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The Loan Conversion Agreement is a crucial document used when parties wish to transform an existing loan obligation into a different form of financial instrument or obligation under Philippine law. This agreement becomes necessary in various scenarios, such as debt restructuring, corporate reorganizations, or when converting debt to equity to improve a company's balance sheet. The document comprehensively outlines the original loan details, conversion mechanisms, and resulting obligations, ensuring compliance with Philippine financial regulations, including BSP requirements and corporate laws. It's particularly vital for companies seeking to reorganize their debt structure or for lenders looking to modify their exposure while maintaining legal certainty. The agreement must carefully consider Philippine tax implications, securities regulations (if applicable), and corporate requirements, especially when the conversion involves share issuance.

1. Parties: Identification of the borrower, lender, and any other relevant parties to the agreement

2. Background: Recitals describing the original loan agreement, current outstanding amount, and the parties' intention to convert the loan

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

4. Acknowledgment of Existing Debt: Confirmation of the outstanding loan amount and terms of the original loan agreement

5. Conversion Terms: Details of how the loan will be converted, including conversion price/ratio, mechanism, and timing

6. Conditions Precedent: Conditions that must be satisfied before the conversion can take effect

7. Implementation of Conversion: Step-by-step process of how the conversion will be executed

8. Representations and Warranties: Statements of fact and assurances from both parties

9. Covenants: Ongoing obligations of the parties post-conversion

10. Tax Provisions: Allocation of responsibility for any taxes arising from the conversion

11. Termination: Circumstances under which the agreement can be terminated

12. Governing Law and Jurisdiction: Confirmation of Philippine law as governing law and jurisdiction for disputes

13. Notices: Process and addresses for serving notices under the agreement

14. Miscellaneous: Standard boilerplate provisions including entire agreement, amendments, and severability