The Convertible Equity Agreement serves as a crucial instrument in Malaysia's startup and growth company ecosystem, providing a flexible funding mechanism that bridges the gap between early-stage investment and formal equity rounds. This document is typically used when companies seek interim financing while deferring formal valuation discussions, or when investors prefer a convertible instrument over immediate equity. It must comply with Malaysian Companies Act 2016 and Capital Markets and Services Act 2007, particularly regarding share issuance and securities regulations. The agreement includes essential provisions for investment terms, conversion mechanisms, investor rights, and protection measures, while accommodating both local and international investment scenarios within Malaysian legal frameworks.

1. Parties: Identification of the Company and the Investor(s), including their full legal names, registration numbers, and registered addresses

2. Background: Recitals explaining the context of the agreement, including the Company's business and the Investor's intention to invest

3. Definitions: Detailed definitions of key terms used throughout the agreement, including financial terms, conversion-related definitions, and company-specific terminology

4. Investment Amount: Specifies the investment amount, payment terms, and conditions precedent to investment

5. Equity Rights: Details of the equity rights granted, including any special rights or restrictions

6. Conversion Mechanism: Specific terms and conditions for conversion, including trigger events, conversion price calculation, and process

7. Pre-Money Valuation: Establishes the pre-money valuation and its calculation methodology

8. Company Representations and Warranties: Company's representations regarding its legal status, authority, and business condition

9. Investor Representations and Warranties: Investor's representations regarding investment capacity and compliance with laws

10. Information Rights: Investor's rights to receive financial and other company information

11. Pre-emptive Rights: Rights of first refusal on future share issuances

12. Confidentiality: Obligations regarding confidential information protection

13. Term and Termination: Duration of the agreement and circumstances for termination

14. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

15. General Provisions: Standard provisions including notices, amendments, and assignment rights