Loan Conversion Agreement Template for Singapore

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Key Requirements PROMPT example:

Loan Conversion Agreement

"Need a Loan Conversion Agreement to convert our existing SGD 2 million bridge loan into Series A preferred shares, with the conversion to take place by March 2025, including standard Singapore tech startup terms and release of previous security arrangements."

Document background
A Loan Conversion Agreement is commonly used in Singapore when parties wish to restructure debt obligations by converting them into equity. This typically occurs in startup funding rounds, debt restructuring scenarios, or when implementing previously agreed convertible loan terms. The agreement must comply with Singapore's regulatory framework, including the Companies Act and Securities and Futures Act. It specifies conversion ratios, timing, and resulting shareholding structures, while addressing corporate approvals, security releases, and tax implications.
Suggested Sections

1. Parties: Identification of the lender and borrower, including their registered addresses and company registration numbers

2. Background: Details of the original loan agreement, outstanding amounts, and circumstances leading to the conversion

3. Definitions: Key terms used throughout the agreement including Conversion Date, Conversion Shares, Conversion Price, etc.

4. Conversion Terms: Specific terms of converting the loan to equity, including conversion price, number of shares, and class of shares

5. Conversion Mechanics: Process and timing of the conversion, including conditions precedent and execution requirements

6. Representations and Warranties: Statements of fact by both parties regarding their authority, capacity, and compliance with law

7. Covenants: Ongoing obligations of the parties before and after conversion

8. Governing Law and Jurisdiction: Specification of Singapore law as governing law and jurisdiction for dispute resolution

Optional Sections

1. Security Release: Terms for releasing any security associated with the original loan, including timing and documentation requirements

2. Tax Provisions: Specific provisions dealing with stamp duty, income tax, and other tax implications of the conversion

3. Foreign Investment Provisions: Compliance requirements with Singapore foreign investment rules and necessary approvals

4. Shareholders Rights: Special rights or restrictions attached to the conversion shares, if any

Suggested Schedules

1. Schedule 1 - Original Loan Agreement: Copy of the original loan agreement being converted

2. Schedule 2 - Conversion Calculation: Detailed formula and calculations for conversion ratio and number of shares

3. Schedule 3 - Form of Share Certificate: Template for new share certificates to be issued upon conversion

4. Schedule 4 - Corporate Approvals: Copies of board resolutions, shareholder resolutions, and other corporate approvals

5. Schedule 5 - Completion Checklist: List of documents and actions required to complete the conversion

Authors

Alex Denne

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

Industries

Companies Act (Cap. 50): Primary legislation governing corporate entities in Singapore, covering company formation, management, shareholders' rights, and corporate restructuring provisions

Securities and Futures Act (Cap. 289): Regulates securities offerings, financial instruments, and capital markets activities in Singapore

Contract Law: Common law principles governing contract formation, enforcement, and remedies in Singapore

Moneylenders Act (Cap. 188): Regulates moneylending activities and provides protection for borrowers in Singapore

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore affecting financial transactions and conversions

Banking Act (Cap. 19): Regulates banking institutions and their activities in Singapore, relevant if financial institutions are involved

Financial Advisers Act: Governs the provision of financial advisory services and related activities

Income Tax Act: Tax implications and treatments for debt-to-equity conversions and related financial transactions

Stamp Duties Act: Governs stamp duty obligations on documents and transactions including loan conversions

Company Constitution: Internal governing document of the company that may contain provisions affecting loan conversions

Shareholders' Agreement: Private agreement between shareholders that may contain provisions affecting share issuance and loan conversions

Directors' Duties: Statutory and fiduciary duties of directors under the Companies Act when approving loan conversions

SGX Listing Rules: Requirements for listed companies on the Singapore Exchange, including disclosure and approval requirements for significant transactions

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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