Debenture Purchase Agreement for the United States

Debenture Purchase Agreement Template for United States

A Debenture Purchase Agreement is a legally binding contract under U.S. federal and state securities laws that governs the issuance and sale of debentures (unsecured debt instruments) by a company to investors. The agreement outlines the terms of the debentures, including interest rates, maturity dates, redemption rights, and default provisions, while ensuring compliance with applicable securities regulations and registration requirements.

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What is a Debenture Purchase Agreement?

The Debenture Purchase Agreement serves as the primary document for companies seeking to raise capital through the issuance of unsecured debt instruments. This agreement, governed by U.S. securities laws, establishes the relationship between the issuer and purchasers, detailing the terms of the debentures and the rights and obligations of all parties. It's particularly useful for companies that need substantial financing but prefer debt to equity financing, or when secured financing isn't feasible. The agreement must comply with federal securities regulations, including the Securities Act of 1933 and applicable state Blue Sky laws, especially regarding registration requirements or exemptions.

What sections should be included in a Debenture Purchase Agreement?

1. Parties: Identification of the issuer and purchaser(s)

2. Background: Context of the debenture issuance and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Purchase and Sale: Terms of the debenture purchase, including price and quantity

5. Terms of Debentures: Interest rate, maturity, redemption rights, and other key terms

6. Representations and Warranties: Statements of fact by both parties

7. Covenants: Ongoing obligations of the issuer

8. Events of Default: Circumstances constituting default and remedies

9. Closing Conditions: Conditions precedent to purchase

What sections are optional to include in a Debenture Purchase Agreement?

1. Registration Rights: Rights to register securities for public trading (when purchasers require ability to resell securities)

2. Conversion Rights: Terms for converting debentures to equity (for convertible debentures only)

3. Subordination Provisions: Terms of subordination to other debt (for subordinated debentures)

What schedules should be included in a Debenture Purchase Agreement?

1. Schedule of Purchasers: List of purchasers and their purchase amounts

2. Form of Debenture: Specimen form of the debenture certificate

3. Disclosure Schedule: Exceptions to representations and warranties

4. Corporate Resolutions: Evidence of authority to issue debentures

5. Legal Opinion: Form of legal opinion to be delivered at closing

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

United States

Publisher

Genie AI

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions
Industries

Securities Act of 1933: Primary federal law governing registration requirements and exemptions for securities offerings, including debentures. Key focus on disclosure requirements and registration process.

Securities Exchange Act of 1934: Federal law regulating secondary market trading of securities and establishing ongoing reporting requirements for issuers.

Trust Indenture Act of 1939: Federal law governing the provisions of trust indentures under which debt securities, including debentures, are issued. Particularly relevant for publicly offered debentures.

State Blue Sky Laws: State-specific securities laws governing registration, exemption, and disclosure requirements for securities offerings within each state's jurisdiction.

Investment Company Act of 1940: Federal law regulating investment companies and their activities, which may be relevant depending on the issuer's status and business activities.

Uniform Commercial Code: State-adopted uniform law governing commercial transactions, particularly Article 8 (Investment Securities) and Article 9 (Secured Transactions) for debenture-related matters.

Internal Revenue Code: Federal tax law provisions governing the tax treatment of debt instruments, including debentures, for both issuers and holders.

Dodd-Frank Act: Comprehensive financial reform legislation affecting various aspects of financial instruments and markets, including certain types of debentures.

Regulation D: SEC regulations providing safe harbor exemptions from securities registration requirements, commonly used for private placement of debentures.

U.S. Bankruptcy Code: Federal law governing bankruptcy proceedings, including provisions affecting creditor rights and priority rules relevant to debenture holders.

State Corporate Laws: State-specific laws governing corporate authority to issue debentures and related corporate governance requirements.

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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