Convertible Loan Agreement

This agreement (the Agreement) is entered into as of between

  1. a company registered in Singapore under number with registered office at (the Company);
  2. of (the Founder); and
  3. The Investors severally described in Schedule 1 herein (Investors)

(individually known as a Party and collectively Parties).

Whereas

  1. The Company is a company incorporated on in Singapore as a private limited company; and
  2. The Investors wish to make an investment by way of an unsecured convertible loan to the Company.
  1. Interpretation

    Accrued Interest means
    interest payable and accrued in respect of the Loan as calculated in accordance with Clause 3.2;
    Affiliate means
    a person, corporation, partnership or other entity, that Controls, is Controlled by, or is under common Control with a Party;
    Anniversary Date means
    each anniversary of the Effective Date or, if such date is not a Business Day, the next Business Day following;
    Audited Accounts means
    the Company's audited balance sheet and audited profit and loss account for the relevant financial year of the Company, together with the related cash flow statements, notes, directors' reports and Auditors' reports (unless the accounts are legally exempted from audit, in which case the accounts shall mean those approved by the Company's accountants);
    Auditors means
    or such other firm of chartered accountants as may be appointed as auditors of the Company from time to time;
    Board means
    the Company's board of directors;
    Business means
    the business conducted by the Company, as set out in Schedule 1 herein;
    Business Day means
    a day on which banks are normally open for business and which is not a Sunday or public holiday in Singapore;
    Business IPRs means
    the IPRs used by the Company in the operation of its business;
    Business Plan means:
    1. as at the Effective Date, the business plan (dated ) prepared by the Company and reviewed and approved by the Board and used as reference for the Loan, and
    2. after the Effective Date, the most recent business plan approved by the Board prior to the date on which the Warranties are given;
    Change of Control means
    in relation to the Company, where a person (or persons acting in concert) directly or indirectly, including through any Subsidiary or Holding Company or Subsidiary of such Holding Company:
    1. has beneficial ownership over more than 50 per cent of the total voting rights conferred by all the issued shares in the capital of the Company which are ordinarily exercisable in general meeting; or
    2. has the right to appoint or remove a majority of its directors; or
    3. has power to direct that the affairs of the Company are conducted in accordance with its wishes;
    in each case where such person or persons did not have such beneficial ownership, right or power at the Effective Date;
    Claim means
    a claim by the Investors for breach of any Warranty;
    Companies Act means
    the Companies Act (Cap 51) of Singapore;
    Control means
    the direct or indirect ownership of more than fifty percent (50%) of the outstanding voting securities of an entity;
    Conversion Price means
    the price per share at which the Loan will be converted into shares in the Company, as stated at Schedule 2;
    Disclosure Letter means
    1. as at the Effective Date, the disclosure letter dated the same date as this Agreement and accepted by the Investors, and
    2. after the Effective Date, the disclosure letter as subsequently amended and agreed by the Parties on the date of each Advance;
    Effective Date means
    ;
    Encumbrance means
    any claim, charge, mortgage, security, lien, option, equity, power of sale, retention of title, right of pre-emption, right of first refusal or security interest of any kind;
    Event of Default means
    any event listed in Clause 9.1;
    Gross Revenues means
    in any Year all income received by the Company during that Year excluding all equity investment in the Company;
    Group means
    , in relation to any Party, its Holding Companies, its Subsidiaries and the Subsidiaries of those Holding Companies;
    Institutional Investor means
    a professional investor (not being an individual);
    IPRs means, in respect of all applicable jurisdictions,
    1. patents, designs, trademarks and trade names (whether registered or unregistered), copyright and related rights, database rights, registered designs, know-how and confidential information;
    2. all other intellectual property rights or equivalent rights which currently exist or are recognised in the future; and
    3. applications, extensions and renewals in relation to any such rights;
    Listing means
    the admission of all or part of the shares in the capital of the Company, or securities representing such shares to the Singapore Exchange (SGX) or to any securities exchange;
    Loan means
    the loan facility made available by the Investors under this Agreement;
    Loan Amount is
    the amount stated in Clause 2.2;
    Management Accounts means
    1. as at the Effective Date, the most recent unaudited monthly management accounts of the Company prior to the Effective Date, and
    2. after the Effective Date, the most recent management accounts prior to the date upon which the Warranties are given;
    Maturity Date
    has the same meaning as in the Termsheet
    Net Revenues means
    , in any Year, Gross Revenues less the amount of Operating Costs;
    Operating Expenses means
    salaries, rental, operational and manufacturing costs, expenses related to IPRs, payments made to professional advisors, utilities, IT support, equipment, asset leasing and hire purchase arrangements, consumables, cost of equipment, fees for sub-contractors and such other items as may be agreed by the Investors but excluding capital expenditure, depreciation, taxes and fines;
    Revenue means
    any cash amounts and other monetary consideration (not for equity) received by the Company in the normal course of conducting the Business.
    Repayment Date means
    the date which is five (5) Business Days following the date of any notice for repayment served by the Investors on the Company pursuant to Clause 4.1(b)(i)to (iii);
    Sale means
    the acquisition by any person of more than fifty percent (50%) of the shares of the Company or all of the shares not already owned by the acquirer; or
    the acquisition by any person of the business or assets of the Company or any material part thereof (for which purpose the Business IPRs shall be considered a material part of the Company's assets);
    SIBOR means
    the Singapore Interbank Offered Rate, as published by the Association of Banks in Singapore;
    Subsequent Financing means
    the next round of financing received by the Company after the Effective Date on arms-length terms led by at least one Institutional Investor.
    Subsidiary means
    a company of which another company, its Holding Company:
    1. holds a majority of the voting rights in;
    2. is a member of and has the right to appoint or remove a majority of its board of directors; or
    3. is a member of and controls alone, pursuant to an agreement with other members, a majority of the voting rights;

    and shall include companies which are the subsidiary of a company that is itself a subsidiary of the Holding Company;

    Tax means
    all forms of taxation, duties, levies and rates whether payable in Singapore or elsewhere and all penalties and interest payable in respect thereof;
    Termsheet means
    the convertible loan termsheet signed by the Parties and attached as Schedule 3 herein;
    Warranties means
    the representations and warranties stated in Clause 5 and Schedule 4;
    Year means
    a period of twelve (12) months starting on the Repayment Date or the Effective Date as the case may require and ending on the date twelve (12) months thereafter and each subsequent period of twelve (12) months.
    1. References in this Agreement to any statutory provisions shall be construed as references to those provisions as respectively amended consolidated or re-enacted (whether before or after the Effective Date) from time to time and shall include any provisions of which they are consolidations or re-enactments (whether with or without amendment).
    2. The Schedules and Recitals form part of this Agreement and any reference to this Agreement shall include the Schedules and Recitals.
  2. Loan made by the Investors

    1. In consideration of the rights and obligations of the Parties as set out in this Agreement, the Investors make the Loan to the Company on the terms and conditions set out in this Agreement.
    2. The Loan Amount is .
    3. The Loan shall be used by the Company for the sole purpose of conducting the Business in accordance with the Memorandum and Articles of Association of the Company.
    4. All payments made by the Company to the Investors or by the Investors to the Company as the case may be under this Agreement shall be made in Singapore Dollars.
      1. Company's Bank Account
      2. Investors' Bank Account
    5. Each of the Investors and the Company shall pay all taxes in respect of payments it receives or makes under this Agreement. Any withholding or other taxes that any Party is required by law to withhold or pay on behalf of any other Party, with respect to any payments to it under this Agreement, shall be deducted from such payments and paid at the same time with the remittance to such other Party, together with evidence of such withholding or payment. The Party withholding or making such payment shall provide the other Party with appropriate documents to obtain the most favourable rate of withholding tax under applicable law.
  3. Interest

    1. If the Investors choose that the Company repays the Loan in full pursuant to Clause 4.1(b), Accrued Interest shall be added to the amount to be repaid. If the Investors elects that the Company repays the Loan in part pursuant to Clause 4.1(b), a pro-rata proportion of the Accrued Interest shall be added to the amount of the Loan that is to be repaid on the relevant Repayment Date.
    2. The Accrued Interest payable by the Company on a repayment of the Loan shall be deemed to have accrued on a daily basis on the amount of the Loan outstanding, at the rate stated in the Termsheet. Such interest shall have accrued from day to day by reference to a year of three hundred and sixty five (365) days and such interest shall be deemed to have been added to the principal amount of the Loan annually on each Anniversary Date and on each Repayment Date (if the relevant Repayment Date is not an Anniversary Date). If the Loan is converted into shares in whole or in part pursuant to Clause 4.1(a), the Investors shall be deemed to have waived its rights to receive Accrued Interest on the Conversion Amount and the Accrued Interest shall not be payable or be converted into shares.
  4. Conversion or Repayment Option

    1. The Investors may, in writing, require the Company to:
      1. convert the full amount or part only of the Loan into fully paid new shares upon request by the Investors, at any time including:
        1. immediately prior to the completion of a Sale, Listing or Subsequent Financing, or in accordance with Clause 4.2, or
        2. upon the occurrence of any Event of Default;
      2. repay the full amount or part only of the Loan together with Accrued Interest:
        1. at any time after the third anniversary of the Effective Date in accordance with Clause 4.3;
        2. in the case of a Sale, immediately prior to the completion of a Sale; or
        3. in the case of a Listing, immediately prior to admission to trading of the shares of the Company on the applicable stock exchange; or
        4. in the case of an Event of Default, in accordance with Clause 9.3.
    2. The Investors may waive the Loan and Accrued Interest pursuant to Clause 4.1(b)(i), 4.1(b)(ii) or 4.1(b)(iii) if, after paying such amount, the Company is likely to become insolvent.
      1. The Investors may either choose to convert the Loan pursuant to Clause 4.1(a) or, without prejudice to the Investors's right to demand repayment at a future time, to withdraw a demand for repayment under this Clause 4.2 if, after the demand by the Investors, the Board reasonably determines that the Company is likely to become insolvent, based on the Company's most recent accounts or other evidence. For the purposes of this Clause the Company shall be considered to be insolvent if, after the payment, it would be unable to pay its debts as they fall due.
    3. A written demand served by the Investors on the Company requiring repayment of the Loan shall state the amount of the Loan and Accrued Interest to be repaid (the Repayment Amount) and shall specify that part of the Loan (if any) to be converted into shares (the Conversion Amount). The Investors may require the repayment of the Loan (and Accrued Interest) partly in cash and partly by way of Conversion Shares. Accrued Interest shall only be repayable in respect of the Repayment Amount.
    4. If the Investors elect the option in Clause 4.1(b)(i), the Repayment Amount shall be due and payable (with the first payment being due on the Repayment Date) as set out below:
      1. on the Repayment Date the Company shall pay to the Investors an amount equal to twenty percent (20%) of the Net Revenues of the Company received by it during the Year immediately preceding the Repayment Date (provided it does not exceed the Repayment Amount) and, subject to Clause 4.4(b) below thereafter, on each subsequent anniversary of the Repayment Date an amount equal to twenty percent (20%) of the Net Revenues of the Company received during the Year immediately preceding that anniversary until the Repayment Amount has been paid in full;
      2. if the Repayment Amount remains outstanding pursuant to Clause 4.1(b) or converted pursuant to Clause 4.1(a) by the date seven years from the Effective Date (the Cut-Off Date), the Company shall (in lieu of making any payments under Clause 4.4(a)) on the first anniversary of the Repayment Date following the Cut-Off Date pay the Investors an amount equal to twenty percent (20%) of the Gross Revenues of the Company received by it during the Year immediately preceding that anniversary and on each subsequent anniversary of the Repayment Date an amount equal to twenty percent (20%) of the Gross Revenues of the Company received during the Year immediately preceding that anniversary until the Repayment Amount has been repaid in full.
    5. Until the Repayment Amount has been paid in full, the Investors may convert the Loan (or any balance outstanding) into Conversion Shares pursuant to Clause 4.1(a).
    6. If the Investors choose the option stated in Clause 4.1(a), the Conversion Amount shall be converted into such number of shares of fully paid new Conversion Shares as, at the Conversion Price, have an aggregate value equal to the Conversion Amount (rounding down to the nearest whole number of Conversion Shares). On the relevant Repayment Date the Company shall issue the appropriate number of new Conversion Shares to the Investors and shall promptly enter the Investors as a members in its register of members and shall forward a share certificate.
    7. The Company shall promptly obtain all necessary shareholder consents and other approvals as required to issue the Conversion Shares to the Investors pursuant to clause 4.
  5. Warranties

    1. The Company represents and warrants to the Investors that, on the Effective Date, each of the statements set out in Schedule 4 is true and accurate in all respects (subject to disclosures made in the Disclosure Letter).
    2. The limitations on liability set out in Clause 6 shall apply in respect of the liability of the Company under this Agreement provided that no provision of Clause 6 shall apply to limit or exclude the liability of the Company in circumstances of fraud or wilful concealment by the Company.
    3. The Company will immediately disclose in writing to the Investors any information which it becomes aware of, which discloses a real or likely breach of any Warranty.
  6. Limits on Liability

    1. The Company's maximum liability under this Agreement in respect of the aggregate of all Claims shall not exceed the Loan Amount.
    2. The Company shall not be liable if:
      1. the circumstances giving rise to the Claim were accurately disclosed to the Investors in the Disclosure Letter; or
      2. the Claim arises from any act done by the Founder(s) or the Company at and in accordance with the written request of the Investors.
    3. To the extent that any alleged breach of the Warranties is capable of remedy, the Investors may allow the Company to remedy the said breach within twenty (20) Business Days of receipt of written notice from the Investors specifying the alleged breach and requiring its remedy.
    4. Subject to clause 6.5 and 6.6 below, the Investors's maximum liability in aggregate to the Company and the Founders arising out of this Agreement shall not exceed the Loan Amount.
    5. Except in circumstances of fraud or wilful misconduct by a Party or its Affiliates, no Party or any of its Affiliates shall be liable to another Party or any Affiliate of another Party for special, indirect, incidental or consequential damages, whether in contract, warranty, negligence, tort, strict liability or otherwise, arising out of any breach of or failure to perform any of the provisions of this Agreement.
    6. The above limits do not apply to the liability of any Party due to personal injury or death caused by that Party's negligence, willful misconduct or fraud.
  7. Events of Default

    1. The following events or circumstances set out in this Clause 7.1 shall each constitute an Event of Default:
      1. the Company fails to issue new Conversion Shares to the Investors if requested by the Investors in accordance with Clause 4;
      2. any material breach of this Agreement, including any material breach of a Warranty by any of the Company, subject to the matters set out in any Disclosure Letter which has been accepted by the Investors;
      3. the failure of the Company to provide a Disclosure Letter the contents of which are reasonably acceptable to the Investors;
      4. the Company is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness, provided that the operation of Clause 4.2 shall not constitute an Event of Default;
      5. the Company enters into any composition or voluntary arrangement for the benefit of its creditors, or proceedings are commenced in relation to the Company under any law, regulation or procedure relating to the re-construction, deferment or re-adjustment of all or substantially all of the Company's debts;
      6. the Company takes any action, or any legal proceedings are started whether by a third party or not, for the purpose of the winding up or dissolution of the Company, other than for a solvent reconstruction or amalgamation;
      7. the appointment of a liquidator, trustee, receiver, administrative receiver, receiver and manager, interim receiver custodian, sequestrator, administrator or similar officer, in respect of all or a substantial part of the assets of the Company;
      8. an effective resolution being passed for the winding-up or entering into administration (whether out of court or otherwise) of the Company;
      9. a distress, execution or other legal process being levied against all or substantially all of the assets of the Company, and not being discharged or paid out in full within ten (10) Business Days of the commencement of each process;
      10. the occurrence in respect of the Company of any event in any jurisdiction to which it is subject having an effect similar to that of any of the events referred to in Clauses (d) to (i) above;
      11. the Company ceases or threatens to cease to carry on all or a substantial part of its business or operations necessary for the completion of its obligations under this Agreement; or
      12. the Company takes any action, or omits to take any action, the consequences of which, in the reasonable opinion of the Investors, would be incompatible with or have an adverse effect on the ability of the Company to comply with its obligations under this Agreement, including undergoing a Change of Control.
    2. On the occurrence of an Event of Default the Investors may in its absolute discretion serve written notice on the Company (Default Notice) and, at their option:
      1. convert the Loan pursuant to Clause 4.1(a); or
      2. require the immediate repayment of the Loan and Accrued Interest pursuant to Clause 7.3 below,
      provided that in the case of the Events of Default described in clauses 9.1(a), (b), (c) or (l), the Investors shall permit the Company twenty (20) Business Days from the date of receipt of the Default Notice to remedy any such Event of Default (if such Event of Default is capable of remedy) to the satisfaction of the Investors.
    3. If the Investors requires repayment of the Loan and Accrued Interest in accordance with Clause 7.2(b), the Loan and Accrued Interest shall be repayable as follows:
      1. Within twenty (20) Business Days of the date on which the Investors notifies the Company that repayment is required pursuant to Clause 7.2(b) (the Notification Date), the Company shall refund to the Investors any portion of the Loan advanced by the Investors but not yet spent (other than any amount which the Company has irrevocably committed to pay to a third party, provided that the Company shall use all reasonable endeavours to minimise any further payments that it is required to pay) and shall provide to the Investors such information as the Investors may reasonably require to enable the Investors to verify compliance with this paragraph; and
      2. the balance of the Loan and Accrued Interest not repaid pursuant to Clause 7.3(a) shall be repaid by the Company to the Investors within the three months following the Notification Date.
    4. After serving a Default Notice pursuant to Clause 7.2, the Investors shall not be required to make any further advance of the Loan.
  8. Obligations of the Company

    1. The Company and the Company's Subsidiaries (if any) shall not, do any of the following without prior written consent of the Investors:
      1. amend its Memorandum of Association or Articles of Association;
      2. alter the share capital or the creation, allotment or issue of any shares or of any other security or the grant of any option or rights to subscribe for or to convert any instrument into such shares or securities, save for options to acquire ordinary shares in the Company granted under any employee share scheme;
      3. create a Subsidiary;
      4. alter the rights attaching to any class of shares in the Company;
      5. pay dividends on any class of shares;
      6. make any material change to the Business; or
      7. create any new security, or increase any existing security over any of the assets of the Company (other than any netting or set-off arrangement entered into in the ordinary course of the Company's banking or financing arrangements, or any lien arising by operation of law and in the ordinary course of business).
    2. Upon written demand from the Investors pursuant to Clause 4.1(b)(i), the Company shall within twenty (20) Business Days provide a budget to the Investors which sets out its anticipated Gross Revenues and Operating Costs for the next twelve (12) months. Following approval of the budget by the Investors, during any period where the Company is repaying the Loan to the Investors in accordance with Clause 4.4(a) or (b), any material change to the budget will require the prior written consent of the Investors.
    3. The Company shall provide the Investors with the following:
      1. Audited Accounts (if it is legally required to prepare audited accounts); otherwise annual accounts for the previous financial year). Together with management letters relating to them, as soon as they are available and in any event, within three months of the end of each financial year;
      2. copies of all documents dispatched by the Company to its shareholders (or any class of them), or its creditors generally, at the same time as they are dispatched;
      3. details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against the Company or any of its directors promptly upon such proceedings being known to the Company; and
      4. additional financial or corporate information relating to the Company (including details of shareholdings, management accounts and minutes of board meetings) upon reasonable written request of the Investors.
  9. Audit

    1. The Investors (at their own expense) may
      1. seek confirmation from the Auditors that the Auditors signed their opinion on the annual accounts of the Company without qualification and that any management letter(s) raises no matter which could negatively affect the Loan made by the Investors; and
      2. audit (either directly or via third parties engaged by them) any expenditure of the Loan Amount and any amounts or equity due to the Investors under this Agreement.
    2. To facilitate clause 9.1, the Company shall provide access (during normal business hours) to accounting and other financial and corporate records relating to this Agreement for auditors or other persons authorised by the Investors. Where elements of expenditure under this Agreement have been subcontracted, the Company shall ensure that the right of access extends to the accounts and records of any such subcontractor.
  10. Further Funding and Anti-Dilution

    1. If the Company seeks further funding from Institutional Investors, the Company shall inform the Investors in good time prior to entering into any term sheet. The Investors will discuss with the Company the possibility to repay the Loan (and Accrued Interest if relevant) pursuant to Clause 4.1(b) or conversion pursuant to Clause 4.1(a) prior to completion of such investment. The Conversion Price shall remain the same.
    2. If the Company issues or undertakes to issue new shares or securities at a lower price than the Conversion Price, the anti-dilution clauses in the Termsheet shall have effect.
  11. Conversion

    1. If the Investors convert the Loan for Conversion Shares pursuant to Clause 4:
      1. the Investors shall for as long as they hold at least five percent (5%) of the total issued share capital of the Company from time to time, be entitled to appoint a director to the Board or in the alternative to appoint an observer to the Board. The observer may receive notice of meetings, copies of the minutes of meetings and copies of all other papers circulated to the Board and any sub-committees as if he were a director;
      2. the Investors shall be party to a shareholders agreement which will include a standard list of matters requiring the prior approval of the participating shareholders before being undertaken by the Company and also a comprehensive list of financial and other information which must be provided by the Company to the participating investors; and
      3. the shareholder agreements or Articles of Association of the Company will include standard tag along and co-sale rights as agreed upon by the-then shareholders and investors in the Company.
  12. Confidentiality

    1. The Parties shall keep confidential and ensure that their respective officers, employees, agents and advisers shall keep confidential all information relating to the customers, business, assets or affairs of the Company or of the Investors, or relating to the contents of this Agreement (the Confidential Information).
    2. Save as set out below, no Party may use for its own purposes or disclose to any third party any Confidential Information of any Party without the prior consent of the disclosing Party.
    3. Confidential Information excludes information which is:
      1. publicly available (otherwise than as a result of a breach of this Agreement or any other agreement between the Parties);
      2. independently developed by the relevant Party with the relevant records to demonstrate this
      3. acquired from a third party where such third party was not in breach of confidentiality obligations;
      4. lawfully in the possession of the relevant Party prior to or on the Effective Date, free of any restriction on disclosure as can be shown by that Party's records;
      5. required to be disclosed by law, regulation or court order; or
      6. disclosed to a Party's professional advisers.
    4. Each Party shall inform any person receiving any Confidential Information, of the confidential nature of the same and shall require such recipient to observe the confidentiality requirements hereunder. Such disclosing Party shall remain responsible for any breach of this clause 12 by the person to whom that Confidential Information is disclosed.
    5. Save as required by law or any competent regulatory authority, no announcement concerning this Agreement or its subject matter shall be made by the Company without the Investors' prior written approval.
    6. Without prejudice to any other rights or remedies which a Party may have, the Parties agree that damages would not be an adequate remedy for any breach of this clause 14 and the remedies of injunction, specific performance and other equitable relief are appropriate for any threatened or actual breach of clause 12.
  13. Notices

    1. Any notice to be given pursuant to this Agreement shall be delivered by overnight courier, by registered mail to the address of the receiving Party set out below or such other address as may be designated by written notice to the other Parties.
      • Address of Company for the attention of:
      • Address of Founder[s] for the attention of:
      • Address of Investors for the attention of:
    2. Any notice given shall be deemed to have been received in the case of delivery by courier or sending by certified mail, on the day of receipt, provided receipt occurs on a Business Day or otherwise on the next following Business Day.
  14. Assignment

    No Party shall assign or transfer this Agreement or otherwise dispose of (whether in whole or in part) any of its rights or obligations hereunder to any third party, without the prior written consent of the other Parties.
  15. Severance of Terms

    1. If the whole or any part of this Agreement is or becomes or is declared illegal or invalid for any reason, that part shall be severed from this Agreement and the remaining parts of this Agreement shall continue in full force and effect.
    2. If in the reasonable opinion of any Party any severance under Clause 15 materially affects this Agreement, the Parties shall discuss and resolve such effect amicably.
  16. Costs

    Each Party bears its own legal costs, legal fees and other expenses incurred in the preparation and execution of this Agreement.
  17. Governing Law

    This Agreement (and any dispute, controversy, proceedings or claim of whatever nature arising out of this Agreement or its formation) shall be governed by and construed in accordance with the laws of Singapore and the Parties irrevocably submit to the exclusive jurisdiction of the Courts of Singapore.
  18. General

    1. If any provisions of the Memorandum or Articles of the Company at any time conflict with any of the provisions of this Agreement, the provisions of this Agreement shall prevail.
    2. No Party shall be deemed to have waived any of its rights or remedies under this Agreement unless such waiver is expressly made in writing and signed by a duly authorised representative of that Party. No delay or failure of any Party in exercising or enforcing any of its rights or remedies under this Agreement operates as a waiver of such rights or remedies nor shall any single or partial exercise or enforcement of any right or remedy by any Party affect any other exercise or enforcement of that right or remedy by that Party.
    3. This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof, and supersedes all previous representations or agreements, whether written or oral, between the Parties. No amendment or supplement to this Agreement is valid unless made in writing and signed by a duly authorised representative of each Party.
    4. Clauses 6 (Limits on Liability), 12 (Confidentiality), 14 (Assignment) and 17 (Governing Law) survive termination of this Agreement.
    5. Nothing in this Agreement shall constitute a partnership between the Parties. Except as specifically provided in this Agreement, none of the Parties may act as agent for any other party nor shall any Party be held liable for or incur liability in respect of the acts or defaults of any other Party.
    6. A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act (Cap 53B) to enforce any term of this Agreement.
    7. This Agreement may be executed in any number of counterparts and by the Parties on separate counterparts.

In witness whereof this Agreement has been signed as follows:

Schedule 1

Schedule 2

Schedule 3

Schedule 4

Warranties

  1. Capacity

    1. The Company has full power and authority to enter into and perform this Agreement, and this Agreement constitutes a binding obligation on the Company.
    2. The execution and performance by the Company of its obligations under this Agreement does not:
      1. breach of any provision of its Memorandum of Association or Articles; or
      2. constitute a default under any existing agreement, whether binding or not, to which the Company is a party, or any order, judgement or decree of any court or government agency to which the Company or the Founder[s] are a party or by which any of them are bound.
  2. Shares and Loan Capital

    1. The persons listed in Schedule 3 as the registered shareholders are the legal and beneficial owners of the number of shares in the Company set out against their names in Schedule 3 (as amended by the Disclosure Letter from time to time) which constitute all the issued shares of the Company.
    2. There is no agreement or commitment outstanding that calls for the allotment, issue, transfer or conversion of any share of the Company other than as provided in this Agreement.
    3. There is no option, pledge, lien, mortgage or charge or other form of security or encumbrance or equity on, over or affecting any shares in the Company and there is no conditional or unconditional agreement or commitment to give or create any and no claim has been made by any person to be entitled to any other than as provided in this Agreement and any relevant statutory provisions.
    4. The Company does not have and never had beneficial interest in or legal title to any equity capital or loan capital in any other corporate entity.
    5. The Company does not act or carry on business in partnership with any other person.
    6. The existing Articles set out all the rights and privileges which are applicable to the Company and neither the Company nor the director nor the existing shareholders have entered into any agreement, understanding or arrangement amending, modifying or supplementing any of the same.
  3. Information and Accounts

    1. All information concerning the Company reasonably believed by the Company to be material for disclosure to the Investors in connection with the grant of the Loan pursuant to this Agreement have been fairly and accurately disclosed in the Business Plan or in the Disclosure Letter.
    2. The Company have carefully reviewed the Business Plan and:
      1. the Business Plan has been prepared with reasonable skill, diligence and care;
      2. all factual information contained in the Business Plan was when given and remains true and accurate and not (whether by omission or otherwise) misleading;
      3. all statements of opinion, forecasts, projections and budgets contained or referred to in the Business Plan:
        1. have been honestly and reasonably made; and
        2. have been properly prepared on bases and assumptions which are honestly considered by the Company, after careful enquiry, to be fair and reasonable.
  4. Accounts

    1. A true and complete copy of the Audited Accounts is annexed to the Disclosure Letter.
    2. The Audited Accounts were prepared under the historic cost convention and complied with, and were prepared in accordance with, all applicable accounting requirements, and have been carefully prepared on a basis consistent with generally accepted accounting practices and policies in Singapore.
    3. The Audited Accounts:
      1. give a true and fair view of the assets and liabilities of the Company as at the Accounts Date and of its profits for the financial period ended on the Accounts Date;
      2. fully disclose all the assets of the Company as at the Accounts Date;
      3. make provision for, reserve for or disclose, as appropriate, all liabilities, whether actual or contingent, all capital commitments, whether actual or contingent, and all bad or doubtful debts of the Company as of the Accounts Date in accordance with applicable accounting requirements; and
      4. make provision for or reserve for deferred taxation in accordance with all applicable accounting requirements.
  5. Management Accounts

    1. The Management Accounts honestly reflect the financial position of the Company as at the date to which the Management Accounts are prepared.
    2. So far as the Company is aware, there has been no material change in the financial position of the Company that would affect the Management Accounts since the preparation of the Management Accounts.
    3. The Management Accounts have been reviewed and approved by the Board.
  6. Position Since the Accounts Date

    Since the Accounts Date:
    1. no dividend has been declared, paid or made by the Company;
    2. the Company has conducted its business in the ordinary and usual course without any interruption in its nature, scope or manner and so as to maintain the same as a going concern;
    3. the Company has not written off any debts, no debt has been released by the Company on terms that the debtor pays less than the book value of its debt, and no debt owing to the Company has proved to any extent to be irrecoverable;
    4. the Company has not entered into any contract involving expenditure on capital account or the purchase of any capital equipment or other items of a capital nature;
    5. there has been no material adverse change in the financial position or trading prospects or turnover of the Company and, so far as the Company are aware, no event, fact or matter has occurred or is likely to occur which will or is likely to give rise to any such change;
    6. no contract or commitment (whether in respect of capital expenditure or otherwise) has been entered into by the Company which involves an obligation of a material nature or magnitude;
    7. the Company has not acquired or disposed of or agreed to acquire or dispose of any business or any asset or assumed or acquired any liability (including any contingent liability) or made any payment otherwise than in the ordinary course of business and at arm's length;
    8. the Company has not disposed of or agreed to dispose of any asset for a consideration payable by instalments where any instalment remains unpaid;
    9. all cash and payments of any kind received by the Company have been credited to its accounts;
    10. the Company has paid its creditors in accordance with the same policy as that adopted throughout the financial period ended on the Accounts Date; and
    11. none of the assets of the Company has been diminished by the wrongful act of any person.
  7. Licenses and Consents

    The Company has obtained all applicable governmental and regulatory licences, authorisations and consents required to own and operate its assets and for the proper carrying on of its business which are in full force and effect and the Company is not in breach of any of the terms and conditions attached to any of them.
  8. Assets

    The Company owns all the assets used in the operation of its business and which are material to the operation of its business. None of such assets are subject to any Encumbrance.
  9. Debts

    The Company does not owe any sums besides those incurred in the ordinary course of business.
  10. Confidential Information

    1. The Company does not use any processes or business methods, and is not engaged in any activities, which involve the misuse or alleged misuse of any confidential information belonging to any third party.
    2. The Company are not aware of any actual or alleged misuse by any person of any of the Company's confidential information (including customer lists which are maintained by or on behalf of the Company in any format or medium).
    3. The Company has not disclosed to any person any of its confidential information except (i) to its professional advisers; or (ii) to its investors and prospective investors; or (iii) where such disclosure was properly made in the ordinary course of the Company business and was made subject to a written agreement under which the recipient is obliged to maintain the confidentiality of such confidential information and is restrained from further disclosing or using it other than for the purposes for which it was disclosed by the Company.
  11. Intellectual Property Rights

    1. The Company is the sole legal and beneficial owner and, where registeration is required, the sole registered proprietor of the Business IPRs free from Encumbrances.
    2. To the best of the knowledge, information and belief of the Company, the Business IPRs are valid and enforceable and not subject to any pending or threatened claims, challenges or proceedings.
    3. As far as the Company are aware, no third party has made unauthorised use of any Business IPR.
    4. The Company has taken all steps and made all payments in time as required to prosecute, maintain and renew all Business IPRs.
    5. No licensee of any Business IPRs is in breach of the relevant agreement, and there are no actual or pending disputes in relation to such agreements.
    6. To the best of the knowledge and belief of the Company, the activities of the Company do not infringe, or have not been alleged to infringe, the IPRs of any third party.
  12. Contracts With Connected Persons

    1. There are no existing contracts or engagements to which the Company is a party and in which the Founder[s] and/or any director of the Company and/or any person who is a Connected Person with any of them is interested.
    2. The Founder[s] and/or any person who is a Connected Person with the Founder[s] [does][do] not own and [is][are] not otherwise interested in any property used in connection with the business of the Company.
    3. The Founder[s] [is][are] not either collectively or individually or with any other person or persons, directly or indirectly, engaged in any other business and [he][they] [is][are] not concerned or interested in any way whatsoever in any other business of a similar nature to or competitive with the Company.
  13. Contracts

    1. The Company is not a party to:
      1. any contract not in the ordinary of its business;
      2. any power of attorney;
      3. any joint venture, consortium, partnership or profit sharing arrangement or agreement or a member of any partnership, whether formal or informal and whether or not having a separate legal identity.
  14. Borrowings

    Except as disclosed in the accounts the Company does not have any outstanding borrowing or indebtedness otherwise than arising in the ordinary course of business.
  15. Litigation, Offences And Compliance With Statutes

    1. Neither the Company nor any of its officers is a party to any dispute resolution process whether in progress, threatened or pending; the Company is not being prosecuted for any offence and no governmental investigation or inquiry in progress or pending. There are no circumstances which may give rise to any such proceedings, investigation or inquiry.
    2. Neither the Company nor any of its officers, agents or employees (during the course of their duties in relation to the business of the Company) has committed or omitted to do any act or thing which is or could be in contravention of any statutory obligation or any other law of Singapore or any other country giving rise to any fine, penalty, default proceedings or other liability in relation to the business or officers of the Company or any of its assets.
    3. None of the Founders have ever been charged with or convicted of any criminal offence other than a road traffic offence (not involving a custodial sentence, whether suspended or not).
    4. The Founders have never been disqualified from being a company director or been adjudged bankrupt or been the subject of a petition for a bankruptcy order.
  16. Taxation

    1. The Company has no tax liability resulting from or by reference to any income, profits or gains earned, accrued or received on or before the date hereof.
  17. Administration

    1. All the accounts and other material records of the Company are up to date, under its control and have been fully and accurately kept.
    2. Every document required by the Companies Act to be filed with the Registrar of Companies has been duly filed and compliance has been and is being made by the Company with the Companies Act.
    3. The copy of the Memorandum and Articles of Association of the Company provided to the Investors is accurate and complete and fully sets out all rights attaching to each class of the share capital of the Company. The register of members and other statutory books of the Company have been properly kept and contain a true and complete record of all the matters therein.
    4. All legal requirements in connection with the formation of the Company have been observed and all material legal requirements in connection with the conduct of the Company have been observed.
    5. No order has been made or petition presented or resolution passed for the winding-up of the Company, no distress, execution or other process has been levied on any of its assets, it has not suspended payment and is not insolvent or unable to pay its debts within the meaning of the Bankruptcy Act, no order has been made or petition presented or resolution passed for the appointment of an administrator, no receiver has been appointed, or any part thereof and there is no unfulfilled or unsatisfied judgment, arbitration award or court order or arbitration order outstanding against it.