Convertible Debt Agreement Template

The main advantage of issuing convertible bonds is that it does not require the issuer and investors to determine the value of the transaction, if there is really not much on which the valuation could be based – in some cases, the business can only be an idea. This assessment would normally be determined during Series A funding, where there are additional data points from which an evaluation can be based. Investor provides the Company with a convertible loan of $10,000.00 in legal currency of Canada (the “primary amount”) that the Company has hereafter received in accordance with the terms and conditions below. : When a business lends money to investors and plans to convert it later into equity or business ownership called a convertible bond, the borrower and lender will decide on the nature of the equity and a fixed date on which the loan will be converted on the basis of commercial value at the beginning of the loan. Convertible loans are short-term debt securities converted into equity. In general, it will be transformed in the next investment cycle. 1. Due date – Subject to Section 3 and 10, the principal amount, as well as accrued and unpaid interest, on this principal amount (together the “debt”) is due and fully payable, provided that a section 9 conversion or a delay event (as defined below) occurred before that date (the “due date”). These agreements are non-refundable and non-transferable. If you need changes or questions, please contact us before you download. By clicking on the button below, I agree with the terms and conditions of sale. (b) debt can be converted, at the investor`s choice, in one of the following events (a “potential transformation event” each) and under the conditions described in this section 9: (i) when the Company enters into a private placement of the Company`s equity securities (these securities or securities are called “significant financing securities” for a gross proceeds of at least $500,000 (containing no debt in debt); “significant financing”), unless the investor lets the company know that he does not want to convert the debt (as indicated in point 9 d), at the same time as the conclusion of this significant financing, the entire debt is automatically converted and into a significant financing guarantee at a price corresponding to the applicable conversion price minus the discount and, moreover, , on the same terms as investors in the context of significant financing.

(ii) in the case of a merger, a merger or reorganization of the company, the sale of control, the IPO of the company`s equity or the sale of all or part of the company`s assets or businesses, except in the context of an internal merger, merger or restructuring, in which persons who are not 100% shareholders or subsidiaries of the company (a change of control) do not participate. , the INVESTOR informs the Corporation that it does not wish to convert the debt (as indicated in point 9(d) and, in parallel with the conclusion of such a change of control, the entire debt is automatically and at the same time converted into the highest shares of the company that are pending immediately before the change of control (the “Change of Control Securities”) at a price corresponding to the current processing price less , where “sale of control” refers to any event in which a person directly or indirectly, legally or advantageously, with his “partners” and “associates” (as defined in the Canada Commercial Corporations Act), shares of the Corporation that hold more than 50% of the votes that may be cast at a general meeting of the Corporation`s shareholders.