Option to Buy Agreement - Shares

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Option to Buy Agreement - Shares Powered By Docstoc
					Reward a preferred buyer or lock in a great price with this Option to Buy Agreement for
Stock. This document sets out an option for the purchaser to purchase shares from the
vendor in the capital stock of the company for certain consideration. The option set forth
in the agreement is for a specific period of time where the purchaser will have the option
to purchase shares from the vender or such option will expire and the option offer to the
purchaser will become null and void. The terms and conditions of this document are
customizable to suit the user's situation. Use this when wanting to grant an individual
the option to buy shares in a company.
                       OPTION TO BUY AGREEMENT
      THIS OPTION TO BUY AGREEMENT (the “Agreement”) made this ____ day of
_______, 2_____ (the “Effective Date”) among _________________ (the “Vendor”),
___________ (the “Purchaser”) and ______________ (the “Company”).

       WHEREAS the Vendor is desirous to sell to the Purchaser and the Purchaser is desirous
to purchase from the Vendor certain shares in the capital stock of the Company owned by the
Vendor at the Effective Date pursuant to the terms and conditions contained herein.

        NOW THEREFORE in consideration of the mutual promises and covenants contained
herein and the payment of _______ ($______) Dollar by each of the parties hereto, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto hereby acknowledge and agree as follows:

1.00   DEFINITIONS

1.01 In this Agreement, unless otherwise stated, the following words and expressions shall
have the following meanings ascribed to them:

       (i)     “Closing Date” shall mean the day which is ______ (___) days following the
               delivery of the Option Notice by the Purchaser;

       (ii)    “Option” shall mean the option offered to the Purchaser contained in this
               Agreement;

       (iii)   “Option Notice” shall mean a notice delivered by the Purchaser to the Vendor
               and the Company indicating that the Purchaser is exercising its/his/her Option;

       (iv)    “Purchase Price” shall mean the sum of __________ ($________) Dollars;

       (v)     “Shares” shall mean __________ (___) issued and outstanding ________ shares
               owned by the Vendor in the capital stock of the Company; and

       (vi)    “Termination Date” shall mean the ___ day of ______, 2_____.

1.02 The headings used in this Agreement are for convenience of reference only, and shall not
affect the interpretation of this Agreement.

1.03   Unless otherwise stated herein, all money amounts shall be in _______ dollars.
2.00    PURCHASER’S OPTION

2.01 The Vendor hereby grants to the Purchaser the option (the “Option”) to purchase the Shares
owned by the Vendor at the Effective Date, at the Purchase Price set forth herein.

2.02 The Purchaser may choose to exercise the Option granted to it/him/her by the Vendor in
whole at any time up to and including the Termination Date in respect of the Shares, provided that
the Purchaser has provided an Option Notice to the Vendor indicating the Purchaser’s desire to
exercise the Option in the form annexed hereto as Schedule “A”.

2.03 At the time the Purchaser delivers the Option Notice to the Vendor in respect of the Shares,
the Purchaser shall also deliver to the Vendor or the Vendor’s attorney, a certified check or bank
draft representing no less than _______ (__%) (the “Deposit”) of the Purchase Price payable for the
Shares. The Deposit paid to the Vendor or the Vendor’s attorney by the Purchaser shall be applied
against the balance owing to the Vendor for the Shares.

3.00    PAYMENT OF PURCHASE PRICE

3.01 On the Closing Date, the Purchaser shall deliver to the Vendor or the Vendor’s attorney, the
balance of the Purchase Price by way of certified check, bank draft, wire transfer or direct deposit.

3.02 Upon the Vendor or its/his/her attorney receiving the balance of the Purchase Price from the
Purchaser, the Vendor or its/his/her attorney shall deliver the share certificate(s) representing the
Shares purchased by the Purchaser duly endorsed by the Vendor to the Purchaser.

3.02 In the event that any of the representations and warranties of the Vendor contained in
Section 4.00 are untrue or incorrect or if the Option Notice fails to be completed for any reason
whatsoever, the Vendor or its/his/her attorneys shall return the Deposit to the Purchaser

4.00    REPRESENTATIONS AND WARRANTIES OF THE VENDOR

4.01    The Vendor hereby represents and warrants to the Purchaser as follows:

        (i)      that at the Effective Date of this Agreement, all necessary corporate and shareholder
                 actions have been taken to permit the Shares to be validly optioned to the Purchaser;
                 and

        (ii)     that on the Closing Date, the Vendor will own the Shares, free and clear of any
                 liens or encumbrances.


4.02 In the event that any of that any of the representations or warranties of the Vendor are
untrue or incorrect as at the Closing Date, the Purchaser shall have the right to terminate this
Agreement and the Option Notice delivered to the Vendor by the Purchaser shall be deemed to
be void and not delivered.



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4.03 The Vendor further represents and warrants to the Purchaser that it/he/she shall not enter
into any discussions with any other party in respect of purchasing the Shares until after the
Termination Date has passed or the Option Notice is delivered by the Purchaser to the Vendor.

5.00    GENERAL PROVISIONS

5.01 No modification, supplement, termination, waiver or amendment to this Agreement may be
made unless agreed to by the Parties in writing.

5.02 Each provision of this Agreement is intended to be severable. If any provision hereof is illegal
or invalid, such illegality or invalidity shall not affect the validity of the remainder hereof.

5.03 Each party hereto hereby covenants and agrees that at any time, and from time to time, after
the Closing Date it will, upon the request of the other, do, execute, acknowledge and deliver or cause
to be done, executed, acknowledged and delivered all such further acts, deeds, assignments, transfers,
conveyances, documents and assurances as may be required for the better carrying out and
performance of the terms of this Agreement.

5.04 Any notice required or permitted to be given hereunder may be effectively given by letter
delivered either by personal delivery, registered mail or by electronic means, addressed to the recipient
as follows:

in the case of the Vendor:




Fax: (___)


with a copy to the Vendor’s Attorney:




Fax: (___)

Attention:




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in the case of the Purchaser:




Fax: (___)

with a copy to:




Fax: (___)

Attention:

and, in each case, mailed by ordinary mail, postage prepaid, or delivered to that address; and, if
mailed as aforesaid, any such notice shall have been deemed to have been given on the fifth (5th)
business day following that on which the letter containing the notice was posted. If any notice is
given by electronic communication, such notice shall be deemed to be delivered on the day of
transmittal thereof if given during normal business hours of the recipient and on the next business
day if given after normal business hours. Any party may change its address for service from time to
time by notice given in accordance with the foregoing.

5.05 This Agreement and the schedules referred to herein constitute the entire agreement between
the parties and supersede all prior agreements, representations, warranties, statements, promises,
information, arrangements and understandings, whether oral or written, express or implied, with
respect to the subject matter hereof . None of the parties shall be bound or charged with any oral or
written agreements, representations, warranties, statements, promises, information, arrangements or
understandings not specifically set forth in this Agreement or in the schedules, documents and
instruments to be delivered on or before the Closing Date pursuant to this Agreement. The parties
further acknowledge and agree that, in entering into this Agreement and in delivering the schedules,
documents and instruments to be delivered on or before the Closing Date, they have not in any way
relied, and will not in any way rely upon any oral or written agreements, representations, warranties,
statements, promises, information, arrangements or understandings, express or implied, not
specifically set forth in this Agreement or in such schedules, documents or instruments.

5.06 This Agreement shall be binding upon and enure to the benefit of the parties and their
respective heirs, administrators, executors, successors and permitted assigns. Nothing herein, express
or implied, is intended to confer upon any person, other than the parties and their respective heirs,
administrators, executors, successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.




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5.07 In the event the Shares are changed by way of being classified or reclassified, subdivided,
consolidated or converted into a different number or class of shares or otherwise, or if the Company
amalgamates, the Purchase Price and the type of security to be delivered to the Purchaser upon
exercise of the Option by the Purchaser shall be adjusted accordingly, in all cases so that the
Purchaser shall receive the same number and type of securities as would have resulted from such
change if the Option or the remaining part thereof had been exercised before the date of the change.

5.06 This Agreement shall be governed by and construed in accordance with the laws of the
Province/State of _____________.

5.07    Time shall be of the essence of this Agreement.

5.08 This Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and such counterparts together shall constitute one
agreement deemed to be dated as of the date hereof.

       IN WITNESS WHEREOF the parties have duly executed this Agreement under their
hands and seals as of the day and year first written above.



Witness:                                                    Vendor
or

                                                            (VENDOR)
                                                            Per:


                                                            Name:
                                                            Title:
                                                            I have authority to bind the Company.



Witness:                                                    Purchaser
or

                                                            (PURCHASER)
                                                            Per:


                                                            Name:
                                                            Title:
                                                            I have authority to bind the Company.




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                                                            (COMPANY)
                                                            Per:



                                                            Name:
                                                            Title:
                                                            I have authority to bind the Company.




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                                             SCHEDULE “A”

                                     FORM OF OPTION NOTICE




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DOCUMENT INFO
Description: Reward a preferred buyer or lock in a great price with this Option to Buy Agreement for Stock. This document sets out an option for the purchaser to purchase shares from the vendor in the capital stock of the company for certain consideration. The option set forth in the agreement is for a specific period of time where the purchaser will have the option to purchase shares from the vender or such option will expire and the option offer to the purchaser will become null and void. The terms and conditions of this document are customizable to suit the user's situation. Use this when wanting to grant an individual the option to buy shares in a company.
This document is also part of a package Stock & Equity Planning Starter Kit 14 Documents Included