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Put Option Deed for Hong Kong

Put Option Deed Template for Hong Kong

A Put Option Deed is a formal legal document governed by Hong Kong law that grants the option holder the right, but not the obligation, to sell a specified asset to the option grantor at a predetermined price within a specified period. This document is structured according to Hong Kong legal requirements and includes detailed provisions on exercise mechanics, pricing, completion procedures, and parties' obligations. It incorporates relevant considerations under the Securities and Futures Ordinance and other applicable Hong Kong regulations, particularly regarding execution requirements for deeds and financial instruments.

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What is a Put Option Deed?

The Put Option Deed is a crucial legal instrument in Hong Kong's financial and corporate landscape, commonly utilized in investment exits, risk management strategies, and corporate restructuring. This document type provides security to investors by ensuring they have a predetermined exit mechanism at agreed terms. The deed format is specifically chosen for its enhanced enforceability under Hong Kong law and typically includes comprehensive details about the option terms, exercise mechanisms, and underlying assets. Put Option Deeds are particularly relevant in private equity investments, joint ventures, and share purchase arrangements, where they serve as a key protection mechanism for investors. The document must comply with Hong Kong's Securities and Futures Ordinance and relevant regulations, especially regarding financial instruments and deed execution requirements.

What sections should be included in a Put Option Deed?

1. Parties: Identification of the Option Grantor and Option Holder(s)

2. Background: Context of the put option arrangement and relationship between parties

3. Definitions and Interpretation: Defined terms, construction rules, and interpretation principles

4. Grant of Put Option: Core terms of the put option, including the right to sell the underlying asset

5. Option Period: Duration of the option, including commencement and expiry dates

6. Exercise Price: Specification of the price at which the option can be exercised

7. Exercise of Option: Procedure and requirements for exercising the option

8. Completion: Obligations and procedures upon exercise of the option

9. Representations and Warranties: Standard and specific warranties from both parties

10. Covenants: Ongoing obligations of the parties during the option period

11. Termination: Circumstances and procedures for early termination

12. Costs and Stamp Duty: Allocation of costs and tax obligations

13. Notices: Communication procedures and contact details

14. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, etc.

15. Execution: Execution blocks meeting deed requirements

What sections are optional to include in a Put Option Deed?

1. Security Arrangements: Required if the option is secured by any assets or guarantees

2. Tag-Along Rights: Include if other shareholders have rights to participate in the sale

3. Drag-Along Rights: Include if the option holder can force other shareholders to sell

4. Regulatory Compliance: Required if the option involves regulated assets or activities

5. Valuation Mechanism: Include if the exercise price is to be determined by valuation

6. Multiple Option Holders: Required if there are multiple option holders with specific rights

7. Pre-emptive Rights: Include if existing shareholders have pre-emptive rights

8. Confidentiality: Optional detailed confidentiality provisions if sensitive information is involved

What schedules should be included in a Put Option Deed?

1. Schedule 1 - Option Notice Form: Template form for exercising the put option

2. Schedule 2 - Details of Underlying Asset: Detailed description of the asset subject to the option

3. Schedule 3 - Completion Requirements: Detailed list of completion deliverables and requirements

4. Schedule 4 - Warranties: Detailed warranties specific to the underlying asset

5. Schedule 5 - Deed of Adherence: Form of deed for new parties to adhere to the agreement

6. Appendix A - Calculation of Exercise Price: If applicable, detailed methodology for price calculation

7. Appendix B - Required Regulatory Approvals: List of required regulatory approvals and procedures

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

Cost

Free to use
Relevant legal definitions








































Clauses



































Relevant Industries

Financial Services

Investment Banking

Private Equity

Real Estate

Technology

Manufacturing

Retail

Professional Services

Energy

Infrastructure

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Investment

Risk Management

Compliance

Treasury

Corporate Secretarial

Business Development

Mergers & Acquisitions

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Director

Legal Counsel

Corporate Lawyer

Investment Manager

Fund Manager

Private Equity Director

Corporate Secretary

Risk Manager

Compliance Officer

Transaction Manager

Investment Banker

M&A Director

Portfolio 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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