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Agreement for Sale of A Business
1. Introduction. Agreement made [date] between [name], whose
principal place of business is at [address] (Seller), and [name],
whose address is [address] (Buyer).
2. Sale and Purchase of Business. Seller is now conducting the
business of [nature of business] under the trade name "[name]"
at [address]. Seller shall sell to Buyer and Buyer shall purchase
from Seller this business, free of all liabilities and encumbrances,
upon the terms and conditions set out in this Agreement. The sale
a. Goodwill. The goodwill of the business as a going firm;
b. Lease. The lease to the premises at which the business is
c. Inventory. All stock in trade and merchandise in Seller's
inventory on the date the sale is closed;
d. Fixtures, Etc. All furniture, fixtures, furnishings, and
other equipment used by Seller in the conduct of the business
more fully described in the Schedule attached to this Agreement
[omitted] and made a part of it.
3. Purchase Price. The purchase price shall be _______ dollars
($_______), which is allocated as follows:
Furnishings, and Equipment _______
Restrictive Covenant _______
4. Purchase Price of Inventory. Upon the close of business on
the day immediately prior to the day on which this sale closes,
Seller and Buyer (or their representatives) shall make a physical
count of Seller's inventory and shall prepare a schedule setting
out each item in stock together with the price paid for it by
Seller. Buyer shall pay to Seller, in addition to the sum provided
in Paragraph 3, the total price paid by Seller for the inventory
counted in accordance with this Paragraph. However, Buyer shall
not be obligated to pay more than _______ dollars ($_______)
for the inventory.
5. Accounts Receivable. Buyer will purchase all of Seller's
accounts receivable as of the date on which this sale is closed
that have been incurred in the regular course of business and
are not more than [number] days old. The purchase price shall
be the total of the face amount of the accounts receivable. Buyer
may withhold _______ percent (_______%) of the purchase
price as a reserve to cover bad debts and trade discounts. Any
part of the reserve not used for this purpose shall be paid to
Seller no later than [date].
5. Accounts Receivable. This sale does not include any of Seller's
accounts or notes receivable, all of which will remain Seller's
property. If, following the close of this sale, Buyer shall collect
any of Seller's accounts or notes receivable, Buyer shall promptly
remit the proceeds to Seller.
6. Payment of the Purchase Price. The purchase price shall be
paid as follows: _______ dollars ($_______) on the signing
of this Agreement and the balance on the closing of the sale by
bank cheque drawn on a local bank.
6. Payment of the Purchase Price. The purchase price shall be
paid as follows: _______ dollars ($_______) on the signing
of this Agreement to be held in escrow by Seller's solicitor;
the price paid for inventory and accounts receivable shall be
paid on the closing of the sale by bank cheque drawn on a local
bank; the balance shall be paid in [number] equal monthly installments
starting [date], which shall be evidenced by a series of promissory
notes signed by Buyer to be delivered by Buyer to Seller at the
closing. The notes shall bear interest at the rate of _______
percent (_______%) per annum, be payable at [bank], and shall
provide that upon default in the payment of any one note in the
series the remaining unpaid notes shall become due and payable
at Seller's option. As security for the payment of the notes,
Buyer shall deliver to Seller at the closing all documents reasonably
required by Seller to perfect a security interest in Seller in
and to the furniture, fixtures, furnishings, and equipment transferred
to Buyer at the closing and the lease to the business premises
assigned to Buyer at the closing.
7. Seller's Accounts Payable and Other Debts. Buyer will not
assume any of Seller's accounts payable or other debts. These
shall remain Seller's obligations, and Seller will indemnify Buyer
against any loss that Buyer may suffer by reason of Seller's failure
to pay any of them.
8. Adjustments to Purchase Price. At the closing, the purchase
price shall be adjusted for the following items: rent, payroll
and payroll taxes, insurance premiums, deposits with utilities,
security deposits, and loss or damage caused by fire, wind, or
other casualty not sufficiently severe to terminate or interrupt
the business. The net adjustments shall be added to or subtracted
from the purchase price, as may be required.
9. Assumption of Contracts by Buyer. Upon the closing of this
sale, Buyer will assume all contracts entered into by Seller in
the course of business that remain executory and that are described
in the Schedule attached to this Agreement [omitted] and made
part of it. Buyer will also assume all contracts entered into
by Seller after the date of this Agreement, provided that they
were entered into in the ordinary course of business and are reasonable.
Seller shall perform any contract that requires performance before
this sale closes. Seller will indemnify Buyer against any loss
incurred by Buyer by reason of Seller's breach of any such contract.
Buyer will indemnify Seller against any loss incurred by Seller
by reason of Buyer's breach of any such contract following the
close of this sale.
10. Time and Place of Closing. The closing shall take place
at the office of [name], Seller's solicitor, at [address], on
[date], at [hour] AM [PM] [time zone].
11. Adjournment of Closing. The closing may be adjourned to
another time but only upon Buyer's and Seller's written consent.
12. Documents to Be Delivered to Buyer at the Closing. At the
closing, Seller shall deliver to Buyer, properly executed, the
following documents: a Bill of Sale with warranties and affidavit
of title, the assignment of the lease to the business premises
together with the landlord's written consent to the assignment,
assignments of the contracts described in Paragraph 9 together
with written consents to the assignments from the other contracting
parties, assignment of Seller's trade name as provided in Paragraph
14, and all other instruments that are reasonably required by
Buyer to transfer to Buyer all of the assets of the business described
in this Agreement free of all encumbrances.
13. When Title Passes. Upon the delivery of the documents to
Buyer described in Paragraph 12, and payment of the purchase price
by Buyer to Seller in accordance with Paragraphs 4, 5, and 6,
this sale shall close, and Buyer shall have title to and possession
of the business.
14. Assignment of Seller's Trade Name. Seller will continue
to do business under the trade name "[name]" prior to the closing
and will do nothing to impair the trade name's value. At the closing,
Seller will assign all rights to the trade name to Buyer. Buyer
will thereafter have the sole right to use the trade name provided
Buyer takes the necessary actions to make the transfer a matter
of public record.
15. Seller's Representations. Seller represents and warrants
a. Good Title. Seller has good and marketable title to all the
assets to be sold pursuant to this Agreement, and they are free
of any encumbrance.
b. Business Contracts. Seller has not entered into any contracts
affecting the business other than those described in the Schedule
attached to this Agreement and made a part of it.
c. Payment of Taxes. When the sale closes, Seller will have
paid all payroll taxes, withholding taxes, and sales taxes then
due to all federal, state, and local taxing authorities.
d. No Judgments, Caveats, Liens, Etc. No judgments, liens, actions,
or proceedings are presently outstanding or pending against the
business or Seller personally, and none will be outstanding or
pending when the sale closes.
16. Buyer's Representations. Buyer represents and warrants that
Buyer has inspected Seller's premises, inventory, furnishings,
fixtures, and equipment and knows their physical condition. Buyer
further represents and warrants that Buyer has examined Seller's
books of account and other business records and is satisfied that
they properly reflect Seller's past and present earnings and financial
condition. Buyer represents and warrants that Buyer has not relied
upon any representations by Seller or others as to the past or
present earnings or the prospects of future earnings of the business.
17. Representations to Survive Closing. The representations
and warranties contained in Paragraphs 15 and 16 shall survive
18. Compliance With Federal Law. In compliance with Federal
law of [state], Seller shall prepare and deliver to Buyer, no
later than [number] days before the closing, a list of Seller's
creditors. The list shall be signed and sworn to or affirmed by
Seller or Seller's agent. The list shall contain the names and
business addresses of all of Seller's creditors, the amounts owed
to them, if known, and the names and business addresses of all
parties known by Seller to assert claims against Seller even if
the claims are disputed. In addition, Seller will give Buyer a
list of the business names and business addresses used by Seller
during the three years ending with the date of this Agreement.
19. Seller's Restrictive Covenant. For a period of [number]
years from the date of closing, Seller will not, directly or indirectly,
either as principal, partner, agent, manager, employee, stockholder,
director, officer, or in any other capacity, engage or be interested
in the conduct of a business similar to the one sold pursuant
to this Agreement within a radius of [number] kilometers from
the city in which the business being sold is located. This restrictive
covenant will be included in the bill of sale to be delivered
at the closing.
20. Restrictive Covenant Assignable by Buyer. The restrictive
covenant contained in Paragraph 19 shall inure to the benefit
of Buyer's assigns, successors, and transferees. If Buyer sells
or otherwise transfers the business, Seller will remain bound
by the terms of the restrictive covenant that may be enforced
by Buyer's assigns, successors, and transferees.
21. Risk of Loss or Destruction. Seller assumes all risk of
loss or damage caused by fire, wind, or other casualty up to the
closing. If the business is terminated or interrupted before the
closing by loss or damage caused by fire, wind, or other casualty,
Buyer may terminate this Agreement and demand the return of any
sums Buyer may have paid to Seller or Seller's agent on account
of the purchase price. Upon return of those sums, this Agreement
shall terminate and be of no effect, and neither Buyer nor Seller
shall have any further rights against each other. If the loss
or damage is not sufficiently severe to terminate or interrupt
the business, the purchase price shall be adjusted to reflect
the loss or damage in accordance with Paragraph 8.
22. Mail Addressed to Seller. Following the closing, Buyer may
open all mail addressed to Seller at the business premises. Buyer
shall properly forward to Seller any mail that does not require
23. Agreement Binding. This Agreement is binding upon and shall
inure to the benefit of the parties' heirs, executors, administrators,
successors, and assigns.
24. Applicable Law. This Agreement shall be construed in accordance
with the laws of [state], the state in which the business is located.
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