The Loan Conversion Agreement is commonly used in the Netherlands when parties wish to establish a mechanism for converting debt into equity or other forms of obligation. This document is particularly relevant in startup financing, corporate restructuring, or investment scenarios where initial debt funding is intended to potentially convert to equity. The agreement must comply with Dutch law requirements, particularly the Dutch Civil Code (Burgerlijk Wetboek) provisions regarding contracts, loans, and corporate law. It typically includes detailed terms about conversion triggers, pricing mechanisms, procedures, and resulting rights. The document is essential for businesses seeking flexible financing options and investors who want the security of debt with the potential upside of equity.

1. Parties: Identification of the lender and borrower, including full legal names, registration details, and addresses

2. Background: Context of the original loan agreement and the parties' intention to establish conversion rights

3. Definitions: Definitions of key terms used throughout the agreement, including financial terms, conversion-related concepts, and technical terminology

4. Original Loan Terms: Summary or restatement of the key terms of the original loan agreement

5. Conversion Rights: Details of when and how the loan may be converted, including trigger events and conversion mechanism

6. Conversion Price/Ratio: Formula or fixed terms for determining the conversion price or ratio

7. Conversion Procedure: Step-by-step process for executing the conversion, including notices, timing, and documentation requirements

8. Representations and Warranties: Statements of fact and assurances from both parties regarding their capacity and authority

9. Covenants: Ongoing obligations of the parties before and after conversion

10. Events of Default: Circumstances that constitute default and their consequences

11. Governing Law and Jurisdiction: Specification of Dutch law as governing law and jurisdiction for disputes

12. Notices: Process and requirements for formal communications between parties

13. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments