A convertible loan agreement is loan agreement which is subject to two (2) main conditions:

• A mutual understanding and agreement of the terms and conditions under which the Lender agrees to lend to the Borrower and the Borrower agrees to borrow from the Lender.
• An understanding that should the repayment amount not be paid on the repayment date, the amount owing by the Borrower shall be converted from a loan to equity in favour of the Lender.