Business Sale Agreement - Template, Sample Form Online Pro · US-law

BUSINESS SALE AGREEMENT (ASSET PURCHASE AGREEMENT)

State of ________

This Business Sale Agreement (this “Agreement”) is entered into and made effective as of the date set forth in the execution block at the end of this document (the “Effective Date”), by and between the following parties:

________, a ________ organized and existing under the laws of the State of ________ (“Seller”), having a principal place of business at:

________

and an email address of: ________; and

________, a ________ organized and existing under the laws of the State of ________ (“Buyer”), having a principal place of business at:

________

and an email address of: ________.

Seller and Buyer may be referred to individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Seller owns and operates a business known as: ________ (the “Business Name”);

WHEREAS, Seller’s business is organized and primarily operated in the State of ________;

WHEREAS, the nature of Seller’s business is as follows:

________

located in ________ County, State of ________;

WHEREAS, Seller desires to sell, and Buyer desires to purchase, the business through the sale of substantially all of the assets used in the operation of the business (the “Assets,” and together with the going concern, the “Business”);

WHEREAS, Seller is willing to sell, and Buyer is willing to purchase, the Business on the terms and conditions stated herein;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1 — SALE OF ASSETS

§ 1.1 Seller hereby agrees to sell, convey, transfer, assign, and deliver the Assets and the Business to Buyer, and Buyer hereby agrees to purchase the Assets and the Business from Seller, subject to the terms and conditions of this Agreement and in reliance on the representations and warranties contained herein, free and clear of all liens, claims, security interests, and encumbrances of every kind.

§ 1.2 The Assets to be conveyed include, without limitation, the following: ________. The following assets are expressly excluded from this sale: ________.

ARTICLE 2 — PURCHASE PRICE AND ALLOCATION

§ 2.1 The purchase price of the Business (the “Purchase Price”) shall be expressed as a single, aggregate price for the buyout of all of the Assets and shall not be assessed as a price per individual Asset.

§ 2.2 The aggregate Purchase Price is $________ (________).

§ 2.3 The Parties agree to allocate the Purchase Price among the Assets in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder. The allocation shall be as follows (or as set forth on a schedule mutually agreed by the Parties): ________. Each Party agrees to timely and accurately prepare and file IRS Form 8594 and all other required documentation consistent with such allocation.

ARTICLE 3 — CLOSING

§ 3.1 The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place on ________ (the “Closing Date”) at the following location:

________

§ 3.2 On the Closing Date, Seller agrees to the following:

(a) Seller shall deliver all of the Assets to Buyer in the same condition as existed when Buyer agreed to purchase, free and clear of all liens, security interests, and other encumbrances, other than those in favor of Buyer;

(b) Seller shall, if reasonably possible, deliver the Assets in the manner requested by Buyer, provided that no additional cost is assessed to Seller for such delivery;

(c) Seller shall execute and deliver to Buyer a bill of sale, assignment and assumption agreement, and any and all other documents memorializing the transfer of the Assets to Buyer; and

(d) Seller shall, where necessary, assist Buyer in perfecting any recordation, registration, or other filing regarding the transfer and new ownership of the Assets, including the filing of UCC termination statements with respect to any pre-existing security interests.

§ 3.3 On the Closing Date, Buyer agrees to the following:

(a) Buyer shall pay the Purchase Price (less any Deposit credited under Article 4) to Seller by bank wire transfer of immediately available funds to the following account:

________

(b) Buyer shall be responsible for any and all sales, use, transfer, and similar taxes applicable to Buyer’s acquisition of the Assets and the Business.

ARTICLE 4 — DEPOSIT

§ 4.1 Prior to the Closing Date, Buyer shall deliver to Seller a deposit in the amount of $________ (________) (the “Deposit”). The Deposit shall be credited against the Purchase Price at Closing.

§ 4.2 The Deposit shall be delivered no later than the following period prior to the Closing Date: ________.

§ 4.3 The Deposit shall be payable by bank wire transfer to the following account:

________

§ 4.4 If the sale of the Business does not close due to any action, inaction, or misrepresentation on the part of Buyer, Seller shall retain the Deposit. If the sale of the Business does not close due to any action, inaction, or misrepresentation on the part of Seller, the Deposit shall be promptly refunded to Buyer in full.

ARTICLE 5 — BUSINESS NAME

§ 5.1 Seller hereby agrees to take any and all steps necessary to properly transfer ownership of the Business Name to Buyer, including, without limitation, the assignment of any registered intellectual property, trade name, or fictitious business name registration, and the execution of any documents required by the United States Patent and Trademark Office or applicable state authorities.

ARTICLE 6 — SELLER’S REPRESENTATIONS AND WARRANTIES

§ 6.1 Seller hereby represents and warrants the following:

(a) Seller has the organizational and legal authority to enter into this Agreement and to perform each of Seller’s obligations hereunder;

(b) the Business is current with all registrations, filings, and other legal documents required for its valid existence and continued operation;

(c) the sale of the Business will not adversely affect any pre-existing creditor, and Seller has complied with any applicable bulk-sale or bulk-transfer notice requirements;

(d) the Business owes no outstanding amounts to the Internal Revenue Service for back taxes or penalties and is current with all taxes owed to the Internal Revenue Service and any other governmental authority, domestic or foreign;

(e) the Business is a duly organized and validly existing legal entity in good standing in the United States;

(f) Seller and its authorized representatives shall not make any change to the current staffing structure of the Business, including hiring or terminating employees, changing employee roles, or changing salary or benefit amounts, prior to the Closing Date without Buyer’s prior written consent;

(g) there is no current, pending, or, to Seller’s knowledge, threatened litigation, claim, or governmental investigation involving the Business;

(h) the Business is current on all payments for required or reasonable insurance policies;

(i) the Business is not infringing upon any third party’s intellectual property; any trademarks, service marks, trade names, copyrights, or patents used by the Business are the legal and exclusive property of the Business; any registered intellectual property is duly registered with the appropriate offices of the United States government; and there are no infringement claims against the Business of which Seller is aware;

(j) any intellectual property not owned by the Business has been duly and legally licensed to the Business, and the sale of the Business will not impair the validity of any such license;

(k) Seller is the sole and exclusive owner of all of the Assets, and there are no encumbrances of any kind that would prevent Seller from completing the sale of the Assets; and

(l) the financial statements and records of the Business provided to Buyer are true, complete, and accurate in all material respects and fairly present the financial condition of the Business.

§ 6.2 Seller expressly acknowledges that Buyer is relying on each of these representations and warranties to enter into this Agreement. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER MAKES NO OTHER REPRESENTATION OR WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

§ 6.3 Buyer shall bring any claim relating to a breach of these warranties within one (1) calendar year following the Closing Date. If any third party is also involved in such claim and Buyer recovers any amount therefrom, the amount of Buyer’s claim against Seller shall be reduced by the amount so recovered.

ARTICLE 7 — BUYER’S REPRESENTATIONS AND WARRANTIES

§ 7.1 Buyer hereby represents and warrants the following:

(a) Buyer has the organizational and legal authority to enter into this Agreement and to perform each of Buyer’s obligations hereunder;

(b) Buyer is able to pay the Purchase Price and all other expenses related to this Agreement;

(c) the purchase of the Business will not adversely affect any pre-existing creditor; and

(d) Buyer has no actual knowledge or reason to believe that any of Seller’s representations are false.

§ 7.2 Buyer expressly acknowledges that Seller is relying on each of these representations and warranties to enter into this Agreement. Except as expressly set forth herein, Buyer disclaims any other warranty, whether express or implied.

§ 7.3 Seller shall bring any claim relating to a breach of these warranties within one (1) calendar year following the Closing Date. If any third party is also involved in such claim and Seller recovers any amount therefrom, the amount of Seller’s claim against Buyer shall be reduced by the amount so recovered.

ARTICLE 8 — CONDITIONS PRECEDENT

§ 8.1 Conditions precedent to be performed by Seller. Seller acknowledges and agrees that Buyer’s obligation to complete the purchase of the Business and to perform its other obligations hereunder is subject to the satisfaction, on or before the Closing Date, of the following conditions:

(a) all warranties, representations, and acknowledgments made by Seller in this Agreement shall be accurate and true in all material respects on the Closing Date;

(b) Seller shall have duly completed all paperwork required for the sale of the Business and execution of this Agreement, including documents, forms, registrations, assignments, and authorizations;

(c) Seller shall have duly executed all paperwork for the sale of the Business;

(d) Seller shall have provided Buyer with all information required for Buyer to assume the proper operation of the Business; and

(e) Seller shall have obtained all necessary consents required, under any existing contracts or otherwise, for Buyer’s continued operation of the Business.

§ 8.2 Conditions precedent to be performed by Buyer. Buyer acknowledges and agrees that Seller’s obligation to complete the sale of the Business and to perform its other obligations hereunder is subject to the satisfaction, on or before the Closing Date, of the following conditions:

(a) all warranties, representations, and acknowledgments made by Buyer in this Agreement shall be accurate and true in all material respects on the Closing Date; and

(b) Buyer shall have duly completed all paperwork required for the purchase of the Business and execution of this Agreement, including documents, forms, registrations, assignments, and authorizations.

§ 8.3 If either Party fails to satisfy its obligations under this Article, this Agreement shall be null and void, and there shall be no further relationship or obligation between the Parties, except as otherwise provided in Article 4.

ARTICLE 9 — RISK OF LOSS

§ 9.1 All risk of loss or damage to the Assets and the Business shall remain with Seller up to and including the Closing Date. From the day after the Closing Date, all risk of loss or damage to the Assets and the Business shall pass to and be borne by Buyer. In the event that any of the Assets are lost, damaged, or destroyed prior to the Closing Date, Seller shall promptly notify Buyer, and the Parties shall negotiate in good faith any appropriate adjustment to the Purchase Price or, if the Parties are unable to agree, either Party may terminate this Agreement without further obligation.

ARTICLE 10 — EMPLOYEES

§ 10.1 Buyer agrees to maintain the employment status of each employee of the Business, including, without limitation, title, salary, and leave benefits. Seller acknowledges and agrees that Seller has maintained full and accurate records for all employees of the Business (the “Employees”) and that, other than as expressly disclosed to Buyer, the Business owes no payment or compensation obligation to any Employee.

§ 10.2 Seller shall be responsible for all payments to Employees, whether salary or other compensation, up to and including the Closing Date. Buyer shall be responsible for all payments to Employees from the day after the Closing Date. The Parties shall comply with all applicable obligations under the Worker Adjustment and Retraining Notification (WARN) Act, the Consolidated Omnibus Budget Reconciliation Act (COBRA), and applicable state law.

ARTICLE 11 — NON-COMPETITION

§ 11.1 For a period of ________ following the Closing Date, and within the geographic area of ________, Seller agrees to refrain from engaging, directly or indirectly, in any form of commercial competition (including, without limitation, through business, marketing, investment, or financial activities) with Buyer in the same or a similar line of business as the Business, whether single-handedly or through the employment of or contracting with any third party or organization. Specifically, Seller shall not:

(a) use any specific information about the Business to procure a commercial advantage over Buyer, or otherwise use any designs, ideas, or concepts created by or belonging to Buyer or the Business without the express written consent of Buyer; or

(b) solicit the clients or customers of the Business to provide or supply goods or services of the same or a similar type to those provided by the Business.

§ 11.2 The Parties agree that the restrictions in this Article are reasonable and necessary to protect the goodwill of the Business conveyed hereunder. If any court determines that any such restriction is unreasonable in duration, geographic scope, or otherwise, the restriction shall be reformed to the maximum extent enforceable under applicable law.

ARTICLE 12 — NON-SOLICITATION

§ 12.1 For a period of ________ following the Closing Date, Seller shall not endeavor to entice away from the Business, or employ or offer to employ, any person employed by Buyer, whether or not such person would commit a breach of his or her contract of employment by accepting such employment. This prohibition shall not apply to the recruitment of any such employee who has responded to a bona fide general advertisement or been recruited by an agency, provided that Seller has not given, directly or indirectly, any form of encouragement to that employee to do so.

ARTICLE 13 — LIABILITIES

§ 13.1 The Parties acknowledge and agree that Buyer shall not assume any of Seller’s liabilities or obligations arising in connection with the ownership or operation of the Business on or before the Closing Date.

§ 13.2 Seller agrees to indemnify Buyer and all of Buyer’s agents, employees, and representatives against any and all damage, liability, and loss, as well as reasonable attorneys’ fees and costs, however caused, arising from the ownership or operation of the Business on or before the Closing Date, including any employment-related claims.

ARTICLE 14 — INDEMNIFICATION

§ 14.1 Each Party agrees to indemnify, defend, and hold harmless the other Party, and all of the other Party’s agents, employees, officers, and representatives, from and against any and all claims, damages, liabilities, losses, costs, and expenses, including reasonable attorneys’ fees, arising out of or resulting from any breach of any representation, warranty, covenant, or obligation made by the indemnifying Party under this Agreement. The indemnification obligations set forth in this Article shall survive the Closing Date and shall remain in full force and effect thereafter.

ARTICLE 15 — CONTRACTS

§ 15.1 All existing contracts of the Business with any third parties, including clients, customers, suppliers, agents, or others, that may legally be assigned through the sale of the Business are hereby assigned to Buyer.

§ 15.2 This Agreement shall not assign, and shall not be construed to assign, any third-party contract if such assignment would constitute a breach of that contract or require a consent that has not been obtained.

§ 15.3 Following the Closing Date, Seller shall have no further responsibility with respect to the assigned contracts.

ARTICLE 16 — EXPENSES

§ 16.1 Each Party shall be responsible for its own expenses and costs relating to or in connection with this Agreement and the transactions contemplated hereby.

ARTICLE 17 — GOOD FAITH OPERATION

§ 17.1 Seller agrees to continue to operate the Business in good faith and in the ordinary course, and to preserve, protect, and enhance the goodwill of the Business, up to and including the Closing Date.

ARTICLE 18 — CONFIDENTIAL INFORMATION

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(a) is or becomes known or available to the public at the time of disclosure, or thereafter through no fault of the receiving Party;

(b) is already known, through legal means, to third parties not subject to this Agreement and not employed by the Business;

(c) is provided by the disclosing Party to third parties, other than the Parties to this Agreement, without restriction;

(d) is information about a Party provided to the other Party by a third party who lawfully possessed such information and had the right to disclose it; or

(e) is independently developed by the receiving Party, where such independent development can be demonstrated.

§ 18.2 Nothing in this Agreement shall prohibit or restrict any disclosure required by law, regulation, or valid legal process, or any disclosure protected under the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1833.

ARTICLE 19 — GENERAL PROVISIONS

§ 19.1 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of ________ and applicable federal law, without regard to its conflict-of-laws principles. Both Parties consent to the exclusive jurisdiction of the state and federal courts located in ________ County, State of ________. The Parties agree that this choice of law, venue, and jurisdiction provision is mandatory, and not permissive, in nature.

§ 19.2 LANGUAGE. All communications and notices made or given pursuant to this Agreement shall be in the English language.

§ 19.3 ASSIGNMENT. Neither this Agreement nor any rights granted hereunder may be assigned, sold, leased, or otherwise transferred, in whole or in part, by either Party without the prior written consent of the other Party.

§ 19.4 AMENDMENTS. This Agreement may be amended only by a writing signed by both Parties.

§ 19.5 NO WAIVER. No term of this Agreement shall be deemed waived by any act or acquiescence of either Party. Only an additional written agreement may constitute a waiver. No waiver of any term or provision shall constitute a waiver of any other term or provision or of the same provision on a future date. Failure to enforce any term shall not constitute a waiver of such term or any other term.

§ 19.6 SEVERABILITY. If any provision of this Agreement is held to be unenforceable, this Agreement shall be deemed amended to the extent necessary to render such provision, and the remainder of this Agreement, valid and enforceable. If a court declines to so amend this Agreement, the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the remaining provisions, which shall be enforced as if the offending provision had not been included.

§ 19.7 PUBLIC ANNOUNCEMENT. Neither Party shall make any public announcement or disclosure regarding the existence of this Agreement or any of its terms without the prior written approval of the other Party.

§ 19.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the Parties and supersedes all prior or contemporaneous understandings, whether written or oral.

§ 19.9 HEADINGS. Headings in this Agreement are for convenience only and shall not be construed to limit or otherwise affect its terms.

§ 19.10 COUNTERPARTS. This Agreement may be executed in counterparts, including by electronic signature, each of which shall be deemed an original and all of which together shall constitute a single agreement. If the execution dates differ, this Agreement shall be effective as of the later date of signature.

§ 19.11 FORCE MAJEURE. Neither Party shall be liable for any failure to perform due to causes beyond its reasonable control, including, without limitation, acts of God, acts of civil or military authorities, riots, embargoes, natural disasters, epidemics, and other unforeseen circumstances.

§ 19.12 SURVIVAL OF TERMS. Any provision of this Agreement that, by its nature, would be expected to survive termination, expiration, or the Closing Date, shall survive and remain in full force and effect.

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EXECUTION

The Parties have executed this Agreement as of the dates set forth below.

SELLER

Name: ________

Representative Name: ________

Representative Title: ________

Representative Signature: _____________________

Date: ________

BUYER

Name: ________

Representative Name: ________

Representative Title: ________

Representative Signature: _____________________

Date: ________