Purchase and sale of assets. This agreement is made _________[date] between _________, a _________ corporation having its principal office at _________(buyer); and _________, a _________ corporation having its principal office at _________(seller) and _________ and _________, h— spouse, and _________ and _________, h— spouse, being all of the stockholders of seller (stockholders). The parties agree as follows: 1. Purchase and Sale: Buyer purchases, and seller sells and transfers to buyer, all of seller's assets, real, personal and mixed, tangible and intangible, and regardless of where located, for the price and upon the terms set forth in this agreement. Such assets include, without limitation, those shown on seller's _________[date] balance sheet, subject to changes occurring in the normal and ordinary course of business between that date and this date. 2. Representations and Warranties: Seller and stockholders represent and warrant that: (a) Seller has good and merchantable title, free and clear of all third-party claims, to all of its assets being sold; (b) Seller's _________[date] balance sheet, a copy of which has been provided to buyer, is true and correct and, since that date up to and including this date, seller has continued to operate at a profit and has not incurred any extraordinary liabilities or liabilities of a kind or character other than those arising in the normal and ordinary course of business; (c) The consummation of this agreement does not violate any agreement or restriction to which seller is subject; (d) The inventories being sold are good and merchantable and suitable for sale in the ordinary course of business, excepting only for items which are valued at salvage value as provided for in this agreement; (e) All other property, machinery and equipment being sold is in good operating condition and repair, subject only to normal wear and tear; and (f) Seller has taken all steps and obtained all authorizations necessary to consummate this transaction. 3. Covenants Not To Compete: In consideration of the foregoing and of the payments provided for in this agreement, stockholders further covenant that, for a period of one year from this date, neither of them shall, directly or indirectly, within a radius of 100 miles of _________(seller's place of business), individually or in association with or as agent or employee of or as an investor in any partnership or corporation, engage in the business of selling industrial fasteners or other products of substantially the same kind or character and to the same class of trade as sold by seller at any time during the three-month period preceding this date. In particular, but by way of limiting and defining the foregoing, neither of the stockholders shall solicit any of seller's customers for the purchase of such products within this area during the period.
4. Price: In consideration of the foregoing purchase and sale, buyer will pay the following sums to seller: (a) An amount equal to the book value of inventory being sold, valued at the lower of seller's cost or current market as of this date, provided that items which are not readily salable as first line products shall be valued at their salvage value; (b) An amount equal to the cash transferred by this agreement; (c) An amount equal to the net book value of the accounts receivable sold under this agreement; plus (d) An amount equal to seller's book value of property, equipment and other assets sold under this agreement, after allowance for depreciation up through this date; less, however, the amount as of this date of seller's business debts and liabilities other than loans to shareholders, which business debts buyer shall pay directly to seller's creditors for and on behalf of seller. If the amount of seller's business debts exceeds the total of items (a) through (d) of this paragraph 4, then this entire transaction shall be rescinded and buyer will reimburse seller for any items of the kind described in items (a) through (d) above which are not returned in substantially their present condition, quantity or amount. 5. Terms of Payment: The purchase price shall be determined by seller's accountants as soon as practicable after this date and those amounts shall then be certified by the shareholders each signing this agreement. Prior to certification, however, namely, at the time this agreement is consummated, but in no event subsequent to _________[date], buyer agrees to pay $_____ to each stockholder. Subsequent to the foregoing payment and after certification, buyer agrees to make the additional payment of any "balance due," equally to stockholders. In no event however, shall the "balance due" be paid later than six months and one week after this date. As used here, the term "balance due" is defined as the difference between the certified amount and the $_____. At the time of certification buyer agrees to pay the business debts. In addition, and not by way of limitation of the foregoing, buyer, as additional consideration for the covenants not to compete provided for in section 3 above, agrees to pay stockholders the sums of $_____ each, to be paid in equal monthly installments of $_____ apiece for a period of 10 months commencing _________[date]. 6. Indemnification: Seller and stockholders, and each of them jointly and severally, agree to indemnify and hold harmless buyer of, against any claim against or other liability of seller or any stockholder which may be asserted against buyer, excepting only to the extent of the business debts that buyer has expressly agreed to pay under section 5. Seller and stockholders further guarantee collection of all accounts receivable transferred under this agreement and waive notice of any extensions of time granted on any of such accounts. 7. Lease: As further consideration for this agreement, buyer agrees to assume seller's existing lease, a copy of which has been furnished to buyer.
8. Notices: Any notices required or permitted to be given shall be deemed sufficiently given if sent by certified or registered mail, postage prepaid, addressed in the case of notice to seller, in care of: _________[name and address of individual or individuals authorized to receive notices for seller] and in the case of buyer, to: _________[name and address of individual or individuals authorized to receive notices for buyer]. In witness, the parties have executed this agreement, on the date stated above. _________[Buyer's name] By _________ _________[Seller's name] By _________