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., a Delaware corporation (the “Company”), and [Name of Lender], a _______________________ (“Lender”). Capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to them in Section 1 below. WHEREAS, Lender intends to lend up to an aggregate amount of $[_______] to the Company (the “Consideration”); and WHEREAS, the parties wish to provide for the sale and issuance of Notes in return for the provision by Lender of the Consideration to the Company. NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: Definitions. (a) “Conversion Shares” shall, for purposes of determining the type of Equity Securities issuable upon conversion of the Notes, mean: (i) if the Notes are converted to equity pursuant to Section 2.3(a) below, the Equity Securities issued in the Next Equity Financing; (ii) if the Notes are converted to equity pursuant to Section 2.3(b) below, shares of Series A Preferred Stock; and (iii) if the Notes are converted to equity pursuant to Section 2.3(c) below, shares of Common Stock. (b) “Conversion Price” shall mean:
(i) with respect to a conversion pursuant to Section 2.3(a) below, the price paid per share for Equity Securities by the investors in the Next Equity Financing; (ii) with respect to a conversion pursuant to Section 2.3(b) below, the price per share based on a pre-conversion valuation of the Company of $XX,000,000; and (iii) with respect to a conversion pursuant to Section 2.3(c) below, the price per share based on a pre-conversion valuation of the Company, all as determined according to the following formula: (a) the higher of (i) 5 x the gross revenues for the most recent trailing 12 calendar month period or (ii) the valuation of the Company established by a mutually acceptable third party evaluator divided by (b) the Company’s fully diluted share figure (assuming the exercise of all outstanding options and warrants to the extent such figures can be determined) .
SFO 360336v1 0083635-000001
the Company’s Common Stock or Preferred Stock. 2011. of the Company’s securities if. (iii) the closing of the transfer (whether by merger. however. employee or consultant of the Company in such capacity for the primary purpose of soliciting or retaining their services. Terms of the Loans. (d) “Equity Securities” shall mean the Company’s Common Stock or Preferred Stock or any securities conferring the right to purchase the Company’s Common Stock or Preferred Stock or securities convertible into. 1.1 above. provided.00 to the Company. as amended (the “Act”). (ii) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity). (g) “Next Equity Financing” shall mean the next sale (or series of related sales) by the Company of its Equity Securities following the date of this Agreement from which the Company receives gross proceeds of not less than $1. issued and/or sold by the Company to any director. (f) “Maturity Date” shall mean April 15.0000. that a transaction shall not constitute a Corporate Transaction if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction. (h) “Notes” shall mean the one or more secured convertible promissory notes issued to Lender pursuant to Section 2. consolidation or otherwise). to a person or group of affiliated persons. (e) “Initial Public Offering” shall mean the closing of the issuance and sale of shares of Equity Securities of the Company in the Company’s first underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933. dissolution or winding up of the Company. in one transaction or a series of related transactions.3 Issuance of Notes. officer. the Company shall sell and issue to Lender a Note.2 below. or exchangeable for (with or without additional consideration). Each time Lender delivers Consideration to the Company pursuant to Section 2.2 Initial Loan. SFO 360336v1 0083635-000001 2 . transfer or other disposition of all or substantially all of the Company’s assets. such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Company (or the surviving or acquiring entity) or (iv) a liquidation. after such closing.(c) “Corporate Transaction” shall mean (i) the closing of the sale. except any security granted.000.3 below). Lender shall loan an amount not less than $100. the form of which is attached hereto as Exhibit A. Subject to the terms and conditions set forth below.000 (excluding the aggregate amount of debt securities converted into Equity Securities upon conversion of the Notes pursuant to Section 2. 1.
At least ten (10) days prior to the closing of the Next Equity Financing. (b) or (c) above.3 (b) it must secure written consent from the Company). the Company shall take such corporate and other action as may be necessary authorize the Conversion Shares (and shares issuable upon conversion of such Conversion Shares). Notwithstanding the foregoing. all outstanding principal and unpaid accrued interest due on such Note shall. (b) Maturity Conversion.1(a). (d) No Fractional Shares. at the option of the holder thereof into Conversion Shares (provided. As soon as is practicable after the holder of a Note delivers notice to the Company pursuant to Section 2. The principal and unpaid accrued interest of each Note will be automatically converted into Conversion Shares upon the closing of the Next Equity Financing. (c) Corporate Transaction. The number of Conversion Shares to be issued upon conversion shall be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Note to be converted on the date of conversion by the Conversion Price.3 below and shall be secured by the assets of the Company as described in such Notes and the related security agreement (the “Security Agreement”). At least ten (10) days prior to the closing of the Corporate Transaction. be (i) due and payable in full at the closing of the Corporate Transaction or (ii) be converted into Conversion Shares. In the event of a Corporate Transaction prior to full payment of a Note or prior to the time when a Note may be converted (as provided herein). which shares shall have the rights. If converted.4 Right to Convert Notes. the number of Conversion Shares to be issued upon conversion shall be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Note to be converted on the date of conversion by the Conversion Price. The issuance of Conversion Shares pursuant to the conversion of each Note shall be upon and subject to the same terms and conditions applicable to the Equity Securities sold in the Next Equity Financing.Each Note shall have a principal balance corresponding to the amount of Consideration paid by Lender pursuant to 2.3(e) below that such holder intends to convert such Note pursuant to this Section 2. preferences and privileges set forth in Exhibit B hereto. Upon the conversion of a Note into Conversion Shares. 1. however if the holder wishes to convert prior to the Maturity Date on the terms set forth in this Section 2. Each Note shall be convertible into Conversion Shares pursuant to Section 2. (a) Next Equity Financing. in lieu of any fractional shares to which the holder of the Note would SFO 360336v1 0083635-000001 3 ..3(b). If the Next Equity Financing has not occurred on or before the Maturity Date. the Company shall notify the holder of each Note in writing of the terms under which the Equity Securities of the Company will be sold in such financing. The number of Conversion Shares to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest on a Note to be converted on the date of conversion by the Conversion Price. at Lender’s election. accrued interest on this Note may be paid in cash at the option of the Company. the principal and unpaid accrued interest of each Note may be converted. the Company shall notify the holder of each Note in writing of the terms of such Corporate Transaction.
SFO 360336v1 0083635-000001 4 . execution and delivery of this Agreement and the Notes. all corporate action has been taken on the part of the Company. the Company hereby represents and warrants to Lender that: 1. on the date of execution of this Agreement. California. directors and stockholders necessary for the authorization. at 10:00 a. the Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Agreement and the Notes the valid and enforceable obligations they purport to be. and the Company shall deliver to Lender an executed Note in return for such Consideration provided to the Company. execution and delivery of this Agreement. A conversion pursuant to Section 2. Representations and Warranties of the Company. Before any Note holder shall be entitled to convert the same into Conversion Shares pursuant to Section 2.1(a).5 Organization. will constitute or result in a material default or violation of any law or regulation applicable to the Company or any material term or provision of the Company’s current Certificate of Incorporation or bylaws or any material agreement or instrument by which it is bound or to which its properties or assets are subject. Good Standing and Qualification. the Company shall not be required to issue or deliver the Conversion Shares until the Note holder has surrendered the Note to the Company. the Company shall pay the Note holder cash equal to such fraction multiplied by the Conversion Price.6 Authorization.m.3(b) or (c) above. Neither the authorization. or at such other time and place as the Company and Lender agree upon orally or in writing. In connection with any conversion.3(c). validly existing. such holder shall give written notice to the Company of the election to convert such Notes into Conversion Shares. nor the issuance and delivery of the Notes. The Company is a corporation duly organized. Except as may be limited by applicable bankruptcy. insolvency.7 Compliance with Other Instruments. The Company has authorized sufficient shares of Common Stock to allow for conversion of the Notes as described in Section 2. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties. or similar laws relating to or affecting the enforcement of creditors’ rights. 1.3(a) and (b) above. (e) Mechanics of Conversion. The closing (the “Closing”) of the purchase of the Note pursuant to Section 2.1(a) and Section 2. and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted.otherwise be entitled. Lender shall deliver the Consideration payable to the Company pursuant to Section 2.2 shall take place at the offices of <Paybl’s Law firm>San Francisco. its officers. Closing. 1.. At the Closing.3(a) or (c) may be made contingent upon the closing of the Next Equity Financing or Corporate Transaction. In connection with the transactions provided for herein. reorganization. Except for the authorization and issuance of the Conversion Shares issuable pursuant to Sections 2.
based in part upon the representations and warranties of Lender in this Agreement. By executing this Agreement. Lender acknowledges that it has received all the information it considers necessary or appropriate for deciding whether to acquire the Securities. 1. as presently in effect.11 Disclosure of Information. and that Lender has no present intention of selling. insolvency. 1. Lender hereby represents and warrants to the Company that as of the date hereof: 1.10 Purchase Entirely for Own Account. or similar laws relating to or affecting the enforcement of creditors’ rights and (ii) laws relating to the availability of specific performance. sold and delivered upon conversion of the Notes will be duly and validly issued. Lender further represents that it does not have any contract.14 Restricted Securities. except as may be limited by (i) applicable bankruptcy.12 Investment Experience. Lender is an “accredited investor” within the meaning of Rule 501 of Regulation D of the Securities and Exchange Commission (the “SEC”). and not with a view to the resale or distribution of any part thereof. with respect to the Securities. and any Common Stock issuable upon conversion of the Conversion Shares (collectively. each Lender also represents it has not been organized solely for the purpose of acquiring the Securities. The Conversion Shares to be issued. 1. Representations and Warranties of Lender.1. In connection with the transactions provided for herein. Lender represents that it has full power and authority to enter into this Agreement. fully paid and nonassessable and. the Conversion Shares. Lender further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities. reorganization. granting any participation in. Lender understands that the Securities are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the SFO 360336v1 0083635-000001 5 . enforceable in accordance with its terms. 1. not as a nominee or agent. transfer or grant participations to such person or to any third person. the “Securities”) will be acquired for investment for Lender’s own account. injunctive relief or other equitable remedies. Lender is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself.8 Valid Issuance of Stock. undertaking. or otherwise distributing the same. This Agreement constitutes Lender’s valid and legally binding obligation. will be issued in compliance with all applicable federal and state securities laws.9 Authorization.13 Accredited Investor. Lender acknowledges that this Agreement is made with Lender in reliance upon such Lender’s representation to the Company that the Notes. 1. can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Securities. If other than an individual. agreement or arrangement with any person to sell.
Section 8. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in extraordinary circumstances. AS AMENDED. Without in any way limiting the representations and warranties set forth above.15 Further Limitations on Disposition. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL. HYPOTHECATED.10 and: (a) There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement.” California Corporate Securities Laws. THEY MAY NOT BE SOLD. Lender further agrees not to make any disposition of all or any portion of the Securities unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 5. UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100. UNLESS THE SALE IS SO EXEMPT. PLEDGED.16 Legends. Lender represents that it is familiar with SEC Rule 144. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED. and understands the resale limitations imposed thereby and by the Act. or (b) (i) Lender has notified the Company of the proposed disposition and has furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition and (ii) if reasonably requested by the Company. 1. 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE.Act only in certain limited circumstances. SFO 360336v1 0083635-000001 6 . 1. as presently in effect. reasonably satisfactory to the Company. OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933. OFFERED FOR SALE. OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. Lender shall have furnished the Company with an opinion of counsel. that such disposition will not require registration of such shares under the Act. It is understood that the Securities may bear the following legend: “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. AS AMENDED.
enforce payment of all amounts due and owing under such Note and exercise any and all other remedies granted to it at law. immediately and without expiration of any period of grace. liquidation. arrangement. and such holder may. without presentment. or shall seek or consent to or acquiesce in the appointment of any trustee. composition. or the Company or its respective directors or majority stockholders shall take any action looking to the dissolution or liquidation of the Company. is intended to confer upon any party other than the parties hereto SFO 360336v1 0083635-000001 7 . 1. or within thirty (30) days after the appointment without the consent or acquiescence of the Company of any trustee. law or regulation. or shall file any answer admitting the material allegations of a petition filed against the Company in any such proceeding. receiver or liquidator of the Company or of all or any substantial part of the properties of the Company. in equity or otherwise.18 Remedies. or notice of any kind. dissolution or similar relief under any present or future statute. (d) The Company shall fail to observe or perform any other obligation to be observed or performed by it under this Agreement. the entire unpaid principal and accrued and unpaid interest on such Note shall. or shall file a voluntary petition for bankruptcy.Defaults and Remedies. or shall admit in writing its inability to pay its debts as they become due.17 Events of Default. be forthwith due and payable. such proceeding shall not have been dismissed. Nothing in this Agreement. 1. or of all or any substantial part of the properties of the Company. 1. Miscellaneous. The following events shall be considered “Events of Default” with respect to each Note: (a) The Company shall default in the payment of any part of the principal or unpaid accrued interest on the Note after the Maturity Date or at a date fixed by acceleration or otherwise.19 Successors and Assigns. arrangement. protest. readjustment.1 above. however. such appointment shall not have been vacated. composition. (b) The Company shall make an assignment for the benefit of creditors. Except as otherwise provided herein. at the option and upon the declaration of the holder of a Note. all of which are hereby expressly waived. (c) Within thirty (30) days after the commencement of any proceeding against the Company seeking any bankruptcy reorganization. Upon the occurrence of an Event of Default under Section 7. that the Company may not assign its obligations under this Agreement without the written consent of Lender. provided. demand. receiver or liquidator of the Company. the Notes or the Security Agreement within 30 days after written notice from Lender to perform or observe the obligation. law or regulation. dissolution or similar relief under any present or future statute. readjustment. the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. express or implied. or shall file any petition or answer seeking for itself any reorganization.
21 Counterparts. All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 8.23 Notices. then on the next business day. (iii) five (5) days after having been sent by registered or certified mail. obligations or liabilities under or by reason of this Agreement. 1. postage prepaid or (iv) one (1) day after deposit with a nationally recognized overnight courier. with written verification of receipt. 555 Price Avenue. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. made and to be performed entirely within the State of California. Suite 250 Redwood City.or their respective successors and assigns any rights. (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient. 1. This Agreement and the Notes shall be governed by and construed under the laws of the State of California as applied to agreements among California residents. but all of which together shall constitute one and the same instrument. CFO Fax: (650) 366-6100 E-Mail: pj@paybl. except as expressly provided in this Agreement. 1. specifying next day delivery.com If to Lender: [Name of Lender] _______________________ _______________________ Attention: ______________ Fax: E-Mail: SFO 360336v1 0083635-000001 8 . each of which shall be deemed an original. return receipt requested. remedies. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified. Inc. 1.20 Governing Law.22 Titles and Subtitles. if not so confirmed. CA 94555 Attention: Pankaj Gupta. This Agreement may be executed in two or more counterparts.5): If to the Company: Paybl.
The Company agrees to indemnify and hold harmless Lender from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers. Each party shall pay all costs and expenses that it incurs with respect to the negotiation. pledge. employees or representatives is responsible. purchase any option or contract to sell. sell any option or contract to purchase. sell. such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. This Agreement.27 Severability.8 shall be binding upon each party to this Agreement and any holder of any Note purchased under this Agreement at the time outstanding and each future holder of all such Notes. shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement and shall only be applicable to Lender (and each future holder of a Note) if all officers and directors and greater than five percent (5%) stockholders of the Company enter into similar agreements. whether any such transaction described in clause (a) or (b) above is to be settled by delivery of securities. during the period commencing on the date of the final prospectus relating to the Company’s Initial Public Offering and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days) (a) lend. or (b) enter into any swap or other arrangement that transfers to another. execution. any of the economic consequences of ownership of the Company’s Equity Securities acquired through the conversion of any Note contemplated by this Agreement. or otherwise transfer or dispose of. Lender agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which Lender or any of its officers. contract to sell.1. The foregoing provisions of this Section 8. directly or indirectly. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. in cash or otherwise. Amendments and Waivers.28 “Market Stand-Off” Agreement. in whole or in part. 1. Any term of this Agreement or the Notes may be amended and the observance of any term of this Agreement or the Notes may be waived (either generally or in a particular instance and either retroactively or prospectively).26 Entire Agreement. the Notes and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. right or warrant to purchase. 1.24 Finder’s Fee. Lender (and each future holder of a Note) hereby agrees that it will not. 1. the prevailing party shall be entitled to reasonable attorneys’ fees. offer. partners. 1. Any waiver or amendment effected in accordance with this Section 8. with the written consent of the Company and Lender. If one or more provisions of this Agreement are held to be unenforceable under applicable law. employees or representatives is responsible. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement. costs and necessary disbursements in addition to any other relief to which such party may be entitled. delivery and performance of this Agreement.10 shall apply only to the Company’s Initial Public Offering. grant any option. without the prior written consent of the managing underwriter. any shares of the Company’s Equity Securities.25 Expenses. SFO 360336v1 0083635-000001 9 .
co-sale. combinations or other similar transaction affecting the Common Stock or Preferred Stock underlying the Conversion Shares that occur prior to the conversion of the Notes. the Company shall execute and deliver to Lender such additional documents and shall provide such additional information to the Lender as Lender may reasonably require to carry out the terms of this Agreement and the Notes and any agreements executed in connection herewith or therewith.10 that are necessary to give further effect thereto. In order to avoid doubt.10 and shall have the right. recapitalizations.31 Further Assurance.The underwriters in connection with the Company’s Initial Public Offering are intended third-party beneficiaries of this Section 8.29 Stock Purchase Agreement. Lender (and each future holder of a Note) further agrees to execute such agreements as may be reasonably requested by the underwriters in the Company’s Initial Public Offering that are consistent with this Section 8. if any. 1. rights of first refusal. power and authority to enforce the provisions hereof as though they were a party hereto. rights of first offer and voting rights. Lender understands and agrees that the conversion of the Notes into Conversion Shares pursuant to Section 2.30 Acknowledgement. it is acknowledged that Lender shall be entitled to the benefit of all adjustments in the number of shares of Common Stock of the Company issuable upon conversion of the Preferred Stock of the Company or as a result of any splits. relating to such securities. From time to time.3(a) may require such Lender’s execution of certain agreements in the form agreed to by investors in the Next Equity Financing relating to the purchase and sale of such securities as well as registration. 1. 1. [Signature page follows] SFO 360336v1 0083635-000001 10 .
Inc.IN WITNESS WHEREOF. COMPANY: Paybl. the parties have executed this Agreement as of the date first above written. By: Name: Title: LENDER: [Name of Lender] By: Name: Title: SFO 360336v1 0083635-000001 11 .
Unless earlier converted into Conversion Shares pursuant to Section 2. upon surrender of the Note.000). OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. This Note is one of a series of Notes issued pursuant to the Purchase Agreement. AS AMENDED. THEY MAY NOT BE SOLD. notice.3 of that certain Note Purchase Agreement dated as of April 15. Inc. Payment. The Company hereby waives demand. Interest shall accrue at a rate of six percent (6%) per annum.. the Company at its expense shall issue and deliver to the holder of this Note. or at such other place as the holder hereof may from time to time designate in writing to the Company. together with accrued interest. and capitalized terms not defined herein shall have the meaning set forth in the Purchase Agreement. hereby promises to pay [Name of Lender] (“Lender”). then to accrued interest due and payable and any remainder applied to principal. PLEDGED. presentment. OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933.EXHIBIT A THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. protest and notice of dishonor. compounded annually. 2007 by and between the Company and Lender (the “Purchase Agreement”). Conversion of Note. a certificate or certificates for the number of full Conversion Shares issuable upon such conversion. OFFERED FOR SALE.000 April 15. the principal sum of One hundred thousand Dollars ($100. SFO 360336v1 0083635-000001 . together with interest thereon from the date of this Note. a Delaware corporation (the “Company”). 1. HYPOTHECATED. the principal and accrued interest shall be due and payable by the Company on demand by the Lender at any time after the Maturity Date. CONVERTIBLE PROMISSORY NOTE Date of Issuance $ 100. Payment shall be credited first to Costs (as defined below). Prepayment of principal. Paybl. may not be made without the Lender’s consent. All payments shall be made in lawful money of the United States of America at the principal office of the Company. As promptly as practicable after the conversion of this Note. AS AMENDED. 2007 FOR VALUE RECEIVED. if any.3 of the Purchase Agreement. This Note and any amounts due hereunder shall be convertible into Conversion Shares in accordance with the terms of Section 2.
The holder of this Note shall not by any act.Amendments and Waivers. provided. Officers and Directors Not Liable. and binds the successors and assigns of the parties hereto. The Company hereby agrees. and agrees to comply with the foregoing terms and conditions for the benefit of the Company. that the Company may not assign its obligations under this Note without the written consent of the holder of this Note. In no event shall any officer or director of the Company be liable for any amounts due and payable pursuant to this Note. The amendment or waiver of any term of this Note. This Note applies to. to pay all expenses. whether by declaration or otherwise. the Company hereby represents that it intends to use the principal of this Note primarily for the operations of its business. delay. subject only to any limitation imposed by applicable law. Lender and any subsequent holder of this Note receives this Note subject to the foregoing terms and conditions. has approved the Company’s execution of this Note based upon a reasonable belief that the principal provided hereunder is appropriate for the Company after reasonable inquiry concerning the Company’s financing objectives and financial situation. and no waiver of any kind shall be valid unless in writing and signed by the party or parties waiving such rights or remedies. Notwithstanding any provision of this Note to the contrary. including reasonable attorneys’ fees and legal expenses. Governing Law. this Note shall be (to the extent necessary to satisfy the requirements of Section 22062(b)(3)(D) of the California Financial Code) subject to the implied covenant of good faith and fair dealing arising under Section 1655 of the California Civil Code. Resolutions of Dispute. Any transfer of this Note may be effected only pursuant to the Purchase Agreement and by surrender of this Note to the Company and reissuance of a new note to the transferee. omission or otherwise be deemed to have waived any of its rights or remedies. Approval. inures to the benefit of. in the exercise of its fiduciary duty. In addition. The Company hereby represents that its board of directors. however. Notice. Expenses. Successors and Assigns. incurred by the holder of this Note (“Costs”) in endeavoring to collect any amounts payable hereunder which are not paid when due. This Note shall be governed by and construed under the laws of the State of California as applied to other instruments made by California residents to be performed entirely within the State of California. The Company agrees that any delay on the part of the holder in exercising any rights hereunder will not operate as a waiver of such rights. and not for any personal. SFO 360336v1 0083635-000001 2 . the resolution of any controversy or claim arising out of or relating to this Note and the provision of notice shall be conducted pursuant to the terms of the Purchase Agreement. family or household purpose.
the Company shall not be obligated to pay. received or collected by the holder of this Note in connection with this Note under applicable law. would exceed the amount of such interest computed on the basis of the Highest Lawful Rate (as defined below). Anything herein to the contrary notwithstanding. interest in excess of the Highest Lawful Rate. the amount of interest computed on the basis provided for in this Note. as provided for herein or in any other document executed in connection herewith. contracted for. “Highest Lawful Rate” means the maximum non-usurious rate of interest. As used herein. collect. Inc. reserve or take. and the holder of this Note shall not be entitled to charge. reserved. COMPANY: Paybl. together with all fees. that may be charged. By: Name: Title: SFO 360336v1 0083635-000001 3 .Usury Savings Provision. as in effect from time to time. if during any period for which interest is computed hereunder. charges and other payments (excluding any payments in connection with the conversion of this Note into equity securities of the Company and the subsequent sale of such securities to the Company or otherwise) that are treated as interest under applicable law. receive.
SFO 360336v1 0083635-000001 .
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