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Unsecured Convertible Promissory Note Template for Singapore

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Key Requirements PROMPT example:

Unsecured Convertible Promissory Note

"Need an Unsecured Convertible Promissory Note for our Singapore-based tech startup to secure $500,000 in bridge financing, with a 2-year maturity ending March 2025 and conversion rights at a $5M valuation cap."

Document background
The Unsecured Convertible Promissory Note is commonly used in Singapore's startup and growth company ecosystem as a bridge financing tool. It provides companies with immediate access to capital while offering investors the flexibility to convert their investment into equity. This document typically includes terms regarding principal amount, interest rate, maturity date, conversion price, trigger events, and is particularly suited for companies seeking interim financing before a larger funding round. Under Singapore law, these notes must comply with securities regulations and corporate governance requirements.
Suggested Sections

1. Parties: Identifies the lender and borrower with full legal names and addresses

2. Background: Context of the loan and relationship between parties

3. Definitions: Key terms used throughout the document

4. Principal Amount: Specifies the loan amount and currency

5. Interest Rate: Details of interest calculation and payment terms

6. Maturity Date: When the note becomes due and payable

7. Conversion Rights: Terms and conditions for converting the note to equity

8. Events of Default: Circumstances that trigger default and remedies

Optional Sections

1. Security: Any collateral arrangements (though typically none for unsecured notes)

2. Subordination: Ranking of the note relative to other debt

3. Prepayment Rights: Terms for early repayment if allowed

Suggested Schedules

1. Schedule 1 - Conversion Mechanics: Detailed procedures for converting the note to shares

2. Schedule 2 - Form of Conversion Notice: Template notice for exercising conversion rights

3. Schedule 3 - Capitalization Table: Current and post-conversion ownership structure

4. Schedule 4 - Payment Schedule: If interest payments are scheduled before maturity

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 company operations, share issuance, and corporate finance requirements in Singapore

Securities and Futures Act (Cap. 289): Regulates securities offerings, financial market activities, and investor protection requirements

Contract Law (Amendment) Act 2022: Latest amendments to contract law affecting formation and enforcement of contractual obligations in Singapore

Electronic Transactions Act (Cap. 88): Governs the electronic execution and validity of contracts and documents

Moneylenders Act (Cap. 188): Regulates money lending activities and sets restrictions on interest rates and lending practices

Moneylenders Rules 2009: Detailed regulations implementing the Moneylenders Act, including operational requirements

Securities and Futures Regulations 2018: Specific regulations regarding offers of investments, securities, and derivatives contracts

MAS Guidelines on Securities Offerings: Monetary Authority of Singapore's guidelines on securities offerings and related compliance requirements

Civil Law Act (Cap. 43): Contains provisions regarding interest rates and civil law matters affecting contracts

Income Tax Act: Tax implications for convertible notes, including treatment of interest and conversion events

Stamp Duties Act: Requirements for stamp duty on issuance and transfer of securities and loan 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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