Note Conversion Agreement Template for England and Wales

A Note Conversion Agreement is utilized when parties wish to convert existing debt instruments into equity shares. This document, governed by English and Welsh law, is particularly common in startup financing where initial debt funding is designed to convert to equity upon specific triggering events. The agreement details the conversion mechanism, price calculations, and resulting shareholding structure, while ensuring compliance with UK company law and financial regulations. It typically follows either a qualifying funding round, an exit event, or reaches a maturity date specified in the original convertible note agreement.

1. Parties: Identification of the contracting parties, including full legal names and registered addresses

2. Background: Context of the agreement, details of the existing note, and purpose of the conversion

3. Definitions: Key terms used throughout the agreement including Conversion Price, Conversion Date, and Securities

4. Conversion Terms: Specific terms and mechanics of the note conversion, including conditions precedent

5. Conversion Price: Details of conversion price calculation, adjustments, and any price protection mechanisms

6. Conversion Procedure: Process and timing for executing the conversion, including notice requirements

7. Representations and Warranties: Standard assurances from both parties regarding capacity, authority, and compliance

8. Governing Law and Jurisdiction: Confirmation of applicable law (England and Wales) and dispute resolution forum