Business Transfer Agreement Template

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Business Transfer Agreement

 

This Business Transfer Agreement (the "Agreement") is made and entered into as of the date of ______________________________ (the "Effective Date") by and between:

 

Party A: ______________________________ with a mailing address of ____________________________________________________________ (the "Seller"); and

 

Party B: ______________________________ with a mailing address of ____________________________________________________________ (the "Purchaser").

 

WHEREAS, the Seller is the legal and beneficial owner of the business known as ____________________________________________________________ (the "Business")

 

WHEREAS, the Seller desires to sell, and the Purchaser desires to purchase, the Business and all of the assets used in connection therewith (the "Business Assets"), on the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

  1. Sale and Purchase of Business Assets. Subject to the terms and conditions of this Agreement, at the Closing (as defined below) the Seller shall sell, transfer, convey, deliver and assign to the Purchaser, and the Purchaser shall purchase and acquire from the Seller, all right, title and interest of the Seller in and to the Business Assets free and clear of all charges, liabilities and encumbrances of any kind whatsoever.

 

  1. Closing. The closing of the purchase and sale of the Business Assets (the "Closing") shall take place at the offices of______________________________ on ______________________________ or at such other time and place as the parties may mutually agree in writing. At the Closing, the Seller shall deliver to the Purchaser the following:

 

(a) Bill of Sale. A bill of sale, in form and substance reasonably satisfactory to the Purchaser, conveying to the Purchaser good and marketable title to the Business Assets, free and clear of all charges, liabilities and encumbrances of any kind whatsoever.

 

(b) Assignment of Contracts. Assignments of all contracts, leases and other agreements to which the Seller is a party and to which the Business Assets relate, in form and substance reasonably satisfactory to the Purchaser and its counsel.

 

(c) Employee Lists. A list of all current employees of the Business, including the names, addresses, telephone numbers and positions of such employees, and copies of all employment agreements, if any, between the Seller and such employees.

 

(d) Tax Returns. Copies of the Seller's federal, state and local tax returns for the three (3) most recent tax years.

 

(e) Financial Statements. Copies of the Seller's balance sheets as of ______________________________ and ______________________________, and the related statements of income and cash flows for the years ended ______________________________ and ______________________________, each in form and substance reasonably satisfactory to the Purchaser and its counsel.

 

(f) Other Documents. Such other documents and instruments as the Purchaser may reasonably request to effectuate the transactions contemplated by this Agreement.

 

  1. Purchase Price. The total purchase price for the Business Assets shall be ______________________________ (______________________________) (the "Purchase Price"). The Purchaser shall pay the Purchase Price to the Seller by ____________________________________________________________.

 

  1. Representations and Warranties of the Seller. The Seller hereby represents and warrants to the Purchaser as follows:

 

(a) Organization and Qualification. The Seller is a ______________________________ duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with power and authority to own its properties and assets and to conduct its business as currently conducted. The Seller has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly and validly executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms.

 

(b) Authorization. The execution, delivery and performance by the Seller of this Agreement, and the consummation by the Seller of the transactions contemplated hereby, have been duly and validly authorized by all necessary action on the part of the Seller, and no further action is required by the Seller in connection therewith.

 

(c) Title to Business Assets. The Seller is the legal and beneficial owner of the Business Assets, and has good and marketable title to the Business Assets, free and clear of all charges, liabilities and encumbrances of any kind whatsoever.

 

(d) No Violation or Conflict. Neither the execution and delivery of this Agreement by the Seller, nor the consummation by the Seller of the transactions contemplated hereby, will (i) violate, conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, (A) the Seller's certificate or articles of incorporation or bylaws, or any agreement or instrument to which the Seller is a party or by which the Seller or its properties or assets are bound, (B) any applicable laws, rules or regulations, or (C) any order, writ, injunction or decree of any court, administrative agency or governmental body having jurisdiction over the Seller or its properties or assets, or (ii) result in the creation or imposition of any lien, charge or encumbrance upon any of the Business Assets.

 

(e) Consents. No consent, approval, authorization or order of, or filing with, any court or governmental body is required in connection with the execution and delivery of this Agreement by the Seller or the consummation by the Seller of the transactions contemplated hereby.

 

(f) brokers. The Seller has not retained any broker, finder or investment banker in connection with the transactions contemplated by this Agreement, and no person is entitled to any broker's, finder's or investment banker's fee or commission in connection with the consummation of such transactions.

 

(g) Absence of Litigation. There is no action, suit, proceeding, investigation or claim pending or, to the knowledge of the Seller, threatened against the Seller or any of the Business Assets, before any court, tribunal, governmental body or administrative agency that might reasonably be expected to result in any material adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Seller or the Business Assets.

 

(h) Environmental Matters. The Seller is not in violation of any environmental law or regulation and is not subject to any pending or, to the knowledge of the Seller, threatened action, suit, proceeding, investigation or claim arising out of any such violation. The Seller has not received any notice of any pending or, to the knowledge of the Seller, threatened action, suit, proceeding, investigation or claim by any governmental body relating to any environmental law or regulation. The Seller is not liable for any environmental cleanup, removal or abatement of any hazardous or toxic substance on, under or about the Business Assets.

 

(i) Employee Matters. There is no labor dispute pending or, to the knowledge of the Seller, threatened against the Seller that might reasonably be expected to have a material adverse effect on the Business. There are no claims, suits or proceedings pending or, to the knowledge of the Seller, threatened against the Seller based upon alleged violations of any federal, state or local law relating to discrimination or other employment matters that might reasonably be expected to have a material adverse effect on the Business.

 

(j) Compliance with Laws. The Seller is in compliance with all applicable laws, rules and regulations.

 

(k) No Undisclosed Liabilities. The Seller has no liabilities or obligations of any nature whatsoever, contingent or otherwise (including, without limitation, any environmental, labor, tax or pension obligations), except (i) those reflected or reserved against on the balance sheet of the Seller dated ______________________________, and (ii) those incurred in the ordinary course of business since ______________________________ consistent with past practice.

 

(l) Full Disclosure. The Seller has omitted no fact or set forth no untrue statement of material fact or has engaged in no course of action that would operate as a fraud or deceit upon the Purchaser.

 

(m) Brokers. The Seller has not retained any broker, finder or investment banker in connection with the transactions contemplated by this Agreement, and no person is entitled to any broker's, finder's or investment banker's fee or commission in connection with the consummation of such transactions.

 

  1. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Seller as follows:

 

(a) Organization and Qualification. The Purchaser is a ______________________________ duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with power and authority to own its properties and assets and to conduct its business as currently conducted. The Purchaser has

 

(b) Buyer has the requisite power and authority to enter into and perform under this Agreement.

(c) Buyer is not required to acquire any consents, approvals or authorizations by any governmental authority to execute, deliver and perform its obligations under this Agreement.

(d) There are no proceedings, judgments, or liens are now pending or threatened against Buyer that may affect or delay its purchase of the Business.

(e) The execution and delivery of this Agreement by Buyer will not conflict with or result in a violation of or default under any material agreements to which Buyer is a party.

(f) Buyer understands that Seller is making no other representations or warranties other than as provided in this Agreement.

 

  1. Covenants. Between the signing of this Agreement and the date of the Closing:

(a) Buyer shall have the right at any reasonable time prior to the Closing, at Buyer's expense, to inspect or have inspected by a certified public accountant or other financial expert, the books and records of the Business.

(b) Seller will operate the Business in the usual and ordinary manner and will not enter into any contract except as may be required in the regular course of business.

(c) Seller shall not remove or cause to be removed any inventory of the Business except upon sale in the ordinary course of business or in the event of return to a supplier for credit.

(d) Seller will pay all taxes, federal, state and local.

(e) Seller will not do anything to cause a violation or breach of any contracts relating to the Business.

(f) Seller will pay and will not increase the salary or commissions of any employee, agent, or representative of the business.

 

  1. Covenant Not to Compete.

 

(a) Seller shall not engage in a business similar to that involved in this transaction in any capacity, directly or indirectly, either as a principal, agent, manager, owner, partner, employee, officer, director, or stockholder of any company or corporation, or engage in or become interested financially or otherwise in any business, trade, or occupation similar to or in competition with the business sold hereunder, within a radius of ____________ miles from the City of for a period of ___________ years from the date of closing or so long as Buyer or his successors carry on a like business, whichever first occurs. The parties agree that this provision is an essential part of this Agreement and is material to the sale and purchase of Seller's business. For purposes of this Agreement, "business similar to that involved in this transaction" includes within its scope any of the following: ________________.

 

(b) The parties agree that Buyer shall have the right to assign this restrictive covenant in the event that Buyer sells the business, and Seller agrees to remain obligated by the covenant to any subsequent purchases from Buyer.

 

(c) Seller shall pay the sum of to Buyer for each week in which or during which Seller may breach or violate the restrictive covenant not to compete contained herein. Buyer's receipt of such sums each week shall not be deemed a waiver or release of Buyer's rights to prevent further violations by seeking equitable relief in a court of law.

 

  1. Notices. All notices given under this Agreement must be in writing. A notice is effective upon receipt and shall be sent via one of the following methods: delivery in person, overnight courier service, certified or registered mail, postage prepaid, return receipt requested, addressed to the party to be notified at the address designated by either party upon reasonable notice to the other party.

 

  1. Amendment. This Agreement may be amended or modified only by a written agreement signed by both of the parties.

 

  1. Survival of Terms. All covenants, warranties, and representations herein shall survive this Agreement and the closing date.

 

  1. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties and their successors and assigns. Neither party may assign its rights or delegate its duties under this Agreement without the other party's prior written consent.

 

  1. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of _____________ without regard to the principles of conflict of laws.

 

  1. Disputes. Any dispute arising from this Agreement shall be resolved through mediation. If the dispute cannot be resolved through mediation, then the dispute will be resolved through binding arbitration conducted in accordance with the rules of the American Arbitration Association.

 

  1. No Waiver. No Party shall be deemed to have waived any provision of this Agreement or the exercise of any rights held under this Agreement unless such waiver is made expressly and in writing.

 

  1. Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in whole or in part, the remaining provisions shall not be affected and shall continue to be valid, legal and enforceable as though the invalid, illegal or unenforceable part had not been included in this Agreement.

 

  1. Entire Agreement. This Agreement and the attachments and any associated documents represent the entire agreement between the parties, and there are no representations, warranties, covenants or conditions, except those specified herein or in accompanying instruments or documents.

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first written above.

 

Purchaser:

Signature: ________________

Full Name: ________________

 

Seller:

Signature: ________________

Full Name: ________________