Convertible Debenture Agreement Template for Singapore

A Singapore-law governed agreement that establishes the terms and conditions for issuing convertible debentures, which are debt instruments that can be converted into equity shares of the issuing company. The agreement details the principal amount, interest rate, conversion terms, maturity period, and rights of both the issuer and debenture holders, while complying with Singapore's Companies Act and Securities and Futures Act requirements.

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What is a Convertible Debenture Agreement?

The Convertible Debenture Agreement is commonly used in Singapore when companies seek to raise capital while offering investors the flexibility to convert their debt investment into equity. This document is particularly relevant for growing companies that need funding but want to defer equity dilution. The agreement must comply with Singapore's regulatory framework, including the Companies Act and MAS guidelines, and typically includes detailed provisions on conversion rights, interest payments, security (if any), and events of default. It serves as a crucial instrument for both debt financing and potential future equity participation.

What sections should be included in a Convertible Debenture Agreement?

1. Parties: Identification of issuer and debenture holder(s)

2. Background: Context of the debenture issuance and company circumstances

3. Definitions: Key terms used throughout the agreement

4. Principal Amount and Interest: Details of the debenture amount and interest terms

5. Conversion Rights: Terms and conditions for converting debentures to shares

6. Maturity and Repayment: Terms of maturity and repayment obligations

7. Events of Default: Circumstances constituting default and consequences

8. Representations and Warranties: Statements of fact and assurances from the issuer

9. Covenants: Ongoing obligations of the issuer during the term of the debenture

10. Governing Law and Jurisdiction: Specification of Singapore law as governing law and jurisdiction for disputes

What sections are optional to include in a Convertible Debenture Agreement?

1. Security: Details of any security/collateral arrangements when the debenture is secured

2. Guarantees: Terms of any third-party guarantees provided for the debenture

3. Anti-dilution Provisions: Protections against share dilution for sophisticated investors

4. Tag-Along Rights: Rights of debenture holders to participate in sale of company shares

5. Information Rights: Rights of debenture holders to receive company financial and other information

What schedules should be included in a Convertible Debenture Agreement?

1. Conversion Formula: Detailed calculation method for conversion price and mechanics

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

3. Security Documents: Details of security arrangements and related documentation

4. Corporate Authorizations: Copies of relevant board and shareholder resolutions

5. Disclosure Schedule: Detailed disclosures relating to representations and warranties

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

Jurisdiction

Singapore

Publisher

Genie AI

Cost

Free to use

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