A North Carolina Convertible Note Subscription Agreement is a legal document that outlines the terms and conditions of an investment in a start-up or early-stage company in North Carolina. This agreement allows investors to provide capital to the company in exchange for convertible promissory notes, which can be converted into equity at a later stage. The North Carolina Convertible Note Subscription Agreement typically contains the following key provisions: 1. Parties: It identifies the names and contact information of the investor(s) and the company. 2. Investment Amount: The agreement states the amount of money the investor is willing to invest in the company. 3. Convertible Note Terms: It defines the terms of the convertible note, such as the interest rate, maturity date, conversion discount, and valuation cap. The interest rate refers to the interest the company will pay on the principal amount invested. The maturity date indicates the deadline for the company to repay the investment or convert it into equity. The conversion discount allows the investor to convert the outstanding amount into equity at a discounted price. The valuation cap sets a maximum company valuation at which the investor can convert the note into equity. 4. Conversion Mechanics: The agreement outlines the process and requirements for converting the convertible note into equity. It may specify the triggers for conversion, such as a subsequent funding round or certain milestones achieved by the company. 5. Representations and Warranties: Both the investor and the company make certain representations and warranties to ensure the accuracy of the information provided and their legal capacity to enter into the agreement. 6. Governing Law and Jurisdiction: It specifies that the agreement is governed by North Carolina law, and any disputes will be resolved in North Carolina courts. 7. Miscellaneous Clauses: The agreement may also include miscellaneous clauses covering topics such as confidentiality, assignment, notices, and amendments. While there may not be specific types of North Carolina Convertible Note Subscription Agreements, variations may occur based on the specific terms negotiated between the investor and the company. These variations may include customized interest rates, conversion discounts, and valuation caps depending on the unique circumstances of each investment. In summary, a North Carolina Convertible Note Subscription Agreement is a legally binding document that formalizes an investment in a North Carolina-based start-up or early-stage company through the issuance of convertible promissory notes. The agreement protects the rights of both the investor and the company and provides clarity on the terms of the investment.