TERM SHEET FOR ONGRIDS ACQUISITION FINANCING NOTES

Borrower

Entity formed to acquire OnGrid business assets (the Business) from

Andrew Black (Seller).

Term Sheet Definitions

Use of Proceeds

Seller Note: The note titled ONGRID BUSINESS

ACQUISITION SELLER NOTE
Acquisition Notes: The notes collectively titled ONGRIDS
ACQUISITION FINANCING NOTES
Working Capital Notes: The notes collectively titled
ONGRIDS WORKING CAPITAL FINANCING NOTES
To finance a portion of the acquisition price for the Business.
$100,000.

Principal Amount of
Acquisition Notes

7%.

Interest Rate
Payments

Interest: Payable quarterly in arrears to the holders of the Acquisition

Notes (the Acquisition Noteholders). However Borrower may elect
to add interest to Acquisition Notes principal on any quarterly
payment date.
Principal: On Maturity Date.

Voluntary Prepayments

Mandatory Prepayment in
Connection with
Change in Control

Voluntary Conversion

Once principal payments on Seller Note have exceeded $50,000,

Borrower may prepay all or portion of the Acquisition Notes principal
from time to time. Partial prepayments shall be made on pro rata basis
across the outstanding Acquisition Notes.
After the Seller Note has been repaid, Borrower shall repay the
Acquisition Notes in full if there is a change in control, including
if a third party acquires the Business either by (i) purchasing the
Business assets from Borrower, or (ii) acquiring majority of
Borrowers outstanding equity.
If Borrower issues equity for cash consideration (an Equity
Financing), an Acquisition Noteholder may elect to convert the
principal outstanding and the interest accrued under the holders
Acquisition Note into such equity at a per share price equal to eightyfive percent (85%) of the price paid by the investors in such Equity
Financing.

Maturity Date

7th anniversary of Closing.

Bonus Payment

If, as of the date the Acquisition Notes are paid, including pursuant to
a mandatory prepayment, principal payments on the Seller Note have
exceeded $100,000 and Borrowers aggregate revenues have exceeded

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$2,400,000 (Borrowers 5-year aggregate revenue projection),

Borrower shall pay the Acquisition Noteholders an additional total of
$20,000 within one (1) year of the date the Acquisition Notes are paid
in full.
None; Acquisition Notes are unsecured.

Collateral
Subordination

Acquisition Notes are subordinated to the Seller Note, on following

terms:

So long as the Seller Note is Current (that is, if all payments

due thereunder have been paid), and/or so long as Seller has
not enforced his rights and remedies under the Seller Note,
Borrower may make, and the Acquisition Noteholders may
retain, interest and principal payments on the Notes, including
voluntary prepayments; and
If Seller enforces the pledge of Borrowers equity securing the
Seller Note and as a result takes control of Borrower, (i) the
Acquisition Notes principal, if exceeding $100,000, shall be
adjusted to $100,000; and (ii) the Maturity Date shall be the
third anniversary of the date Seller takes such control.

In a liquidation, winding up or bankruptcy of Borrower:

Restrictions

Michael Bishops total annual compensation not to exceed $90,000,

unless and until Borrowers twelve (12) month trailing revenues
exceed $500,000. Michael Bishops total annual compensation not to
exceed $110,000 under any circumstances.
Borrower to provide Acquisition Noteholders with quarterly
financial statements.

Reporting

Events of Default

Amendments/Waivers

Governing Law
Expenses

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The Seller Note shall be paid in full before any payment is

made with respect to the Acquisition Notes; and
The Acquisition Notes shall be paid in full before any payment
is made with respect to the Working Capital Notes.

Failure to pay principal and accrued interest on the Maturity

Date or a mandatory prepayment date
Breach of any covenant not cured within thirty (30) days

Amendment or waiver of Acquisition Notes terms require consent of

Acquisition Noteholders holding a majority of the outstanding
Acquisition Notes principal.
However, any amendment that would treat an Acquisition Noteholder
differently from the other Acquisition Noteholders would require such
Acquisition Noteholders consent.
California.
Each party is responsible for its own legal and other expenses in

connection with the closing of the financing.

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