Templte convertile lon greement User notes This is simple convertile lon greement intended to e used when shreholder lends money to compny, generlly s form of ridging finnce until n expected event tkes plce (e.g. the signing of lrge commercil greement or cpitl rising round. The lon is to e drwn down on one dte, is unsecured nd is repyle nd convertile (from the conversion dte t the compny s discretion. Becuse the lon cn e repid or converted t the compny s option, this convertile lon is effectively qusi-equity nd is fvourle to the compny - depending on the interest rte nd/or shre conversion price. This lon greement does not contin the lender-friendly provisions which would usully e included in lon greements documenting lons from unrelted third prties. Under New Zelnd securities legisltion, compny my not issue (or offer to issue shres, options or other securities without eing stisfied tht n exclusion to the informtion disclosure requirements of the Finncil Mrkets Conduct Act 2013 pplies in reltion to tht offer or issue. Plese see Simmonds Stewrt guidnce note: New Zelnd securities lw requirements for cpitl rising y privte technology compnies under the fund rising section of the templtes pge of our wesite for n explntion of the relevnt exclusions. note pplies efore it offers to issue, or issues, shres. using this templte The User Notes nd the sttements in the footer elow (ll mrked in red re included to ssist in the preprtion of this document. They re for reference only you should delete ll user notes nd the sttements in the footer from the finl form of your document. The use of [squre rckets] round lck text mens tht: the requested detils need to e inserted there re different options for you to consider within cluse the whole cluse is optionl nd you need to consider whether to include it, sed on the compny s circumstnces nd the user notes. Before finlising your document, check for ll squre rckets to ensure you hve considered the relevnt option nd ensure tht ll squre rckets hve een deleted. If you delete ny cluses or schedules, rememer to cross reference check the document. A compny must ensure tht n exemption or exclusion descried in tht guidnce This templte document is provided for guidnce purposes only. We recommend you otin the help of qulified lwyer to complete it. Use of this document is suject to the terms nd conditions set out t www.simmondsstewrt.com/templtes.
CONVERTIBLE LOAN AGREEMENT DATE PARTIES 1 [User note: Use this description if the lender is compny.] [INSERT NAME OF COMPANY] LIMITED, compny numer [insert compny numer] (Lender [User note: Use this description if the lender is n individul.] [INSERT] (Lender [User note: Use this description if the lender is trust. Ech trustee of the trust must e included s prty to nd sign this greement. Include here the nme nd ddress of ech trustee of the trust.] [INSERT], [INSERT] nd [INSERT] s trustees of [insert nme of trust] (together, the Lender 2 [User note: Use this description for the orrowing compny.] [INSERT NAME OF COMPANY] LIMITED, compny numer [Insert compny numer] (Compny AGREEMENT The Lender hs greed to provide to the Compny convertile lon on the terms set out in this Agreement. SIGNED for nd on ehlf of [INSERT NAME OF COMPANY] LIMITED y: Signture of uthorised signtory Print full nme of uthorised signtory [User note: Use the following signture lock if the Lender is compny.] SIGNED for nd on ehlf of [INSERT NAME OF COMPANY] LIMITED y: Signture of uthorised signtory Print full nme of uthorised signtory
Confidentil [User note: Use the following signture lock if the Lender is n individul.] SIGNED y [INSERT NAME OF INDIVIDUAL]: Signture [User note: Use the following signture lock if the Lender is trust. Ech trustee of the trust must sign the greement. Insert this signture lock for ech trustee.] SIGNED y [INSERT NAME OF TRUSTEE] s trustee of the [INSERT NAME OF TRUST]: Signture of [Insert nme of trustee]
Confidentil TERMS OF THIS AGREEMENT 1 INTERPRETATION 1.1 Definitions: In this Agreement, unless the context requires otherwise: Definition Agreement Cpitl Rise Conversion Conversion Dte Mening this Agreement including ny schedule ttched to it. the issue y the Compny of shres or other securities for cpitl rising purposes fter the dte of this Agreement, under which the Compny rises not less thn $[insert]. the conversion of n mount of the Lon into Shres under cluse 4. the erlier of: the dte of Cpitl Rise; nd the dte tht is [12] months fter the dte of this Agreement. Conversion Notice hs the mening given in cluse 4.1. Conversion Price where no Cpitl Rise hs occurred y the Conversion Dte, [insert price] per Shre; or where Cpitl Rise hs occurred y the Conversion Dte, the lowest price per Shre t which Shres or other securities in the Compny were issued under the Cpitl Rise, less [20]%. [User note: Consider crefully the rte t which the lon will convert. For exmple, if the lon is eing mde to provide ridging finnce to the Compny pending cpitl rise, the shreholder my wnt the conversion price to e reltively low if the Compny is not le to rise tht cpitl.] Defult Interest Rte Drwdown Dte [insert]% per nnum. [insert dte] or such other dte s the prties gree. Event of Defult hs the mening given in cluse 8.1. Interest Rte [insert]% per nnum. 3
Confidentil Lon Purpose Repyment Dte Shres $[insert mount of lon] or the principl mount outstnding under tht lon from time to time. [insert purpose of Lon, i.e. wht the Compny is rising the lon for.] [insert dte or description of dte on which the Lon ecomes repyle. E.g. the first nniversry of the dte of this Agreement]. ordinry shres in the Compny. 1.2 Interprettion: A reference to: i ii iii iv v vi cluse or schedule is to cluse in or schedule to this Agreement; person includes ody corporte, n ssocition of persons (whether corporte or not, trust, governmentl or other regultory ody, uthority or entity, in ech cse whether or not hving seprte legl personlity; including nd similr words do not imply ny limittion; sttute includes references to tht sttute s mended or replced from time to time; prty is reference to prty to this Agreement, nd includes tht prty s permitted successors nd permitted ssigns; nd $ or dollrs re to New Zelnd currency. c The hedings in this Agreement re for convenience only nd hve no legl effect. The singulr includes the plurl nd vice vers. 2 CONDITIONS This Agreement is conditionl on: the Compny delivering to the Lender resolutions of the directors of the Compny uthorising the execution of this Agreement nd the issue of Shres on conversion of the Lon in ccordnce with this Agreement; nd [User note: See Simmonds Stewrt Templte resolutions uthorising issue of convertile lon for directors resolution pproving the execution of convertile lon greement nd the issue of shres under it.] 4
Confidentil the Compny eing stisfied (cting resonly tht n exclusion to the informtion disclosure requirements of the Finncil Mrkets Conduct Act 2013 pplies in reltion to the issue of the Conversion Shres. [User note: Plese see Simmonds Stewrt guidnce note: New Zelnd securities lw requirements for cpitl rising y privte technology compnies for n explntion of the relevnt exclusions. A compny must ensure tht one of the exclusions descried in tht guidnce note pplies efore it tkes the lon.] 3 THE LOAN 3.1 Lon: The Lender must mke the Lon ville to the Compny in one drwing only on the terms set out in this Agreement. 3.2 Drwdown: The Lender must py the full mount of the Lon to the Compny on the Drwdown Dte in clered funds into the nominted ccount of the Compny. 3.3 Purpose: The Compny must use ll mounts drwn down only for the Purpose or for ny other purpose pproved y the Lender. 4 CONVERSION 4.1 Conversion y notice: At ny time on or fter the Conversion Dte, the Compny my y notice in writing to the Lender convert the Lon to Shres in the Compny (Conversion Notice. Within seven dys fter the dte of tht notice, the Compny must: convert the Lon, together with ll interest ccrued on it, into Shres y pplying such mount to suscrie for Shres t the Conversion Price; nd issue to the Lender those Shres. 4.2 Issue of Shres: Shres issued on Conversion will e credited s fully pid nd rnk pri pssu with ll other ordinry shres of the Compny then in issue. 4.3 Frctionl entitlements: The numer of Shres to e issued to the Lender will e rounded up to the nerest whole numer in the event of frctionl entitlement. 4.4 Adjustment: If there is ny onus issue, consolidtion or sudivision of ny Shres or ny reduction or cncelltion of shre cpitl (or ny similr reorgnistion of the cpitl of the Compny, the Conversion Price will e djusted y the Compny, if necessry, to ensure tht the economic effect of the Conversion remins the sme. 5 INTEREST The Compny must py interest on the Lon t the Interest Rte, ccruing nd compounding monthly nd pyle on the dte of repyment of the Lon (except tht if the Lon is not repid in full on the Repyment Dte, ll interest outstnding t ny time will then e pyle y the Compny on demnd in ccordnce with cluse 6.1. 5
Confidentil 6 REPAYMENT AND PREPAYMENT 6.1 Repyment of Lon: The Compny will repy the Lon, together with ll interest ccrued on it, within five Business Dys fter receipt of written demnd from the Lender provided tht the Lender must not give ny written demnd: efore the Repyment Dte; or fter receipt of Conversion Notice. 6.2 Prepyment: At ny time fter the Drwdown Dte, the Compny my prepy ll or ny prt of the Lon, together with ll interest ccrued on it up to the dte of pyment. 6.3 Defult interest: If the Compny does not py ny sum pyle y it under this Agreement s nd when due (nd in the mnner provided in this Agreement it must py interest t the Defult Interest Rte on tht unpid sum (insted of interest under cluse 5 from the due dte to the dte of ctul pyment, oth efore nd fter judgment. Defult interest will ccrue dily nd will e clculted on the sis of yer of 365 dys nd the ctul numer of dys elpsed. Defult interest will e due nd pyle immeditely on demnd. 7 COMPANY S UNDERTAKINGS While the Lon remins outstnding, the Compny: will notify the Lender promptly in writing upon the occurrence of n Event of Defult nd provide sttement of steps eing tken to remedy the Event of Defult; nd will not, unless pproved in writing y the Lender: i ii mke ny mteril chnge to the usiness crried on y it t the dte of this Agreement; enter into ny trnsction involving the sle, trnsfer or other disposl of: ny mteril proportion of the Compny s ssets; or ny shres or other interest in ny susidiry (s defined in the Compnies Act 1993 of the Compny; or iii py ny dividend or mke ny other distriutions in respect of its shres. 8 EVENTS OF DEFAULT 8.1 Defult: An Event of Defult will hve occurred if ny of the following occurs: rech of ny term of this Agreement y the Compny; 6
Confidentil if: i ii iii n order is mde, resolution pssed or legl proceedings issued (other thn proceeding which, in the resonle opinion of the Lender, is vextious or frivolous, or corporte ction is tken, notice given or other step tken for the dissolution of the Compny; liquidtor, receiver, mnger, sttutory mnger, inspector, trustee or other similr person is ppointed in respect of the Compny or some or ll of its ssets; or ny distress, ttchment, or execution is levied, issued, enforced or otined on or ginst ll or sustntilly ll of the Compny s ssets; or c ny security over the ssets of the Compny is enforced. 8.2 Accelertion: Despite ny other provision of this Agreement, t the time of or t ny time fter the occurrence of ny Event of Defult, the Lender, without limiting ny other rights it might hve, my y notice to the Compny declre ll or ny prt of the Lon, together with ll interest ccrued on it, immeditely due nd pyle, in which cse those mounts will ecome immeditely due nd pyle. 9 WARRANTIES Ech prty represents nd wrrnts to the other tht the following is true s t the dte of this Agreement: c if it is Compny, it is duly incorported nd vlidly existing under the lws of New Zelnd; it hs the power, nd, if it is compny, hs tken ll necessry ction (including the pssing of ll resolutions nd otining ny necessry consents to enter into, execute nd deliver, nd exercise its rights, nd perform its oligtions, under this Agreement; nd it hs vlidly executed nd delivered this Agreement nd its oligtions under this Agreement re legl, vlid nd inding nd this Agreement is enforcele ginst it in ccordnce with its terms. 10 INDEPENDENT TRUSTEES The liility of ny independent trustee under this Agreement is not n unlimited or personl liility nd insted is limited to the funds from time to time elonging to the trust on ehlf of which he hs entered into this Agreement, in the proper course of the dministrtion of tht trust. In this cluse, n independent trustee is ny prty who hs signed this greement in his cpcity s the trustee of trust nd who is not eneficiry of the trust nor hs ny right to, or interest in, ny of the ssets of the trust except in his cpcity s trustee of tht trust. 7
Confidentil 11 GENERAL 11.1 Confidentility: Ech prty must keep this Agreement nd informtion it receives out the Compny nd its usiness in connection with this Agreement (Confidentil Informtion confidentil, nd must not use or disclose tht Confidentil Informtion without the prior written consent of the other prty except to the extent tht: c d disclosure is required y lw; the relevnt informtion is lredy in the pulic domin; it is resonly required to otin professionl dvice; or it is resonly necessry in connection with ny proposed: finncing of tht prty; sle of tht prty s interest in the Compny; or sle of ll or prt of the usiness of, or the shres in, tht prty, nd the prty receiving the Confidentil Informtion hs entered into confidentility undertkings sustntilly the sme s those set out in this cluse. 11.2 Notices: All notices nd communictions given under this Agreement must e in writing nd will e delivered personlly, sent y post or sent y emil to the ddress or emil ddress set out in the Schedule (or t such other ddress s notified from time to time y the prty chnging its ddress. 11.3 Time of service: Any notice given under this Agreement will e deemed to e vlidly given: c in the cse of delivery, when received; in the cse of posting, on the second dy following the dte of posting; or if emiled, one hour fter the emil is sent unless return emil is received y the sender within tht one hour period stting tht the ddressee s emil ddress is wrong or tht the messge cnnot e delivered, provided tht ny notice received fter 5 pm on Business Dy or on ny dy tht is not Business Dy will e deemed to hve een received on the next Business Dy. 11.4 Entire greement: This Agreement contins ll of the terms, representtions nd wrrnties mde etween the prties relting to the mtters delt with in this Agreement nd supersedes nd cncels ll prior discussions nd greements covering the suject mtter of this Agreement. The prties hve not relied on ny representtion, wrrnty or greement relting to the mtters delt with in this Agreement tht is not expressly set out in this Agreement, nd no such representtion, wrrnty or greement hs ny effect from the dte of this Agreement. 8
Confidentil Without limiting the previous sentence, the prties gree to contrct out of sections 9, 12A nd 13 of the Fir Trding Act 1986. 11.5 Further ssurnces: The prties must ech sign ll further documents, pss ll resolutions nd do ll further things s my e necessry or desirle to give effect to this Agreement. 11.6 Amendment: This Agreement my only e mended y greement of the prties in writing. 11.7 Wiver: No exercise or filure to exercise or dely in exercising ny right or remedy will constitute wiver y tht prty of tht or ny other right or remedy ville to it. 11.8 No ssignment: No prty my ssign ny of its rights or oligtions under this Agreement without the prior written consent of the other prties. 11.9 Costs: Except s otherwise provided in this Agreement, the prties will meet their own costs relting to the negotition, preprtion nd implementtion of this Agreement. 11.10 Prtil invlidity: If ny provision of this Agreement ecomes invlid or unenforcele to ny extent, the reminder of this Agreement nd its ppliction will not e ffected nd will remin enforcele to the gretest extent permitted y lw. 11.11 Signture: This Agreement my e executed in two or more counterprts, ech of which is deemed n originl nd ll of which constitute the sme Agreement. A prty my enter into this Agreement y signing nd sending (including y emil counterprt copy to ech other prty. 11.12 Governing lw nd jurisdiction: This Agreement will e governed y New Zelnd lw, nd the prties sumit to the non-exclusive jurisdiction of the New Zelnd courts. 9
Confidentil SCHEDULE Detils for notices Compny Contct Nme: Compny: Address (Physicl Address & PO Box: Emil ddress: Lender Contct Nme: Compny: Address (Physicl Address & PO Box: Emil ddress: This templte document is provided for guidnce purposes only. We recommend you otin the help of qulified lwyer to complete it. Use of 10