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Convertible Bond Agreement

Convertible Bond Agreement Template for Canada

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Key Requirements PROMPT example:

Convertible Bond Agreement

"I need a Convertible Bond Agreement for a Canadian technology company issuing CAD 5 million in bonds with a 5% interest rate, convertible after March 2025, with standard anti-dilution provisions and early redemption rights for the issuer."

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Document background
The Convertible Bond Agreement is a critical financing instrument used by Canadian companies seeking to raise capital while offering investors the flexibility to convert their debt investment into equity. This document is particularly relevant for growth-stage companies or established corporations requiring significant capital for expansion, acquisition, or operational needs. The agreement must comply with Canadian securities regulations, including provincial securities laws and federal legislation such as the Canada Business Corporations Act. It typically includes detailed provisions on conversion mechanics, anti-dilution protections, and security arrangements. The document is essential for companies looking to offer more attractive investment terms than straight debt while potentially delaying equity dilution.
Suggested Sections

1. Parties: Identification of the Bond Issuer and the Bondholders/Trustees

2. Background: Context of the bond issuance, corporate authority, and purpose of the financing

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Bond Terms: Principal amount, interest rate, maturity date, and basic terms of the bonds

5. Conversion Rights: Terms and conditions for converting bonds into shares, including conversion price and ratio

6. Conversion Procedures: Detailed process for exercising conversion rights

7. Interest Payments: Interest calculation, payment dates, and payment mechanics

8. Issuer Covenants: Ongoing obligations of the issuer, including financial covenants and reporting requirements

9. Events of Default: Circumstances constituting default and consequences

10. Bondholder Rights: Rights and protections of bondholders, including voting rights and meetings

11. Transfer Restrictions: Limitations and procedures for transferring the bonds

12. Representations and Warranties: Standard declarations by the issuer regarding its status and capacity

13. Security and Ranking: Priority of bonds and any security provided

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Applicable law and dispute resolution procedures

Optional Sections

1. Anti-dilution Provisions: Used when additional protection against share dilution is required

2. Redemption Rights: Include when early redemption options are offered to either party

3. Security Trustee Provisions: Required when a security trustee is appointed to hold security for bondholders

4. International Payment Provisions: Needed for cross-border transactions or multiple currency provisions

5. Tax Gross-up: Include when tax implications need to be addressed specifically

6. Change of Control Provisions: Used when specific provisions for change in company control are needed

7. Registration Rights: Include when bondholders need rights to register converted shares

8. Subordination Provisions: Required when bonds are subordinated to other debt

Suggested Schedules

1. Form of Bond Certificate: Template of the physical or electronic bond certificate

2. Conversion Notice: Standard form for bondholders to exercise conversion rights

3. Financial Covenants: Detailed financial ratios and calculations

4. Share Capital Structure: Details of the issuer's share capital and rights

5. Conversion Price Adjustments: Detailed mechanisms for adjusting conversion price

6. Form of Transfer Certificate: Template for transferring bonds between holders

7. Meeting Procedures: Detailed procedures for bondholder meetings

8. Compliance Certificate: Template for regular compliance reporting

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈË°æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
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Relevant Industries

Technology

Mining and Resources

Renewable Energy

Manufacturing

Real Estate

Healthcare and Biotechnology

Infrastructure

Financial Services

Telecommunications

Clean Technology

Relevant Teams

Legal

Finance

Treasury

Corporate Development

Compliance

Risk Management

Board of Directors

Executive Leadership

Investment Relations

Corporate Secretariat

Relevant Roles

Chief Financial Officer

Corporate Counsel

Finance Director

Treasury Manager

Investment Banking Director

Corporate Secretary

Financial Controller

Compliance Officer

Risk Manager

Board Director

Chief Executive Officer

Investment Manager

Legal Counsel

Company Secretary

Bond Trustee

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

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