Participating and Convertible Debenture

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

PARTICIPATING AND CONVERTIBLE DEBENTURE

THIS DEBENTURE is made and entered into this {{day}} day of {{month}}, {{year}}

BETWEEN:

{{issuer_company_name}}, a company duly incorporated under the laws of {{jurisdiction_of_incorporation}}, with its registered office at {{issuer_company_address}} (hereinafter referred to as the “Issuer”)

AND

{{investor_name}}, an individual residing at {{investor_address}} / a company duly incorporated under the laws of {{jurisdiction_of_incorporation}}, with its registered office at {{investor_company_address}} (hereinafter referred to as the “Debenture Holder”)

1. PRINCIPAL AMOUNT AND INTEREST

1.1. The Issuer hereby acknowledges receipt of the sum of {{principal_amount}} ({{principal_amount_words}}) from the Debenture Holder (the “Principal Amount”).

1.2. The Principal Amount shall bear interest at a rate of {{interest_rate}}% per annum, calculated daily and compounded annually (the “Fixed Interest Rate”).

1.3. In addition to the Fixed Interest Rate, the Debenture Holder shall be entitled to a participating interest equal to {{participating_interest_percentage}}% of the net profit of the Issuer for each financial year, commencing from {{start_date_of_participation}} (the “Participating Interest”). The Issuer shall provide audited financial statements to the Debenture Holder within {{days_to_provide_financials}} days of the end of each financial year for the purpose of calculating the Participating Interest.

2. MATURITY DATE AND REPAYMENT

2.1. The Principal Amount, together with all accrued and unpaid interest (Fixed and Participating), shall be due and payable without demand on {{maturity_date}} (the “Maturity Date”).

2.2. The Issuer may, at its option, with {{days_notice_of_prepayment}} days’ prior written notice to the Debenture Holder, prepay the Principal Amount in whole or in part, together with all accrued interest, without penalty.

2.3. All payments hereunder shall be made in {{currency}} in immediately available funds to the account designated by the Debenture Holder.

3. CONVERSION RIGHTS

3.1. The Debenture Holder shall have the right, at any time prior to the Maturity Date, to convert the outstanding Principal Amount and all accrued and unpaid interest into ordinary shares of the Issuer (the “Conversion Shares”) at a conversion price of {{conversion_price}} per share (the “Conversion Price”).

3.2. The Debenture Holder shall exercise this conversion right by providing written notice to the Issuer (the “Conversion Notice”), specifying the amount of the Debenture to be converted.

3.3. Upon receipt of the Conversion Notice, the Issuer shall issue the Conversion Shares to the Debenture Holder within {{days_to_issue_shares}} business days.

3.4. The number of Conversion Shares to be issued shall be calculated by dividing the aggregate amount being converted by the Conversion Price.

4. COVENANTS OF THE ISSUER

4.1. The Issuer covenants that it will operate its business in a prudent and efficient manner and will not take any action that would materially adversely affect the value of the Debenture or the Debenture Holder’s conversion rights.

4.2. The Issuer shall provide the Debenture Holder with all financial statements and other information as reasonably requested.

4.3. The Issuer shall not, without the prior written consent of the Debenture Holder, issue any shares or other securities ranking in priority to or pari passu with the Conversion Shares.

5. EVENTS OF DEFAULT

5.1. The occurrence of any of the following shall constitute an Event of Default under this Debenture:

(a) Failure by the Issuer to make any payment of principal or interest when due hereunder.

(b) Breach by the Issuer of any other material covenant or obligation contained herein.

(c) Insolvency or bankruptcy of the Issuer.

5.2. Upon the occurrence of an Event of Default, the entire outstanding Principal Amount, together with all accrued and unpaid interest, shall become immediately due and payable at the option of the Debenture Holder.

6. GOVERNING LAW AND JURISDICTION

6.1. This Debenture shall be governed by and construed in accordance with the laws of {{governing_law_jurisdiction}}.

6.2. Any dispute arising out of or in connection with this Debenture shall be subject to the exclusive jurisdiction of the courts of {{jurisdiction_for_disputes}}.

7. MISCELLANEOUS

7.1. This Debenture constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

7.2. This Debenture may not be amended or modified except by a written instrument signed by both parties.

7.3. This Debenture shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Signatures

IN WITNESS WHEREOF, the parties have executed this Participating and Convertible Debenture as of the date first written above.

_____________________________

For: {{issuer_company_name}}

Name: {{issuer_signatory_name}}

Title: {{issuer_signatory_title}}

_____________________________

{{investor_name}}

Name: {{investor_signatory_name}} (if applicable)

Title: {{investor_signatory_title}} (if applicable)