[{"data":1,"prerenderedAt":531},["ShallowReactive",2],{"document-conversion-agreement-D13173":3},{"document":4,"label":23,"preview":11,"thumb":24,"description":5,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":25,"breadcrumb":29,"related":35,"customDescModule":182,"customdescription":6,"mdFm":183,"mdProseHtml":530},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":16,"keywords":15},"CONVERSION AGREEMENT This Conversion Agreement (the \"Agreement\") is effective [DATE], BETWEEN: [COMPANY NAME], (\"Company A\") a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [COMPANY NAME], (\"Company B\") a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] Collectively, Company A and Company B shall be referred to as the \"Parties.\" WHEREAS, upon the terms and subject to the conditions set forth herein and in accordance with [STATE/PROVINCE] law, the Board of Managers of the Company deems it advisable to convert the Company from a limited liability company to a corporation to be named [NAME OF THE CONVERTED COMPANY] (the \"Conversion\") to facilitate the initial public offering of [NAME OF THE CONVERTED COMPANY] common stock, par value [PRICE] per share (the \"Common Stock\"), pursuant to a registration statement filed with the appropriate Securities law of [STATE/PROVINCE] (the \"Initial Public Offering\"); WHEREAS, subsequent to the Conversion and pursuant to the terms of an Agreement, the Parties will merge into [NAME OF THE CONVERTED COMPANY]; WHEREAS, the Parties intend for the Conversion to be treated as a transaction governed by appropriate law; WHEREAS, the Board of Managers and the requisite equity holders of the Company (including the Parties hereto that are equity holders of the Company) have approved the Conversion, in accordance with the requirements of [STATE/PROVINCE] law; NOW, THEREFORE, the Parties agree as follows: CONVERSION Upon the terms and subject to the conditions of this Agreement, at the Closing, the Company shall cause to be filed with the appropriate department of the [STATE/PROVINCE] (i) a certificate of conversion (the \"Certificate of Conversion\") providing for the Conversion, and (ii) a certificate of incorporation of [NAME OF THE CONVERTED COMPANY] (the \"Certificate of Incorporation\"). The Conversion shall become effective at the time and date as specified in the Certificate of Conversion (the \"Conversion Effective Time\"). The Conversion shall have the effects set forth under [STATE/PROVINCE] law. Without limiting the generality of the foregoing, and subject thereto, at the Conversion Effective Time, all the properties, rights, privileges, and powers of the Company shall vest in [NAME OF THE CONVERTED COMPANY], and all debts, liabilities, and duties of the Company shall become the debts, liabilities, and duties of [NAME OF THE CONVERTED COMPANY]. The Certificate of Incorporation and bylaws of [NAME OF THE CONVERTED COMPANY], as in effect as of the Conversion Effective Time, shall be the Certificate of Incorporation and bylaws of [NAME OF THE CONVERTED COMPANY] until thereafter amended in accordance with the provisions thereof and applicable law. Subject to applicable law, (i) the members of the Board of Managers of the Company as of the Conversion's Effective Time shall be the members of the Board of Directors of [NAME OF THE CONVERTED COMPANY] and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation, or removal, and (ii) the officers of the Company as of the Conversion Effective Time shall be the officers of [NAME OF THE CONVERTED COMPANY] and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation, or removal. All of the equity interests of the Company outstanding as of immediately prior to the Conversion Effective Time shall, as of the Conversion Effective Time, by virtue of the Conversion and without any action on the part of any Party hereto or the holder thereof or any other Person, be canceled and extinguished and converted into the right to receive the Common Stock. All of such outstanding equity interests of the Company when so converted shall no longer be outstanding and shall automatically be canceled, and the former holders thereof shall cease to have any rights with respect thereto, except the right to receive the Common Stock. At the Conversion Effective Time, all the outstanding equity interests of the Company immediately prior to the Conversion Effective Time shall, by reason of the Conversion, be converted into the number of shares of Common Stock of [NAME OF THE CONVERTED COMPANY]. Neither any provision of the Transaction Documents nor the consummation of the transactions contemplated thereby will limit, impair or otherwise modify any vesting restrictions or repurchase rights with respect to any equity issued by the Company to any officer or employee of the Company, which vesting restrictions and repurchase rights shall continue to apply to the Common Stock of [NAME OF THE CONVERTED COMPANY] issued hereby to any such Persons until the expiration of such vesting restrictions and repurchase rights in accordance with their terms. As of the Conversion Effective Time, that certain Limited Liability Company Agreement of the Company, dated as of [DATE] (as amended or otherwise modified from time to time, the \"Company LLC Agreement\") shall be terminated and of no further force and effect, and no Party thereto shall have any further rights, duties or obligations pursuant to the Company LLC Agreement, except that the following provisions of the Company LLC Agreement shall survive the Closing: (i) with respect to any tax matters relating to tax periods of the Company ending on or prior to the Closing, and (ii) for the avoidance of doubt, the provisions of the Company LLC Agreement memorialized in the agreements. Notwithstanding the foregoing, the termination of the Company LLC Agreement pursuant to this Section shall not relieve any Party thereto from any liability arising in connection with any breach by such Party of the Company LLC Agreement, whether arising prior to or after the Conversion Effective Time. In consideration of the aforementioned termination of the Company LLC Agreement, upon consummation of the Initial Public Offering, [NAME OF THE CONVERTED COMPANY], in its capacity as successor-in-interest to the Company, shall make cash payment, by wire transfer, of immediately available funds, to [SPECIFY], at the direction of the other Party or a designee thereof, in the amount of [AMOUNT]. Closing: The closing (the \"Closing\") of the transactions contemplated hereunder shall take place at [ADDRESS] on the date hereof. At the Closing: The Certificate of Conversion and the Certificate of Incorporation shall be filed pursuant to the terms of Section 2.01. The Company shall obtain and deliver fully executed copies by each of the Parties thereto of each of the following agreements: (A) that certain Termination Agreement to be dated as of the Closing Date among the Company and certain of its Subsidiaries, (B) that certain Stockholders Agreement to be dated as of the Closing Date among [NAME OF THE CONVERTED COMPANY] and certain of its stockholders, and (C) that certain Registration Agreement to be dated as of the Closing Date among [NAME OF THE CONVERTED COMPANY] and certain of its stockholders. Each of the Parties shall deliver such other documents, instruments and agreements as are required to be delivered by such Party at the Closing, pursuant to this Agreement. REPRESENTATIONS AND WARRANTIES OF COMPANY B Such Party is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. The execution, delivery and performance by such Party of the Transaction Documents to which it is or will be a party and the consummation of the transactions contemplated thereby are within the corporate powers and authority, as applicable, of such Party and have been duly authorized by all necessary corporate action on the part of such Party",null,"Conversion Agreement","7",513,"doc","https://templates.business-in-a-box.com/imgs/1000px/conversion-agreement-D13173.png","https://templates.business-in-a-box.com/imgs/250px/13173.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#13173.xml",{"title":15,"description":6},"conversion agreement",[17,20],{"label":18,"url":19},"Legal Agreements","/templates/business-legal-agreements/",{"label":21,"url":22},"Transfer & Assignment Agreements","/templates/transfer-assignment-agreement/","Conversion Agreement Template","https://templates.business-in-a-box.com/imgs/400px/13173.png",[26,17,20],{"label":27,"url":28},"Templates","/templates/",[30,31,32],{"label":27,"url":28},{"label":18,"url":19},{"label":33,"url":34},"Equity & Mergers","/templates/equity-and-mergers/",[36,40,44,48,52,56,60,64,68,72,76,80,84,100,115,133,153,167],{"label":37,"url":38,"thumb":39,"extension":10},"Conversion Rate Optimization","/template/conversion-rate-optimization-D12942","https://templates.business-in-a-box.com/imgs/250px/12942.png",{"label":41,"url":42,"thumb":43,"extension":10},"Conversion of Account to COD","/template/conversion-of-account-to-cod-D201","https://templates.business-in-a-box.com/imgs/250px/201.png",{"label":45,"url":46,"thumb":47,"extension":10},"Conversion of Account to COD 2","/template/conversion-of-account-to-cod-2-D200","https://templates.business-in-a-box.com/imgs/250px/200.png",{"label":49,"url":50,"thumb":51,"extension":10},"How To Optimize Conversion Rate","/template/how-to-optimize-conversion-rate-D13015","https://templates.business-in-a-box.com/imgs/250px/13015.png",{"label":53,"url":54,"thumb":55,"extension":10},"Conversion Metrics Your Brand Should Measure","/template/conversion-metrics-your-brand-should-measure-D13320","https://templates.business-in-a-box.com/imgs/250px/13320.png",{"label":57,"url":58,"thumb":59,"extension":10},"Non-Profit Partnership Agreement","/template/non-profit-partnership-agreement-D14023","https://templates.business-in-a-box.com/imgs/250px/14023.png",{"label":61,"url":62,"thumb":63,"extension":10},"Acquisition Agreement","/template/acquisition-agreement-D847","https://templates.business-in-a-box.com/imgs/250px/847.png",{"label":65,"url":66,"thumb":67,"extension":10},"Amalgamation Agreement","/template/amalgamation-agreement-D855","https://templates.business-in-a-box.com/imgs/250px/855.png",{"label":69,"url":70,"thumb":71,"extension":10},"Arbitration Agreement","/template/arbitration-agreement-D856","https://templates.business-in-a-box.com/imgs/250px/856.png",{"label":73,"url":74,"thumb":75,"extension":10},"Attorney Agreement","/template/attorney-agreement-D862","https://templates.business-in-a-box.com/imgs/250px/862.png",{"label":77,"url":78,"thumb":79,"extension":10},"Bonus Agreement","/template/bonus-agreement-D13815","https://templates.business-in-a-box.com/imgs/250px/13815.png",{"label":81,"url":82,"thumb":83,"extension":10},"Caregiver Agreement","/template/caregiver-agreement-D13510","https://templates.business-in-a-box.com/imgs/250px/13510.png",{"description":85,"descriptionCustom":6,"label":86,"pages":87,"size":9,"extension":10,"preview":88,"thumb":89,"svgFrame":90,"seoMetadata":91,"parents":93,"keywords":92,"url":99},"NON-DISCLOSURE AGREEMENT (NDA) This Non-Disclosure Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Disclosing Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [RECEIVING PARTY NAME] (the \"Receiving Party\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS, Receiving Party has been or will be engaged in the performance of work on [DESCRIBE]; and in connection therewith will be given access to certain confidential and proprietary information; and WHEREAS, Receiving Party and Disclosing Party wish to evidence by this Agreement the manner in which said confidential and proprietary material will be treated. NOW, THEREFORE, it is agreed as follows: NON-DISCLOSURE OF CONFIDENTIAL INFORMATION Both Parties understand and agree that each Party may have access to the confidential information of the other party. For the purposes of this Agreement, \"Confidential Information\" means proprietary and confidential information about the Disclosing Party's (or it's suppliers') business or activities. Such information includes all business, financial, technical, and other information marked or designated by such Party as \"confidential\" or \"proprietary.\" Confidential Information also includes information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. For the purposes of this Agreement, Confidential Information does not include: Information that is currently in the public domain or that enters the public domain after the signing of this Agreement. Information a Party lawfully receives from a third Party without restriction on disclosure and without breach of a non-disclosure obligation. Information that the Receiving Party knew prior to receiving any Confidential Information from the Disclosing Party. Information that the Receiving Party independently develops without reliance on any Confidential Information from the Disclosing Party. Each Party agrees that it will not disclose to any third Party or use any Confidential Information disclosed to it by the other Party except when expressly permitted in writing by the other Party. Each Party also agrees that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control. TERM The term of this Agreement is [number] of [years/months] from the date of execution by both Parties. TITLE The Receiving Party agrees that all Confidential Information furnished by the Disclosing Party shall remain the sole property of the Disclosing Party. DISCLAIMER","Non Disclosure Agreement Nda","3","https://templates.business-in-a-box.com/imgs/1000px/non-disclosure-agreement-nda-D12692.png","https://templates.business-in-a-box.com/imgs/250px/12692.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12692.xml",{"title":92,"description":6},"non disclosure agreement nda",[94,96],{"label":18,"url":95},"business-legal-agreements",{"label":97,"url":98},"Confidentiality Agreements","confidentiality-agreement","/template/non-disclosure-agreement-nda-D12692",{"description":101,"descriptionCustom":6,"label":102,"pages":103,"size":9,"extension":10,"preview":104,"thumb":105,"svgFrame":106,"seoMetadata":107,"parents":109,"keywords":108,"url":114},"SHAREHOLDERS AGREEMENT This Shareholders Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST SHAREHOLDER NAME] (the \"First Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND SHAREHOLDER NAME] (the \"Second Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [THIRD SHAREHOLDER NAME] (the \"Third Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WITNESSETH: WHEREAS, the present distribution of shares of the Company is as follows: Name Number of Shares WHEREAS, in order to insure the harmonious and successful management and control of the Company, and to provide for an orderly and fair disposition of shares of common stock of the Company now or hereafter owned by any Shareholder; NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and intending to be legally bound, the parties hereby agree as follows: Definitions and organisation of the company \"Offering Shareholder\" means any Shareholder, or his personal representatives, heirs, administrators, and executors, as the case may be, who pursuant to this Agreement must or does offer all or any of his Shares to the Company or the Continuing Shareholders. \"Continuing Shareholders\" means all Shareholders other than an Offering Shareholder. \"Shares\" means shares of Common Stock of the Company now or hereafter owned by any Shareholder. \"Buyer\" means the Company or those Continuing Shareholders who purchase an Offering Shareholder's Shares pursuant to this Agreement. \"Management Shareholder\" means First Shareholder, Second Shareholder and Third Shareholder. ORGANISATION OF THE COMPANY The affairs of the Company will be managed by a board of [NUMBER] directors unless changed by a unanimous Directors' Resolution. The present directors of the Company are [DIRECTORS' NAMES]. It is agreed that [SHAREHOLDERS' NAMES] shall each be entitled to elect one director to the board of directors of the Company so long as each is a Shareholder. Two (2) directors shall constitute a quorum for the transaction of any business at any meeting of the board of directors. At all meetings of the board of directors, every motion to be carried must receive a majority of the votes cast, subject to the provisions of subparagraphs 2.4 and 2.5. Unless otherwise agreed, board meetings will be held at the head office of the Company. In the event that a nominee to the Board of one of the Shareholders shall fail to vote and act as a director to carry out the provisions of this agreement, then the shareholders agree to exercise their right as shareholders of the Company and in accordance with the Articles of the Company to remove such nominee from the Board and to elect in the place or stead thereof such individual who will use his/her best efforts to carry out the provisions of this agreement but only in the event that the Shareholder whose nominee has been removed fails to appoint a successor within a period of fourteen days from the date such nominee has been removed. The election, appointment and determination of officers and the auditors and advisors of the Company, the defining of their duties and functions and the salaries and remuneration to be paid to them will be a function of the board of directors. Until changed by the board of directors, the Officers of the Company and their annual salaries shall be: Office Held: Director: [NAME] [SALARY] Secretary: [NAME] [SALARY] All direct out-of-pocket expenses will be reimbursed provided these falls within guidelines set out by the Board of Directors from time to time. Until otherwise agreed, each officer of the Company will commit to spending his/her full time on the affairs of the Company. Until changed by the board of directors, the auditors and advisors of the Company shall be: Auditor: Legal Advisors: There shall be kept, in such bank or banks (including trust companies) as may be determined by the board of directors, bank accounts of the Company in which shall be deposited all monies received by the Company in the course of carrying on business from time to time. All payments on account of the Company shall be made by cheques drawn on the bank account and all cheques, drafts or other instruments drawn and made for the purposes of the business of the Company shall be executed by such directors, officers or employees as may from time to time be authorized so to do by the board of directors. Subject to paragraph 2.6, all decisions relating to the management and control of the business of the Company shall be determined by the board of directors of the Company, provided always that the following matters shall be determined by a Special Directors' Resolution: any capital expenditures greater than xxxx; any lease commitments greater than xxxx; the acquisition of any business interests by the Company; the elections of officers of the Company; the payment of any cash dividends or stock dividends to Shareholders of the Company; the issuance of any debt obligations of the Company; the disposal of the whole or any part of the business, undertaking, or assets of the Company outside the normal course of business of the Company the transfer of any shares of the Company; changes or variations in the objects or powers of the Company; the liquidation or winding up of the Company; the approval of any contracts or transactions outside the normal course of business; the execution of any contract involving a consideration greater than xxxx within the normal course of business; the lending of money by the Company; the guarantee by the Company of the debts or obligations of any other person, firm or body corporate; any non-budgeted expenditures greater than xxxx; business plan and/or budgets. The following decisions shall be determined by a Unanimous Directors' Resolution: alterations, variations or changes to the authorized or issued capital of the Company; the salaries and bonuses of officers and directors of the Company; the issue, redemption or purchase of any Shares; and changes in the number of directors of the Company The Shareholders may pledge any of their Shares as security for any borrowings by them provided the pledgee executes an agreement, in writing, providing that the pledgee shall be subject to all of the terms of this Agreement. The board of directors shall meet at least four times during each fiscal year of the Company. Any director can call a meeting provided 10 days notice is given. Notice may be waived. During the first year from the date of this agreement, the board of directors shall meet on a monthly basis. Directors may elect to attend a board meeting by telephone conference call. Each Shareholder shall, for so long as s/he is the owner of shares of the Company devote such of his/her business, time and energy as may be reasonably required to carry on the business of the Company and the Shareholder shall use his/her best efforts, skill and abilities to promote the interests of the Company. Each Shareholder agrees that he/she will not engage, without the consent of the other Shareholders, in a business which is directly competitive to that of the Company. Purchase for Investment","Shareholders Agreement","16","https://templates.business-in-a-box.com/imgs/1000px/shareholders-agreement-D1016.png","https://templates.business-in-a-box.com/imgs/250px/1016.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1016.xml",{"title":108,"description":6},"shareholders agreement",[110,111],{"label":18,"url":95},{"label":112,"url":113},"Incorporation Agreements","incorporation-agreement","/template/shareholders-agreement-D1016",{"description":116,"descriptionCustom":6,"label":117,"pages":118,"size":119,"extension":10,"preview":120,"thumb":121,"svgFrame":122,"seoMetadata":123,"parents":124,"keywords":131,"url":132},"COMPANY NAME:_______________________ Address: _______________________________________ City: ______________________________ State/Province: ___________ Zip/postal code__________ Country: ________________ Phone: _________________ Fax: __________________ Email: _________________________________________ Purchase Order The following number must appear on all related correspondence, shipping papers, and invoices: P.O. NUMBER: Contact: Address: _______________________________________ City: ______________________________ State/Province: ___________ Zip/postal code___________ Country: ________________ Phone: _________________ Fax: __________________ Email: _________________________________________ Ship To:","Purchase Order","1",49,"https://templates.business-in-a-box.com/imgs/1000px/purchase-order-D1411.png","https://templates.business-in-a-box.com/imgs/250px/1411.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1411.xml",{"title":6,"description":6},[125,128],{"label":126,"url":127},"Sales & Marketing","sales-marketing",{"label":129,"url":130},"Bids & Quotes","bids-quotes","purchase order","/template/purchase-order-D1411",{"description":134,"descriptionCustom":6,"label":135,"pages":87,"size":136,"extension":10,"preview":137,"thumb":138,"svgFrame":139,"seoMetadata":140,"parents":141,"keywords":151,"url":152},"PROMISSORY NOTE This Promissory Note (the \"Note\") is made and effective the [DATE], BETWEEN: [LENDER NAME] (the \"Lender\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Borrower\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] TERMS FOR VALUE RECEIVED, the Borrower promises to pay to the order of Lender, at its principal office located at [ADDRESS], or at such other place that is designated in writing by the holder hereof, the principal sum of [AMOUNT], together with all charges and interest herein provided, payable at the rate and in the manner hereinafter set forth: Borrower shall make monthly payments of principal and interest at the rate of [%] per annum based upon an amortization of [NUMBER] months. Monthly payments shall be due on or before the first day of each month with the first payment being due on or before [DATE]. If not sooner paid, all amounts due under this Note, including principal, interest and other charges shall be due and payable in full on or before the first day of [MONTH], [YEAR] (the \"Maturity Date\"). Time is of the essence of the payment obligations hereunder and each monthly payment shall be due and payable on or before the first day of each month. This Note is and will be secured by a certain first priority security interest in all of the tangible and intangible property of the Borrower, to be recorded in all applicable governmental offices. The parties shall execute a separate security agreement, in form and substance acceptable to the Lender in all respects. Borrower agrees to execute any such security agreements presented by the Lender or other documents required by the Lender in order to perfect its security interest in the above described property. Said Security Agreement and any other instruments and documents executed in connection with or given as security for this Note shall hereinafter be referred to collectively as the \"Loan Documents.\" All of the terms, covenants, Conditions, representations and warranties contained in the Loan Documents are hereby made part of this Note to the same extent and with the same force and effect as if fully set forth herein. If all or any portion of any payment due hereunder is not received by the Lender within [NUMBER] calendar days after the date when such payment is due, Borrower shall pay a late charge equal to [%] of such payment, such late charge to be immediately due and payable without demand by Lender. Borrower shall have the right to prepay all (but not a portion) of the indebtedness evidenced by this Note at any time, by paying the Lender an amount equal to the sum of (I) the principal balance then outstanding, (ii) all interest accrued to the date of such prepayment, (iii) all interest calculated through the Maturity Date, and (iv) any late charge or charges then due and owing. If any payment under this Note is not paid in full by the [DAY] of any month during the term hereof or if the entire amount due as represented by this Note is not paid in full on or before the Maturity Date, or should default be made in the performance or observation of any of the terms, covenants, or conditions contained in the Loan Documents, or if any representation or warranty contained in the Loan Documents is breached or is or becomes untrue, this Note shall be in default, and the entire principal amount outstanding hereunder, accrued interest thereon, all late charges, if any, and any and all other charges due hereunder, shall, at Lender's option, immediately become due and payable, without further notice, the giving of such notice being expressly waived by the Borrower","Promissory Note",39,"https://templates.business-in-a-box.com/imgs/1000px/promissory-note-D434.png","https://templates.business-in-a-box.com/imgs/250px/434.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#434.xml",{"title":6,"description":6},[142,145,148],{"label":143,"url":144},"Finance & Accounting","finance-accounting",{"label":146,"url":147},"Business Loans","business-loan",{"label":149,"url":150},"Promissory Notes","promisory-note","promissory note","/template/promissory-note-D434",{"description":154,"descriptionCustom":6,"label":155,"pages":156,"size":9,"extension":10,"preview":157,"thumb":158,"svgFrame":159,"seoMetadata":160,"parents":162,"keywords":161,"url":166},"LOAN AGREEMENT This Loan Agreement (\"Agreement\") is made and effective the [DATE], BETWEEN: [LENDER NAME] (the \"Lender\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Borrower\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] Promise to Pay Within [NUMBER] months from today, Borrower promises to pay to Lender the sum of [AMOUNT], and interest and other charges stated below. Responsibility Although this Agreement may be signed below by more than one person, Borrower understands that both parties are individuals responsible for paying back the full amount. Breakdown of Loan Amount of Loan: Other (Describe): Amount Financed: Finance Charge: Total of Payments: Annual Rate: Repayment Borrower will repay the amount of this note in [NUMBER] equal uninterrupted monthly installments of [AMOUNT] each on the [DAY] of each month starting on the [DATE], and ending on [DATE]. Prepayment Borrower has the right to prepay the whole outstanding amount at any time","Loan Agreement","2","https://templates.business-in-a-box.com/imgs/1000px/loan-agreement-D417.png","https://templates.business-in-a-box.com/imgs/250px/417.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#417.xml",{"title":161,"description":6},"loan agreement",[163,164,165],{"label":143,"url":144},{"label":146,"url":147},{"label":146,"url":147},"/template/loan-agreement-D417",{"description":168,"descriptionCustom":6,"label":169,"pages":170,"size":171,"extension":10,"preview":172,"thumb":173,"svgFrame":174,"seoMetadata":175,"parents":176,"keywords":180,"url":181},"INDEPENDENT CONTRACTOR AGREEMENT This Independent Contractor Agreement (\"Agreement\") is made and effective [Date], BETWEEN: [INDEPENDENT CONTRACTOR NAME] (the \"Independent Contractor\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] RECITALS Independent Contractor is engaged in providing [Describe] business services, its Employer Tax I.D. Number is [Insert], and its Business License Number is [insert]. Independent Contractor has complied with all Federal, State, and local laws regarding business permits, sales permits, licenses, reporting requirements, tax withholding requirements, and other legal requirements of any kind that may be required to carry out said business and the Scope of Work which is to be performed as an Independent Contractor pursuant to this Agreement. Independent Contractor is or remains open to conducting similar tasks or activities for clients other than the Company and holds themselves out to the public to be a separate business entity. Company desires to engage and contract for the services of the Independent Contractor to perform certain tasks as set forth below. Independent Contractor desires to enter into this Agreement and perform as an independent contractor for the company and is willing to do so on the terms and conditions set forth below. NOW, THEREFORE, in consideration of the above recitals and the mutual promises and conditions contained in this Agreement, the Parties agree as follows: TERMS This Agreement shall be effective commencing [Date], and shall continue until terminated at the completion of the Scope of Work which shall occur no later than [Date] or by either party as otherwise provided herein. STATUS OF INDEPENDENT CONTRACTOR This Agreement does not constitute a hiring by either party. It is the parties intentions that Independent Contractor shall have an independent contractor status and not be an employee for any purposes, including, but not limited to, [laws]. Independent Contractor shall retain sole and absolute discretion in the manner and means of carrying out their activities and responsibilities under this Agreement. This Agreement shall not be considered or construed to be a partnership or joint venture, and the Company shall not be liable for any obligations incurred by Independent Contractor unless specifically authorized in writing. Independent Contractor shall not act as an agent of the Company, ostensibly or otherwise, nor bind the Company in any manner, unless specifically authorized to do so in writing. TASKS, DUTIES, AND SCOPE OF WORK Independent Contractor agrees to devote as much time, attention, and energy as necessary to complete or achieve the following: [Describe]. The above to be referred to in this Agreement as the \"Scope of Work\". It is expected that the Scope of Work will completed by [Date]. Independent Contractor shall additionally perform any and all tasks and duties associated with the Scope of Work set forth above, including but not limited to, work being performed already or related change orders. Independent Contractor shall not be entitled to engage in any activities which are not expressly set forth by this Agreement. The books and records related to the Scope of Work set forth in this Agreement shall be maintained by the Independent Contractor at the Independent Contractor's principal place of business and open to inspection by Company during regular working hours. Documents to which Company will be entitled to inspect include, but are not limited to, any and all contract documents, change orders/purchase orders and work authorized by Independent Contractor or Company on existing or potential projects related to this Agreement. Independent Contractor shall be responsible to the management and directors of Company, but Independent Contractor will not be required to follow or establish a regular or daily work schedule. Supply all necessary equipment, materials and supplies. Independent Contractor will not rely on the equipment or offices of Company for completion of tasks and duties set forth pursuant to this Agreement. Any advice given Independent Contractors regarding the scope of work shall be considered a suggestion only, not an instruction. Company retains the right to inspect, stop, or alter the work of Independent Contractor to assure its conformity with this Agreement. ASSURANCE OF SERVICES Independent Contractor will assure that the following individuals (the \"Key Employees\") will be available to perform, and will perform, the Services hereunder until they are completed (identify by title and name as applicable): [Name of Key Employee, Title] [Name of Key Employee, Title] The Key Employees may be changed only with the prior written approval of the Company, which approval shall not be unreasonably withheld. COMPENSATION Independent Contractor shall be entitled to compensation for performing those tasks and duties related to the Scope of Work as follows: [Describe] Such compensation shall become due and payable to Independent Contractor in the following time, place, and manner: [Describe] NOTICE CONCERNING WITHHOLDING OF TAXES Independent Contractor recognizes and understands that it will receive a [specify tax] statement and related tax statements, and will be required to file corporate and/or individual tax returns and to pay taxes in accordance with all provisions of applicable Federal and State law. Independent Contractor hereby promises and agrees to indemnify the Company for any damages or expenses, including attorney's fees, and legal expenses, incurred by the Company as a result of independent contractor's failure to make such required payments. AGREEMENT TO WAIVE RIGHTS TO BENEFITS Independent Contractor hereby waives and foregoes the right to receive any benefits given by Company to its regular employees, including, but not limited to, health benefits, vacation and sick leave benefits, profit sharing plans, etc. This waiver is applicable to all non-salary benefits which might otherwise be found to accrue to the Independent Contractor by virtue of their services to Company, and is effective for the entire duration of Independent Contractor's agreement with Company. This waiver is effective independently of Independent Contractor's employment status as adjudged for taxation purposes or for any other purpose. Neither this Agreement, nor any duties or obligations under this Agreement may be assigned by either party without the consent of the other. TERMINATION This Agreement may be terminated prior to the completion or achievement of the Scope of Work by either party giving [number] days written notice. Such termination shall not prejudice any other remedy to which the terminating party may be entitled, either by law, in equity, or under this Agreement. NON-DISCLOSURE OF TRADE SECRETS, CUSTOMER LISTS AND OTHER PROPRIETARY INFORMATION Independent Contractor agrees not to disclose or communicate, in any manner, either during or after Independent Contractor's agreement with Company, information about Company, its operations, clientele, or any other information, that relate to the business of Company including, but not limited to, the names of its customers, its marketing strategies, operations, or any other information of any kind which would be deemed confidential, a trade secret, a customer list, or other form of proprietary information of Company. Independent Contractor acknowledges that the above information is material and confidential and that it affects the profitability of Company. ","Independent Contractor Agreement","6",62,"https://templates.business-in-a-box.com/imgs/1000px/independent-contractor-agreement-D160.png","https://templates.business-in-a-box.com/imgs/250px/160.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#160.xml",{"title":6,"description":6},[177],{"label":178,"url":179},"Consultant & Contractors","consulting-contractor-business","independent contractor agreement","/template/independent-contractor-agreement-D160",false,{"seo":184,"reviewer":195,"legal_disclaimer":199,"quick_facts":200,"at_a_glance":202,"personas":206,"variants":231,"glossary":257,"clauses":294,"how_to_fill":345,"common_mistakes":386,"faqs":411,"industries":439,"comparisons":456,"diy_vs_lawyer":471,"jurisdictions":484,"related_template_ids_curated":505,"schema":518,"classification":519},{"meta_title":185,"meta_description":186,"primary_keyword":187,"secondary_keywords":188},"Conversion Agreement Template | BIB","Free conversion agreement template for converting debt, equity, or entity type. Covers conversion terms, valuation, conditions, and representations.","conversion agreement template",[189,190,191,192,193,194],"debt to equity conversion agreement","equity conversion agreement template","conversion agreement template word","free conversion agreement template","business conversion agreement","loan conversion agreement template",{"name":196,"credential":197,"reviewed_date":198},"Bruno Goulet","CEO, Business in a Box","2026-05-02",true,{"difficulty":201,"legal_review_recommended":199,"signature_required":199,"notarization_required":182},"advanced",{"what_it_is":203,"when_you_need_it":204,"whats_inside":205},"A Conversion Agreement is a legally binding contract that governs the transformation of one financial instrument or legal interest into another — most commonly converting a debt obligation (such as a loan or promissory note) into equity ownership in a company. This free Word download gives you a structured, attorney-reviewed starting point you can edit online and export as PDF to share with investors, lenders, or business partners.\n","Use it when a creditor and debtor agree to convert an outstanding loan balance into shares, when converting one class of equity to another, or when restructuring a financial obligation to avoid default. It is also used when converting a business entity type — such as an LLC to a corporation — and the parties need to document the treatment of existing interests.\n","Identification of parties and the instrument being converted, conversion terms and the conversion rate or price, conditions precedent to closing, representations and warranties from both parties, anti-dilution and pre-emptive rights provisions, closing mechanics, and governing law.\n",[207,211,215,219,223,227],{"title":208,"use_case":209,"icon_asset_id":210},"Startup founders","Converting outstanding convertible notes into equity at a priced funding round","persona-startup-founder",{"title":212,"use_case":213,"icon_asset_id":214},"Angel investors and early-stage VCs","Documenting the conversion of a bridge loan into preferred shares at series close","persona-investor",{"title":216,"use_case":217,"icon_asset_id":218},"Small business owners","Converting a shareholder loan into equity to restructure the company's balance sheet","persona-small-business-owner",{"title":220,"use_case":221,"icon_asset_id":222},"Corporate attorneys","Drafting conversion mechanics for entity reorganizations or debt restructurings","persona-corporate-attorney",{"title":224,"use_case":225,"icon_asset_id":226},"CFOs and finance directors","Managing debt-to-equity conversions to improve leverage ratios before a refinancing","persona-cfo",{"title":228,"use_case":229,"icon_asset_id":230},"Private lenders and creditors","Converting a defaulted or maturing loan into an ownership stake rather than pursuing collection","persona-private-lender",[232,236,240,243,246,250,254],{"situation":233,"recommended_template":234,"slug":235},"Converting a short-term bridge loan into equity at the next priced round","Convertible Note Agreement","convertible-note-agreement-D870",{"situation":237,"recommended_template":238,"slug":239},"Converting one class of shares (e.g., preferred to common) upon an exit event","Share Conversion Agreement","conversion-agreement-D13173",{"situation":241,"recommended_template":242,"slug":239},"Converting an LLC membership interest into corporate stock during entity conversion","Entity Conversion Agreement",{"situation":244,"recommended_template":245,"slug":239},"Converting an outstanding shareholder loan to equity on agreed terms","Debt to Equity Conversion Agreement",{"situation":247,"recommended_template":248,"slug":249},"Issuing simple future equity without a valuation cap or discount","SAFE Agreement (Simple Agreement for Future Equity)","simple-agreement-for-future-equity-safe-D13395",{"situation":251,"recommended_template":252,"slug":253},"Restructuring multiple creditor debts into a combined equity stake","Debt Restructuring Agreement","secured-lumpsum-promissory-note-agreement-D13041",{"situation":255,"recommended_template":256,"slug":235},"Granting an option to convert debt at a future date if conditions are met","Convertible Loan Agreement",[258,261,264,267,270,273,276,279,282,285,288,291],{"term":259,"definition":260},"Conversion","The contractual process by which one financial instrument or legal interest is exchanged for another, such as debt being exchanged for equity shares.",{"term":262,"definition":263},"Conversion Price","The price per share at which outstanding debt or a convertible instrument is exchanged for equity, usually set at a discount to the next round's share price.",{"term":265,"definition":266},"Conversion Rate","The ratio at which the existing instrument converts into the new one — for example, $1,000 of debt converting at $1.00 per share yields 1,000 shares.",{"term":268,"definition":269},"Convertible Note","A short-term debt instrument that automatically or optionally converts into equity — typically preferred shares — when a triggering event occurs, such as a qualified financing round.",{"term":271,"definition":272},"Valuation Cap","A ceiling on the company's valuation used to calculate the conversion price, ensuring early investors receive shares at no worse than the capped price regardless of how high the round values the company.",{"term":274,"definition":275},"Discount Rate","A percentage reduction applied to the per-share price of the conversion round, rewarding early investors with cheaper shares than later-round participants.",{"term":277,"definition":278},"Conditions Precedent","Specific requirements that must be satisfied before the conversion is legally effective — such as completion of a qualified financing or board approval.",{"term":280,"definition":281},"Anti-Dilution Protection","A clause that adjusts the conversion price downward if the company later issues shares at a lower price, protecting the converting party from value erosion.",{"term":283,"definition":284},"Representations and Warranties","Statements of fact made by each party at the time of signing, confirming matters such as authority to execute, accuracy of capitalization, and absence of undisclosed liabilities.",{"term":286,"definition":287},"Capitalization Table (Cap Table)","A spreadsheet or schedule listing all equity holders and their respective ownership percentages, updated to reflect post-conversion ownership.",{"term":289,"definition":290},"Qualified Financing","A funding round that meets defined minimum criteria — typically a minimum aggregate amount raised — that automatically triggers conversion of outstanding instruments.",{"term":292,"definition":293},"Pro Rata Rights","The right of a converting investor to participate in future financing rounds in proportion to their post-conversion ownership stake, preserving their percentage.",[295,300,305,310,315,320,325,330,335,340],{"name":296,"plain_english":297,"sample_language":298,"common_mistake":299},"Parties and Recitals","Identifies the converting party (creditor or holder) and the issuing party (company or debtor) by their full legal names and describes the background and purpose of the conversion.","This Conversion Agreement (the 'Agreement') is entered into as of [DATE] by and between [COMPANY LEGAL NAME], a [STATE/PROVINCE] [ENTITY TYPE] (the 'Company'), and [HOLDER FULL NAME / ENTITY NAME] (the 'Holder'). The parties wish to convert the outstanding [INSTRUMENT TYPE] described herein into equity of the Company on the terms set out below.","Using a trade name instead of the registered legal entity name for either party. If the entity name does not match the cap table or corporate registry, the shares issued may be attributed to the wrong legal person.",{"name":301,"plain_english":302,"sample_language":303,"common_mistake":304},"Description of the Instrument Being Converted","Precisely identifies the debt, note, or other instrument subject to conversion — including the original principal amount, any accrued interest, the issue date, and the outstanding balance at conversion.","The Holder holds that certain Promissory Note dated [ORIGINAL DATE] in the original principal amount of $[AMOUNT], of which $[OUTSTANDING PRINCIPAL] in principal and $[ACCRUED INTEREST] in accrued interest remains outstanding as of the Conversion Date (the 'Outstanding Balance').","Failing to account for accrued interest in the Outstanding Balance. Omitting accrued interest means the Holder may have a residual unsatisfied claim after conversion, creating a future dispute.",{"name":306,"plain_english":307,"sample_language":308,"common_mistake":309},"Conversion Terms and Conversion Price","States the price per share (or unit) at which the outstanding balance converts, whether a discount or valuation cap applies, and the resulting number of shares to be issued.","The Outstanding Balance shall convert into [X] shares of [CLASS OF STOCK] of the Company at a Conversion Price of $[PRICE] per share, calculated as the lesser of (a) $[CAP PRICE] and (b) [DISCOUNT]% of the price per share paid by investors in the Qualified Financing.","Not specifying which class of shares is issued on conversion. Leaving the class open creates ambiguity about voting rights, liquidation preferences, and dividend entitlements at the point of conversion.",{"name":311,"plain_english":312,"sample_language":313,"common_mistake":314},"Conditions Precedent to Conversion","Lists the events or approvals that must occur before the conversion becomes effective — such as completion of a qualifying financing round, board approval, or regulatory clearance.","The conversion of the Outstanding Balance shall be conditioned upon: (a) the closing of a Qualified Financing of at least $[MINIMUM AMOUNT] in aggregate gross proceeds; (b) approval by the Company's Board of Directors; and (c) execution of all required investor documentation for such Qualified Financing.","Setting conditions that are vague or within a single party's complete control. A condition like 'subject to Company's satisfaction' gives one party unilateral power to block conversion indefinitely.",{"name":316,"plain_english":317,"sample_language":318,"common_mistake":319},"Issuance of Shares and Closing Mechanics","Describes what happens at closing — the cancellation of the converted instrument, the delivery of share certificates or electronic book-entry, and the timeline for completing these steps.","Upon satisfaction of the Conditions Precedent, the Company shall: (a) cancel the [INSTRUMENT NAME] and mark it as satisfied in full; (b) issue to the Holder a certificate (or book-entry notation) representing [NUMBER] shares of [CLASS]; and (c) update the Company's capitalization table within [5] business days of the Conversion Date.","Failing to document the cancellation of the original instrument at closing. If the note is not formally cancelled, the Holder may later assert that the debt still exists independently of the shares received.",{"name":321,"plain_english":322,"sample_language":323,"common_mistake":324},"Representations and Warranties of the Company","Statements by the company confirming it has authority to issue shares, that the shares will be validly issued and fully paid, that the capitalization table is accurate, and that there are no undisclosed encumbrances.","The Company represents and warrants that: (a) it is duly organized and in good standing under the laws of [JURISDICTION]; (b) the shares to be issued upon conversion are duly authorized and, when issued, will be validly issued, fully paid, and non-assessable; and (c) the capitalization table attached as Schedule A is true and complete as of the date hereof.","Giving reps that are accurate at signing but not at closing. If the cap table changes between signature and the conversion closing date, the stale representation can expose the company to misrepresentation claims.",{"name":326,"plain_english":327,"sample_language":328,"common_mistake":329},"Representations and Warranties of the Holder","Statements by the converting party confirming they own the instrument free of liens, have authority to convert, and are acquiring shares for their own account (satisfying securities law exemptions).","The Holder represents and warrants that: (a) the Holder owns the [INSTRUMENT] free and clear of all liens, claims, and encumbrances; (b) the Holder has full power and authority to enter into this Agreement; and (c) the Holder is acquiring the shares for the Holder's own account, for investment purposes only, and not with a view to resale or distribution.","Omitting the investment-purpose representation. Without it, the share issuance may not qualify for a private placement exemption under applicable securities law, exposing the company to unregistered offering liability.",{"name":331,"plain_english":332,"sample_language":333,"common_mistake":334},"Anti-Dilution and Pre-Emptive Rights","Specifies any price adjustment protections if the company later issues shares at a lower price, and any right of the Holder to participate in future rounds to maintain their ownership percentage.","In the event the Company issues additional shares of [CLASS] at a price per share less than the Conversion Price, the Conversion Price shall be adjusted on a [broad-based weighted average / full-ratchet] basis. The Holder shall have pro rata rights to participate in future equity financings up to the Holder's post-conversion ownership percentage.","Including a full-ratchet anti-dilution clause without understanding its punitive effect. Full-ratchet resets the conversion price to the new lower price regardless of how few shares are issued at the lower price — this can dramatically dilute founders and other investors.",{"name":336,"plain_english":337,"sample_language":338,"common_mistake":339},"Tax Treatment and Acknowledgments","Addresses the tax characterization of the conversion (e.g., whether accrued interest is treated as ordinary income), and each party's acknowledgment that they have sought independent tax and legal advice.","Each party acknowledges that the tax consequences of this conversion may vary depending on individual circumstances. The Holder acknowledges that any accrued interest included in the Outstanding Balance may be treated as ordinary income in the year of conversion under applicable tax law. Each party has had the opportunity to consult with independent tax and legal counsel prior to execution.","Omitting any tax acknowledgment language and treating conversion as a purely mechanical financial event. Accrued interest converted to equity is typically taxable income to the Holder even though no cash is received — failing to flag this creates surprise tax liability.",{"name":341,"plain_english":342,"sample_language":343,"common_mistake":344},"Governing Law, Entire Agreement, and Miscellaneous","States the jurisdiction whose law governs the agreement, confirms the document supersedes all prior understandings, and includes standard boilerplate on amendments, counterparts, and notices.","This Agreement shall be governed by the laws of [STATE / PROVINCE / COUNTRY], without regard to its conflict-of-law principles. This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior discussions, representations, and agreements. Amendments must be in writing and signed by both parties.","Selecting a governing law that has no connection to either party or the transaction. Courts in several jurisdictions will apply local law regardless of a contractual choice-of-law clause that lacks a reasonable relationship to the parties.",[346,351,356,361,366,371,376,381],{"step":347,"title":348,"description":349,"tip":350},1,"Identify the parties with their full legal names","Enter the company's registered legal entity name — not a trade name — and the Holder's full legal name or registered entity name. Confirm both match the relevant corporate registry and cap table.","Pull the exact entity name from the certificate of incorporation or articles of organization to avoid mismatches that can void the share issuance.",{"step":352,"title":353,"description":354,"tip":355},2,"Describe the instrument being converted in full","Reference the original instrument by its title, date, and original principal amount. Calculate the outstanding principal and accrued interest as of the intended conversion date and record both figures separately.","Use the actual accrual formula from the original note — simple vs. compound interest at the stated rate — to calculate accrued interest precisely, and attach the original instrument as an exhibit.",{"step":357,"title":358,"description":359,"tip":360},3,"Set the conversion price and resulting share count","Determine whether the conversion price is a fixed negotiated price, the lower of a valuation cap and a discounted round price, or another formula. Calculate the exact number of shares the Outstanding Balance yields at that price.","Round down to the nearest whole share and state how any fractional share will be handled — cash payment at conversion price, or simply forfeited — to avoid ambiguity.",{"step":362,"title":363,"description":364,"tip":365},4,"Specify the class of shares to be issued","State clearly whether the Holder receives common stock, preferred stock, or a specific series of preferred (e.g., Series A Preferred). Attach or cross-reference the certificate of incorporation and any applicable investors' rights agreement.","If the shares carry special rights (liquidation preference, dividends, anti-dilution), reference the governing documents rather than restating all terms in the body of this agreement.",{"step":367,"title":368,"description":369,"tip":370},5,"Define the conditions precedent with objective criteria","List every event that must occur before conversion is effective. Use objective, measurable thresholds — a minimum financing amount in dollars, a board resolution date, a specific regulatory approval — rather than subjective satisfaction standards.","Include a long-stop date: if conditions are not satisfied by [DATE], either party may terminate the agreement. Without a long-stop, the obligation to convert can hang open indefinitely.",{"step":372,"title":373,"description":374,"tip":375},6,"Complete the representations and warranties sections","Have each party confirm their authority to execute, the accuracy of their stated facts, and — for the Holder — the investment-purpose representation required for private placement exemptions under securities law.","Date the representations as of both the signing date and the conversion closing date using a bring-down mechanism, so that material changes between signing and closing are captured.",{"step":377,"title":378,"description":379,"tip":380},7,"Address anti-dilution, pro rata rights, and tax acknowledgments","Decide whether to include anti-dilution protection and which formula applies. Add a tax acknowledgment confirming each party has had the opportunity to consult counsel. Insert the governing law and entire agreement clauses.","Broad-based weighted average anti-dilution is standard for most transactions — full-ratchet is investor-friendly but can severely harm founders and should only be accepted with full understanding of the downside scenario.",{"step":382,"title":383,"description":384,"tip":385},8,"Execute, cancel the original instrument, and update the cap table","Both parties must sign before the conversion closing date. At closing, mark the original instrument cancelled, deliver shares or a book-entry confirmation, and update the capitalization table immediately.","Retain a fully executed copy with wet or electronic signatures, the cancelled original instrument, and the updated cap table as a single closing package — this is the evidence trail you will need for any future financing or audit.",[387,391,395,399,403,407],{"mistake":388,"why_it_matters":389,"fix":390},"Forgetting to include accrued interest in the conversion amount","If only the principal converts, the Holder retains an outstanding unsatisfied claim for accrued interest, creating a lingering creditor relationship alongside a new equity stake — a structurally problematic combination.","Calculate all accrued but unpaid interest to the conversion date using the original note's rate and formula, add it to the principal balance, and state the combined Outstanding Balance in the instrument description clause.",{"mistake":392,"why_it_matters":393,"fix":394},"Failing to formally cancel the original instrument at closing","Without documented cancellation, the Holder may later assert that both the debt and the equity coexist — essentially claiming double recovery — especially in an insolvency or dispute.","Include an explicit cancellation step in the closing mechanics clause, have the Holder surrender the original note marked 'Cancelled and Satisfied in Full,' and retain the cancelled instrument in your corporate records.",{"mistake":396,"why_it_matters":397,"fix":398},"Leaving the class of shares issued on conversion undefined","Ambiguity over whether the Holder receives common or preferred stock, and which series, creates disputes over liquidation preferences, voting rights, and dividend entitlements that are difficult and expensive to unwind.","Name the exact class and series of shares in the conversion terms clause and attach the relevant provisions of the certificate of incorporation or shareholders' agreement as a schedule.",{"mistake":400,"why_it_matters":401,"fix":402},"Using vague or subjective conditions precedent","A condition framed as 'subject to the Company's satisfaction' or 'at the Company's reasonable discretion' effectively gives one party a unilateral veto over conversion, making the agreement unenforceable against that party.","State all conditions as objective, verifiable facts — a specific dollar threshold for the qualifying financing, a board resolution by a fixed date, or a named regulatory approval — so neither party can unilaterally block conversion.",{"mistake":404,"why_it_matters":405,"fix":406},"Omitting the investment-purpose representation from the Holder","Without a representation that the Holder is acquiring shares for investment and not resale, the company cannot rely on common private placement exemptions, potentially making the share issuance an unregistered securities offering.","Include a standard accredited-investor and investment-purpose representation in the Holder's warranties section, and confirm the Holder's accredited status with appropriate documentation before closing.",{"mistake":408,"why_it_matters":409,"fix":410},"Not including a long-stop date on conditions precedent","Without a termination date, both parties can be bound to an open-ended obligation to convert if conditions are never satisfied — creating strategic leverage for whichever party benefits from delay.","Add a long-stop date clause: if all conditions precedent are not satisfied by [SPECIFIC DATE], either party may terminate the agreement by written notice, with no further obligation to convert.",[412,415,418,421,424,427,430,433,436],{"question":413,"answer":414},"What is a conversion agreement?","A conversion agreement is a legally binding contract that governs the transformation of one financial instrument or legal interest into another. The most common use is converting outstanding debt — such as a loan or promissory note — into equity shares in the issuing company. It sets out the conversion price, the number of shares to be issued, any conditions that must be met, and the mechanics of closing the transaction.\n",{"question":416,"answer":417},"When is a conversion agreement used?","Conversion agreements are most frequently used when a convertible note or bridge loan matures or reaches a qualifying financing trigger and the holder elects or is required to take equity rather than repayment. They are also used when a company restructures its balance sheet by converting shareholder loans to equity, when preferred shares convert to common upon an IPO or acquisition, and when an LLC converts to a corporation and existing interests must be formally redesignated.\n",{"question":419,"answer":420},"What is the difference between a convertible note and a conversion agreement?","A convertible note is the original instrument — a loan document that contains built-in conversion rights from the outset. A conversion agreement is the separate document executed at the moment of actual conversion to formally effect the exchange of debt for equity. Think of the convertible note as the contract that creates the right, and the conversion agreement as the closing document that exercises it and records the transaction.\n",{"question":422,"answer":423},"Does a conversion agreement need to be signed by both parties?","Yes. A conversion agreement is a bilateral contract and requires execution by both the company (or debtor) and the holder (or creditor). Both signatures should be obtained before or on the conversion closing date. Conversion mechanics that occur automatically under a note's terms still benefit from a signed confirmation agreement to create a clear audit trail for the cap table, future investors, and tax authorities.\n",{"question":425,"answer":426},"What is a valuation cap and how does it affect the conversion price?","A valuation cap is a ceiling on the company valuation used to calculate the holder's conversion price, regardless of how high the next round actually values the company. If a note has a $5M valuation cap and the company raises a round at a $10M valuation, the holder converts at the $5M-implied price — receiving twice as many shares as investors in the new round. The cap rewards early investors for taking risk before the company's value was established.\n",{"question":428,"answer":429},"Are conversion agreements enforceable if there is no original written instrument to convert?","In most jurisdictions, a conversion agreement converting an oral or undocumented loan into equity faces significant enforceability risk. Courts generally require the underlying obligation to be sufficiently certain in amount and terms before a conversion can be given legal effect. If the original loan was not documented in writing, both parties should first execute a promissory note formalizing the debt, then enter the conversion agreement referencing that note. Consider consulting a lawyer in this situation.\n",{"question":431,"answer":432},"What are the tax implications of converting debt to equity?","Tax treatment typically depends on jurisdiction, but in most cases the holder must recognize accrued interest as ordinary income in the year of conversion even though no cash is received. For the company, cancellation of debt in exchange for equity can in some circumstances give rise to cancellation of indebtedness income under US tax rules, though specific exemptions may apply. Both parties should consult a tax advisor before executing a conversion agreement, as the consequences vary meaningfully by structure and jurisdiction.\n",{"question":434,"answer":435},"Can a conversion agreement include anti-dilution protection?","Yes. It is common to include anti-dilution provisions that adjust the conversion price downward if the company later issues shares at a lower price. The two main formulas are broad-based weighted average (industry standard, moderate protection) and full-ratchet (aggressive, resets the price to the new lower price regardless of the number of shares issued). Most startup investors and company counsel prefer broad-based weighted average because full-ratchet can severely dilute founders and later investors in a down round.\n",{"question":437,"answer":438},"Do I need a lawyer to prepare a conversion agreement?","For straightforward debt-to-equity conversions between known parties with a clearly documented original instrument, a high-quality template is a sound starting point. Engage a lawyer when the conversion involves a material amount, complex securities law considerations, multiple creditors, regulatory approvals, cross-border parties, or when the capitalization structure is already complex. A 2–4 hour legal review typically costs $400–$1,000 and is worthwhile for any conversion that will materially affect the company's cap table.\n",[440,444,448,452],{"industry":441,"icon_asset_id":442,"specifics":443},"Technology / SaaS","industry-saas","Bridge loans and SAFE agreements converting at series priced rounds, often with valuation caps and discount rates that must be precisely modeled against the round's pre-money valuation.",{"industry":445,"icon_asset_id":446,"specifics":447},"Real estate","industry-real-estate","Mezzanine debt or preferred equity instruments converting to full equity ownership upon a development milestone or refinancing event, with conversion prices tied to appraised asset valuations.",{"industry":449,"icon_asset_id":450,"specifics":451},"Financial services","industry-fintech","Regulated convertible instruments subject to additional securities and banking regulatory requirements, including potential approval from financial regulators before conversion can close.",{"industry":453,"icon_asset_id":454,"specifics":455},"Manufacturing","industry-manufacturing","Shareholder or related-party loans converted to equity to improve debt-to-equity ratios ahead of acquisition, refinancing, or a strategic partnership requiring a cleaner balance sheet.",[457,460,464,468],{"vs":234,"vs_template_id":458,"summary":459},"D{CONVERTIBLE_NOTE_ID}","A convertible note agreement is the original lending document that creates the debt and embeds future conversion rights from the outset. A conversion agreement is the closing document executed when those rights are actually exercised, formally extinguishing the debt and issuing shares. You need both: the note creates the right; the conversion agreement exercises it.",{"vs":461,"vs_template_id":462,"summary":463},"SAFE Agreement","D{SAFE_AGREEMENT_ID}","A SAFE (Simple Agreement for Future Equity) is not debt — it carries no interest or maturity date and converts automatically on a triggering event without requiring a separate conversion agreement. A conversion agreement is used with instruments that are structured as debt or have more complex conversion conditions. SAFEs are simpler to execute but offer less flexibility in negotiating conversion mechanics.",{"vs":465,"vs_template_id":466,"summary":467},"Share Purchase Agreement","D{SHARE_PURCHASE_ID}","A share purchase agreement involves a new cash investment in exchange for shares. A conversion agreement involves no new cash — it exchanges an existing financial claim (debt or another instrument) for equity. The economics and legal mechanics differ materially: a share purchase increases the company's cash, while a conversion improves its balance sheet by reducing liabilities.",{"vs":252,"vs_template_id":469,"summary":470},"D{DEBT_RESTRUCTURING_ID}","A debt restructuring agreement modifies the terms of existing debt — extending maturity, reducing interest, or deferring payments — without necessarily converting it to equity. A conversion agreement terminates the debt relationship entirely by exchanging the outstanding balance for ownership. Restructuring preserves the creditor relationship; conversion ends it.",{"use_template":472,"template_plus_review":476,"custom_drafted":480},{"best_for":473,"cost":474,"time":475},"Simple debt-to-equity conversions between two known parties with a clearly documented original instrument and a straightforward cap table","Free","30–60 minutes",{"best_for":477,"cost":478,"time":479},"Conversions involving material amounts, valuation caps and discounts, anti-dilution provisions, or parties in different jurisdictions","$400–$1,000","2–5 days",{"best_for":481,"cost":482,"time":483},"Complex multi-creditor conversions, regulated industries, cross-border transactions, or any conversion that materially restructures the company's cap table ahead of a significant financing event","$2,000–$8,000+","1–3 weeks",[485,490,495,500],{"code":486,"name":487,"flag_asset_id":488,"note":489},"us","United States","flag-us","Debt-to-equity conversions must comply with federal and state securities laws — share issuances typically rely on Regulation D exemptions, requiring the holder to be an accredited investor. Delaware corporate law governs most startup conversions and imposes specific requirements on board authorization for share issuances. Cancellation of indebtedness rules under the Internal Revenue Code may create taxable income for the company in certain conversion structures; consult a tax attorney before closing.",{"code":491,"name":492,"flag_asset_id":493,"note":494},"ca","Canada","flag-ca","Share issuances on conversion must comply with applicable provincial securities legislation, typically relying on the accredited investor or private issuer exemptions. In Ontario and British Columbia, board resolutions authorizing the specific share issuance are required. Quebec-based transactions may require French-language documentation for provincially regulated entities. The Canada Revenue Agency treats accrued interest as income to the holder in the taxation year of conversion regardless of cash receipt.",{"code":496,"name":497,"flag_asset_id":498,"note":499},"uk","United Kingdom","flag-uk","Conversions of debt to equity are generally exempt from the UK's financial promotion restrictions when conducted between sophisticated parties, but compliance with the Companies Act 2006 requirements for share allotment — including directors' authority and pre-emption rights waivers — is mandatory. HMRC treats accrued interest as income in the period it arises regardless of conversion. Enterprise Investment Scheme or Seed EIS tax reliefs may be affected by the terms of the convertible instrument, and early specialist advice is recommended.",{"code":501,"name":502,"flag_asset_id":503,"note":504},"eu","European Union","flag-eu","Securities law requirements vary significantly by member state, but the EU Prospectus Regulation exempts most private conversion transactions from prospectus requirements when offered to fewer than 150 persons per member state. GDPR considerations apply when personal data of the holder is processed as part of the transaction. Several member states — including Germany and France — require notarization of share transfer documents; confirm local requirements before closing. Tax treatment of converted accrued interest varies by member state and should be confirmed with local counsel.",[506,507,508,509,510,511,512,513,514,515,516,517],"non-disclosure-agreement-nda-D12692","shareholders-agreement-D1016","purchase-order-D1411","promissory-note-D434","loan-agreement-D417","independent-contractor-agreement-D160","letter-of-intent_acquisition-of-business-D5197","term-sheet-D473","service-agreement-D12711","investment-agreement-D12831","partnership-agreement-D12704","employment-agreement_at-will-employee-D541",{"emit_how_to":199,"emit_defined_term":199},{"primary_folder":95,"secondary_folder":520,"document_type":521,"industry":522,"business_stage":523,"tags":524,"confidence":529},"equity-and-mergers","agreement","general","startup",[525,526,527,528],"fundraising","equity","conversion-agreement","debt-to-equity",0.92,"\u003Ch2>What is a Conversion Agreement?\u003C/h2>\n\u003Cp>A \u003Cstrong>Conversion Agreement\u003C/strong> is a legally binding contract that formally governs the transformation of one financial instrument or legal interest into another — most commonly the exchange of an outstanding debt obligation for equity ownership in a company. When a startup's convertible note reaches its trigger event, when a shareholder loan is restructured into shares, or when preferred equity converts to common stock on an exit, the conversion agreement is the closing document that records the terms, extinguishes the original instrument, and establishes the new ownership relationship. Without it, the transaction exists only in informal communications and unenforceable oral understandings, leaving both parties exposed to disputes over the number of shares issued, the applicable conversion price, and whether the original debt was truly satisfied.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>The consequences of converting a financial instrument without a properly executed conversion agreement are concrete and serious. A creditor who converts a loan without formal documentation retains the legal ability to argue the debt was never satisfied — potentially asserting both a shareholder and a creditor claim simultaneously, particularly in an insolvency. Without a signed agreement specifying the conversion price and share class, the company may face cap table disputes that block future financing rounds, since investors and their counsel will find unexplained discrepancies in the equity register. Tax authorities in every major jurisdiction treat accrued interest as income in the year of conversion regardless of whether cash changed hands — an undocumented transaction leaves both parties without the records needed to support their respective tax filings. A well-prepared conversion agreement closes all of these gaps in a single closing package: it cancels the original instrument, issues shares on agreed terms, and creates the audit trail that future lenders, investors, and regulators will require.\u003C/p>\n",1778696287907]