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Debt Conversion Agreement Template for Philippines

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Key Requirements PROMPT example:

Debt Conversion Agreement

"I need a Debt Conversion Agreement for converting PHP 50 million of corporate debt owed to ABC Bank into common shares of our manufacturing company, with the conversion to be completed by March 2025."

Document background
The Debt Conversion Agreement is a crucial instrument in corporate debt restructuring under Philippine law, commonly used when companies seek to improve their balance sheet structure or address financial difficulties. This document is typically employed when a company wishes to convert its existing debt obligations into equity shares or other securities, thereby reducing its debt burden and strengthening its capital structure. The agreement must comply with the Philippine Corporation Code, Securities Regulation Code, and relevant BSP regulations, particularly when involving foreign currency denominated debt. It outlines the complete conversion mechanism, including debt acknowledgment, conversion terms, resulting securities, and necessary corporate actions. The document is especially relevant during corporate restructuring, financial rehabilitation, or strategic capital structure optimization initiatives.
Suggested Sections

1. Parties: Identifies the debtor company and the creditor(s) entering into the agreement

2. Background: Recitals explaining the existing debt and the parties' intention to convert it

3. Definitions: Defines key terms used throughout the agreement

4. Acknowledgment of Existing Debt: Confirms the amount and details of the existing debt being converted

5. Conversion Terms: Specifies the conversion ratio, price, and mechanism for converting debt to equity or other securities

6. Implementation of Conversion: Details the process and timeline for implementing the conversion

7. Issuance of Securities: Describes the securities to be issued and their terms

8. Representations and Warranties: Standard representations from both parties regarding authority, validity, and compliance

9. Conditions Precedent: Conditions that must be satisfied before the conversion can take place

10. Corporate Actions: Required corporate actions to effect the conversion

11. Tax Provisions: Addresses tax implications and responsibilities

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

13. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability

Optional Sections

1. Regulatory Compliance: Required when specific regulatory approvals (e.g., SEC, BSP) are needed for the conversion

2. Foreign Exchange Provisions: Needed when the debt involves foreign currency or foreign parties

3. Creditor Committee Provisions: Required in cases involving multiple creditors

4. Security Arrangements: Needed if any security interests are being retained or modified

5. Registration Rights: Required when the converted securities need to be registered with regulatory authorities

6. Corporate Governance: Needed if the conversion results in significant ownership changes requiring board representation

7. Restructuring Provisions: Required when the conversion is part of a larger corporate restructuring

Suggested Schedules

1. Schedule A - Debt Details: Detailed description of the existing debt including principal amount, interest, and other charges

2. Schedule B - Conversion Calculations: Detailed calculations showing the conversion ratio and resulting securities

3. Schedule C - Form of Securities: Form of share certificates or other securities to be issued

4. Schedule D - Corporate Authorizations: Copies of board resolutions and other corporate authorizations

5. Schedule E - Regulatory Approvals: Copies of required regulatory approvals or filings

6. Schedule F - Amended Articles of Incorporation: If required, proposed amendments to the articles of incorporation

7. Schedule G - Closing Checklist: List of all documents and actions required for closing the conversion

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions





















































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Relevant Industries

Banking & Financial Services

Manufacturing

Real Estate & Property

Infrastructure & Construction

Technology

Telecommunications

Energy & Utilities

Mining & Resources

Retail & Consumer Goods

Healthcare & Pharmaceuticals

Agriculture & Food Production

Transportation & Logistics

Relevant Teams

Legal

Finance

Corporate Secretarial

Treasury

Compliance

Risk Management

Corporate Finance

Board of Directors

Executive Management

Investor Relations

Relevant Roles

Chief Financial Officer

Financial Director

Corporate Treasurer

General Counsel

Legal Director

Corporate Secretary

Chief Executive Officer

Finance Manager

Investment Officer

Compliance Officer

Risk Manager

Corporate Restructuring Officer

Senior Legal Counsel

Financial Controller

Board Director

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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