Terms and Conditions for the issuance of Convertible Bonds. This is a private issuance of convertible bonds that can be converted into shares for companies pending their IPOs.
Convertible Bonds are Bonds that can be converted into shares of the issuer at the discretion of the investors. This will allow the investor the participate in the upside of an issuer upon IPO or increase in the value of the issuer's shares. It is less risky than buying the stocks outright as investors can hold onto the bonds as a debt instrument should there be no listing or the share price went down. Bondholders also have priority over shareholders in the event of insolvency or liquidation. The value of the Convertible Bonds would be equivalent to that of a typical bonds plus an option to purchase the stocks. As it is a hybrid between stocks and bonds, Convertible Bonds typically offer higher yields than stock but lower yields than typical bonds.
The Bonds constitute direct, unsubordinated, unconditional and (subject to Condition 4) unsecured obligations of the Issuer. The Bonds shall at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by mandatory provisions of applicable law and subject to Condition 4, at all times rank at least equally with all of its other present and future direct, unsubordinated, unconditional and unsecured obligations.
The Issuer will keep the Register at its specified office, and, upon any change to its specified office, the Issuer shall promptly give notice in writing to the Bondholders in accordance with Condition 14 (and the term “specified office” shall be construed accordingly) on which shall be entered in respect of each holder: (a) its name and address; (b) the details of its registered account (as referred to in Condition 7(B)); (c) the telephone and facsimile numbers of the relevant contact persons for such holder; (d) the names of its authorised signatories; and (e) the particulars of the Bonds held by it and the details of all transfers of the Bonds. A Bondholder may change such details by notice to the Issuer. Each Bondholder shall be entitled to receive only one Certificate in respect of its entire holding of Bonds.
Conversion Period: Subject to as provided in these Conditions, each Bond shall entitle the holder to convert such Bond into Shares credited as fully paid at any time during the Conversion Period referred to below (the “Conversion Right”), provided that, notwithstanding any other provision to the contrary, the Conversion Rights attaching to each Bond may only be exercised by the holder of that Bond in one single exercise on the Conversion Date.
Subject to and upon compliance with these Conditions, the Conversion Right in respect of a Bond may be exercised, at the option of the holder thereof, at any time after the first anniversary of the Issue Date up to the close of business (at the specified office of the Issuer) on the seventh day prior to the Maturity Date or, if such Bond shall have been called for redemption by the Issuer prior to the Maturity Date, then up to the close of business (at the place aforesaid) on a date no less than seven days (at the place aforesaid) prior to the date fixed for redemption thereof (the “Conversion Period”).
A Conversion Right may not be exercised in respect of the Bonds, where except as provided in Condition 6(A)(iv) and Condition 10(B), following the giving of notice by the Majority Bondholders pursuant to Condition 10.
The number of Shares to be issued on exercise of a Conversion Right will be determined by dividing the principal amount of the Bonds to be converted by the Conversion Price in effect on the relevant Conversion Date. A Conversion Right may only be exercised in respect of one or more Bonds. If more than one Bond held by the same holder is converted at any one time by the same holder, the number of Shares to be issued upon such conversion will be calculated on the basis of the aggregate principal amount of the Bonds to be converted.
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