Convertible Note and NPA Agreement

CONVERTIBLE NOTE AND NPA AGREEMENT

THIS CONVERTIBLE NOTE AND NOTE PURCHASE AGREEMENT (this Agreement) is made as of by and between Issuer Name: , an entity organized under the laws of (Entity type: Corporation LLC Other), with principal place of business at (Issuer), and Investor Name: , with principal place of business at (Investor). Issuer and Investor are each a Party and collectively the Parties.

RECITALS

WHEREAS, Issuer desires to issue and sell to Investor, and Investor desires to purchase from Issuer, a convertible promissory note in the principal amount set forth below, subject to the terms and conditions of this Agreement and the Note;

WHEREAS, the Parties intend that the indebtedness evidenced by the Note shall be convertible into equity of the Issuer upon the occurrence of certain financing events, and that the issuance and sale of the Note shall be governed by the purchase provisions contained in this Agreement (the Note Purchase Agreement or NPA);

WHEREAS, the Parties desire to set forth the terms on which the Note will be issued, the circumstances and mechanics of conversion, and the representations, warranties, covenants, defaults and remedies applicable to the Parties.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

1. DEFINITIONS

1.1 Defined Terms. For purposes of this Agreement, the following terms shall have the following meanings:

"Note" means the Convertible Promissory Note issued by Issuer to Investor in substantially the form attached hereto as Exhibit A, evidencing the indebtedness described herein.

"Qualified Financing" means an equity financing of the Issuer pursuant to which gross proceeds to the Issuer equal or exceed (the Qualified Financing Threshold), subject to adjustment as set forth herein.

"Conversion Price" means the per share price at which the Note converts pursuant to Section 4, determined in accordance with the discount or valuation cap set forth by the Parties.

2. ISSUANCE AND PURCHASE

2.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Investor agrees to purchase and Issuer agrees to issue the Note in the principal amount of (Principal Amount) for an aggregate purchase price of (Purchase Price) at the Closing.

2.2 Closing. The Closing shall occur on the Effective Date or at such other time as the Parties may mutually agree. At the Closing, Investor shall deliver the Purchase Price by wire transfer or other immediately available funds and Issuer shall deliver the Note duly executed.

3. PRINCIPAL, INTEREST AND MATURITY

3.1 Interest. The Note shall accrue interest at a rate of per annum, compounded annually, from the Issuance Date until conversion or payment in full.

3.2 Maturity. Unless earlier converted pursuant to Section 4, the entire unpaid principal and accrued but unpaid interest shall be due and payable on (Maturity Date).

4. CONVERSION

4.1 Conversion on Qualified Financing. Upon the closing of a Qualified Financing, the outstanding principal and accrued interest under the Note shall automatically convert into the equity securities issued in such Qualified Financing at a conversion price equal to the lesser of (a) eighty percent (80%) of the price per share paid by the investors in the Qualified Financing (Discount Rate: ), and (b) the price per share implied by a pre-money valuation cap of (Valuation Cap), as adjusted for stock splits, combinations and similar events.

4.2 Conversion at Maturity. At the option of the Investor, any outstanding principal and accrued interest may be converted at the Maturity Date into the Issuer's equity at a conversion price computed using the Discount Rate or Valuation Cap, as applicable, provided Investor gives written notice to Issuer at least ten (10) days prior to the Maturity Date.

4.3 Mechanics of Conversion. Upon conversion, Issuer shall issue to Investor, and Investor shall accept, a certificate or evidence of issuance for the number of shares equal to the quotient of (x) the outstanding principal and accrued interest under the Note divided by (y) the Conversion Price, rounded down to the nearest whole share. Issuer shall deliver such shares within five (5) business days following conversion, subject to compliance with applicable securities laws.

5. PREPAYMENT; RESTRICTIONS

5.1 No Prepayment. Except with the written consent of Investor, Issuer shall not prepay the Note in whole or in part prior to conversion or Maturity.

5.2 Transfer Restrictions. Investor may not transfer the Note or any rights hereunder except in compliance with applicable securities laws and the Issuer's governing documents and only upon prior written consent of Issuer, which shall not be unreasonably withheld, provided that transfers to affiliates or permitted transferees shall be allowed.

6. EVENTS OF DEFAULT; REMEDIES

6.1 Events of Default. The occurrence of any of the following shall constitute an Event of Default: (a) Issuer's failure to pay any principal or interest when due (subject to any grace period set forth in the Note); (b) Issuer's breach of any material covenant or representation hereunder which is not cured within thirty (30) days after written notice; (c) Issuer's insolvency, bankruptcy filing or appointment of a receiver; or (d) any material adverse change in Issuer's business or capitalization that would reasonably be expected to prevent conversion.

6.2 Remedies. Upon an Event of Default, Investor may (i) accelerate the Note and declare all amounts immediately due and payable, (ii) seek specific performance, injunctive or other equitable relief, and (iii) exercise any other remedies available at law or in equity; provided, however, that Investor's election of one remedy shall not preclude election of another.

7. REPRESENTATIONS AND WARRANTIES

7.1 Issuer Representations. Issuer represents and warrants to Investor that: (a) Issuer is duly organized, validly existing and in good standing under the laws of the state of its organization and has full corporate power and authority to enter into and perform this Agreement and to issue the Note; (b) this Agreement and the Note, when executed and delivered by Issuer, will constitute valid and binding obligations of Issuer enforceable in accordance with their terms except as limited by bankruptcy, insolvency, reorganization and similar laws of general application; (c) the issuance of the Note is duly authorized and, when issued in accordance with the terms hereof, will be validly issued, fully paid and non-assessable.

7.2 Investor Representations. Investor represents and warrants to Issuer that: (a) Investor has full power and authority to enter into and perform its obligations under this Agreement; (b) Investor is acquiring the Note for investment for its own account and not with a view to distribution or resale in violation of applicable securities laws; and (c) Investor acknowledges and accepts the risks of investment in Issuer, including loss of investment and illiquidity.

8. COVENANTS

8.1 Conduct of Business. From the date hereof until conversion or repayment of the Note, Issuer shall carry on its business in the ordinary course and shall not merge, consolidate, sell all or substantially all of its assets, or enter into any material transaction outside the ordinary course without the prior written consent of Investor.

8.2 Information Rights. Issuer shall deliver to Investor annual financial statements within 120 days after fiscal year-end and quarterly unaudited financial statements within 45 days after each fiscal quarter end, or such other information as reasonably requested by Investor.

9. NOTE PURCHASE AGREEMENT PROVISIONS

9.1 Conditions Precedent to Closing. The obligations of Investor to close the purchase of the Note are subject to the satisfaction or waiver of customary conditions precedent including, without limitation, (a) accuracy of representations and warranties of Issuer as of the Closing, (b) delivery of the Note, and (c) the absence of any injunction or legal restraint preventing issuance of the Note.

9.2 Use of Proceeds. Issuer shall use the net proceeds from the Purchase Price for general corporate purposes consistent with the business plan delivered to Investor, and shall not use such proceeds for any unlawful purpose.

10. NOTICES

10.1 Manner of Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given when delivered personally, by nationally recognized overnight courier, by electronic mail (with confirmation), or three (3) business days after deposit in the United States mail, postage prepaid, addressed to the Party to be notified at its address set forth in this Agreement or at such other address as such Party shall have specified by notice to the other.

11. AMENDMENTS; WAIVER; COUNTERPARTS

11.1 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of Issuer and Investor. No failure or delay by a Party in exercising any right shall operate as a waiver of that right.

11.2 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. Signatures delivered by electronic transmission shall be effective as originals.

12. GOVERNING LAW; MISCELLANEOUS

12.1 Governing Law. This Agreement and the Note shall be governed by and construed in accordance with the internal laws of the state of without regard to any choice-of-law principles.

12.2 Entire Agreement. This Agreement, together with the Note and any exhibits or schedules hereto, constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, whether oral or written.

12.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be modified to the extent necessary to make it enforceable and the remaining provisions shall remain in full force and effect.

12.4 Assignment. Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party, except that Investor may assign all or a portion of its rights to an affiliate or permitted transferee without Issuer's consent.

13. ADDITIONAL TERMS

REPRESENTATIONS CONCERNING SECURITIES LAW COMPLIANCE

Investor certifies that it is an accredited investor or otherwise has the knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of investment in Issuer and acknowledges that Issuer is relying upon such representation in consummating the transactions contemplated by this Agreement.

SCHEDULE OF EXHIBITS

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