Days prior written notice of theCompany’s intention to drawdown any additional advances on this Notice. If Holder accepts suchadditional drawdown request, it shall notify the Company in writing of such acceptance within suchten Business Day period.(c) Each drawdown shall be recorded on the grid in Schedule 1 hereto. The Companyhereby authorizes Holder to record on the grid in Schedule 1 hereto all advances,repayments, prepayment and unpaid principal balance on this Note from time to time to reflect thedrawdown advances made on the date of the Initial Closing and any subsequent drawdown advance.4. Maturity. Unless sooner paid, the entire unpaid principal amount and all unpaidaccrued interest shall become fully due and payable on the earliest of (i) December 31, 2010, and(ii) the acceleration of the maturity of this Note by Holder upon the occurrence of an Event ofDefault (such earliest date, the “Maturity Date”).5. Payments.(a) Form of Payment. All payments of interest and principal shall be in accordancewith Section 20 herein.(b) Interest Payments. The Company shall pay to Holder accrued and unpaid interest onthe Maturity Date. Interest at the rate first set forth above shall accrue on any interest whichhas not been paid on the date on which it is payable until such time as payment therefor isactually delivered to Holder.(c) Prepayment. The Company shall have the right to prepay any and all amounts owedunder this Note in whole or in part at any time without notice.
 
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(d) Collateral Documents. The Company’s obligations hereunder shall be securedpursuant to the Collateral Documents.6. Repayment Upon Maturity. All outstanding Obligations under this Note shall becomeimmediately due and payable on the Maturity Date.7. Repayment Upon Acquisition or Financing. In the event that the Company sells,conveys, licenses or otherwise disposes of a majority of its assets or is acquired by way of amerger, consolidation, reorganization or other transaction or series of transactions pursuant towhich stockholders of the Company prior to such acquisition own less than fifty percent (50%) ofthe voting interests in the surviving or resulting entity (each, an “Acquisition”), thenall outstanding Obligations under this Note shall, at the option of Holder, become immediately dueand payable upon the closing of the Acquisition, senior in preference to any payment in respect ofany other equity or debt security of the Company. In the event that the Company closes a Debt,equity or combined Debt or equity financing resulting in gross proceeds or available credit to theCompany of not less than $20,000,000, including the gross proceeds from this Note to the extentthat any amounts owing hereunder are converted into Debt or equity in connection with suchfinancing (a “Financing”), then all of the remaining outstanding Obligations under thisNote shall, at the option of Holder, become immediately due and payable upon the closing of suchfinancing.8. Affirmative Covenants. So long as any Obligations under this Note remainoutstanding, the Company shall:(a) Compliance with Laws. Comply in all material respects with applicable laws,rules, regulations and orders, such compliance to include, without limitations, paying before thesame become delinquent all taxes, assessments, and charges imposed upon it or upon its property byany Governmental Authority except for good faith contests for which adequate reserves are beingmaintained.(b) Information. Deliver to Holder or cause to be delivered to Holder, in form anddetail satisfactory to Holder, the following financial and other information:(i) as soon as available but no later than 90 days after and as of the end of each fiscalyear, the Company’s annual audited financial statements, accompanied by an unqualified reportthereon of independent certified public accountants selected by the Company and reasonablysatisfactory to Holder (all such financial statements to be delivered pursuant to this subsection(b)(i) to be prepared in accordance with GAAP);(ii) as soon as available but no later than 30 days after and as of the end of each fiscalquarter, the Company’s quarterly unaudited financial statements (all such financial statements tobe delivered pursuant to this subsection (b)(ii) to be prepared in accordance with GAAP);(iii) concurrently with delivery to the equity investors of the Company, any and all operatingand financial information, or other communications, delivered, from time to time, to such equityinvestors;
 
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(iv) written notice of any of the following, promptly, and in any event within three (3) daysafter the Company becomes aware of any of the following: (i) any proceeding being instituted orthreatened by or against it involving a sum in excess of the Threshold Amount (as defined below) inthe aggregate for all proceedings, (ii) any order, judgment or decree being entered against theCompany or any of its properties or assets involving a sum in excess of the Threshold Amount in theaggregate for all such orders, judgments and decrees, and (iii) any actual or prospective change,development or event which has had or could reasonably be expected to have a Material AdverseEffect; and(v) such other statements, lists of property and accounts, budgets, forecasts, projections,reports, or other information as Holder may from time to time reasonably request.(c) Notice of Litigation. Provide to Holder promptly after the commencement thereof,notice of all actions, suits, and proceedings before any court or Governmental Authority affectingthe Company.(d) Notice of Defaults and Events of Defaults. Provide to Holder, as soon as possibleand in any event within three (3) days after the occurrence thereof, with written notice of eachevent which either (i) is an Event of Default, or (ii) with the giving of notice or lapse of timeor both would constitute an Event of Default, in each case setting forth the details of such eventand the action which is proposed to be taken by the Company with respect thereto.(e) Governmental Approvals. Promptly obtain and maintain any and all authorizations,consents, approvals, licenses, franchises, concessions, leases, rulings, permits, certifications,exemptions, filings or registrations by or with any Governmental Authority material and necessaryfor the Company to conduct its business and own (or lease) its properties or to execute, deliverand perform the Transaction Document.(f) Insurance. Promptly obtain and maintain in full force and effect at all timeswith responsible insurance companies such insurance covering its assets and properties, in suchamounts and against such risks and with such deductibles as an enterprise conducting a similarbusiness under similar business conditions as the Company would customarily maintain.(g) Continuance of Business. Maintain its legal existence, licenses and privileges ingood standing under and in compliance with all applicable laws and continue to operate the businesscurrently conducted by the Company. Without limiting the generality of the foregoing, the Companyshall do and cause to be done all things necessary to apply for, preserve, maintain and keep infull force and effect all of its registrations of trademarks, service marks and other marks, tradenames and other trade rights, patents, copyrights and other intellectual property in accordancewith prudent business practices.(h) Maintenance. Conduct its business in a manner consistent with relevant industrystandards, keep its material assets and properties in good working order and condition, make allneedful and proper repairs, replacements and improvements thereof, and pay when due all amountspayable in the course of ordinary operation of the business of the Company (or, in the case oftrade accounts payable, pay such amounts payable in the ordinary course within 90calendar days after invoice), so that such business may be properly and prudently conducted atall times.
 
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(i) Taxes. Pay and discharge (i) all federal and other material taxes, fees,assessments and governmental charges or levies imposed upon it or upon its properties or assetsprior to the date on which penalties attach thereto, and all lawful claims for labor, materials andsupplies which, if unpaid, might become a Lien upon any of its properties or assets, except to theextent such taxes, fees, assessments or governmental charges or levies, or such claims, are beingcontested in good faith by appropriate proceedings and are adequately reserved against inaccordance with GAAP; and (ii) all other lawful claims which, if unpaid, would by law become a Lienupon its property not constituting a Permitted Lien.9. Negative Covenants. So long as any Obligations under this Note remain outstanding,the Company shall not take any of the following actions, unless such action was unanimouslyapproved by the Company’s Board of Directors:(a) Liens. Create or suffer to exist any Lien on any assets of the Company exceptPermitted Liens.(b) Debt. Incur any Debt other than Permitted Debt; prepay, redeem, purchase, defeaseor otherwise satisfy in any manner prior to the scheduled repayment thereof any Permitted Debt(other than amounts due or permitted to be prepaid in respect of the Notes); or amend, modify orotherwise change the terms of any Permitted Debt (other than the Notes) so as to accelerate thescheduled repayment thereof.(c) Merger. Enter into any consolidation, merger, or other combination, or become apartner in a partnership, a member of a joint venture, or a member of a limited liability company.(d) Sale of Assets. Sell, license, transfer or otherwise dispose of any interest inany of the Company’s assets except as provided for under the Security Agreement.(e) Acquisitions and Investments. Acquire or commit or agree to acquire all or anystock, securities or assets of any other Person, other than inventory and equipment acquired in theordinary course of business, or make any loans to or other investments in any other Person, otherthan in the ordinary course of business.(f) Distributions. Declare or pay any dividends or make any distribution of any kindon the Company’s capital stock, or purchase, redeem or otherwise acquire, directly or indirectly,any shares of the Company’s capital stock, any Options, any Convertible Securities or other rightsto acquire shares of capital stock of the Company, except for the repurchase of such securitiesfrom former employees of or consultants to the Company at the original issue price paid thereforpursuant to contractual rights of the Company upon the termination of such employees’ orconsultants’ employment by or provision of service to the Company.(g) Additional Issuances. Issue, designate or authorize the issuance of any shares ofcapital stock of the Company or any security or other instrument convertible into capital stock ofthe Company; permit any such issuance, designation, or authorization of issuance with respect toany subsidiary of the Company; or form any Subsidiary.
 
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(h) Changes in Business. Enter into or engage in any business other than that carriedon (or contemplated to be carried on) as of the date of the Initial Closing.(i) Operating Leases. The Company shall not make any expenditures in respect ofoperating leases, except for: (i) operating leases between the Company and any of its wholly ownedSubsidiaries or between any of its wholly owned Subsidiaries; and (ii) operating leases enteredinto or assumed by the Company in the ordinary course of business.(j) Capital Expenditures. The Company shall not make or become legally obligated tomake any expenditure in respect of the purchase or other acquisition of any fixed or capital asset(including obligations under any capital lease, but excluding any expenditures in respect of anynormal replacements and maintenance which are properly charged to current operations), except forcapital expenditures in the ordinary course of business not exceeding $75,000, on a consolidatedbasis, in any fiscal year.(k) Subsidiaries. Cause or permit any direct or indirect Subsidiary of the Company to(i) acquire or hold any material assets or (ii) engage in any business activities, except (ineither case) without the prior written approval of Holder.10. Use of Proceeds. The Company shall use the proceeds from this Note for generalcorporate purposes, excluding any payment of dividends, repurchase of capital stock or repayment ofDebt of the Company or of any subsidiary of the Company (other than as provided herein or in anyother Transaction Document, and other than Permitted Debt).11. Default.(a) Events of Default. For purposes of this Note, any of the following events whichshall occur shall constitute an “Event of Default”:(i) any Obligation under this Note is not paid when and as the same shall become due andpayable, whether at maturity, by acceleration, or otherwise;(ii) default shall occur in the observance or performance of (A) any covenant, obligation oragreement of the Company contained in Sections 9 or 10, or (B) any other provision of this Note,the Agreement or any of the Collateral Documents and any such default shall continue uncured for aperiod of five (5) days after the Company knew or should have known, exercising reasonablediligence, of the event or circumstances giving rise to such default; or any “Event ofDefault” shall exist under any Collateral Document;(iii) any representation, warranty or certification made by the Company herein or in theAgreement or the Collateral Documents or in any certificate, report, document, agreement orinstrument delivered pursuant to any provision hereof or thereof shall prove to have been false orincorrect in any material respect on the date or dates as of which made (any such falsity being a“Representation Default”) and, to the extent the event or circumstances giving rise to suchRepresentation Default is amenable to being cured such that the Representation Default would nolonger exist, such Representation Default shall continue uncured for a period of five (5) daysafter the Company knew or should have known, exercising reasonable diligence, of the event orcircumstances giving rise to such Representation Default;
 
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(iv) the Company shall (A) apply for or consent to the appointment of a receiver, trustee,custodian or liquidator of itself or any part of its property, (B) become subject to theappointment of a receiver, trustee, custodian or liquidator for itself or any part of its propertyif such appointment is not terminated or dismissed within thirty (30) days, (C) make an assignmentfor the benefit of creditors, (D) fail generally or admit in writing to its inability to pay itsdebts as they become due, (E) institute any proceedings under the United States Bankruptcy Code orany other federal or state bankruptcy, reorganization, receivership, insolvency or other similarlaw affecting the rights of creditors generally, or file a petition or answer seekingreorganization or an arrangement with creditors to take advantage of any insolvency law, or file ananswer admitting the material allegations of a bankruptcy, reorganization or insolvency petitionfiled against it, or (F) become subject to any involuntary proceedings under the United StatesBankruptcy Code or any other federal or state bankruptcy, reorganization, receivership, insolvencyor other similar law affecting the rights of creditors generally, which proceeding is not dismissedwithin thirty (30) days of filing, or have an order for relief entered against it in any proceedingunder the United States Bankruptcy Code;(v) the Company shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-upor dissolution), (ii) suspend its operations other than in the ordinary course of business, or(iii) take any action to authorize any of the actions or events set forth above in this Section11(a)(v);(vi) any final judgment or judgments for the payment of money aggregating in excess of $75,000(the “Threshold Amount”) shall be rendered against the Company which judgments are not,within 30 days after the entry thereof, bonded, discharged or stayed pending appeal, or are notdischarged within 30 days after the expiration of such stay;(vii) (A) any Debt of the Company (other than any prior indebtedness of the Company to theHolder and any trade payables) shall not be paid at its stated maturity or shall be duly declaredto be or shall become due and payable prior to the stated maturity thereof, or (B) there shalloccur and be continuing any default or event of default under any agreement or instrument relatingto any such Debt (other than any prior indebtedness of the Company to the Holder and any tradepayables), or (C) the holder or holders of such Debt, or any trustee, agent or other representativeon behalf of such holder or holders, shall have demanded or required, pursuant to the terms of anyagreement or instrument relating to such Debt (other than any prior indebtedness of the Company tothe Holder or any trade payables), that the Company redeem, repurchase or otherwise acquire orretire such Debt for value at any time prior to its stated maturity;(viii) upon the 60th day following written notice from the Holder to the Companydemanding payment of any prior indebtedness of the Company to the Holder arising out of any defaultunder such prior indebtedness;(ix) there shall fail, at any time, to be sufficient authorized shares of Common Stock of theCompany to permit the issuance of that number of shares of Common Stock for which all of theWarrants are exercisable (assuming full vesting thereof); or
 
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(x) the occurrence or existence of any event or condition that, in Holder’s reasonablejudgment, would have or could result in a Material Adverse Effect.(b) Consequences of Events of Default.(i) If any Event of Default shall occur for any reason, whether voluntary or involuntary, andbe continuing, Holder may, upon notice or demand, declare the outstanding Obligations under thisNote to be due and payable, whereupon the outstanding Obligations under this Note shall be andbecome immediately due and payable, and the Company shall immediately pay to Holder all suchObligations. Upon the occurrence of an actual or deemed entry of an order for relief with respectto the Company under the United States Bankruptcy Code, then all Obligations under this Note shallautomatically be due immediately without notice of any kind. The Company agrees to pay Holder allreasonable out-of-pocket costs and expenses incurred by Holder in any effort to collect Obligationsunder this Note, including attorneys’ fees, and to pay interest at the lesser of (A) Post-DefaultRate hereunder and (B) the highest rate permitted by applicable law, on such costs and expenses tothe extent not paid when demanded.(ii) Holder shall also have any other rights which Holder may have been afforded under anycontract or agreement at any time and any other rights which Holder may have pursuant to applicablelaw. Holder may exercise any and all of its remedies under the Collateral Documents and the otherTransaction Documents contemporaneously or separately from the exercise of any other remedieshereunder or under applicable law.12. Lost, Stolen, Destroyed or Mutilated Notes. In case any Note shall be mutilated,lost, stolen or destroyed, the Company shall issue a new Note of like date, tenor and denominationand deliver the same in exchange and substitution for and upon surrender and cancellation of anymutilated Note, or in lieu of any Note lost, stolen or destroyed, upon receipt of evidencesatisfactory to the Company of the loss, theft or destruction of such Note.13. Transferability of Note; Agent.(a) Subject to compliance with applicable federal and state securities laws and the transferrestrictions set forth in Section 3.4 of the Agreement under which this Note was issued,this Note and all rights hereunder may be transferred, in whole or in part, without charge toHolder hereof (except for transfer taxes), upon surrender of this Note properly endorsed and incompliance with the provisions of the Agreement. Each taker and holder of this Note, by taking orholding the same, consents and agrees that this Note, when endorsed in blank, shall be deemednegotiable, and that the holder hereof, when this Note shall have been so endorsed, may be treatedby the Company, at the Company’s option, and all other persons dealing with this Note as theabsolute owner hereof for any purpose and as the person entitled to exercise the rights representedby this Note, or to the transfer hereof on the books of the Company and notice to the contrarynotwithstanding; but until such transfer on such books, the Company may treat the registered ownerhereof as the owner for all purposes. Upon any such transfer, a new Note, in substantially theform of this Note (the “New Note”), evidencing the portion of this Note so transferred,shall be issued to the transferee and a New Note evidencing the remaining portion of this Note notso transferred, if any, shall be issued to the transferring Holder. The acceptance ofthe New Note by the transferee thereof shall be deemed the acceptance by such transferee of all ofthe rights and obligations of a holder of a Note.
 
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(b) As a condition to any transfer of this Note, the original Holder of this Note, theproposed transferee of this Note, and the Company shall enter into an agency agreement in a formmutually agreeable to the parties thereto, which provides for the appointment of, and duties andresponsibilities of, the original Holder of this Note as agent, and which shall provide thatobservance of any term of this Note and all Notes issued pursuant to the Agreement or pursuant toany transferee may be waived (either generally or in a particular instance and either retroactivelyor prospectively) with holders representing at least a majority of the aggregate principal amountof the Notes issued by the Company at such time.14. Governing Law. This Note is to be construed in accordance with and governed bythe laws of the State of California.15. Amendment and Waiver. Any term of this Note may be amended only with the writtenconsent of the Company and Holder. The observance of any term of this Note may be waived (eithergenerally or in a particular instance and either retroactively or prospectively) only with thewritten consent of persons then holding at least a majority of the aggregate principal amount ofthe Note.16. Notices. Except as may be otherwise provided herein, all notices, requests,waivers and other communications made pursuant to this Note shall be made in accordance withSection 5.6 of the Agreement.17. Severability. If one or more provisions of this Note are held to be unenforceableunder applicable law, such provision shall be excluded from this Note and the balance of the Noteshall be interpreted as if such provision were so excluded and shall be enforceable in accordancewith its terms.18. Assignment. The Company shall not have the right to assign its rights andobligations hereunder or any interest herein.19. Remedies Cumulative; Failure or Indulgence Not a Waiver. The remedies provided inthis Note shall be cumulative and in addition to all other remedies available under this Note andany of the other Transaction Documents. No failure or delay on the part of Holder in the exerciseof any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any singleor partial exercise of any such power, right or privilege preclude other or further exercisethereof or of any other right, power or privilege.20. Payments. Whenever any payment of cash is to be made by the Company to any Personpursuant to this Note, such payment shall be made in lawful money of the United States of Americaby a check drawn on the account of the Company and sent via overnight courier service to suchPerson at such address as previously provided to the Company in writing (which address, in the caseof Holder as of the date of issuance hereof, shall initially be the address for Holder as set forthin the Agreement); provided that Holder may elect to receive a payment of cash via wire transfer ofimmediately available funds by providing the Company with prior written notice setting out suchrequest and Holder’s wire transfer instructions. Whenever anypayment to be made shall otherwise be due on a day which is not a Business Day, such paymentshall be made on the immediately succeeding Business Day and such extension of time shall beincluded in the computation of accrued interest.
 
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21. Excessive Interest. Notwithstanding any other provision herein to the contrary,this Note is hereby expressly limited so that the interest rate charged hereunder shall at no timeexceed the maximum rate permitted by applicable law. If, for any circumstance whatsoever, theinterest rate charged exceeds the maximum rate permitted by applicable law, the interest rate shallbe reduced to the maximum rate permitted, and if Holder shall have received an amount that wouldcause the interest rate charged to be in excess of the maximum rate permitted, such amount thatwould be excessive interest shall be applied to the reduction of the principal amount owinghereunder (without charge for prepayment) and not to the payment of interest, or if such excessiveinterest exceeds the unpaid balance of principal, such excess shall be refunded to the Company.22. Waiver of Notice. To the extent permitted by law, the Company hereby waivesdemand, notice, protest and all other demands and notices in connection with the delivery,acceptance, performance, default or enforcement of this Note and the Transaction Documents.
 
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by its officers,thereunto duly authorized as of the date first above written.         **VIA PHARMACEUTICALS, INC.**           By: /s/ Lawrence K. Cohen           Name: Lawrence K. Cohen     Title:President and Chief Executive Officer  *[Signature page to Note for Bay City Capital Fund IV, L.P.]*
 
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SCHEDULE 1Outstanding Note Balance for Note issued to Bay City Capital Fund IV, L.P.                     Date Drawdown  Prepayment  Unpaid Principal  Accrued Interest  Outstanding Balance 3/29/10 $1,223,625              $1,223,625