G/SeriesSeed-Cooley-CmA/notes/Term

Ti	=	Term Sheet for Convertible Promissory Note Financing of {Company.Name.Full}
0.1.sec	=	This term sheet is an expression of intent only, does not express the agreement of the parties, is not meant to be binding on the parties and is meant to be used as a negotiation aid by the parties. The parties do not intend to be bound until they enter into a definitive agreement regarding the subject matter of this term sheet.
0.2.sec	=	Issuer: {Company.Name.Full}, a Delaware corporation (the "{DefT.Company}").
0.3.sec	=	[Financing Amount][Investors]:
0.4.sec	=	Up to {Seed.Round.Total.$} from investors identified by the {_Company} (the "{_Investors}", each an "{DefT.Investor}"). Amounts may be funded in multiple closings.][Investors shall be identified by the {_Company} (the "{_Investors}", each an "{DefT.Investor}"). Amounts may be funded in multiple closings.
0.	=	[G/Z/paras/s4]
1.Ti	=	Promissory Notes:
1.0.sec	=	The {_Company} shall issue promissory notes (the "{DefT.Notes}") in exchange for amounts invested by the Investors. The Notes will have the following principal provisions:
1.1.Ti	=	Maturity:
1.1.sec	=	Unless earlier repaid or converted, outstanding principal and unpaid accrued interest on the Notes shall be due and payable upon request of the Majority Holders made on or after {Note.MaturityDate.cl} (the "{DefT.Maturity_Date}").
MaturityDate.Simple.cl	=	{MaturityDate.YMD}
MaturityDate.AfterClosing.cl	=	the date which is [___] months from the initial closing
1.2.Ti	=	Interest:
1.2.sec	=	{Interest.sec}
Interest.sec	=	Select {Interest.AnnualCompound.sec} {Interest.Simple.sec}
Interest.AnnualCompound.sec	=	Interest shall accrue on an annual basis at the rate of {Note.InterestRate.Annum.%} per annum, compounded annually.
Interest.Simple.sec	=	Simple interest shall accrue on an annual basis at the rate of {Note.InterestRate.Annum.%} per annum
1.3.Ti	=	Future Notes:
//	=	Something optional here? (There was a closing bracket at the end.)
1.3.sec	=	If, while the Notes are outstanding, the {_Company} issues other indebtedness of the {_Company} convertible into equity securities of the {_Company} with material terms that are more favorable to the Investor (the "{DefT.Other_Debt}"), than the terms of the Notes, then the {_Company} will provide each Investor with written notice thereof, together with a copy of all documentation relating to the {_Other_Debt} and, upon request of such Investor, any additional information related to the {_Other_Debt} as may be reasonably requested by such Investor. The {_Company} will provide such notice to the Investors promptly (and in any event within 30 days) following the issuance of the {_Other_Debt}. In the event an Investor determines that the terms of the {_Other_Debt} are preferable to the terms of the Notes, such Investor will notify the {_Company} in writing within five days following such Investor's receipt of such notice from the {_Company}. Promptly after receipt of such written notice from such Investor, but in any event within 30 days, the {_Company} will amend and restate such Investor's Note to be substantially identical to the promissory note evidencing the {_Other_Debt}, excluding the principal and accrued interest.
//	=	Optional:
1.4.Ti	=	Conversion at {_Qualified_Financing}:
1.4.sec	=	{UponQualifiedFinancing.Cl}, {ThenConvert.cl} {Price.cl}. {MiniQualifiedSecurities.sec}
//	=	NB: this has the notion of "principal purpose". Cf. the Promissory Note section of same name.
UponQualifiedFinancing.Cl	=	In the event the {_Company} consummates, {Period.cl}, an equity financing pursuant to which it sells shares of its equity securities (the "{DefT.Next_Round_Securities}"), with an aggregate sales price of not less than {EquityEvent.ThresholdProceeds.$}, excluding any and all indebtedness under the Notes that is converted into {_Next_Round_Securities}, and with the principal purpose of raising capital (a "{DefT.Qualified_Financing}")
Period.cl	=	{Period.BeforeMaturityDate.cl}
Period.BeforeMaturityDate.cl	=	on or prior to the Maturity Date
Period.WhileOutstanding.cl	=	while this Note is outstanding
ThenConvert.cl	=	then all principal, together with all unpaid accrued interest under the Notes, shall automatically convert into shares of the {_Next_Round_Securities}
Price.cl	=	{Price.Qualified.Discount.cl}
Price.Qualified.Simple.cl	=	at the cash price per share paid by the other purchasers of {_Next_Round_Securities} in the {_Qualified_Financing}
Price.Qualified.Discount.cl	=	at {Convert.PriceDiscount.%} of the cash price per share paid by the other purchasers of {_Next_Round_Securities} in the {_Qualified_Financing}
//	=	Compare with the section of the same name in the Promissory Note.
//	=	Optional:
MiniQualifiedSecurities.sec	=	If the conversion price of the Notes is less than the cash price per share at which {_Next_Round_Securities} is issued in the {_Qualified_Financing}, the {_Company} may, solely at its option, elect to convert the Notes into shares of a newly created series of capital stock having the identical rights, privileges, preferences and restrictions as the {_Next_Round_Securities} issued in the {_Qualified_Financing}, and otherwise on the same terms and conditions, other than with respect to (if applicable): (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, which will equal the conversion price; and (ii) the per share dividend, which will be the same percentage of the conversion price as applied to determine the per share dividends of new investors in the {_Qualified_Financing} relative to the purchase price paid by such investors.
//	=	Optional- alternative Section 1.5 (preceeding). It is still in raw form.
Conversion at {_Qualified_Financing}:	=
In the event the {_Company} consummates, [on or prior to the Maturity Date][while this Note is outstanding], an equity financing pursuant to which it sells shares of its equity securities ("Next Round Securities"), with an aggregate sales price of not less than $________, excluding any and all indebtedness under the Notes that is converted into Next Round Securities, and with the principal purpose of raising capital (a "Qualified Financing"), then all principal, together with all unpaid accrued interest under the Notes, shall automatically convert into shares of Next Round Securities at the lesser of (i) [___]% of ]the cash price per share paid by the other purchasers of Next Round Securities in the Qualified Financing and (ii) the price obtained by dividing $________ by the number of outstanding shares of common stock of the {_Company} [immediately prior to the Qualified Financing][as of the date of the Note] (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, [including all shares of common stock reserved and available for future grant under any equity incentive or similar plan of the {_Company}, and/or any equity incentive or similar plan to be created or increased in connection with the Qualified Financing,] but excluding the shares of equity securities of the {_Company} issuable upon the conversion of the Notes or other indebtedness). [ If the conversion price of the Notes is less than the cash price per share at which Next Round Securities are issued in the Qualified Financing, the {_Company} may, solely at its option, elect to convert the Notes into shares of a newly created series of capital stock having the identical rights, privileges, preferences and restrictions as the Preferred Stock issued in the Qualified Financing, and otherwise on the same terms and conditions, other than with respect to (if applicable): (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, which will equal the conversion price; and (ii) the per share dividend, which will be the same percentage of the conversion price as applied to determine the per share dividends of new investors in the Qualified Financing relative to the purchase price paid by such investors.]	=
1.5.Ti	=	Optional Conversion at non-Qualified Financing.
1.5.sec	=	In the event the {_Company} consummates, on or prior to the Maturity Date, an equity financing pursuant to which it sells shares of Next Round Securities in a transaction that does not constitute a {_Qualified_Financing}, then {OptionalConversion.Deciders.cl} shall have the option to treat such equity financing as a {_Qualified_Financing} on the same terms set forth herein.
OptionalConversion.Deciders.Majority.cl	=	Majority Holders
//	=	Cf. Promissory Note - "Holder" instead of "Investor".
OptionalConversion.Deciders.EachHolder.cl	=	each Investor
//	=	These are left in their raw state. It seems more sensible to work on the conversion provisions as an independent object, and then transclude them.
1.6.Ti	=	Conversion at Maturity:
1.6.sec	=	In the event that the Note remains outstanding on the Maturity Date, then the outstanding principal balance of the Investor's Note and any unpaid accrued interest shall [automatically without any further action by such Investor][upon the election of the Majority Holders][upon the election of such Investor] convert into shares of [the {_Company}'s common stock][a newly created series of the {_Company}'s preferred stock on the terms and conditions set forth on Exhibit A] at a conversion price equal to the quotient resulting from dividing $________ by the number of outstanding shares of common stock of the {_Company} [as of the Maturity Date][as of the date of the Note] (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants,[ including all shares of common stock reserved and available for future grant under any equity incentive or similar plan of the {_Company},] but excluding the shares of equity securities of the {_Company} issuable upon the conversion of the Notes or other indebtedness).]
1.7.Ti	=	Change of Control:
1.7.sec	=	If the {_Company} is acquired prior to the {_Qualified_Financing}, [then at each Investor's option, either (i) such][each] Investor shall receive a cash repayment equal to the outstanding principal and unpaid accrued interest[, plus an additional payment equal to [___]% of the principal amount of such Investor's Note][, or (ii) such Investor's Note shall be converted into shares of common stock at a conversion price equal to the quotient resulting from dividing $________ by the number of outstanding shares of common stock of the {_Company} [immediately prior to the Change of Control][as of the date of such Investor's Note] (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, but excluding the shares of equity securities of the {_Company} issuable upon the conversion of the Notes or other indebtedness)].
1.8.Ti	=	Pre Payment:
1.8.sec	=	The principal and accrued interest may not be prepaid unless approved in writing by the Majority Holders.
1.9.Ti	=	Security:
1.9.sec	=	The Notes shall be unsecured obligations of the {_Company}.
1.	=	[G/Z/ol/9]
2.Ti	=	Documentation:
2.sec	=	The investments will be made pursuant to documentation prepared by the {_Company}'s legal counsel. The Notes may be amended by the {_Company} and the holders of a majority (by unpaid principal amount) of the Notes (the "Majority Holders").
3.Ti	=	Expenses:
3.sec	=	The {_Company} and Investors will each bear their own legal and other expenses with respect to the Notes financing.
00.1.sec	=	Signatures on next page
00.2.sec	=	This term sheet is non-binding and is intended solely as a summary of the terms that are currently proposed by the parties. The parties acknowledge that they neither intend to enter, nor have they entered, into any agreement to negotiate a definitive agreement pursuant to this term sheet, and either party may, at any time prior to execution of such definitive agreement, propose different terms from those summarized herein or unilaterally terminate all negotiations pursuant to this term sheet without any liability whatsoever to the other party. Each party shall be solely liable for all of its own fees, costs and other expenses in conjunction with negotiation and preparation of a definitive agreement pursuant to this term sheet.
00.3.sec	=	{Company.By.Sec} {Seed.By.Sec}
00.4.sec	=	{Annex.Sec}
00.	=	[G/Z/paras/s4]
	=
Annex.Sec	=	Exhibits Exhibit A {TermsOfPreferred.Sec}
	=	[G/Z/ol/3]

Exhibits

Exhibit A