Option and Purchase Agreement: Definition, Terms, Example
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What is an Option And Purchase Agreement?
An option and purchase agreement is a contract between a company and an individual that wishes to purchase stock options in the company. The contract states who each party is, how many options they intend to purchase, and what the monetary value of each option it. It also outlines when the stock options can be exercised and what terms and conditions must be met in order for a shareholder to exercise their stock options.
The purpose of an option and purchase agreement is to ensure that companies and shareholders mutually agree on the terms and conditions that govern their relationship.
Common Sections in Option And Purchase Agreements
Below is a list of common sections included in Option And Purchase Agreements. These sections are linked to the below sample agreement for you to explore.
Option And Purchase Agreement Sample
EXHIBIT 10.1
OPTION AND PURCHASE AGREEMENT
THIS AGREEMENT, effective as of June 28 th, 2017, is made by and between Thomas Archer (“Producer”) and Regnum Corp. (“Owner”) concerning the rights to a Screenplay entitled “Hot Sands” and the materials upon which it is based. The following terms and conditions shall apply:
1. DEFINITION OF “WORK”: For purposes of this Agreement, “Work” means the Screenplay entitled “Hot Sands” owned by Regnum Corp. and any and all other literary materials, titles, themes, formats, formulas, incidents, action, story, dialogue, ideas, plots, phrases, slogans, catchwords, art, designs, compositions, sketches, drawings, characters, characterizations, names, and trademarks now contained therein, as well as such elements as may at any time hereafter be added or incorporated therein, and all versions thereof in any form.
2. GRANT OF OPTION: In consideration of the mutual promises contained herein, and the payment to Owner of $2,500.00 (the “Option Price”), which shall be applicable against the Purchase Price, Owner hereby grants to Producer the exclusive, irrevocable right and option (the “Option”) for 12 months (the “Option Period”) to acquire the exclusive motion picture, television, videocassette, and all subsidiary, allied, and ancillary rights in and to the Work pursuant to the terms set forth below.
3. EXTENSION OF OPTION :
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(a) | Producer shall have the right to extend the Option Period for one (1) period of 12 months for $2,500.00 which shall be non-applicable against the Purchase Price. For the right to the extension of the first Option Period there must be one of the following: |
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(i) | letter of commitment to direct from a director; |
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(ii) | the project is set up at a company or studio able to fund the project; |
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(iii) | substantial negotiations in progress for complete financing of the film; |
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(iv) | letter of commitment to act in the film from one actor; or |
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(v) | a full-length feature-film script has been completed. |
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(b) |
Producer shall have the right to extend the Option Period for one (1) additional 12 month period for $2,500.00 which shall be non-applicable against the Purchase Price. In order to have a right to a second extension, Producer must secure at least two (2) of the above five (5) items. |
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4. EXERCISE OF OPTION: Producer may exercise this Option at any time during the Option Period, as it may be extended, by giving written notice of such exercise to Owner and delivery to Owner of the minimum Purchase Price as set forth below. In the event Producer does not exercise said Option during the period as it may be extended, this Agreement shall be of no further force or effect whatsoever. All rights granted hereunder become property of Owner.
5. PENDING EXERCISE OF OPTION: Producer shall have the right to engage in all customary development and pre-production activities during the Option Period as it may be extended.
6. GRANT OF RIGHTS: Effective upon Producer’s exercise of the Option, Owner hereby exclusively sells, grants and assigns to Producer, Producer’s successors, licenses and assigns all rights in and to the Work, throughout the universe, in perpetuity, in any and all media and by any means now known or hereafter devised, including, without limitation, all forms of theatrical and non-theatrical distribution and exhibition (including without limitation, free broadcast, pay television, cable, subscription, pay-per-view, video-on-demand, DVD and Internet), including without limitation the following: all motion picture rights, including the right to make remakes, new versions or adaptations of the Work or any part thereof; to make series and serials of the Work or any part thereof; the right, for advertising and publicity purposes only, to prepare, broadcast, exhibit and publish in any form or media, any synopses, excerpts, novelizations, serializations, dramatizations, summaries and stories of the Work, or any part thereof; and all rights of every kind and character whatsoever in and to the Work and all the characters and elements contained therein.
7. PURCHASE PRICE: As consideration for all rights and property herein granted, and all warranties and covenants herein made by Owner, Producer agrees to pay Owner the following sums not later than the commencement of principal photography of a production:
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(a) | $32,500. if the final budget for the motion picture (less contingencies, financing costs, and bank fees) based on the Work does not exceed two million dollars ($2,000,000), less any moneys paid as option exercise money and less the option payment for the initial period; |
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(b) | If the final budget exceeds two million dollars ($2,000,000), one percent (1%) of the final budget for the motion picture (less contingencies, financing costs, and bank fees) based on the Work less any amounts paid for option exercise; however, in no event shall the amount of such payment exceed fifty-thousand dollars ($50,000). |
8. CREDITS:
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(a) | In the event a motion picture based substantially on the Work is produced hereunder, Owner shall receive credit. |
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(b) |
Such credit shall be accorded on a single card in the main titles on all positive prints of the picture and in all paid advertising in which the director has received credit, subject to Producer’s and any distributor’s usual and customary exclusions. All other matters regarding prominence, placement, size, style and color of said credits shall be in Producer’s sole discretion. Nothing herein shall be construed to prevent so-called award or congratulatory or other similar advertising with respect to the material or Picture which omits the name of the Writer. |
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9. NO OBLIGATION TO PRODUCE : While Producer shall use best efforts to effect a production hereunder, nothing herein shall be construed to obligate Producer to produce, distribute, release, perform or exhibit a film based upon the Work, in whole or in part, or otherwise to exercise, exploit or make any use of the rights, license, privileges or property gained herein to Producer.
10. REPRESENTATIONS AND WARRANTIES :
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(a) | The Work itself is original with Owner and no part of the Work is in the public domain other than the extent to which historical facts are, by their nature, in the public domain; |
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(b) | Owner has the right, authority and legal capacity to grant the rights granted to Producer herein; |
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(c) | The work is not subject to any claim, arbitration, mediation, or litigation; |
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(d) | The Work does not, and no use thereof will, infringe upon or violate any personal, proprietary or other right of any third party, including, without limitation, defamation, libel, slander or violation of any right of privacy or publicity or any copyright in underlying material; and |
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(e) | Owner shall not exploit the Work in a manner inconsistent with the terms of this Agreement, specifically, to not sell, license, exploit or transfer any rights in the Work. |
11. REMEDIES: Owner recognizes and confirms that in the event of a failure or omission by Producer constituting a breach of its obligations under this Agreement, whether or not material, the damage, if any, caused Owner is not irreparable or sufficient to entitle Owner to injunctive or other equitable relief. Consequently, Owner’s rights and remedies shall be limited to the right, if any, to obtain damages at law and Owner shall not have any right in such event to terminate or rescind this Agreement or any of the rights granted to Producer hereunder or to enjoin or restrain the development, production, advertising, promotion, distribution, exhibition or exploitation of the Picture and/or any of Producer’s rights pursuant to this Agreement.
12. MISCELLANEOUS :
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(a) | Arbitration. Disputes under this Agreement shall be settled pursuant to binding arbitration under the rules of the Independent Film and Television Alliance (“IFTA”) in California. The prevailing party will be entitled to reasonable attorney fees and costs. |
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(b) | Indemnification. Owner shall indemnify and defend Producer from and against any and all claims and damages arising from the breach of any representation or warranty of Owner hereunder to the extent such claim or damage does not arise out of a breach by Producer hereunder. Producer shall indemnify and defend Owner from and against any and all claims and damages arising from the production, distribution, exhibition or exploitation of the Picture, or any element thereof, to the extent such claim or damage does not arise out of a breach by Owner hereunder. |
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(c) | Accounting. Producer agrees to keep and maintain complete and accurate books and records relating to the Picture and the proceeds derived therefrom. |
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(d) | Assignment. Owner may not assign its rights or obligations hereunder. Producer may freely assign its rights and obligations hereunder. |
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(e) | Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. |
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(f) | Notices. All notices under this Agreement shall be in writing and may be served by facsimile or electronic mail. The date of receipt by facsimile or electronic mail, as the case may be, shall be the date of service of notice. |
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(g) | This agreement may be signed in counterparts. Facsimile and scanned copies shall be deemed originals for all purposes. |
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(h) | This Agreement constitutes the entire agreement between the parties hereto with respect to all of the matters herein and its execution has not been induced by, nor do any of the parties hereto rely upon or regard as material, any representations or writing whatsoever not incorporated herein and made a part hereof. No amendment or modification hereto shall be valid unless set forth in a writing signed by both parties. | <
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.
| PRODUCER | OWNER | |||
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| /s/ Thomas Archer | /s/ Tiffani Jones | |||
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Thomas Archer |
Regnum Corp |
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Reference:
Security Exchange Commission - Edgar Database, EX-10.1 3 regnum_ex101.htm OPTION AND PURCHASE AGREEMENT, Viewed March 7, 2023, View Source on SEC.
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Meet some of our Option And Purchase Agreement Lawyers
Sage Law Firm M.
Sage Law Firm M.
Richard A. Mathurin is as a member of the professional team at Sage Law. Since graduating cum Laude from The University of Notre Dame and UCLA School of Law, Rich has enjoyed an exciting and diversified career in the practice of law. In his early career, he assisted several energy companies all over the world in the development and funding of major wind energy and other green technology projects. Following an assignment by his firm to their Far East offices in Tokyo and Singapore, Rich represented global corporations such as Hitachi, UPS, and Fuji-Xerox in major commercial transactions. More recently, Rich returned to his native San Diego to care for an ill family member and work in the local community. Rich specializes in tax resolution, bankruptcy and small business services helping clients get in compliance with complex tax laws and manage their personal and business finances. When he is not working servicing his valued clients, Rich is an ardent golfer and enjoys rooting for his favorite Boston sports teams.
"Rich did a great job with the incorporation of our firm. No muss, no fuss, everything done within a week. Would recommend!"
Angela Y.
NJ and NY corporate contract lawyer and founder of a firm specializing in helping entrepreneurs. With a background in law firms, technology, and world class corporate departments, I've handled contracts and negotiations for everything from commercial leases and one-off sales agreements, to multi-million dollar asset sales. I love taking a customer-focused and business-minded approach to helping my clients achieve their goals. Other information: learning to surf, lover of travel, and one-time marathoner (NYC 2018) yulawlegal.com
"Angela is simply phenomenal. Nothing else to say; if she bids on your project, hire her!"
Rebecca S.
I absolutely love helping my clients buy their first home, sell their starters, upgrade to their next big adventure, or transition to their next phase of life. The confidence my clients have going into a transaction and through the whole process is one of the most rewarding aspects of practicing this type of law. My very first class in law school was property law, and let me tell you, this was like nothing I’d ever experienced. I remember vividly cracking open that big red book and staring at the pages not having the faintest idea what I was actually reading. Despite those initial scary moments, I grew to love property law. My obsession with real estate law was solidified when I was working in Virginia at a law firm outside DC. I ran the settlement (escrow) department and learned the ins and outs of transactions and the unique needs of the parties. My husband and I bought our first home in Virginia in 2012 and despite being an attorney, there was so much we didn’t know, especially when it came to our HOA and our mortgage. Our real estate agent was a wonderful resource for finding our home and negotiating some of the key terms, but there was something missing in the process. I’ve spent the last 10 years helping those who were in the same situation we were in better understand the process.
"Rebecca you were awesome I appreciate you working with me and helping me get this done. I look forward to working with you in the future."
Justin A.
I am a lawyer who helps small businesses, nonprofits, and startups with a wide variety of agreements, corporate formation, and corporate governance. I earned my BA from Tulane University and my JD from the University of Chicago Law School. Before starting my own practice, I worked at an international law firm in New York City. Outside of work, I am on the board of the nonprofit Seattle REconomy (which runs the NE Seattle and Shoreline tool libraries) and I enjoy gardening, baking bread, and outdoor activities with my spouse and two dogs.
"Justin provided excellent, expedient service and made sure my needs were met satisfactorily."
Max K.
I am a business attorney and former in-house corporate attorney with more than a decade of experience helping companies navigate contracts, commercial relationships, day-to-day operations, and disputes. My practice includes drafting, reviewing, and negotiating commercial agreements, licenses, leases, vendor and service agreements, and other business arrangements. Licensed in Nevada, California, New York, and Texas, I also hold an Executive MBA. My goal is to serve as practical, long-term outside counsel to small businesses and entrepreneurs that value responsiveness, sound judgment, and advice grounded in commercial realities - not merely technical legal answers. I handle disputes when necessary, but much of the value I bring lies in identifying issues early, preserving business relationships, and preventing avoidable conflicts. I do not bill separately for routine phone calls. I want clients to feel comfortable calling before a small concern becomes an expensive problem, and I am always happy to have an initial conversation to see if the fit is right for you. www.linkedin.com/in/maxkelner
"This was my 1st time having to consult with a legal expert about anything and Max made the process easy and stress-free."
Curt L.
For over thirty five (35) years, Mr. Langley has developed a diverse general business and commercial litigation practice advising clients on day-to-day business and legal matters, as well as handling lawsuits and arbitrations across Texas and in various other states across the country. Mr. Langley has handled commercial matters including employment law, commercial collections, real estate matters, energy litigation, construction, general litigation, arbitrations, defamation actions, misappropriation of trade secrets, usury, consumer credit, commercial credit, lender liability, accounting malpractice, legal malpractice, and appellate practice in state and federal courts. (Online bio at www.curtmlangley.com).
Tim E.
I am a business attorney focused on providing practical, targeted legal services for small businesses, startups, contractors, consultants, and service providers. I help clients efficiently review, draft, and improve everyday business contracts, including service agreements, NDAs, independent contractor agreements, vendor contracts, commercial leases, and purchase documents. My approach is straightforward: identify the terms that matter, explain risks in plain English, and deliver clear, usable edits or drafts without unnecessary complexity. I regularly handle fixed-fee, quick-turnaround projects such as contract reviews, agreement drafting, and demand or termination letters. While I offer streamlined, project-based services for routine matters, I can also assist with broader business legal needs as they arise.
"Very responsive and worked with me to get the contract I needed"
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