Board Resolutions: Issuance and Sale of Convertible Notes under a Note Purchase Agreement

Summary

This board resolutions template includes board resolutions to approve the issuance and sale of convertible notes pursuant to a note purchase agreement in the seed-stage financing of a startup company. This template includes practical guidance, drafting notes, alternate clauses, and optional clauses. A convertible note is a loan with interest that converts into preferred or common stock upon certain events. Early stage companies use convertible notes in place of equity for early seed financing before their initial preferred stock financing. These resolutions may be customized for many different types of note financing transactions, including subordinated notes, secured notes, or notes issued together with warrants, but should be tailored to reflect the specific details of the contemplated financing. For a full listing of key content for in-house counsel and corporate secretaries when performing corporate functions, see In-House Corporate Secretary Resource Kit. For further information on various seed financing options, including simple agreements for future equity (SAFEs) and convertible notes, see Seed Financing Options Checklist, Seed Financing: Convertible Note or SAFE, and Convertible Notes. For additional resources related to start-up seed financing, see Start-Up Seed Financing Resource Kit. For templates related to convertible note financing, see Convertible Note (Note Purchase Agreement), Note Purchase Agreement, Convertible Note Financing Checklist, Convertible Note (Standalone), Board Resolutions: Issuance and Sale of Standalone Note, and Term Sheet (Convertible Note). For more on board resolutions generally, see Board Resolutions for Capital Markets Transactions Resource Kit.