This put option agreement template has 6 pages and is a MS Word file type listed under our finance & accounting documents.
Sample of our put option agreement template:
PUT OPTION AGREEMENT This Put Option Agreement (the "Agreement") is effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the "First Quorum"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [COMPANY NAME] (the "Second Quorum"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [COMPANY NAME] (the "First Investor"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [COMPANY NAME] (the "Second Investor"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [COMPANY NAME] (the "Company"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS pursuant to a financing agreement made the [DATE] (the "Financing Agreement") each of [SPECIFY] (the "Investors") have each agreed to make a convertible subordinated term loan, convertible in whole or in part into common shares of the Company and each have agreed to subscribe for common shares of Company all in accordance with the terms and conditions set forth in the Financing Agreement (the shares issuable upon conversion of the loan together with the shares subscribed for as aforesaid are hereafter the "Company Shares"); AND WHEREAS Company and the Investors have agreed that, subject to the satisfaction of the conditions set forth in section [SPECIFY] of the Financing Agreement, each of the Investors shall have the right to put all of its Company Shares to Company in exchange for cash, upon the terms and subject to the conditions of this Agreement; NOW, THEREFORE, in consideration of the foregoing and the mutual promises of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: PUT OPTION Grant of Option Upon the terms and subject to the conditions of this Agreement, Company hereby grants to each of the Investors an option (the "Option") to require Company to purchase from each of the Investors all but not less than all of its Company Shares held by each of the Investors on the Effective Date (as defined below). Effectiveness The Option shall become effective and exercisable on or after [DATE] (the "Effective Date") unless an Initial Public Offering, Secondary Public Offering or Private Sale (as those terms are defined in the Financing Agreement) has been completed prior to such date, but in any case shall expire on [DATE]. Exercise of Option Delivery of Put Notice. Any Investor may exercise the Option by delivering to Company, at the address designated and in the manner described in Section 2, at any time after the Effective Date written notice of such exercise (the "Put Notice"). Put Notice. The Put Notice shall specify (i) the date on which the Option will be completed (the "Put Completion Date"), which may be no earlier than [NUMBER] days following the date an Investor sends the Put Notice to Company and; (ii) the name and address of the entity or person to whom payment of the Put Purchase Price (as defined below) shall be made. Purchase Price The aggregate purchase price for the Company Shares (the "Put Purchase Price") to be purchased by Company upon exercise of the Option pursuant to this Section 1 shall be at any particular date, the dollar amount per share equal to the fair market value per share of the Company Shares as at such date as determined by an evaluation board appointed in the manner set forth in paragraph [SPECIFY] of the shareholders agreement made [DATE] among the parties hereto and others (the "Shareholders Agreement"), which determination shall be final and binding on the parties hereto. Such evaluation board shall deliver its report within [NUMBER] days of its appointment. Payment of Purchase Price The Put Purchase Price shall be payable, as to [PERCENTAGE %] thereof, on the Put Completion Date, and as to balance thereof in equal installments on the last day of each of the [NUMBER], [NUMBER], [NUMBER], [NUMBER], [NUMBER], [NUMBER], [NUMBER], [NUMBER] and [NUMBER] months following the Put Completion Date, and shall bear interest at the Prime Rate (as defined in the Financing Agreement) until payment in full of the Put Purchase Price and all accrued and unpaid interest thereon is made. On Closing, Company shall deliver promissory notes to the Investors securing the unpaid balance of the Put Purchase Price. Such unpaid balance of the Put Purchase Price and all accrued interest thereon shall be evidenced by a promissory note and shall be secured by such security as the Investors may reasonably request and as may be permitted by [YOUR COUNTRY LAW], including without limitation a subordination and postponement of any debt of Company to any Shareholder of Company (other than the Investors who is a party to this Agreement. Closing Place, Time and Date. The closing of the sale and purchase of the Company Shares (the "Closing") shall take place at the offices of [INDIVIDUAL NAME], [FULL ADDRESS], [STATE/PROVINCE] at [HOUR] local time, on the Put Completion Date or such other place, time or date as the parties may agree. At the Closing, the Investors shall deliver to Company certificates representing the Company Shares, duly endorsed for transfer to Company or its designee, and Company shall deliver to the Investors the Put Purchase Price in the manner described in section 1.5
