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Acquisition Confidentiality Agreement Template for Hong Kong

A Hong Kong law-governed confidentiality agreement specifically designed for merger and acquisition transactions, establishing binding obligations regarding the confidential exchange of sensitive business information during the due diligence and negotiation phases. The agreement incorporates key provisions compliant with Hong Kong's legal framework, including the Personal Data (Privacy) Ordinance and Securities and Futures Ordinance, while providing comprehensive protection for commercial secrets, intellectual property, and business information. It addresses both physical and digital information sharing, data room access protocols, and includes specific provisions for the Hong Kong business environment.

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What is a Acquisition Confidentiality Agreement?

The Acquisition Confidentiality Agreement is a crucial document in the early stages of any potential merger or acquisition transaction in Hong Kong. It is typically executed before detailed discussions or due diligence commence, when a potential acquirer requires access to sensitive business information of the target company. The agreement ensures compliance with Hong Kong's regulatory framework, including requirements under the Securities and Futures Ordinance for listed companies and the Personal Data (Privacy) Ordinance for handling personal information. This document is essential for protecting proprietary information, trade secrets, and sensitive business data while allowing necessary information sharing for transaction evaluation. It typically includes provisions for data room access, digital information sharing, and specific requirements tailored to Hong Kong's business and legal environment.

What sections should be included in a Acquisition Confidentiality Agreement?

1. Parties: Identification of the disclosing party (typically the target company) and receiving party (potential acquirer), including full legal names and registered addresses

2. Background: Context of the potential acquisition and purpose of sharing confidential information

3. Definitions: Key terms including 'Confidential Information', 'Representatives', 'Permitted Purpose', and 'Affiliate'

4. Scope of Confidential Information: Detailed description of what constitutes confidential information in the context of the potential acquisition

5. Confidentiality Obligations: Core obligations regarding the use, protection, and non-disclosure of confidential information

6. Permitted Disclosures: Circumstances under which confidential information may be shared with representatives and advisors

7. Security Measures: Required procedures and safeguards for protecting confidential information

8. Return or Destruction of Confidential Information: Obligations regarding the handling of confidential information if the acquisition does not proceed

9. Duration and Survival: Term of the agreement and which provisions survive termination

10. Remedies: Available remedies in case of breach, including injunctive relief

11. General Provisions: Standard clauses including governing law, jurisdiction, entire agreement, and amendments

What sections are optional to include in a Acquisition Confidentiality Agreement?

1. Securities Laws Compliance: Required when either party is a listed company, addressing insider trading and market disclosure obligations

2. Personal Data Protection: Detailed provisions for compliance with the Personal Data (Privacy) Ordinance when personal data is involved

3. Standstill Provisions: Restrictions on acquiring target company shares or approaching other stakeholders, typically used for listed companies

4. Non-Solicitation: Restrictions on soliciting employees, customers, or suppliers, included when there are specific concerns about poaching

5. Reverse Engineering Prohibition: Specific restrictions on reverse engineering products or technology, used when technical information is shared

6. Competition Law Compliance: Required when the parties are competitors or when merger control issues may arise

7. Social Media and Public Communications: Guidelines for public communications and social media usage, particularly relevant for high-profile transactions

What schedules should be included in a Acquisition Confidentiality Agreement?

1. Schedule 1 - Specified Representatives: List of authorized representatives who may access the confidential information

2. Schedule 2 - Security Protocols: Detailed security procedures and requirements for handling confidential information

3. Schedule 3 - Excluded Information: List of specific information explicitly excluded from confidentiality obligations

4. Appendix A - Form of Confidentiality Undertaking: Template undertaking to be signed by representatives accessing confidential information

5. Appendix B - Data Room Rules: Rules and procedures for accessing and using the data room, if applicable

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

Jurisdiction

Hong Kong

Publisher

Genie AI

Cost

Free to use

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