Convertible Debenture

Letterhead

{{company_name}}

{{company_address}}

Phone: {{company_phone}}

Email: {{company_email}}

Website: {{company_website}}

CONVERTIBLE DEBENTURE

THIS CONVERTIBLE DEBENTURE (this “Debenture”) is issued on this {{date_of_issue}} by and between:

{{company_name}}, a company duly incorporated under the laws of [Relevant African Country, e.g., Kenya] with company registration number {{company_registration_number}} and having its registered office at {{company_address}} (the “Company”); and

{{investor_name}}, an individual residing at {{investor_address}} / a company duly incorporated under the laws of [Relevant African Country] with company registration number {{investor_registration_number}} and having its registered office at {{investor_address}} (the “Holder”).

1. PRINCIPAL AMOUNT

FOR VALUE RECEIVED, the Company promises to pay to the order of the Holder, the principal sum of {{currency_symbol}}{{principal_amount}} ({{principal_amount_words}}) on the Maturity Date (as defined below), or earlier as provided herein, and to pay interest on the outstanding principal amount in accordance with the terms set forth below.

2. INTEREST

Interest shall accrue on the outstanding principal amount of this Debenture at an annual rate of {{interest_rate}}% (the “Interest Rate”), compounded {{compounding_frequency}}. Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed. Accrued interest shall be payable {{interest_payment_frequency}}.

3. MATURITY DATE

Unless converted earlier pursuant to Section 5, the entire outstanding principal amount of this Debenture, together with all accrued and unpaid interest thereon, shall become due and payable on {{maturity_date}} (the “Maturity Date”).

4. PAYMENT

All payments of principal and interest hereunder shall be made in {{currency_name}} ({{currency_code}}) in immediately available funds to the Holder at the address set forth above or such other address as the Holder may designate in writing to the Company. The Company shall be entitled to prepay this Debenture in whole or in part at any time without penalty, provided that all accrued interest up to the date of prepayment is also paid.

5. CONVERSION

5.1. Automatic Conversion upon Equity Financing:

Immediately prior to the closing of the next bona fide equity financing round of the Company in which the Company raises gross proceeds of at least {{minimum_financing_amount}} (a “Qualified Financing”), the outstanding principal amount of this Debenture and all accrued and unpaid interest thereon shall automatically convert into the same class of equity shares issued to investors in such Qualified Financing at a conversion price equal to the lower of:

(a) {{discount_rate}}% of the per share price paid by investors in the Qualified Financing; or

(b) the price per share resulting from a pre-money valuation of the Company of {{currency_symbol}}{{valuation_cap}} (the “Valuation Cap”).

5.2. Optional Conversion:

At any time prior to the Maturity Date, the Holder may, at its option, elect to convert the outstanding principal amount of this Debenture and all accrued and unpaid interest thereon into ordinary shares of the Company at a conversion price based on a pre-money valuation of the Company of {{currency_symbol}}{{optional_conversion_valuation}}.

5.3. Conversion upon Change of Control:

In the event of a Change of Control (as defined below) prior to the conversion or repayment of this Debenture, the Holder shall have the option to either (i) convert the outstanding principal and accrued interest into equity shares of the Company immediately prior to such Change of Control at the Valuation Cap, or (ii) demand immediate repayment of the outstanding principal and accrued interest plus a multiple of {{change_of_control_multiple}}.

“Change of Control” means (a) the sale of all or substantially all of the assets of the Company, (b) a merger, consolidation, or other business combination of the Company with or into another entity where the Company’s shareholders immediately prior to such transaction own less than 50% of the voting power of the surviving entity immediately after such transaction, or (c) the sale of more than 50% of the voting shares of the Company in a single transaction or a series of related transactions.

6. REPRESENTATIONS AND WARRANTIES

The Company hereby represents and warrants to the Holder that (a) it is duly organized, validly existing, and in good standing under the laws of {{country_of_incorporation}}; (b) it has the full corporate power and authority to execute and deliver this Debenture and to carry out its obligations hereunder; and (c) the execution, delivery, and performance of this Debenture will not violate any provision of its constitutional documents, any agreement to which it is a party, or any law applicable to it.

7. EVENTS OF DEFAULT

The occurrence of any of the following shall constitute an “Event of Default” under this Debenture:

(a) Failure by the Company to pay any principal or interest amount when due under this Debenture;

(b) The Company's breach of any material covenant or agreement contained in this Debenture, which breach is not cured within {{cure_period_days}} days after written notice thereof from the Holder;

(c) The commencement of insolvency, bankruptcy, or analogous proceedings by or against the Company which is not dismissed within {{insolvency_cure_days}} days.

8. REMEDIES ON DEFAULT

Upon the occurrence of an Event of Default, the Holder may, at its option, declare the entire outstanding principal amount of this Debenture, together with all accrued and unpaid interest thereon, to be immediately due and payable. The Holder shall have all rights and remedies available at law or in equity.

9. GOVERNING LAW AND JURISDICTION

This Debenture shall be governed by and construed in accordance with the laws of [Relevant African Country, e.g., Kenya]. Any dispute arising out of or in connection with this Debenture, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the arbitration rules of [e.g., the Nairobi Centre for International Arbitration] in force at the time of the dispute, which rules are deemed to be incorporated by reference into this clause. The seat of the arbitration shall be [e.g., Nairobi, Kenya]. The language of the arbitration shall be English.

10. MISCELLANEOUS

10.1. Notices: All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by reputable overnight courier, or sent by email, to the parties at their respective addresses set forth above (or at such other address for a party as shall be specified by like notice).

10.2. Amendments and Waivers: Any term of this Debenture may be amended or waived only with the written consent of the Company and the Holder.

10.3. Assignment: This Debenture and the rights and obligations hereunder may not be assigned by the Company without the prior written consent of the Holder. The Holder may assign its rights and obligations hereunder to an affiliate or in connection with a bona fide transfer of all or substantially all of the Holder’s assets, upon written notice to the Company.

10.4. Severability: If any provision of this Debenture is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.

SIGNATURES

IN WITNESS WHEREOF, the parties hereto have executed this Convertible Debenture as of the date first written above.

FOR THE COMPANY:

_____________________________

By: {{company_authorised_signatory_name}}

Title: {{company_authorised_signatory_title}}

Date: {{signature_date}}

FOR THE HOLDER:

_____________________________

By: {{holder_name}}

Title: {{holder_title}} (if applicable)

Date: {{signature_date}}