Commercial Real Estate Option Agreement

COMMERCIAL REAL ESTATE OPTION AGREEMENT

This Commercial Real Estate Option Agreement ("Agreement") is made and entered into as of the Effective Date: , by and between Optionor: , an entity of type Individual Corporation LLC Partnership, whose principal address is ("Optionor"), and Optionee: , an entity of type Individual Corporation LLC Partnership, whose principal address is ("Optionee"). Optionor and Optionee are each a "Party" and collectively the "Parties."

RECITALS

WHEREAS, Optionor is the owner of certain commercial real property and improvements located at , legally described as:

WHEREAS, Optionee desires to obtain, and Optionor is willing to grant, an exclusive option to purchase the Property upon the terms and conditions set forth in this Agreement; and

WHEREAS, the Parties intend for this Agreement to govern the limited right to purchase the Property and to establish the procedures, obligations and remedies applicable to the Option.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. GRANT OF OPTION

1.1 Grant. Optionor hereby grants to Optionee the exclusive and irrevocable option (the "Option") to purchase all of Optionor's right, title and interest in and to the Property, subject to the terms and conditions set forth in this Agreement. The Option includes the rights to inspect the Property in accordance with Section 5 and to designate an assignee in accordance with Section 9 where permitted.

2. OPTION TERM AND CONSIDERATION

2.1 Term. The Option shall commence on and shall expire at 5:00 p.m. local time on (the "Expiration Date"), unless earlier terminated in accordance with this Agreement.

2.2 Consideration. In consideration for the grant of the Option, Optionee shall pay to Optionor the nonrefundable sum of $ (the "Option Consideration"), payable on or before the Effective Date. The Option Consideration shall be credited to the Purchase Price at Closing if the Option is timely exercised; otherwise, it shall be retained by Optionor as liquidated damages as provided in Section 8.

3. EXERCISE OF OPTION; PURCHASE PRICE; CLOSING

3.1 Exercise Notice. Optionee may exercise the Option by delivering written notice of exercise (the "Exercise Notice") to Optionor prior to the Expiration Date. The Exercise Notice shall specify the election to purchase the Property and identify any assignee if permitted by Section 9.

3.2 Purchase Price. The purchase price for the Property shall be $ (the "Purchase Price"), payable in cash at Closing, subject to customary prorations and adjustments set forth in this Agreement.

3.3 Closing. The closing of the purchase and sale contemplated by the exercise of the Option ("Closing") shall occur at a mutually agreed location within days after Optionor's receipt of the Exercise Notice, unless the Parties agree in writing to another date. At Closing, Optionor shall deliver to Optionee a duly executed deed conveying the Property free and clear of all monetary liens except those specifically assumed by Optionee and subject only to Permitted Exceptions (as defined below).

4. TITLE, SURVEY AND PERMITTED EXCEPTIONS

4.1 Title Commitment. Within days after the Effective Date, Optionor shall deliver to Optionee a commitment for title insurance and all documents in Optionor's possession concerning title to the Property. Optionee shall have the right to object to title defects within days after receipt of such commitment.

4.2 Permitted Exceptions. "Permitted Exceptions" shall mean those easements, covenants, conditions, restrictions, rights-of-way, zoning laws and other matters of record and visible on the Property that are expressly accepted by Optionee in writing or that do not materially interfere with Optionee's intended use. Optionor shall use commercially reasonable efforts to cure title defects to the extent required by Optionee in writing prior to Closing.

5. INSPECTION; CONDITION OF PROPERTY

5.1 Inspections. During the Option Term, Optionee and its agents shall have the right to enter the Property upon reasonable prior notice to Optionor to conduct environmental, structural, engineering and other inspections, tests and surveys. Optionee shall promptly restore the Property to its prior condition following any such investigation and shall be liable for any damage caused by its agents or contractors.

5.2 As-Is. Except as otherwise expressly provided in this Agreement, Optionee acknowledges that, except for the warranties and representations in Section 7, the Property is being offered and shall be transferred at Closing in its then-existing condition, and Optionor makes no other express or implied warranties as to condition.

6. TAXES, RENTS AND UTILITIES

6.1 Prorations. Real estate taxes, assessments, rents (if any) and utilities shall be prorated as of the date of Closing in accordance with local custom. Any tax periods that encompass the Closing shall be prorated on a per diem basis unless otherwise agreed in writing.

7. REPRESENTATIONS AND WARRANTIES

7.1 Optionor's Reps. Optionor represents and warrants to Optionee that: (a) Optionor has good and marketable fee simple title to the Property subject only to Permitted Exceptions; (b) there are no pending actions, claims or proceedings affecting the Property that would reasonably be expected to impair Optionor's ability to convey the Property at Closing; and (c) to Optionor's knowledge, there is no undisclosed release of hazardous substances on, under or migrating to the Property, except as disclosed in writing to Optionee.

7.2 Optionee's Reps. Optionee represents and warrants to Optionor that it has the authority to enter into this Agreement, that the individual executing this Agreement on its behalf is duly authorized, and that Optionee has sufficient financial capacity to perform its payment obligations hereunder.

8. DEFAULT; REMEDIES

8.1 Remedies. If Optionee timely exercises the Option and Optionor refuses or fails to close in accordance with this Agreement, Optionee shall be entitled to specific performance or, at Optionee's election, damages. If Optionee fails to timely exercise the Option or otherwise defaults under this Agreement, Optionor shall be entitled to retain the Option Consideration as liquidated damages and to pursue any other remedies available at law or in equity.

9. ASSIGNMENT

9.1 Assignment. Optionee may not assign its rights under this Agreement without the prior written consent of Optionor, which consent shall not be unreasonably withheld; provided, however, that Optionee may assign the Option to an affiliate or to an institutional purchaser in connection with a financing, provided Optionee remains primarily liable for performance and provides written notice to Optionor.

10. BROKERS

10.1 Brokerage. Each Party represents to the other that it has not engaged any broker or agent other than those identified in writing. Each Party shall indemnify and hold the other harmless from any commissions or fees arising from its engagement of brokers or agents.

11. NOTICES

11.1 Method. All notices required or permitted hereunder shall be in writing and shall be deemed given if personally delivered, sent by nationally recognized overnight courier, or sent by certified mail, return receipt requested, to the addresses set forth above or such other address as a Party may designate by notice. Notices shall be effective upon receipt.

12. GOVERNING LAW; DISPUTE RESOLUTION

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflicts of law principles. The Parties agree that any action to enforce this Agreement may be brought in the courts having jurisdiction in the county in which the Property is located, and each Party consents to such jurisdiction.

13. ENTIRE AGREEMENT; AMENDMENTS; WAIVER

13.1 Entire Agreement. This Agreement, together with any exhibits and documents expressly incorporated herein, constitutes the entire agreement between the Parties with respect to the Option and supersedes all prior negotiations, understandings and agreements, whether written or oral.

13.2 Amendments and Waiver. No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom enforcement is sought. The waiver by either Party of a breach shall not be deemed a waiver of any subsequent breach.

14. SEVERABILITY; COUNTERPARTS; FURTHER ASSURANCES

14.1 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable by a court of competent jurisdiction, such provision shall be severed and the remaining provisions shall continue in full force and effect.

14.2 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original and all of which together shall constitute one instrument. Execution and delivery of this Agreement by electronic transmission shall be effective as an original signature.

14.3 Further Assurances. Each Party shall execute and deliver such further instruments and take such further actions as may reasonably be necessary to effectuate the transactions contemplated by this Agreement.

15. MISCELLANEOUS PROVISIONS

15.1 Time is of the essence with respect to all dates and time periods set forth in this Agreement.

15.2 Headings. Headings in this Agreement are for convenience only and shall not affect interpretation.

EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date set forth above.

Sign Now