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The Convertible Debenture Agreement is a crucial financing instrument in the Philippine business landscape, typically utilized by companies seeking to raise capital while offering investors the flexibility to convert their debt investment into equity. This document is particularly relevant for growing companies that need substantial funding but wish to defer immediate equity dilution, or when traditional debt or equity financing alone may not be optimal. The agreement must comply with Philippine securities laws, particularly the Securities Regulation Code and SEC regulations, requiring specific approvals and registrations. It comprehensively covers debt terms (principal, interest, maturity), conversion mechanisms (price, timing, adjustments), investor protections, and company obligations, making it suitable for both institutional and sophisticated individual investors.

1. Parties: Identifies the issuing company (Issuer), the debenture holder(s), and any trustees or agents

2. Background: Explains the context of the debenture issuance and the company's authority to issue the debentures

3. Definitions: Defines key terms used throughout the agreement, including financial metrics, conversion price calculations, and technical terms

4. Issue of Debentures: Details the principal amount, issue price, and conditions precedent for the debenture issuance

5. Interest: Specifies interest rate, calculation method, payment dates, and default interest provisions

6. Repayment and Redemption: Sets out maturity date, repayment terms, and early redemption provisions

7. Conversion Rights: Details the right to convert debentures into shares, including conversion price, period, and adjustment mechanisms

8. Conversion Procedure: Specifies the process and requirements for exercising conversion rights

9. Company Covenants: Lists the company's ongoing obligations, including financial covenants and reporting requirements

10. Events of Default: Defines circumstances constituting default and consequences thereof

11. Security: Details any security or guarantees provided for the debentures

12. Transferability: Sets out restrictions and procedures for transferring the debentures

13. Notices: Specifies how formal communications between parties should be made

14. Governing Law and Jurisdiction: Confirms Philippine law as governing law and specifies jurisdiction for disputes

15. General Provisions: Contains standard boilerplate provisions including amendments, waivers, and severability