Put And Call Option Shareholders Agreement Template for India

The Put And Call Option Shareholders Agreement is a vital instrument in Indian corporate structuring, typically employed when shareholders wish to establish predetermined exit mechanisms or strategic investment arrangements. This document becomes particularly relevant in situations involving private equity investments, joint ventures, or strategic corporate partnerships where parties need clearly defined exit routes. The agreement must carefully navigate Indian regulatory requirements, including compliance with the Companies Act 2013, SEBI regulations for listed entities, and FEMA regulations for foreign investors. It includes comprehensive provisions covering option mechanics, valuation methodologies, exercise procedures, and completion requirements. The document is essential for businesses seeking to provide security and clarity in shareholder relationships while ensuring regulatory compliance in the Indian jurisdiction.

1. Parties: Identification of all parties to the agreement, including shareholders, company, and any guarantors

2. Background: Context of the agreement, existing shareholding structure, and purpose of the put and call options

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules of interpretation

4. Put Option Terms: Detailed terms of the put option, including exercise price, exercise period, and mechanics

5. Call Option Terms: Detailed terms of the call option, including exercise price, exercise period, and mechanics

6. Exercise Process: Procedures and formalities for exercising either option, including notice requirements and timelines

7. Valuation Mechanism: Method for determining the exercise price, including any adjustments or fair market value calculations

8. Completion Requirements: Steps to be taken upon exercise of either option, including payment and share transfer procedures

9. Representations and Warranties: Standard and specific warranties from all parties regarding capacity, authority, and shares

10. Covenants: Ongoing obligations of the parties during the option period

11. Events of Default: Circumstances constituting default and consequences thereof

12. Regulatory Compliance: Provisions ensuring compliance with Indian laws, including Companies Act and SEBI regulations

13. Confidentiality: Obligations regarding confidential information

14. Notices: Process for serving notices under the agreement

15. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

16. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments