Bond Terms

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENT. FOR PURPOSES OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” AND THE DATE OF ORIGINAL ISSUE OF THIS NOTE IS _____ ___, 202_.

[ISSUER NAME]

Zero Coupon Promissory Note

Austin, Texas
[TODAY’S DATE]

QOZB Capital, a Delaware corporation (the “Company”), for value received, promises to pay, subject to the terms and conditions of this Note, to [HOLDER], a ________ [corporation][limited liability company] (the “Holder”), the sum of [DOLLAR AMOUNT] ($_____________________), which amount includes interest, on _______ __, 202_ (the “Maturity Date”).

1. Payments.

1.1. The amount of this Zero-Coupon Promissory Note (the “Note”) shall be payable in full on the Maturity Date.

1.2. Payment of this Note shall be made to Holder at [HOLDER’S ADDRESS], or such other place or places within the United States as may be specified by the Holder of this Note in a written notice to the Company at least 10 business days before the payment date.

1.3. Such payment shall be made in lawful money of the United States of America by mailing the Company a good check in the proper amount to such Holder on the due date of such payment or otherwise transferring funds for receipt by such Holder on the due date of such payment.

1.4. If payment on this Note becomes due and payable on a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close, the maturity thereof shall be extended to the next succeeding business day.

1.5. In no event shall the amount of interest due or payable hereunder exceed the maximum rate of interest allowable by applicable law. It is the express intent hereof that the Company does not pay, and the Holder does not receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be legally paid by the Company under applicable law.

2. Cancellation of Note.

Upon payment in full of all outstanding obligations under this Note, the Company’s obligations in respect of payment of this Note shall terminate and the Holder shall surrender this Note to the Company.

3. Transferability Restrictions. This Note may not be sold, transferred, pledged, hypothecated or otherwise encumbered in violation of the securities laws or, if such sale, transfer, pledge, hypothecation or encumbrance would defeat the Company’s or the Note’s exemption under Regulation D (“Reg. D”) promulgated by the Securities And Exchange Commissions (the “SEC”) under the Securities Act of 19333, as amended, and may only be sold if:
3.1 Any party to whom it is sold, transferred, pledged, hypothecated or encumbered (“Prospective Transferee”) is an “accredited investor” as that term is defined in Reg. D (17 CFR § 230.501);
3.2 The Prospective Transferee, at Prospective Transferee’s sole cost and expense, provides to the Company, an opinion of counsel satisfactory to the Company (in the Company’s sole, subjective opinion), that the Company is not and will not, be required to register itself or the Note with the SEC as a result of the sale, transfer, pledge, hypothecation or encumbrance; and
3.3 The Prospective Transferee agrees to be bound by all of the terms, conditions and provisions set forth herein applicable to the Holder and to provide a signed writing to the Company, certifying the same prior to any such any such sale, transfer, pledge, hypothecation or encumbrance.
4. Events of Default. In the event that:

4.1 the Company defaults for more than ten (10) Business Days in making the payment of principal or interest required to be made on this Note; or

4.2 the Company:

(a) commences any case, proceeding or other action (x) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, composition or other relief with respect to it or its debts or (y) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or shall make a general assignment for the benefit of its creditor; or

(b) is the debtor named in any other case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (C) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the facts set forth in clause (i) or (ii) above; or (D) shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

(c) with respect to the Company’s Notes, if any, issued concurrently herewith, the Company defaults in the payment of principal or defaults in the payment of interest on such Notes and such default continues unremedied for a period of more than ten (10) Business Days; then, and in any such event (an “Event of Default”), and at any time thereafter, if such Event of Default shall then be continuing, any Holder of this Note may, by written notice to the Company, declare this Note due and payable, whereupon this Note shall be due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived.

5. Investment Representation.

This Note has not been and will not be registered (i) under the Securities Act of 1933, as amended (the “Act”), on the ground that the issuance of this Note is exempt from registration under Section 4(a)(2) of the Act as not involving any public offering or (ii) under any applicable state securities law on the ground that the issuance of this Note does not involve any public offering; and that the Company’s reliance on the Section 4(a)(2) exemption of the Act and on applicable state securities laws is predicated in part on the following representations hereby made to the Company by the Holder. Each Holder of this Note hereby acknowledges, represents and warranty’s that:

5.1 Holder and its successors and assigns are each acquiring the Note for investment purposes only for their own account, with no intention of dividing their participation with others or otherwise distributing the same, subject, nevertheless, to any requirements of law that the disposition of its property shall at all times be within its control.

5.2 Holder is aware of the Company’s business affairs and financial condition and has obtained sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Note. Holder is accepting the Note for Holder’s own account only and not with a view to, or for the resale in connection with, or any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Holder does not have any present intention to transfer or attempt to transfer the Note to any other person or entity.

5.3 Holder understands that the Note has not been registered under the Securities Act of 1933, as amended (the “Securities Act”) by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Holder’s intent as expressed herein.

5.4 Holder understands that the Note is a “restricted security” under applicable U.S. federal and state securities laws and that, pursuant to these laws, Holder must hold the Note until repaid unless they it is registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Holder acknowledges that the Company has no obligation to register or qualify the Note for resale and in fact has no plan to register the Note for resale. Holder further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on the requirements set forth in the Company’s operating agreement, and various other requirements including, but not limited to, the time and manner of sale, the holding period for the Note, and requirements relating to the Company which are outside of the Holder’s control, and which the Company is under no obligation and may not be able to satisfy.

5.5 Holder understands that Holder may suffer adverse tax consequences as a result of Holder’s receipt or disposition of the Note. Holder represents that Holder has consulted any tax consultants Holder deems advisable in connection with the purchase or disposition of the Note and that Holder is not relying on the Company for any tax advice.

5.6 Holder has read and understands the Risk Factors attached hereto, has determined to invest in this Note and is able to bear the economic risk even in light of the Risk Factors.

6. Miscellaneous.

6.1. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and of a letter of indemnity reasonably satisfactory to the Company, and upon reimbursement to the Company of all reasonable expenses’ incident thereto, and upon surrender or cancellation of the Note, if mutilated, the Company will make and deliver a new Note of like tenor in lieu of such lost, stolen, destroyed or mutilated Note.

6.2. In the event that one of the Events of Default specified in Section 4 hereof has occurred and is continuing, the Holder of this Note shall be reimbursed by the Company for the payment of its reasonable attorneys’ fees actually paid relating to the enforcement of any of the provisions of this Note.

6.3. This Note and the rights and obligations of the Company and any Holder hereunder shall be construed in accordance with and be governed by the substantive and procedural laws of the State of North Carolina, including its statutes of limitations, without regard to any conflicts of law principle, decisional law or statutory provision which would require, cause or permit the application of the substantive law of any other jurisdiction. The parties hereto hereby irrevocably consents to the personal jurisdiction of the courts of the State of North Carolina located in the County of Mecklenburg and of the United States District Court for the Western District of North Carolina, Charlotte Division (collectively, the “Designated Courts”), in any action to enforce, interpret or construe any provision of this Agreement or of any other agreement or document delivered in connection with this Agreement, and also hereby irrevocably waive any defense of improper venue or forum non conveniens to any such action brought in any of the Designated Courts. The parties further irrevocably agree that any action to enforce, interpret or construe any provision of this Agreement will be brought only in one of the Designated Courts and not in any other court.

6.4. Time is of the essence of this Note. If any provisions of this Note or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Note and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

IN WITNESS WHEREOF, the Company has executed this Note as of the day and year first above written.

[ISSUER NAME]

By: __________________________
Name:
Title:

Agreed to and accepted:

[HOLDER]

By: __________________________
Name:
Title:

Schedule 6.6

[DEBT INSTRUMENT] RISK FACTORS

An investment in the Note involves a high degree of risk and is suitable only for persons of substantial financial means who have no need for liquidity in their investment and who can afford the entire loss of their investment in the Note. There can be no assurance that the objectives of the Company will be achieved. Holders must be prepared to lose all or substantially all of their investment in the Company. As the investment involves a high degree of risk and there is no provision for cash payment of interest until Maturity, a prospective Holder should not purchase the Note to provide current income payments or to meet current income requirements. Prospective Holders should carefully consider the following risk factors, which may not include all risks that might affect this investment.

Prospective Holders should consult their own legal, tax and financial advisers as to all of the risks involved and as to an investment in the Note, generally before purchasing the Note. Holders should consider the Note as a supplement to an overall investment program and should only invest if they are willing to undertake the risks involved. An investment in the Note involves significant risks that may not be associated with other investments. In addition, Holders who are subject to income tax should be aware that an investment in the Note may create taxable income or tax liabilities. Prospective Holders should carefully consider, among other factors and risks, the types of risks described below.

The information contained or represented regarding this investment has been obtained from sources deemed reliable. However, no representation or warranty is made as to its accuracy or completeness.

There can be no assurance that there will be any return of capital. Even if the Company is successful, investment results may vary substantially on a quarterly or annual basis.

Risks Associated with the Capitalization

Start-up Enterprises. The Company is a start-up. Start-up enterprises are speculative investments and profits therefore hinge upon public acceptance of the businesses, which may or may not occur. No assurances can be given that amounts invested by the Company can be recovered or any profit realized or that public acceptance can be obtained, and if obtained, that such acceptance will translate into profitability. The marketability and value of the operations are dependent upon many factors, which are beyond the Holder’s control including development of adequate financing, marketing, and other matters affecting a ready market such as fluctuating supply and demand.

The Company’s single focus Investment Purpose. The Company was formed for the sole purpose of investing in cryptocurrency with the intent of making a profit by selling each investment for more than the amount for which the Company purchased it (the “Investment Strategy”). The Company’s intent is that the profits from its Investment Strategy (if any) are sufficient to return the face amount of the Note to the Holder. There is no alternative plan to produce the funds needed to pay the face amount of the Note in the event the investment in cryptocurrency fails. Holder could lose its entire investment in the event the Company’s investment strategy fails.

No Operating History. The Company has no operating history upon which Holders may base an evaluation of potential future performance. The Company may experience operating and net losses in the future.

No Minimum offering proceeds. There is no minimum issuance threshold (or amount to be raised) associated with this offering, which means that the Company will deposit and begin utilizing the proceeds of the sale of the Note immediately upon acceptance, in accordance with the terms of the Note and the completion of the five (5) day cooling-off period following receipt of the executed Note.

Key Personnel Dependent. The Company’s success depends upon its ability to attract and retain qualified employees and upon the ability of the Company’s manager and other officers (if any) (“Management”) to implement the Company’s business strategy. Although the Company is not aware of any planned departures, it relies substantially upon the services of the Manager and party responsible for executing the investment strategy. The loss of any of the Manager’s services or the inability to attract and retain other talented personnel could have a material adverse effect on the Company’s business. These individuals have additional commitments and will not be able to devote 100% of their time to the operation of the Company’s business.

Risks of Note

Non-transferability and Illiquidity of Note. The Note is being offered and sold for investment only and may not be acquired by the Holder with the view to any resale or distribution. The Note will not be registered under the Securities Act or the securities laws of any other state or jurisdiction by reason of specific exemptions relating to transactions not involving a public offering, which exemptions depend in part upon the investment intent of the purchaser. Accordingly, purchasers of the Note will have to bear the economic risk of their investment. A Holder should not expect to be able to readily liquidate the Note since the Note cannot be readily assigned or transferred. For such reason, these securities may not represent satisfactory collateral for a loan. Each person or entity contemplating an investment in the Note should consider whether the purchase of Note is suitable for such Person in light of such Person’s individual investment objectives and present and future financial needs. Each such Person is urged to consult both a qualified financial advisor and an attorney in connection with that consideration and to give particular attention to the limited liquidity of the investment.

Determination of Profit and Loss. The determination of net profit and net loss for any fiscal period includes unrealized gains and losses. In order to determine net profit and net loss for any fiscal period including unrealized gains and losses, the assets held by the Company must be valued. Some, possibly all, of the assets may not be liquid, making valuation and the determination of the resulting gain or loss subject to the judgment of Management. Uncertainties as to the valuation of the assets of the Company could have an adverse effect on the Company’s net asset value if these judgments regarding appropriate valuation should prove incorrect. The Company is not required to obtain independent appraisals or valuations of any such assets.

Restrictions on Transfer of Note. Holders may not assign, transfer, gift or otherwise dispose of the Note without written notice to and the prior written consent of the Company. The Company may condition the transfer or disposition of any Note on the receipt by the Company of an opinion of counsel acceptable to the Company (the cost of which shall be borne by the Holder) to the effect that such transaction will not impair the availability of an exemption from registration under applicable securities laws, and that such transfer is being made under a lawful exemption from registration. Consequently, Holders must be prepared to bear the risk of their investment in the Note for an indefinite period of time.

No Public Market and Arbitrary Valuation of Securities. There is no secondary market for the Note, and none is expected to develop. Consequently, Holders may not be able to liquidate the Note in the event of an emergency or for any other reason, and the Note may not be pledged as collateral for a loan. Even if a market was to become available and the restrictions of transferability met, there can be no assurance that a Holder will be able to resell such Note at or above the face amount of the Note. The Offering Price for the Note was arbitrarily determined by the Company and may not be indicative of the actual value of the Note.

Specific Risk of Non-Compliance with State and Federal Securities Laws. The Note has not been registered with the Securities and Exchange Commission, in reliance upon an exemption provided by the Securities Act. The Company believes that the Offering presently qualifies, and will continue to qualify, under that federal exemption. If an exemption under the Securities Act is not available due to inadequate disclosure, manner of sale, retroactive change in or interpretation of any securities laws or regulations, or any other reason, suits for rescission could be brought against the Company. If such a suit was successful, both the capital and the assets of the Company could be adversely affected, thus jeopardizing the ability of the Company to pay interest and principal applicable to the Note or to even continue in business.

Indemnification. The individual members of Management will have limited liability to the Holders under certain circumstances, and may be indemnified out of the Company’s assets for acts or omissions performed or omitted by them which may cause loss or damage to the Company. Indemnification payments are recoverable only out of the Company’s assets. Any such indemnification could reduce or deplete the Company’s assets and harm its ability to pay principal and interest with respect to the Note or return any monies to the Holders.

No Independent Representation of Holders. The interests of Holders have not been separately represented by legal counsel in connection with the Offering and the organization of the Company. Counsel for the Company expressly disclaims any representation of the Holders. Accordingly, the terms of the Offering, the Note or the management of the Company may not have been structured in the most favorable manner to the Holders and may not include legal protections for the Holders, which could have been obtained if the Holders had retained independent counsel.

Risks of Legal Action. The Company is subject to lawsuits or proceedings by government entities and/or private parties. Expenses or liabilities of the Company arising from any such suit or proceedings would be borne by the Company.

Factors Outside the Control of the Company Could Impair the Business of the Company or Cause Losses. Risks Associated with the general financial markets, politics, war, terrorism, acts of God, pandemics, and other factors outside the control of the Company could, (i) cause the Company to lose customers, (ii) cause its customers and potential customers to have little or no assets to spend on the Company’s products and services, (iii) lead to a change in the laws making the business of the Company unlawful or adding financial burden to the Company in order to comply with the changed laws, or (iv) otherwise detrimentally affect the political, regulatory and/or socioeconomic environment within which the Company currently exists.

Highly Speculative Financial Projections. All financial projections (if any) and other assumptions made by Management are highly speculative and, while based on best estimates of projected general economic conditions, there can be no assurance that the Company will operate profitably or remain solvent. If plans prove unsuccessful, Holders could lose all or part of their investment. There can be no assurance that the business will be able to generate meaningful revenues or profits.

Risks Particular to Cryptocurrency Markets
Digital assets, such as cryptocurrency, were largely introduced within the past decade, and the value of such digital assets is influenced by a wide variety of factors which are uncertain and difficult to evaluate, as the infancy of the industry and the cryptocurrency market’s reliance on relatively new technologies, such as cryptographic software protocols, dependence upon miners and core developers, the future success (or lack thereof) of various developers to upgrade source code to improve transaction processing speed (“throughput”) and the potential for malicious activity. Additional risks include, but are not limited to the following:

The trading prices of many digital assets associated with blockchain protocols have experienced extreme volatility in recent periods of time, and many continue to do so.

Blockchain protocols and the software used to operate them are in the early stages of development. Digital assets that are associated with such protocols and software have experienced, and likely will experience in the future, sharp fluctuations in value. Given the infancy of the development of blockchain protocols, parties may be unwilling to transact in digital assets, which would dampen their growth and thus the growth of the Company.

Digital assets are dependent upon the internet. A disruption of a blockchain network would affect the ability to transfer digital assets, and thus negatively affect the Company.

The acceptance of software patches or upgrades by a significant, but not overwhelming blockchain network, such as Ethereum, could affect the ability to transfer digital assets and consequently, adversely affect their value.

Blockchain networks have no central decision-making body or clear manner in which participants can come to an agreement, other than through widespread, voluntary consensus. If key constituencies to any one network, such as miners, core developers, or digital currency users, are unable to reach consensus among themselves about proposed changes, it may negatively impact that network’s utility, operations, and ability to adapt and face challenges, including technical and scaling challenges. These challenges could adversely affect the business operations of the Company. In addition, disagreements among the key constituencies mentioned above could cause a network to engage in a “hard fork” wherein one virtual currency splits into two and results in the validation of blocks and transactions that were previously invalid, or vice-versa. Hard forks are potentially disorganized and can result in a double-spending problem, wherein coins spent in a new block can once again be spent in the old block, as merchants and users with the old version of the software will not see the spending registered on the new chain. A hard fork could potentially devalue the digital assets held by the Company. In addition, in the event that the cryptography underlying digital assets held by the Company proves to be flawed or ineffective, hard forks could result in vulnerabilities in either the old or the new network and subject the Company to security risks. For example, flaws in the source code for digital asset networks have historically been exposed and exploited, including flaws that disabled functionality for some users, exposed users’ personal information and/or resulted in the theft of users’ digital assets. This is not limited just to hard forks, but can occur at any time. Advances in quantum computing may also result in previous cryptography becoming ineffective, enabling a malicious actor to steal the Company’s digital assets. Even if such malicious activities do not happen to the fund Company, but rather to a competitor, these types of events tend to reduce confidence in the cryptocurrency market, negatively affect demand for digital currency and thus devalue the Company’s digital assets.

The open-source nature of many blockchain protocols means that core developers are not directly compensated for their contributions in maintaining and developing protocols and related source-code. As a result, core developers and other contributors may lack a financial incentive to maintain or develop a network that the Company needs in order to run its operations. Or, such a network may lack the resources to adequately address emerging issues or to execute planned changes to source code, and these events could negatively impact the Company.

Over the past several years, digital asset mining operations have become more costly, as they have evolved from individual users mining with computer processors, graphics processing units and first generation application specific integrated circuit machines to “professionalized” mining operations using specialized hardware or sophisticated machines. Currently, miners are paid “gas fees” for validating a transaction. However, networks are working to reduce such fees to miners. If the profit margins of miners fall, they may sell newly-issued tokens earned by mining to make up for the shortfall, which would result in an increase in liquid supply of the digital asset in question and generally reduce its market price. The Company anticipates that it will be exposed to this risk.

Banks and other established institutions may refuse to process funds for digital asset transactions, process wires, or maintain accounts for the Company due to its involvement in cryptocurrency.

Moreover, because blockchain technology and digital assets in general have been existence for such a short period of time and are continuing to develop, there may be additional risks in the future that are impossible to predict or evaluate as of the date of this Offering. It is not clear how all the elements of the Company’s operations will unfold over time, specifically with regard to governance between miners, developers and users, and the long-term security of the cryptocurrency market overall.

Tax Risks

Changes in the Law. The Company and the Holders could be adversely affected by changes in the tax laws that may result through future Congressional action, courts or other judicial decisions, or interpretations by the IRS.

Limited Tax Benefits. There are not anticipated to be significant tax deductions for Holders. Holders should not invest with the expectation of obtaining any significant tax deduction.

Investment by Tax Exempt Entities. Tax exempt entities such as Individual Retirement Accounts, Keogh Plans, 401(k) plans, SEPs and similar retirement plans, as well as charitable remainder trusts, should give careful consideration as to whether an investment in the Company is suitable for them. Because equity conversion is a possible outcome, income from the Company may constitute “unrelated business taxable income” (“UBTI”), such that tax-exempt entities will be required to report income for federal income tax purposes. No assurance can be given that any income will not be excluded from UBTI. The receipt of any UBTI by a tax-exempt entity will require the entity to file a federal income tax return. In addition, a tax-exempt entity may be required to commence mandatory distributions to a participant prior to the time the entity receives payment from the Company.

ERISA Disclosure. Any investment by an Employee Benefit Plan (as that term is defined in Section 3(3) of Employee Retirement Income Security Act of 1974, as amended )the Note should be made only after consultation with an investment advisor, tax counsel and/or legal counsel.

Conflicts Of Interest

The interests of the Company and those of Management will conflict in some respects or in certain instances. The following discussion describes certain possible conflicts of interest that may arise for Management in the course of conducting the business of the Company. It should be noted, however, that the following discussion is not intended to be all-inclusive and that other transactions or dealings may arise in the future that could result in conflicts of interest for Management.

The contemplated activities of the Company may involve transactions between the Company and officers or directors of the Company.

The Company may also sell property to or purchase property from Management and their affiliates. All or a part of these possible transactions may be purchased by the Company utilizing the proceeds of the sale of the Note. No independent merit review will be conducted to ensure the terms of such transactions are fair and economical to the Company and such terms will not be negotiated on an arms-length basis.

While Management will endeavor to avoid conflicts of interest to the extent possible, such conflicts nevertheless are likely to occur and, in such event, the actions of Management may not be advantageous to the Company. Therefore, in these instances the interests of Management are likely to conflict with the interests of the Company.

The Company will also make payments or reimbursements for the Company’s organizational expenses, which may be paid from the proceeds of the Offering. The Company will make these payments regardless of whether the activities of the Company produce cash flow to enable the Company to make payments of principal and interest to the Holders.

The Company is subject to various conflicts of interest arising out of the relationships between and amongst its key personnel. Management may sit on the board or serve as officers or managers of other business concerns, some of which may compete with the Company’s proposed business activities. Management is not required to devote their entire time or attention to the Company nor will they be restricted in any manner from participating in other businesses or activities, despite the fact that such other businesses or activities may compete with the operations and activities of the Company and may operate in the same geographic areas.

Management may engage, for their own account and/or for the account of others, in all aspects of the cryptocurrency industry. Management may begin or continue such activities, individually, jointly with others, or as owners or managers of any Person; may deal with the Company as counterparties or through any other Person in which they may be interested; may sell assets to the Company or any entity managed by or related to the Company or buy assets from the Company or any entity managed by or related to the Company; and shall not be required to permit the Company or the Holders to participate in any other activities in which the Company may be interested or share in any profits or other benefits therefrom.

Conflicts of Interest. Management’s decisions and actions with respect to these conflicts of interest or potential conflicts of interest may have a material adverse effect on the Company and therefore its ability to return the fact amount of the Note to the Holder.

THE FOREGOING RISK FACTORS AND CONFLICTS OF INTEREST DO NOT PURPORT TO BE A COMPLETE EXPLANATION OF ALL OF THE RISKS AND CONFLICTS INVOLVED IN AN INVESTMENT IN THE NOTE, THE COMPANY OR THIS OFFERING. POTENTIAL HOLDERS SHOULD READ THESE LISTED ITEMSAND CAREFULLY CONSIDER THEM ALONG WITH OTHER POTENTIAL RISKS AND CONFLICTS, AND SHOULD CONSULT WITH THEIR LEGAL AND TAX COUNSEL, BEFORE DETERMINING WHETHER TO PURCHASE THE NOTE.

AN INVESTMENT IN THE NOTE IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. BECAUSE THE COMPANY’S PLAN IS COMPLEX, ONLY THE MOST GENERAL DESCRIPTION OF THE RISKS AND CONFLICTS INVOLVED IN THE OPERATION OF THE COMPANY IS PRACTICABLE, AND THE DESCRIPTION MAY NOT FULLY CONVEY THE RISKS OF THE PLAN IMPLEMENTED BY THE COMPANY.