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Loan Note Subscription Agreement Generator for England and Wales

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Key Requirements PROMPT example:

Loan Note Subscription Agreement

"Need a Loan Note Subscription Agreement for our tech startup to issue £500,000 of convertible loan notes to three institutional investors, with a 8% interest rate and conversion rights exercisable after January 2025."

Document background
A Loan Note Subscription Agreement is commonly used when companies seek to raise debt finance through the issue of loan notes to investors. This document, governed by English and Welsh law, provides a comprehensive framework for the subscription process, including payment terms, conditions for completion, and investor protections. It's particularly useful for private companies seeking alternative financing options to traditional bank lending, and can accommodate various structures including secured, unsecured, or convertible notes. The agreement ensures compliance with UK financial services regulations and provides certainty for both issuers and investors.
Suggested Sections

1. Parties: Identifies the issuer and subscriber(s) of the loan notes

2. Background: Sets out the context and purpose of the loan note subscription

3. Definitions: Defines key terms used throughout the agreement including regulatory references to FSMA, Companies Act etc.

4. Subscription: Details of the subscription amount, price, and mechanics

5. Conditions Precedent: Conditions that must be satisfied before subscription completion

6. Completion: Mechanics and timing of completion of the subscription

7. Representations and Warranties: Standard representations from both issuer and subscriber

8. Covenants: Ongoing obligations of the parties

9. Events of Default: Circumstances constituting default and consequences

10. Boilerplate Provisions: Standard legal provisions including notices, assignments, amendments

Optional Sections

1. Security: Details of any security package - include when loan notes are secured

2. Conversion Rights: Terms of conversion into shares - include for convertible loan notes

3. Interest: Interest calculation and payment terms - include when interest is payable

4. Transferability: Terms governing transfer of notes - include if notes are transferable

Suggested Schedules

1. Form of Loan Note Instrument: The formal instrument creating the loan notes

2. Form of Note Certificate: Template certificate evidencing ownership

3. Conditions Precedent Documents: List of required completion documents

4. Form of Transfer Instrument: Template for transferring notes if applicable

5. Warranties: Detailed warranties given by the issuer

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions







































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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company law in the UK, particularly relevant for sections relating to share capital and debt securities

Financial Services and Markets Act 2000: Core financial services legislation that regulates financial activities and financial promotions in the UK

Consumer Credit Act 1974: Legislation governing consumer credit agreements, relevant if the loan notes involve private individuals

Financial Promotion Order 2005: Regulations controlling how financial products can be marketed and promoted in the UK

Regulated Activities Order 2001: Defines which activities require FCA authorization and regulation

FCA Handbook: Comprehensive guide of FCA rules and guidance, particularly relevant for transferable securities

Prospectus Regulation Rules: Rules governing the requirement for and content of prospectuses for securities offerings

UK Market Abuse Regulation: Legislation preventing market abuse and insider trading in financial instruments

UK Listing Rules: Rules applicable to companies listed or seeking listing on UK regulated markets

Income Tax Act 2007: Tax legislation relevant for the treatment of interest payments and other income from loan notes

Corporation Tax Act 2009: Tax legislation governing corporate taxation aspects of loan notes

Law of Property Act 1989: Legislation governing formalities for creating certain types of property rights and contracts

Money Laundering Regulations 2017: Regulations requiring checks and procedures to prevent money laundering and terrorist financing

UK GDPR: Data protection regulation governing the processing of personal data

Data Protection Act 2018: UK's implementation of data protection requirements, complementing UK GDPR

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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