The Put And Call Agreement serves as a critical instrument in various business transactions where parties seek to establish predetermined exit mechanisms or strategic investment options. This document, governed by U.S. federal and state laws, is commonly used in joint ventures, investment arrangements, and shareholder agreements to provide certainty and flexibility in future ownership transfers. It outlines the specific circumstances under which parties can exercise their rights to sell (put) or buy (call) assets, typically including detailed provisions on pricing mechanisms, exercise periods, and completion procedures. The agreement must comply with federal securities regulations, particularly the Securities Exchange Act of 1934 and state-specific contract laws, making it essential for complex business transactions where future ownership changes may be contemplated.
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1. Parties: Identification of all parties to the agreement, including full legal names and addresses
2. Background: Context of the agreement, relationship between parties, and purpose of the put and call arrangement
3. Definitions: Detailed definitions of key terms used throughout the agreement, including 'Put Option', 'Call Option', 'Exercise Price', 'Exercise Period', etc.
4. Grant of Options: Clear statement of the put and call options being granted, including the subject matter of the options
5. Exercise Price: Specification of the price(s) at which the options can be exercised, including any price adjustment mechanisms
6. Exercise Period: Time period during which the options can be exercised, including start and end dates
7. Exercise Procedure: Detailed process for exercising either option, including notice requirements and documentation
8. Payment Terms: Terms and conditions for payment upon exercise of either option
9. Completion: Process and requirements for completing the transfer once an option is exercised
10. Representations and Warranties: Standard and specific representations and warranties from all parties
11. Covenants: Ongoing obligations of the parties during the option period
12. Term and Termination: Duration of the agreement and circumstances under which it can be terminated
13. General Provisions: Standard boilerplate clauses including notices, amendments, governing law, etc.
1. Tag-Along Rights: Include when certain parties should have the right to join in a sale triggered by option exercise
2. Drag-Along Rights: Include when majority stakeholders need the ability to force minority holders to join in a sale
3. Regulatory Compliance: Include when the transaction involves regulated industries or securities
4. Tax Provisions: Include when specific tax treatment is important to the transaction structure
5. Financing Arrangements: Include when exercise of options may require or involve external financing
6. Third Party Rights: Include when third parties may have interests affected by the option exercise
7. Non-Competition: Include when parties need to be restricted from competing activities
8. Escrow Arrangements: Include when payment or shares need to be held in escrow
1. Asset Schedule: Detailed description of the assets subject to the put and call options
2. Valuation Methodology: Detailed methodology for calculating exercise price if not fixed
3. Form of Exercise Notice: Template notice for exercising put or call options
4. Required Consents: List of third-party consents required for option exercise
5. Encumbrances: List of any existing encumbrances on the subject assets
6. Transfer Documents: Forms of documents required to effect transfer upon exercise
7. Corporate Authorizations: Copies of corporate approvals and authorizations
Find the exact document you need
Put And Call Agreement
A U.S.-governed agreement establishing mutual rights to sell (put) and buy (call) specific assets under predetermined terms, subject to federal and state securities laws.
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Put Option Agreement
A U.S.-governed agreement granting the right to sell an asset at a predetermined price within a specified period, subject to federal securities regulations.
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Call Option Contract
A US-governed agreement granting the right to purchase a specified asset at a predetermined price within a defined period, subject to federal securities laws.
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