SEATTLE ANGEL CONFERENCE CONVERTIBLE NOTE TERM SHEET 

THIS TERM SHEET SUMMARIZES THE PRINCIPAL TERMS OF THE PROPOSED  FINANCING FOR THE COMPANY THAT IS SELECTED AS A WINNER AMONG THE  COMPANIES AT THE SEATTLE ANGEL CONFERENCE (THE “COMPANY”). THE  PURPOSE OF THIS TERM SHEET IS TO PROVIDE THE BASIS FOR POSSIBLE  INVESTMENT; THERE IS NO OBLIGATION ON THE PART OF ANY NEGOTIATING  PARTY UNTIL A DEFINITIVE NOTE PURCHASE AGREEMENT IS SIGNED BY ALL  PARTIES. THIS TERM SHEET IS SUBJECT TO THE SATISFACTORY COMPLETION OF  DUE DILIGENCE. THIS TERM SHEET DOES NOT CONSTITUTE EITHER AN OFFER TO  SELL OR AN OFFER TO PURCHASE SECURITIES. THIS TERM SHEET AND ANY TERMS  CONTAINED HEREIN MAY BE CHANGED AT ANY TIME BY THE INVESTOR (AS  DEFINED BELOW). 

Amount of  Convertible Loan: Company  Structure and  Existing  Financing: $ from [SAC ENTITY NAME] (the “Investor”). At  Closing, a convertible promissory note (the “Note”) will be issued to the  Investor for cash equal to the principal balance of the Note. This Term Sheet assumes the Company is a “C” corporation or is ready  to become a “C” corporation prior to the closing of the financing and does  not have an existing financing in progress. If the Company has an  existing financing in progress, the Investor may invest on the terms of  such existing financing, rather than the terms set forth herein, so long as  such terms are reasonable in the sole discretion of the Investor. 

Closing: The closing will occur as soon as reasonably practicable after the Seattle  Angel Conference final event. The Investor retains the right to cease  negotiations with the Company at any time. The Company will provide  to the Investor, on a timely basis, due diligence items requested by the  Investor, and be available to answer questions which may arise about the  Company. 

Company  Covenants: The Company will covenant in the Note not to grant any liens on or  pledge any its assets while the Note is outstanding. 

Use of Funds: Working capital to support the growth of the Company. The proceeds  from the sale of the Note shall not be used to repay existing loans, pay  deferred or accrued compensation, or pay past due trade payables. The  Company will represent and warrant that it does not owe any accrued or  deferred or accrued compensation amounts.

 Interest: Simple interest will accrue at the rate of [NUMBER] percent  ([NUMBER]%) per annum and will be payable in full upon maturity.1 – Convertible Note Term Sheet #1348725 v1 / 47089-001 

Maturity Date: The Note will be due eighteen (18) months from the date of the Initial  Closing (the “Maturity Date”), or earlier upon a default or an acquisition  of the Company. The Investor, in its sole discretion, may elect in writing  to extend the term of the Note and in connection therewith subject such  extension to additional terms and conditions as may be agreed upon by  the Investor and the Company. 

Conversion: Automatic Conversion on Next Equity Financing. 
The Note and all accrued interest will automatically convert into shares  of preferred stock sold in the next preferred stock financing of the  Company (“Next Equity Securities”) that raises at least $[AMOUNT] (excluding the amount of the Note and any other notes or convertible  securities outstanding as of the date of the financing), (a “Next Equity Financing”). Upon the closing of a Next Equity Financing, the Note and all accrued  interest will convert into Next Equity Securities at a conversion price  equal to the lower of: (a) [100% MINUS DISCOUNT AMOUNT]% of  the original issue price of the Next Equity Securities sold in the Next  Equity Financing; or (b) a price per share reflecting a pre-money  valuation of [$AMOUNT] [TO BE INSERTED LATER BASED ON  DILIGENCE] on a fully diluted basis (the “Valuation Cap”). The  Investor shall otherwise convert on the same terms and conditions  applicable to the other purchasers in the Next Equity Financing. 

Conversion on Nonqualifying Financing. In the event the Company consummates, on or prior to the Maturity Date,  an equity financing that does not qualify as a Next Equity Financing (a  “Nonqualifying Financing”), the Investor shall have the right, in the  Investor’s sole discretion and option, to treat such Nonqualifying  Financing as a Next Equity Financing pursuant to which the entire  principal amount and accrued but unpaid interest under this Note will  convert into shares of the equity securities issued and sold at the close of  the Nonqualifying Financing (the “Nonqualifying Securities”), using the  same discount or the Valuation Cap as described above. 

Extension or Conversion on or After Maturity. In the event that the amounts under the Note do not convert to equity  securities on or prior to the Maturity Date, the Investor may elect at any  time or after such Maturity Date to: (1) extend the Maturity Date of the  Note; (2) have the entire principal amount of the Note plus accrued but  unpaid interest automatically convert, on a date selected by the Investor, into that number of shares of Redeemable Common Stock (as defined  below) calculated by dividing such entire principal amount of the Note plus accrued but unpaid interest by the quotient obtained by dividing (A)  $[AMOUNT], by (B) the number of fully diluted shares of the Company;  or (3) have the entire principal amount of the Note plus accrued but  unpaid interest automatically convert, on the a date selected by the  Investor, into that number of shares of Series Seed Preferred Stock (as  defined below) calculated by dividing such entire principal amount of the  Note plus accrued but unpaid interest by the quotient obtained by dividing  (A) $[AMOUNT], by (B) the number of fully diluted shares of the  Company. 

Redeemable Common Stock” means Common Stock of the Company issued to the Investor, [PERCENTAGE]% of which the Company shall  be subject to a redemption right belonging to the Investor. Each quarter,  the Company shall be obligated to redeem, for a price equal to the  conversion price upon which the Note converted to Redeemable Common  Stock (the “Per Share Redemption Price”), that number of the  redeemable shares equal to (x) [PERCENTAGE]% of the Company’s  revenue, divided by the Per Share Redemption Price. "

Series Seed Preferred Stock
” means a new class of preferred stock to  be authorized by the Company having rights and preferences as described  in the Series Seed Documents (Version 3.2) located at  https://www.seriesseed.com/, and pursuant to which (a) the pre-money  valuation shall be $[AMOUNT], (b) the post-money unallocated option  pool shall be no less than [PERCENTAGE]% on a fully-diluted basis, (c)  the “Major Purchaser” threshold shall be $[AMOUNT], and (d) the Board  of Directors shall comprise no more than three directors, at least one of  which shall be elected by holders of a majority of Series Seed Preferred  Stock. 

Prepayment: No prepayment without the prior written consent of the Investor. 

Change of  Control: If a Change of Control occurs prior to Note conversion, effective  immediately prior to the closing of such transaction, Investor shall be  entitled to receive the greater of: (x) a cash payment in the amount of all  accrued interest plus 200% of the outstanding principal amount of the  Note or (y) the amount Investor would have received as a holder of  Common Stock of the Company in such Change of Control assuming the  Note and all accrued interest had converted into shares of Common Stock  of the Company at the Valuation Cap.
Reports: For so long as the Investor owns debt or equity in the Company, the  Company will be obligated to provide the Investor with unaudited  quarterly financial statements within 45 days after the end of each fiscal  quarter and unaudited annual financial statements with 90 days after the  end of each fiscal year (unless the Company’s financial statements are  audited, in which case the Company will provide the Investor the audited  financial statements). In addition, the Company will provide to the  Investor a quarterly summary of business activity and other information  as reasonably requested by the Investor. 

Board Observer: The Investor will have the right to have one observer present at all  meetings of the board, including any committees thereof. The right to  have an observer at such meetings will terminate at such time as this Note  has been converted and the Investor holds less than 10% of the  outstanding capital stock of the Company. If an observer is appointed,  such person will be entitled to notice of such meetings and to receive all  information and materials provided to board members participating in  such meetings or taking any action without a meeting, in any case at the  same time as board members receive such notice and materials. 

Most Favored  Terms: Holders of the Note will be entitled to receive the benefit of any more  favorable terms or conditions that may be provided to other lenders to,  and/or investors in, the Company prior to the date that the Notes are  converted into capital stock of the Company. 
Amendment: The Note and any related agreements may be amended with the consent  of the Company and the Investor. 

Expenses: Each party will be responsible for their own fees and expenses in  connection with this transaction, provided, however, that the Company  will reimburse the Investor for the fees and expenses of its counsel up to  $5,000. The Investor will prepare investment documents based on this  Term Sheet.

Attachment A Seattle Angel Conference  Due Diligence Document Request Provide all information about the Company, including any subsidiaries, from the inception of the Company. Reference  to any “agreement” includes any oral agreement, and a written description of such oral agreement must be provided.  The Fund may request additional documentation on a case by case basis. 
Provided  or N/A Description

 A Basic Corporate Information A1 Articles/Certificate of Incorporation, Bylaws A2 Minutes/written consents of shareholders and Board of Directors A3 List of officers, directors, and key employees A4 List of all shareholders (and holders of options/warrants) setting forth the shares owned (or  subject to option/warrant), and copies of all agreements related to the issuance of the shares  (and options/warrants) A5 Copies of any shareholder (or buy-sell) agreement, voting agreement, investor rights  agreement, registration agreement or any other agreement affecting the issuance, transfer, or  sale of shares A6 Copies of all promissory notes, credit agreements or other evidence of indebtedness A7 Most recent monthly and annual financial statements, including a current list of all accounts  payable

 B Founders, Employees and Independent Contractors B1 List of all founders, employees and independent contractors, and all agreements between the  Company and any such person B2 Copies of employment agreements, independent contractor agreements, consulting  agreements, and advisory board agreements B3 Copies of all proprietary information agreements, including any agreements related to  assignment of inventions, work for hire, non-competition, and non-solicitation B4 Copies of any employee benefit plans, stock option plans, commission plans, bonus plans, and  deferred compensation plans

 C Intellectual Property C1 List of all patents, patent applications (including provisional applications), registered  trademarks, trademark applications, copyright registrations, and copies of documents related  to such items of intellectual property C2 Copies of all inbound licenses of intellectual property (other than off-the-shelf software  products) C3 Copies of all outbound licenses of intellectual property C4 List of all persons who have contributed to the creation or development of intellectual  property in any manner C5 List of all domain names used or owned by the Company, website terms of use and privacy  policy C6 Description of any open source software incorporated into products, or plans to use open  source software in the future

 D Material Contracts D1 Copy of any office space lease D2 Copy of any equipment leases D3 Copy of any manufacturing agreement, distribution agreement or reseller agreement D4 Copy of any other agreement that is material to the Company D5 Copies of any material nondisclosure agreements

 E Litigation and Compliance

Provided  or N/A Description E1 Description of all litigation, claims, proceedings, judgments, injunctions, consent decrees or  orders against the Company, including any threats thereof, and a description of any claims the  Company may have against any third party E2 List of all material government permits, or licenses issued by any governmental agency E3 Description of any investigation, notice of noncompliance or fine from any governmental  agency

 F Other F1 List of any security interests, liens, or encumbrances against the assets of the Company, together with supporting documentation
2 – Attachment A #1348725 v1 / 47089-001 
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