Convertible Bond Agreement Template for Philippines

The Convertible Bond Agreement is a sophisticated financing instrument used when companies seek to raise capital while offering investors the flexibility to convert their debt investment into equity shares. This document is particularly relevant in the Philippine context where companies need to comply with specific securities regulations, foreign ownership restrictions, and corporate law requirements. It is commonly used by growth-stage companies looking to attract investors with a combination of fixed returns and potential equity upside. The agreement must comply with the Securities Regulation Code, SEC regulations, and the Revised Corporation Code of the Philippines, making it essential to include specific local law provisions while maintaining international market standards for convertible instruments.

1. Parties: Identification of the Issuer, Bondholders (or Trustee if applicable), and any guarantors

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

3. Definitions and Interpretation: Definitions of key terms and interpretation rules used throughout the agreement

4. Bond Issuance and Status: Terms of issuance, face value, status and ranking of the bonds

5. Interest: Interest rate, calculation methods, payment dates and payment mechanics

6. Conversion Rights: Core conversion terms, including conversion price, period, and adjustment mechanisms

7. Conversion Procedures: Detailed process for exercising conversion rights and issuance of shares

8. Representations and Warranties: Standard representations and warranties from the Issuer and any guarantors

9. Covenants: Positive and negative undertakings of the Issuer

10. Events of Default: Circumstances constituting default and consequences thereof

11. Meetings of Bondholders: Procedures for bondholders' meetings and collective decision-making

12. Transfers and Register: Rules regarding transfer of bonds and maintenance of the register

13. Payments: Payment mechanics, currency, and tax provisions

14. Enforcement: Rights and remedies of bondholders upon default

15. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law