CONVERTIBLE PROMISSORY NOTE
RMB $$ December 20th, 2009
For value received xyz corporation a Hong Kong corporation (“Payor” or the “Company”) promises to pay to [ ] or his assigns (“Holder”) the principal sum of RMB $$ . This Convertible Promissory Note is referred to herein as the “Note”.
1. All payments of principal shall be in lawful money. All payments shall be applied to principal only.
2. In the event that Payor issues and sells shares of its Equity Securities (as defined below) to investors (the “Investors”) on or before March 20th, 2010 (the “Maturity Date”) in an equity financing with total proceeds to the Payor of not less than RMB $$ (excluding the conversion of the Notes or other debt) (a “Qualified Financing”), then the outstanding principal balance of this Note shall automatically convert in whole without any further action by Holder into such Equity Securities. The number of shares of Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the entire principal amount of this Note of RMB $$ by (ii) RMB $, and the issuance of such Equity Securities shall be on the same terms and conditions as given to the Investors. For purposes of this Note, the term “Equity Securities” shall mean the Payor’s Common Stock or any securities conferring the right to purchase the Payor’s Common Stock or securities convertible into, or exchangeable for (with or without additional consideration), the Payor’s Common Stock (excluding the Notes and the Warrants), in each case issued in the Qualified Financing following the date hereof, except that such defined term shall not include any security granted, issued and/or sold by the Payor to any employee, director or consultant in such capacity.
3. Unless this Note has been converted in accordance with the terms of Section 2 above, the entire outstanding principal balance shall become fully due and payable on the Maturity Date.
4. In the event of any default hereunder, Payor shall pay all reasonable attorneys’ fees and court costs incurred by Holder in enforcing and collecting this Note.
5. Payor may prepay this Note prior to the Maturity Date without any pre-payment penalties.