Explanation and Guide Form: Explanation: Option Agreement for Purchase of Assets. This is an option for one party (the "Optionor") to purchase all of the existing assets of an ongoing business (the "Optionee"). The agreement is very pro-Optionor oriented.
Form 24.2
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OPTION AGREEMENT FOR PURCHASE OF ASSETS THIS AGREEMENT (this “Agreement”) is entered into as of _________, by and among _________________, a ___________ corporation (“Purchaser”), ______________, a ____________ corporation (the “Company”), and __________, __________and __________ (collectively the “Key Stockholders”). RECITALS On the terms and subject to the conditions of this Agreement, the Company desires to grant Purchaser an option to purchase all assets (tangible and intangible) of the Company in consideration of the Option Fee (as defined below), and Purchaser desires to obtain such option for such consideration on the terms and subject to the conditions of this Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt of which is acknowledged by the parties, Purchaser and the Company hereby agree as follows: 1. DEFINITIONS AND INTERPRETATION
1.1 Definitions. Except as otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the meanings given in Annex I. 1.2 Interpretation. Except as otherwise expressly provided, the rules of interpretation set forth in Annex I shall apply to this Agreement. 2. OPTION
2.1 Grant of Option. The Company irrevocably grants to Purchaser the sole and exclusive option (the “Option”), irrevocable until [date] , _____ to purchase on the terms set forth herein, all existing assets (tangible and intangible) of the Company, together with all assets hereafter acquired (collectively, the “Assets”), including but not limited to the following: (a) (b) (c) (d) (e) (f) (g) (h) [specific key asset] All trademarks, tradenames and other Intellectual Property rights; All benefits under Contracts; All accounts receivable; All computers, equipment, workstations, and other personal property; All rights to fees or royalties; All goodwill associated with business; and Any other assets, tangible or intangible, of the Company.
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The Purchaser has the option, at its discretion, to exclude from the purchase any particular Asset. 2.2 No Assumption of Liabilities. Purchaser shall not assume any liabilities or obligations of the Company. However, to the extent that the Purchaser determines, in its sole discretion, to accept the assignment of a contract of the Company, Purchaser agrees to be responsible for obligations under said contract accruing after the Closing. 2.3 Option Fee. The purchase price for the Option (the “Option Fee”) is $__________, payable in cash upon the execution of this Agreement. 2.4 Exercise of the Option. The Option may be exercised by Purchaser by written notice of its intention to exercise the Option to the Company at any time during the Option Period (the “Option Notice”). Subject to Section 2.6 below, the Option Notice shall include the proposed date, time and place of the Closing. 2.5 Purchase Price. The purchase price for the Assets shall be $__________, payable as follows: $__________ at Closing; $________ six (6) months after Closing; $________ one (1) year after Closing. The representations and warranties of the Company shall survive the Closing. Without limiting Purchaser’s rights, at Purchaser’s election any breaches of Company representations, warranties and covenants shall offset payments due after the Closing. If the parties disagree as to whether a breach has occurred, such dispute shall be litigated unless the parties agree to arbitrate the matter. No deferred portion of the purchase price shall be paid until resolution of the status of any breaches has occurred. 2.6 Closing. The closing of the purchase and sale of the Assets shall be consummated on the date set forth in the Option Notice or such other later date as Purchaser shall specify, but in any event no later than thirty (30) calendar days after the date of the Option Notice (the “Closing”). 2.7 Closing Deliveries. At the Closing:
(a) The Company shall deliver to Purchaser the following, each of which (A) shall be dated as of the Closing; (B) shall be in form and substance reasonably satisfactory to Purchaser; and (C) shall have been duly authorized, executed and delivered by the parties thereto: (i) Instruments of assignment with respect to all the benefits under the contracts included in the Assets; (ii) Assets; (iii) Such other good and sufficient instruments of conveyance, transfer and assignment that are reasonably requested by Purchaser to vest in Purchaser all of the right, title and interest of the Company in the Assets, to put Purchaser in full and actual possession, enjoyment and control of the Assets; (iv) The Noncompetition Agreements; and A Bill of Sale with respect to the personal property included in the
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(v) the Company. (b)
The Opinion of _______________________________, counsel to
Purchaser shall deliver: (i) The _________ Agreement; and
(ii) $_________ by check or wire transfer as the first payment for the purchase price for the Assets. (iii) An assumption agreement with respect to post-Closing obligations under Company contracts accepted by Purchaser. 3. REPRESENTATIONS AN