This is a put and/or call option agreement. An option agreement is often entered into to protect a minority shareholder who wishes to be assured of an exit from a joint venture. This document is drafted in Neutral Form.
Seller and Buyer have agreed to enter into certain option arrangements on the terms of this agreement.
The cost of obtaining the Auditors' Certificate shall be borne by the parties equally.
For the purpose of calculating the Option Price, the same accounting principles and policies shall be applied for all periods up to the exercise of the Option. The accounts of the Company shall be drawn up in accordance with the then current accounting principles generally applied to the consolidated accounts of Seller and its Subsidiaries for the relevant year.
Within seven days of receipt of the Auditor's Certificate either Seller or Buyer may give a written notice to the other (the Counter Notice) stating that Seller or Buyer (as the case may be) disputes the sum set out in the Auditor's Certificate.
Seller and Buyer shall use all reasonable endeavours to meet and discuss the objections of Seller or Buyer (as the case may be) and to reach agreement.
If the parties are unable to agree within 15 days of receipt of a Counter Notice, either party may instruct an internationally recognised firm of accountants (independent of the parties and agreed by them) to determine the dispute. In the absence of agreement, the internationally recognised firm of accountants shall be appointed by the President for the time being of the Institute of Chartered Accountants on the application of either party. The internationally recognised firm of accountants is referred to in this Agreement as the Expert.
The parties shall procure that there is made available to the Expert such information about the Company as the Expert reasonably requires to determine the dispute. The Expert shall be deemed to be acting as an expert and not as an arbitrator and its decision shall be final and binding on the parties. The cost of obtaining the Expert's certificate (the Expert's Certificate) shall be borne as directed by the Expert and if there is no such direction by the parties equally.
Interest at a rate of 2 per cent per annum above the base rate for the time being of the Bank shall be payable to Seller on the Option Price from the expiry of the day on which Completion ought to take place in accordance with clause 5.1 to the date of actual payment.