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Equity Interest Purchase Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Equity Interest Purchase Agreement

"I need an Equity Interest Purchase Agreement for the acquisition of 75% shareholding in a Hong Kong technology startup, with completion planned for March 2025, including earn-out provisions and specific warranties for intellectual property protection."

Document background
The Equity Interest Purchase Agreement is a crucial document used in Hong Kong for corporate transactions involving the transfer of ownership in a company through the sale of shares or other equity interests. This agreement is essential when parties wish to document a share purchase transaction in compliance with Hong Kong law, particularly the Companies Ordinance (Cap. 622) and Securities and Futures Ordinance (Cap. 571). It is commonly used in various scenarios including corporate acquisitions, restructuring, investment rounds, and exit transactions. The document typically includes detailed provisions on purchase price mechanisms, conditions precedent, representations and warranties, tax matters, and completion procedures, all tailored to meet Hong Kong regulatory requirements and market practices.
Suggested Sections

1. Parties: Identification of buyer, seller, and any guarantors with full legal names and addresses

2. Background: Context of the transaction, including description of the target company and purpose of the agreement

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

4. Sale and Purchase: Core transaction terms including equity interest being sold, purchase price, and payment terms

5. Conditions Precedent: Conditions that must be satisfied before completion of the transaction

6. Pre-Completion Obligations: Obligations of parties between signing and completion, including conduct of business requirements

7. Completion: Mechanics of closing, including timing, location, and actions required at completion

8. Representations and Warranties: Statements of fact and assurances from seller about the business and equity interest

9. Tax Matters: Allocation of tax liabilities and responsibilities, including stamp duty obligations

10. Confidentiality: Obligations regarding confidential information and announcements

11. Indemnification: Rights and obligations regarding compensation for losses arising from breaches

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

13. Notices: Process and requirements for formal communications between parties

14. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and entire agreement

Optional Sections

1. Non-Competition and Non-Solicitation: Restrictions on seller's future business activities, used when protecting goodwill is crucial

2. Earn-out Provisions: Additional payment terms based on future performance, used in cases with contingent consideration

3. Employee Matters: Specific provisions regarding employees and benefits, important for larger workforce transitions

4. Intellectual Property Rights: Detailed IP provisions when significant IP assets are involved

5. Bank Guarantees: Requirements for bank guarantees when additional payment security is needed

6. Foreign Investment Provisions: Special provisions for cross-border transactions involving foreign investors

7. Share Pledge: Security arrangements when shares are used as collateral for deferred payments

8. Management Transition: Provisions for management changes, used when key personnel transitions are involved

Suggested Schedules

1. Target Company Information: Detailed information about the target company including corporate documents and structure

2. Equity Interest Details: Specific details of the equity interest being transferred

3. Purchase Price Calculation: Detailed methodology for calculating the purchase price, including adjustments

4. Completion Deliverables: List of documents and items to be delivered at completion

5. Warranties: Detailed warranties about the business, assets, and liabilities

6. Encumbrances: List of existing encumbrances on the equity interest or company assets

7. Material Contracts: List and details of important contracts affecting the business

8. Intellectual Property: Schedule of IP rights owned or licensed by the target company

9. Real Property: Details of real estate owned or leased by the target company

10. Employee Information: List of employees and their key employment terms

11. Required Consents: List of third-party consents required for the transaction

12. Form of Transfer Instruments: Templates for share transfer forms and other completion documents

Authors

Alex Denne

Head of Growth (Open Source Law) @ ºÚÁÏÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions















































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