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Note Purchase Agreement for the United Kingdom

Note Purchase Agreement Template for United States

A Note Purchase Agreement is a legal document governed by U.S. federal and state securities laws that establishes the terms and conditions under which investors purchase debt instruments (notes) from an issuing entity. The agreement details the economic terms of the notes, including interest rates, maturity dates, and payment schedules, as well as representations, warranties, and covenants of the parties. It also includes provisions for defaults, remedies, and transfer restrictions in compliance with applicable securities regulations.

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What is a Note Purchase Agreement?

The Note Purchase Agreement is a fundamental document in debt financing transactions, used when companies seek to raise capital through the issuance of debt securities. This agreement, governed by U.S. securities laws, outlines the complete terms of the note offering, including purchase price, interest rates, maturity dates, and conversion rights (if applicable). It's commonly used for private placements, venture debt, and growth capital financing. The document must comply with federal securities regulations, including registration requirements or applicable exemptions, as well as state-specific 'Blue Sky' laws. The Note Purchase Agreement serves as the primary contract protecting both issuer and investor interests through detailed representations, warranties, and covenants.

What sections should be included in a Note Purchase Agreement?

1. Parties: Identification of the issuer, purchaser(s), and any other relevant parties

2. Background: Context of the note issuance and purpose of the financing

3. Definitions: Key terms used throughout the agreement

4. Purchase and Sale of Notes: Core transaction terms including purchase price, interest rate, and maturity

5. Closing Conditions: Conditions precedent to the purchase obligation

6. Representations and Warranties: Statements of fact by issuer and purchaser

7. Covenants: Ongoing obligations of the parties

8. Events of Default: Circumstances triggering acceleration or other remedies

9. Miscellaneous: Standard boilerplate provisions including governing law, notices, and amendments

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

1. Security Interest: Terms of collateral securing the notes - include when notes are secured by assets

2. Subordination: Terms of subordination to senior debt - include when notes are subordinated to other debt

3. Registration Rights: Rights to register notes for public trading - include when public trading is contemplated

4. Conversion Rights: Terms for converting notes to equity - include for convertible notes

What schedules should be included in a Note Purchase Agreement?

1. Form of Note: Template of the actual note instrument to be issued

2. Disclosure Schedule: Exceptions to representations and warranties made by the issuer

3. Purchaser Schedule: List of purchasers and their respective purchase amounts

4. Capitalization Table: Current capital structure of issuer showing all outstanding securities

5. Security Agreement: Details of collateral and security interest (for secured notes only)

Authors

Alex Denne

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

Jurisdiction

United States

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Clauses
































Industries

Federal Securities Laws: Primary federal regulations including Securities Act of 1933 (registration requirements and exemptions), Securities Exchange Act of 1934, Regulation D (private placement rules), and Rule 144 (resale restrictions)

State Securities Laws (Blue Sky Laws): State-specific regulations covering registration requirements, exemptions, and required disclosures at the state level

Investment Company Act of 1940: Federal legislation that may apply depending on the issuer's status and nature of the investment vehicle

Trust Indenture Act of 1939: Federal law governing debt securities and their administration through trustees

Uniform Commercial Code: State-adopted uniform commercial laws, particularly Articles 3 (Negotiable Instruments), 8 (Investment Securities), and 9 (Secured Transactions)

Federal Tax Laws: Internal Revenue Code provisions related to debt instruments and tax treatment of interest payments

State Contract Laws: Basic contract formation requirements and enforceability provisions under state jurisdiction

Bankruptcy Laws: Federal Bankruptcy Code provisions affecting creditor rights and security interests

Anti-Fraud Provisions: Rule 10b-5 under Securities Exchange Act and state anti-fraud provisions to prevent misrepresentation and fraud

International Regulations: Foreign investment regulations, currency exchange regulations, and international securities laws if cross-border elements are involved

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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