Put Option Agreement Template for England and Wales

A Put Option Agreement is a legal contract governed by English and Welsh law that grants one party (the option holder) the right, but not the obligation, to sell specified assets to another party (the option grantor) at a predetermined price within a specified time period. The agreement sets out the terms and conditions for exercising the option, including the strike price, exercise period, and completion mechanics, while ensuring compliance with UK financial services regulations and corporate law requirements.

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What is a Put Option Agreement?

A Put Option Agreement is commonly used in commercial transactions under English and Welsh law where parties seek to manage risk and create future selling rights. This document is particularly relevant in share purchase transactions, joint ventures, and investment arrangements where exit mechanisms are crucial. The agreement typically includes detailed provisions on exercise procedures, warranties, and regulatory compliance, particularly important given the UK's comprehensive financial services regulatory framework. Put Option Agreements provide security to investors by guaranteeing a minimum exit value for their investment.

What sections should be included in a Put Option Agreement?

1. Parties: Identification of the grantor and grantee of the put option

2. Background/Recitals: Context of the agreement and relevant background information

3. Definitions: Key terms used throughout the agreement including Option Period, Strike Price, Underlying Assets

4. Grant of Option: Core terms of the put option, including the right to sell at specified price

5. Exercise of Option: Mechanism and process for exercising the option

6. Consideration: Details of option premium and payment terms

7. Completion: Process and obligations upon exercise of the option

8. Representations and Warranties: Standard warranties regarding capacity and authority

9. Governing Law and Jurisdiction: Confirmation of English law and jurisdiction

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

1. Security Provisions: Additional provisions when security is required for option obligations

2. Tag-Along Rights: Provisions for rights of other shareholders to participate in corporate share option arrangements

3. Regulatory Compliance: Specific regulatory obligations when dealing with regulated assets or entities

4. Tax Provisions: Specific tax treatment and obligations when tax implications need specific addressing

What schedules should be included in a Put Option Agreement?

1. Form of Option Exercise Notice: Template notice for exercising the option

2. Details of Underlying Assets: Detailed description of assets subject to the option

3. Calculation of Option Price: Formula or methodology for price calculation if complex

4. Required Regulatory Approvals: List of necessary regulatory clearances for regulated transactions

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

England and Wales

Publisher

Genie AI

Cost

Free to use

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