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Convertible Note Contract
"I need a Convertible Note Contract for my UK-based tech startup to secure £500,000 in bridge financing, with a 20% discount rate on conversion and a valuation cap of £5 million, to be issued by March 2025."
1. Parties: Identification of the issuer and noteholder(s)
2. Background: Context and purpose of the convertible note
3. Definitions: Key terms used throughout the agreement
4. Subscription: Terms of the note subscription including amount and payment
5. Interest: Interest rate and payment terms
6. Conversion Rights: Terms and conditions for converting the note to equity
7. Repayment: Terms for repayment if conversion doesn't occur
8. Events of Default: Circumstances constituting default and consequences
1. Security: Terms of any security provided for the note - used when the note is secured against assets
2. Transferability: Provisions regarding transfer of the note - used when transfer rights need to be restricted or defined
3. Information Rights: Rights of noteholder to company information - used when noteholder requires specific information access
4. Tag-Along Rights: Rights to participate in sale of company shares - used when providing additional investor protections
1. Form of Conversion Notice: Template notice for exercising conversion rights
2. Calculation of Conversion Price: Detailed methodology for calculating conversion price
3. Cap Table: Current and post-conversion shareholding structure
4. Company Information: Key company details and financial information
Authors
Business Day
Company
Completion
Conversion Date
Conversion Notice
Conversion Price
Conversion Rights
Default Interest Rate
Discount Rate
Event of Default
Exit Event
Interest Rate
Issue Date
Loan Amount
Maturity Date
Next Funding Round
Noteholder
Original Noteholder
Qualifying Financing
Qualifying Financing Amount
Repayment Date
Security
Shareholders' Agreement
Subscription Amount
Subscription Price
Valuation Cap
Conversion Shares
Warranties
Working Hours
Material Adverse Change
Permitted Transfer
Articles of Association
Board
Directors
Business Plan
Confidential Information
Group
Subsidiary
Status and Ranking
Interest
Repayment
Conversion Rights
Conversion Mechanics
Conversion Price Adjustments
Events of Default
Acceleration
Security
Warranties and Representations
Information Rights
Confidentiality
Assignment and Transfer
Pre-emption Rights
Tag-Along Rights
Drag-Along Rights
Board Observer Rights
Anti-dilution Protection
Most Favored Nation
Undertakings
Negative Pledge
Notices
Costs and Expenses
Amendment and Waiver
Severability
Entire Agreement
Governing Law
Jurisdiction
Force Majeure
Further Assurance
Counterparts
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