Goodwin has created Model Form Bridge Financing Documents to facilitate providing urgent capital to US-based portfolio companies to enable them to make payroll and satisfy other immediate obligations.
- Unsecured Demand Note with PIK (quarterly PIK)
- Unsecured Demand Note without PIK (accrual to maturity)
- Secured Demand Note with PIK (quarterly PIK)
- Secured Demand Note without PIK (accrual to maturity)
- SAFE (with a step-up discount mechanism)
These forms are for informational purposes only and do not constitute legal or any other advice on any particular matter.
Please note these are highly simplistic forms which do not necessarily provide adequate protection to the investor or adequately address situation-specific factors which could cause a loan to be recharacterized as an equity investment. In addition, investors may wish to add company-specific restrictive covenants (for example, prohibitions on additional debt incurrence or a change of control), ongoing financial reporting obligations and/or other provisions. These forms do not address usury law and/or choice of law considerations, nor have they considered lending licensing laws or all other applicable laws, regulations, considerations or implications. These forms do not address governance issues or whether board or stockholder approval or third-party consent is required for such transactions, nor do they address whether the bridge financing is a conflict of interest transaction or may trigger a rights offering. The forms are insufficient to grant a perfected or priority lien against any collateral, and additional filings and asset-specific actions would be necessary to accomplish such perfection.
You should consult with an attorney licensed to practice in your jurisdiction, as well as tax and other relevant advisors, rather than relying on these forms, and you should not use these forms without obtaining proper legal, tax, and other professional advice.
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