Debenture Subscription Agreement for the United States

Debenture Subscription Agreement Template for United States

A Debenture Subscription Agreement is a legally binding contract under U.S. federal and state securities laws that governs the terms and conditions under which investors subscribe to debentures issued by a company. The agreement details the rights and obligations of both the issuer and subscribers, including payment terms, interest rates, maturity dates, and default provisions. It must comply with SEC regulations and applicable state securities laws.

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What is a Debenture Subscription Agreement?

The Debenture Subscription Agreement is used when a company seeks to raise debt capital by issuing debentures to investors. This document is crucial in U.S. securities transactions as it establishes the framework for the debt instrument, including subscription terms, payment schedules, and investor rights. The agreement must comply with the Securities Act of 1933, Securities Exchange Act of 1934, and state-specific securities regulations. It's particularly important for companies seeking alternative financing methods to equity and traditional bank loans.

What sections should be included in a Debenture Subscription Agreement?

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

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

3. 3. Definitions: Key terms used throughout the agreement

4. 4. Subscription Details: Terms of the debentures, including amount, interest rate, and maturity

5. 5. Payment Terms: Payment schedule and mechanisms

6. 6. Representations and Warranties: Statements of fact and assurances from both parties

7. 7. Covenants: Ongoing obligations of the issuer

8. 8. Events of Default: Circumstances constituting default and remedies

9. 9. Governing Law: Applicable law and jurisdiction

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

1. Security Provisions: Details of any security or collateral (include when debentures are secured)

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

3. Redemption Rights: Early redemption terms (include if early redemption is permitted)

What schedules should be included in a Debenture Subscription Agreement?

1. Schedule A - Form of Debenture Certificate: Template of the actual debenture certificate

2. Schedule B - Payment Schedule: Detailed payment terms and dates

3. Schedule C - Security Details: Description of security/collateral if applicable

4. Appendix 1 - Corporate Resolutions: Relevant corporate approvals

5. Appendix 2 - Disclosure Schedule: Required disclosures and exceptions to representations

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: Federal law governing registration and disclosure requirements for securities offerings, including debentures. Requires full and fair disclosure of securities being offered and prohibits fraudulent practices.

Securities Exchange Act of 1934: Federal law establishing ongoing reporting requirements for issuers of securities, including periodic financial reports and material event disclosures.

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

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

Investment Company Act of 1940: Federal law regulating investment companies and their offerings, which may be applicable depending on the nature of the issuing entity.

State Corporate Laws: Laws of the state where the issuer is incorporated, governing corporate authority, approvals, and other corporate matters related to issuing debentures.

Internal Revenue Code: Federal tax laws affecting debt instruments, including provisions on interest deductibility, original issue discount, and taxation of interest payments.

SEC Regulations: Various SEC rules including Regulation D for private placements and Regulation S for international offerings, governing the issuance and sale of securities.

Exchange Rules: Rules and requirements set by securities exchanges if the debentures will be listed for trading on a public exchange.

Uniform Commercial Code: State-adopted uniform laws, particularly Articles 8 (Investment Securities) and 9 (Secured Transactions), governing securities and secured transactions.

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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