CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, , an exempted company organized and existing under the laws of [the Cayman Islands] (“Payor”), hereby promis to pay to the order of , a organized and existing under the laws of the , or its assigns (“Holder”), the principal sum of United States dollars (US$ ).
1.PAYMENT; SECURITY; MATURITY; DEFAULT INTEREST
(a)This note (“Note”) is issued pursuant to the terms of that certain Convertible Note Purcha Agreement (the “Purcha Agreement”) dated by and among Payor, Holder and the other parties thereto. Capitalized terms ud herein and not otherwi defined herein shall have the respective meanings given to them in the Purcha Agreement.
(b)The indebtedness created pursuant to Note shall be nior in all respects (including right of payment), as to principal and any and all other liabilities and obligations, to all other indebtedness of Payor, now existing or hereafter.
(c) At any time on or after the earlier of (i) ( ) calendar days after the execution of this Note, which is __________, and (ii) the date of consummation of the Series A Financing or any other Equity Financing, whichever the earlier (the “Maturity Date”), if any portion of the outstanding principal amount of this Note or any accrued and unpaid interest thereon has not been converted in full in accordance with the terms of Section 2 below, Holder may demand payment of all or a portion of the outstanding principal amount of this Note, together with interest (if any) accrued on the outstanding principal amount pursuant to the terms and conditions of this Note (such amount in total, the “Payment Demand Amount”) by prenting a written demand notice to Payor (a “Payment Demand”). As soon as possible but in no event later than [three] ([3]) business days upon receipt of such Payment Demand, Payor shall repay the Payment Demand Amount by wire transfer of immediately available funds in United States dollars to bank accounts designated by Holder.
(d) Notwithstanding any terms otherwi provided in this Note, the Holder of this Note shall be entitled to interest (the “Interest”) at a simple interest rate of % per annum (the “Interest Rate”), on the principal amount of this Note, due and payable by the Payor together with the repayment or redemption of the principal amount pursuant to the terms of this Note, provided, however, that in the event of conversion of this Note pursuant to Section 2(b) below, the Interest Rate with respect to the principal amount elected to be converted by the Holder shall be zero.
(e)Upon the occurrence and during the continuance of (i) any Event of Default (including the failure to convert the Note pursuant to Section 2 below for any reason attributable to the Payor and/or Founders), or (ii) failure to consummate the Series A Financing within ( ) calendar days after the execution of this Note for any reason attributable to the Payor and/or Founders, the Interest Rate shall be adjust to percent ( %) compound per annum, which interest shall start to accrue retroactively from the date hereof until all unpaid principal amount of this Note and interests thereon are repaid or convert in full pursuant to this Note.
(f)If, prior to the Maturity Date, (i) Payor or any of its Subsidiaries enters into an agreement pertaining to a sale of Payor’s or such Subsidiary’s share capital, Payor’s direct or indirect interest in any such Subsidiary, or any contractual right of Payor or such Subsidiary to direct or cau the direction of the management and policies of any entity, whether in one transaction or a ries of related transactions, or (ii) a Deemed Liquidation Event occurs, then Holder may elect to immediately demand payment of the outstanding principal balance of this Note, together with any interest accrued and unpaid thereon, and the Maturity Date shall have advanced to the earliest occurrence of such event.
2.CONVERSION
(a)At any time on or after the date of this Note (regardless of whether the Note has matured in accordance with Section 1(d) above, and regardless of whether an Event of Default has occurred and outstanding), Holder may deliver a written notice to Payor demanding conversion (the “Conversion Notice”), on the date t forth in the Conversion Notice (the “Conversion Date”), of all or a portion of the outstanding principal amount of this Note (and if so elected by Holder, together with any accrued and unpaid interest thereon), into such equity curities of Payor at such per share conversion price (the “Conversion Price”) as t forth below.
(b) All or a portion of the outstanding principal amount of this Note, at the sole option of Holder, shall be converted, on the closing date of the Series A Financing, into the equity curities issued in the Series A Financing by the Payor at a Conversion Price equal to (i) % of the per share purcha price of the Series A Financing (the “Per Share Price”) if th
e closing of Series A Financing is consummated within days of the date hereof, or (ii) % of the Per Share Price if the closing of the Series A Financing is consummated within ( ) days of the date hereof.
(c)If Payor issues any equity curities between the date of this Note and the Conversion Date (other than in the Series A Financing) (such issuance of equity curities, an “Equity Financing”), all or a portion of the outstanding principal amount of this Note, at the sole option of Holder, shall be converted, on the closing date of such Equity Financing, into the equity curities issued in the Equity Financing at a Conversion Price equal to the lower of (i) the per share purcha price of such Equity Financing or (ii) % of the Per Share Price. If more than one ries of equity curities are issued in the Equity Financing, then all or a portion of the outstanding principal amount of this Note together with any accrued and unpaid interest (if so elected by Holder) thereon, at the sole option of Holder, shall be converted into the most nior equity curities issued in such Equity Financing. For the avoidance of doubt, the equity curities issued upon conversion of the Note shall in any event rank superior to or at least pari passu with the most nior equity curities issued in such Equity Financing.
