A Washington Convertible Secured Promissory Note is a legally binding document that outlines the terms and conditions of a loan in the state of Washington. It serves as a written agreement between a lender and a borrower, ensuring that both parties are on the same page regarding the loan specifics. When it comes to convertible secured promissory notes, the Washington state legislation recognizes different types based on variations in their terms. Some common types of Washington Convertible Secured Promissory Notes include: 1. Fixed-Rate Convertible Secured Promissory Note: This type of note establishes a fixed interest rate for the loan, meaning that the interest rate will remain constant throughout the loan period. It also allows the lender to convert the outstanding principal into equity ownership in the borrower's company, typically based on predetermined conversion terms. 2. Variable-Rate Convertible Secured Promissory Note: Unlike the fixed-rate note, a variable-rate convertible secured promissory note allows for changes in the interest rate over time. The interest rate is tied to a benchmark index, such as the Prime Rate or LIBOR, and adjusts periodically according to the terms outlined in the note. The conversion provisions remain the same as in the fixed-rate note. 3. Senior Convertible Secured Promissory Note: This type of note grants the lender priority status over other creditors in case of default or liquidation. If the borrower fails to fulfill the terms of the loan, the lender holding a senior convertible secured promissory note will have a higher claim on the borrower's assets compared to those with junior notes. 4. Subordinated Convertible Secured Promissory Note: In contrast to a senior note, a subordinated convertible secured promissory note ranks lower in the order of priority during default or liquidation. This type of note represents a higher risk for the lender, as they will be paid later than holders of senior notes in the event of borrower insolvency. It is important to note that the specific terms and conditions of each Washington Convertible Secured Promissory Note can vary based on the negotiation between the lender and the borrower. These terms may include the loan amount, interest rate, repayment schedule, conversion ratio (if applicable), collateral requirements, and any other details that both parties agree upon. By utilizing a Washington Convertible Secured Promissory Note, lenders and borrowers in the state can establish a clear understanding of their loan agreement, minimizing potential misunderstandings and disputes. It is recommended that individuals seek legal advice and consult the Washington state statutes to ensure compliance and accurately draft the specific terms of the note.