8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 12, 2009

SMART MOVE, INC.
(Exact name of registrant as specified in its charter)

Delaware	001-32951	54-2189769
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5990 Greenwood Plaza Blvd. #390 Greenwood Village, CO	80111
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (720) 488-0204

Not Applicable

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Forward Looking Statements

Statements in this Current Report on Form 8-K (including the exhibits) that are not purely historical facts, including statements regarding Smart Move, Inc.’s beliefs, expectations, intentions or strategies for the future, may be “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding expected financing or funding transactions and any statements identified by forward looking terms such as “may,” “will,” “would,” “expect,” “plan,” “anticipate” or “project.” These statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements, including, among others, risks relating to general economic conditions affecting the Company’s operations or the demand for its services and any delay or failure of the Company to complete any funding or financing transaction at levels sufficient to meet its working capital requirements. Smart Move has included a discussion of these and other pertinent risk factors in its Annual Report on Form-KSB for 2007 and in Quarterly Reports on Form 10-Q for the first, second and third quarters of 2008. Smart Move disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 1.01. Entry into a Material Definitive Agreement

On January 12, 2009, Smart Move, Inc. (the “Company”) entered into the material agreement described in Item 2.03, below, and attached as Exhibit 4.1 which is a Bridge Loan Agreement with Thomas P. Grainger by which the Company obtained gross loan proceeds of $300,000. The Company and the Investor also entered into a Debenture in the form attached hereto as Exhibit 4.2.

In accordance with rules of the American Stock Exchange, the Audit Committee of the Board of Directors of Smart Move, Inc. reviewed the terms of the proposed transaction with a related person to determine whether the arrangements would be consistent with the best interests of the Company and its stockholders. Based upon the transaction terms and conditions to be applicable under the terms of agreement proposed, the Company’s current need for funding to maintain operations and its delays in securing equity capital at higher targeted levels, the Committee concluded that the transaction terms proposed are fair and reasonable under all of the circumstances, and are in, or not inconsistent with, the best interests of the Company and its stockholders. The Committee also noted that the terms were no less favorable to the Company than terms that would be obtainable at the current time by the Company for a comparable transaction in arms’ length dealings negotiated in good faith with unrelated third parties. The Committee took into account in its determination the probability that shares issuable to the investor as compensation for extension of the maturity date would likely become issuable in view of the uncertainty that the Company would be able to complete an equity raise at the level of $8,000,000, and that the terms and conditions would include appropriate provisions confirming the purchaser’s passive investment intent and to ensure no change of control could be triggered by any securities issuances or the exercise of purchase rights under the warrant.

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Item 2.03. Creation of a Direct Financial Obligation

On January 12, 2009, a Bridge Loan Agreement in the form attached as Exhibit 4.1, was entered into between the Company and Thomas P. Grainger for a short term loan in the principal amount of $300,000 bearing interest at 12% per annum. Although the loan maturity date is specified as February 15, 2009, the agreement specifies automatic extension of the maturity date until June 1, 2009 unless the Company completes one or more new financings aggregating $8,000,000. The loan is secured to the extent of principal and interest not to exceed $245,000 by 800 SmartVault containers on a pro rata and pari passu basis with holders of security in the same assets with respect to $1,255,000 of existing indebtedness. The loan bears interest at the rate of 12% per annum, payable monthly and at maturity. The Company paid a placement agent that is a registered FINRA broker a fee equal to 6% of the gross proceeds at the closing of the bridge loan. The terms of the bridge loan include conditional issuances of restricted securities to the lender as described in Item 3.02. The Company and the Investor also entered into a Debenture, a copy of the form of which is attached hereto as Exhibit 4.2.

Item 3.02. Unregistered Sales of Securities

In connection with the bridge loan funding described in Items 1.02 and 2.03 above, and as additional risk-related consideration agreed to be paid to the lender for making the short-term loan on an unsecured basis, the Company issued its secured 12% debenture and also agreed, subject to satisfaction of approval requirements to issue restricted common stock at the maturity date along with warrants to purchase common stock, also constituting restricted securities. The stated Maturity Date of February 15, 2009 will be automatically extended until June 1, 2009 unless an equity raise of at least $8,000,000 occurs, which is currently not expected to occur prior to the latest maturity date. Assuming that the automatic extension to June 1, 2009 will be applicable, on February 15, 2009, the Company will accrue an obligation to issue 5,000,000 shares of its common stock at the final maturity date and will also accrue an obligation to issue restricted common stock to the investor at the final maturity date in the amount of 2,500,000 shares as of each of February 15, March 15, April 15, and May 15, 2009, along with warrants issuable at each such date granting a right to acquire 225% of the restricted common stock at an exercise price equal to 110% of the market price of the Company’s common stock on the date of closing or applicable date of vesting of extension consideration shares. The lender is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the Securities Act of 1933, as amended (“the 1933 Act”) and the Company relied upon the exemption from securities registration afforded by the provisions of Rule 506 of Regulation D, under the Securities Act of 1933. A placement agent fee equal to 6% of the gross bridge loan proceeds was paid by the Company to a registered FINRA broker at the Closing.

The Company and the Investor also entered into a Debenture, a copy of the form of which is attached hereto as Exhibit 4.2.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

EX 4.1- Bridge Loan Agreement dated as of January 12, 2009 among the Company and Thomas P. Grainger

EX 4.2- 10% Unsecured Debenture

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.

	SMART MOVE, INC.
Date: January 16, 2009	By:	/s/ Edward Johnson

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EX-4.1

Exhibit 4.1

BRIDGE LOAN AGREEMENT

THIS BRIDGE LOAN AGREEMENT (“Agreement”) is made and entered into by and between Smart Move, Inc., a Delaware corporation (the “Company”), and Thomas P. Grainger (“Investor”).

Recitals

A. The Company and the Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended; and

B. The Company wishes to procure a short-term loan maturing on February 15, 2009, unless automatically extended in successive thirty day increments as herein provided to a final maturity date not later than June 1, 2009, for a secured promissory note in the form attached hereto as Exhibit “A” in the principal amount of $300,000, bearing interest at the rate of 12% per annum, interest to be payable monthly (the “Debenture”) and (ii) an Equity Consideration consisting of (A) shares of Company common stock, par value $.0001 per share (“Common Stock) and (B) a three-year warrant to purchase shares of Company Common Stock to be issued in the form described in Section 2.2 (the “Warrant”).

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common control with, such Person.

“Closing” has the meaning set forth in Section 3.

“Closing Date” means a mutually acceptable date on or before January 9, 2009.

“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Debenture” has the meaning set forth in recitals.

“Equity Consideration” means the Equity Shares and Warrant to be issued as set forth in Section 2.2.

“Equity Shares” shall have the meaning as set forth in Section 2.2.

“Extension Fees” shall mean the Company Common Stock to be issued pursuant to the Debenture in the event that the maturity date is extended.

“Purchase Price” means $300,000.

“SEC Filings” has the meaning set forth in Section 4.

“Securities” means the Debenture, the Equity Shares, the Warrant and the Underlying Shares.

“Transaction Documents” means this Agreement, the Warrant and the Debenture.

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“Underlying Shares” means the Warrant Shares.

“Warrants” has the meaning set forth in the recitals.

“Warrant Shares” means the shares of Common Stock issuable upon the exercise of the Warrant.

“1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

2. Debenture and Other Securities Issued in Exchange for Bridge Loan Funding.

2.1 Purchase and Issuance of the Debenture. Subject to the terms and conditions of this Agreement, on the Closing Date the Investor shall purchase and the Company shall sell and issue to the Investor the Debenture in the principal amount of $300,000, in the form attached hereto as Exhibit A, in exchange for the Purchase Price.

2.2 Purchase of Debenture and Issuance of the Equity Consideration. At the Closing Date the Investor shall have the vested right to receive on the Maturity Date, as consideration for making the loan contemplated hereby, 5,000,000 shares of the Company’s common stock which shall constitute restricted securities. The stated Maturity Date shall be automatically extended from February 15, 2009 in successive increments of thirty (30) days each, unless prior to the original or current extended Maturity Date, the Company has raised new equity capital of at least $8,000,000, but from and after June 1, 2009, only the Investor in his sole discretion, may extend the Maturity Date. An entitlement of the Investor to receive an additional share issuance of restricted common stock in the amount of 2,500,000 shares shall become fully vested as of each of February 15, March 15, April 15, and May 15, 2009, as applicable for each 30 day or partial period extension triggered as of such date (aggregating 10,000,000 shares of restricted common stock if all extensions apply, such shares to be issued together with the 5,000,000 consideration shares at the Maturity Date. .. In addition the Company shall issue Warrants at the Closing and on each additional extension date on which a right to receive issuance of additional shares as above described becomes vested as a result of the extension election. Each Warrant shall be in the identical form and contain all of the terms, conditions and restrictions set forth in the warrant attached as Exhibit B to that certain Agreement between the Investor and the Company dated July 28, 2008, except that each Warrant shall be issued at the applicable Closing and any elected extension date, if applicable, and shall evidence the right to purchase a number of shares of Company Common Stock equal to 225% of the Equity Shares concurrently becoming vested for issuance at the Maturity Date, and each Warrant will specify an exercise price per share equal to 110% of the market price of Company’s common stock on the date of Closing or the applicable date of any extension election.

3. Closing. Subject to the attaining of necessary approvals and consents at the closing of the funding transaction contemplated by this Agreement, the Company shall cause the delivery of the Debenture registered in the name of the Investor and the Investor shall issue a check in good and sufficient funds or shall make a wire transfer to the Company in same day funds of the sum of three hundred thousand dollars ($300,000). The closing of the funding contemplated by this Agreement (“Closing”) shall take place on or before January 9, 2009 (“Closing Date”).

4. Delivery of SEC Filings. The Company has made available to the Investor through the EDGAR system, true and complete copies of the Company’s most recent Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007 (the “10-KSB”), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-KSB and prior to the date hereof (collectively, the “SEC Filings”). The SEC Filings are the only filings required of the Company pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole.

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5. Use of Proceeds of the Sale of the Debenture; Use of Proceeds of a New Financing Transaction. The net proceeds of the sale of the Debenture hereunder shall be used by the Company for working capital to enable the Company to continue business operations until it is able to complete a New Financing Transaction. The Company will not pursue a New Financing Transaction except on a basis which provides for the Debenture to be repaid in full upon the Closing or completion of the New Financing Transaction.

6. Approvals Required; Conditions and Limitations. The effectiveness of the Transaction Documents and the issuance and sale of the Securities is subject to the required prior approval by the Company’s Audit Committee of this Agreement (being an agreement between the Company and a related person) and to the approval of listing of the Securities by the Alternext Exchange (formerly called the American Stock Exchange), and to the consent of the John Thomas Bridge and Opportunity Fund, L.P., a prior bridge funding lender pursuant to agreements entered into with the Company in November, 2008.

7. Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, other than a fee equal to 8% of the note proceeds to be paid to J.P. Turner Inc., a registered FINRA broker.

8. Accredited Investor; Purchase Entirely for Own Account and not to Acquire Control. Investor is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act. The Securities to be received by Investor hereunder will be acquired for Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time except as required by law. Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered. This Agreement and the Securities to be received by the Investor pursuant to the Warrant shall be expressly subject to the Restricted Ownerhip Percentage limitations included in the Investor’s existing Warrant described in Recitals B above whereby the number of shares that may be acquired by the holder at any time may not exceed 35% of the total issued and outstanding shares of the Common Stock of the Company or under any other circumstances have the effect of causing or enabling a change in control to occur that would not otherwise occur.

9. Disclosure of Information. Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities. Investor acknowledges receipt of copies of the SEC Filings, that all statements, representations and warranties of the Company in this Agreement are deemed supplemented or qualified by the disclosures therein contained, that the SEC Filings include forward looking statements concerning results or expectations that are subject to significant risks as therein described which the Investor has been advised to consider in making the Bridge Loan and related investment in the securities constituting the Equity Consideration. Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, amend or affect Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.

10. Restricted Securities. Such Investor understands that the Securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances and in compliance with applicable federal and state securities laws.

11. Legends. It is understood that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:

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(a) “The securities represented hereby may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144, or (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification under applicable state securities laws. Notwithstanding the foregoing, the securities may be pledged in connection with a bona fide margin account secured by the securities.”

(b) If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by such state authority.

12. No General Advertisement. Investor did not learn of the investment in the Securities as a result of any public advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television, radio or internet or presented at any seminar or other general advertisement.

13. Patriot Act. Neither Investor nor any of its Affiliates has been designated, and is not owned or controlled, by a “suspected terrorist” as defined in Executive Order 13224. None of the cash used to fund such Investor’s portion of the Purchase Price has been, and none of the cash used to fund any cash exercise of such Investor’s Warrants will be, or derived from, any activity that could cause the Company to be in violation of the United States Bank Secrecy Act, the United States International Money Laundering Control Act of 1986 or the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001.

14. Best Efforts. The Company shall use its best efforts to close a New Financing Transaction prior to the Maturity Date of the Debenture.

15. Miscellaneous.

15.1 Counterparts; Faxes. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed via facsimile, which shall be deemed an original.

15.2 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one Business Day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

If to the Company:

Smart Move, Inc.
5990 Greenwood Plaza Blvd, #2 Suite 390
Greenwood Village, CO 80111
Attention: Chris Sapyta
Facsimile: 720-488-0199

If to the Investor, to the address set forth on the signature page with a copy to Investor’s legal counsel:

Bill Wyatt
Wyatt & Winslow, LLC
222 West Magnolia Street
Fort Collins, Colorado 80521-2899
Facsimile: (970) 484-1170
E-mail: wyattlaw@qwest.net

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15.3 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement 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 Investor. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, each future holder of all such Securities, and the Company.

15.4 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

15.5 Entire Agreement. This Agreement, including the Exhibits and the Disclosure Schedules, and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

15.6 Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

15.7 Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Colorado without regard to the choice of law principles thereof.

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

The Company:	SMART MOVE, INC.
	By:
	Name:
	Title:

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The Investor:	Thomas P. Grainger
	By:
	Name:
	Title:

Aggregate Purchase Price: $300,000
Principal Amount of Debenture: $300,000

Address for Notice:

Thomas P. Grainer
4 miles South of Saratoga Highway 130
Saratoga, WY 82231

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EX-4.2

Exhibit 4.2

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

Original Issue Date: January ___, 2009

$300,000

12% SECURED DEBENTURE
DUE MARCH 31, 2009

THIS DEBENTURE of Smart Move, Inc., a Delaware corporation, having a principal place of business at 5990 Greenwood Plaza Blvd, #2 Suite 390, Greenwood Village, Colorado 80111 (the “Company”), designated as its 12% Secured Debenture, due February 15, 2009 (the “Debenture”), with ability of the Company to extend the note in 30 day increments until June 1, 2009.

FOR VALUE RECEIVED, the Company promises to pay to Thomas P. Grainger or its registered assigns (the “Holder”), the principal sum of $300,000 on February 15, 2009, provided the Company has completed a new equity raise of at least $5,000,000 on or before such date, or on the specific later extended maturity date to which the maturity of the Debenture may be automatically extended for successive periods of thirty (30) days each. With respect to each automatic extension of thirty days (or prorata portion thereof in the case of the final automatic extension) the obligation to issue 2,500,000 shares of restricted common stock at maturity of accrues (10,000,000 shares of restricted stock being issuable at maturity for the extensions if all automatic extensions are applicable), provided that in no event shall the Maturity Date be extended beyond June 1, 2009 except with the consent of Holder (the “Maturity Date”). The Company shall pay the accrued interest to the Holder monthly and at the Maturity Date on the then outstanding principal amount of this Debenture at the rate of 12% per annum, all interest payable in cash. The Company may pay this Debenture only at the applicable original or extended Maturity Date. Any extension of the Maturity Date beyond June 1, 2009 shall be in the sole discretion of the Holder.

This Debenture is subject to the terms and conditions set forth in the Bridge Loan Agreement, as well as to the following additional provisions:

Section 1. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration of transfer or exchange.

Section 2. This Debenture has been issued subject to certain investment representations of the original Holder set forth in the Bridge Loan Agreement and may be transferred or exchanged only in compliance with the Bridge Loan Agreement and applicable federal and state securities laws and regulations. Prior to due presentment to the Company for transfer of this Debenture, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Section 3. Events of Default.

(a) “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

(i) any default in the payment of the principal amount of, or interest on, the Debenture;

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(ii) any representation or warranty made by the Company in the Bridge Loan Agreement or any other Transaction Documents was incorrect in any material respect on or as of the date made;

(iii) the Company shall fail to observe or perform any other covenant or agreement contained in this Debenture or any of the other Transaction Documents which failure is not cured, if possible to cure, within 10 Trading Days after notice of such default is sent by the Holder or by any other holder to the Company; or

(iv) the Company shall commence, or there shall be commenced against the Company a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or there is commenced against the Company any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 60 days; or the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days; or the Company makes a general assignment for the benefit of creditors; or the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company; or any corporate or other action is taken by the Company or any subsidiary thereof for the purpose of effecting any of the foregoing;

Section 4. This Debenture is a direct obligation of the Company, and the obligation of the Company to repay this Debenture is absolute and unconditional. This Debenture shall be secured to the aggregate extent of principal and interest owing hereunder that does not exceed $245,000 by 800 SmartVault containers, such security interest to be held pro rata and on a parri pasu basis with the holders of existing indebtedness in the aggregate principal amount of $1,255,000 currently held by third parties which is also secured by the subject 800 SmartVault containers.

Section 5. Interest on the amount advanced will accrue on this Debenture until the Maturity Date. at the rate of twelve percent (12% per annum), and be payable monthly on or before the 15^th day of each month and at the Maturity Date. If any portion of this Debenture is outstanding on the Maturity Date, as extended, if applicable, interest at the rate of eighteen percent (18%) per annum or the highest rate allowed by law, whichever is lower, shall accrue on the outstanding principal of this Debenture from the Maturity Date to and including the date of payment by the Company. All past due interest shall accrue on a daily basis and shall be payable in cash. The Holder may demand payment of all or any part of this Debenture, together with accrued interest, if any, and any other amounts due hereunder, as of the Maturity Date or any date thereafter.

Section 6. Any payment made by the Company to the Investor, on account of this Debenture shall be applied in the following order of priority: (i) first, to any amounts other than principal and accrued interest, if any, hereunder, (ii) second, to accrued interest, if any, through and including the date of payment, and (iv) then, to principal of the Debenture.

Section 7. The outstanding principal of the Bridge Loan evidenced by this Debenture may be prepaid in cash in whole or in part at the option of the Company without penalty. All payments contemplated to be made “in cash” and shall be made in immediately available good funds of United States of America currency by wire transfer to an account designated in writing by the Investor to the Company (which account may be changed by notice similarly given). For purposes of the Debenture, the phrase “date of payment” means the date good funds are received in the account designated by the notice which is then currently effective.

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Section 8. The Maturity Date of this Debenture is February 15, 2009, but the Maturity Date shall be automatically extended for successive periods of thirty days each unless the Company completes a new equity capital raise of at least $5,000,000 prior to the original or extended Maturity Date, and 2,500,000 shares of restricted common stock will become vested in for payment at the final Maturity Date on each of February 15, March 15, April 15, and May 15, 2009 if all automatic extensions are applicable. In no event may the Maturity Date be extended by election of the Company beyond June 1, 2009, except at the election of and in the sole discretion of the Holder.

Section 9. This Debenture shall be governed by and interpreted in accordance with the laws of the State of Colorado for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws.

Section 10. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any notice of conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, facsimile number 5990 Greenwood Plaza Blvd. Suite 390 Greenwood Village, CO 80111. fascimile number 720-488-0190, Attn: Chris Sapyta or such other address or facsimile number as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. Denver, Colorado time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (Denver, Colorado time) on any date and earlier than 11:59 p.m. (Colorado time) on such date, (iii) the second business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding business day.

Section 11. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Company.

Section 12. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above indicated.

SMART MOVE, INC.

By:

Name:

Title:

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