Convertible Note Contract Template for Switzerland

The Convertible Note Contract is commonly used by Swiss companies, particularly startups and growth-stage businesses, seeking to raise capital while deferring company valuation. This financing instrument offers flexibility by initially structuring the investment as debt, with the option to convert into equity upon specified trigger events such as qualified financing rounds, exits, or maturity. The document must comply with Swiss corporate law requirements, particularly regarding share capital regulations and debt instruments under the Swiss Code of Obligations. It typically includes provisions for interest accrual, conversion mechanics, investor rights, and company obligations. The agreement is particularly useful in bridge financing scenarios or when companies and investors prefer to postpone setting a definitive company valuation.

1. Parties: Identification of the Note Issuer (Company) and the Noteholder(s)

2. Background: Context of the financing, company status, and purpose of the convertible note

3. Definitions: Key terms used throughout the agreement, including financial definitions and conversion-related terms

4. Subscription and Issuance: Terms of note subscription, payment obligations, and issuance details

5. Principal Amount and Interest: Specification of the loan amount, interest rate, and interest calculation method

6. Maturity and Repayment: Maturity date, repayment terms, and early repayment provisions

7. Conversion Rights: Terms and conditions for converting the note into equity, including conversion price and mechanism

8. Conversion Procedure: Step-by-step process for exercising conversion rights

9. Company Representations and Warranties: Company's statements regarding its status, authority, and capacity

10. Noteholder Representations and Warranties: Noteholder's statements regarding investment capacity and understanding of risks

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

12. Notices: Communication requirements and contact details

13. Governing Law and Jurisdiction: Confirmation of Swiss law application and jurisdiction

14. Miscellaneous: Standard provisions including amendments, assignment, and severability