Option to purchase business of going corporation. Agreement made this _________ day of _________, _________[year], between _________ Company, a corporation created and existing under the laws of the State of _________, referred to as A and _________, of _________, referred to as B, provides that: A is now and for many years past has been engaged in the business of _________, at _________; and B proposes to organize a corporation under the laws of the State of _________, or some other satisfactory state, to be known as _________ Company or to be designated by some other suitable name, with an authorized capital stock of $_____, divided into _________ shares of $_____ each, of which _________ shares shall be _________ percent noncumulative preferred stock, and _________ shares shall be common stock, for the purpose of acquiring plants and properties of the various manufacturers engaged in the manufacture of _________, and A is willing to sell to B its business as a going concern, together with its plant, real estate and other property used in that connection, and to that end to give to B the privilege or option to purchase its business, plant, real estate, goodwill and other property on the terms and subject to the conditions stated. Therefore, in consideration of the premises and one dollar paid to A by B, and of their mutual agreements it is agreed between the parties as follows: 1. A agrees to sell to B, or to his [her] assigns, as a going concern, the business carried on by A together with its plant, including all the real estate now owned and occupied by A for the purpose of its manufacture of _________, and the buildings and structures, improvements, appurtenances, and easements. Also all machinery, tools, fixtures, appliances and apparatus employed as a part, together with all patents, patent rights, trademarks, brands, inventions, processes and trade names, now in its possession or owned or controlled by it, and the goodwill of the business of A as a going concern, excepting only money in the bank or on hand, and bills and accounts receivable and goods, wares and merchandise, material and supplies mentioned below. 2. B is given the sole and exclusive privilege and option to purchase from A all the above described property on or before the _________ day of _________, _________[year]. 3. The price to be paid for the property with good title, free and clear of all liens, charges, incumbrances, taxes, and assessments, shall be $_____ of which _________ dollars shall be paid in cash and the balance by the delivery to A in the name or names of the person or persons as it may in writing direct of _________ shares of the preferred capital stock and _________ shares of the common capital stock of the corporation to be organized as stated above. The payments will be made contemporaneously with the transfer of the plant, real estate and other property as provided. 4. In the event of the exercise by B of the above option, it is agreed that all raw material, goods manufactured and in the process of manufacture, including all supplies owned by A at the date of the transfer of the business, plant, real estate and other property shall be inventoried as of that date, at their fair cash market value, and B shall take and pay for them in cash at the value ascertained simultaneously with the transfer and conveyance of the business, plant, real estate and other property. In the event that any of the property inventoried shall be sold or in any manner transferred, or disposed of by A subsequent to the date of the taking of the inventory, and prior to the consummation of the purchase provided for, or if the property shall be destroyed or damaged by fire, flood or other casualty, then in
either event credit shall be given to B for the property sold, transferred, disposed of, damaged or destroyed at the inventoried value. 5. In the event that B elects to exercise this option, notice shall be given to A by registered letter or other written communication on or before the _________ day of _________, _________[year]. This notice shall be addressed to A at _________. 6. Good and sufficient abstracts of title to the real estate shall be delivered to counsel for B by A on or before _________[date]. 7. In the event that notice of the election to exercise this option is not given to A by B, within the time specified, then this agreement shall be null and void, and cease to be of any force or effect. 8. In the event that B elects to exercise this option it is agreed that he [she] will take over and assume all unfinished contracts of A for the purchase of material and supplies and the manufacture and delivery of products which may have been entered into by it prior to the date of exercising the option, and will indemnify it or cause it to be indemnified sufficiently and satisfactorily against any liability. 9. In the event of the purchase of the property rights and business described pursuant to the terms of this option, then contemporaneously A shall cause to be duly executed by itself and by its president, vice president, secretary and treasurer, a contract or contracts with B, his [her] successors and assigns, whereby A and its officers respectively shall bind themselves for the period of _________ years from the date of the contracts not to directly or indirectly engage or be or become interested in any manner or in any capacity whether as principal or agent or through investment or the lending of money or in other way in the business of manufacturing, buying, selling, dealing in or dealing with _________, or any related parts, or any appurtenances or appliances, within any part of the United States of America except the States of _________ and _________ and the Territories of _________ and _________, but this prohibition shall not prevent A or its officers or any of them from engaging in that business as an officer, director, stockholder, employee or creditor of the new corporation to be organized. 10. In the event that B elects to exercise this option, then it may be assigned to the corporation to be organized and this agreement in its entirety shall inure to the benefit of and be obligatory upon that corporation, and B shall be released from liability to the same extent as though he [she] had never been a party to this agreement. In witness, etc.