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Convertible Bond Agreement Template for New Zealand

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Key Requirements PROMPT example:

Convertible Bond Agreement

"I need a Convertible Bond Agreement for my New Zealand technology startup to raise NZD 2 million from three investors, with automatic conversion on a qualifying funding round and a 20% discount on conversion price."

Document background
A Convertible Bond Agreement is typically used by growth-stage companies in New Zealand seeking to raise capital while deferring equity dilution. This document is particularly relevant when companies need significant funding but want to postpone setting a firm valuation, or when investors seek the security of debt with potential equity upside. The agreement comprehensively details the terms of the convertible bonds, including principal amount, interest rate, maturity date, conversion price, and trigger events. It must comply with New Zealand's financial markets regulations and securities laws, particularly the Financial Markets Conduct Act 2013. The document is structured to protect both the issuing company's interests and bondholders' rights, including specific provisions for conversion mechanics, events of default, and security arrangements if applicable.
Suggested Sections

1. Parties: Identification of the issuer and the bondholder(s)

2. Background: Context of the agreement, including company's intent to issue convertible bonds and bondholder's intent to subscribe

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Bond Terms: Core terms including principal amount, interest rate, maturity date, and face value

5. Subscription and Issuance: Process and conditions for subscribing to and issuing the bonds

6. Interest: Interest calculation, payment dates, and payment mechanisms

7. Conversion Rights: Terms and conditions under which bonds can be converted to shares

8. Conversion Procedure: Detailed process for exercising conversion rights

9. Company Covenants: Issuer's obligations and undertakings

10. Events of Default: Circumstances constituting default and consequences

11. Representations and Warranties: Standard representations by both parties

12. Transferability: Terms governing transfer of bonds

13. Notices: Communication requirements and contact details

14. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and amendments

Optional Sections

1. Security: Include when bonds are secured against company assets

2. Guarantee: Include when there is a guarantor for the bonds

3. Negative Pledge: Include to restrict company's ability to create security over its assets

4. Anti-dilution Provisions: Include to protect bondholders from dilution through corporate actions

5. Tag-Along Rights: Include when bondholders are given right to participate in sale of company shares

6. Redemption Rights: Include when early redemption options are available

7. Information Rights: Include when bondholders are given specific information access rights

8. Board Observer Rights: Include when bondholders are given right to appoint board observer

Suggested Schedules

1. Bond Certificate Form: Template for the physical or electronic bond certificate

2. Conversion Notice: Form of notice for exercising conversion rights

3. Calculation Methods: Detailed procedures for calculating interest, conversion price adjustments

4. Company Information: Key company details including capital structure and existing securities

5. Shareholders' Agreement Terms: Key terms that will apply to bondholders upon conversion

6. Security Documents: If secured, details of security arrangements and priority

7. Payment Schedule: Schedule of interest payment dates and amounts

8. Corporate Authorizations: Copies of relevant board and shareholder resolutions

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Technology

Healthcare

Biotechnology

Renewable Energy

Financial Services

Manufacturing

Software Development

E-commerce

Agriculture Technology

Real Estate

Infrastructure

Education Technology

Clean Technology

Relevant Teams

Legal

Finance

Treasury

Corporate Development

Compliance

Risk Management

Board of Directors

Company Secretariat

Investment

Corporate Finance

Relevant Roles

Chief Financial Officer

Finance Director

Corporate Lawyer

Investment Manager

Company Secretary

Chief Executive Officer

Treasury Manager

Financial Controller

Investment Banker

Legal Counsel

Compliance Officer

Board Director

Corporate Finance Manager

Risk Manager

Business Development Director

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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