Capital Notes Sample Clauses
The Capital Notes clause defines the terms and conditions under which a company issues capital notes, which are a form of debt instrument that can often be converted into equity under certain circumstances. This clause typically outlines the interest rate, maturity date, conversion triggers, and rights of noteholders, such as priority in repayment or participation in future financing rounds. Its core practical function is to provide a flexible financing mechanism for companies, allowing them to raise capital while deferring valuation discussions and offering investors a structured path to potential equity ownership.
Capital Notes. 1.01 Company shall issue its Capital Notes, in the maximum total principal sum of $5,000,000 with the same being in the series, maturing on the dates, and bearing interest at the rates enumerated on Exhibit A attached hereto, which said Capital Notes shall constitute those issued under and pursuant to this Indenture. Such Capital Notes shall be issued in denominations of multiples of $1,000.
1.02 The Capital Notes to be issued under and pursuant to the terms hereof shall be in the form attached hereto as Exhibit B.
1.03 All Capital Notes issued pursuant to this Indenture shall be issued directly to the registered owners as to principal and interest, and shall be transferable by the registered owner in person or by duly authorized attorney at the office of the Company upon surrender and cancellation of the original Capital Note, at which time a new registered Capital Note(s) shall be executed and delivered by Company in lieu thereof with the same registered in the name of the transferee or transferees. Each Capital Note issued in consummation of an assignment and transfer of an original issue, or any subsequent Capital Notes issued and outstanding under the terms hereof, shall be appropriately recorded by both Company and by Trustee.
1.04 All Capital Notes issued under and pursuant to this Indenture shall be certified by Trustee and shall not be valid for any purpose until so certified. Whenever a Capital Note is surrendered for transfer or assignment and a new Capital Note issued in lieu thereof, the same shall be certified at that time by Trustee prior to its delivery to the registered owner or owners.
1.05 All Capital Notes issued under the terms hereof shall have equal priority as to principal. Upon the happening of an "event of default," all interest due and unpaid on that date on all Capital Notes issued and outstanding shall have priority over any principal amounts of such Capital Notes, and shall be paid ratably either in money or property among the Capital Note holders to whom the said unpaid interest is due and owing, and no payment of principal shall be made until all said unpaid interest has been paid and discharged in full. Following payment of the interest, the principal sums due and unpaid on all Capital Notes issued and outstanding as of that date shall then be paid. For the purpose of principal payment, whether by virtue of distribution of money or property, priority with respect thereto shall be equal between all such outstanding Capital N...
Capital Notes. Prior to the Closing each of the Sellers shall assign to the Buyer, for no consideration, all capital notes issued to such Seller by the Company (the “Capital Notes”), a form of the Capital Notes assignment is attached hereto as Annex C.