This Convertible Promissory Note template is designed for use in South Africa when companies seek interim financing with the potential for equity conversion. It's particularly useful for startups and growing companies that need immediate funding but prefer to defer equity valuation to a later date. The document combines elements of debt financing with equity features, structured to comply with South African company law, securities regulations, and financial sector requirements. It includes essential provisions for the loan amount, interest, conversion mechanisms, and investor protections, while remaining adaptable to various business contexts and investor requirements. The note typically bridges the gap between funding rounds or provides initial investment in a company, with the benefit of potentially converting into equity at favorable terms for both the company and investor.

1. Parties: Identification of the Issuer (company) and the Noteholder, including their full legal names, registration numbers, and addresses

2. Background: Context of the note issuance, including the company's intention to borrow money and the noteholder's agreement to lend

3. Definitions and Interpretation: Definitions of key terms used in the note, including 'Conversion Price', 'Maturity Date', 'Qualifying Financing', etc.

4. Principal Amount and Interest: Details of the loan amount, interest rate, and calculation method

5. Repayment Terms: Terms for repayment of principal and interest, including payment dates and method

6. Conversion Rights: Conditions and mechanisms for converting the note into equity, including conversion price and timing

7. Conversion Mechanics: Detailed process for executing the conversion, including notice requirements and share issuance procedures

8. Representations and Warranties: Standard representations by both parties regarding capacity, authority, and compliance

9. Events of Default: Circumstances constituting default and consequences thereof

10. Transferability: Terms governing the transfer or assignment of the note

11. Notices: Process and requirements for formal communications between parties

12. General Terms: Standard contractual provisions including governing law, jurisdiction, and amendment procedures