[This is the Form of Standard Convertible Note.

This form is generally used when representing

the investors and may be appropriate in certain circumstances when representing the issuer. A
less onerous form for the issuer is the Form of Short-Form Convertible Note available on KM.]

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION

HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.

{COMPANY NAME}

[SUBORDINATED]1 [SECURED] CONVERTIBLE PROMISSORY NOTE2

$[_______________] [____________, 200_]

[_____________], California

FOR VALUE RECEIVED, { Company name}, a {state of incorporation} corporation (the

“Company”) promises to pay to [____________________] (“Investor”), or its registered assigns,
in lawful money of the United States of America the principal sum of [__________] Dollars ($
[_________]), or such lesser amount as shall equal the outstanding principal amount hereof, together
with interest from the date of this Note on the unpaid principal balance at a rate equal to [.00]% per
annum, computed on the basis of the actual number of days elapsed and a year of 365 days. All
unpaid principal, together with any then unpaid and accrued interest and other amounts payable
hereunder, shall be due and payable on the earlier of (i) [________________] (the “Maturity
Date”), or (ii) when, upon or after the occurrence of an Event of Default (as defined below), such
amounts are declared due and payable by Investor or made automatically due and payable in
accordance with the terms hereof. This Note is one of the “Notes” issued pursuant to the Note
Purchase Agreement of even date herewith (as amended, modified or supplemented, the “Note
Purchase Agreement”) between the Company and the Investors (as defined in the Note Purchase
Agreement).

1
Typically, in the context of a bridge financing for a venture backed private company, banks holding senior debt
will required that the subordinated convertible notes be subordinated to the bank debt pursuant to the such bank’s
standard form or subordination agreement. However, if the context requires subordination terms can be inserted directly
into this convertible note is subordinated -- add the subordination provision.

2
This form contemplates a separate Note Purchase Agreement, containing representations, warranties and
conditions, and a Security Agreement. To use this Note without a Note Purchase Agreement, delete all references to the
Note Purchase Agreement in this Note, move the purchaser’s securities law representations from the Note Purchase
Agreement into the Note and consider adding an acknowledgement signature by the Investor.
 [THE OBLIGATIONS DUE UNDER THIS NOTE ARE SECURED BY A SECURITY
AGREEMENT (THE “SECURITY AGREEMENT”) DATED AS OF THE DATE HEREOF AND
EXECUTED BY COMPANY FOR THE BENEFIT OF THE INVESTOR. ADDITIONAL
RIGHTS OF INVESTOR ARE SET FORTH IN THE SECURITY AGREEMENT.]

The following is a statement of the rights of Investor and the conditions to which this Note is
subject, and to which Investor, by the acceptance of this Note, agrees:

1. Definitions. As used in this Note, the following capitalized terms have the following
meanings:

(a) the “Company” includes the corporation initially executing this Note and any
Person which shall succeed to or assume the obligations of the Company under this Note.

(b) “Event of Default” has the meaning given in Section 5 hereof.

(c) “Financial Statements” shall mean, with respect to any accounting period for
any Person, statements of operations, retained earnings and cash flow of such Person for such period,
and balance sheets of such Person as of the end of such period, setting forth in each case in
comparative form figures for the corresponding period in the preceding fiscal year if such period is
less than a full fiscal year or, if such period is a full fiscal year, corresponding figures from the
preceding fiscal year, all prepared in reasonable detail and in accordance with GAAP. Unless
otherwise indicated, each reference to Financial Statements of any Person shall be deemed to refer to
Financial Statements prepared on a consolidated basis.

(d) “GAAP” shall mean generally accepted accounting principles as in effect in the
United States of America from time to time.

(e) “Investor” shall mean the Person specified in the introductory paragraph of this
Note or any Person who shall at the time be the registered holder of this Note. [A reference to a Lien
of Investor or a security agreement executed in favor of Investor shall be deemed to include a Lien
granted to a collateral agent on behalf of Investor and a security agreement executed in favor of a
collateral agent on behalf of Investor, respectively.] 3

(f) [“Lien” shall mean, with respect to any property, any security interest, mortgage,
pledge, lien, claim, charge or other encumbrance in, of, or on such property or the income therefrom,
including, without limitation, the interest of a vendor or lessor under a conditional sale agreement,
capital lease or other title retention agreement, or any agreement to provide any of the foregoing, and
the filing of any financing statement or similar instrument under the Uniform Commercial Code or
comparable law of any jurisdiction.]

(g) [“Majority in Interest” shall mean, more than 50% of the aggregate outstanding
principal amount of the Notes issued pursuant to the Note Purchase Agreement.]

3
Include this bracketed sentence and the definition of “Lien” if the Notes are secured.
 (h) “Material Adverse Effect” shall mean a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of the Company; (b) the ability
of the Company to pay or perform the Obligations in accordance with the terms of this Note and the
other Transaction Documents and to avoid an Event of Default, or an event which, with the giving of
notice or the passage of time or both, would constitute an Event of Default, under any Transaction
Document; or (c) the rights and remedies of Investor under this Note, the other Transaction
Documents or any related document, instrument or agreement.

(i) “Note Purchase Agreement” has the meaning given in the introductory
paragraph hereof.

(j) “Obligations” shall mean and include all loans, advances, debts, liabilities and
obligations, howsoever arising, owed by the Company to Investor of every kind and description
(whether or not evidenced by any note or instrument and whether or not for the payment of money),
now existing or hereafter arising under or pursuant to the terms of this Note, the Note Purchase
Agreement [and the other Transaction Documents]4, including, all interest, fees, charges, expenses,
attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by the Company
hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to
become due, and whether or not arising after the commencement of a proceeding under Title 11 of
the United States Code (11 U. S. C. Section 101 et seq.), as amended from time to time (including
post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding.

(k) “Person” shall mean and include an individual, a partnership, a corporation

(including a business trust), a joint stock company, a limited liability company, an unincorporated
association, a joint venture or other entity or a governmental authority.

(l) “Securities Act” shall mean the Securities Act of 1933, as amended.

(m) [“Security Agreement” has the meaning given in the introductory paragraphs to
this Note.]

(n) “Subsidiary” shall mean (a) any corporation of which more than 50% of the
issued and outstanding equity securities having ordinary voting power to elect a majority of the
Board of Directors of such corporation is at the time directly or indirectly owned or controlled by the
Company, (b) any partnership, joint venture, or other association of which more than 50% of the
equity interest having the power to vote, direct or control the management of such partnership, joint
venture or other association is at the time directly or indirectly owned and controlled by the
Company, (c) any other entity included in the financial statements of the Company on a consolidated
basis.

4
If the Transaction Documents include Warrants, it is a good idea on a company-side deal to carve out Warrants
from the term Obligations if the Notes are secured. Because the Warrants typically have an exercise period which is
longer than the term of the Notes, the obligations under the Warrants would still be secured (and the assets of the
Company would still be tied up) even after the Notes have been fully repaid.
 (o) “Transaction Documents” shall mean this Note, each of the other Notes issued
under the Note Purchase Agreement, the Note Purchase Agreement [the Warrants issued under the
Note Purchase Agreement] [and the Security Agreement].

2. Interest. Accrued interest on this Note shall be payable [at maturity] OR [on the last
business day of each [month] OR [calendar quarter] until the outstanding principal amount hereof
shall be paid in full at maturity, with the first such payment due on _____________, 200_.]

3. Prepayment. [This Note may not be prepaid.] OR [Upon five days5 prior written notice to
Investor, the Company may prepay this Note in whole or in part; provided that: (i) any prepayment
of this Note may only be made in connection with the prepayment of all Notes issued under the Note
Purchase Agreement on a pro rata basis, based on the respective aggregate outstanding principal
amounts of each such Note, and (ii) any such prepayment will be applied first to the payment of
expenses due under this Note, second to interest accrued on this Note and third, if the amount of
prepayment exceeds the amount of all such expenses and accrued interest, to the payment of
principal of this Note.]

4. [Certain Covenants.

(a) Information Rights; Notices. The Company shall furnish to Investor the
following:

(i) Monthly Financial Statements. Within 30 days after the last day of
each month, a copy of the Financial Statements of the Company for such quarter and for the fiscal
year to date, certified by the chief financial officer or controller of the Company to present fairly the
financial condition, results of operations and other information presented therein and to have been
prepared in accordance with GAAP consistently applied, subject to normal year-end adjustments and
except that no footnotes need be included with such Financial Statements;

(ii) Annual Financial Statements. Within [90] OR [120] days after the
close of each fiscal year of the Company, (i) copies of the audited Financial Statements of the
Company for such year, audited by nationally recognized independent certified public accountants,
(ii) copies of the unqualified opinions and management letters delivered by such accountants in
connection with such Financial Statements, and (iii) a report containing a description of projected
business prospects (including capital expenditures) and management’s discussion and analysis of
financial condition and results of operation of the Company and its Subsidiaries;

(iii) Notice of Defaults. Promptly upon the occurrence thereof, written

notice of the occurrence of any Event of Default hereunder.]

5. Events of Default.6 The occurrence of any of the following shall constitute an “Event of
Default” under this Note and the other Transaction Documents:

5
If this Note does not automatically convert as contemplated in Section 7, a longer period may be advisable to give
the Investor time to convert.
[This is the Form of Standard Convertible Note. This form is generally used when representing
the investors and may be appropriate in certain circumstances when representing the issuer. A
less onerous form for the issuer is the Form of Short-Form Convertible Note available on KM.]
(a) Failure to Pay. The Company shall fail to pay (i) when due any principal or
interest payment on the due date hereunder or (ii) any other payment required under the terms of this
Note or any other Transaction Document on the date due and such payment shall not have been
made within five days of the Company’s receipt of Investor’s written notice to the Company of such
failure to pay; or

(b) Breaches of Covenants. The Company [or any of its Subsidiaries] shall fail to
observe or perform any other covenant, obligation, condition or agreement contained in this Note or
the other Transaction Documents (other than those specified in Sections 5(a)) and (i) such failure
shall continue for 15 days, or (ii) if such failure is not curable within such 15-day period, but is
reasonably capable of cure within 30 days, either (A) such failure shall continue for 30 days or
(B) the Company or its Subsidiary shall not have commenced a cure in a manner reasonably
satisfactory to Investor within the initial 15-day period; or

(c) Representations and Warranties. Any representation, warranty, certificate, or

other statement (financial or otherwise) made or furnished by or on behalf of the Company to
Investor in writing in connection with this Note or any of the other Transaction Documents, or as an
inducement to Investor to enter into this Note and the other Transaction Documents, shall be false,
incorrect, incomplete or misleading in any material respect when made or furnished; or

(d) Other Payment Obligations. Any indebtedness under any bonds, debentures, notes
or other evidences of indebtedness for money borrowed (or any guarantees thereof, excluding this
Note and the other Transactions Documents) by the Company [or any of its Subsidiaries] in an
aggregate principal amount in excess of [$100,000] is not paid when due either at its stated maturity
or upon acceleration thereof, and such indebtedness is not discharged, or such acceleration is not
rescinded or annulled; or

[ALTERNATIVE: The Company [or any of its Subsidiaries] shall (i) fail to make any
payment when due under the terms of any bond, debenture, note or other evidence of indebtedness
for money borrowed to be paid by such Person (excluding this Note and the other Transaction
Documents but including any other evidence of indebtedness of the Company or any of its
Subsidiaries to Investor) and such failure shall continue beyond any period of grace provided with
respect thereto, or (ii) default in the observance or performance of any other agreement, term or
condition contained in any [such] bond, debenture, note or other evidence of indebtedness, and the
effect of such failure or default is to cause, or permit the holder or holders thereof to cause,
indebtedness in an aggregate amount of [$100,000] or more to become due prior to its stated date of
maturity; or]

(e) Voluntary Bankruptcy or Insolvency Proceedings. The Company [or any of its
Subsidiaries] shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or

6
Provisions may also be added to provide that the Investor may accelerate the Note if the Company is subject to a
Change of Control.
[This is the Form of Standard Convertible Note. This form is generally used when representing
the investors and may be appropriate in certain circumstances when representing the issuer. A
less onerous form for the issuer is the Form of Short-Form Convertible Note available on KM.]
custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its
inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of
its or any of its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term may be
defined or interpreted under any applicable statute), (vi) commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such
relief or to the appointment of or taking possession of its property by any official in an involuntary
case or other proceeding commenced against it, or (vii) take any action for the purpose of effecting
any of the foregoing; or

(f) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the

appointment of a receiver, trustee, liquidator or custodian of the Company [or any of its
Subsidiaries] or of all or a substantial part of the property thereof, or an involuntary case or other
proceedings seeking liquidation, reorganization or other relief with respect to the Company [or any
of its Subsidiaries] or the debts thereof under any bankruptcy, insolvency or other similar law now or
hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be
dismissed or discharged within 30 days of commencement; or

(g) Judgments. A final judgment or order for the payment of money in excess of
[$50,000] shall be rendered against the Company [or any of its Subsidiaries] and the same shall
remain undischarged for a period of 30 days during which execution shall not be effectively stayed,
or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be
issued or levied against a substantial part of the property of the Company [or any of its Subsidiaries]
and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise
dismissed within 30 days after issue or levy; or

(h) Transaction Documents. Any Transaction Document or any material term thereof
shall cease to be, or be asserted by the Company not to be, a legal, valid and binding obligation of
the Company enforceable in accordance with its terms [or if the Liens of Investor in any of the assets
of the Company [or its Subsidiaries] shall cease to be or shall not be valid, first priority perfected
Liens or the Company [or any Subsidiary] shall assert that such Liens are not valid, first priority and
perfected Liens]; or

(i) [Material Adverse Effect. One or more conditions exist or events have occurred
which could reasonably indicate, or reasonably result in, a Material Adverse Effect.]

6. Rights of Investor upon Default. Upon the occurrence or existence of any Event of
Default (other than an Event of Default described in Sections 5(e) or 5(f)) and at any time thereafter
during the continuance of such Event of Default, Investor may, [with the consent of a Majority in
Interest of the holders of the Notes issued under the Note Purchase Agreement,] by written notice to
the Company, declare all outstanding Obligations payable by the Company hereunder to be
immediately due and payable without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived, anything contained herein or in the other Transaction
[This is the Form of Standard Convertible Note. This form is generally used when representing
the investors and may be appropriate in certain circumstances when representing the issuer. A
less onerous form for the issuer is the Form of Short-Form Convertible Note available on KM.]
Documents to the contrary notwithstanding. Upon the occurrence or existence of any Event of
Default described in Sections 5(e) and 5(f), immediately and without notice, all outstanding
Obligations payable by the Company hereunder shall automatically become immediately due and
payable, without presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the other Transaction Documents to the
contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of
any Event of Default, Investor may exercise any other right power or remedy granted to it by the
Transaction Documents or otherwise permitted to it by law, either by suit in equity or by action at
law, or both.

7. Conversion.

(a) Automatic Conversion.7 In the event the Company consummates, prior to the
Maturity Date an equity financing pursuant to which it sells shares of a series of Preferred Stock (the
“Preferred Stock”) with an aggregate sales price of not less than $[_____________], [including]
OR [excluding] any and all notes which are converted into preferred stock (including this Note and
the other Notes issued under the Note Purchase Agreement), and with the principal purpose of
raising capital (a “Qualified Equity Financing”), then the outstanding principal amount of [and all
accrued interest under] this Note shall automatically convert into shares of the Preferred Stock at the
same price and on the same terms as the other investors that purchase the Preferred Stock in the
Qualified Equity Financing. Upon such conversion of this Note, the Investor hereby agrees to
execute and deliver to the Company all transaction documents related to the Qualified Equity
Financing, including a purchase agreement and other ancillary agreements, with customary
representations and warranties and transfer restrictions (including a 180-day lock-up agreement in
connection with an initial public offering), and having the same terms as those agreements entered
into by the other purchasers of the Preferred Stock. The Investor also agrees to deliver the original
of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an
agreement acceptable to the Company whereby the holder agrees to indemnify the Company from
any loss incurred by it in connection with this Note) at the closing of the Qualified Equity Financing
for cancellation; provided, however, that upon satisfaction of the conditions set forth in this
Section 7(a), this Note shall be deemed converted and of no further force and effect, whether or not
it is delivered for cancellation as set forth in this sentence.

(b) Optional Conversion. If no Qualified Financing takes place prior to [________,

200_] OR [the Maturity Date]8, then all or a portion of the outstanding principal amount of [and all

7
In some cases, the parties may wish for the Note to remain outstanding after the issuance of the Preferred Stock.
Accordingly, the Investor could voluntarily convert the Note into Preferred Stock at any time prior to repayment of the
Note. If that is the case, additional mechanics should be added to deal with stock splits, conversion of the underlying
stock in a merger, etc.

8
Provisions may also be added to provide that the Investor has the right to convert the Note if the Company is
subject to a Change of Control.
[This is the Form of Standard Convertible Note. This form is generally used when representing
the investors and may be appropriate in certain circumstances when representing the issuer. A
less onerous form for the issuer is the Form of Short-Form Convertible Note available on KM.]
accrued interest under] 9 this Note shall be convertible at the option of the Investor into that number
of shares of the Company’s Common Stock as is determined by dividing such principal amount [and
accrued interest] by $[_____] per share (adjusted to reflect subsequent stock dividends, stock splits,
combinations or recapitalizations).10 Before Investor shall be entitled to convert this Note into shares
of Common Stock under this Section 7(b), the Investor shall execute and deliver to the Company a
common stock purchase agreement reasonably acceptable to the Company containing customary
representations and warranties and transfer restrictions (including a 180-day lock-up agreement in
connection with an initial public offering). In addition, before Investor shall be entitled to convert
this Note into shares of Common Stock under this Section 6(b), it shall surrender this Note, duly
endorsed, at the office of the Company and shall give written notice to the Company at its principal
corporate office, of the election to convert the same pursuant to this Section, and shall state therein
the amount of the unpaid principal amount of this Note to be converted and the name or names in
which the certificate or certificates for shares of Common Stock are to be issued. The Company
shall, as soon as practicable thereafter, issue and deliver at such office to Investor a certificate or
certificates for the number of shares of Common Stock to which Investor shall be entitled upon
conversion (bearing such legends as are required by the common stock purchase agreement, [the
Note Purchase Agreement] and applicable state and federal securities laws in the opinion of counsel
to the Company), together with a replacement Note (if any principal amount is not converted) and
any other securities and property to which Investor is entitled upon such conversion under the terms
of this Note, including a check payable to Investor for any cash amounts payable as described in
Section 7(c). The conversion shall be deemed to have been made immediately prior to the close of
business on the date of the surrender of this Note, and the Person or Persons entitled to receive the
shares of Common Stock upon such conversion shall be treated for all purposes as the record
Investor or Investors of such shares of Common Stock as of such date.

(c) Fractional Shares; Interest; Effect of Conversion. No fractional shares shall be

issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to
Investor upon the conversion of this Note, the Company shall pay to Investor an amount equal to the
product obtained by multiplying the conversion price by the fraction of a share not issued pursuant to
the previous sentence. In addition, the Company shall pay to Investor any interest accrued on the
amount converted and on the amount to be paid to the Company pursuant to the previous sentence.
Upon conversion of this Note in full and the payment of any amounts specified in this Section 7(c),
the Company shall be forever released from all its obligations and liabilities under this Note.

9
Consider whether to pay accrued interest (or accrued interest after a declared record date) in cash. Because
interest accrues on a daily basis and preferred financings rarely occur on schedule, it becomes logistically difficult to
manage a transaction closing where the number of shares to be issued is a moving target.

10
The fall-back security can also be an earlier series of preferred stock if any is authorized and unissued. If this
Note can be convertible into Common Stock, then make sure that there the holder of this Note will be subject to a lock-
up agreement – if this Note is convertible into an earlier series of preferred stock, then make sure that such holder is a
party to the Company’s Investor Rights Agreement and other stockholder agreements (if any). This may require adding
covenants to this Note or to the Note Purchase Agreement.
 8. Successors and Assigns. Subject to the restrictions on transfer described in Sections 10
and 11 below, the rights and obligations of the Company and Investor shall be binding upon and
benefit the successors, assigns, heirs, administrators and transferees of the parties.

9. Waiver and Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of the Company and [Investor] OR [the holders of a Majority in
Interest].

10. Transfer of this Note or Securities Issuable on Conversion Hereof. With respect to any
offer, sale or other disposition of this Note or securities into which such Note may be converted,
Investor will give written notice to the Company prior thereto, describing briefly the manner thereof,
together with a written opinion of Investor’s counsel, or other evidence if reasonably satisfactory to
the Company, to the effect that such offer, sale or other distribution may be effected without
registration or qualification (under any federal or state law then in effect). Upon receiving such
written notice and reasonably satisfactory opinion, if so requested, or other evidence, the Company,
as promptly as practicable, shall notify Investor that Investor may sell or otherwise dispose of this
Note or such securities, all in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this Section 10 that the opinion of counsel for Investor, or
other evidence, is not reasonably satisfactory to the Company, the Company shall so notify Investor
promptly after such determination has been made. Each Note thus transferred and each certificate
representing the securities thus transferred shall bear a legend as to the applicable restrictions on
transferability in order to ensure compliance with the Act, unless in the opinion of counsel for the
Company such legend is not required in order to ensure compliance with the Act. the Company may
issue stop transfer instructions to its transfer agent in connection with such restrictions. Subject to
the foregoing transfers of this Note shall be registered upon registration books maintained for such
purpose by or on behalf of the Company as provided in the Note Purchase Agreement. Prior to
presentation of this Note for registration of transfer, the Company shall treat the registered holder
hereof as the owner and holder of this Note for the purpose of receiving all payments of principal
and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue
and the Company shall not be affected by notice to the contrary.

11. Assignment by the Company. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the
Company without the prior written consent of [Investor] OR [the holders of a Majority in Interest].

12. Notices. All notices, requests, demands, consents, instructions or other communications
required or permitted hereunder shall in writing and faxed, mailed or delivered to each party at the
respective addresses of the parties as set forth in the Note Purchase Agreement, or at such other
address or facsimile number as the Company shall have furnished to Investor in writing. All such
notices and communications will be deemed effectively given the earlier of (i) when received,
(ii) when delivered personally, (iii) one business day after being delivered by facsimile (with receipt
of appropriate confirmation), (iv) one business day after being deposited with an overnight courier
service of recognized standing or (v) four days after being deposited in the U.S. mail, first class with
postage prepaid.
 13. Pari Passu Notes. Investor acknowledges and agrees that the payment of all or any
portion of the outstanding principal amount of this Note and all interest hereon shall be pari passu in
right of payment and in all other respects to the other Notes issued pursuant to the Note Purchase
Agreement or pursuant to the terms of such Notes. In the event Investor receives payments in excess
of its pro rata share of the Company’s payments to the Investors of all of the Notes, then Investor
shall hold in trust all such excess payments for the benefit of the holders of the other Notes and shall
pay such amounts held in trust to such other holders upon demand by such holders.

14. Payment. Payment shall be made in lawful tender of the United States.

15. Default Rate; Usury. During any period in which an Event of Default has occurred and is
continuing, the Company shall pay interest on the unpaid principal balance hereof at a rate per
annum equal to the rate otherwise applicable hereunder plus five percent (5%). In the event any
interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then
that portion of the interest payment representing an amount in excess of the then legal maximum rate
shall be deemed a payment of principal and applied against the principal of this Note.

16. Expenses; Waivers. If action is instituted to collect this Note, the Company promises to
pay all costs and expenses, including, without limitation, reasonable attorneys’ fees and costs,
incurred in connection with such action. The Company hereby waives notice of default, presentment
or demand for payment, protest or notice of nonpayment or dishonor and all other notices or
demands relative to this instrument.

17. Governing Law. This Note and all actions arising out of or in connection with this Note
shall be governed by and construed in accordance with the laws of the State of [California], without
regard to the conflicts of law provisions of the State of [California], or of any other state.

[Signature Page Follows]

The Company has caused this Note to be issued as of the date first written above.

{COMPANY NAME}
a {state of incorporation} corporation

By:

Name:

Title:

[Signature page to [Subordinated] [Secured] Convertible Promissory Note]