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An Option Agreement as an asset protection tool. Service offer

In an option agreement, one party (the Buyer) has the right to buy (call option) or sell (put option) a certain asset (for instance, shares) at an agreed price within a certain period of time or on the occurrence of a certain event. For the right to buy or sell the asset, the buyer pays the other party (the Seller) (who is the legal owner of the asset) an option premium.

Contents

  1. Аdvantages of an option agreement
  2. Required documents
  3. Fees

For an option agreement to be legally made and valid, it must have two elements: a promise not to withdraw the offer and the consideration.

An option agreement can be used as an effective asset protection tool.

Аdvantages of an option agreement

  • protection of assets against unfavourable market conditions (such as price fluctuations);
  • protection of assets against hostile takeover attempts (it is possible to make an option agreement to buy back all shares at a fixed price in the event of an attempted hostile takeover or other event);
  • it is possible to make an option agreement to sell back the purchased asset – this instrument serves to protect shareholders’ rights;
  • protection of interests of asset owners in the event of a disagreement between the owners and the company’s management or if there is a risk of the asset being sold;
  • if any events adversely affecting the interests of the owners occur, it is possible to exercise the option and buy out the asset.

In order to eliminate the risk of asset sale during the option period, it is advisable to make an asset pledge agreement whereby the owners will become pledgees.

Required documents

For drafting an option agreement for company shares under English or Cyprus law, we require:

  1. details of the parties (for an individual – full name, residential address; for a legal entity – name, country of incorporation, registration number, registered office, full name of the signatory and his/her capacity);
  2. option premium amount;
  3. price of the shares;
  4. how the option premium and shares will be paid;
  5. offer period;
  6. details of the attorney (if there is a power of attorney; full name, residential address);
  7. other terms and conditions.
The option agreement drafting fee depends on the applicable law, complexity of the option closing mechanism and other conditions.
The drafting time for a short agreement is 1-3 working days, for an extended version – 5-7 working days once the fees are paid and the option details are agreed.

Fees

Services
Fees (EUR)
Extended version
Drafting an Option Agreement under English law
from 2 500
Drafting an Option Agreement under Cyprus law
from 2 000
Drafting a Power of Attorney
from 200
Apostille of a Power of Attorney (depending on the country of apostille)
from 440
Preparing documents for the change of shareholder (depending on the jurisdiction)
from 450
Finding an escrow agent
1 000
Escrow agent fees (depending on the complexity of the option closing mechanism, including safekeeping of documents in a safe deposit box)
from 3 000 / year
Drafting an Escrow Agreement
from 2 000
Drafting an Asset Pledge Agreement
from 600
Advising on the making and exercise of an Option Agreement (procedure, risks)
300 / hour
Short version
Drafting an Option Agreement, including a notice template
600
Preparing documents for the change of shareholder (depending on the jurisdiction)
from 450

*The service fee is effective as of February 2025.

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USD 2 500
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