This participating and convertible debenture template has 9 pages and is a MS Word file type listed under our finance & accounting documents.
Sample of our participating and convertible debenture template:
PARTICIPATING AND CONVERTIBLE DEBENTURE [SPECIFY] (Corporation incorporated under the [SPECIFY CORPORATION ACT]) [SPECIFY AMOUNT] No.: [SPECIFY NUMBER] PROMISE TO PAY [SPECIFY]. (the "Corporation"), for value received, hereby recognizes owing and promises to pay to [SPECIFY] ("[SPECIFY] ") or its authorized assignee, at the head office of [SPECIFY] or any other place which [SPECIFY] may communicate in writing from time to time to the Corporation: the principal amount of [AMOUNT SPECIFY CURRENCY] in [COUNTRY] legal currency (the "Principal Amount") upon presentation and remittance of this Debenture which Principal Amount shall be calculated as set forth in Section 2.2 hereof and which is repayable following the terms and conditions set forth in this Debenture; for as long as [SPECIFY] holds this Debenture, the interest on the Principal Amount equals to a percentage of the aggregate dividends and other distributions declared on the [SPECIFY] shares of the share capital of the Corporation (the "[NUMBER] Shares"), calculated by dividing [SPECIFY] Shares by the total number of issued and outstanding [NUMBER] shares on a fully diluted basis (the "Interest"). Such Interest is payable on the date where the dividends declared on [SPECIFY] shares of the Corporation are payable. If no dividends are declared, then no interest shall be payable for a given year. For the purposes of this Debenture "fully diluted basis" means, when determining the issued and outstanding [SPECIFY Shares of the Corporation, the aggregate of all issued and outstanding [SPECIFY] Shares and the number of [SPECIFY] Shares that would be issued on the full exercise of all convertible debentures, options, warrants and other rights of any kind and whether or not contingent, to acquire [SPECIFY] Shares or to have [SPECIFY] Shares issued from treasury. REPAYMENT OF THE DEBENTURE Unless [SPECIFY] (i) has previously requested the redemption of the aggregate of the Debenture in accordance with the provisions of Article 3, or (ii) has previously requested the conversion of the Debenture in accordance with Article 4, the Principal Amount is repayable concurrently with the exercise by [SPECIFY] of its Put Option described in Article [NUMBER] of the Unanimous Shareholders' Agreement of the Corporation entered into as of the date hereof (the "Shareholders' Agreement"). [SPECIFY] may request the repayment of this Debenture in [SPECIFY]'s Put Notice, as defined in Article [NUMBER] of the Shareholders' Agreement (the "Put Notice") (the "Date of Repayment"). The Principal Amount payable on the Date of Repayment pursuant to section 2.1 hereof shall be equal the Fair Market Value (as hereinafter defined) of [NUMBER] Shares of the Corporation on the Date of Repayment as if such shares were issued and outstanding on the Date of Repayment, event though such amount is less then the [AMOUNT] amount disbursed by [SPECIFY] as of the date hereof. For the purposes of this Debenture, Fair Market Value means: the fair market value of the shares of the Corporation, as determined by an independent evaluator, who must be an auditor with expertise in business evaluations, jointly designated by the Corporation and [SPECIFY]; in determining such fair market value; (i) no diminution or accretion in value shall be attributed to any majority or minority interest; in the event of failure to agree upon such an evaluator within [NUMBER] days of the date of the event by reason of which the evaluation is required to act hereunder, the Corporation and/or [SPECIFY] may apply to the arbitration as contemplated in the Shareholders Agreement; the evaluator shall deliver his report within [NUMBER] days of this appointment and his decision shall be final and binding upon all parties; all expenses incurred in relation with the determination of the fair market value will be borne by the Corporation. Concurrently with the payment of the Principal Amount as set forth in paragraph 2.2, the Corporation shall pay [SPECIFY] any unpaid Interest, as of the Date of Repayment. The Corporation may not repay by anticipation all or any portion of the Principal Amount hereunder, without the prior written consent of [SPECIFY]. Once the Debenture has been repaid in full, the Corporation shall be relieved of any and all obligations hereunder. REDEMPTION OF THE DEBENTURE AT THE OPTION OF [SPECIFY] [SPECIFY] may request the Corporation to redeem the Debenture by remitting to the Corporation a written notice in accordance with Article 11 hereof at any time following the occurrence of an event of default as provided under Article 8 or a special event as provided under Article 9. (The date of the written notice is the "Date of Redemption".) In the event of a default or a special event, the redemption price of the Debenture will be payable without delay by the Corporation to [SPECIFY] and shall be equal to the aggregate of (i) the Principal Amount as set forth in section 2.2 hereof (ii) the unpaid Interest, if any, as of the Date of Redemption. Once the Debenture has been redeemed in full, the Corporation shall be relieved of any and all obligations hereunder. RIGHT OF CONVERSION [SPECIFY] shall have the right at its option, and at any time, to convert in full this Debenture into [SPECIFY] shares of the Corporation (the "Shares") (or any other shares following the redesignation or reclassification of the Shares), by remitting the Debenture to the Corporation together with a notice of conversion in the form of the one attached hereto (the "Date of Conversion") in the manner set forth under Article 11 hereof. Upon compliance by [SPECIFY] with the provisions of section 4.1, the [SPECIFY] Shares to be issued at the time of the exercise of the right of conversion conferred by this Debenture is deemed to have been issued and [SPECIFY] is deemed to become the registered holder of these Shares as of the Date of Conversion and the Corporation must make the necessary inscriptions in its registers. The Corporation must as soon as possible following the Date of Conversion but within a maximum period of [NUMBER] days remit to [SPECIFY] a share certificate registered in the name of [SPECIFY] for the [SPECIFY] Shares to which [SPECIFY] is entitled. At the time of the conversion of the Debenture, [SPECIFY] shall also be entitled, at its sole discretion, to receive in cash the unpaid Interest thereon, as the case may be, at the Date of Conversion. The Corporation shall pay all costs incurred in connection with the issue of the Shares arising from the exercise of the right of conversion. The Corporation undertakes towards [SPECIFY], as long as a right of conversion pertaining to the Debenture may be exercised, to: make all necessary steps and see to it that a sufficient number of Shares is authorized at all times for the purposes of issue in order to satisfy the terms of the right of conversion pertaining to the Debenture; ensure that all the Shares issued at the time of the exercise of the right of conversion are duly and validly issued as fully paid. REPRESENTATIONS AND WARRANTIES In addition to the representations and warranties made pursuant to the Subscription Agreement entered into as of the date hereof which are hereby reiterated and repeated herein in favor of [SPECIFY], the Corporation represents and warrants to [SPECIFY] the following additional representations and warranties: the Corporation has all corporate powers and legal capacity required in order to execute and deliver this Debenture and to perform and satisfy all the conditions herein stipulated; all actions, steps and corporate proceedings of the Corporation necessary to approve and authorize it to execute and deliver this Debenture and perform all of its obligations hereunder have been duly and validly authorized and taken by the Corporation, its directors and, if required, its shareholders and no further actions, approvals or authorizations are required;
