A Convertible Note is a simple promissory note, usually bearing interest and payable at some future date. The unique aspects of a convertible note are:
A. It converts into equity in the company so long as certain agreed metrics are achieved;
B. Conversion rather than repayment is the usual intention of the parties
C. The usual events for conversion (a conversion event) could be some or all of:
1. Later financing acquired of an agreed minimum level;
2. Developmental milestones reached by the company; and/or
3. Strategic partnerships concluded with important companies;
The conversion into equity is usually at a valuation that is consistent with the valuation agreed to with investors in an investment round that occurs at a later time.
A Harris Texas Convertible Promissory Note by Corporation is a legal document that outlines the terms and conditions of a loan agreement between a corporation and a lender. It is a type of promissory note that can be converted into equity or shares of the corporation at a later date. The Convertible Promissory Note is issued as part of a series of notes under a Convertible Note Purchase Agreement, which sets forth the terms under which the notes are issued and purchased. This agreement ensures transparency and clarity between the corporation and the lender. The Harris Texas Convertible Promissory Note by Corporation may have variations or different types, including: 1. Fixed Conversion Price Note: This type of note has a predetermined conversion price at which the lender can convert the debt into equity. The conversion price is typically determined at the time of issuance. 2. Floating Conversion Price Note: In this type of note, the conversion price is not fixed but determined based on a specific formula or market conditions at the time of conversion. It allows for potential adjustments to the conversion price to reflect the market value of the corporation's shares. 3. Blanket Lien Note: This type of note includes a security interest or lien on the corporation's assets. It offers additional protection to the lender in case of default on the loan. 4. Secured Note: A secured note is backed by collateral provided by the corporation. The collateral acts as security for the loan, ensuring that the lender has a claim on specific assets in case of default. 5. Unsecured Note: An unsecured note does not have any collateral attached to it. It relies solely on the corporation's ability to repay the loan without any specific assets being pledged as security. The Harris Texas Convertible Promissory Note by Corporation — One of Series of Notes Issued Pursuant to Convertible Note Purchase Agreement provides a flexible financing option for corporations, allowing them to raise capital while providing potential upside to the lender through conversion into equity. It is crucial for both the corporation and the lender to carefully review the terms and conditions stated in the note and the associated convertible note purchase agreement to ensure their agreement aligns with their respective goals and requirements.A Harris Texas Convertible Promissory Note by Corporation is a legal document that outlines the terms and conditions of a loan agreement between a corporation and a lender. It is a type of promissory note that can be converted into equity or shares of the corporation at a later date. The Convertible Promissory Note is issued as part of a series of notes under a Convertible Note Purchase Agreement, which sets forth the terms under which the notes are issued and purchased. This agreement ensures transparency and clarity between the corporation and the lender. The Harris Texas Convertible Promissory Note by Corporation may have variations or different types, including: 1. Fixed Conversion Price Note: This type of note has a predetermined conversion price at which the lender can convert the debt into equity. The conversion price is typically determined at the time of issuance. 2. Floating Conversion Price Note: In this type of note, the conversion price is not fixed but determined based on a specific formula or market conditions at the time of conversion. It allows for potential adjustments to the conversion price to reflect the market value of the corporation's shares. 3. Blanket Lien Note: This type of note includes a security interest or lien on the corporation's assets. It offers additional protection to the lender in case of default on the loan. 4. Secured Note: A secured note is backed by collateral provided by the corporation. The collateral acts as security for the loan, ensuring that the lender has a claim on specific assets in case of default. 5. Unsecured Note: An unsecured note does not have any collateral attached to it. It relies solely on the corporation's ability to repay the loan without any specific assets being pledged as security. The Harris Texas Convertible Promissory Note by Corporation — One of Series of Notes Issued Pursuant to Convertible Note Purchase Agreement provides a flexible financing option for corporations, allowing them to raise capital while providing potential upside to the lender through conversion into equity. It is crucial for both the corporation and the lender to carefully review the terms and conditions stated in the note and the associated convertible note purchase agreement to ensure their agreement aligns with their respective goals and requirements.
