Series B Noteholder Agreement

Series B Noteholder Agreement

This Series B Noteholder Agreement (the Agreement) is entered into as of by and among:

Parties

Recitals

WHEREAS, the Company has issued one or more convertible promissory notes and desires to set forth the agreement among the holders of such notes and the Company with respect to conversion mechanics, treatment upon a Series B Preferred financing, adjustment mechanics, and related rights and obligations; and

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

Definitions

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

"Notes" means the convertible promissory notes listed in Schedule A: Note Details attached hereto, representing indebtedness of the Company to the Noteholder and evidenced by instruments.

"Qualified Series B Financing" means the Company’s bona fide equity financing resulting in aggregate gross proceeds to the Company of at least (exclusive of amounts converted from outstanding convertible instruments).

Schedule A: Note Details

The table below lists each Note held by the Noteholder to which this Agreement applies. If additional Notes exist, attach additional rows on a separate Schedule A.

Terms of the Notes

Principal Amount Outstanding (aggregate):

Interest shall accrue on the unpaid principal at the rates set forth in Schedule A and shall be payable upon conversion, repayment or maturity unless otherwise agreed. Accrued unpaid interest shall be convertible with the principal as set forth in Section 3 below.

Conversion upon Qualified Series B Financing

Upon the closing of a Qualified Series B Financing, each Noteholder shall have the right, at the election of the Noteholder (which election shall be irrevocable if made in connection with the financing closing), to convert the outstanding principal and accrued and unpaid interest of each Note into shares of the Series B Preferred Stock issued in such financing at a conversion price per share equal to the lower of:

1. the price per share paid by the investors in the Qualified Series B Financing; or
2. the price per share equal to the price paid by the Series B investors multiplied by (1 - ), representing the discount described in this Agreement.

If the Qualified Series B Financing price is not determinable, the conversion price shall be determined by independent valuation in accordance with customary valuation procedures agreed by the Company and holders representing a majority of the outstanding principal.

Conversion on Maturity or Other Events

At maturity, unless repaid in full, Notes shall automatically convert into the Company’s Common Stock at a conversion price equal to as reasonably determined by the Board or in accordance with a valuation method approved by holders of a majority in principal of the Notes.

Repayment, Prepayment, and Default

Repayment obligations: The Company shall repay outstanding principal and accrued interest on the Maturity Date unless earlier converted. Prepayment by the Company is: permitted not permitted

Events of Default shall include: failure to pay principal or interest when due beyond any applicable cure period, insolvency, a material breach of this Agreement uncured for 30 days, or any material adverse change affecting the Company’s ability to perform. Upon Event of Default, holders may declare the Notes immediately due and payable and pursue all remedies available at law or in equity.

Adjustments; Anti-Dilution

In the event of stock splits, stock dividends, combinations, recapitalizations, reclassifications, or other similar events, appropriate adjustments shall be made to the number of shares issuable upon conversion. Any adjustment made pursuant to this Section shall be made in a manner that preserves the economic benefit of the Notes to the Noteholders.

Representations and Warranties of the Company

The Company represents and warrants to the Noteholder that as of the Agreement Date: (a) the Company is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation; (b) the execution, delivery and performance of this Agreement are within the Company’s corporate powers and have been duly authorized; (c) the Notes are valid and binding obligations of the Company enforceable in accordance with their terms except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws; and (d) there are no outstanding rights, options or agreements that would prevent the issuance of shares upon conversion of the Notes in accordance with their terms, subject to shareholder approvals required by law or the Company’s charter documents.

Representations and Warranties of Noteholder

The Noteholder represents and warrants that: (a) it has full power and authority to execute and deliver this Agreement and any Notes it holds; (b) it is acquiring the Notes for investment and not with a view to resale or distribution in violation of applicable securities laws; and (c) it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment.

Covenants

Until conversion or repayment in full, the Company shall: (a) comply with its material contracts and applicable law; (b) not create any lien on its intellectual property assets senior to the Notes except with the consent of holders of a majority in principal amount of the Notes; and (c) provide to holders periodic updates regarding material business developments upon written request consistent with confidentiality obligations.

Notices

Notices under this Agreement shall be in writing and delivered by hand, overnight courier, certified mail (return receipt requested), or email (with delivery confirmation) to the addresses set forth below or to such other address as either party may designate by notice to the other in accordance with this Section.

Assignment; Transfer

Notes may not be assigned or transferred except (a) in compliance with applicable securities laws, and (b) with the prior written consent of the Company (which consent shall not be unreasonably withheld), provided that a transfer to an affiliate or to permitted transferees shall be allowed upon notice to the Company.

Amendments; Waiver

Any amendment or waiver of any provision of this Agreement shall require the written consent of the Company and the holders of at least a majority in aggregate principal amount of the outstanding Notes, unless a greater percentage is required by the Notes or applicable law.

Governing Law; Venue

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to conflict of laws principles. The parties agree that exclusive venue for disputes shall be in the state or federal courts located in the same state, unless otherwise required by mandatory jurisdictional rules.

Severability; Counterparts

If any provision of this Agreement is held invalid or unenforceable, such invalidity shall not affect the remaining provisions which shall remain in full force and effect. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

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