Sample Contract of Sale of Business

8/10/2019 Sample Contract of Sale of Business

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Ass"stance 2er"od

(insert number of daysbefore and after*ompletion)

$$$$$$$$$$$$$$$$$$$$$$$$$$ days before *ompletion and

$$$$$$$$$$$$$$$$$$$$$$$$$$ days after *ompletion$

see dictionary and clause .

Restra"nt Area

(insert the area where the"endor and *ovenantorsmust not compete etc$, with

the Business during theRestraint Period)

$$$$$$$$$$$$$$$$$$$$$$$$$$ kilometre radius from the Premises see dictionary and clause#'$

Restra"nt 2er"od

(insert the period duringwhich the "endor and*ovenantors must notcompete etc$ with theBusiness within theRestraint +rea)

$$$$$$$$$$$$$$$$$$$$$$$$$$ months after the *ompletion /ate see dictionary and clause#'$

Cond"t"ons

(for e&ample, sub0ect tofinance)

see dictionary and clauses #

and

Co!)et"on .ate see dictionary and clause'$

Locat"on for Co!)et"on see dictionary and clause'$


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itle:

SI,NE.by the *ovenantors(if more than one, all *ovenantors should sign)


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17 Coo)"ng Off

$ 6ub0ect to clause $#, the Purchaser may terminate this contract by giving written notice to the "endor (or the "endor-sagent) within Business /ays after the day the Purchaser signs the contract$

$# he Purchaser is not entitled to give notice under clause $ where the Purchaser:$#$ received independent advice from a solicitor before signing the contract! or$#$# previously signed a similar contract for the purchase of the Business$

$ 7f the Purchaser terminates this contract under clause $, any payment the Purchaser made to the "endor or6takeholder must be refunded$

*7 Sa)e and 2(rc%ase7f all *onditions are satisfied, at *ompletion:#$ the "endor (as legal and beneficial owner) sells! and#$# the Purchaser buys, free from all 3ncumbrances (other than those 3ncumbrances listed in the Particulars),the Business and the +ssets$

37 Cond"t"ons

$ he rights and obligations of the parties in this contract have no force or effect until all *onditions are satisfied$

$# 3ach party must:$#$ immediately notify the other party of the satisfaction of its *onditions! and$#$# provide evidence to establish, to the reasonable satisfaction of the other party, that its *onditions have been

satisfied$

$ 7f the *onditions are not satisfied or waived by the Purchaser on or before:

$$ 5$'' p$m$, two Business /ays prior to the *ompletion /ate! or$$# such other date and time agreed in writing by the parties,this contract terminates immediately, e&cept with regard to:$$ the /eposit! and$$ the *onfidential 7nformation$

7 2(rc%ase 2r"ce

$ he Purchaser must pay:$$ on the date specified in the Particulars8the /eposit to the 6takeholder! and$$# on *ompletion8the balance of the Purchase Price as directed by the "endor$

$# 9ithin two Business /ays of receipt, the 6takeholder must invest the /eposit in an interest bearing account with itsBank$

$ he "endor must direct the 6takeholder to cause the /eposit and interest earned on the /eposit to be:$$ released to the "endor upon *ompletion! or$$# released and forfeited to the "endor if this contract is lawfully terminated due to the breach of the

Purchaser, without pre0udice to any other right that the "endor may have arising from the breach! or$$ released to the Purchaser if the contract is lawfully terminated other than as a result of a default on the part

of the Purchaser$

$ nless otherwise agreed by the "endor, the Purchaser must pay the Purchase Price by bank che;ue$

$5 he Purchase Price must be apportioned between the +ssets on the basis set out in the Particulars$

7 T"t)e and R"s4

5$ he Purchaser is only entitled to the income and profits of the Business accrued after *ompletion$

5$# Possession of the +ssets sold under this contract and risk related to the +ssets must be given and taken at *ompletion$

5$ ntil *ompletion, the "endor must maintain current insurance policies in respect of the +ssets covering such risks andfor such amounts as would be maintained in accordance with prudent business practice and, if re;uired by thePurchaser, have noted on all relevant insurance policies the interest of the Purchaser in the +ssets$

5$ 7f any of the +ssets are damaged, destroyed or otherwise affected before *ompletion to a degree which, in thereasonable opinion of the Purchaser, materially and adversely affects the conduct or profitability of the Business, thePurchaser may immediately terminate this contract by notice in writing to the "endor$

5$5 7f the Purchaser does not elect to terminate this contract and the "endor is not ade;uately insured under the contractsof insurance referred to in clause 5$, an appropriate ad0ustment must be made to the Purchase Price as agreed

between the "endor and the Purchaser or, failing agreement, as determined by an independent third party acting as ane&pert$ 7f the parties cannot agree on appointment of the third party or their remuneration or both, then either partymay ask the President (or nominee) of the


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;7 Sa)e as ,o"ng Concern

%$ he Purchaser warrants that it is registered for 6 purposes and will remain registered prior to and during*ompletion$

%$# he parties acknowledge and agree that the sale of the +ssets under this contract, together with the supply of anythingelse by the "endor to the Purchaser under this contract, constitutes a 6=free supply of a going concern$

%$ 7f at any time the supply or supplies under this contract do not constitute a supply of a going concern, the Purchasermust pay to the supplier an amount e;ual to the 6 payable on the supply together with any general interest chargeor penalties imposed by the *ommissioner of a&ation$

87 Ass"stancehe "endor must do whatever is reasonably necessary to introduce the Purchaser to customers and suppliers connected withthe Business and give the Purchaser reasonable assistance and advice about running the Business during the +ssistance Period$

97 Access to Records and Co!"es

1$ he "endor must facilitate and ensure that the Purchaser, its agents, representatives, accountants and solicitors areauthorised and provided with full and free access to the Premises and the Records at all reasonable times before the*ompletion /ate$

1$# 7n e&ercise of the rights granted under clause 1$, the Purchaser may make copies of material e&amined, consult withthe "endor-s auditor or accountant and, sub0ect to the prior consent of the "endor (which may not be unreasonablywithheld), consult with 3mployees$

1$ ntil completion, or in the event that the sale and purchase of the Business and +ssets is not completed under thiscontract, the Purchaser, its agents, representatives, accountants and solicitors must keep strictly confidential all

information supplied or obtained under clauses 1$ and 1$#$

107 Co!)et"on

'$ *ompletion must take place on the *ompletion /ate at the location specified in the Particulars or such other place asthe parties agree$

'$# +t *ompletion, the "endor must, at its own cost (if any):'$#$ deliver to the Purchaser releases of all 3ncumbrances affecting the +ssets (other than those 3ncumbrances

being transferred by this contract and specified in the Particulars) from all persons holding those interests!and

'$#$# deliver to the Purchaser each item of the Plant and 3;uipment, >otor "ehicles, ?ired 3;uipment and


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2$ 7n respect of each Business *ontract and +rrangement assigned under this contract:2$$ the "endor is responsible for complying with all of the obligations under it for the period up to and

including the *ompletion /ate! and2$$# the Purchaser is responsible for complying with all of the obligations under it for the period after the

*ompletion /ate! and2$$ each party accordingly indemnifies the other against all *laims or


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#'$$# for the Restraint Period:#'$$#$ solicit, canvass, induce, or encourage any person or entity who is an employee, contractor or

agent of the Purchaser in the conduct of the Business to leave the employment or agency of thePurchaser! or

#'$$#$# solicit, canvas, approach or accept any approach from any person or entity who was during theyear prior to *ompletion a customer of the Business, with a view to establishing a relationshipwith (including obtaining the custom of) that person or entity for a business which does or maycompete with the Business or a material part of the Business,

on its or their own account or for or on behalf of any person or entity$

#'$# 7n consideration of the Purchaser, at the re;uest of the "endor and the *ovenantors, agreeing to enter into this contract

and solely for the protection of the oodwill, the "endor and the *ovenantors 0ointly and severally undertake to thePurchaser that the "endor and the *ovenantors will not at any time after *ompletion use a symbol, logo, domainname, trademark or business name substantially identical or deceptively similar to the business names, trademarks orthe domain names of the Business$

#'$ he "endor and the *ovenantors acknowledge that:#'$$ the Business may be adversely affected if, after *ompletion, the "endor and the *ovenantors engage in any

activity referred to in clauses #'$ and #'$#! and#'$$# the prohibitions and restrictions contained in clauses #'$ and #'$# are reasonable and necessary to protect

the oodwill! and#'$$ they have received valuable consideration for agreeing to the covenants in clauses #'$ and #'$#! and#'$$ the only effective, fair and reasonable manner in which the interests of the Purchaser can be protected is by

the restraints and covenants imposed by clauses #'$ and #'$#$

#'$ he provisions of this clause #' must be interpreted in accordance with clause $$

*17 +arrant"es

#$ he "endor and the *ovenantors warrant and represent to the Purchaser as at the date of this contract and as at the*ompletion /ate the matters set out in this clause$

#$# 7f the "endor is a company:#$#$ the "endor is duly incorporated and has full corporate power to own the +ssets and to carry on the

Business! and#$#$# the "endor has the power to enter into and perform this contract! and#$#$ no petition has been issued against the "endor to wind it up nor has action been taken or threatened to be

taken to seie or take possession of any of its assets (including the +ssets)! and#$#$ no controller, administrator or trustee of the "endor has been appointed$

#$ 7f the "endor is a natural person or a company:

#$$ there are no unsatisfied 0udgments against the "endor which have not been disclosed to the Purchaser! norhas any se;uestration order been made or writ of e&ecution issued against the "endor or any of its assets(including the +ssets)! and

#$$# the "endor does not have any interest directly or indirectly in any company or business which is or is likelyto be competitive with the Business! and

#$$ the sale of the +ssets pursuant to this contract does not result in a breach of any obligation (including anystatutory, contractual or fiduciary obligation) or constitute a default under or result in the imposition of anyencumbrance under any agreement or undertaking, by which the "endor is bound$

#$ he +ccounts e&hibit a true and fair view of the financial position and affairs of the Business, are true and accurate toa material e&tent and are not affected by unusual, e&traordinary or non=recurring items$

#$5 he "endor holds all material statutory licences, consents and authorisations necessary for the carrying on of theBusiness$

#$2 he conduct of the Business by the "endor does not contravene any laws in any material respect and no allegation of

any contravention of any applicable laws is known to the "endor$

#$% +ll information concerning the Business and the +ssets which the "endor or any of the "endor-s representatives havefurnished to the Purchaser or the Purchaser-s representatives prior to the e&ecution of this contract is true, completeand accurate in all material respects and is not misleading or deceptive whether by inclusion or omission$

#$. +s far as the "endor and the *ovenantors are aware, there are no *laims by any person (including the 3mployees) orauthority relating to the Business, other than those disclosed to the Purchaser$

#$1 here are no outstanding notices or orders served or made by any person, body or authority affecting the Business andthe "endors are not aware of any proposals or circumstances which may result in such a notice or order being servedor made$

#$' he +ssets:#$'$ are all of the assets (other than the 3&cluded +ssets) which have been used and which are appropriate,

material and necessary for the successful conduct of the Business! and

#$'$# will all be the property of the "endor at *ompletion and will be free from all 3ncumbrances (other thanthose 3ncumbrances listed in the Particulars)$#$ he Premises


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#$ he "endor has duly and punctually observed and performed the terms and conditions of the Premises


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*37 ,ST

#$ 3&cept as otherwise provided by this clause, all consideration payable under this contract in relation to any supply ise&clusive of 6$

#$# 7f 6 is payable in respect of any supply made by a supplier under this +greement (6 +mount), the recipient willpay to the supplier an amount e;ual to the 6 payable on the supply$

#$ 6ub0ect to clause #$, the recipient will pay the 6 +mount at the same time and in the same manner as theconsideration for the supply is to be provided under this contract$

#$ he supplier must provide a ta& invoice to the recipient before the supplier will be entitled to payment of the 6+mount under clause #$$

#$5 7f this contract re;uires a party to reimburse an e&pense or outgoing of another party, the amount to be paid orreimbursed by the first party will be the sum of:#$5$ the amount of the e&pense or outgoing less any input ta& credits in respect of the e&pense or outgoing to

which the other party is entitled! and#$5$# if the payment or reimbursement is sub0ect to 6, an amount e;ual to that 6$

#$2 7f an ad0ustment event occurs in relation to a ta&able supply under this contract:#$2$ the supplier must provide an ad0ustment note to the recipient within % days of becoming aware of the

ad0ustment! and#$2$# any payment necessary to give effect to the ad0ustment must be made within % days after the date of receipt

of the ad0ustment note$

*7 Conf"dent"a) Inforat"on

#$ Cor the sole purpose of protecting the Purchaser (both prior to and after *ompletion) in respect of the ac;uisition of

the +ssets, the "endor covenants with the Purchaser that the "endor will:#$$ sub0ect to clause #$$#, not at any time after the date of this contract without the prior consent of the

Purchaser disclose any *onfidential 7nformation to any person other than the Purchaser! and#$$# at all times after the date of this contract use their best endeavours to prevent disclosure by any officer,

employee, agent of or consultant to the "endor$

#$# *lause #$ does not apply to disclosures by the "endor (or any officer, employee, agent of or consultant to the"endor) of *onfidential 7nformation:#$#$ that is now or in the future in the public domain other than due to a default under this contract! or#$#$# that is re;uired to be disclosed by the "endor to any government authority! or#$#$ that is re;uired to be disclosed by the "endor under any law, *ourt order or legislation from time to time in

force$

*7 ."s!(tes

#5$ 7f the Purchaser fails to pay money owing under this contract the "endor may sue for the unpaid money immediatelywithout first complying with clause #5$$

#5$# + party may seek urgent interlocutory relief in relation to the actions of the other party under this contract without firstcomplying with clause #5$$

#5$ nless clause #5$ or #5$# applies, if a dispute arises out of or relates to this contract (including any dispute as tobreach or termination of this contract) a party to the contract may not commence court proceedings relating to thatdispute (/ispute) unless:#5$$ the party claiming the /ispute has arisen has given written notice to the other party specifying the nature of

the /ispute (."s!(te Not"ce)! and#5$$# the parties first endeavour in good faith to resolve the /ispute e&peditiously using mediation, applying the

procedures and within the timeframes specified in clauses #5$ and #5$5$

#5$ pon the service of a /ispute 4otice the parties must 0ointly agree on a mediator and the mediator-s remuneration$ 7f

the parties fail to agree within 5 days of the service of the /ispute 4otice (or such other period agreed by the parties)either party may ask the President (or nominee) of the


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#2$5 he Purchaser must pay any stamp duty on this contract and any document e&ecuted under it including on theassignment or transfer of the Premises


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#.$$#$# a person includes the legal personal representatives, successors and permitted assigns of thatperson! and

#.$$ a reference to this or another document includes the document as varied or replaced regardless of anychange in the identity of the parties! and

#.$$ a reference to writing includes all modes of representing or reproducing words in a legible, permanent andvisible form! and

#.$$5 headings and subheadings are inserted for ease of reference only and do not affect the interpretation of thiscontract! and

#.$$2 a reference to ADA or AdollarsA is a reference to +ustralian dollars! and#.$$% a reference to:

#.$$%$ the singular includes the plural and vice versa! and#.$$%$# a gender includes the other genders! and

#.$$. a reference to a statute includes regulations under it and consolidations, amendments, re=enactments orreplacements of any of them$

#.$# 7f a payment or other act is re;uired by this contract to be made or done on a day which is not a Business /ay, thepayment or act must be made or done on the ne&t following Business /ay$

*97 ."ct"onar$

Acco(nts .atemeans the date not more than days prior to *ompletion when the accounts of the Business are prepared$

Assets means individually and collectively the oodwill, the /ebtors, the Plant and 3;uipment, the >otor "ehicles, the7ntellectual Property Rights, the 6tock, the 9ork in Progress and the benefit of the Business *ontracts and +rrangements,6tatutory


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-"red E5("!entmeans each item of plant and e;uipment identified in the Particulars hired by the "endor under a ?irePurchase +greement and used e&clusively in the conduct of the Business$

Inte))ect(a) 2ro!ert$ R"g%tsmeans all intellectual property and proprietary rights (whether registered or unregistered) ownedor used by the "endor or necessary for the conduct of the Business including:

(a) the business name,(b) the trademarks!(c) the *onfidential 7nformation! and(d) all patents, patent applications, drawings, discoveries, inventions, improvements, trade secrets, technical data, formulae,

computer programs, know=how, logos, registered and unregistered designs, design rights, copyright and similarindustrial or intellectual property rights$

Leased E5("!entmeans each item of e;uipment (including >otor "ehicles) identified in the Particulars leased by the"endor under an 3;uipment

Sample Contract of Sale of Business

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