An equity conversion note agreement is one that is entered into between an issuing company and its investor. The company issues a promissory note to the investor to convert the investment made in debt by the investor into equity after a specified time period. The conversion note is the primary document in the agreement which denotes the conversion into equity upon the attainment of a future date specified on it.
The agreement has many other essential details agreed upon between the investor and the company such as conversion clause, type of security initially taken by the investor, number of units held by the investor, conversion into equity date, number of units of equity converted, effective date of conversion, the rate at which conversion will be provided, interest applicable for non-conversion payable by the company to the investor, face value of units held by investor, market value of equity at which the conversion will take place etc.
Sample for Equity Conversion Note Agreement
A sample of the agreement can be downloaded from below.
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