Legal Note Conversion Agreement

LEGAL NOTE CONVERSION AGREEMENT

This Legal Note Conversion Agreement (the Agreement) is made as of by and between Issuer Name: , a , with principal place of business at (Issuer), and Holder Name: , with address at (Holder).

RECITALS

WHEREAS, on or about , Holder acquired from Issuer that certain promissory note in the original principal amount of $ (the Original Note), which bears interest at per annum and matures on .

WHEREAS, the parties desire to convert the outstanding principal, accrued interest and any other amounts due under the Original Note into equity of Issuer or into a replacement note, on the terms and subject to the conditions set forth in this Agreement.

WHEREAS, the parties intend that the conversion provided for herein shall be binding on and benefit Issuer, Holder and their respective successors and permitted assigns.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below:

"Conversion Date" means the date on which conversion occurs as set forth in Section 4.

"Conversion Shares" means the class and series of capital stock to be issued to Holder upon conversion as set forth in Section 2.3.

2. CONVERSION ELECTION

2.1 Conversion Amount. Subject to the terms and conditions of this Agreement, Holder elects to convert the outstanding principal amount of $ , plus accrued and unpaid interest as of the Conversion Date, and any other amounts due under the Original Note (collectively, the Conversion Amount).

2.2 Conversion Election. Holder chooses conversion to: Equity (shares) Replacement Promissory Note (Check the applicable conversion type. If Replacement Promissory Note is selected, the replacement terms in Section 2.4 apply.)

2.3 Equity Conversion Terms. If conversion to equity is selected, Holder shall receive Conversion Shares equal to the Conversion Amount divided by the Conversion Price. Conversion Price shall be $ per share for shares of class . Issuance of Conversion Shares shall be fully paid and nonassessable.

2.4 Replacement Note Terms. If conversion to a replacement promissory note is selected, the replacement note shall bear interest at per annum, shall mature on , and shall otherwise contain terms substantially as set forth in the replacement note attached as Exhibit A to this Agreement and delivered to Holder at Closing.

3. ADJUSTMENTS

3.1 Stock Splits; Recapitalizations. If Issuer effects any share split, reverse split, subdivision, combination, reclassification, or other change in its capitalization prior to issuance of Conversion Shares, the Conversion Price and number of Conversion Shares shall be proportionately adjusted to reflect such change.

3.2 Anti-Dilution. The Conversion Price shall be subject to adjustment in accordance with the anti-dilution protections expressly set forth in Issuer's certificate of incorporation or the applicable purchase agreement in effect as of the Conversion Date. Absent an express anti-dilution provision agreed in writing by Issuer and Holder, no further adjustment shall be made.

4. CLOSING; DELIVERY

4.1 Closing. The conversion shall occur at a closing (the Closing) to be held on (the Conversion Date), or such other date as the parties mutually agree in writing.

4.2 Delivery by Issuer. At Closing, Issuer shall deliver to Holder either (a) a certificate or certificates representing the Conversion Shares registered in the name of Holder or its designee, or (b) a replacement promissory note executed by Issuer, in each case free and clear of all liens, restrictions and encumbrances, and against which issuance no further approval by Holder is required.

4.3 No Fractional Shares. No fractional shares shall be issued. If after computation Holder would be entitled to any fractional share, Issuer shall round such fraction down to the nearest whole share and pay cash in lieu of the fractional share based on the Conversion Price.

5. REPRESENTATIONS AND WARRANTIES

5.1 Issuer Representations. Issuer represents and warrants to Holder as of the Effective Date and as of the Closing that:

(a) Organization and Authority. Issuer is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation and has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder.

(b) Enforceability. This Agreement has been duly authorized, executed and delivered by Issuer and constitutes a legal, valid and binding obligation of Issuer enforceable in accordance with its terms except as limited by bankruptcy, insolvency or similar laws.

(c) Authorization of Shares. The Conversion Shares, when issued and delivered in accordance with this Agreement, will be validly issued, fully paid and nonassessable and free of any preemptive rights of any person.

5.2 Holder Representations. Holder represents and warrants to Issuer that: (a) Holder has full power and authority to enter into this Agreement and to consummate the transactions contemplated hereby; (b) Holder is acquiring the Conversion Shares or replacement note for investment for Holder's own account and not with a view to distribution; and (c) Holder is an accredited investor or otherwise has the sophistication and ability to protect its own interests with respect to the acquisition.

6. CONDITIONS PRECEDENT

6.1 Conditions to Issuer's Obligations. Issuer's obligations to effect the conversion are subject to the satisfaction or waiver of each of the following conditions precedent: (a) receipt of all corporate approvals required under Issuer's organizational documents and applicable law; (b) no injunction or other legal restraint preventing issuance of Conversion Shares or replacement note; and (c) Holder's compliance with this Agreement.

6.2 Conditions to Holder's Obligations. Holder's obligations to convert are subject to the accuracy of Issuer's representations and Issuer's performance of its obligations at or prior to Closing.

7. TAXES; EXPENSES

Each party shall bear its own expenses incurred in connection with the negotiation, preparation, execution and performance of this Agreement. Issuer shall be responsible for any transfer taxes payable in connection with the issuance of Conversion Shares, unless otherwise required by law, in which case Holder shall cooperate in executing such documents as may be necessary to minimize taxes.

8. NOTICES

All notices, requests, consents and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, sent by nationally recognized overnight courier, or sent by certified or registered mail to the addresses set forth above (or to such other address as either party shall designate by notice to the other).

9. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the internal laws of the state of , without regard to conflict of laws principles. Each party irrevocably submits to the exclusive jurisdiction of the state and federal courts located in that state for any action arising out of or relating to this Agreement.

10. ENTIRE AGREEMENT; SEVERABILITY

This Agreement, together with the Original Note and any exhibits or schedules hereto, constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral, relating to such subject matter. If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, such provision shall be amended to the minimum extent necessary to make it enforceable, and the remaining provisions shall continue in full force and effect.

11. AMENDMENTS; WAIVER; COUNTERPARTS

No amendment, modification, supplement or waiver of any provision of this Agreement shall be effective unless made in writing and signed by the parties. No waiver by any party of any breach or default shall be deemed a waiver of any subsequent breach or default. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures delivered by facsimile or electronic image shall be binding.

12. MISCELLANEOUS

12.1 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Holder may not assign any of its rights under this Agreement without the prior written consent of Issuer, except to an affiliate or pursuant to a transfer of substantially all of Holder's assets.

REPRESENTATIONS AS TO AUTHORITY TO SIGN

Each person signing below represents and warrants that they are duly authorized to execute and deliver this Agreement on behalf of the party for whom they sign and that this Agreement is a valid and binding obligation of such party enforceable in accordance with its terms.

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