This Bridge Note Agreement (this “Agreement”) is entered into on or about ____________ by and between {{ company_name }}, a {{ incorporation_state }} corporation (the “Company”), and ______________ (the “Bridge Investor”), in consideration of the Bridge Investor’s payment of $6,000 (the “Principal Amount”) to the Company on or about ____________.
The Company will issue at most one (1) Bridge Note in this funding cycle. The Bridge Investor is the sole party receiving this instrument. No additional bridge participants will be solicited or accepted. This constraint exists to keep the Company’s capitalization clean and to preserve the Seed Investor’s {{ equity_percent }}% target under the primary SAFE Agreement.
Principal Amount means $6,000.
Equity Grant means 101,010 shares of the Company’s Common Stock, equal to 1.0% of fully-diluted equity at issuance, issued to the Bridge Investor at execution of this Agreement.
Term means twenty-six (26) consecutive weeks beginning on the date of execution.
Repayment Schedule means the weekly payment schedule set forth in Section 4, totaling $7,000 over the Term.
SAFE means the Simple Agreement for Future Equity issued by the Company to the Seed Investor in the primary ${{ '{:,}'.format(investment_amount) }} seed round, as described in the SAFE Agreement dated of even date herewith.
In consideration of the Bridge Investor’s payment of the Principal Amount, the Company shall issue to the Bridge Investor 101,010 shares of Common Stock at execution of this Agreement, representing 1.0% of fully-diluted equity at issuance. The Equity Grant is subject to standard dilution from subsequent rounds, including dilution from SAFE conversion at the next priced equity round, after which the Bridge Investor’s ownership position is expected to be approximately 0.9% of fully-diluted equity.
The Equity Grant is issued as common stock subject to the same restrictions and rights as other common shareholders, with no preferred rights, no liquidation preference, and no anti-dilution protection. The Bridge Investor acknowledges and accepts these terms.
In addition to the Equity Grant, the Company shall pay the Bridge Investor weekly distributions totaling $7,000 over the 26-week Term, on the following schedule:
| Weeks | Weekly Payment | Weeks Total |
|---|---|---|
| Weeks 1–25 | $269.00 | $6,725.00 |
| Week 26 (final) | $275.00 | $275.00 |
| Total | $7,000.00 | $7,000.00 |
Weekly payments commence the first Friday following execution and continue every Friday thereafter for 26 weeks. The cash return on Principal Amount is $1,000 (16.7% over the Term).
The Principal Amount will be deployed by the Company against early-stage operational needs as detailed in the Use of Funds document, in concert with the primary SAFE deployment.
For so long as this Agreement remains outstanding, the Company will deliver to the Bridge Investor: (i) monthly business updates covering platform metrics, user growth, revenue, and deployment progress; and (ii) the same information rights afforded to the Seed Investor under the SAFE.
The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of {{ incorporation_state }} (upon completion of incorporation). The execution, delivery and performance by the Company of this Agreement is within the power of the Company and has been duly authorized by all necessary actions on the part of the Company.
The Bridge Investor has full legal capacity, power and authority to execute and deliver this Agreement. The Bridge Investor is making this investment solely for its own account, for investment purposes, and not with a view to the public resale or distribution thereof. The Bridge Investor acknowledges that this is an early-stage investment involving substantial risk, including the possibility that the Company may be unable to complete the Repayment Schedule and/or that the Equity Grant may decline to zero value.
If the Company fails to make a weekly payment within ten (10) calendar days of its scheduled date, the Bridge Investor may declare the Repayment Schedule in default and demand acceleration of the remaining balance. In the event of default, the Equity Grant shall remain with the Bridge Investor regardless of the resolution of the Repayment Schedule.
(a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of {{ incorporation_state }}.
(b) Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to its subject matter.
(c) Amendment. Any provision of this Agreement may be amended only with the written consent of the Company and the Bridge Investor.
(d) Subordination. The rights of the Bridge Investor under the Repayment Schedule are subordinate to the Company’s general operating obligations but rank ahead of any distributions to common shareholders other than the Bridge Investor itself.
(e) Counsel. Each party acknowledges that they have had the opportunity to seek independent legal counsel before signing.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed and delivered as of the date first written above.