| Company | RYSE Inc. |
| Interest Rate | 12% per annum (365-day year, simple interest) |
| Interest Payments | Monthly cash — 1st business day of each month |
| Maturity Date | 24 months from Closing Date |
| Conversion on Exit | Automatic at 30% discount — IPO, pre-IPO round, or acquisition |
| Qualified Financing (≥$1M) | Optional (investor election) — 30% discount, 15 business days to elect |
| Principal at Maturity | Auto-converts to equity — not repaid in cash |
| No Prepayment | Company may not prepay without investor consent |
| Security | General unsecured obligation — no security interest |
| Governing Law | Province of Ontario, Canada |
1.1 Company. RYSE Inc. is a corporation incorporated under the laws of Canada, with its registered corporate address at 20 Camden St. Suite 200, Toronto, Ontario, M5V 1V1 (the "Company").
1.2 Investor. (the "Investor"), with address at .
2.1 Principal Amount. The Company agrees to issue to the Investor a convertible promissory note (the "Note") in the principal amount of USD $ (the "Principal"), to be delivered on the Closing Date.
2.2 Closing Date. The date the Investor delivers the Principal to the Company by wire transfer or other agreed method (the "Closing Date"). The Company will countersign this Agreement upon receipt of funds.
2.3 Use of Proceeds. The Company shall use the proceeds for general working capital and business development purposes.
2.4 No Security Interest. This Note is a general unsecured obligation of the Company. The Investor holds no security interest in any assets of the Company.
3.1 Interest Rate. Simple interest shall accrue on the outstanding Principal at a rate of twelve percent (12%) per annum, calculated on the basis of a 365-day year.
3.2 Monthly Cash Payments. Interest shall be paid in cash on the first business day of each calendar month following the Closing Date. For the avoidance of doubt: (a) interest shall not accrue, compound, or be deferred; (b) no interest shall be included in any conversion calculation under Section 5; and (c) all interest obligations are extinguished upon each monthly payment as it becomes due.
4.1 Maturity Date. Twenty-four (24) months from the Closing Date shall be the "Maturity Date." Unless earlier converted pursuant to Section 5, the outstanding Principal shall on the Maturity Date automatically convert into common shares in accordance with Section 5.4. The Principal is not repayable in cash at maturity except in the event of an uncured Event of Default under Section 7.
4.2 No Prepayment. The Company may not prepay the Principal, in whole or in part, without the prior written consent of the Investor.
The conversion mechanics set out in this Section govern the automatic or optional conversion of the Principal into equity securities of the Company. No interest paid monthly in cash pursuant to Section 3.2 shall be included in any conversion calculation.
5.1 Qualified Equity Financing (Optional — Investor Election). If the Company completes, prior to the Maturity Date, an equity financing of at least USD $1,000,000 (a "Qualified Financing"), the Investor may (but is not obligated to) convert the outstanding Principal at 70% of the lowest per-share price in such financing (a 30% discount). The Investor must deliver written notice of election within fifteen (15) business days of receiving notice of the Qualified Financing closing. If the Investor does not timely elect, the Note remains outstanding.
5.2 Pre-IPO or IPO (Automatic Conversion). Upon closing of a financing round designated as a pre-IPO round, or upon the Company's initial public offering on any recognized exchange (an "IPO Event"), the outstanding Principal shall automatically and without further action by either party convert into common shares at 70% of the per-share price in such IPO Event (a 30% discount).
5.3 Change of Control / Acquisition (Automatic Conversion). Upon any sale of all or substantially all assets, merger, amalgamation, or other change of control transaction (an "Acquisition"), the outstanding Principal shall automatically and without further action convert at 70% of the per-share price implied by the Acquisition consideration (a 30% discount). The Company shall provide at least twenty (20) business days' prior written notice of any anticipated Acquisition closing.
5.4 Maturity Conversion (Automatic). If the Principal has not been converted on or before the Maturity Date, it shall automatically convert into common shares at 70% of the price per share paid in the most recent arm's-length equity financing completed by the Company prior to the Maturity Date. If no such financing has occurred, the Conversion Price shall be based on a pre-money valuation mutually agreed in writing no later than thirty (30) days prior to the Maturity Date.
5.5 Mechanics. Upon conversion, the Company shall issue shares equal to the Principal divided by the applicable Conversion Price (rounded down to the nearest whole share), and shall deliver share certificates or book-entry confirmation within fifteen (15) business days. Upon conversion, this Note is cancelled.
6.1 Company. RYSE Inc. represents and warrants that it is duly incorporated and validly existing under the laws of Canada; has full corporate authority to execute and perform this Agreement; and that this Agreement constitutes a valid, binding, and enforceable obligation.
6.2 Investor. The Investor represents and warrants that: (a) it has full legal capacity to execute and perform this Agreement; (b) it is acquiring this Note for investment purposes only; (c) it has sufficient knowledge to evaluate the merits and risks and can bear the risk of total loss; (d) it qualifies as an accredited investor (or the equivalent under its local jurisdiction) and has completed Schedule A; and (e) it has not relied on any representations other than those contained in this Agreement.
7.1 Events of Default. Each of the following constitutes an "Event of Default": (a) failure to make any monthly interest payment within ten (10) business days of its due date, not cured within five (5) business days of written notice; (b) insolvency, general assignment for the benefit of creditors, or bankruptcy proceedings; (c) material breach of any representation, warranty, or covenant not cured within twenty (20) days of written notice; or (d) a resolution for voluntary dissolution or winding up of the Company.
7.2 Acceleration. Upon an Event of Default, at the Investor's option upon written notice, the entire outstanding Principal shall become immediately due and payable in cash, together with any unpaid interest amounts then owing.
8.1 United States. This Note is offered in reliance upon the exemption from registration under the U.S. Securities Act of 1933 provided by Regulation D, Rule 506(b) or Rule 506(c). The Investor represents it is an "accredited investor" as defined in Rule 501(a) of Regulation D. This Note has not been registered under the Securities Act or any U.S. state securities laws and may not be resold except pursuant to an effective registration statement or applicable exemption.
8.2 Canada. This Note is offered pursuant to applicable private placement exemptions under Canadian securities laws, including the accredited investor exemption under National Instrument 45-106 – Prospectus Exemptions.
8.3 International Investors. If the Investor resides outside the United States or Canada, the Investor represents that the offer and sale of this Note complies with all applicable securities laws of its home jurisdiction, and that the Investor is not a "U.S. Person" as defined in Rule 902(k) of Regulation S.
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
9.2 Dispute Resolution. Any dispute shall first be submitted to good faith negotiation between the parties. If not resolved within thirty (30) days, it shall be resolved by binding arbitration in Toronto, Ontario, under the rules of the ADR Institute of Canada, with a single arbitrator.
9.3 Amendment. This Agreement may not be amended except by a written instrument duly executed by both parties.
9.4 Entire Agreement. This Agreement, together with Schedule A, constitutes the entire agreement between the parties with respect to the subject matter hereof.
9.5 Confidentiality. The existence and terms of this Agreement shall be kept confidential by both parties, except as required by applicable law or to legal, financial, and tax advisors bound by equivalent confidentiality obligations.
9.6 Notices. All notices shall be in writing and delivered by personal delivery, registered mail, or email with confirmation of receipt.
9.7 Assignment. The Investor may not assign or transfer this Note without the prior written consent of the Company. The Company may not assign this Agreement without the Investor's prior written consent.
9.8 Counterparts. This Agreement may be executed in counterparts. Electronic signatures and PDF copies shall be deemed originals.
IN WITNESS WHEREOF, the parties have executed this Convertible Promissory Note Purchase Agreement as of the Closing Date first written above.
COMPANY:
Trung Pham, Founder & CEO
RYSE INC.
20 Camden St., Suite 200
Toronto, Ontario, M5V 1V1
INVESTOR:
Printed Name:
Date:
Address:
Schedule A
Accredited Investor Certificate
The undersigned Investor hereby certifies that it qualifies as an accredited investor (or the equivalent under its local jurisdiction) by checking at least one applicable category below, in connection with the purchase of a Convertible Promissory Note of RYSE Inc.
Jurisdiction of Residence or Organization:
If other, specify accredited investor basis:
Investor Signature
Date
Printed Name
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