Document background
A Promissory Note Conversion Agreement is typically used when a company and its creditor (note holder) agree to convert an existing debt obligation into equity shares. This document is essential in scenarios such as startup funding rounds, debt restructuring, or strategic investment arrangements. The agreement must comply with Hong Kong's legal framework, particularly the Companies Ordinance and Securities and Futures Ordinance. It details crucial elements including the original promissory note terms, conversion price calculation methods, timing of conversion, and resulting shareholding structure. This type of agreement is particularly relevant in Hong Kong's dynamic business environment, where companies frequently seek to optimize their capital structure or provide investors with equity participation rights. The document serves as a crucial bridge between debt and equity financing, requiring careful consideration of both corporate law and financial regulations.
