|Interest Rate:||The Notes will bear interest at |
___% per annum. Interest will accrue and be payable upon maturity.
|Conversion:||The Notes are convertible the next round of preferred stock issued by the Company in an equity financing in which the Company raises at least $|
[2,000,000] (excluding debt that is converting to preferred stock) which closes before the Maturity Date (as defined below), at the lower of (i) a
[15-20%] discount to the purchase price of the securities sold in such offering, or (ii) the price per share determined by reference to the Valuation Cap, on a fully-diluted basis (but not considering the conversion of this note and other similar notes).
|Maturity Date:||The Notes will mature |
__) years after their date of issuance (“Maturity Date”).
________ (waivable at the Company’s discretion).
|Use of Proceeds:||The proceeds of the offering will be immediately available to the Company for general working capital purposes.|
|Size of the Offering:||$|
________. The Company reserves the right to raise a greater or lesser amount in its sole discretion.
|Suitability:||An investment in the Notes is available to “accredited investors” who can bear the substantial risks involved and are willing to accept the lack of liquidity of their investment.|
|Subordination:||The Promissory Notes will be subordinated to other borrowings of the Company.|
|Closings:||There is no minimum amount required to be raised before the Company can accept subscriptions. The Company may hold any number of subsequent closings.|
|Amendment:||The Notes may be amended with the consent of the Company and holders of a majority in interest of the principal amount of the Notes outstanding.|
|Restricted Securities:||The Promissory Notes are not registered securities and are not transferable without the written approval of the Company.|