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Convertible Note Agreement - Legal Forms
| Convertible Note Agreement Form. This is a Legal Forms form and can be used in Corporation Business . |
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CONVERTIBLE NOTE AGREEMENT This Agreement by and between ________________________________________ a corporation duly organized and existing under the laws of the State of ____________, "Corporation" and those individuals listed on Exhibit A which is attached and incorporated by reference, " Note Holders". W I T N E S S E T H: WHEREAS, Note Holders are willing to lend Corporation the aggregate sum of ___________ which shall be evidenced by ________________________ percent Convertible Promissory Notes. In consideration of the mutual covenants and conditions contained in this agreement, the parties agree, represent and warrant as follows: 1. Issue of Notes A. The Corporation will authorize the issue of its ______________ percent Convertible notes, "Notes" in the aggregate principal amount of ____________ to be dated _________________ to mature on ___________ to bear interest on the unpaid principal thereof at the rate of __________ percent per annum until maturity, payable _______________on the _____________day of ______________ in each year, commencing on ______________________, ______ , and after maturity at the rate of ________ percent per annum until paid, and to be substantially in the form of Exhibit A attached hereto. For the purposes of calculating interest for any period for which the interest shall be payable, such interest shall be calculated on the basis of a ______day month and a _______ day year. The Corporation will promptly and punctually pay to Note Holders or their nominee the interest on any of the Notes held by Note Holders without presentment of the Notes. In the event that Note Holders shall sell or transfer any of the Notes, they shall notify the Corporation of the name and address of the transferee. In the event the Corporation defaults on any installment of interest or principal, then any Note Holder of these Notes may, at his option, without notice, declare the entire principal and the interest accrued thereon immediately due and payable and may proceed to enforce the collection thereof. All the Notes shall contain a confession of judgment provision. B. The Corporation will also authorize the issue of ________ shares of its common stock, " Stock" and will authorize the issuance of and reserve for such purchase such a number of additional shares of common stock, "Conversion Stock" as may from time to time be the maximum number required for issuance upon conversion of the Notes pursuant to the conversion privileges hereinafter stated. 2. Sale and Purchase of Notes and Stock The Corporation will sell the Notes to the purchasers listed on Exhibit A, each of whom agrees to purchase the principal amount of the Notes set opposite their names, subject to the terms and conditions of and in reliance upon the representations and warranties of the Corporation contained in this agreement, at the purchase price of ______ percent of the principal amount. 3. Representations and Warranties by the Corporation A. Corporation, a duly organized corporation existing in good standing under the laws of the State of _________________ has the corporate power to own its own property and to carry on in the business as it is now being conducted. B. Corporation has on its corporate records the names of the following individuals who each own ______________ shares of common stock which constitute all the issue and outstanding capital stock of the Corporation as of this date. C. The Corporation has furnished to the Note Holders an Offering Circular which is attached as Exhibit B. The financial statements contained in Exhibit B are true and correct and have been prepared in accordance with generally accepted accounting principles consistently followed throughout the period indicated. D. There is no action or proceeding pending or threatened against the Corporation before any court or administrative agency, the determination of which might result in any material adverse change in the business of the Corporation. E. The Corporation has title to the respective properties and assets including the properties and assets reflected on the financial statement for the year ending ____________, _____ and which assets and properties are subject to no liens, mortgages, encumbrances or charges except a security interest to _____________________________________________________ F. The Corporation is not a party to any contract or agreement or subject to any restriction which materially and adversely affects its business, property, assets, or financial condition, and neither the execution nor delivery of this Agreement, nor the confirmation of the transactions contemplated herein, nor the fulfillment of the terms hereof, nor the compliance with the terms and provisions hereof and of the Notes, will conflict with or result in the breach of the terms, conditions or provisions or constitute a default, under the Articles of Incorporation or of any Agreement or instrument to which the Corporation is now a party. G. The Corporation has not declared, set aside, paid or made any dividend or other distributions with respect to its capital stock and has not made or caused to be made directly or indirectly, any payment or other distribution of any nature whatsoever to any of the holders of its capital stock except for regular salary payments for services rendered and the reimbursement of business expenses. H. All of the equipment and automobiles of the Corporation are in good condition and repair. I. There are no outstanding options or rights to purchase shares of the Corporation and no outstanding securities with the right of conversion into shares of the Corporation. J. The Corporation owns or possesses adequate licenses or other rights to use, all patents, trademarks, trade names, trade secrets, and copyrights used in its business. No one has asserted to the Corporation that its operations infringe on the patents, trademarks, trade secrets or other rights utilized in the operation of its business. K. Neither the Corporation nor any agent or employee acting in its behalf has offered the Notes or the Stock or any portion thereof for sale to or solicited in any offer to buy the same from anyone other than the purchasers listed in the attached Exhibit A, and neither the Corporation nor any agent or employee acting in its behalf will sell or offer for sale the Notes or Stock or any portion thereof to or solicit any offer to buy the Notes or the Stock from anyone so as to bring the issuance or sale thereof within the
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