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Put Option Agreement Template for England and Wales

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Key Requirements PROMPT example:

Put Option Agreement

I need a Put Option Agreement for my company to grant our minority shareholder the right to sell their 15% shareholding back to us at an agreed price of £2.5m, exercisable between January 2025 and June 2025.

Document background
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.
Suggested Sections

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

Optional Sections

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

Suggested Schedules

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) @ ºÚÁÏÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions





































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Industries

Common Law Contract Principles: Fundamental principles of contract formation, offer, acceptance, consideration, and intention to create legal relations under English common law

Law of Property Act 1925: Foundational legislation governing property rights and transactions in England and Wales

Law of Property (Miscellaneous Provisions) Act 1989: Legislation governing formalities for contracts relating to land and property interests

Financial Services and Markets Act 2000: Primary legislation regulating financial services and markets in the UK, including options and derivatives

FSMA Regulated Activities Order 2001: Specifies which activities require FCA authorization and regulation in relation to financial instruments

MiFID II (UK implementation): Regulatory framework for financial markets and improving protections for investors, as retained in UK law post-Brexit

Companies Act 2006: Primary legislation governing company operations, including share transfers and corporate procedures

Companies (Model Articles) Regulations 2008: Standard articles of association for companies, relevant for share transfer provisions

UK Listing Rules: Regulations governing companies listed on UK markets, particularly relevant if the option involves listed securities

UK Prospectus Regulation Rules: Requirements for public offerings of securities in the UK

Market Abuse Regulation: Regulations preventing market abuse and insider trading, as retained in UK law

Unfair Contract Terms Act 1977: Legislation controlling unfair terms in contracts and limiting the extent to which liability can be excluded

Financial Collateral Arrangements (No.2) Regulations 2003: Regulations governing financial collateral arrangements and security interests

Consumer Rights Act 2015: Protection for consumers in contracts, relevant if the put option agreement involves consumer parties

Income Tax Act 2007: Tax legislation relevant to income arising from financial instruments and options

Corporation Tax Act 2010: Tax legislation governing corporate entities and their financial transactions

Taxation of Chargeable Gains Act 1992: Tax legislation relevant to gains arising from the exercise or disposal of options

Money Laundering Regulations 2017: Regulations concerning anti-money laundering and terrorist financing requirements in financial transactions

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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