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Private Placement Agreement

Private Placement Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Private Placement Agreement

"I need a Private Placement Agreement for a Hong Kong technology startup issuing Series A preferred shares to raise HKD 50 million, with specific provisions for anti-dilution protection and information rights for professional investors."

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Document background
A Private Placement Agreement is a crucial document used when a company wishes to raise capital by offering securities to a limited number of selected investors without conducting a public offering. In the Hong Kong context, this document must comply with the Securities and Futures Ordinance (Cap. 571) and related regulations, particularly regarding professional investor exemptions and safe harbor provisions. The agreement typically includes detailed terms of the offering, investor qualifications, subscription procedures, representations and warranties, and various protective provisions for both the issuer and investors. It's commonly used by companies seeking efficient capital raising while avoiding the more stringent requirements of a public offering, and is particularly popular among growth-stage companies, real estate investment vehicles, and investment funds operating in Hong Kong and the broader Asian market.
Suggested Sections

1. Parties: Identifies the issuer, placement agent (if any), and the type of investors eligible to participate

2. Background: Explains the context of the private placement, including the type of securities being offered and the purpose of the offering

3. Definitions: Defines key terms used throughout the agreement

4. Subscription and Issue: Details the terms of subscription, including price, number of securities, and payment terms

5. Closing Conditions: Specifies conditions precedent to closing, including regulatory approvals and documentation requirements

6. Representations and Warranties of the Issuer: Issuer's confirmations regarding its status, authority, and material aspects of its business

7. Investor Representations and Warranties: Investor's confirmations regarding eligibility, sophistication, and understanding of risks

8. Covenants: Ongoing obligations of the parties, including information rights and compliance requirements

9. Transfer Restrictions: Limitations on the transfer of securities and required procedures

10. Termination: Circumstances under which the agreement can be terminated and the consequences

11. Confidentiality: Obligations regarding non-disclosure of confidential information

12. Notices: Procedures for formal communications between parties

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

14. General Provisions: Standard boilerplate provisions including amendments, assignments, and severability

Optional Sections

1. Placement Agent Provisions: Required when a placement agent is involved in the offering, including their role, responsibilities, and fees

2. Registration Rights: Include if investors are granted rights to register their securities for public trading in the future

3. Tag-Along Rights: Include if investors are given the right to join in any future sale by major shareholders

4. Pre-emptive Rights: Include if investors are given rights to participate in future offerings to maintain their percentage ownership

5. Board Nomination Rights: Include if investors are granted rights to nominate directors

6. Information Rights: Include specific reporting requirements beyond statutory obligations if agreed with investors

7. Exit Rights: Include if specific exit mechanisms or IPO rights are granted to investors

Suggested Schedules

1. Subscription Form: Template form for investors to complete when subscribing for securities

2. Securities Terms: Detailed terms and conditions of the securities being offered

3. Investor Questionnaire: Form to verify investor qualification and eligibility

4. Corporate Information: Details of the issuer's corporate structure, capitalisation, and material contracts

5. Risk Factors: Detailed description of investment risks

6. Financial Information: Recent financial statements and projections of the issuer

7. Use of Proceeds: Detailed breakdown of how the placement proceeds will be used

8. Shareholders' Rights: Summary of rights attached to the securities and existing shareholders' rights

Authors

Alex Denne

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Acceptance Period
Affiliate
Agreement
Applicable Law
Board
Business Day
Closing
Closing Date
Companies Ordinance
Company
Completion
Confidential Information
Consideration
Constitutional Documents
Control
Disclosure Documents
Effective Date
Encumbrance
Event of Default
Financial Statements
GAAP
Governmental Authority
Group
Hong Kong
HKMA
HKEX
Indebtedness
Investor(s)
Investment Amount
Issue Price
Issuer
Key Management
Laws
Listing Rules
Material Adverse Change
Material Adverse Effect
Ordinary Shares
Parties
Placement Agent
Placement Period
Placement Shares
Professional Investor
Prohibited Person
Relevant Securities
Representatives
Reserved Matters
Securities
Securities and Futures Ordinance
Security Interest
SFC
Shareholder
Shares
Subscription Agreement
Subscription Amount
Subscription Price
Subscription Rights
Subsidiary
Tax
Transaction Documents
Transfer
Warranties
Clauses
Subscription
Securities Issuance
Payment Terms
Closing Conditions
Representations and Warranties
Due Diligence
Compliance
Regulatory Matters
Information Rights
Confidentiality
Non-Disclosure
Transfer Restrictions
Tag-Along Rights
Drag-Along Rights
Pre-emptive Rights
Anti-Dilution
Board Representation
Voting Rights
Dividend Rights
Exit Rights
Registration Rights
Indemnification
Force Majeure
Termination
Default
Remedies
Governing Law
Dispute Resolution
Assignment
Notices
Amendment
Waiver
Severability
Entire Agreement
Costs and Expenses
Time of Essence
Further Assurance
Counterparts
Third Party Rights
Relevant Industries

Financial Services

Technology

Real Estate

Healthcare

Manufacturing

Energy

Infrastructure

Consumer Goods

Professional Services

Education

Telecommunications

Entertainment and Media

Biotechnology

E-commerce

Retail

Relevant Teams

Legal

Finance

Corporate Development

Compliance

Risk Management

Investment Banking

Corporate Secretary Office

Board of Directors

Treasury

Investor Relations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Company Secretary

Investment Manager

Compliance Officer

Corporate Finance Director

Investment Banker

Private Equity Manager

Fund Manager

Legal Counsel

Corporate Finance Manager

Risk Manager

Board Director

Financial Controller

Industries
Securities and Futures Ordinance (Cap. 571): Primary legislation governing securities, futures, and financial products in Hong Kong. Contains provisions for private placements under Schedule 17 (Professional Investors Rules) and offerings exemptions.
Companies Ordinance (Cap. 622): Regulates company formation, operation, and corporate governance. Includes provisions regarding share issuance, transfer restrictions, and shareholder rights.
Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615): Sets requirements for customer due diligence and record-keeping in financial transactions, including private placements.
Contract Law of Hong Kong: Common law principles governing contract formation, validity, and enforcement, essential for the agreement's legal framework.
Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32): Contains prospectus requirements and private placement exemptions, particularly relevant for safe harbor provisions.
Trustee Ordinance (Cap. 29): Relevant if the private placement involves trust structures or trustee appointments for security holders.
Personal Data (Privacy) Ordinance (Cap. 486): Governs the collection and handling of personal data from investors during the private placement process.
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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