For Discussion Purposes Only
Securities: Up to an aggregate of $750,000 of Unsecured
Convertible Notes (Notes) with an annual coupon rate of
8% on the outstanding Note balance. The Notes may be
issued in multiple closings.
Issuer: Foo company, Inc., a Delaware corporation
Minimum Amount: $25,000. The Company may sell smaller Notes at its
Coupon: The 8% coupon will accrue using the simple
method of interest calculation and will be payable on the
Repayment Date: 12 months from the date of issue; Company may not
Optional Conversion: The principal and accrued interest on the Notes will be
subject to conversion, at the option of the holder, into the
same securities issued in the Company’s next financing
round at a 20% discount to the price per share in that
financing; provided that Notes will convert at a maximum
post-money valuation of $2,500,000 (the Cap).
Acquisition: In the event that the Company is acquired prior
to the earlier of the conversion of the Notes or the
Repayment Date, then each Note holder can optionally
convert at the price of the Cap within 30 days after such
acquisition, in full satisfaction of such Note.
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