Convertible Note Purchase Agreement

Convertible Note Purchase Agreement Template

This Convertible Note Purchase Agreement (“Agreement”) is entered into on [Date], by and between:

Company (Issuer): [Company Name]
Address: [Address]
Phone: [Phone Number]
Email: [Email Address]

Investor (Purchaser): [Investor Name or Entity]
Address: [Address]
Phone: [Phone Number]
Email: [Email Address]

Together referred to as the “Parties.”

1. Purchase and Sale of Notes

The Company agrees to issue and sell to the Investor, and the Investor agrees to purchase, convertible promissory notes (the “Notes”) in the aggregate principal amount of $[Amount].

2. Interest

The Notes shall accrue interest at an annual rate of [X]%, compounded annually, until conversion or repayment.

3. Maturity Date

The Notes shall mature on [Maturity Date]. If conversion has not occurred by that date, the principal and accrued interest shall become payable unless otherwise agreed.

4. Conversion Terms

Upon a qualified financing event of at least $[Amount], the Notes and accrued interest shall automatically convert into equity securities of the Company at:

• Discount Rate: [X]% of the price paid by new investors.

• Valuation Cap: $[Valuation Cap].
  If no qualified financing occurs before the Maturity Date, the Investor may elect to convert or demand repayment.

5. Optional Conversion

The Investor may voluntarily convert the Notes into equity at any time prior to the Maturity Date at the terms set forth above.

6. Use of Proceeds

The Company agrees to use the proceeds exclusively for business development, operations, and growth as described in Exhibit A.

7. Representations and Warranties

Company Representations:

• The Company is duly organized, validly existing, and authorized to issue the Notes.

• No conflicts exist that would prevent execution of this Agreement.

Investor Representations:

• The Investor is an accredited investor with full authority to purchase the Notes.

• The Investor understands the risks of early-stage investments.

8. Investor Rights

The Investor shall receive the same rights and preferences afforded to future equity investors, including information and reporting rights, unless otherwise agreed.

9. Events of Default

The following shall constitute an Event of Default:

• Failure to pay principal or interest when due.

• Bankruptcy or insolvency of the Company.

• Breach of material obligations under this Agreement.
  Upon default, the Investor may demand immediate repayment of all amounts owed.

10. Governing Law

This Agreement shall be governed by and construed under the laws of [State/Country].

11. Entire Agreement

This Agreement represents the entire understanding between the Parties and supersedes all prior negotiations or communications.

Signatures

Company Signature: ____________________________ Date: _________
Printed Name & Title: _________________________________________

Investor Signature: ____________________________ Date: _________
Printed Name & Title: _________________________________________