������Ƶ

The Loan To Equity Conversion Agreement is a crucial document used in corporate financing and debt restructuring scenarios under Hong Kong law. It is particularly relevant when companies seek to improve their balance sheet by converting debt obligations into equity, or when lenders see strategic value in becoming shareholders. The agreement must comply with Hong Kong's Companies Ordinance, Securities and Futures Ordinance, and other relevant regulations. It typically includes detailed provisions on conversion mechanics, valuation methodologies, corporate approvals, and completion procedures. This document type is commonly used in situations involving startup financing, corporate restructuring, or strategic investments, where debt holders wish to convert their position to equity ownership. The agreement must address both the extinguishment of the existing loan and the creation of new shareholding rights, ensuring compliance with Hong Kong's corporate and securities laws.

1. Parties: Identification of the borrower company, the lender(s), and any guarantors or other relevant parties

2. Background: Recitals describing the existing loan arrangement, the company's share capital structure, and the intention to convert the loan to equity

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Acknowledgment of Existing Loan: Confirmation of the outstanding loan amount and terms of the existing loan agreement

5. Conversion Terms: Detailed terms of the conversion including conversion price, number of shares to be issued, and timing of conversion

6. Conversion Mechanism: Process and procedures for implementing the conversion, including necessary corporate actions and documentation

7. Conditions Precedent: Conditions that must be satisfied before the conversion can take place, including corporate and regulatory approvals

8. Representations and Warranties: Statements of fact and assurances from both parties regarding their capacity, authority, and the shares to be issued

9. Company's Obligations: Company's commitments regarding share issuance, corporate approvals, and post-conversion matters

10. Lender's Obligations: Lender's commitments regarding the conversion process and any required actions or documentation

11. Completion: Process for completing the conversion, including timing, location, and deliverables

12. Termination: Circumstances under which the agreement may be terminated and the consequences of termination

13. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction for disputes

14. General Provisions: Standard provisions including notices, amendments, assignment, and severability