OUTLINE OF TERMS AND CONDITIONS AS AGREEMENT FOR THE PURCHASE AND SALE OF BUSINESS ASSETS AND BUSINESS COMMONLY KNOWN AS ________________________________________________________________
(Name of Business)
Contained herein are the basic terms and conditions which shall form the basis of an agreement for the purchase and sale of business assets for the business named below. The Parties understand and agree that escrow Instructions shall be drafted to further define specific provisions as is customary in a Bulk Sale/Business Sale Escrow and in accordance with those provisions contained herein. Should you not be clear regarding any part of this agreement, you are advised to seek independent legal advice. DATE OF THIS OUTLINE/AGREEMENT: ____________________ _____, 20_____ BUSINESS TRADE NAME: ______________________________________________________________________ Business Premises Address: _________________________________________________ Suite/Unit # _________ City: ___________________________________________________ Nevada SELLER: Zip: _________________________
□ Sole Proprietor □ Partnership □ Corporation □ LLC
Phone: ____________________________
Entity or Partnership Name: ______________________________________________________________________ Owner or Officer Name: ____________________________________________________ Title: _________________ Owner or Officer Name: ____________________________________________________ Title: _________________ Owner or Officer Name: ____________________________________________________ Title: _________________ Home Address: __________________________________________________________ Unit/Apt#: _____________ City: ________________________________________________ State ____________________ Zip ___________ Federal TAX ID Number: ________________________ BUYER: and/or Social Security Number: ______-____-______
□ Sole Proprietor □ Partnership □ Corporation □ LLC
Phone: ____________________________
Entity or Partnership Name: ______________________________________________________________________ Owner or Officer Name: ____________________________________________________ Title: _________________ Owner or Officer Name: ____________________________________________________ Title: _________________ Owner or Officer Name: ____________________________________________________ Title: _________________ Home Address: __________________________________________________________ Unit/Apt#: _____________ City: ________________________________________________ State ____________________ Zip ___________ Federal TAX ID Number: ________________________ and/or Social Security Number: ______-____-______
THIS IS A LEGAL DOCUMENT AND A BINDING AGREEMENT. IF YOU DO NOT UNDERSTAND ANY PART OF THIS AGREEMENT OR IF YOU ARE NOT SURE IF THIS AGREEMENT SUITS YOUR SPECIFIC NEED OR PURPOSE YOU ARE ADVISED TO SEEK INDEPENDENT LEGAL ADVICE. Page 1 Initial Buyer ____________ Initial Seller____________
1.
TRANSACTIONAL INFORMATION: TOTAL PURCHASE PRICE: EARNEST MONEY DEPOSIT:
□ ASSET SALE □ STOCK OR LLC INTEREST SALE
$ _______________________ $ _______________________ $ _______________________ $________________________
Payable to Accelerated Escrow Company, Inc.
TO BE PAID AT CLOSE OF ESCROW IN THE FORM OF PROMISSORY NOTE:*
Purchase price shall include the furniture, fixtures, and equipment, (F.F. & E.) included in Exhibit A, as well as business telephone numbers, customer lists, computer software and hardware, and any licenses that may be transferable at the time of sale. All assets shall be delivered free and clear of any and all liens, debts and encumbrances of any kind or nature. All accounts receivable or accounts payable shall remain the property of Seller. Purchaser is purchasing the F.F. & E. in “GOOD WORKING CONDITION”. The aforementioned Earnest Money Deposit is: _____ Refundable ______ Non-Refundable* (*Assuming that all contingencies as provided for herein are met including but not limited to any Landlord Approval and Privileged License requirements.) 2. *PROMISSORY NOTE: _____ Yes ____ No Amount: $________________________
If indicated as “Yes” above, a Promissory Note (“NOTE”) shall be executed by Buyer in favor of Seller. Payments shall commence ____ days after the close of escrow and every payment thereafter due on the same calendar day of each subsequent and consecutive month. Said Note shall be secured by a Security Agreement, Personal Guaranty, and UCC-1 Financing Statement covering the assets of the Business being conveyed by Seller to Buyer, executed by Seller as Secured Party and Buyer as debtor. Said Note is a fully amortized Note. No prepayment penalty shall be imposed for the early retirement of the Note. Interest Rate to be _____% Note to be amortized over ______ months and to be paid in full in______ months. Payment Grace Period is ______ days. Late Payment Penalty: _____ % of payment due or $______________. Special Notes for Promissory Note: ________________________________________________________________ _____________________________________________________________________________________________ 3. LEASE PREMISES: _____ Yes ____ No If indicated as “Yes” above, this Agreement is subject to and contingent upon the Buyer obtaining and approving a valid lease or assignment of the current lease from the Landlord in its present form including any attachments and exhibits. It is further agreed by the parties that this transfer is subject to and contingent upon the Buyer reviewing the said lease for the Business premises located at ___________________________________________ _____________ prior to close of escrow. The close is contingent upon the Buyer obtaining the landlord’s written consent to the assignment and assumption of the current lease or approval of a new lease. Buyer, upon execution of this Assignment, shall reimburse Seller for the Lease deposit and Buyer’s pro-rata share of prepaid rents. Note: Assumption of present Lease by Buyer may not release Seller of obligations unless specifically released by Landlord. Any lease assignment fee shall be paid by: □ Buyer □ Seller □ Split between Buyer and Seller.
THIS IS A LEGAL DOCUMENT AND A BINDING AGREEMENT. IF YOU DO NOT UNDERSTAND ANY PART OF THIS AGREEMENT OR IF YOU ARE NOT SURE IF THIS AGREEMENT SUITS YOUR SPECIFIC NEED OR PURPOSE YOU ARE ADVISED TO SEEK INDEPENDENT LEGAL ADVICE. Page 2 Initial Buyer ____________ Initial Seller____________
4. NO ASSUMPTION OF LIABILITIES: Except for Buyer’s assumption of the lease, Buyer is assuming no liabilities of Seller. Seller shall convey the Business and the Purchased Assets to Buyer free and clear of any liens, debts, and encumbrances of any kind or nature. 5. CLOSE OF ESCROW: shall occur on or about _______________ ______ 20___ or upon Buyer’s receipt of landlord’s written consent to the assignment and assumption of the lease, and/or upon the approval of any privileged licenses required to operate the business provided for herein, whichever the later occurs. 6. INVENTORY: Is Inventory Included? ____ Yes ____ No
Amount included in Purchase Price $________________ OR ___ on hand at time of close of escrow. Seller shall maintain sufficient inventory of merchandise to conduct business operations in its usual and customary manner and until the close, Seller shall conduct the operations of the Business in its usual and customary manner. The close of transfer shall be further contingent upon the Business experiencing no adverse change prior to the close. Seller shall continue to maintain all current insurance and the risk of loss shall be upon Seller until close of transfer. Purchase Price ____ shall or _____ shall not be adjusted according to inventory count. Buyer and Seller shall conduct inventory prior to close of escrow. It is agreed that any inventory shall consist of marketable goods. In no event shall the inventory exceed $______________________. 7. NON COMPETE PROVISION: Is there a Non-Compete Agreement? ____ Yes ____ No If indicated “Yes” above, the Seller, provided that the Buyer is not in default under any terms of the Agreement, agrees that it shall not and will not, for a period of ___consecutive years from the close of this sale, directly or indirectly, engage in the __________________________________ business within a radius of ___ miles of the business being sold nor aid or assist anyone else, except Buyer, to do so within these limits nor have any interest, directly or indirectly, in such business except as an employee of Buyer. 8. TRADE NAME: Is the business Trade Name included in Purchase Price? ____ Yes ____ No If indicated “Yes” above, the purchase price includes the use of the Trade Name and any and all rights Seller may have to the trade name, known as: _______________________________________________. 9. TRAINING: Is Training Included? ____ Yes ____ No If indicated “Yes” above, Seller shall train the Buyer in the daily operations and functions of the business without compensation for a period of _____) days from close. Said training shall include but not be limited to introduction to local vendors/suppliers of the Business, standing accounts (if any), record and bookkeeping procedures (inventory, accounting, etc.) and day to day operations. 10. WITHHOLD PROCEEDS: Any funds to be withheld for training or other purposes? ____ Yes ____ No If indicated “Yes” above, it is agreed that the sum of $ _______________________ of Seller Proceeds will be held in escrow for a period of ______ days after close of escrow, to insure Seller performance and any remaining Seller obligations in regards to purchase agreement and business sale including training or other such “Seller” obligations. 11. NO BROKER: Parties and each of them warrant that NO Broker has been engaged in this transaction to represent either Buyer or Seller. 12. PRIVILEGED LICENSE REQUIRED: Is there a Privileged License? ____ Yes ____ No If indicated as “Yes” above, this transaction is subject to and contingent upon the Buyer obtaining approval from the appropriate government agency to operate the business provided for herein. This may include but not be limited to the State of Nevada Gaming Control Board, or the issuance of any “temporary” Liquor License in the appropriate municipality or governing authority, or a “temporary” Massage Establishment or other privileged license as may be required to operate said business. Buyer shall diligently pursue the application process, and apply within ten (10)
THIS IS A LEGAL DOCUMENT AND A BINDING AGREEMENT. IF YOU DO NOT UNDERSTAND ANY PART OF THIS AGREEMENT OR IF YOU ARE NOT SURE IF THIS AGREEMENT SUITS YOUR SPECIFIC NEED OR PURPOSE YOU ARE ADVISED TO SEEK INDEPENDENT LEGAL ADVICE. Page 3 Initial Buyer ____________ Initial Seller____________
days of the opening of escrow, for each license required to operate the business provided for herein. The closing shall occur at such time the appropriate licenses are approved and granted. 13. SUBJECT TO SBA LOAN APPROVAL: Is this subject to SBA Loan? ____ Yes ____ No If indicated as “Yes” above, this transaction is subject to approval of an SBA loan and successful funding of said SBA loan to close this transaction. Buyer and Seller shall cooperate in the loan process, by supplying and executing any required documentation to facilitate the SBA loan. Should additional time be required to complete this transaction as a result of the SBA Loan process, Buyer and Seller hereby agree to extend the estimated closing date to accommodate such delays as are deemed “reasonable”. Buyer shall diligently pursue the application process, and advise Seller as of the status of the loan process, in regular intervals 14. FRANCHISE APPROVAL REQUIRED: Is this a Franchise? ____ Yes ____ No If indicated “Yes” above, Buyer and Seller agree this transaction is subject to the approval of the Franchisor for the business provided for herein. Buyer and Seller shall cooperate to facilitate such transfer, and the Franchise License Transfer Fee and any Training Fees shall be paid by □ Buyer □ Seller □ Split. 15. GENERAL PROVISIONS: Seller acknowledges and represents that the Seller is operating the business in compliance with all applicable laws and contracts. The compliance will not be violated by this sale and the business will pass all applicable inspections upon Change of Possession. There are no claims or investigations pending which would affect the business or assets being sold. All financial information and statements, if any, furnished to Buyer are complete, accurate, prepared in a manner consistent with prior statements, and fairly present the financial condition of the businesses of the dates stated on them. Except as otherwise noted in this agreement, each party shall pay when due all operating costs incurred while that party is in possession and hold the other party harmless there from. 16. ALLOCATION OF SALES PRICE: Buyer and Seller should contact their accountant or other competent source to determine how the sales price should be allocated for tax purposes, prior to close of escrow. An allocation schedule shall be provided at the Close of Escrow. If Buyer and Seller already know or have already agreed to an allocation of purchase price, please note information below: 1. 2. 3. 4. 5. 6. 7. 8. 9. 11. Equipment, Fixtures, Furniture Licenses Leasehold Improvements Inventory (Estimate) Customer Lists Covenant Not To Compete Franchises, Trade Name/Trade Mark Goodwill Real Property/Land Other Assets ________________________ TO EQUAL TOTAL PURCHASE PRICE $_____________________ $_____________________ $_____________________ $_____________________ $_____________________ $_____________________ $_____________________ $_____________________ $_____________________ $_____________________ $_____________________
17. ESCROW FEES: to be paid by: □ Buyer □ Seller □ Split between Buyer and Seller. Accelerated Escrow Company, Inc. shall be engaged as Escrow Agent upon execution of this Agreement, and is to note any contingencies provided for herein within any Transfer Instructions. Escrow Fees are
THIS IS A LEGAL DOCUMENT AND A BINDING AGREEMENT. IF YOU DO NOT UNDERSTAND ANY PART OF THIS AGREEMENT OR IF YOU ARE NOT SURE IF THIS AGREEMENT SUITS YOUR SPECIFIC NEED OR PURPOSE YOU ARE ADVISED TO SEEK INDEPENDENT LEGAL ADVICE. Page 4 Initial Buyer ____________ Initial Seller____________
earned upon opening of escrow and are non-refundable. In the event of cancellation, Buyer further acknowledges that all search costs and any cancellation fees shall be deducted from the deposit prior to any funds being released or returned, and transfer process will then be cancelled. All equipment will be brought to good working condition at the close but with no Warranties implied. Searches shall be conducted to determine if there are any liens or other recorded items, which might affect the title to the property to be conveyed as well as other state statutes dealing with State agencies. In order to accomplish this, the parties agree to retain the services of Accelerated Escrow Company, Inc. who shall conduct the necessary searches and prepare the necessary documents for closing. The parties acknowledge that the Nevada Bulk Sale statute has been repealed effective October 1, 1991. Seller shall execute an Affidavit of Creditors at or prior to closing, agreed upon between Buyer and Seller. At closing, Seller shall sign an Indemnification Agreement, to indemnify and save Buyer harmless as to any creditor not upon the Affidavit of Creditors submitted by Seller. All amounts due all creditors as shown on the Affidavit of Creditors or as disclosed by the public records shall be paid at time of closing, except for those creditors whose obligations shall be assumed, if any. Escrow Agent is NOT AN ATTORNEY and CANNOT ADVISE the parties as to any legal remedy or business, tax consequences of any provision or instrument set forth or prepared in connection with this transaction. The undersigned parties , their orders, assigns, heirs, and successors jointly and severally hereby fully indemnify and agree to hold Transfer Agent, Accelerated Escrow Company, Inc., their Agents, Officers and Employees harmless from any and all responsibility and liability.
18. DISPUTE REGARDING DEPOSITED FUNDS: Buyer and Seller understand that in the event that a dispute should arise regarding any funds on deposit with Transfer Agent/Escrow Company, such funds will remain on deposit until such dispute is settled between parties. Should such parties not agree to cancellation of escrow and disbursements of funds on deposit, in a reasonable period of time, and such reasonable period of time shall be at the sole discretion of Accelerated Escrow, then Accelerated Escrow Company, Inc. is hereby granted authority by all parties to petition the court for a decision, or to place funds on deposit with the court, until such decision or order is granted. Further, Buyer and Seller agree that any costs associated with such petition to the court, as well as any attorney fees, shall be first withdrawn from any funds on deposit, and paid to Accelerated Escrow Company, Inc. as Transfer Agent. Buyer and Seller shall be responsible to any prevailing party all costs associated with any petition to the court or reimbursement of funds. Buyer and Seller understand and agree that should this escrow be canceled, for any reason, a cancellation fee shall be imposed and charged against any funds on deposit.
19. ARBITRATION: In the event of any dispute amongst or between the Buyer(s) and Seller(s) or Escrow Agent regarding this transaction the parties agree to submit the matter to arbitration nominating the American Arbitration Association to arbitrate the dispute. Arbitration fees will be split equally between the parties. Any party may be represented by legal counsel. The decision of the Arbitrator will be final, binding and conclusive. The right of appeal is hereby waived. 20. REAL PROPERTY: Is Real Property involved in this transaction? ____ Yes ____ No This transaction is subject to the successful completion of the transfer of the Real Property located at and more commonly known as ___________________________________________________________ in the City of ____________________________ APN#: _____________________________. A Title Company as may be selected by Buyer shall be engaged to process all matters concerning the Real Property, and handle all documentation as are customary in a commercial land transaction and as agreed between the parties. Buyer and Seller shall be responsible for all fees due Title Company and for any transfer costs, taxes, title policies and fees as are customary for a commercial land transaction. Buyer and Seller hereby authorize Escrow Agent and/or Title Company to facilitate all matters concerning payoff of loans, prorate of any property taxes, sewer/sanitation fees, recording of deeds, and other such matters required to complete the transaction provided for herein. Other Contingencies Regarding Real Property: _______________________________________________________
THIS IS A LEGAL DOCUMENT AND A BINDING AGREEMENT. IF YOU DO NOT UNDERSTAND ANY PART OF THIS AGREEMENT OR IF YOU ARE NOT SURE IF THIS AGREEMENT SUITS YOUR SPECIFIC NEED OR PURPOSE YOU ARE ADVISED TO SEEK INDEPENDENT LEGAL ADVICE. Page 5 Initial Buyer ____________ Initial Seller____________
_____________________________________________________________________________________________ 21. DUE DILIGENCE: Is this transaction subject to review of books & records? ____ Yes ____ No If marked yes, this Agreement is subject to and contingent upon Buyer’s review and approval of the books records, and equipment of the Business within ____ days beginning ______________ ____ 20____. Buyer shall deposit with Escrow Agent a written notice of his approval or disapproval of the books and records during the aforementioned review period. However, should Buyer fail to notify Escrow Agent if it’s disapproval of the books, records and equipment within such Due Diligence period, as provided within this paragraph, silence shall be deemed as Buyer’s approval of said “due diligence” for the Business provided herein. 22. ADDITIONAL CONTINGENCIES: This transaction remains subject to those outstanding contingencies as defined below: (If none, please write “NONE”.) (a) ____________________________________________________________________ (b) ____________________________________________________________________ (c) ____________________________________________________________________ (d) ____________________________________________________________________
THIS DOCUMENT CONSTITUTES A LEGALLY BINDING CONTRACT AND IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS DOCUMENT AND AGREEMENT, YOU ARE ADVISED TO SEEK COMPETENT LEGAL AND FINANCIAL ADVICE BEFORE THE SIGNING OF THIS DOCUMENT. ANY CHANGES, CORRECTIONS OR ADDITIONS SHALL BE MADE A PART OF THIS AGREEMENT AS AN ADDENDUM PROPERLY SIGNED AND DATED BY ALL PARTIES. THIS OUTLINE/AGREEMENT MAY BE EXECUTED IN SEVERAL COUNTERPARTS, EACH OF WHICH UPON EXECUTION SHALL BE DEEMED TO BE AN ORIGINAL, BUT SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE AND BE ONE AND THE SAME INSTRUMENT. ANY COPIES TRANSMITTED BY FACSIMILE SHALL BE DEEMED AN ORIGINAL AND A FACSIMILE SIGNATURE SHALL BE CONSIDERED THE SAME AS AN ORIGINAL SIGNATURE.
The undersigned and each of them represent and warrant they have full authority to execute this document as owner and/or on behalf of any partnership or entity and such partnership or entity shall be bound to these terms and conditions.
BUYER:
____________________________________ ________________________________ Signature Name (Please Print) ____________________________________ ________________________________ Signature Name (Please Print) _____/_____/_____ Date _____/_____/_____ Date
SELLER:
____________________________________ ________________________________ Signature Name (Please Print) ____________________________________ ________________________________ Signature Name (Please Print) _____/_____/_____ Date _____/_____/_____ Date
THIS IS A LEGAL DOCUMENT AND A BINDING AGREEMENT. IF YOU DO NOT UNDERSTAND ANY PART OF THIS AGREEMENT OR IF YOU ARE NOT SURE IF THIS AGREEMENT SUITS YOUR SPECIFIC NEED OR PURPOSE YOU ARE ADVISED TO SEEK INDEPENDENT LEGAL ADVICE. Page 6 Initial Buyer ____________ Initial Seller____________
EXHIBIT A List of Fixtures, Furniture and Equipment 1. ___________________________________________________________________________________ 2. ___________________________________________________________________________________ 3. ___________________________________________________________________________________ 4. ___________________________________________________________________________________ 5. ___________________________________________________________________________________ 6. ___________________________________________________________________________________ 7. ___________________________________________________________________________________ 8. ___________________________________________________________________________________ 9. ___________________________________________________________________________________ 10. __________________________________________________________________________________ 11. __________________________________________________________________________________ 12. __________________________________________________________________________________ 13. __________________________________________________________________________________ 14. __________________________________________________________________________________ 15. __________________________________________________________________________________ 16. __________________________________________________________________________________ 17. __________________________________________________________________________________ 18. __________________________________________________________________________________ 19. __________________________________________________________________________________ 20. __________________________________________________________________________________ 21. __________________________________________________________________________________ 22. __________________________________________________________________________________ 23, __________________________________________________________________________________ 24. __________________________________________________________________________________ 25. __________________________________________________________________________________ 26. __________________________________________________________________________________ 27. __________________________________________________________________________________ 28. __________________________________________________________________________________ 29. __________________________________________________________________________________ 30. __________________________________________________________________________________ (List any additional Fixtures, Furniture and Equipment on additional pages and attach.)
THIS IS A LEGAL DOCUMENT AND A BINDING AGREEMENT. IF YOU DO NOT UNDERSTAND ANY PART OF THIS AGREEMENT OR IF YOU ARE NOT SURE IF THIS AGREEMENT SUITS YOUR SPECIFIC NEED OR PURPOSE YOU ARE ADVISED TO SEEK INDEPENDENT LEGAL ADVICE. Page 7 Initial Buyer ____________ Initial Seller____________