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The Convertible Note Subscription Agreement is a crucial financing instrument in Hong Kong's startup and growth company ecosystem. It provides a bridge between equity funding rounds, offering companies quick access to capital while deferring valuation discussions. The document is particularly useful when companies need interim financing but prefer to postpone setting a definitive valuation. It combines elements of debt and equity financing, providing investors with the security of debt and the upside potential of equity through conversion rights. The agreement must comply with Hong Kong's regulatory framework, particularly the Companies Ordinance and Securities and Futures Ordinance, and typically includes detailed provisions on conversion mechanics, interest calculations, events of default, and investor protections. This type of agreement is commonly used in seed rounds, bridge financing, and pre-Series A investments.

1. Parties: Identification of the Company (Issuer) and the Subscriber(s) (Note holder(s))

2. Background: Context of the convertible note issuance, including company status and purpose of the fundraising

3. Definitions and Interpretation: Key terms used throughout the agreement, including financial terms, conversion mechanics, and technical definitions

4. Subscription and Issue: Terms of the note subscription, including principal amount, closing conditions, and subscription mechanics

5. Note Terms: Core terms of the convertible note including interest rate, maturity date, and repayment provisions

6. Conversion Rights: Detailed provisions regarding conversion triggers, conversion price calculations, and mechanics of conversion

7. Company Representations and Warranties: Standard and specific representations about the company's status, authority, and business

8. Subscriber Representations and Warranties: Representations regarding the subscriber's status, investment intent, and capacity

9. Covenants: Ongoing obligations of the company, including information rights and operational restrictions

10. Events of Default: Circumstances constituting default and corresponding remedies

11. Transferability: Provisions governing the transfer of notes and any restrictions

12. Notices: Process for formal communications between parties

13. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and amendments