The Promissory Note Convertible To Equity is a crucial financing instrument in the Canadian business landscape, particularly for early-stage companies seeking to raise capital while deferring company valuation. This document is typically used when a company needs immediate funding but wants to postpone establishing a firm equity valuation until a larger financing round. It combines the security of debt with the upside potential of equity, providing investors with the option to convert their loan into shares under predetermined conditions. The document must comply with Canadian securities laws, including provincial securities regulations and federal corporate law requirements. It includes detailed terms about the loan amount, interest rate, maturity date, conversion triggers, conversion price calculations, and investor rights. This instrument is particularly valuable for bridge financing situations, where companies need interim funding between larger equity rounds or are approaching a significant financing event.
Your data doesn't train Genie's AI
You keep IP ownership of your information
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
OR
Let Genie AI's market-leading legal AI identify missing terms, unusual language, compliance issues and more - in just seconds.
1. Parties: Identification of the Lender and Borrower (Company), including full legal names and addresses
2. Background: Brief context of the financing arrangement and purpose of the note
3. Definitions: Key terms used throughout the agreement, including 'Qualified Financing', 'Conversion Price', 'Maturity Date', etc.
4. Promise to Pay: Core promise to repay the principal amount with specified interest
5. Interest Rate: Details of interest rate, calculation method, and payment schedule
6. Maturity Date: Specification of when the principal and accrued interest become due
7. Conversion Rights: Terms under which the note may be converted into equity, including conversion price and mechanism
8. Automatic Conversion: Circumstances triggering automatic conversion (e.g., qualified financing)
9. Optional Conversion: Holder's right to convert at their discretion, if applicable
10. Representations and Warranties: Basic representations by both parties regarding authority and capacity
11. Events of Default: Circumstances constituting default and consequences
12. Notice Requirements: How and when notices must be given between parties
13. Amendment and Waiver: Process for modifying the agreement or waiving rights
14. Governing Law: Specification of applicable Canadian jurisdiction
1. Security Interest: Include when the note is secured by company assets
2. Subordination: Include when the note needs to be subordinated to other debt
3. Most Favored Nation: Include to protect against better terms being offered to subsequent investors
4. Pre-payment Rights: Include if early repayment is allowed and under what terms
5. Registration Rights: Include if holder will receive registration rights upon conversion
6. Board Observer Rights: Include if lender gets board observation rights
7. Information Rights: Include if lender gets specific information access rights
8. Change of Control: Include specific provisions for company sale or change of control
9. Tax Treatment: Include specific provisions regarding tax treatment of interest and conversion
1. Schedule A - Principal Amount and Payment Terms: Detailed breakdown of the loan amount, interest calculations, and payment schedule
2. Schedule B - Conversion Calculations: Detailed methodology for calculating number of shares upon conversion
3. Schedule C - Form of Conversion Notice: Template notice to be used when exercising conversion rights
4. Schedule D - Wire Transfer Instructions: Banking details for payment of principal and interest
5. Schedule E - Capitalization Table: Current cap table showing potential post-conversion ownership
6. Appendix 1 - Corporate Resolutions: Company resolutions authorizing the note issuance
Relevant legal definitions
Clauses
Relevant Industries
Technology
Biotechnology
Clean Energy
Financial Services
Healthcare
E-commerce
Software Development
Manufacturing
Consumer Products
Professional Services
Media and Entertainment
Real Estate
Agricultural Technology
Educational Technology
Relevant Teams
Legal
Finance
Corporate Development
Treasury
Executive Leadership
Board of Directors
Investment
Compliance
Corporate Secretary Office
Relevant Roles
Chief Executive Officer
Chief Financial Officer
Chief Legal Officer
General Counsel
Corporate Secretary
Investment Manager
Venture Capital Associate
Angel Investor
Corporate Lawyer
Securities Lawyer
Investment Banker
Financial Controller
Treasury Manager
Board Member
Company Director
Startup Founder
Finance Director
Business Development Manager
Find the exact document you need
Note Secured By (Real Estate)
A Canadian legal document establishing a debt obligation secured by real estate property, combining promissory note elements with security features.
find out more
Landlord Tenant Promissory Note For Rent Payment
A Canadian legal document that formalizes a tenant's promise to pay outstanding or future rent payments to their landlord, governed by federal and provincial laws.
find out more
Promissory Note For Funeral
A Canadian legal document establishing a promise to pay for funeral services, governed by federal and provincial regulations.
find out more
Promissory Note For Late Rental Payment
A Canadian legal document formalizing an agreement between landlord and tenant for the repayment of overdue rent, including payment terms and conditions.
find out more
Straight Note (Real Estate)
A Canadian legal document establishing a secured real estate debt obligation, detailing repayment terms and property security arrangements.
find out more
Simple Promissory Note For Family Loan
A Canadian legal document that formalizes and documents the terms of a loan between family members, ensuring clarity and legal compliance while protecting both parties' interests.
find out more
Promissory Note For Real Estate Purchase
A Canadian legal document evidencing a borrower's promise to pay a specified sum for real estate purchase, governed by federal and provincial laws.
find out more
Unconditional Promissory Note
A Canadian legal document containing an unconditional written promise to pay a specified sum of money, governed by federal and provincial laws including the Bills of Exchange Act.
find out more
Cash Promissory Note
A Canadian legal document containing a written, signed, and unconditional promise to pay a specified sum of money to a named party, either on demand or at a defined future date.
find out more
Installment Promissory Note
A Canadian law-governed installment promissory note establishing structured repayment terms for a debt obligation with scheduled payments.
find out more
International Promissory Note
A Canadian-law governed promissory note for international transactions, documenting a formal promise to pay with cross-border considerations.
find out more
Trust Deed And Note
A Canadian legal document establishing a trust structure combined with a debt instrument, setting out trust arrangements and note terms under federal and provincial legislation.
find out more
Promissory Note Letter For Delayed Payment
A Canadian legal document containing a written promise to pay a specified sum of money at a future date, governed by federal and provincial laws.
find out more
Promissory Note For Car
A Canadian legal document combining a promissory note with vehicle security provisions, documenting a borrower's promise to repay a car loan.
find out more
Promissory Note Compound Interest
A Canadian legal document evidencing a debt obligation with compound interest terms, compliant with federal and provincial lending laws.
find out more
Senior Promissory Note
A Canadian-law governed debt instrument documenting a senior-ranking promise to pay a specified sum with defined payment terms and conditions.
find out more
Recourse Promissory Note
A Canadian-law governed financial instrument documenting a borrower's promise to repay a debt, with the lender maintaining recourse rights against the borrower's other assets.
find out more
Promissory Note With Real Estate Mortgage
A Canadian legal document combining a promissory note with real estate mortgage security, subject to federal and provincial laws, used to evidence and secure debt against property.
find out more
Promissory Note With Collateral
A Canadian legal document combining a promise to pay with security interests in collateral, governed by federal and provincial legislation including the Bills of Exchange Act and PPSA.
find out more
Promissory Note Repayment Schedule
A Canadian-law governed document that establishes the detailed repayment schedule and terms for a promissory note, including payment amounts, frequencies, and due dates.
find out more
Promissory Note Cosigner Agreement
Canadian legal agreement establishing a cosigner's guarantee of a promissory note, outlining obligations and responsibilities under federal and provincial law.
find out more
Promissory Note Convertible To Equity
A Canadian-law governed convertible debt instrument that allows for the conversion of a loan into equity shares under specified conditions, commonly used in early-stage financing.
find out more
Promissory Note Secured By A Deed Of Trust
A Canadian legal instrument combining a promissory note with real property security through a trust deed arrangement, establishing loan terms and security rights under Canadian law.
find out more
Generic Promissory Note
A Canadian-law governed document containing a written promise to pay a specified sum of money, including payment terms and conditions.
find out more
Standby Promissory Note
A Canadian law-governed contingent payment instrument that combines features of traditional promissory notes with standby payment obligations, becoming payable upon specific triggering events.
find out more
Refinance Promissory Note
A Canadian legal document evidencing a borrower's promise to repay a refinanced debt under new terms, complying with federal and provincial lending regulations.
find out more
Partial Claim Promissory Note
A Canadian legal document establishing terms for partial debt payment arrangements, governed by federal and provincial legislation.
find out more
Consumer Promissory Note
A legally binding financial document used in Canada that records a consumer's promise to repay a specific sum of money to a lender, subject to federal and provincial consumer protection laws.
find out more
Promissory Note From Corporation To Shareholder
A Canadian law-governed promissory note documenting a corporation's legally binding promise to repay a specified sum to a shareholder, including payment terms and conditions.
find out more
Old Promissory Note
A Canadian-law governed financial instrument documenting an unconditional promise to pay a specific sum of money, structured according to federal and provincial requirements.
find out more
Multiple Advance Promissory Note
A Canadian-law governed financial instrument that establishes terms for multiple loan advances up to a maximum amount, including draw conditions, interest, and repayment terms.
find out more
Simple Note Payable
A Canadian-compliant legal document evidencing a promise to pay a specified sum of money with defined interest rates and payment terms.
find out more
Unsecured Promissory Note Issued By A Corporation
A Canadian law-governed unsecured promissory note template for corporate borrowers, establishing terms for repayment of debt without collateral.
find out more
Credit Card Promissory Note
A Canadian legal document that converts credit card debt into a formal promise to pay, establishing repayment terms and conditions under Canadian federal and provincial laws.
find out more
6 Month Promissory Note
A Canadian law-governed financial instrument documenting a six-month promise to pay a specified sum with defined interest and payment terms.
find out more
Promissory Note With Balloon Payment
A Canadian-law governed financial instrument documenting a debt obligation with regular payments and a larger final balloon payment, including interest terms and security provisions.
find out more
Personal Promissory Note
A Canadian legal document establishing a promise to pay a specific sum of money under defined terms, governed by federal and provincial legislation.
find out more
Secured Demand Promissory Note
A Canadian legal document combining a demand promissory note with security interests in collateral, governed by federal and provincial laws.
find out more
Renewal Promissory Note
A Canadian legal document that renews and potentially modifies an existing promissory note, establishing new payment terms while maintaining the original debt obligation.
find out more
Interest Only Promissory Note With Balloon Payment
A Canadian promissory note structure where the borrower makes interest-only payments with a final balloon payment of the principal at maturity.
find out more
ұԾ’s Security Promise
Genie is the safest place to draft. Here’s how we prioritise your privacy and security.
Your documents are private:
We do not train on your data; ұԾ’s AI improves independently
All data stored on Genie is private to your organisation
Your documents are protected:
Your documents are protected by ultra-secure 256-bit encryption
We are ISO27001 certified, so your data is secure
Organizational security:
You retain IP ownership of your documents and their information
You have full control over your data and who gets to see it
.png)