VIEWS: 79 PAGES: 2 CATEGORY: Option Purchase Agreement POSTED ON: 1/15/2013
An option contract is a contract that gives the right to one party to enter into a second contract with the other party at a later date. In this form, the prospective buyer is granted an option to purchase a business within a specified period of time. The prospective buyer will pay the seller a sum of money since the seller is, in effect, taking the property off the market during the option period. If the prospective buyer exercises his option during that time, a second contract is entered into regarding the sale of the business. If the option period expires, then neither party has any obligation to the other. However, the money paid for the option is normally not returned to the prospective buyer.
Option to Purchase a Business Agreement made on the (date) between (Name of Optionor) of (street address, city, county, state, zip code), referred to herein as Optionor, and (Name of Optionee), a corporation organized and existing under the laws of the state of (name of state), with its principal office located at (street address, city, county, state, zip code), referred to herein as Optionee. 1. Grant of Option. In consideration of $_____________ and other good and valuable consideration paid by Optionee, the receipt of which is acknowledged, Optionor grants to Optionee the option (the Option) to acquire the (name or type of business) of Optionor at (street address, city, county, state, zip code) including the real property on which the business is conducted and all fixtures, stock in trade, good will, and other assets of the business, as constituted on the date on which notice of the exercise of the option is served on Optionor. 2. Term of Option. The Option shall be effective as of the date of this Agreement and shall expire on (date), unless previously exercised by Optionee or its assigns. 3. Exercise of Option. The Option may be exercised at any time during its term, by written notice to Optionor, specifying the suggested date for closing the sales transaction, which date shall occur at least (number) days, but no more than (number) days, subsequent to the date of the notice. 4. Purchase Price. The purchase price shall be $_________. This price shall be payable in cash upon the delivery of the deed and bill of sale and other documents necessary to transfer the real property on which the business is conducted and all fixtures, stock in trade, good will, and other assets of the business to Optionee. 5. Casualty Losses. If, prior to any transfer of Optionor's business under this Agreement, any part of it shall be destroyed or damaged by fire or other casualty, the purchase price shall be abated to the extent or amount of the loss, unless reconstruction or replacement shall have been effected by Optionor. If the parties are unable to agree on the amount of the loss, the amount of the loss shall be ascertained and determined by an appraisal made by three appraisers, one of whom shall be appointed by each party and the third by the two appraisers chosen by the parties. 6.
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