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Convertible Debt Agreement Template for Singapore

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Key Requirements PROMPT example:

Convertible Debt Agreement

"Need a Convertible Debt Agreement under Singapore law for a $500,000 investment in my fintech startup, with a 6% interest rate and automatic conversion triggered at our Series A round, which we expect in March 2025."

Document background
The Convertible Debt Agreement is commonly used in Singapore's startup ecosystem as a bridge financing tool, offering investors the opportunity to convert their loan into equity at a future date, typically during a subsequent funding round. This document type is particularly relevant when companies need immediate funding but prefer to defer equity valuation discussions. The agreement must comply with Singapore's strict regulatory requirements, including the Companies Act and MAS guidelines, making it essential to include specific provisions for conversion rights, interest calculations, and security registration where applicable.
Suggested Sections

1. Parties: Identification of lender and borrower with full legal details

2. Background: Context of the convertible debt arrangement and purpose

3. Definitions: Key terms used throughout the agreement

4. Loan Amount and Terms: Principal amount, interest rate, maturity date

5. Conversion Rights: Terms and conditions for converting debt to equity

6. Conversion Price: Formula or fixed price for conversion

7. Repayment Terms: Payment schedule and conditions

8. Events of Default: Circumstances constituting default and consequences

9. Representations and Warranties: Standard assurances from both parties

Optional Sections

1. Anti-dilution Provisions: Protection against share dilution, used when specifically requested by investor

2. Information Rights: Lender's rights to company information and financial updates

3. Board Rights: Rights to board representation for larger investments

4. Pre-emptive Rights: Rights to participate in future funding rounds

Suggested Schedules

1. Schedule 1: Form of Conversion Notice: Template for exercising conversion rights

2. Schedule 2: Cap Table: Current and post-conversion shareholding structure

3. Schedule 3: Financial Statements: Latest financial statements of the company

4. Schedule 4: Calculation of Conversion Price: Detailed formula and examples for conversion price calculation

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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Industries

Companies Act (Cap. 50): Primary legislation governing corporate matters including debenture issuance, registration of charges, share capital regulations, and directors' duties. Key for the structural framework of convertible debt instruments.

Securities and Futures Act (Cap. 289): Regulates securities offerings, disclosure requirements, and prospectus exemptions. Determines whether the convertible debt instrument qualifies as a security under Singapore law.

MAS Guidelines: Monetary Authority of Singapore's regulatory framework covering debt securities, capital markets regulations, and private placement requirements.

Contract Law (Application of Law) Act: Provides fundamental principles of contract formation, enforcement, obligations and remedies applicable to the convertible debt agreement.

Moneylenders Act (Cap. 188): Governs moneylending activities and interest rate regulations, which may be relevant depending on the nature of the convertible debt arrangement.

Stamp Duties Act: Specifies stamp duty requirements for loan agreements and subsequent conversion of debt to equity.

Personal Data Protection Act 2012: Governs the collection, use, and disclosure of personal data of parties involved in the agreement.

Income Tax Act: Determines tax treatment of interest payments and tax implications of debt-to-equity conversion under Singapore tax law.

ACRA Registration Requirements: Specifies registration and filing requirements with the Accounting and Corporate Regulatory Authority for corporate debt instruments.

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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