OPTION AGREEMENT made [date], between [name] (Owner), and [name] (Purchaser).
WITNESSETH:
WHEREAS, the Purchaser desires to have the exclusive right and option (Option) to purchase certain real property owned by Owner in [county], described in Exhibit A [omitted] attached hereto (the Property), and
WHEREAS, the Owner is willing to grant this Option to Purchaser,
THEREFORE, the Owner, in consideration of [$ amount] received from the Purchaser, hereby grants to the Purchaser the exclusive option to purchase, on the following terms and conditions the parcel of land described in Exhibit A attached hereto:
1. Option Period. This Option shall commence on the date of this agreement and shall remain in effect until midnight [date] (Option Period).
2. Exercise of Option. This Option may be exercised by Purchaser at any time during the aforesaid Option Period by written notice to Owner delivered or mailed by certified mail, return receipt requested, to the Owner's address set forth subsequently, stating that the Purchaser desires to acquire the Property.
3. Price. The purchase price of the Property shall be [$ amount].
4. Contract of Sale and Purchase. In the event this Option is exercised, this instrument and the provisions hereof shall constitute the Contract of Sale between the Owner and the Purchaser.
5. Inspection of Premises. The Purchaser, Purchaser's employees, agents, or representatives, during the term of this Option shall have the right and privilege to enter on the previously described lands to make inspection thereof, to make surveys, verify the description of the Property attached hereto as Exhibit A, and/or tests to determine the use to which said Property may be put, so long as the inspection, surveys, verifications, and/or tests do not damage the Property or interfere with the ordinary transaction of business by the Owner.
6. Title Examination; Time of Closing. The Purchaser shall have [number] days after the date of exercise of this Option within which to have the title to the Property examined by his attorney. If such examination shows (1) the title to said Property to be free and clear of all liens, outstanding oil, gas, and mineral interests, defects, objections, and encumbrances, except (a) the usual easements for roads, railroads, power lines, gas lines, utilities, (b) items to be cleared at or before closing, and (c) loans agreed herein to be assumed by Purchaser; and (2) the title to be good and marketable, then this transaction shall be closed within a reasonable time but no later than [number] days after exercise of this Option. If the evidence of title shall not meet the requirements above specified, the Purchaser shall so notify the owner in writing within [number] days after the date of the exercise of this Option specifying the defects and objections to title, and the Owner shall have a reasonable period of time, not to exceed [number] days after receipt of that notice, to cure the defects, and will, in good faith, exercise due diligence to do so. Upon curing said defects, the transaction will be closed within a reasonable time not to exceed [number] days after Purchaser's attorney agrees that defects in title are cured and title is good and marketable. If the defects are not cured within the required time, the Purchaser shall have the right to either (1) take any and all necessary action to cure said defects at the expense of the Purchaser; or (2) accept title of Owner, notwithstanding said defects and to close this transaction in accordance with its terms and conditions; or (3) terminate this Option, and if the Purchaser shall elect to terminate, the amount paid as consideration for this Option shall immediately be refunded to Purchaser. If the title to the Property is, or after curing by Owner is rendered to be, without objectionable defects and good and marketable (as specified), and Purchaser fails to close this transaction in accordance with the terms of this Option, then this Option shall terminate and the amount paid as consideration for the Option and all extensions thereof shall be forfeited to the Owner as liquidated damages, and all obligations of this Option as to all parties shall terminate.
7. Ad Valorem Taxes. Upon closing, taxes for the year in which the transaction is closed shall be prorated between Owner and Purchaser as of the date of closing.
8. Condition of Property. Should Purchaser exercise this Option, Owner shall deliver to Purchaser at closing, possession of the Property in substantially the same condition as on the date of the execution of this Option. In the event all or a material portion of the buildings or structures on the Property or standing trees shall be substantially damaged, destroyed, or a portion of the Property condemned after the date hereof but prior to closing, Purchaser, after notification of such, may elect to (1) reduce the purchase price in the amount of the condemnation award or the decrease in value (as determined by a qualified appraiser, but subject to arbitration) caused by the damage or destruction of the Property or (2) receive such insurance proceeds or condemnation award as may be paid or payable with respect to such damage, destruction or taking, if the purchase herein provided should be consummated. Closing periods specified herein may be extended by the period of time required to determine amount or values under this provision.
9. Real Estate Commissions. Each party hereto represents to the other that no real estate broker commission shall be due on the purchase contemplated hereby, but in the event one is claimed, same shall become the obligation of the party who engaged any such broker.
10. Rents and Revenue. Rent and other items of current revenue and expense shall be prorated as of the date of closing. All special assessments due or pending on the closing date shall be paid by Purchaser. State stamps and surtax on the general warranty deed, if any, shall be paid for by Purchaser.
11. Failure to Exercise Option. If, for any reason not provided for in Paragraph 6 hereof, the Purchaser does not exercise this Option, the consideration paid for this Option shall be retained by the Owner, and neither party shall have any further right or claim against the other party.
12. Deed. If the Purchaser exercises this Option, the Owner shall convey title to the Property to the Purchaser or the Purchaser's assignee by good and sufficient general warranty deed, warranting title to be free and clear of all liens, charges and encumbrances, clouds and defects whatsoever, except for restrictions, reservations, limitations, easements, and conditions of record and zoning ordinances, which, in the Purchaser's opinion, do not interfere with the Purchaser's use of the Property and for taxes which are a lien but not due and payable. Such warranty deed shall be delivered to the Purchaser on the date of closing. Prior to delivery of the deed to the Purchaser, a copy of the deed shall be submitted to the Purchaser's counsel for approval. If on the date of
purchase, the Owner is unable to deliver the warranty deed in the form required by this Option, the Purchaser may, at its option, elect to waive the requirements of this Option relating to the warranty deed or may refuse to consummate the transaction; in which event, the Owner and Purchaser shall be fully relieved of any liability hereunder.
13. Notices. Any notice which may be or is required to be given pursuant to provisions of this Option shall be delivered or sent by certified mail, postage prepaid, return receipt requested, and addressed as follows:
If to the Owner: [Address]
If to the Purchaser: [Address]
14. Assignability. This Option shall be binding on and inure to the benefit of the Owner and the Purchaser, and their respective assigns. It is expressly understood that rights of purchase under this Option may not be assigned without the written consent of the other party, except that the Purchaser may without such consent assign this Option to its wholly owned subsidiary.
15. Recording. A memorandum agreement of this Option may, at Purchaser's Option, be executed in recordable
form, and at the Purchaser's election and expense, this Option may be recorded in the public office for the recording of such documents in [county, state].
IN WITNESS WHEREOF
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