Note Conversion Agreement Template for Philippines

The Note Conversion Agreement is a crucial document in corporate financing and restructuring scenarios under Philippine law. It is typically used when a company and its note holders agree to convert outstanding debt obligations into equity shares, often as part of a debt restructuring, investment strategy, or pre-IPO reorganization. The agreement must comply with the Philippine Securities Regulation Code, Revised Corporation Code, and relevant SEC regulations, particularly regarding share issuance and foreign ownership restrictions if applicable. This document outlines all essential aspects of the conversion, including valuation, timing, conditions precedent, and regulatory compliance requirements. It's particularly relevant in scenarios involving startup financing, corporate restructuring, or strategic investment where debt holders seek to become shareholders.

1. Parties: Identification of the Note Holder(s) and the Company

2. Background: Details of the existing notes, their issuance date, principal amount, and the parties' intention to convert the notes into equity

3. Definitions: Key terms used throughout the agreement, including 'Conversion Price', 'Conversion Date', 'Notes', 'Shares', etc.

4. Agreement to Convert: Core provision establishing the agreement to convert the notes into shares

5. Conversion Terms: Detailed terms of conversion, including conversion price, number of shares to be issued, and calculation method

6. Conditions Precedent: Conditions that must be satisfied before conversion can occur, including regulatory approvals and corporate authorizations

7. Completion Mechanics: Step-by-step process for implementing the conversion, including timing and delivery requirements

8. Representations and Warranties: Standard representations from both parties, including authority, validity of notes, and share issuance authority

9. Company Undertakings: Company's obligations regarding share issuance, maintaining necessary authorizations, and regulatory compliance

10. Termination: Circumstances under which the agreement may be terminated and the consequences

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

12. General Provisions: Standard boilerplate provisions including notices, amendments, and entire agreement