Loan Note Subscription Agreement Template for Singapore

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Key Requirements PROMPT example:

Loan Note Subscription Agreement

"Need a Loan Note Subscription Agreement under Singapore law for a tech startup issuing SGD 5 million in secured notes to three institutional investors, with quarterly interest payments and a maturity date of March 2025."

What is a Loan Note Subscription Agreement?

The Loan Note Subscription Agreement is a crucial document used when companies seek to raise debt financing through the issuance of loan notes in Singapore. It provides a comprehensive framework for the relationship between issuers and subscribers, ensuring compliance with Singapore's regulatory requirements, including the Securities and Futures Act and MAS guidelines. This agreement is particularly useful for companies seeking alternative financing methods to traditional bank loans, offering more flexibility in terms and potentially wider access to investors. It includes detailed provisions on subscription mechanics, note terms, security arrangements, and investor protections.

What sections should be included in a Loan Note Subscription Agreement?

1. Parties: Identifies the issuer, subscriber(s), and any other relevant parties

2. Background: Sets out the context and purpose of the loan note issuance

3. Definitions: Defines key terms used throughout the agreement

4. Subscription: Details of the subscription, including amount and price

5. Terms of the Notes: Key terms including interest, maturity, and repayment provisions

6. Conditions Precedent: Conditions that must be satisfied before subscription

7. Representations and Warranties: Statements of fact and assurances from parties

8. Covenants: Ongoing obligations of the parties

9. Events of Default: Circumstances constituting default and consequences

What sections are optional to include in a Loan Note Subscription Agreement?

1. Security: Details of any security or guarantees (include when notes are secured)

2. Transferability: Provisions regarding transfer of notes (include when notes are transferable)

3. Conversion Rights: Terms for converting notes to equity (include for convertible loan notes)

What schedules should be included in a Loan Note Subscription Agreement?

1. Form of Note: Template of the actual loan note certificate

2. Conditions Precedent Documents: List of required documents and conditions

3. Payment Schedule: Detailed repayment terms and dates

4. Security Documents: Details of security arrangements if applicable

5. Form of Transfer Certificate: Template for transferring notes if transferable

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

Relevant legal definitions
Industries

Securities and Futures Act (Cap. 289): Primary legislation governing securities and futures trading in Singapore. Critical for the structure and issuance of loan notes as they are considered securities under Singapore law.

Companies Act (Cap. 50): Key legislation governing corporate matters including corporate borrowing powers, financial assistance restrictions, and directors' duties in relation to debt instruments.

Moneylenders Act (Cap. 188): Regulates moneylending activities in Singapore. Need to ensure the loan note structure doesn't inadvertently bring the transaction within the scope of this Act.

Contracts Act (Cap. 53): Provides the fundamental legal framework for contract formation and enforcement in Singapore, including principles of offer, acceptance, and consideration.

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore that may affect the structuring and offering of loan notes.

MAS Notice on Lending of Singapore Dollar: Specific regulations regarding lending Singapore dollars to non-resident financial institutions, which may impact cross-border loan note transactions.

Securities and Futures Regulations: Detailed regulatory requirements supplementing the Securities and Futures Act, including disclosure and licensing requirements.

Financial Advisers Act: Relevant if the loan note offering involves financial advisory services or recommendations to potential subscribers.

Stamp Duties Act: Governs stamp duty obligations that may arise in relation to loan note documentation and transfers.

Anti-Money Laundering Regulations: Compliance requirements for preventing money laundering, including customer due diligence and transaction monitoring.

Personal Data Protection Act 2012: Requirements for handling personal data of individuals involved in the loan note transaction, including consent and disclosure obligations.

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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