Asset Purchase Agreement
This is an agreement between a seller of business assets and a buyer. This long-form
document sets the terms of such a sale and includes provisions regarding payment,
liens and encumbrances on the assets, conditions precedent for the closing,
representations of the parties, matters involving third parties, etc. This document is
intended to provide standard terms that appear in similar agreements, but it can
customized to reflect the needs of the drafting parties.
ASSET PURCHASE AGREEMENT
Dated as of _________, 20____
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the “Agreement”) is dated as of ___________, 20____ by and between
_______________________________ (“Buyer”) and ______________________ (“Seller”)
collectively referred to as “the Parties”.
WHEREAS, Buyer desires to acquire, and Seller desires to sell, all of the assets, properties and
rights of Seller relating to Seller’s business that are used, necessary or related to the operations of
_____________________________________________ (collectively the “Business”), including,
without limitation [Instruction: Insert general description of the assets that are subject to
this Purchase Agreement] (Purchased Assets”) as more specifically set forth in Schedule A,
upon the terms and subject to the conditions set forth in this Agreement (the “Acquisition”).
NOW, THEREFORE, in consideration of the representations, warranties, covenants and
agreements set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
The following terms, as used herein, have the following meanings:
“Acquisition” is defined in the first recital of the preamble to this Agreement.
“Assignment and Assumption Agreement and Bill of Sale” means that certain Assignment and
Assumption Agreement and Bill of Sale between Seller and Buyer attached hereto as Exhibit A.
“Assumed Contracts” means all contracts, agreements, leases, licenses, commitments, sales,
purchase orders and other instruments related to the Business, including, without limitation, as
set forth on Schedule____.
“Business” is defined in the first recital of the preamble to this Agreement.
“Buyer” is defined in the preamble to this Agreement.
“Damages” means any losses, amounts paid in settlement, claims, damages, Liabilities,
obligations, judgments, settlements and reasonable out-of-pocket costs (including, without
limitation, costs of investigation or enforcement), expenses and attorneys’ fees (including
reasonable fees and expenses of in-house counsel), including, without limitation, any
consequential, special or punitive damages which are assessed as a result of a third party action,
in each case, net of any insurance proceeds actually received by Buyer.
“GAAP” means generally accepted accounting principles in effect in the United States of
America at the time of application thereof, applied on a consistent basis. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, and all determinations
with respect to accounting matters hereunder shall be made in accordance with generally
accepted accounting principles, applied on a consistent basis.
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“Liabilities” means any liability or obligation (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated and whether due or to become due), including, without limitation, any liability for
“Lien” means any mortgage, lien (including any tax lien), pledge, charge, security interest,
option, adverse claim, restriction or encumbrance of any kind.
“Pre-Closing Tax Period” means (i) any Tax period ending on or before the Closing Date and
(ii) with respect to a Tax period that commences before but ends after the Closing Date, the
portion of such period up to and including the Closing Date.
“Purchased Assets” are specifically listed in Schedule A of this Agreement.
“Seller” is defined in preamble to this Agreement.
“Tax” means any federal, state, local or foreign income, gross receipts, franchise, estimated,
alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise,
natural resources, severance, stamp, customs, duties, real property, personal property, capital
stock, social security, unemployment, disability, payroll, license, employee or other withholding,
or other tax, of any kind whatsoever, and including any interest, penalties or additions to tax. All
other definitions are contained within the relevant provisions herein.
PURCHASE AND SALE
o Purchase and Sale. On the terms and subject to the conditions of this Agreement,
Seller shall sell, convey, transfer, assign and deliver to Buyer, and Buyer shall purchase and
accept from Seller on the Closing Date, any and all right, title and interest of Seller in and to any
and all of the assets of the Business, including, without limitation, any items as listed as
Purchased Assets, wherever such Purchased Assets may be located.
o Excluded Assets. Buyer expressly understands and agrees that all assets, properties
and rights of Seller not related to the Business (the “Excluded Assets”) shall be excluded from
the Purchased Assets and disclosed in Schedule ___.
o Assumed and Excluded Liabilities.
1. On the Closing Date, Buyer shall assume and agree to perform the Seller's
obligations pursuant to the contracts listed on Schedule ____ (“Assumed Contracts”) (other
than Liabilities attributable to any failure by Seller to comply with the terms thereof) but only
to the extent such obligations relate to periods after the Closing Date and the other liabilities
specified on Schedule _____ as Assumed Liabilities (the “Assumed Liabilities”).
2. Except for the Assumed Liabilities, Buyer shall not assume any Liabilities in
connection with the Acquisition or pursuant to this Agreement including, without limitation,
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a. any Liability for Tax of Seller including, without limitation,
any Taxes arising from the operation of the Business or ownership of
Purchased Assets on or prior to the Closing Date; provided, however that
Apportioned Obligations shall be paid in the manner set forth in Section
b. any Liability relating to any employees of Seller including,
without limitation, any liabilities or obligations under any employee plans or
benefit arrangements [If this provision is applicable describe the employee
plans or benefit arrangements];
c. any Liability of the Business arising on or prior to the Closing
Date including, without limitation, under Assumed Contracts included in the
d. any Liability relating to any action, suit, arbitration,
investigation or proceeding against the Business or with respect to the
Purchased Assets arising from events occurring on or prior to the Closing
e. any Liability relating to an Excluded Asset.
(collectively, the “Excluded Liabilities”)
o Assignment of Contracts and Rights. Notwithstanding anything to the contrary in
this Agreement, this Agreement shall not constitute an agreement to assign any Purchased Asset
or any claim or right or any benefit arising thereunder or resulting therefrom if an attempted
assignment thereof, without consent of a third party thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights of Buyer or Seller thereunder.
Seller will use its commercially reasonable efforts (but without any payment of money by Seller
or Buyer) to obtain the consent of the other parties to the assignment of any such Purchased
Asset or claim or right or any benefit arising thereunder or resulting therefrom for the
assignment thereof to Buyer as Buyer may request. If such consent is not obtained, or if an
attempted assignment thereof would be ineffective or would adversely affect the rights of Buyer
thereunder so that Buyer would not in fact receive all such rights, Seller and Buyer will
cooperate in a mutually agreeable arrangement under which Buyer would obtain the benefits
and assume the obligations thereunder in accordance with this Agreement, including, without
limitation, subcontracting, sub-licensing, or subleasing to Buyer, or under which Seller would
enforce for the benefit of Buyer, with Buyer assuming Seller’s obligations, any and all rights of
Seller against a third party thereto. Seller will promptly pay to Buyer when received all monies
received by Seller under any Purchased Asset or any claim or right or any benefit arising
thereunder, except to the extent the same represents an Excluded Asset. Notwithstanding the
foregoing, to the extent that such rights and benefits have not been provided to Buyer by
alternate arrangements satisfactory to Buyer, in its sole discretion, Buyer and Seller shall
negotiate in good faith for a downward adjustment in the Purchase Price paid by Buyer for the
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o Purchase Price; Allocation of Purchase Price.
3. The purchase price for the Purchased Assets shall be ____________________
dollars ($______________) (“Purchase Price”). The Purchase Price shall be paid by wire
transfer or by ______________________ of immediately available funds on the Closing Date
4. As soon as practicable after the Closing, Buyer shall deliver to Seller a
statement (the “Allocation Statement”), allocating the Purchase Price among the Purchased
Assets in accordance with Section 1060 of the Internal Revenue Code. If within ten (10) days
after the delivery of the Allocation Statement Seller notifies Buyer in writing that Seller objects
to the allocation set forth in the Allocation Statement, Buyer and Seller shall use commercially
reasonable efforts to resolve such dispute within twenty (20) days. In the event that Buyer and
Seller are unable to resolve such dispute within twenty (20) days, Buyer and Seller shall jointly
retain a nationally recognized accounting firm (the “Accounting Referee”) to resolve the
disputed items. Upon resolution of the disputed items, the allocation reflected on the
Allocation Statement shall be adjusted to reflect such resolution. The costs, fees and expenses
of the Accounting Referee shall be borne equally by Buyer and Seller.
5. Seller and Buyer agree to (i) be bound by the Allocation Statement and (ii) act
in accordance with the Allocation Statement in the preparation, filing and audit of any tax
return (including filing Form 8594 with its federal income Tax return for the taxable year that
includes the date of the Closing).
o Closing. The closing (the “Closing”) of the purchase and sale of the Purchased
Assets hereunder shall take place at the offices _____________________ on
________________, 20_____ at ______a.m./ p.m., or at such other time or place as Buyer and
Seller may agree (the “Closing Date”). Seller is not required to be physically present at the
o Transfer. As soon as practical after the Closing, but in no event more than ten (10)
days after the Closing Date, Seller shall deliver physical possession of all of the Purchased
Assets to Buyer.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
o Organization and Qualification. Seller has been duly organized and is validly
existing and in good standing under the laws of the State ____________ and has the requisite
corporate power and authority and all necessary government approval to own, lease and operate
its properties and to carry on its business as it is now being conducted. [Assuming seller is a
registered business entity}
o Corporate Authorization. The execution, delivery and performance by Seller of
this Agreement to which it is a party, and the consummation by Seller of the transactions
contemplated hereby and thereby are within Seller’s respective corporate powers and have been
duly authorized by all necessary corporate action on the part of Seller. This Agreement to
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which Seller is a party have been duly executed and delivered by Seller, and constitute valid and
binding agreements of Seller enforceable against Seller in accordance with their respective
o Non-Contravention. The execution, delivery and performance by Seller of this
Agreement to which Seller is a party do not and will not: (i) contravene or conflict with the
corporate charter or bylaws of Seller; (ii) contravene or conflict with or constitute a violation of
any provision of any law or regulation, judgment, injunction, order or decree binding upon or
applicable to Seller, the Business or the Purchased Assets; (iii) result in the creation or
imposition of any Lien on any Purchased Asset, other than permitted liens; or (iv) constitute a
material default under or give rise to any right of termination, cancellation or acceleration of any
material right or obligation of Seller relating to the Business or the Purchased Assets or to a loss
of any material benefit to the Business or the Purchased Assets to which Seller is entitled under
any provision of any material agreement, contract or other instrument binding upon Seller or by
which any of the Purchased Assets is or may be bound.
o Required Consents. Schedule ____ sets forth each Assumed Contract or permit
requiring a consent, waiver, authorization or approval as a result of the execution, delivery and
performance of this Agreement or the consummation of the transactions contemplated hereby
and thereby (each such consent, a “Required Consent”).
o Absence of Certain Changes. Since ___________________20____, Seller has
conducted the Business in the ordinary course consistent with past practices, and:
6. Seller has not entered into any material transaction or incurred any material
Liability with respect to the Business or the Purchased Assets other than in the ordinary course
of business consistent with past practice; and
7. There has not been any material adverse change in the Purchased Assets or the
condition (financial or otherwise) of the Business.
o Personal Property.
8. The Purchased Assets include the items specified in Schedule A.
9. The equipment [If applicable] included in the Purchased Assets has no
material defects, is in good operating condition and repair, has been reasonably maintained
consistent with standards generally followed in the industry (giving due account to the age and
length of use of same, ordinary wear and tear excepted) and is suitable for its present uses in
connection with the Business.
10. No Purchased Asset is subject to any Lien, except for the following
(collectively, the “Permitted Liens”):
a. liens for Taxes not yet due or being contested in good faith;
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b. liens for inchoate mechanics’ and materialmen’s liens for
construction in progress and workmen’s, repairmen’s, warehousemen’s and
carriers’ liens arising in the ordinary course of the Business; or
c. liens and imperfections of title the existence of which would not
materially adversely affect the use of the property subject thereto.
o Sufficiency of Purchased Assets; Operation of Business. The Purchased Assets,
constitute all of the assets, properties and rights necessary, and are sufficient, to conduct the
Business as currently conducted.
o Title to Purchased Assets. Upon consummation of the transactions contemplated
hereby, Buyer will have acquired good and marketable title in and to, or a valid leasehold
interest in (to the extent not owned by Seller prior to the Closing Date), each of the Purchased
Assets, free and clear of all Liens, except for Permitted Liens.
o Litigation. There is no action, suit, arbitration, investigation or proceeding pending
against or, to the best of Seller’s knowledge, threatened against or affecting the Business or any
Purchased Asset before any court or arbitrator or any governmental body, agency or official
except as listed on Schedule ____.
11. Except for the Assumed Contracts or any agreements, contracts or
commitments disclosed in Schedule _____, Seller is not a party to or subject to any of the
following agreements, contracts or commitments relating to the Business or necessary or useful
for the operation of the Business or ownership of the Purchased Assets:
a. any real property lease;
b. any contract for the purchase of materials, supplies, goods,
services, equipment or other assets providing for annual payments by Seller
or pursuant to which in the last year Seller paid in the aggregate $10,000 or
c. any sales, distribution or other similar agreement providing
for the sale by Seller of materials, supplies, goods, services, equipment or
other assets that provides for annual payments to Seller of, or pursuant to
which in the last year either Seller or any Affiliate thereof received in the
aggregate, $10,000 or more;
d. any partnership, joint venture or other similar contract
arrangement or agreement;
e. any contract relating to indebtedness for borrowed money or
the deferred purchase price of property (whether incurred, assumed,
guaranteed or secured by an asset);
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f. any material license agreement, franchise agreement or
agreement in respect of similar rights granted to or held by Seller;
g. any agency, dealer, sales representative or other similar
h. any agreement, contract or commitment that substantially
limits the freedom of Seller to compete in any line of business including,
without limitation, the Business, or with any Person or in any area or to own,
operate, sell, transfer, pledge or otherwise dispose of or encumber any
Purchased Asset or that would so limit the freedom of Buyer after the
i. any agreement, contract or commitment which is or relates to
an agreement with or for the benefit of any Affiliate of Seller; or
j. any other agreement, contract or commitment not made in the
ordinary course of business consistent with past practice which is material to
the Business or relates primarily to the Purchased Assets.
12. Each Assumed Contract or any agreement, contract or commitment required
to be disclosed on Schedule _____ is a valid and binding agreement of the parties thereto and is
in full force and effect, and neither Seller nor any other party thereto is in default in any
material respect under the terms of any such Assumed Contract or such agreement, contract or
commitment nor has any event or circumstance occurred that, with notice or lapse of time or
both, would constitute any event of default thereunder. Neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby or thereby will
result in or cause the breach of any Assumed Contract.
o Licenses and Permits. Seller possesses all material permits, licenses and approvals
(the “Permits”) necessary or used in order to carry on the Business or own the Purchased Assets.
Schedule ____ hereto sets forth all Permits. Except as set forth on Schedule _____ hereto,
Seller is in compliance in all respects with all Permits; there are no proceedings pending or, to
the best of Seller’s knowledge, threatened, to revoke, suspend, cancel or modify any Permit and
all such Permits may be assigned to Buyer as contemplated hereby without the consent of the
issuing authority. Seller does not know of any reason why Buyer will not be able promptly to
obtain all Permits necessary in order to carry on, or to use the current Permits in, the Business or
to own the Purchased Assets.
o Compliance with Laws. Neither Seller nor the Business is in violation in any
material respect of any applicable law, regulation, ordinance, order or any other requirement of
any governmental body or court (including, without limitation, matters relating to securities,
loans, employment and improper payments), and no notice has been received by Seller or the
Business or any of their respective officers or directors alleging any such violation.
o Receivables. All accounts, notes receivable and other receivables included in the
Purchased Assets are, and all accounts and notes receivable arising from or otherwise relating to
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the Business on or prior to the Closing Date will be, valid and genuine and arose in the ordinary
course of business consistent with past practice.
o Employees; Labor Matters.
13. Neither Seller nor any Affiliate of Seller has incurred any Liability
(contingent or otherwise) under Title IV of ERISA or Section 412 of the Code, and no facts
exist which could reasonable form a basis for such Liability. No Employee Plan is a
“multiemployer plan,” as defined in Section 3(37) of ERISA, nor has Seller or any Affiliate
thereof at any time contributed to or been obligated to contribute to any “multiemployer plan.”
o Intellectual Property.
14. Schedule _____ contains a complete and correct list of all trademarks, trade
names, service marks, service names, copyrights domain names and patents (“Intellectual
Property”) included in the Purchased Assets, which Seller has ownership rights in or has a valid
right to use, license or sublicense in connection with or which relates to the Business of the
Company, and identifies all registration and application numbers, the owner of record and
jurisdiction pertaining thereto. The Intellectual Property identified on Schedule _____ is valid,
subsisting, unexpired, in proper form and enforceable and all renewal fees and other
maintenance fees which have fallen due on or prior to the effective date of this Agreement have
been paid; and the grants, registrations and applications for such owned Intellectual Property
have not lapsed, expired or been abandoned and no application or registration thereof is the
subject of any legal or governmental proceeding before any governmental, registration or other
authority in any jurisdiction.
15. Schedule ____ sets forth a complete list of all: (i) licenses, sublicenses and
other agreements in which Seller has granted to any person or has been granted by any person
the right to use the Intellectual Property including, without limitation, all content, supplier,
composer and distributor agreements; and (ii) all other consents, co-existence agreements,
indemnifications, forbearances to sue, settlement agreements and licensing or cross-licensing
arrangements to which the Seller is a party relating to the Intellectual Property or the
proprietary rights of any third party. Except as set forth in Schedule ______, Seller is not under
any obligation to pay royalties or other payments in connection with any license, sublicense or
other agreement, or restricted from assigning its rights under any license, sublicense or
agreement respecting Intellectual Property, nor will Seller otherwise be, as a result of the
execution and delivery of this Agreement or the performance of its obligations under this
Agreement, in breach of any license, sublicense or other agreement relating to the Intellectual
16. Except as set forth herein, Seller is the exclusive owner of all right, title and
interest in, free and clear of all Liens and other adverse claims, all of the Intellectual Property
used in the conduct of the business of Seller as currently conducted and proposed to be
conducted. Seller has taken the steps reasonably necessary to protect its right, title and interest
in and to the Intellectual Property.
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17. With respect to Trade Secrets (i) the documentation relating to such Trade
Secrets is current, accurate and sufficient in detail and content to identify and explain it and to
allow its full and proper use without reliance on the knowledge or memory of any individual;
(ii) Seller has taken all reasonable precautions to protect the secrecy, confidentiality of the
Trade Secrets and (iii) Seller has good title and an absolute (but not necessarily exclusive) right
to use any such Trade Secrets. The Trade Secrets are not part of the public knowledge or
literature and, to Seller’s Knowledge, have not been used, divulged or appropriated either for
the benefit of any Person or to the detriment of Seller. No Trade Secret is subject to any
adverse claim or has been challenged or threatened in any way.
18. Except as disclosed herein, there are no conflicts with or infringements of any
Intellectual Property by any third party. The conduct of the Business as currently conducted
does not conflict with or infringe in any way with any proprietary right of any third party.
There is no claim, suit, action or proceeding pending or, to Sellers’ knowledge, threatened
against the Business (i) alleging any such conflict or infringement with any third party’s
proprietary rights or (ii) challenging the ownership, use, validity or enforceability of the
19. The Intellectual Property is sufficient and adequate and constitutes all of the
Intellectual Property that is necessary to carry on the Business as presently conducted or
o [If applicable] Software. Schedule ____ sets forth a complete list of all Software
that Seller either owns outright, or has an exclusive perpetual, royalty-free license to use,
reproduce, modify, distribute and sublicense which is related to the Purchased Assets
(“Proprietary Software”). Seller has not sold, licensed, leased or otherwise transferred or
granted any interest or rights in or to any portion of the Proprietary Software. Seller has taken
the steps reasonably necessary to protect its right, title and interest in and to the Proprietary
Software, including, without limitation, the execution of appropriate confidentiality agreements
or assignments. The third party operating and applications computer software programs and
databases used or licensed that are material to the conduct of the Business as now conducted and
as presently contemplated to be conducted (the “Third Party Software”) are listed on Schedule
3.16 hereto. Seller has valid, fully paid, licenses to use, reproduce, modify, distribute and
sublicense all copies of the Third Party Software, and have not sold, licensed, leased or
otherwise transferred or granted any interest or rights in or to any portion thereof. The
Proprietary Software and Third Party Software together are sufficient and adequate and
constitute all of the software that is necessary to carry on the Business as presently conducted or
o Finder’s Fees. There is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of Seller who might be entitled to
any fee or commission from Seller upon consummation of the transactions contemplated by this
o Tax Returns. The United States tax returns for the years ______________ (the “Tax
Returns”), (i) are included as Schedule _____; (ii) present fairly the financial condition and the
results of operations of the Business as of the dates and for the periods indicated thereon,
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excluding any revenues related to any Excluded Assets; (iii) are complete, correct, and
consistent with the books of account and records of the Seller and (iv) reflect accurately all costs
and expenses for the Business, excluding any expenses related to any Excluded Assets.
20. No representation or warranty of Seller in this Agreement omits to state a
material fact necessary to make the statements herein, in light o the circumstances in which
they were made, not misleading.
21. There is no fact known to either Seller that has specific application to the
Purchased Assets or the Business (other than general economic or industry conditions) and that
materially adversely affects or, as far as either Seller can reasonably foresee, materially
threatens, the Purchased Assets or the prospects, financial condition or results of operations of
the Business, that has not been set forth in this Agreement or the disclosure schedules hereto.
22. Seller has timely paid all Taxes which will have been required to be paid on or
prior to the date hereof, the non-payment of which would result in a Lien on any Purchased
Asset, would otherwise adversely affect the Business or would result in Buyer becoming liable
or responsible therefore.
23. Seller has established, in accordance with GAAP, adequate reserves for the
payment of, and will timely pay, all Taxes which arise from or with respect to the Purchased
Assets or the operation of the Business and are incurred in or attributable to the Pre-Closing
Tax Period, the non-payment of which would result in a Lien on any Purchased Asset, would
otherwise adversely affect the Business or would result in Buyer becoming liable therefore.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
o Organization and Qualification. Buyer has been duly organized and is validly
existing and in good standing (to the extent applicable) under the laws of the jurisdiction of its
incorporation or organization and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on its business as it
is now being conducted. [Applicable if Buyer is an organized business entity}
o Corporate Authorization. The execution, delivery and performance by Buyer of
this Agreement, and the consummation by Buyer of the transactions contemplated hereby and
thereby are within Buyer’s powers and have been duly authorized by all necessary action on the
part of Buyer. This Agreement to which Buyer is a party has been duly executed and delivered
by Buyer and constitutes valid and binding agreements of Buyer, enforceable against Buyer in
accordance with their respective terms.
o Non-Contravention. The execution, delivery and performance by Buyer of this
Agreement to which Buyer is a party do not and will not (i) contravene or conflict with the
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organizational documents or bylaws of Buyer or (ii) contravene or conflict with or constitute a
violation of any provision of any material law or regulation, judgment, injunction, order or
decree binding upon or applicable to Buyer.
o Finders’ Fees. There is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of Buyer who might be entitled to
any fee or commission from Buyer upon consummation of the transactions contemplated by this
COVENANTS OF THE PARTIES
The parties hereto agree that:
o Commercially Reasonable Efforts; Further Assurances.
24. Subject to the terms and conditions of this Agreement and except as otherwise
set forth in this Agreement, each party will use its commercially reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable
under applicable laws and regulations to consummate the transactions contemplated by this
Agreement. Seller and Buyer each agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as may be necessary
or desirable in order to consummate or implement expeditiously the transactions contemplated
by this Agreement and to vest in Buyer title to the Purchased Assets as provided herein.
25. Seller hereby constitutes and appoints, effective as of the Closing Date, Buyer
and its successors and assigns as the true and lawful attorney of Seller with full power of
substitution in the name of Buyer or in the name of Seller, but for the benefit of Buyer, except
as otherwise contemplated hereby, (i) to collect for the account of Buyer any items of
Purchased Assets and (ii) to institute and prosecute all proceedings which Buyer may in its sole
discretion deem proper in order to assert or enforce any right, title or interest in, to or under the
Purchased Assets, and to defend or compromise any and all actions, suits or proceedings in
respect of the Purchased Assets. Buyer shall be entitled to retain for its account any amounts
collected pursuant to the foregoing powers, including any amounts payable as interest in
o Certain Filings. Seller and Buyer shall cooperate with one another and shall use all
reasonable efforts and take all reasonable steps to obtain all consents, approvals, waivers or
other documents from any third parties, including any governmental authorities, and make all
filings, registrations and other notifications, as may be required to consummate the transactions
contemplated by this Agreement and, in taking such actions or making any such filings,
furnishing information required in connection therewith and seeking timely to obtain any such
actions, consents, approvals or waivers.
o Confidentiality. Except for disclosure to a party’s advisors, who shall agree to be
bound by these confidentiality terms, or as required by law or securities regulations, neither
party shall disclosure the terms of this Agreement to any third party.
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o Nonsolicitation; Noncompetition by Seller [Instruction: If Applicable Insert
Individuals Names who would be subject to this provision. If this is applicable, then the
individual also needs to be named a party to this Agreement and listed in the opening
paragraph listing the parties.]
26. ______________________ agrees, that, for a period of _____ (__) years
following the Closing Date, Seller shall be prohibited from soliciting employees, consultants or
suppliers of, the Business without the prior written consent of Buyer.
27. Seller acknowledges and agrees that the covenants set forth in this Section
5.04 are reasonable and valid in scope and in all other respects. If any of such covenant is
found to be invalid or unenforceable by a final determination of a court of competent
jurisdiction (i) the remaining terms and provisions hereof shall be unimpaired and (ii) the
invalid or unenforceable term or provision shall be deemed replaced by a term or provision that
is valid and enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.
o Public Announcements. Buyer shall publish a press release concerning the
transactions contemplated hereby provided that it first provides a copy to Seller.
Notwithstanding the foregoing, Buyer shall not be prevented from complying with the
applicable law or securities market regulations with respect to the foregoing.
o Tax Matters.
28. Buyer and Seller agree to furnish or cause to be furnished to each other, upon
request, as promptly as practicable, such information and assistance relating to the Business
and the Purchased Assets (including access to books and records) as is reasonably necessary for
the filing of all tax returns, the making of any election relating to Taxes, the preparation for any
audit by any taxing authority, and the prosecution or defense of any claim, suit or proceeding
relating to any Tax. Buyer and Seller shall retain all books and records with respect to Taxes
pertaining to the Purchased Assets for a period of at least six years following the Closing Date.
On or after the end of such period, each party shall provide the other with at least 10 days prior
written notice before destroying any such books and records, during which period the party
receiving such notice can elect to take possession, at its own expense, of such books and
records. Seller and Buyer shall cooperate with each other in the conduct of any audit or other
proceeding relating to Taxes involving the Purchased Assets or the Business.
29. All real property taxes, personal property taxes and similar ad valorem
obligations levied with respect to the Purchased Assets for a taxable period which includes (but
does not end on) the Closing Date (collectively, the “Apportioned Obligations”) shall be
apportioned between Seller and Buyer based on the number of days of such taxable period
included in the Pre-Closing Tax Period and the number of days of such taxable period after the
Closing Date (such portion of such taxable period, the “Post-Closing Tax Period”). Seller shall
be liable for the proportionate amount of such taxes that is attributable to the Pre-Closing Tax
Period, and Buyer shall be liable for the proportionate amount of such taxes that is attributable
to the Post-Closing Tax Period.
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30. All excise, sales, use, value added, registration stamp, recording,
documentary, conveyancing, franchise, property, transfer, gains and similar Taxes, levies,
charges and fees (collectively, “Transfer Taxes”) incurred in connection with the transactions
contemplated by this Agreement shall be borne by Seller. Seller shall not be responsible for
Buyer’s sales tax obligations, if any. Seller represents and warrants to Buyer that, with respect
to the transactions contemplated by this Agreement, Seller is entitled to an exemption from
Transfer Taxes for isolated, casual or occasional sales in each jurisdiction that would otherwise
impose a Transfer Tax on the transactions. Buyer and Seller shall cooperate in providing each
other with any appropriate resale exemption certifications and other similar documentation.
31. Apportioned Obligations shall be timely paid and all applicable filings, reports
and returns shall be filed, as provided by applicable law. The paying party shall be entitled to
reimbursement from the non-paying party in accordance with Section 5.06(b). Upon payment
of any such Apportioned Obligation or Tax, the paying party shall present a statement to the
non-paying party setting forth the amount of reimbursement to which the paying party is
entitled under Section 5.06(b) together with such supporting evidence as is reasonably
necessary to calculate the amount to be reimbursed. The non-paying party shall make such
reimbursement promptly but in no event later than 10 days after the presentation of such
o Assistance. Seller shall forward to Buyer, on a timely basis, all e-mail, payments,
postal mail, telephone or other correspondence or items received by Seller with regard to the
o Closing Deliveries. At the Closing:
32. Buyer shall deliver to Seller the portion of the Purchase Price set forth in
Section 2.05(a)(i), by wire transfer or other agreed upon method of transferring immediately
available funds to the account or accounts set forth on Schedule ____.
33. Seller and Buyer shall each execute and deliver the Agreement, and Seller
shall deliver to Buyer such deeds, bills of sale, endorsements, consents (including, without
limitation, all of the Required Consents), assignments and other good and sufficient instruments
of conveyance and assignment as the parties and their respective counsel shall deem reasonably
necessary or appropriate to vest in Buyer all right, title and interest in, to and under the
34. Seller shall execute and deliver all requisite resolutions or actions of its
directors, managers, shareholders and members, as applicable and necessary, approving the
execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby and thereby.
35. Each of Seller and Buyer shall execute and deliver all such instruments,
documents and certificates as may be reasonably requested by the other party that are
necessary, appropriate or desirable for the consummation at the Closing of the transactions
contemplated by this Agreement.
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36. All of the representations and warranties of the Seller contained in this
Agreement (the “Seller’s Representations”) shall survive the Closing and continue in full force
and effect for eighteen (18) months; provided, however, that the representations and warranties
of Seller contained in Section 3.01 (Organization and Qualification), Section 3.02 (Corporate
Authorization), Section 3.03 (Non-Contravention), Section 3.08 (Title to Purchased Assets) and
Section 3.17 (Finder’s Fee) (collectively the “Seller’s Perpetual Representations”), in each
case, shall survive the Closing and continue in full force and effect forever thereafter. All of
the covenants of Seller contained in this Agreement shall survive the Closing and continue in
full force and effect forever thereafter.
37. The representations and warranties of Buyer set forth in this Agreement, or in
any certificate delivered by Buyer with respect to such representations (the “Buyer’s
Representations”) shall survive the Closing and continue in full force and effect for _________
(_____) months [Instruction: Recommendation is a minimum of twelve months]. All of
the covenants of Buyer contained in this Agreement shall survive the Closing and continue in
full force and effect forever thereafter.
38. Notwithstanding anything to the contrary in this Section 7.01, any notice
given in accordance with Section 8.01 of this Agreement (and delivered within the applicable
survival period for such representation or warranty) claiming an alleged breach of any
representation or warranty contained in this Agreement shall without further action extend the
survival period for the representation or warranty alleged to have been breached as applied to
the circumstances set forth in such notice until immediately after the final resolution of the
o Indemnification Provisions for Benefit of Buyer and Seller.
39. In the event Seller breaches any of Seller’s Representations or Seller’s
Perpetual Representations and provided that, as to any claim for such breach of Seller’s
Representations or Seller’s Perpetual Representations, Buyer makes a written claim for
indemnification against Seller within the survival period, if applicable, then Seller agrees to
indemnify the Buyer, its Affiliates and each of their officers, directors, employees, agents or
representatives (collectively, the “Buyer Indemnified Parties”) from and against all Damages
that any Buyer Indemnified Parties suffer resulting from or arising out of such event; provided,
however, that Seller shall not have any obligation to indemnify any Buyer Indemnified Party
from and against any Damages resulting from the breach of any Seller’s Representation (as
opposed to any covenant of Seller) other than Seller’s Perpetual Representations (i) until
Damages exceed five thousand dollars ($5,000) and (ii) to the extent the aggregate amount of
Damages for which Seller has actually indemnified Buyer Indemnified Parties with respect to
prior breaches of Seller’s Representations (other than Seller’s Perpetual Representations)
exceeds the Purchase Price (the “Cap”).
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40. Without limiting the generality or effect of the foregoing, Seller shall
indemnify, defend and hold harmless any Buyer Indemnified Parties from and against any and
all Damages resulting from or arising out of any of the following (which indemnification,
defense and hold harmless shall not be subject to any of the limitations set forth in Section
a. any breach of the covenants of Seller contained in this
Agreement or in any other Ancillary Agreement and any breach of Seller’s
b. any claim of any creditor or beneficiary (in their capacity as
such) of Seller or any of its Affiliates, whether arising prior to, on or after the
c. any and all Pre-Closing Tax Liability;
d. any Liability resulting from or related to any Excluded Asset;
e. any Excluded Liability; or
f. any fraud or intentional misrepresentation by Seller
41. In the event Buyer breaches any of Buyer Representations and provided that,
as to any claim for breach of such Buyer Representations, Seller makes a written claim for
indemnification against Buyer within the survival period, if applicable, then Buyer agrees to
indemnify Seller, its Affiliates and each of its officers, directors, employees, agents or
representatives (collectively, the “Seller Indemnified Parties”) from and against all Damages
that any Seller Indemnified Parties suffer resulting from or arising out of such event; provided,
however, that Buyer shall not have any obligation to indemnify any Seller Indemnified Parties
from and against any Damages resulting from the breach of any Buyer Representations (as
opposed to any covenant of Buyer) to the extent the aggregate amount for which Buyer has
actually indemnified Seller Indemnified Parties with respect to prior breaches of Buyer
Representations exceeds the Cap.
42. Without limiting the generality or effect of the foregoing, Buyer shall
indemnify, defend and hold harmless any Seller Indemnified Parties from and against any and
all Damages resulting from or arising out of any breach of the covenants of Seller contained in
this Agreement or in any other Ancillary Agreement (which indemnification, defense and hold
harmless shall not be subject to any of the limitations set forth in Section 7.02(c)).
o Matters Involving Third Parties.
43. If any third party notifies any party hereto (the “Indemnified Party”) with
respect to any matter which may give rise to a claim (other than a Tax Claim) for
indemnification against the other party hereto (the “Indemnifying Party”) under this Article VII,
then the Indemnified Party shall use reasonable efforts to notify the Indemnifying Party thereof
promptly and in any event within ten (10) days after receiving any written notice from a third
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party; provided, however, that no delay on the part of the Indemnified Party in notifying the
Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless,
and then solely to the extent that, the Indemnifying Party is materially prejudiced thereby.
44. Once the Indemnified Party has given notice of the matter to the Indemnifying
Party, the Indemnified Party may, subject to the Indemnifying Party’s rights to assume the
defense of such matter pursuant to this Section 7.03, defend against the matter in any manner it
45. The Indemnifying Party may at any point in time choose to assume the
defense of all of such matter, in which event:
a. the Indemnifying Party shall defend the Indemnified Party
against the matter with counsel of its choice reasonably satisfactory to the
b. the Indemnified Party may retain separate counsel at its sole
cost and expense (except that the Indemnifying Party shall be responsible for
the fees and expenses of one separate co-counsel for all Indemnified Parties
to the extent the Indemnified Party is advised, in writing by its counsel, that
either (A) the counsel the Indemnifying Party has selected has a conflict of
interest or (B) there are legal defenses available to the Indemnified Party that
are materially different from or additional to those available to the
Indemnifying Party); and
c. the Indemnifying Party shall reimburse the Indemnified Party
for the reasonable costs of defense or investigation for the period prior to the
assumption of the defense.
46. Assumption of the defense of any matter by the Indemnifying Party shall
without further action constitute an irrevocable waiver by the Indemnifying Party of its right to
claim at a later date that such third party action for which the defense was assumed is not a
proper matter for indemnification pursuant to this Article VII.
47. The Indemnified Party shall not consent to the entry of a judgment or enter
into any settlement with respect to any matter which may give rise to a claim for
indemnification without the written consent of the Indemnifying Party, which consent may not
be unreasonably withheld or delayed; provided, however, that if the Indemnifying Party has
failed to provide indemnification required to be provided pursuant to this Article VII for thirty
(30) days after a request therefor, then the Indemnified Party may take any such action without
the consent of the Indemnifying Party (provided that the Indemnified Party must give the
Indemnifying Party at least ten (10) days prior notice of such action).
48. The Indemnifying Party shall not consent to the entry of a judgment or enter
into any settlement with respect to any matter which may give rise to a claim for
indemnification or enter into any settlement which does not include a provision whereby the
plaintiff or claimant in the matter releases the Indemnified Party from all liability with respect
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thereto, without the written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed.
o Certain Additional Provisions Relating to Indemnification.
49. After the Closing Date, the indemnification provisions set forth in this Article
VII shall constitute the sole and exclusive recourse and remedy available to the parties hereto
with respect to the breach of any representation or warranty contained in this Agreement except
for willful misconduct, fraud or intentional misrepresentations or breaches of Section 5.04.
50. All payments by an Indemnifying Party under Article VII shall be treated as an
adjustment to the Purchase Price for all foreign, federal, state and local income tax purposes.
51. The Indemnification provided for in this Article VII shall survive any
investigation at any time made by or on behalf of Buyer or any knowledge or information that
Buyer may have.
o Notices. All notices, requests and other communications to either party hereunder
shall be in writing (including telecopy or similar writing) and shall be given,
if to Buyer, to:
if to Seller, to:
o Amendments; No Waivers.
52. Any provisions of this Agreement may be amended or waived if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment, by Buyer and
Seller, or in the case of a waiver, by the party against whom the waiver is to be effective.
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53. No failure or delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
o Expenses. Except as otherwise provided herein, all costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or expense.
o Successors and Assigns. Except as otherwise provided in this Agreement, no party
hereto shall assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other party hereto and any such attempted assignment without such prior
written consent shall be void and of no force and effect; provided, however, Buyer may assign
this Agreement to any of its Affiliates or to any third party purchaser of the Business or all or
substantially all of the Purchased Assets without consent. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
o Governing Law. This Agreement shall be construed in accordance with and
governed by the law of the State of __________________, without regard to the conflicts of law
rules of such state.
o Counterparts; Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received a counterpart hereof signed by the other party hereto.
o Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements,
understandings and negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement, promise, understanding,
condition or warranty not set forth herein has been made or relied upon by either party hereto.
Nothing in this Agreement is intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
o Captions. The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
o Incorporation of Exhibits and Schedules. The Schedules referred to in this
Agreement are incorporated herein and made a part hereof.
o Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of strict construction
will be applied against any party. Any references to any federal, state, local or foreign statute or
law will also refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. Unless the context otherwise requires: (a) a term has the meaning assigned
to it by this Agreement; (b) including means “including without limitation”; (c) “or” is
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disjunctive but not exclusive; (d) words in the singular include the plural, and in the plural
include the singular; and (e) “$” means the currency of the United States of America.
o Severability. In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law,
such invalidity, illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
o No Third-Party Beneficiaries. Except as set forth in Article VII, this Agreement
shall not confer any rights or remedies upon any Person other than the parties hereto and thereto
and their respective successors and permitted assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
by their respective authorized officers as of the day and year first above written.
[This provision should only be inserted if there is a non-competition provision being
executed by an entity/person besides the Seller, for example, an officer(s) of Seller, etc.]
The undersigned has executed this Agreement for the limited purpose of, and hereby
agrees to be bound and abide by the terms of Sections 5.04 of this Agreement:
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