Cornerstone Investment Agreement for Singapore

Cornerstone Investment Agreement Template for Singapore

A Cornerstone Investment Agreement under Singapore law is a legally binding document that formalizes the commitment of significant investors to purchase shares in an upcoming IPO or capital raising. The agreement, governed by Singapore's Securities and Futures Act and related regulations, outlines the terms of investment, including lock-up periods, investment amounts, and conditions precedent. It provides stability to the IPO process by securing substantial investment commitments before the public offering.

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What is a Cornerstone Investment Agreement?

The Cornerstone Investment Agreement is a critical document in Singapore's capital markets, typically used when companies are preparing for an IPO or significant capital raising. It demonstrates market confidence and provides certainty to the offering by securing substantial investment commitments from reputable investors before the public offering. The agreement details the investment terms, including lock-up periods, pricing mechanisms, and investor rights, while ensuring compliance with Singapore's regulatory framework, particularly the Securities and Futures Act and MAS guidelines.

What sections should be included in a Cornerstone Investment Agreement?

1. Parties: Details of the cornerstone investor and the company/issuer

2. Background: Context of the investment and IPO plans

3. Definitions: Key terms used throughout the agreement

4. Investment Commitment: Details of investment amount, pricing, and allocation

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

6. Lock-up Provisions: Restrictions on disposal of invested shares

7. Representations and Warranties: Standard assurances from both parties

8. Termination Rights: Circumstances under which the agreement can be terminated

What sections are optional to include in a Cornerstone Investment Agreement?

1. Board Representation: Rights to nominate board members, applicable when investor receives board nomination rights

2. Anti-dilution Rights: Protection against future share dilution, typically included for larger cornerstone investments

3. Information Rights: Rights to receive company information, typically included for strategic investors

What schedules should be included in a Cornerstone Investment Agreement?

1. Schedule 1: Investment Details: Detailed breakdown of investment amount and share allocation

2. Schedule 2: Conditions Precedent: Detailed list of conditions to be satisfied

3. Schedule 3: Warranties: Detailed warranties from both parties

4. Appendix A: Form of Lock-up Undertaking: Standard form of lock-up agreement

5. Appendix B: Completion Documents: List of documents required at completion

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

Jurisdiction

Singapore

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Securities and Futures Act (SFA): Primary legislation governing securities, futures, and financial markets in Singapore, including regulations for investment products and securities offerings

Companies Act: Core legislation governing company formation, operation, and corporate affairs in Singapore, including shareholder rights and corporate governance

Financial Advisers Act: Regulates financial advisory services in Singapore and sets requirements for providing investment advice

Monetary Authority of Singapore (MAS) Act: Establishes MAS's regulatory authority and oversight of financial institutions and markets in Singapore

MAS Guidelines on Cornerstone Investments: Specific regulatory guidelines issued by MAS governing cornerstone investment practices and requirements

SGX Listing Rules: Rules and requirements for companies listed or seeking listing on the Singapore Exchange, including IPO-related cornerstone investment provisions

Code of Corporate Governance: Guidelines for corporate governance practices in Singapore, affecting investor rights and company management

Investment Company Act: Regulations governing investment companies and their operations in Singapore

Anti-Money Laundering and Counter-Terrorism Financing Act: Legislation to prevent money laundering and terrorism financing in financial transactions and investments

Contract Law (Common Law): Singapore's common law principles governing contract formation, enforcement, and interpretation

Misrepresentation Act: Laws governing false or misleading statements in contractual relationships and investments

Electronic Transactions Act: Legislation governing electronic contracts and digital signatures in Singapore

Personal Data Protection Act (PDPA): Regulations governing the collection, use, and disclosure of personal data in Singapore

Competition Act: Laws preventing anti-competitive practices and ensuring fair market competition

Tax Laws and Regulations: Various tax provisions affecting investments, including stamp duty, capital gains, and corporate tax considerations

Foreign Exchange Control Regulations: Rules governing foreign currency transactions and international fund transfers in investment contexts

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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