ASSET PURCHASE AGREEMENT
This Agreement entered into this the ____ day of _________ , 20 __ by and among
__________ , a ______________________ corporation (hereinafter "Seller"),
______________________ (hereinafter individually and collectively "Selling Shareholder") and
______________________ , a ___________ corporation (hereinafter "Buyer").
WHEREAS, Seller operates a business primarily engaged in the
______________________________ ; and
WHEREAS, Seller owns equipment, inventory, contract rights, and miscellaneous assets
used in connection with the operations of its business; and
WHEREAS, Buyer desires to acquire substantially all of the assets used or useful, or
intended to be used in the operation of Sellers business and Seller desires to sell such assets to
Buyer; and
WHEREAS, the Selling Shareholders are the sole shareholders of Seller.
NOW, THEREFORE , in consideration of mutual covenants contained herein and other
good and valuable consideration the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
SECTION 1. ASSETS PURCHASED; LIABILITIES ASSUMED
1.1 ASSETS PURCHASED. Seller agrees to sell to Buyer and Buyer agrees to purchase
from Seller, on the terms and conditions set forth in this Agreement the following assets
("Assets"):
1.1.1 All equipment, rolling stock, and tools miscellaneous inventory listed on Exhibit "A",
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together with any replacements or additions to the equipment, etc. made prior to the
closing date.
1.1.2 All inventories and supplies owned by Seller together with any replacements or
additions to the inventories made prior to the closing date, but excluding inventory
disposed of in the ordinary course of Seller's business.
1.1.3 Seller's goodwill.
1.2 NO ASSUMPTION OF LIABILITIES. Buyer shall not be responsible for any unfilled
orders from customers of Seller nor shall Buyer assume responsibility of payment for
other obligations of Seller, including but not limited to, Seller's obligations under any
lease, contract or account.
SECTION 2. EXCLUDED ASSETS
Excluded from this sale and purchase are Seller's accounts receivable, cash, notes
receivable, prepaid accounts and land and any and all other assets except those listed on Exhibit
"A".
SECTION 3. PURCHASE PRICE FOR ASSETS
The purchase price for the assets shall be $ ________ .00, allocated as follows:
1. Equipment, contracts, rolling stock,
inventory and other personal property $
2. Goodwill $
TOTAL $
Buyer shall be responsible for all sales and transfer taxes associated with the
contemplated transaction; provided, however, Seller agrees to execute or provide whatever
documents are necessary for Buyer to have transferred to it and receive credit for any balance
remaining on the vehicle tags of Seller.
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SECTION 4. PAYMENT OF PURCHASE PRICE
The price for the Assets shall be paid as follows:
4.1 At closing, Buyer shall cause to be delivered to Seller the sum of $ _________ .00
presently held in escrow by ______________________ , Attorneys at Law,
______________________ , ______________________ , _____ , pursuant to that certain
Escrow Agreement between the parties even dated herewith.
4.2 On ______________________ , 20 _____ , Buyer shall pay to Seller the sum of
$ _________ .00.
4.3 On ______________________ , 20 _____ , Buyer shall pay to Seller the remaining
$ _________ .00 due hereunder.
4.4 The parties agree that amounts due hereunder shall be net amounts due to Seller without
regard to any interest whatsoever, whether actual, imputed or implied.
SECTION 5. OTHER AGREEMENTS
At closing, the parties shall execute the following additional agreements:
5.1 The non-competition agreement between Buyer and Seller.
5.2 The non-competition agreement between Buyer and Selling Shareholder.
5.3 The Consulting Agreement between Buyer and Selling Shareholder.
SECTION 6. SECURITY
6.1 As security for the timely performance of all of Buyer's obligations under this agreement,
including the payment of the amount set forth in Section 4, Seller retains and, effective at
closing, Buyer grants to Seller a security interest in the equipment, inventory and other
personal property listed on Exhibit "E", together with all accessories, substitutions,
additions, replacements, parts and accessions affixed to or used in connection with such
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items (hereinafter the "Collateral"). At closing, Buyer shall execute and deliver to Seller
as Security Agreement in the form attached as Exhibit "F". Buyer shall also execute
appropriate UCC Financing Statements for the perfection of the Seller's security interest.
6.2 Upon payment of the ______________________ , 20 _____ and
______________________ , 20 _____ payments specified in Sections 4.2 and 4.3,
respectively, and the January 1, 20 _____ payment under that certain Non-Competition
Agreement between Buyer and Seller, dated as of the Closing Date as provided in Section
15, Seller shall release and terminate its security interest in all of the Collateral listed on
Exhibit "E", except the ______________________ , Serial # ______________________
and the ______________________ , Serial # ______________________ .
6.3 Upon payment of all amounts due to Seller pursuant to Section 4 and all amounts due to
Seller and Selling Shareholder pursuant to those certain Non-Competition Agreements
between Buyer and Seller and Buyer and Selling Shareholder, respectively, both dated as
of the Closing Date pursuant to Section 15, except the ______________________ ,
20 _____ payment due to Seller pursuant to the Non-Competition Agreement between
Seller and Buyer, Seller shall release and terminate its security interest in the 20 _____
______________________ , Serial # ______________________ .
6.4 Upon payment of all amounts due to Seller pursuant to Section 4 and due to Seller and
Selling Shareholder pursuant to those certain Non-Competition Agreements between
Buyer and Seller and Buyer and Selling Shareholder, respectively, both dated as of the
Closing Date pursuant to Section 15, Seller shall release and terminate its security interest
in the ______________________ , Serial # ______________________
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SECTION 7. SELLER'S AND SELLING SHAREHOLDER'S REPRESENTATIONS
AND WARRANTIES
Seller and Selling shareholder each represent warrant to Buyer as follows:
7.1 CORPORATE EXISTENCE. Seller is now and on the date of closing will be a
corporation duly organized and validly existing and in good standing under the laws of
the State of _________________ . Seller has all requisite corporate of power and
authority to own, operate and/or lease the assets, as the case may be, and to carry own its
business as now being conducted.
7.2 AUTHORIZATION. The execution, delivery and performance of this Agreement have
been duly authorized and approved by the Board of Directors and Shareholders of Seller,
and this Agreement constitutes a valid and binding agreement of Seller in accordance
with its terms.
7.3 TITLE TO ASSETS. Except as described in the Agreement, Seller holds good and
marketable title to the assets, free and clear of restrictions on or conditions to transfer or
assignment, and free and clear of liens, pledges, charges or encumbrances.
7.4 BROKERS AND FINDERS. Neither Seller nor Selling Shareholder has employed any
broker or finder in connection with the transaction contemplated by this Agreement or
taken action that would give rise to valid claims against any party for a brokerage
commission, finder's fee or other like payment.
7.5 TRANSFER NOT SUBJECT TO ENCUMBRANCES OR THIRD PARTY
APPROVAL. The execution and delivery of this Agreement by Seller and Selling
Shareholder, and the consummation of the contemplated transactions, will not result in
the creation or imposition of any valid lien, charge or encumbrance on any of the assets,
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and will not require the authorization, consent, or approval of any third party, including
any governmental division or regulatory agency.
7.6 LABOR AGREEMENTS AND DISPUTES. Seller is neither a party to, nor otherwise
subject to any collective bargaining or other agreement governing the wages, hours, in
terms of employment of Seller's employees. Neither Seller not selling shareholder is
aware of any labor dispute or labor trouble involving employees of Seller.
7.7 NONCANCELLABLE CONTRACTS. At the time of closing, there will be no
material leases, employment contracts, contracts for services, or maintenance, or other
similar contacts, existing or related to or connected with the operation of Seller's business
not cancelable within thirty (30) days.
7.8 LITIGATION. Seller and Selling Shareholder have no knowledge of any claim,
litigation, proceeding, or investigation pending or threatened against Seller that might
result in any material adverse change in the business or condition of the assets being
conveyed under this Agreement.
7.9 ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of the
representations or warranties of Seller or Selling Shareholder contain or will contain any
untrue statements of a material fact or omit or will omit or misstate a material fact
necessary in order to make statements in this Agreement not misleading. Seller and
Selling Shareholder know of no fact that has resulted, or that in the reasonable judgment
of Selling Shareholder will result in material change in the business, operations, or assets
of Seller that has not been set forth in this Agreement or otherwise disclosed to Buyer.
SECTION 8. REPRESENTATIONS OF BUYER
Buyer represents and warrants as follows:
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8.1 CORPORATE EXISTENCE. Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of _____________ . Buyer has all
requisite corporate power and authority to enter into this Agreement and perform its
obligations hereunder.
8.2 AUTHORIZATION. The execution, delivery and performance of this Agreement have
been duly authorized and approved by the Board of Directors and shareholders of Buyer,
and this Agreement constitutes a valid and binding agreement of Buyer in accordance
with its terms.
8.3 BROKERS AND FINDERS. Buyer has not employed any broker or finder in
connection with the transactions contemplated by this Agreement and has taken no action that
would give rise to a valid claim against any party for a brokerage commission, finders fee or
other like payment.
8.4 ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of the
representations or warranties of Buyer contain or will contain any untrue statement of a material
fact or omit or will omit or misstate a material fact necessary in order to make the misstatements
contained herein not misleading.
SECTION 9. COVENANTS OF SELLER AND SELLING SHAREHOLDER
9.1 SELLER'S OPERATION OF BUSINESS PRIOR TO CLOSING. Seller and selling
shareholder agree that between the date of this Agreement and the date of closing, Seller
will:
9.1.1 Use its best efforts to preserve its business organization and preserve the continued
operation of its business with its customers, suppliers, and others having business
relations with Seller.
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9.1.2 Not assign, sell, lease or otherwise transfer or dispose of any of the assets listed on
Exhibit "A", except to Buyer.
9.1.3 Maintain all of its assets other than inventories in their present conditions, reasonable
wear and tear and ordinary usage accepted and maintain the inventories at levels
normally maintained.
9.2 ACCESS TO PREMISES AND INFORMATION. At reasonable times prior to the
closing date, Seller will provide Buyer and its representatives with reasonable access
during business hours to the assets, titles, contracts and records of Seller and furnish such
additional information concerning Seller's businesses Buyer may from time to time
reasonably request.
9.3 EMPLOYEE MATTERS.
9.3.1 Prior to closing, Seller will deliver to Buyer lists of the names of all persons on the
payroll of Seller, together with a statement of amounts paid to each during Seller's
most recent fiscal year and amounts paid for services from the beginning of the
current fiscal year to a closing date. Seller will also provide Buyer with a schedule of
all employee bonus arrangements and a schedule of other material compensation or
personnel benefits or policies in effect.
9.3.2 Prior to the closing date, Seller will not, without Buyer's prior written consent, enter
into any material agreements with its employees, increase the rate of compensation or
bonus payable to or to become payable to any employee or effect any change in the
management, personnel policies, or employee benefits, except in accordance with
existing employment practices.
9.3.3 As of or prior to the closing date, Seller will terminate all of its employees, except
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Selling Shareholder, not having employee agreements transferable to Buyer and will
pay each employee all wages, commissions, and accrued vacation pay earned up to
the time of termination, including overtime pay.
9.4 CONDITIONS AND BEST EFFORTS. Seller and Selling Shareholder will use their
best efforts to effectuate the transactions contemplated by this Agreement and to fulfill all
the conditions of the obligations of Seller and Selling Shareholder under this Agreement,
and will do all acts and things as may be required to carry out their respective obligations
under this Agreement and to consummate and complete this agreement.
SECTION 10. COVENANTS OF BUYER
10.1 CONDITIONS AND BEST EFFORTS. Buyer will use its best efforts to effectuate the
transaction contemplated by this Agreement and to fulfill all the conditions of Buyer's
obligations under this Agreement, and shall do all acts and things as may be required to
carry out Buyer's obligations and to consummate this Agreement.
10.2 CONFIDENTIAL INFORMATION. If for any reason the sale of Assets is not closed,
Buyer will not disclose to third parties any confidential information received from Seller
or Selling Shareholder in the course of investigating, negotiating, and performing the
transactions contemplated by this Agreement.
SECTION 11. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligation of Buyer to purchase the Assets is subject to the fulfillment, prior to or at
the closing date, of each of the following conditions, any one or portion of which may be waived
in writing by Buyer:
11.1 REPRESENTATIONS, WARRANTIES AND COVENANTS AND SELLING
SHAREHOLDER.
All representations and warranties made in this Agreement by Seller and Selling
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Shareholder shall be true as of the closing date as fully as those such representations and
warranties had been made on or as of the closing date, and, as of the closing date, neither
Seller nor Selling Shareholder shall have violated or shall have failed to perform in
accordance with any covenant contained in this Agreement.
11.2 LICENSES AND PERMITS. Buyer shall have obtained all licenses and permits from
public authorities necessary to authorize the ownership and operation of the business of
Seller.
11.3 CONDITIONS OF THE BUSINESS. There shall have been no material adverse
change in the manner in of operation of Seller's business prior to the closing date.
11.4 NO SUITS OR ACTIONS. At the closing date, no suit, action or other proceeding shall
have been threatened or instituted to restrain, enjoin or otherwise prevent the
consummation of this Agreement or the contemplated transactions.
SECTION 12. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND
SELLING SHAREHOLDER
The obligations of Seller and Selling Shareholder to consulate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or at the closing date, of
the following condition, which may be waived in writing by Seller:
All representations and warranties made in this Agreement by Buyer shall be true as of
the closing date as fully as though such representations and warranties have been made on and as
of the closing date, and Buyer shall not have violated or shall not have failed to perform in
accordance with any covenant contained in this Agreement.
SECTION 13. BUYER'S ACCEPTANCE
Buyer represents and acknowledges that it has entered into this Agreement on the basis of
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its own examination, personal knowledge, and opinion the value of the business. Buyer has not
relied on any representations made by Seller other than those specified in this Agreement. Buyer
further acknowledges that Seller has made no agreement or promise to repair or improve any
equipment, rolling stock or other personal property being sold to Buyer under this Agreement,
and that Buyer takes all such property in the condition existing on the date of this Agreement,
except as otherwise provided in this Agreement.
SECTION 14. INDEMNIFICATION AND SURVIVAL
14.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Agreement shall survive the closing of this Agreement,
except that any party to whom a representation of warranty has been made in this
Agreement shall be deemed to have waived any misrepresentation or breach of
representation or warranty which such party had knowledge prior to closing. Any party
learning of a misrepresentation or breach of representation or warranty under this
Agreement shall immediately give notice thereof to all other parties to this Agreement.
The representations and warranties in this Agreement shall terminate three (3) years from
the closing date, and such representations or warranties shall thereafter be without force
or effect, except any claim with respect to which notice has been given to the party to be
charged prior to such expiration date.
14.2 SELLERS AND SELLING SHAREHOLDERS INDEMNIFICATION.
14.2.1 Seller and selling Shareholder each hereby agree to indemnify and hold buyer, its
successors and assigns harmless from and against:
(1) Any and all claims, liabilities and obligations of every kind and description,
contingent or otherwise, arising out of or related to the operation of Seller's
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business prior to the close of business on the day before the closing date,
except for claims, liabilities and obligations of seller expressly assumed by
buyer under this agreement or paid by insurance maintained by Seller, selling
Shareholder or Buyer.
(2) Any and all damage or deficiency resulting from any material
misrepresentation or breach of warranty or covenant, or nonfulfillment of any
agreement on the part of Seller or the selling Shareholder under this
agreement.
14.2.2 Sellers and Selling Shareholders indemnity obligations under 14.2.1 shall be subject
to the following:
(1) If any claim is asserted against buyer that would give rise to a claim by Buyer
against Seller and Selling Shareholder for indemnification under the
provisions of this paragraph, the Buyer shall promptly give written notice to
selling Shareholder concerning such claim as selling Shareholder shall, at no
expense to Buyer defend the claim.
(2) Selling Shareholder shall not be required to indemnify buyer for amount that
exceeds the total purchase price paid by buyer under Section 3 of this
agreement.
14.3 BUYERS INDEMNIFICATION. Buyer agrees to defend, indemnify and hold harmless
Seller and Selling Shareholder from and against:
14.3.1 Any all claims, liabilities and obligations of every kind and description arising out of
or related to the operation of the business following closing or arising out of buyers
faith to perform obligations of Seller assumed by buyer pursuant to this agreement.
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14.3.2 Any all damage or deficiency resulting from any material misrepresentation, breech
of warranty or covenant, or nonfulfillment of any agreement on the part of Buyer
under this agreement.
SECTION 15. CLOSING
15.1 TIME AND PLACE. This agreement shall be closed at the offices of
______________________ , ______________________ , ______________________ ,
_______________ ______________________ on the ____ day of _________ , 20 __ , or
such other time as the parties may agree in writing. If the closing has not occurred on or
before ______________________ , 20 ___ , then either party may elect to terminate this
agreement. If, however, the closing has not occurred because of a breech of contract by
one or more of the parties, the breaching party or parties shall remain liable for breech of
contract.
15.2 OBLIGATIONS OF SELLERS AND SELLING SHAREHOLDER AT CLOSING.
The closing, Seller and Selling Shareholder shall deliver to buyer the following:
15.2.1 Bills of Sale, Assignments, properly endorsed Certificate of Titles, and other
instruments of transfer, and form and substance reasonably satisfactory to counsel for
Buyer, necessary to transfer and convey all of the assets to Buyer.
15.2.2 Non-competition Agreements referenced in Section 5.
15.2.3 The Security Agreement referenced in Section 6.
15.2.4 The Consulting Agreement referenced in Section 5.
15.2.5 Such other certificates and documents as may be called for by the provisions of this
Agreement.
15.3 OBLIGATIONS OF BUYER AT CLOSING. At the closing Buyer shall delivery to
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Seller the following:
15.3.1 A check drawn on the Trust Account of __________ in the amount specified in
Section 4.1.
15.3.2 Such other certificates and documents as may be called for by the provisions of this
Agreement.
SECTION 16. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
16.1 BOOKS AND RECORDS. This sale does not include the books of account and records
of Seller's business. However, possession and custody of such books and records, except
for Seller's general ledger, may be retained by Buyer for a period of six (6) months.
During this period, Seller or its agents shall have access to such books and records and
may make copies thereof. Buyer will exercise reasonable care in the safekeeping of such
records. Seller shall retain its general ledger but shall make it available for inspection by
Buyer from time to time upon reasonable request.
16.2 SELLER'S RIGHT TO PAY. In the event Buyer fails to make any payment of taxes,
assessments, insurance premiums, or other charges that Buyer is required to pay to third
parties under this Agreement, Seller shall have the right, but not the obligation, to pay the
same. Buyer will reimburse Seller for any such payment immediately upon Seller's
demand, together with interest at the same rate provided in the Note from the date of
Seller's payment until Buyer reimburses Seller. Any such payment by Seller shall not
constitute a waiver by Seller of any remedy available by reason of Buyer's default for
failure to make the payments.
SECTION 17. BULK SALES LAW. Buyer waives compliance by Seller with the Bulk
Transfer Act. In the event any creditor of Seller claims the benefit of the Bulk
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Transfer Law as against Buyer or any of the assets being conveyed to Buyer
under this Agreement, Seller and Selling Shareholder shall immediately pay or
otherwise satisfy such claim or undertake its defense. Seller and Selling
Shareholder shall indemnify and hold Buyer harmless from and against any and
all loss, expense, or damage resulting from the failure to comply with the Bulk
Transfer law. If Seller fails to comply with the provision of this Section 17 and
Buyer is required to pay any creditor of Seller in order to protect the property
purchased under this agreement from claims or liens of Seller's creditors, except
those assumed by Buyer, the Buyer may offset the amount it pays against the
balance due Seller by furnishing to the Seller proof of such payment in the form
of a receipt from the creditor involved.
SECTION 18. TERMINATION OF AGREEMENT
18.1 BY MUTUAL CONSENT. This Agreement may be terminated by mutual written
consent of Buyer and Seller.
18.2 BREACH OF REPRESENTATIONS AND WARRANTIES; FAILURE OF
CONDITIONS. Buyer may elect by notice to Seller, and Seller may elect by notice to
Buyer, to terminate this Agreement if;
18.2.1 The terminating party shall have discovered a material error, misstatement, or
omission in the representations and warranties made in this Agreement by the other
party which shall not have been cured by such other party within fifteen (15) days
after written notice to such other party specifying in detail such asserted error,
misstatement, or omission, or by the closing date, whichever first occurs.
18.2.2 All of the conditions precedent of the terminating party's obligations under this
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Agreement as set forth in either Section 11 or 12, as the case may be, have not
occurred and have not been waived by the terminating party on or prior to the closing
date.
18.3 CLOSING NOTWITHSTANDING THE RIGHT TO TERMINATE. The party with
a right to terminate this Agreement pursuant to Section 18.2.1 or 18.2.2 shall not be
bound to exercise such right, and its failure to exercise such right shall not constitute a
waiver of any other right it may have under this Agreement, including but not limited to
remedies for breach of a representation, warranty, or covenant.
SECTION 19. MISCELLANEOUS
19.1 The provisions of this Agreement shall be binding upon and inure to the benefit of the
heirs, personal representatives, successors, and assigns of the parties.
19.2 Any notice or other communication required or permitted to be given under this
Agreement shall be in writing and shall be mailed by certified mail, return receipt
requested, postage prepaid, addressed to the parties as follows:
SELLER: BUYER:
All notices and other communications shall be deemed to be given at the expiration of
three (3) days after the date of mailing. The addresses to which notices or other
communications shall be mailed may be changed from time to time by giving written
notice to the other parties as provided above.
19.3 In the event of a default under this Agreement, the defaulting party shall reimburse the
non-defaulting party or parties for all costs and expenses reasonably incurred by the non-
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defaulting party or parties in connection with the default, including without limitation
attorney fees. Additionally, in the event a suit or action is filed to enforce this Agreement
or with respect to this Agreement, the prevailing party or parties shall be reimbursed by
the other party for all costs and expenses incurred in connection with the suit or action,
including without limitation reasonable attorney fees at the trial level and on appeal.
19.4 No waiver of any provision of this Agreement shall be deemed, or shall constitute, a
waiver of any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
19.5 This Agreement shall be governed by and shall be construed in accordance with the laws
of the State of _____________ .
19.6 This Agreement constitutes the entire agreement between the parties pertaining to its
subject matter and it supersedes all prior contemporaneous agreements, representations,
and understandings of the parties. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by all parties.
Witness the signatures of the parties this the ____ day of _________ , 20 __ .
SELLER: BUYER:
BY: BY:
SELLING SHAREHOLDER:
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STATE OF _________________
COUNTY OF ___________
PERSONALLY appeared before me, the undersigned authority in and for the county and
state aforesaid, the within named ___________ who acknowledged to me that he is ________ of
______ , and who acknowledged that he signed, delivered and executed the above and foregoing
instrument on the date and year therein mentioned, for and on behalf of said corporation after
first having been duly authorized so to do.
GIVEN under my hand and official seal, this the ____ day of _________ , 20 __ .
__________________________
NOTARY PUBLIC
MY COMMISSION EXPIRES:
______________________
STATE OF _________________
COUNTY OF ___________
PERSONALLY appeared before me, the undersigned authority in and for the county and
state aforesaid, the within named ___________ who acknowledged to me that he is ________ of
______ , and who acknowledged that he signed, delivered and executed the above and foregoing
instrument on the date and year therein mentioned, for and on behalf of said corporation after
first having been duly authorized so to do.
GIVEN under my hand and official seal, this the ____ day of _________ , 20 __ .
__________________________
NOTARY PUBLIC
MY COMMISSION EXPIRES:
______________________
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