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Option To Purchase Business Agreement Template for Singapore

An Option to Purchase Business Agreement under Singapore law is a legally binding document that grants a potential buyer the exclusive right, but not the obligation, to purchase a business within a specified period. The agreement is governed by Singapore's Contract Law and related commercial legislation, including the Sale of Goods Act and Companies Act. It outlines the terms of the option, including the purchase price, exercise period, conditions precedent, and completion requirements, while providing protection for both parties through warranties and representations.

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What is a Option To Purchase Business Agreement?

The Option To Purchase Business Agreement is commonly used in Singapore business transactions where parties wish to secure a potential sale while conducting due diligence or arranging financing. This document provides the option holder with exclusive rights to purchase the business under specified terms and conditions, while protecting the option grantor's interests through clearly defined exercise periods and consideration requirements. The agreement must comply with Singapore's commercial laws and typically includes detailed provisions about the business assets, liabilities, employees, and intellectual property that would be transferred upon exercise of the option.

What sections should be included in a Option To Purchase Business Agreement?

1. Parties: Identification and details of the Option Grantor and Option Holder

2. Background: Context of the transaction and brief description of the business

3. Definitions: Key terms used throughout the agreement

4. Grant of Option: Terms of the option, including exercise period and option fee

5. Purchase Price: Agreed consideration and payment terms

6. Exercise of Option: Process and requirements for exercising the option

7. Conditions Precedent: Conditions that must be fulfilled before completion

8. Completion: Process and requirements for completion of the sale

9. Warranties and Representations: Standard business warranties and representations by both parties

What sections are optional to include in a Option To Purchase Business Agreement?

1. Employee Matters: Terms relating to transfer of employees - use when the business has employees who will transfer

2. Intellectual Property: Terms relating to IP transfer and protection - use when the business includes significant IP assets

3. Property Matters: Terms relating to transfer of property interests - use when the business includes real estate assets

4. Non-Compete Provisions: Restrictions on seller's future business activities - use when protection against competition is required

5. Transitional Services: Terms for post-completion support - use when seller's assistance is needed post-completion

What schedules should be included in a Option To Purchase Business Agreement?

1. Business Assets Schedule: Detailed list of assets included in the sale

2. Excluded Assets Schedule: List of assets specifically excluded from the sale

3. Employee Schedule: List of employees and their key employment terms

4. Contracts Schedule: List of business contracts to be transferred

5. IP Schedule: Details of intellectual property assets

6. Property Schedule: Details of real estate assets and leases

7. Form of Transfer Deed: Template for business transfer documentation

8. Due Diligence Disclosure: Seller's disclosures against warranties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Singapore

Publisher

Ƶ

Cost

Free to use

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