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The Convertible Loan Agreement Startup is a crucial financing instrument in the Philippine startup ecosystem, particularly suitable for early-stage companies seeking bridge financing or initial investment. This document type is commonly used when a startup needs immediate funding but determining a definitive company valuation is premature or impractical. It offers investors the security of debt with the upside potential of equity, while providing startups with more flexible terms compared to traditional loans. The agreement must comply with Philippine regulations, including the Innovative Startup Act (RA 11337), Securities Regulation Code, and Corporation Code. It typically includes conversion mechanics, valuation caps, discount rates, and investor protection provisions, all structured within the Philippine legal framework.

1. Parties: Identification of the Lender and the Borrower (startup company)

2. Background: Context of the agreement, including brief description of the startup's business and purpose of the convertible loan

3. Definitions and Interpretation: Key terms used throughout the agreement, including financial and technical definitions

4. Loan Amount and Disbursement: Details of the loan amount, disbursement conditions and mechanics

5. Interest: Interest rate, calculation method, and payment terms

6. Conversion Rights: Conditions and mechanisms for converting the loan into equity, including conversion price or discount rate

7. Conversion Mechanics: Detailed process for executing the conversion, including notices and documentation requirements

8. Repayment Terms: Conditions for repayment if conversion does not occur, including maturity date and prepayment provisions

9. Company Covenants: Key promises and obligations of the startup company

10. Information Rights: Lender's rights to receive financial and other company information

11. Events of Default: Circumstances constituting default and consequences

12. Representations and Warranties: Key statements of fact by both parties

13. Confidentiality: Obligations regarding confidential information

14. Notices: Process for formal communications between parties

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