Securities to Be Issued:

5,000,000 shares of Series A Preferred Stock.

Amount of Investment:

€5,000,000

Pre-Money Valuation/Price:

Pre-money valuation of €5,000,000, based on the fully diluted capitalization of 5,000,000 shares (inclusive of outstanding options and stock reserves for future option grants). Resulting price per share of €1.00.

Closing:

The anticipated closing date is xx xxx 2023, with all funding to be committed at that time.

Dividends:

Annual dividend equal to €0.10 per share, representing an annual dividend rate of 10% per share. The dividend shall be cumulative and accrue quarterly, and shall be payable, in addition to any liquidation preference as described below, upon the first to occur of (A) an initial public offering by the Company of shares of its Common Stock; or (B) upon any sale, merger or other acquisition of the Company. No dividends shall be paid on any shares of Common Stock unless all accrued dividends shall be have been paid in full on the Series A Preferred.

Liquidation Preference:

In the event of any liquidation, dissolution or winding up of the Company, the holders of the Series A Preferred shall be entitled to receive €2.00 per share, plus any accrued and unpaid dividends, in preference to the holders of the Common Stock.

After the liquidation preference of the Series A Preferred has been satisfied in full, any remaining proceeds shall be paid to the holders of both the Common Stock and the Series A Preferred, pro rata based a share-by-share basis.

A merger or consolidation of the Company with or into another corporation in which the Company does not survive, or the sale or transfer of all or substantially all of the Company’s assets, will be treated as a liquidation, unless the shareholders of the Company own more than 50% of the surviving entity.

Conversion:

Each share of Series A Preferred shall initially be convertible, at the election of the holder at any time, into one share of Common Stock (i.e, a 1:1 conversion ratio), subject to antidilution adjustments described below.

Each share of Series A Preferred shall automatically convert, at the conversion ratio then in effect, upon either (A) the consummation of a firmly underwritten public offering of Common Stock with a price of at least €5.00 per share and aggregate proceeds to the Company in excess of €25 million (an “Initial Public Offering”) or (B) the written consent of a majority of the outstanding Series A Preferred.

Antidilution Adjustment:

Conversion ratio of the Series A Preferred shall be adjusted on a “full ratchet” basis for any issuance of capital stock at a price less than €1.00 (other than the sale of Common Stock to employees, directors and consultants), such that the Series A Preferred shall receive the full benefit of any reduction in the valuation of the Company in future rounds of financing. There shall be proportional adjustments for stock splits and stock dividends.

Voting Rights:

The Series A Preferred shall vote on an “as-converted-to Common” basis, and shall be entitled to a class vote as provided by law. The Series A Preferred shall have special voting rights with respect to certain matters—see “Protective Covenants” below.

Board Representation:

The holders of the Series A Preferred shall have the right to designate two directors to the Board of Directors, and the holders of the Common Stock shall have the right to designate one director. The size of the Board of Directors will be fixed at three in the bylaws of the Company.

Protective Provisions:

As long as not less than 50% of the originally issued shares of Series A Preferred remain outstanding, the Company shall not, without the prior written consent of the holders of a majority of the outstanding Series A Preferred:

· Amend or modify the rights and preferences of the Series A Preferred, or create any security on parity with or senior to the Series A Preferred;

· Increase the authorized number of shares of Series A Preferred:

· Enter into any merger, consolidation or sale of assets transaction in which the voting control of the Company would be transferred;

· Increase the size of the board of directors;

· Incur any bank debt or other indebtedness for money of any kind;

· Hire or fire any officers of the Company;

· Approve an annual operating budget;

· Enter into any lease facility for the Company’s principal offices;

· Issue stock to vendors or consultants; or

· Effect any acquisition of any products, technologies or businesses.

Pre-Emptive Right:

The holders of the Series A Preferred shall have a right to purchase any or all new issuances of the Company’s shares in connection with any future financing transactions of the Company (subject to customary exclusions). Such right shall expire upon completion of an Initial Public Offering.

Right of First Refusal and Co-Sale:

All shares of Common Stock held by the founders of the Company shall be made subject to a right of first refusal and co-sale agreement, such that no such shareholder may sell stock unless the holders of the Series A Preferred has an opportunity to purchase such shares. If such right of first refusal is not exercised in full, then each holder of the Series A Preferred shall have the right to cause its shares to be included in the sale. These rights shall terminate upon completion of an Initial Public Offering.

Key-Person Insurance:

The Company shall procure key-person insurance policies for each of its founders in the amount of €2,000,000, naming the holders of the Series A Preferred as beneficiaries.

Vesting of Founders’ Stock:

The shares of Common Stock held by the founders shall be made subject to a five-year vesting schedule, commencing upon completion of the Series A Preferred Financing, with the first 25% of such shares vesting upon the first anniversary of the closing, and the remaining shares vesting in equal amounts of the next 48 months. In the event of termination of employment of a founder for any reason, then any shares that are unvested at the time of such termination may be repurchased by the Company at their original purchase price.

Stock Purchase Agreement:

The Series A Preferred financing shall be made pursuant to a Series A Preferred Stock Purchase Agreement which shall contain appropriate representations and warranties of the Company and customary conditions of closing.

Expenses:

The Company shall pay the legal fees and expenses of counsel for the investors.

The Company shall pay a €2,000/month consulting fee for value adding services provided by the investors…

Binding Commitment:

This Memorandum of Terms is intended to be a legally binding commitment of the Company and the founders in favor of the holders of the Series A Preferred.

Exclusivity:

The Company and each of the founders agrees that for a period of 60 days from the execution date of this document, they will not solicit, negotiate or enter into any agreement or commitment or accept any proposal for any debt or equity financing of the Company, other than pursuant to this Memorandum of Terms.