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Convertible Promissory Note Purchase Agreement for Malaysia

Convertible Promissory Note Purchase Agreement Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that establishes the terms and conditions under which an investor provides funding to a company in exchange for a convertible promissory note. This document details the loan amount, interest rate, maturity date, conversion mechanisms, and circumstances triggering conversion into equity. It incorporates specific requirements under Malaysian securities laws and financial regulations, including compliance with the Capital Markets and Services Act 2007 and relevant Securities Commission guidelines. The agreement also addresses investor rights, company obligations, and enforcement mechanisms under Malaysian jurisdiction.

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Convertible Promissory Note Purchase Agreement

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What is a Convertible Promissory Note Purchase Agreement?

The Convertible Promissory Note Purchase Agreement is a crucial financing instrument commonly used in Malaysia's growing startup and scale-up ecosystem. It provides a bridge between debt and equity financing, allowing companies to receive immediate funding while deferring valuation discussions to a future date. This document type is particularly relevant for companies seeking interim financing before a larger equity round, typically during early or growth stages. The agreement must comply with Malaysian regulatory requirements, including the Companies Act 2016 and Capital Markets and Services Act 2007, while addressing key commercial terms such as conversion triggers, valuation caps, and discount rates. It's designed to protect both the issuing company's and investors' interests while providing flexibility in future financing rounds.

What sections should be included in a Convertible Promissory Note Purchase Agreement?

1. Parties: Identification of the issuing company and the note purchaser(s)

2. Background: Context of the transaction and purpose of the convertible note financing

3. Definitions: Key terms used throughout the agreement, including financial terms, conversion-related definitions, and other technical terms

4. Purchase and Sale of Notes: Terms of the note purchase, including purchase price and closing mechanics

5. The Notes: Fundamental terms of the notes including principal amount, interest rate, and maturity date

6. Conversion Rights: Detailed provisions regarding conversion mechanics, including timing, price, and triggers

7. Repayment Terms: Conditions and procedures for repayment of the note if not converted

8. Company Representations and Warranties: Standard company representations about its legal status, authority, and business condition

9. Investor Representations and Warranties: Investor's confirmations regarding investment capacity and sophistication

10. Covenants: Ongoing obligations of the company during the note term

11. Events of Default: Circumstances constituting default and consequences thereof

12. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law, etc.

What sections are optional to include in a Convertible Promissory Note Purchase Agreement?

1. Information Rights: Used when investors require specific financial and operational information rights beyond statutory requirements

2. Board Observer Rights: Included when investors are granted the right to appoint a board observer

3. Most Favored Nation Provision: Added when investors want protection against more favorable terms being offered in subsequent note issuances

4. Pre-emptive Rights: Included when investors are granted rights to participate in future financing rounds

5. Transfer Restrictions: Added when specific limitations on note transfer are required

6. Subordination Provisions: Necessary when the notes need to be subordinated to other company debt

7. Multiple Closing Provisions: Required when the note purchase agreement contemplates multiple closing dates

What schedules should be included in a Convertible Promissory Note Purchase Agreement?

1. Form of Convertible Promissory Note: The actual form of note to be issued to investors

2. Capitalization Table: Current and pro-forma capitalization of the company

3. Disclosure Schedule: Exceptions to company representations and warranties

4. Use of Proceeds: Detailed breakdown of intended use of investment proceeds

5. Required Consents and Filings: List of third-party consents and regulatory filings required

6. Existing Indebtedness: Schedule of company's existing debt obligations

7. Key Terms of Conversion: Detailed mechanics and calculations for conversion scenarios

Authors

Alex Denne

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

Jurisdiction

Malaysia

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions













































Clauses






























Relevant Industries

Technology

Financial Services

E-commerce

Healthcare

Renewable Energy

Software Development

Biotechnology

Fintech

Manufacturing

Education Technology

Digital Media

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Treasury

Compliance

Executive Leadership

Investment

Corporate Secretarial

Risk Management

Business Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Manager

Legal Counsel

Corporate Secretary

Finance Director

Venture Capital Partner

Investment Analyst

Corporate Lawyer

Startup Founder

Business Development Director

Investment Director

Company Director

Compliance Officer

Treasury Manager

Industries







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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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