In properly drafted convertible loan agreements the conversion of the repayment claim is usually made dependent on the occurrence of certain events, e.g., (qualified) financing rounds, expiration of term, occurrence of an exit event etc., the so-called "conversion events".
Depending on the specific terms and conditions of the convertible loan, conversion events can trigger a conversion right, a conversion obligation or a payment of the repayment claim (often the case at the occurrence of an exit event).
In some convertible loan agreements, the conversion and repayment mechanisms provide for the application of discounts, caps and/or floors (in case of a conversion) and premiums, e.g., percentage of the loan amount or multiples (in case of a repayment).