Capital Waters Convertible v2.0

Since the launch of our Capital Waters convertible loan agreement in April last year we have received a lot of much appreciated feedback from our user base, for which a big thank you!

Taking into account the feedback and after having made extensive use of the convertible in various investment rounds, we decided to make a few tweaks so as to make our convertible even better and easier to use.

We have simplified both the Term Sheet and the convertible itself some more and made a few minor textual improvements. Moreover, a Take-Over (an acquisition or another event pursuant to which control over the company is transferred) no longer results in an automatic conversion but instead entitles the lender to payment of an amount equal to (standard) two times the loan plus interest. We are of the opinion that this is more in line with market practice, is easier in execution than conversion of the loan and provides more certainty to parties given that conversion – depending on the situation – may sometimes result in the conversion shares immediately having to be transferred due to for instance drag-along rights being effectuated and sometimes merely will result in an issuance of shares to the lenders, thus having various potential outcomes instead of one clear one.

The new version can be downloaded here, both in English and Dutch.

Should you have any questions or remarks regarding the revised Capital Waters convertible loan agreement, please let us know. As always we love to receive your feedback as well as any suggestions for other investment related documentation you would like to see. Make sure to check in on www.capitalwaters.nl regularly since there are some exciting new documents and other things planned for 2016!

Finally, as always bear in mind that the use of our documentation is at your own risk, so please read the disclaimer.

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