Convertible Note Sale Agreement

April 9th, 2021 by

Convertible bonds give flexibility to both investors and startup creators. Founders receive the funding they need. Investors get a potentially high return. 1.5. “Equity Securities,” the common or preferred share of the company or securities that transfer the right to acquire the common shares or preferred shares or securities of the Company; which may be converted into common or preferential shares of the company, except for all guarantees granted, issued and/or sold by the company to acquire or exchange a director, officer, employee or advisor of the company in such a capacity, for (with or without additional consideration), excluding all guarantees granted, issued and/or sold by the company. You can also calculate equity based on the valuation ceiling. Suppose your pre-Series A funding valuation is $2 million. This value triggers the ceiling. First, you would divide the ceiling by valuation to determine the share price. Or $1,000,000 divided by $2,000,000. The result is a share price for the holder of the $0.50 rating. Then divide the amount of the investment by the share rate ($500,000/$0.50).

That is equivalent to one million shares. “Equity” refers to securities that are tradable or convertible at maturity and issued by the company. For the purposes of this communication, all securities are in all respects comparable to those issued by the Company to other investors. The same conditions apply to all securities participating in the satisfaction of this rating, with the same rights and privileges, expressly or otherwise, as those that would be offered to other investors in accordance with applicable laws. Preferred share: Investors with convertible bonds end up receiving preferred shares. This type of action offers equity and influence in a company. This may include a seat on the board and veto rights. However, it depends on the terms of the note. 1.2. “change of control”: a sale, promotion or other sale of all or other assets or activity of the company (with a former entity of the company) or a merger or consolidation with or to another company or other business transaction, or a series of transactions under which the shareholders of the company hold, immediately prior to the transaction, less of the majority of the voting rights of the company (or successor company); provided that a change of control does not involve transactions or a series of related transactions conducted primarily for good faith capital financing purposes (including, but not only for the next equity financing), that receive cash from the company or that cancel or transform a successor or debt of the company or are subject to it. old.

2 The initial financial statements (the “initial closing”) of the acquisition of the bonds in return for the consideration paid by each lender are made at the [date of the first closing] or at another time when the entity and lenders acquire orally or in writing the majority of the total principal of the bonds to be sold.

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