Equity Buyback Agreement Template for Hong Kong

The Equity Buyback Agreement is a crucial document used when a Hong Kong company wishes to repurchase its own shares from existing shareholders. This transaction type is governed by specific provisions of the Hong Kong Companies Ordinance (Cap. 622) and, for listed companies, additional requirements under the Securities and Futures Ordinance and Hong Kong Stock Exchange rules. The agreement is particularly relevant in scenarios such as shareholder exits, capital restructuring, or implementing employee share schemes. It must address key regulatory requirements including solvency tests, shareholder approvals, and public notifications where applicable. The document typically includes detailed provisions on valuation methodology, payment terms, completion mechanics, and necessary warranties and representations, while ensuring compliance with Hong Kong's strict regulatory framework for share buybacks.

1. Parties: Identification of the company conducting the buyback and the selling shareholder(s)

2. Background: Context of the buyback, including company status, existing shareholding structure, and purpose of the buyback

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

4. Sale and Purchase: Core terms of the buyback including number of shares, price, and completion mechanics

5. Purchase Price: Detailed terms of consideration, payment method, and timing

6. Conditions Precedent: Conditions that must be satisfied before completion of the buyback

7. Completion: Timing, location, and mechanics of completion, including actions required by each party

8. Seller's Warranties: Warranties regarding share ownership, authority to sell, and absence of encumbrances

9. Company's Warranties and Undertakings: Company's warranties regarding authority, compliance with laws, and financial condition

10. Confidentiality: Obligations regarding confidential information and announcements

11. Costs and Expenses: Allocation of transaction costs and expenses

12. Notices: Process and requirements for formal notices under the agreement

13. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability

14. Governing Law and Jurisdiction: Hong Kong law as governing law and jurisdiction for disputes