Put and Call Option Agreement - Company

This document is a Put and Call Option Agreement for a company. The agreement is entered into between two parties, referred to as the buyer and the seller. The buyer is identified as Party 1, with their principal place of business at Party 1 address. The seller is identified as Party 2, with their principal place of business at Party 2 address. The agreement is important as it establishes certain option arrangements between the buyer and the seller.

 

The document begins with an interpretation section, which provides definitions for various terms used throughout the agreement. These definitions include terms such as after-tax earnings, business day, call option, company, completion, controlling interest, group, net tangible assets, option notice, option period, option price, option shares, parties, persons acting in concert, put option, regulatory approvals, reorganisation, shares, subsidiary, and more.

 

The agreement then proceeds to outline the specific terms and conditions for the put option, call option, or both options, depending on the agreement between the buyer and the seller. The exercise of the option is explained, including the option period and the requirement for an option notice. The option price is determined based on factors such as net tangible assets, after-tax earnings, or a fixed exercise price. The process for calculating the option price is detailed, including the involvement of auditors and the possibility of disputes.

 

The completion of the agreement is described, including the venue for completion and the events that take place at completion. These events include the payment of the option price, the transfer of option shares, the delivery of share certificates, and the registration of transfers. The agreement also addresses the assumption of obligations by the buyer in the event of a change of control.

 

The agreement includes provisions regarding non-assignment, amendments, governing law, notices and service, no rights of third parties, entire agreement, and counterparts. It is important for both parties to carefully review and understand the terms and conditions of the agreement before entering into it.

 

Each section of the document provides detailed information and instructions for the respective topic, ensuring that both parties have a clear understanding of their rights and obligations under the agreement.

How to use this document?

To use this document, follow these steps:

1. Review the definitions in the interpretation section to familiarize yourself with the key terms used throughout the agreement.

2. Determine whether you are entering into a put option, call option, or both options, based on your agreement with the other party.

3. If you are the buyer, consider the option price calculation method that applies to your agreement, such as net tangible assets, after-tax earnings, or a fixed exercise price.

4. If you are the seller, understand the process for obtaining the auditors' certificate and the possibility of disputes regarding the option price.

5. Agree on the venue for completion and ensure that all necessary regulatory approvals have been obtained.

6. At completion, ensure that the option price is paid by electronic funds transfer to the seller's bank account.

7. If you are the seller, deliver the transfer or renounceable documents of title in respect of the option shares to the buyer.

8. If you are the seller, deliver the share certificates relating to the option shares to the buyer.

9. Ensure that the transferor transfers are registered and duly stamped.

10. If applicable, assume the obligations of any member of the seller group under guarantees and/or counter-indemnities to third parties in respect of obligations of the company group.

11. If a change of control occurs, the seller may exercise the put option irrespective of the time of such change of control.

12. Remember that neither party may assign or transfer any of its rights or obligations under this agreement without the other party's consent.

13. Any amendments to this agreement must be made in writing and signed by both parties.

14. This agreement is governed by and construed in accordance with the laws of the relevant country.

Please note that this guidance is a summary and does not constitute legal advice. It is important to consult with a legal professional to ensure that your specific circumstances are properly addressed in the agreement.