This asset purchase agreement is made between a sole proprietorship business owner
and a purchaser. The agreement sets forth the terms and conditions of the sale of the
business including the purchase price, the assumption of debts and obligations, and the
provision that an audit will take place. This particular agreement provides that the
purchase price will be adjusted based on the results of the audit. This document
contains numerous other standard clauses commonly found in asset purchase
agreements and can be customized to address the specific needs of the contracting
Agreement for Sale of Business by Sole Proprietorship
with Purchase Price Contingent on Audit
This Asset-Purchase Agreement is made this the (date), between (Name of Seller), of
(street address, city, state, zip code), hereinafter called “Seller”, and (Name of Buyer), of (street
address, city, state, zip code), hereinafter called “Buyer”.
Whereas, Seller now owns and conducts a (type of business) Business under the name of
(Name of Business) at (street address, city, state, zip code), hereinafter called the “Business”;
Whereas, Seller desires to sell and Buyer desires to buy the Business for the price and on
the terms and conditions set forth below;
Now, therefore, for and in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Sale of Assets
Subject to the terms, conditions and agreements provided elsewhere in this
Agreement, Buyer agrees to purchase and Seller agrees to sell, as of the closing date, all of the
assets held by Seller together with the Business of Seller as a going concern, including, but not
limited to, its goodwill, franchises, contract rights, trademarks and trade names, and cash, except
any funds withheld from employees of Seller for taxes as of the closing date.
2. Purchase Price
The purchase price shall be $_____________, together with the assumption by Buyer of
certain obligations and liabilities of Seller as provided in Section 4 of this Agreement and
subject to the adjustments set forth in Section 5 of this Agreement.
3. Audit; Financial Statements
(Name of accounting firm), certified public accountants, shall, at the expense of Buyer,
make an audit of the books and records of Seller as of the close of business on (date), and shall
furnish the parties, when the audit is completed, with a certified balance sheet of Seller as of the
close of business on that date (the Balance Sheet) and a statement of income and earnings
retained in the business of Seller for the period ending on that date (the Income Statement).
4. Assumption of Debts and Obligations
Buyer shall assume (a) all of the liabilities shown as liabilities on the balance sheet to be
prepared as provided in this Agreement, except liabilities for taxes (other than taxes the value of
which have been included in inventory and are shown as accounts payable or accrued taxes on
the balance sheet), and withheld funds of employees; (b) liabilities asserted by customers relating
to goods shipped on or after (date); and (c) all contracts, commitments, and obligations incurred
in the ordinary course of business that are specifically referred to or are described in and meet
the requirements and conditions as set forth in Section 8 of this Agreement.
5. Price Adjustment
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The purchase price shall be adjusted if the net assets (which term shall mean the excess of
the assets to be transferred to the Buyer less the liabilities to be assumed by the Buyer valued at
their book value as shown on the Balance Sheet) are not equal to $___________ by decreasing
the purchase price $___________ for each dollar that $___________ exceeds the net assets, or
by increasing the purchase price $___________ for each dollar by which the net assets exceed
$___________. However, in the computation of the net assets for the purpose of the adjustment
contemplated by this Section, the amount of allowance for bad debts provided for in the Balance
Sheet shall not be subtracted from gross assets.
6. Seller’s Warranties
Seller represents and warrants that: (a) Seller has delivered to Buyer an accurate list and
summary description of all patents, patent applications, trademarks, trade names, and copyrights
presently owned or held by Seller as set forth in Exhibit A, which is attached and incorporated
by this reference; and (b) Seller has no presently existing contracts or commitments, including
leases of real or personal property extending beyond (date of closing), except as set forth in
Exhibit B, which is attached to and incorporated in this Agreement.
7. Operation of Business for Account of Buyer
Beginning on (date), and until the closing date, Seller shall use the assets to be purchased
to continue to operate the Business for the account of Buyer. In that connection Seller shall
establish and maintain separate books of account as soon as practicable and convenient, which
shall be transferred to Buyer at the closing. All profits and losses during this period shall be for
the account of Buyer. All assets received or acquired by Seller during that period shall be
transferred to Buyer and/or accounted for at the time of closing. All liabilities incurred by Seller
during that period shall be assumed by Buyer at the closing, provided that the Business of Seller
during the period has been conducted in the regular and ordinary course and not in violation of
any provision of this Agreement.
8. Ordinary Course of Business
A. Until the closing, the Business of Seller shall be conducted only in the ordinary
course. Except with the consent of Buyer, no contract or commitment, including leases of
real or personal property, shall be entered into by or on behalf of Seller involving an
amount in excess of $___________. No assets, the cost of which is in excess of
$____________, shall be purchased by Seller.
B. Seller will use its best efforts to preserve its business organization intact, keep
available to the company the services of its present officers and employees, and preserve
for the company the goodwill of Seller's suppliers, customers, and others having business
relations with it.
C. Except with the consent of Buyer, Seller shall not extend credit to any one
customer in excess of $_________________. Seller will use its best efforts to maintain
existing licenses and franchises in full force and effect. All reasonable steps shall be
taken to renew or extend any such licenses and franchises expiring in accordance with its
or their terms.
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The invalidity of any portion of this Agreement will not and shall not be deemed to affect
the validity of any other provision. If any provision of this Agreement is held to be invalid, the
parties agree that the remaining provisions shall be deemed to be in full force and effect as if
they had been executed by both parties subsequent to the expungement of the invalid provision.
10. No Waiver
The failure of either party to this Agreement to insist upon the performance of any of the
terms and conditions of this Agreement, or the waiver of any breach of any of the terms and
conditions of this Agreement, shall not be construed as subsequently waiving any such terms and
conditions, but the same shall continue and remain in full force and effect as if no such
forbearance or waiver had occurred.
11. Governing Law
This Agreement shall be governed by, construed, and enforced in accordance with the
laws of the State of __________.
Unless provided herein to the contrary, any notice provided for or concerning this
Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or
registered mail if sent to the respective address of each party as set forth at the beginning of this
13. Mandatory Arbitration
Any dispute under this Agreement shall be required to be resolved by binding arbitration
of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one
arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall
arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration
Association then in force and effect.
14. Entire Agreement
This Agreement shall constitute the entire agreement between the parties and any prior
understanding or representation of any kind preceding the date of this Agreement shall not be
binding upon either party except to the extent incorporated in this Agreement.
15. Modification of Agreement
Any modification of this Agreement or additional obligation assumed by either party in
connection with this Agreement shall be binding only if placed in writing and signed by each
party or an authorized representative of each party.
16. Assignment of Rights
The rights of each party under this Agreement are personal to that party and may not be
assigned or transferred to any other person, firm, corporation, or other entity without the prior,
express, and written consent of the other party.
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This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute but one and the same
18. Compliance with Laws
In performing under this Agreement, all applicable governmental laws, regulations,
orders, and other rules of duly-constituted authority will be followed and complied with in all
respects by both parties.
WITNESS our signatures as of the day and date first above stated.
(Printed Name of Seller) (Printed Name of Buyer)
(Signature of Seller) (Signature of Buyer)
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