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Convertible Debt Agreement
Need a Convertible Debt Agreement for my UK-based technology startup to secure £500,000 in bridge financing from three angel investors, with a 20% discount rate on conversion and a maturity date of March 2025.
1. Parties: Identification and details of the contracting parties, including registered addresses and company numbers
2. Background: Context and purpose of the convertible debt arrangement, including the company's intention to borrow and the lender's intention to provide the convertible loan
3. Definitions: Key terms used throughout the agreement, including financial terms, conversion mechanisms, and technical definitions
4. Subscription and Issue: Terms of debt issuance and subscription, including loan amount, closing conditions, and mechanics of advance
5. Interest: Interest rate, calculation method, payment terms, and default interest provisions
6. Conversion Rights: Terms and conditions for converting debt to equity, including conversion price, timing, and mechanics
7. Repayment Terms: Conditions for repayment of the principal amount, including maturity date and early repayment provisions
8. Events of Default: Circumstances constituting default and consequences, including acceleration rights
9. Covenants: Ongoing obligations of the company, including financial and operational commitments
10. Assignment and Transfer: Rules regarding the transfer of notes and assignment of rights under the agreement
1. Security: Terms of any security provided for the debt, including type of security and enforcement rights
2. Warranties and Representations: Additional assurances from the issuing company regarding its status, capacity, and business
3. Information Rights: Rights of noteholders to receive company information and financial statements
4. Tag-Along Rights: Rights of noteholders to participate in sale of company shares
5. Anti-dilution Protection: Provisions protecting noteholders from dilution of their potential equity stake
6. Most Favored Nation: Provisions ensuring noteholders receive the benefit of more favorable terms granted to subsequent investors
1. Form of Conversion Notice: Template document for noteholders to exercise their conversion rights
2. Cap Table: Current and post-conversion shareholding structure of the company
3. Calculation of Conversion Price: Detailed methodology and examples for determining the conversion price
4. Form of Note Certificate: Template for the physical convertible loan note certificate
5. Company's Constitutional Documents: Articles of association and other relevant constitutional documents
6. Conditions Precedent: List of documents and conditions required before completion
Authors
Applicable Interest Rate
Business Day
Change of Control
Company
Completion
Conversion Date
Conversion Notice
Conversion Price
Conversion Rights
Conversion Shares
Default Interest Rate
Discount Rate
Encumbrance
Event of Default
Exit Event
Financial Year
Fully Diluted Share Capital
Group
Interest Payment Date
Issue Date
Maturity Date
New Financing Round
Noteholder(s)
Notes
Original Noteholders
Permitted Transfer
Principal Amount
Qualified Financing
Qualifying IPO
Redemption Date
Relevant Indebtedness
Security
Shareholders' Agreement
Subscription Amount
Subsidiary
Transfer
Valuation Cap
Warranties
Status and Ranking
Interest
Repayment
Conversion Rights
Conversion Price Adjustments
Anti-dilution Protection
Security
Warranties and Representations
Covenants
Events of Default
Acceleration
Transferability
Information Rights
Pre-emption Rights
Tag-Along Rights
Drag-Along Rights
Confidentiality
Assignment
Notices
Costs and Expenses
Amendments and Waivers
Severability
Counterparts
Governing Law
Jurisdiction
Further Assurance
Entire Agreement
Third Party Rights
Remedies
Force Majeure
Termination
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