Subordinated Convertible Promissory Note (Genie AI)

The legal template for a Subordinated Convertible Promissory Note (Genie AI) is a written agreement that outlines the terms and conditions under which a lender provides a loan to a borrower, specifically relating to the convertible promissory note issued by Genie AI.

A convertible promissory note is a financial instrument that represents a debt owed by the borrower (Genie AI) to the lender. It allows the lender to convert the debt into equity or ownership in the borrower's company at a later stage, usually upon the occurrence of certain events or milestones, such as a subsequent financing round or the sale of the borrower's company.

The template covers crucial information such as the principal amount of the loan, the interest rate applied, the repayment terms, any default provisions, and the conversion terms for converting the debt into equity. It may also include provisions on subordination, which means that the lender agrees to prioritize the repayment of the loan below other debts in the event of the borrower's bankruptcy or insolvency.

The purpose of this legal template is to provide a standardized framework that ensures both the lender and the borrower understand their rights, obligations, and commitments concerning the loan and the potential conversion of debt into equity. It serves to protect the interests of both parties and establishes clear guidelines for future transactions, ultimately promoting transparency and reducing the likelihood of disputes or misunderstandings.