THIS NOTE AND ANY SHARES ACQUIRED UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
INTUITY MEDICAL, INC.
8.0% PAY IN KIND CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, Intuity Medical, Inc., a Delaware corporation (the Company), promises to pay to the undersigned holder or such partys assigns (the Holder) the principal sum of $2,775,000 on March 31, 2024 (the Maturity Date), and to pay interest on the unpaid principal amount of this Note (the Interest) at the rate and on the dates specified herein.
1. Interest. The Company promises to pay the Interest at the rate per annum of 8.0% (the Interest Rate), payable in-kind by the Company quarterly in arrears each March 31, June 30, September 30 and December 31, commencing June 30, 2021 (each day on which interest shall be so payable, an Interest Payment Date). On each Interest Payment Date, Interest shall accrete and be considered additional principal of this Note for all purposes, and all references herein to the principal of this Note shall include all accreted interest. Interest on this Note shall be computed on the basis of a year of 365 days for the actual number of days elapsed.
2. Automatic Conversion upon Qualifying IPO or SPAC Transaction. In the event that the Company consummates, on or prior to the Maturity Date, a Qualifying IPO (as defined below), then the outstanding principal of this Note (including accreted interest as set forth above) shall automatically convert in whole without any further action by the Holder into common stock of the Company or, in the case of a SPAC Transaction (as defined below), common stock of the SPAC (as defined below), at a conversion price equal to 80% of (i) the price per share of the Companys common stock paid by the purchasers in the Qualifying IPO (which price shall be the price to public as set forth in the final prospectus relating to such IPO) or (ii) the lowest price per share of the SPACs common stock offered to investors in such SPAC Transaction (including the Companys existing stockholders or other investors participating in any private investment in public equity, or PIPE, in connection with such SPAC Transaction). A Qualifying IPO is (i) a firm commitment underwritten public offering of shares of the Companys common stock pursuant to an effective registration statement filed under the Act (an IPO) in which the aggregate cash consideration paid to holders of the Companys securities is at least $75,000,000 (before deduction of underwriters commissions and other offering expenses) or (ii) a SPAC Transaction in which the aggregate cash