Buyout Contract Template

BUYOUT CONTRACT TEMPLATE

Recitals

WHEREAS, Buyer Name: (the "Buyer") and Seller Name: (the "Seller") desire to effect the purchase and sale described below;

WHEREAS, Business Name: is an entity engaged in lawful business activities, and Seller owns % of the ownership interests in the Business (the "Interests");

WHEREAS, the parties wish to set forth the terms and conditions under which Buyer will purchase from Seller, and Seller will sell to Buyer, all or a portion of Seller's Interests in the Business upon the terms and conditions of this Agreement.

Scope of Work

The Scope of Transaction shall include transfer of ownership interests described above, transfer of any related management rights, a schedule for transition of duties and records, and cooperation by Seller to effect a commercially reasonable transfer of customer relationships, contracts, and operational control as specifically set out in the Scope of Transaction.

Purchase and Sale

Subject to the terms and conditions of this Agreement, at the Closing Buyer shall purchase from Seller, and Seller shall sell to Buyer, the Interests free and clear of all liens, encumbrances and adverse claims, except as expressly disclosed in writing prior to the Effective Date.

Payment Terms

If any payment required hereunder is not paid when due, interest shall accrue on the unpaid amount at the rate specified above and Buyer shall be entitled to recover all costs of collection, including reasonable attorneys' fees, to the extent permitted by law.

Closing; Adjustments

The Closing shall occur on or before , unless extended by mutual written agreement. At Closing, Seller shall deliver good and marketable title to the Interests, executed transfer instruments, and such other documents as Buyer may reasonably request. Any taxes, fees, or prorations shall be adjusted as of the Closing Date in accordance with customary practice.

Representations and Warranties

Seller represents and warrants that: (a) Seller is the sole lawful owner of the Interests being sold, with full authority to transfer same; (b) the Interests are free of liens and encumbrances except as disclosed in writing; and (c) there are no pending or threatened claims, actions or proceedings that would materially impair the Interests. Buyer represents and warrants that Buyer has the financial capacity to perform Buyer’s obligations under this Agreement.

Covenants

From the Effective Date until the Closing, Seller shall (i) preserve the business in the ordinary course, (ii) not transfer or encumber the Interests, and (iii) promptly provide Buyer with access to records reasonably necessary to effect the transfer and to perform due diligence.

Confidentiality

Each party acknowledges that, in connection with the negotiation and performance of this Agreement, it will receive Confidential Information of the other party. "Confidential Information" means non-public business, financial, technical, or commercial information disclosed by a party. Each recipient shall (a) hold Confidential Information in strict confidence, (b) use it only for purposes of performing this Agreement, and (c) not disclose it to third parties except to affiliates, attorneys, accountants or other advisors who need to know and who are bound by confidentiality obligations at least as protective as those herein. Confidential Information does not include information that is or becomes publicly available through no breach by the recipient, is rightfully received from a third party without restriction, or is independently developed.

Breach of confidentiality will cause irreparable harm, for which monetary damages may be inadequate, and the non-breaching party shall be entitled to seek injunctive relief in addition to other remedies.

Term and Termination

This Agreement shall be effective as of the Effective Date and shall continue until the Term End Date, unless earlier terminated in accordance with this Agreement. Either party may terminate this Agreement for material breach if the breaching party fails to cure within the Notice Period after written notice.

Indemnification

Each party (the "Indemnitor") shall indemnify, defend and hold harmless the other party (the "Indemnitee") from and against any and all losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees) arising out of any breach of a representation, warranty or covenant of the Indemnitor, or from any undisclosed liabilities of the Business. Indemnification shall be subject to customary notice and mitigation obligations and any limitations of liability expressly set forth herein.

Notices

Notices shall be in writing and shall be deemed given upon personal delivery, confirmed delivery by reputable overnight courier, or three business days after deposit in the mail, postage prepaid, to the addresses set forth above.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to choice of law principles.

Entire Agreement; Amendment

This Agreement, together with any exhibits and schedules hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations and agreements. This Agreement may be amended only by a written instrument executed by both parties.

Miscellaneous

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect. Neither party may assign its rights or delegate its duties without the prior written consent of the other, except that Buyer may assign to an affiliate or successor in interest.

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