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Investment Agreement for Hong Kong

Investment Agreement Template for Hong Kong

A comprehensive legal document governed by Hong Kong law that formalizes the terms and conditions of an investment transaction between investors and a company. The agreement details the investment amount, share allocation, investor rights, corporate governance provisions, and exit mechanisms. It incorporates Hong Kong's regulatory requirements, including compliance with the Securities and Futures Ordinance and Companies Ordinance, while establishing clear protocols for shareholder relationships, board representation, and protection of minority interests.

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What is a Investment Agreement?

The Investment Agreement is a crucial document used when an investor (whether corporate or individual) seeks to make a significant investment in a company under Hong Kong law. It is commonly employed in various scenarios, from venture capital investments to private equity deals, and serves to protect both the investor's interests and establish clear operational parameters for the company post-investment. The agreement must comply with Hong Kong's regulatory framework, particularly the Companies Ordinance and Securities and Futures Ordinance, while addressing key aspects such as share subscription, corporate governance, minority shareholder protection, and exit mechanisms. This document is essential for any substantial investment transaction in Hong Kong, providing legal certainty and clear guidelines for all parties involved.

What sections should be included in a Investment Agreement?

1. Parties: Identification of all parties to the agreement, including the investor(s) and investee company

2. Background: Context of the investment, including brief company history and purpose of the investment

3. Definitions: Definitions of key terms used throughout the agreement

4. Investment Terms: Details of the investment amount, share class, and price per share

5. Completion: Conditions precedent, completion mechanics, and timing of the investment

6. Warranties and Representations: Standard and specific warranties given by the company and existing shareholders

7. Corporate Governance: Board composition, voting rights, and management provisions

8. Reserved Matters: List of actions requiring investor consent

9. Share Transfer Restrictions: Limitations on transfer of shares and pre-emptive rights

10. Exit Provisions: Terms relating to IPO, trade sale, and other exit mechanisms

11. Confidentiality: Obligations regarding confidential information

12. General Provisions: Standard boilerplate clauses including governing law, notices, and amendments

What sections are optional to include in a Investment Agreement?

1. Anti-Dilution Rights: Protection against future down rounds, used when investing in early-stage companies

2. Tag-Along Rights: Right to join in sale of shares by other shareholders, important for minority investor protection

3. Drag-Along Rights: Right to force other shareholders to join in a sale, typically included for majority investors

4. Liquidation Preference: Priority rights in case of liquidation, common in venture capital investments

5. Employee Share Option Pool: Provisions for employee share schemes, relevant when company plans to implement ESOP

6. Information Rights: Specific reporting requirements, important for significant investments

7. Non-Compete and Non-Solicitation: Restrictions on competitive activities, relevant when founders are key to business

8. Strategic Collaboration: Terms for business cooperation, relevant for strategic investors

What schedules should be included in a Investment Agreement?

1. Capital Structure: Details of company's share capital pre and post-investment

2. Warranties: Detailed list of company warranties and disclosures

3. Reserved Matters List: Comprehensive list of matters requiring investor consent

4. Completion Requirements: Detailed list of completion deliverables and requirements

5. Key Terms Sheet: Summary of key commercial terms agreed between parties

6. Corporate Information: Company details, directors, and key contracts

7. Intellectual Property: List of company's IP assets and registrations

8. Financial Statements: Recent financial statements and projections

Authors

Alex Denne

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

Jurisdiction

Hong Kong

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions






















































Clauses











































Relevant Industries

Technology

Financial Services

Real Estate

Manufacturing

Healthcare

E-commerce

Education

Renewable Energy

Biotechnology

Infrastructure

Consumer Goods

Professional Services

Media and Entertainment

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Compliance

Risk Management

Investment

Board of Directors

Company Secretariat

Due Diligence

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Director

Legal Counsel

Corporate Lawyer

Investment Manager

Company Secretary

Board Director

Compliance Officer

Private Equity Manager

Venture Capital Partner

Due Diligence Manager

Strategy Director

Corporate Development Manager

Risk Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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