SAFE Investment Document

SAFE Investment Document

This Simple Agreement for Future Equity ("Agreement") is entered into as of by and between Company Name: , organized as , with principal place of business at (the "Company"), and Investor Name: , an , with address at (the "Investor").

RECITALS

WHEREAS, the Investor desires to make a capital contribution to the Company in the aggregate amount of (the "Purchase Amount") in exchange for the right to receive equity in the Company pursuant to the terms set forth herein; and

WHEREAS, the parties intend that the Purchase Amount will convert into equity securities of the Company upon the occurrence of certain events described in this Agreement, subject to the valuation cap, discount and other terms set forth herein.

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the Purchase Amount and any equity issued in connection therewith.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties agree as follows:

1. DEFINITIONS

Capitalized terms used in this Agreement shall have the meanings set forth below or elsewhere in this Agreement. "Equity Financing" means the Company's next sale of its preferred equity securities for capital raising purposes. "Liquidity Event" means a Change of Control or an initial public offering. "Dissolution Event" means any voluntary or involuntary liquidation, winding up or dissolution of the Company. "Conversion Price" means the price per share determined in accordance with Section 3.

2. PURCHASE; FUNDING

2.1 Purchase. In consideration of the agreements contained in this Agreement, the Investor shall deliver to the Company the Purchase Amount by wire transfer or other immediately available funds on or before (the "Funding Date"). Delivery of the Purchase Amount shall be deemed acceptance of and agreement to be bound by the terms of this Agreement.

3. AUTOMATIC CONVERSION UPON EQUITY FINANCING

3.1 Conversion. In the event that the Company consummates an Equity Financing prior to termination of this Agreement, the Purchase Amount shall automatically convert into the number of shares of the same equity securities issued in such Equity Financing equal to the Purchase Amount divided by the lesser of (a) the price per share determined by applying the Valuation Cap and (b) the price per share equal to the Financing Price multiplied by (1 - Discount Rate).

Valuation Cap:    Discount Rate:

4. LIQUIDITY EVENT

4.1 Treatment. If, prior to conversion of this Agreement, a Liquidity Event occurs, the Investor shall, at the Investor's option exercised in writing delivered to the Company not later than the closing of such Liquidity Event, either (a) receive a cash payment equal to the Purchase Amount, subject to the Company's ability to pay such amount from available proceeds, or (b) receive the number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price (with "Liquidity Price" determined by reference to the Valuation Cap and the capitalization immediately prior to the Liquidity Event). If the Investor fails to timely deliver such election, the Purchase Amount shall be automatically treated as elected in paragraph (b).

5. DISSOLUTION

5.1 Dissolution Payment. In the event of a Dissolution Event prior to conversion or repayment, the Investor shall be entitled to receive, immediately prior to distribution to holders of Common Stock, an amount equal to the Purchase Amount, subject to the available assets of the Company. Payment of such amounts shall be contingent on the existence of sufficient assets after payment of liabilities having priority under applicable law.

6. REPRESENTATIONS AND WARRANTIES

6.1 Company Representations. The Company represents and warrants to the Investor that: (a) the Company is duly organized, validly existing and in good standing under its jurisdiction of formation and has the corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and performance of this Agreement have been duly authorized by all necessary corporate action; (c) this Agreement constitutes a valid and binding obligation of the Company enforceable in accordance with its terms except as limited by bankruptcy, insolvency, and similar laws affecting creditors' rights generally; and (d) to the knowledge of the Company, the execution, delivery and performance of this Agreement does not conflict with any material agreement, instrument, order or law to which the Company is subject.

6.2 Investor Representations. The Investor represents and warrants to the Company that: (a) the Investor has full power and authority to enter into this Agreement; (b) the Purchase Amount and any securities issued upon conversion will be acquired for the Investor's own account for investment and not with a view to distribution; and (c) the Investor understands the speculative nature and risks of investing in early-stage companies.

7. COVENANTS

7.1 Notices of Financing. The Company shall use commercially reasonable efforts to notify the Investor in writing at least ten (10) business days prior to consummation of an Equity Financing, Liquidity Event or Dissolution Event, providing the Investor with the material terms of such transaction and any investor materials reasonably requested by the Investor in connection with the Investor's rights under this Agreement.

7.2 Further Assurances. The Company shall execute and deliver such further instruments and take such other actions as may be reasonably necessary to effectuate the transactions contemplated by this Agreement.

8. MISCELLANEOUS

8.1 Notices. All notices, requests, consents, demands, and other communications under this Agreement shall be in writing and shall be delivered to the addresses set forth below under "Notices" or to such other address as either party may designate by notice to the other.

8.2 Amendments; Waivers. No provision of this Agreement may be amended or waived except by an instrument in writing signed by the Company and the Investor. No failure or delay by any party in exercising any right shall operate as a waiver of such right.

8.3 Counterparts. 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 electronic transmission shall be binding.

8.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to conflicts of law principles.

8.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral.

8.6 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law, such provision shall be reformed only to the extent necessary to make it enforceable, and the remaining provisions shall remain in full force and effect.

9. ADDITIONAL TERMS

9.1 Assignment. This Agreement and the rights hereunder are personal to the Investor and may not be assigned without the prior written consent of the Company; provided that the Investor may assign this Agreement, in whole or in part, to an affiliate or to a purchaser of substantially all of the Investor's rights hereunder.

9.2 Remedies. The parties agree that monetary damages may be an inadequate remedy for breach of certain covenants and that the non-breaching party shall be entitled to seek injunctive relief in addition to any other remedies available at law or in equity.

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