Convertible Note Agreement Template – US

Disclaimer

The information provided herein is intended solely as a general example for establishing a financial instrument involving convertible debt. It does not constitute legal or financial advice and should not be relied upon as a substitute for consulting with qualified legal or financial professionals experienced in securities and contract law. Regulations and laws governing such agreements may vary by jurisdiction, and modifications may be necessary to ensure compliance. The use of this example is at the user’s own risk; we assume no liability for errors, omissions, or consequences resulting from its use without proper professional review.

Please note: This is a sample Convertible Note Agreement template for illustrative purposes only. Actual terms may differ based on specific negotiations and applicable law.

Convertible Note Agreement Sample (US)

Parties Involved:

Lender: XYZ Capital LLC
Address: 123 Investment Drive, New York, NY 10001

Borrower: ABC Startup Inc.
Address: 456 Innovation Road, San Francisco, CA 94107

Principal and Terms:

The principal amount of this convertible note is $100,000, with an interest rate of 6% per annum, maturing on December 31, 2024. The note is convertible into equity upon qualified financing or other events as detailed herein.

Conversion Terms:

The note shall convert into the equity securities of the Borrower at a conversion price of 20% discount to the price per share in a qualified financing, or as otherwise provided in this agreement.

Interest and Repayment:

Interest shall accrue daily and be payable upon conversion or maturity. The principal amount shall be repaid if not converted, on the maturity date, unless otherwise agreed.

Covenants:

The Borrower agrees to provide regular financial statements and to use the funds for the purposes outlined in this agreement.

Governing Law:

This agreement shall be governed by and construed under the laws of the State of New York, without regard to conflict of law principles.

Additional Provisions:

• The Borrower shall not incur additional debt that materially affects the ability to repay this note without prior consent of the Lender.
• The notes and all related rights shall be assignable only with the prior written consent of both parties.
• This agreement represents the entire understanding between the Parties concerning the convertible note.

New York, ______________________