Exhibit
10.3
Promissory
Note
(Inventory
Financing)
August 17,
2009
Borrower: Sielox,
LLC
Lender: Summit
Financial Resources, L.P.
Amount:
$500,000.00
Maturity: August
17, 2010
For value received,
Borrower promises to pay to the order of Lender at 2455 E. Parleys
Way, Suite 200, Salt Lake City, Utah 84109, the sum of five hundred
thousand dollars ($500,000.00) or such other principal balance as
may be outstanding hereunder in lawful money of the United States
with interest thereon at a variable rate computed on the basis of a
three hundred sixty (360) day year as follows: two percent (2%) per
annum above the Prime Rate (hereinafter defined) from time to time
in effect, adjusted as of the date of any change in the Prime
Rate.
This Promissory Note
shall be a revolving line of credit under which Borrower may
repeatedly draw and repay funds, so long as no Event of Default has
occurred under the Loan and Security Agreement dated August 17,
2009, between Lender and Borrower (the “Loan and Security
Agreement”) and so long as the aggregate, outstanding
principal balance at any time does not exceed the principal amount
of this Promissory Note. Disbursements under this Promissory
Note shall be made in accordance with the Loan and Security
Agreement.
Interest shall accrue
from the date of disbursement of the principal amount or portion
thereof until paid, both before and after judgment, in accordance
with the terms set forth herein. Interest shall not accrue on
the principal balance of unused proceeds funding the Reserve (as
defined in the Loan and Security Agreement) as provided in the Loan
and Security Agreement.
Principal and interest
shall be payable as follows: Interest accrued is to be paid
monthly commencing September 1, 2009, and on the same day of each
month thereafter. All principal and unpaid interest shall be
paid in full on August 17, 2010.
All payments shall be
applied first to accrued interest and the remainder, if any, to
principal.
Unless Lender agrees
otherwise in writing, Borrower shall execute the necessary
documents and arrange for all payments hereunder to be paid by
automatic transfer of fund
