Convertible Debt Agreement Template for Austria

The Convertible Debt Agreement is a crucial financing instrument commonly used by growing companies in Austria seeking to raise capital while deferring company valuation. This document is particularly relevant for startups and scale-ups in their early to growth stages, providing a bridge between funding rounds or serving as an alternative to immediate equity investment. The agreement must comply with Austrian corporate law, particularly the Stock Corporation Act (AktG) and Limited Liability Companies Act (GmbHG), while addressing key commercial terms including interest rates, maturity dates, conversion triggers, and valuation caps. It's designed to protect both the company's and investor's interests while providing flexibility in future financing scenarios. The document typically comes into play during interim financing rounds, bridge financing, or when companies need quick access to capital while negotiating larger equity rounds.

1. Parties: Identification of the issuing company and the investor(s)

2. Background: Context of the investment and purpose of the agreement

3. Definitions: Key terms used throughout the agreement, including financial and conversion-related definitions

4. Loan Amount and Issuance: Details of the principal amount, issuance date, and funding mechanics

5. Interest: Interest rate, calculation method, payment periods, and default interest provisions

6. Maturity and Repayment: Maturity date, repayment terms, and early repayment provisions

7. Conversion Rights: Terms and conditions for converting the debt into equity, including conversion price and ratio

8. Conversion Mechanics: Detailed process for executing the conversion, including notices and documentation requirements

9. Company Representations and Warranties: Standard and specific representations regarding company status, authority, and financial condition

10. Investor Representations and Warranties: Representations regarding investment capacity and regulatory compliance

11. Covenants: Ongoing obligations of the company, including information rights and operational restrictions

12. Events of Default: Circumstances constituting default and corresponding remedies

13. Termination Rights: Conditions under which either party may terminate the agreement

14. Miscellaneous: Standard provisions including notices, amendments, governing law, and jurisdiction