Put Option Agreement | Practical Law

Put Option Agreement | Practical Law

A put option agreement to be used by a company and a stockholder in connection with an investment in the company. This agreement sets out the terms and conditions under which a company grants a stockholder the right to sell (or put) the shares of the company held by that stockholder to the company under certain circumstances. It is drafted in favor of the stockholder, but aims to be reasonable and includes provisions commonly included in many put option agreements. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.

Put Option Agreement

Practical Law Standard Document 2-535-6206 (Approx. 16 pages)

Put Option Agreement

by Practical Law Corporate & Securities
Maintained • USA (National/Federal)
A put option agreement to be used by a company and a stockholder in connection with an investment in the company. This agreement sets out the terms and conditions under which a company grants a stockholder the right to sell (or put) the shares of the company held by that stockholder to the company under certain circumstances. It is drafted in favor of the stockholder, but aims to be reasonable and includes provisions commonly included in many put option agreements. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.
On August 23, 2023, the SEC adopted new rules under the Investment Advisers Act of 1940 for private fund advisers (see Legal Update, SEC Adopts New Rules for Private Fund Advisers) (the "New Rules"). The New Rules are generally effective 12 to 18 months after publication in the Federal Register and will have a material impact on limited partnership agreements for private equity funds and may require revisions to this resource. Updates are planned in the near future. For more information on the final rule, see Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews, 88 Fed. Reg. 63206 (Sept. 14, 2023).