OPTION TO PURCHASE ASSETS

THIS AGREEMENT made _____________, ___, 20__, between ________________

_______________corporation (Company) and _______________________________
corporation (Optionee).
RECITALS
[Optional] Company is simultaneously herewith entering into a credit agreement
(Credit Agreement) with Optionee, whereby Optionee agrees to make certain loans to
Company. Company is simultaneously herewith entering into a management agreement
(Management Agreement) with Optionee, Optionee agrees to make certain management
available to Company.
In consideration of the loan and management agreements, Company is willing to grant,
and Optionee desires to receive, certain options.
NOW, THEREFORE, it is agreed between the parties as follows:
1. Definitions. As used in this Agreement:
(a) Net Assets of Company shall mean all of its assets of every kind and nature owned
by it on a specified date.
(b) Net Worth of Company as of any specified date shall mean the excess of the net
book value of its Net Assets as of that date over the amount of its total liabilities (exclusive of
contingent liabilities) as of that date.
(c) Date of exercise of the option shall mean the date on which notice of exercise of the
option is served on Company.
(d) Closing Date shall mean the date designated in the notice of exercise of the option,
which shall be the last business day of a calendar month occurring at least 15 days after the date
of its exercise.
2. Grant of option. Company grants Optionee the right (Option) to acquire Companys
Net Assets, as constituted on the Closing Date. The Option shall expire on ___ [date], unless
sooner exercised by Optionee or its assigns. The Option may be exercised at any time during its
term, by writ-ten notice to Company, specifying the Closing Date and the medium of payment of
the option price. [Optional: Notwithstanding anything to the contrary, the rights of Optionee
under this paragraph terminate upon its breach or default under the terms of the Credit
Agreement and/or Management Agreement.]
3. Purchase price. The purchase price shall be equal to the sum of the following:
(a) An amount equal to Companys Net Worth at ____________ [date], which, for the
purposes hereof, shall be taken at $______________, plus

(b) An amount equal to any increase in Companys Net Worth between _________ [date]
and the Option
4. Method of payment. The purchase price shall be payable, at Optionees election: (a) in
shares of Optionees common stock, or of those of any successor corporation or transferee of any
substantial part of Optionees business, if such shares (i) are listed and traded on a national
securities ex-change, such shares to be applied in payment of the purchase price at the average of
their closing prices on the five business days preceding and succeeding the date of exercise of the
Option on which they have been traded, and (ii) are in no event applied in payment of more than
30 percent of the purchase price; (b) by cash; or (c) by any combination of the above.
5. Initial payment of purchase price. On the Option Closing Date, Optionee shall pay or
deliver _____ [amount] percent of the estimated purchase price based upon Companys Net
Worth as of the last day of the calendar quarter preceding the Option Closing Date. Such
payment shall be against delivery to Optionee of all appropriate bills of sale, assignments, or
other documents that, in the opinion of Optionees counsel, transfer to Optionee good and
marketable title to Companys Net Assets as of the Option Date, free and clear of liens,
encumbrances, security interests, and restrictions, except minor defects in title not materially
adversely affecting Optionees use of such property, subject to Companys liabilities taken into
account in determining its Net Worth as of the Option Closing Date, such liabilities (and only
such liabilities) to be assumed by Optionee.
6. Final payment of purchase price. Beginning on the Option Closing Date and as
expeditiously as possible, the parties certified public accountants shall jointly determine
Companys Net Worth as of the Option Closing Date. Such determination shall be made in
accordance with generally accepted principles of accounting practice and binding and conclusive
on the parties as the option price. On a settlement date fixed by Optionee within 15 days after
completion of such determination, Optionee shall pay or deliver to Company, or shall the return
of, such amount in cash and in shares (at the same value as placed thereon as provided in
paragraph 4) as, when taken with the amount previously paid or delivered, will equal the option
price.
7. Shares as purchase price. Any shares of common stock delivered to Company in
payment of the purchase price shall be issued to and registered in Companys name or duly
endorsed for transfer to it. The shares shall be validly issued, fully paid, nonassessable, and duly
listed for admission to trading on each national securities exchange on which all other shares of
that class are listed and traded. Company represents and warrants that the shares are acquired for
investment and not for re-sale.
8. Conduct of business. During the term of the Option, [Optional Company will, subject
to the Management Agreement with Optionee, carry on its business in the usual and ordinary
manner to and including the Option Closing Date (or any extension thereof), and will not enter
into any unusual con-tracts or make any unusual commitments affecting the operation of the
business beyond the Option Closing Date without Optionees consent. During the term of the
Option, Optionee, through its agents and representatives, shall have full and complete access, at
all reasonable times, to the premises and to all Companys books and records.

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9. Bulk sales law. Company shall, at Optionees request, upon the exercise of the Option,
com-ply with the requirements of the bulk transfer provisions of the Uniform Commercial Code
then in effect in the State of ____________.
10. Approval. This Option Agreement has been approved at a duly held meeting of
Companys Board of Directors, and has been ratified by Companys shareholders at a duly held
meeting. Certified copies of the directors and shareholders resolutions have been delivered to
Optionee.
11. Notices. All notices, payments, or other documents required by this Option
Agreement shall be deemed duly served if delivered personally, by mail or any other means and
to any address that either party designates to the other by written notice, served as pro-vided
above.
12. Binding effect. This Option Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and recordable.
13. Non-waiver. No delay or failure by either party to exercise any right hereunder, and
no partial or single exercise of any such right, shall constitute a waiver of that or any other right,
unless otherwise expressly provided herein.
14. Entire agreement; modification. This Agreement supersedes all prior agreements and
constitutes the entire agreement between the parties hereto with respect to the subject matter
hereof. It may not be amended or modified except by an instrument executed and signed by both
parties.
15. Headings. Headings in this Agreement are for convenience and reference only and
shall not be used to construe its provisions.
16. Governing law. This Option Agreement shall be governed by and construed in
accordance with the laws of the State of __________.
17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument.
18. Time of essence. Time is of the essence of this Agreement.
IN WITNESS WHEREOF the parties have caused this option to be executed as of the
day and year first stated above.

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