| name | convertible-note-purchase-agreement |
| title | Convertible Note Purchase Agreement |
| description | Drafts a company-side Convertible Note Purchase Agreement for U.S. early-stage convertible debt financings. Structures note economics, conversion mechanics, reps and warranties, closing conditions, covenants, default provisions, and miscellaneous terms. Use when drafting a convertible note purchase agreement, bridge note, convertible debt financing, or SAFE alternative for a startup or early-stage company. |
| author | CaseMark |
| author_url | https://github.com/CaseMark/skills/tree/main/skills/legal/convertible-note-purchase-agreement |
| license | Apache-2.0 |
| version | 0.1.0 |
| execution_mode | open |
| jurisdiction | us |
| practice | finance |
| language | en |
Convertible Note Purchase Agreement
Drafts a company-side CNPA for U.S. early-stage convertible debt financings. Covers the full agreement from preamble through miscellaneous provisions.
Prerequisites
Gather before drafting:
- Parties — legal names, jurisdictions, authorized signatories (issuer + each purchaser)
- Economics — aggregate principal, purchase price, interest rate (simple/compound), maturity date, valuation cap, discount rate
- Conversion mechanics — qualified financing threshold, optional conversion triggers, conversion price formula
- Cap table — all outstanding equity and debt (for rep accuracy)
- Authorization — term sheet or board resolution confirming deal economics
- Use of proceeds — stated business purpose
Drafting Workflow
1. Preamble
Date, full legal names, recitals stating financing purpose and issuance authority.
2. Purchase and Sale of Notes
- Note description: aggregate principal, per-note denomination, series designation
- Purchase price: face value or specify OID if issued at discount
- Closing mechanics: date, wire instructions, deliverables (executed notes to Purchasers; funds to Company)
3. Company Representations and Warranties
Include reps for: organization and good standing, corporate authority (board authorization, no charter/bylaw conflicts), capitalization (fully-diluted cap table with all convertible instruments), no material litigation, compliance with law, financial statement accuracy, no default under material agreements, and use of proceeds.
4. Purchaser Representations and Warranties
Include reps for: accredited investor status under Rule 501 [VERIFY], investment intent (own account, not for distribution), restricted securities acknowledgment, sophistication and ability to bear loss, and independent investigation.
5. Conditions to Closing
- Reps and warranties true as of closing
- All pre-closing covenants performed
- No material adverse change
- Legal opinion from Company counsel (if required)
- All ancillary documents executed (side letters, ROFR waivers)
- Board/stockholder approvals obtained
- No injunction or legal prohibition
6. Post-Closing Covenants
- Use of proceeds restricted to stated purpose
- Financial reporting to Noteholders (specify frequency/format)
- Additional indebtedness: parity or subordination rules
