Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2...

31
ASSET PURCHASE AGREEMENT CONTENTS RECITALS 1. Defined Terms 1.1 Accounts Receivable 1.2 Agreement 1.3 Buyer 1.4 Business Agreements 1.5 Business 1.6 Business Records 1.7 Closing 1.8 Closing Date 1.9 Deeds of Trust 1.10 Escrow Agent 1.11 Escrow Fund 1.12 Goodwill 1.13 Hazardous Substance 1.14 Intellectual Property Rights 1.15 Inventory 1.16 Liabilities of the Business 1.17 Licenses and Authorizations

Transcript of Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2...

Page 1: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

ASSET PURCHASE AGREEMENT CONTENTS

RECITALS 1. Defined Terms

1.1 Accounts Receivable

1.2 Agreement

1.3 Buyer

1.4 Business Agreements

1.5 Business

1.6 Business Records

1.7 Closing

1.8 Closing Date

1.9 Deeds of Trust

1.10 Escrow Agent

1.11 Escrow Fund

1.12 Goodwill

1.13 Hazardous Substance

1.14 Intellectual Property Rights

1.15 Inventory

1.16 Liabilities of the Business

1.17 Licenses and Authorizations

1.18 Most Recent Financial Statements

1.19 Permitted Exceptions

1.20 Promissory Note

Page 2: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

1.21 Purchase Price

1.22 Purchased Assets

1.23 Real Estate

1.24 Seller

1.25 Tangible Personal Property

1.26 Termination Date

1.27 Title Policy II. Purchase and Sale of Assets

2.1 Sale of Assets

2.2 Purchase Price and Method of Payment(a) Purchase Price

(b) Method of Payment

(c)Allocation of Purchase Price

2.3 Delivery of Assets III. Closing

3.1 Closing

3.2 Prorations

3.3 Transfer Taxes, Etc.

3.4 Costs and Expenses

3.5 Performance by Seller at Closing

3.6 Performance by Buyer at Closing

3.7 Approval of Documents

3.8 Notice

Page 3: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

IV. Representations and Warranties of Seller

4.1 Organization, Corporate Power, and Authority

4.2 Authorization, Binding Effect, and No Conflicts

4.3 Consents and Approvals

4.4 Real Estate

4.5 Tangible Personal Property

4.6 Inventory

4.7 Accounts Receivable

4.8 Business Agreements

4.9 Intellectual Property Rights

4.10 Licenses and Authorizations

4.11 Financial Statements

4.12 Litigation

4.13 Insurance

4.14 Employee Agreements

4.15 No Broker

4.16 Disclosure

4.17 Compliance with Laws

4.18 Nonforeign Status V. Representations and Warranties of Buyer

5.1 Organization, Corporate Power, and Authority

5.2 Authorization, Binding Effect and No Conflicts

5.3 Consents and Approvals

5.4 Availability of Funds

Page 4: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

5.5 No Broker VI. Covenants of Seller

6.1 Investigation and Access

6.2 Operation of the Business by Seller

6.3 Negative Covenants of Seller

6.4 Accounts Receivable

6.5 Further Assurances

6.6 Covenant Not to Compete VII. Conditions Precedent to Closing

7.1 Seller's Performance

7.2 Buyer's Performance VIII. Indemnification; Risk of Loss

8.1 Assets to Be Conveyed Free of Liabilities or Encumbrances

8.2 Indemnification of Buyer

8.3 Indemnification of Seller

8.4 Risk of Loss IX. Termination

9.1 Right to Terminate Before Closing

9.2 Specific Performance in the Event of Seller's Failure to Close X. Miscellaneous

10.1 Schedules and Exhibits

10.2 No Assignment, Successors, Assigns, Etc.

10.3 Construction

Page 5: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

10.4 Counterparts

10.5 Survival of Representations and Warranties

10.6 Notices

10.7 Amendment

10.8 Entire Agreement

10.9 Waiver XI. Disclaimer SCHEDULE I: Tangible Personal Property SCHEDULE II: Licenses and Authorizations SCHEDULE III: Business Agreements SCHEDULE IV: Real Estate SCHEDULE V: Intellectual Property SCHEDULE VI: Inventory EXHIBIT A: Form of Bill of Sale EXHIBIT B: Form of Assignment EXHIBIT C: Form of Promissory Note

THIS ASSET PURCHASE AGREEMENT (the ''Agreement'') is made and entered into as of this [DAY] day of [MONTH] [YEAR], by and between [SELLER COMPANY] a [SELLER STATE OF FORMATION] corporation (hereinafter referred to as the ''Seller''), and [BUYER COMPANY] a [BUYER STATE OF FORMATION] corporation (hereinafter referred to as the ''Buyer'').RECITALSA. Seller is engaged in the business of [DESCRIPTION OF BUSINESS] (the ''Business'').B. Seller desires to sell to Buyer certain assets and properties used in the Business, and Buyer desires to purchase the same, all on the terms and conditions set forth in this Agreement.NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements contained herein, and subject to the conditions hereinafter set forth, Seller and Buyer hereby agree as follows:

Page 6: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

I Defined TermsFor purposes of this Agreement, the following capitalized terms shall have the meanings set forth below, unless the context clearly indicates otherwise.1.1 ''Accounts Receivable'' means all accounts receivable as of the Closing Date. The Accounts Receivable shall be listed and valued as of the close of business on the day preceding the Closing Date on a schedule to be prepared by the Cooper & Cooper, Certified Public Accountants.1.2 ''Agreement'' means this Asset Purchase Agreement.1.3 ''Buyer'' is defined in the first paragraph of this Agreement.1.4 ''Business Agreements'' means those certain agreements, contracts and commitments entered into by Seller in connection with the Business, as more particularly described on Schedule III attached hereto, including all renewals, extensions and modifications thereof.1.5 ''Business'' is defined in the Recitals above.1.6 ''Business Records'' means all logs, books, and business records, operating manuals, and other files and documentation (or true copies thereof) pertaining to the Assets and the operation of the Business, including (i) audited balance sheets, statements of income, statements of changes in stockholders equity and statement of cash flow for the [NUMBER OF YEARS] most recent fiscal years, (ii) the Most Recent Financial Statements, and (iii) federal, state and local income tax returns filed by Seller for the [NUMBER OF YEARS] most recent tax years.1.7 ''Closing'' means the closing of the purchase and sale of the Assets in accordance with this Agreement.1.8 ''Closing Date'' means the date specified in [SECTION 3.1] on which the Closing will take place.1.9 ''Deed of Trust'' mean the deed of trust to the Real Estate, in the form set forth in Exhibit D attached hereto, securing the obligation of the Buyer under the Promissory Note.1.10 ''Escrow Agent'' means [BANK], [BANK LOCATION].1.11 ''Escrow Fund'' means the sums to be held in escrow pursuant to [SECTION 8.2(c)] in the event of a dispute between the Buyer and Seller concerning Buyer's right to indemnification from Seller.1.12 ''Goodwill'' means the goodwill of the Business, to the extent such exists.1.13 ''Hazardous Substance'' means substances heretofore or hereafter designated as hazardous under the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., the Federal Water Pollution Control Act, 33 U.S.C. 1257, et seq., the Clear Air Act, 42 U.S.C. 2001, et seq., or the Comprehensive Environmental Response Compensation and Liability Act of 1980, 42 U.S.C. 9601, et seq., all as amended, and the term additionally includes any substance which after release into the environment and upon exposure, ingestion, inhalation or assimilation, either directly from the environment or indirectly by ingestion through food chains, will or may reasonably be anticipated to cause death, disease, behavior abnormalities, cancer and/or genetic abnormalities in humans.

Page 7: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

1.14 ''Intellectual Property Rights'' means all trade names, trademarks, trademark applications, patents, patent applications, copyrights, copyright applications and similar intangible rights used by Seller in connection with the Business and more particularly described in Schedule V attached hereto. The term includes, without limitation, the right to use the name ''[SELLER].''1.15 ''Inventory'' means all inventories used in the Business, including raw materials, work in progress and finished goods, all as more particularly described on Schedule VI attached hereto. The Inventory shall be valued by [ACCOUNTANT], Certified Public Accountants, of the close of business on the day preceding the Closing Date at the lower of book value or net realizable value.1.16 ''Liabilities of the Business'' means all liabilities and obligations that arise from or are related to the operation and ownership of the Business (whether liquidated or unliquidated, absolute or contingent, known or unknown, due or to become due, and whether arising before or after the Closing Date), including, but not limited to, obligations arising under the Business Agreements.1.17 ''Licenses and Authorizations'' means all licenses, permits, and authorizations issued by government agencies necessary to the ownership and operation of any of the Assets or the Business, all as more particularly described on Schedule II.1.18 ''Most Recent Financial Statements'' means the unaudited balance sheet, statement of income, statement of change in stockholders equity and statement of cash flow for the [FINANCIAL] month period ended [END DATE].1.19 ''Permitted Exceptions'' means those exceptions to clear title to the Real Estate described on Schedule IV which Buyer has agreed in writing to accept.1.20 ''Promissory Note'' means that note in the form of Exhibit C hereto, to be executed by Buyer and delivered to Seller at Closing, in the face amount of [DOLLAR AMOUNTS 5 IN WORDS] ([DOLLAR AMOUNT 5 IN NUMBERS]) to be paid in [PAYEE NAME], equal annual installments commencing [COMMENCING DATE], bearing interest at [PERCENT IN WORD]percent ([PERCENT]%) per annum, and secured by the Deed of Trust.1.21 ''Purchase Price'' means the price specified in [SECTION 2.2] hereof to be paid by Buyer to Seller at Closing.1.22 ''Purchased Assets'' means the assets of Sellers to be purchased by Buyer pursuant to this Agreement, consisting of the (i) Real Estate, (ii) Tangible Personal Property, (iii) Inventory, (iv) Accounts Receivable, (v) Business Agreements, (vi) Intellectual Property Rights, (vii) Licenses and Authorizations, (viii) Business Records, and (ix) Good Will.1.23 ''Real Estate'' means the real property owned by Seller and used in the Business, as more particularly described on Schedule IV hereto.1.24 ''Seller'' is defined in the first paragraph of this Agreement.1.25 ''Tangible Personal Property'' means the machinery, equipment, motor vehicles, office furniture, tools, and related items of tangible personal property, all as more particularly listed and described on Schedule I attached

Page 8: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

hereto, together with all supplies and spare parts. For purposes of this Agreement, the term Tangible Personal Property shall also include manufacturers warranties related to said property.1.26 ''Termination Date'' means the date specified in [SECTION 9.1] on which this Agreement will terminate if Closing has not taken place.1.27 ''Title Policy'' means the [INSURANCE COMPANY] policy of title insurance issued by a title insurer reasonably satisfactory to the Buyer insuring title to the Real Estate to be in the Buyer as of the Closing. The Title Policy shall be subject to the Permitted Exceptions and shall be in the policy amount of [DOLLAR AMOUNT 1]. A preliminary commitment for such policy of title insurance shall be ordered by Seller at its sole cost and expense.II Purchase and Sale of Assets2.1 Sale of Assets. On the Closing Date, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of Seller's right, title and interest in and to the Purchased Assets.2.2 Purchase Price and Method of Payment. (a) Purchase Price. At Closing, Buyer shall pay to Seller as full consideration for the Assets the sum of [DOLLAR AMOUNT 2 IN WORDS] $[DOLLAR AMOUNT 2] (the ''Purchase Price''). The Purchase Price shall be (i) increased by the amount, if any, of the positive difference between the (A) sum of the Accounts Receivable and the Inventory as determined at the close of business on the day preceding the Closing Date, as provided in [SECTION 1.1 and [SECTION 1.15], minus (B) the sum of the accounts receivable and inventory as shown on the audited balance sheet of the Seller for the fiscal year last ended; or(ii) decreased by the amount, if any, of the negative difference between (A) the amount described in 2.1(a)(I)(A), minus (B) the amount described in 2.1(a)(II)(B).(b) Method of Payment. On the Closing Date, Buyer shall deliver to Seller cash in the amount of [DOLLAR AMOUNT IN WORDS 3],[$ DOLLAR AMOUNT 3] plus or minus the positive difference or the negative difference described, respectively, in [SECTION 2.1(a)(I)] or [SECTION 2.1(a)(II)]. The cash payment shall be made by wire transfer or delivery of other immediately available funds. The balance of the Purchase Price shall be paid by Buyer to Seller by delivery of Buyer's Promissory Note. Buyer shall have the right to prepay at any time, without penalty, all or part of the principal balance of the Promissory Note (together with all interest accrued to the time of such prepayment). The Promissory Note shall be secured by the Deed of Trust.(c) Allocation of Purchase Price. The Purchase Price shall be allocated for all purposes by the parties as follows:The portion of the Purchase Price allocated to Accounts Receivable shall be (I) increased by the amount, if any, of the positive difference between (A) the Accounts Receivable at the close of business on the day preceding the Closing Date, minus (B) the accounts receivable as shown on the audited balance sheet of the Seller for the fiscal year last ended, and (II) decreased by the amount, if any, of the negative difference between such amounts.

Page 9: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

The portion of the Purchase Price allocated to the Inventory shall be (I) increased by the amount, if any of the positive difference between (A) the Inventory at the close of business on the day preceding the Closing Date, minus (B) the inventory as shown on the audited balance sheet of the Seller for the fiscal year last ended, and (II) decreased by the amount, if any, of the negative difference between such amounts.The portion of the Purchase Price allocated to the Tangible Personal Property and Real Estate is further allocated among the various items and classes of Tangible Personal Property and Real Estate as more particularly specified on [SCHEDULE 1] and [ARTICLE IV] hereto. (d) Tax Reporting of Allocations. Buyer and Seller shall report the sale and purchase of the Assets for all federal, state, local and foreign tax purposes in a manner consistent with the allocation set forth in this [SECTION 2.2(c)]2.3 Delivery of Assets. Buyer shall take delivery of all Assets at Closing. Prior to Closing, representatives of Seller and Buyer shall jointly take a physical inventory of the Tangible Personal Property at each location, and verify, by initialling a copy of [SCHEDULE 1], that all Tangible Personal Property listed on said schedule is present and accounted for at each such location. The parties shall follow such mutually acceptable procedures as they shall deem necessary to ensure that, following completion of the physical inventory, all items of Tangible Personal Property listed as [SCHEDULE 1] are in fact delivered to Buyer at Closing.III Closing3.1 Closing. The Closing of the purchase and sale contemplated by this Agreement (the ''Closing'') shall take place on [CLOSING DATE] (the ''Closing Date'') at the offices of [ADDRESS], or at such other time or place as shall be agreed by the parties in writing; provided, however, that all conditions to the Closing herein set forth shall have been satisfied.3.2 Prorations. The operation of the Business and all income and expenses attributable thereto through the close of business on the day preceding the Closing Date shall be for the account of Seller. Thereafter, the operation of the Business and all income and expenses attributable thereto shall be for the account of Buyer. Expenses such as power and utility charges, property taxes and assessments, rents, license fees, dues, subscriptions, and other charges, prepaid and deferred items, and all other items of income and expense connected with the Business shall be prorated between Seller and Buyer as of the Closing Date. All prorations shall be made and paid in cash within [NUMBER OF CASH PAID DAYS] of the Closing Date.In the event the parties are unable to agree on the proration of an item of income or expense within such [EXPENSE OF PERIOD DAYS] period, the matter shall be referred to the firm of [ACCOUNTANT], Certified Public Accountants, for determination. The determination of [ACCOUNTANT] shall be final and binding on the parties with respect to proration of the disputed item, and any amount owing by one party to the other shall be paid in cash within [NUMBER OF CASH PAID DAYS] of [ACCOUNTANT]'s determination. Prior to submission of the disputed item to [ACCOUNTANT], each party shall

Page 10: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

give to the other its written determination of how it believes the item should be prorated. The party whose determination is closest to that of [ACCOUNTANT] shall be indemnified by the other party for all reasonable costs incurred in resolving the dispute, including the fees of [ACCOUNTANT].3.3 Transfer Taxes, Etc. To the extent applicable, any retail sales/use taxes and real estate transfer taxes due as a result of the purchase and sale of Assets contemplated hereby shall be paid entirely by Seller, and Seller shall indemnify and hold Buyer harmless therefrom.3.4 Costs and Expenses. Except as otherwise provided in [SECTION 3.2 and [SECTION 3.3], each party shall separately bear the costs and expenses incurred by it in connection with this Agreement and the transactions contemplated hereby; provided, however, that if any party shall commence legal action to specifically enforce or otherwise seek redress under, or for breach of, this Agreement, the prevailing party in such action shall be entitled to recover its costs and reasonable attorneys' fees incurred to prosecute or defend the action, including costs and fees incurred in any appellate proceeding.3.5 Performance by Seller at Closing. At Closing, Seller shall deliver to Buyer the following: (a) A Bill of Sale in the form of [EXHIBIT A] and all other appropriate documents and instruments in customary form and substance sufficient to transfer to Buyer all of Seller's right, title and interest in and to all tangible assets that are a part of the Assets, free and clear of any mortgages, liens, pledges, privileges, charges, claims and encumbrances any kind whatsoever, except for any mortgages, liens, pledges, privileges, charges, claims and encumbrances described in any of the schedules attached hereto or permitted by this Agreement.(b) An Assignment and Assumption Agreement in the form of [EXHIBIT B] sufficient to convey to Buyer all right, title and interest of Seller in and to the Accounts Receivable, the Business Agreements and all other intangible assets that are a part of the assets.(c) A statutory warranty deed to the Real Estate and all other documents sufficient to convey title thereto to Buyer, free and clear of any liens, claims or encumbrances of any kind whatsoever, except for the Permitted Exceptions, together with a Title Policy to the Real Estate.(d) Certificates of title and other documents sufficient to convey to Buyer title to the motor vehicles purchased by Buyer pursuant to this Agreement and to permit Buyer to register such motor vehicles in its name with the proper licensing authorities.(e) A certified copy of a resolution of Seller's board of directors authorizing the execution of this Agreement and the transactions contemplated hereby.(f) A certificate of Seller to the effect that all warranties and representations of Seller herein are true and correct as of the Closing Date.(g) All other instruments and documents that Buyer or its counsel, in the reasonable exercise of their discretion, shall deem to be necessary (x) to fulfill any obligation required to be fulfilled by Seller on the Closing Date, and

Page 11: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

(y) to evidence satisfaction of any conditions to Closing referred to in [SECTION 7.2] hereof.3.6 Performance by Buyer at Closing. At Closing, Buyer shall deliver to Seller the following: (a) Cash in the amount of [DOLLAR AMOUNT 4 IN WORDS] [($DOLLAR AMOUNT 4)] adjusted as provided in [SECTION 2.2(b)].(b) Buyer's Promissory Note, together with the Deed of Trust securing such note.(c) A certified copy of a resolution of Buyer's board of directors authorizing this transaction.(d) A certificate of Buyer to the effect that all warranties and representations of Seller herein are true and correct as of the Closing Date.(e) All other instruments and documents that Seller or its counsel, in the reasonable exercise of their discretion, shall deem to be necessary (x) to fulfill any obligation required to be fulfilled by Buyer on the Closing Date, and (y) to evidence satisfaction of any conditions to Closing referred to in [SECTION 7.2] hereof.3.7 Approval of Documents. Unless otherwise provided herein, all instruments and documents delivered pursuant to this Agreement shall be dated as of the Closing Date, and shall be satisfactory to the parties and to their respective counsel as to form and content.3.8 Notice. Immediately following the Closing, the parties shall give notice of the transfer of Assets to the Washington Department of Revenue, as permitted by WAC 458-20-216.IV Representations and Warranties of Seller

Seller represents and warrants to Buyer that the following statements are true and correct on the date hereof, and will be true and correct on the Closing Date as though made on such date:4.1 Organization, Corporate Power, and Authority. Seller is a corporation duly organized, validly existing and in good standing under the laws of Washington, and has the requisite corporate power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.4.2 Authorization, Binding Effect, and No Conflicts. The execution, delivery and performance by Seller of this Agreement and the consummation by Seller of the transactions contemplated thereby have been duly authorized by all necessary corporate action on the part of Seller. This Agreement has been duly and validly executed and delivered by Seller and constitutes the valid and binding obligation of Seller, enforceable in accordance with its terms, subject to (i) applicable bankruptcy, insolvency or other similar laws relating to creditors' rights generally, and (ii) general principles of equity. The execution, delivery and performance by Seller of this Agreement and the consummation by Seller of the transactions contemplated hereby will not (x) violate any provision of law, rule or regulation to which Seller is subject, (y) violate any order, judgement or decree applicable to Seller, or (z) conflict with, or result in a breach or default under, any term or condition of the

Page 12: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

Articles of Incorporation or the Bylaws of Seller, or any agreement or other instrument to which Seller is a party or by which Seller may be bound; except, in each case, for violations, conflicts, breaches or defaults which in the aggregate would not materially hinder or impair the consummation of the transactions contemplated hereby.4.3 Consents and Approvals. Neither the execution of this Agreement nor the consummation of the sale of the Assets requires the approval or consent of any governmental authority having jurisdiction over the business of Seller nor of any party to any agreement with Seller.4.5 Real Estate. The Real Property reflected on Schedule IV is and will be at Closing owned outright by Seller, is free of all liens, reservations, encumbrances, encroachments, liabilities, or other claims or defects of title (except for the Permitted Exceptions) and, to the knowledge of Seller, is free of all Hazardous Substances. Buyer shall be under no obligation to approve any Permitted Exceptions; provided, however, that Buyer shall not unreasonably withhold its approval of any if the same shall cause Buyer no economic damage nor interfere with Buyer's full use and enjoyment of the property. To Seller's knowledge, none of the buildings, structures or other appurtenances or improvements on the Real Estate (or any Tangible Personal Property therein), nor the operation or maintenance thereof, violates any restrictive covenant or any provision of any federal, state or local law, ordinance, rule or regulation, or encroaches on property of others, and no condemnation proceeding is pending or threatened which would preclude or impair the use of any of the Real Estate by Buyer for the purposes for which it is currently used.4.6 Tangible Personal Property. Schedule I contains a complete and accurate list, as of the date of this Agreement and as of Closing, of all of the Tangible Personal Property. Seller has good and marketable title to all Tangible Personal Property, free and clear of any and all liens, reservations, encumbrances, encroachments, liabilities, or other claims, except (i) as otherwise set forth in the [SCHEDULE 1], (ii) liens of current taxes not yet due or being contested in good faith by appropriate proceedings, and (iii) liens, reservations, encumbrances, encroachments, liabilities, or other claims which individually or in the aggregate do not have a material adverse effect on the financial condition of the Business. All Tangible Personal Property is in good operating condition and repair. Seller has executed and filed a Request for Certificate of Information (UCC Form 11R) with the Washington Secretary of State in the name of Seller to verify the representations in this [SECTION 4.5], and shall deliver the response thereto to Buyer prior to Closing. Seller also shall obtain and deliver to Buyer as soon as possible an updated UCC search as of the Closing Date. The Tangible Personal Property will be conveyed by Seller to Buyer at the Closing in good operating condition and repair, ordinary wear and tear excepted, free and clear of all liens, reservations, encumbrances, encroachments, liabilities, or other claims, except for those described in (i) to (iii) of this [SECTION 4.5], and will be sufficient to permit Buyer, immediately following the Closing, to operate and

Page 13: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

conduct the Business in the same manner as is presently conducted by Seller as of the date of this Agreement.4.7 Inventory. The Inventory is merchantable and fit for the purpose for which it was procured or manufactured, and none of such Inventory is slow-moving, obsolete, damaged, or defective, subject only to the reserve for inventory write-down set forth in the Most Recent Financial Statements, as adjusted for the passage of time through the Closing Date in accordance with past customs and practices of the Seller.4.8 Accounts Receivable. All Accounts Receivable of the Seller are reflected properly on their books and records, are valid receivables subject to no setoffs or counterclaims, are presently current and collectible, and will be collected in accordance with their terms at their recorded amounts, subject only to the reserve for bad debt set forth in the Most Recent Financial Statements, as adjusted for the passage of time through the Closing Date in accordance with past customs and practices of the Seller.4.9 Business Agreements. The Business Agreements listed on Schedule III hereto constitute valid and binding obligations of Seller and are in full force and effect as of the date of this Agreement and, with the exception of those Business Agreements which will have been completed prior to the Closing Date according to their terms, will on the Closing Date constitute valid and binding obligations of Seller and be in full force and effect. Neither Seller nor any other party to such Business Agreements are in material default under any such agreements.4.10 Intellectual Property Rights. Seller owns or has the right pursuant to license, sublicense, agreement or permission to use all Intellectual Property Rights necessary for the operation of the Business as presently conducted and as presently proposed to be conducted. Seller has taken all reasonable action to protect each item of Intellectual Property that it owns or uses. To Seller's knowledge, Seller is not infringing upon, misappropriating, violating or otherwise acting adversely to the right of any other person under, or in respect to, any trade names, trademarks, patents, copyrights, or similar intangible rights, and the Seller has not received any charge, complaint, claim or notice of such an infringement, misappropriation, violation or adverse act. To the knowledge of the Seller, and the directors and officers of Seller, no third party has infringed upon, misappropriated, violated or otherwise acted adversely to the Intellectual Property Rights.4.11 Licenses and Authorizations. On the date hereof, the Licenses and Authorizations set forth in Schedule II hereto are in full force and effect, and, to the knowledge of Seller, constitute all licenses, permits and authorizations from regulatory bodies which are required for the ownership and operation of the Assets and the Business. All motor vehicles purchased by Buyer pursuant to this Agreement are and will be currently licensed as of the Closing Date, with all license and registration fees paid. Seller is not aware of any material violation of any federal, state, or local law or regulation in respect to Seller's ownership or operation of the Assets.4.12 Financial Statements. All financial statements that Seller is required to

Page 14: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

provide Buyer pursuant to this Agreement have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods covered by such financial statements, are correct and complete, and are consistent with the books and records of the Seller; except, however, that the Most Recent Financial Statements are subject to normal year end adjustments, which will not be material, and lack footnotes.4.12 Litigation. There are no actions, suits, claims, proceedings or investigations pending or, to the knowledge of Seller, threatened against Seller that would affect Seller's title or interest in any of the Assets. Seller has received no notice, and has no knowledge, that it is in default of any order, writ, injunction or decree of any court or federal, state, municipal or governmental department, commission, board, bureau, agency or instrumentality with respect to the ownership and operation of the Assets. To the best knowledge of Seller, Seller has complied in all material respects with all laws, regulations, franchises, licenses and orders applicable to the Assets.4.13 Insurance. There is presently in force extended coverage casualty and liability insurance in respect to the physical Assets to be transferred and conveyed hereunder, and Seller will maintain or cause such insurance to be maintained in full force and effect until Closing. Seller has provided Buyer with copies of such policies and will cooperate with Buyer, if so requested, in arranging for transfer of insurance at Closing.4.14 Employee Agreements. There are no collective bargaining agreements and no deferred compensation or profit-sharing plans or arrangements presently in force, or any other agreement with employees that would affect the transfer of Assets contemplated by this Agreement or require Buyer to continue any employment or compensation arrangement with any person. Seller has no commitment to enter into any such agreements, or establish any such plans or arrangements, nor will it do so while this Agreement is in effect.4.15 No Broker. Seller has not employed any broker, finder or agent, nor otherwise become obligated for any broker's, finder's or agent's or similar fee with respect to the transaction contemplated by this Agreement, except for a fee payable to LMN Investment Bankers, Inc., which shall be Seller's sole responsibility.4.16 Disclosure. Neither this Agreement nor any of the Schedules or Exhibits annexed hereto contains any untrue statement of any material fact, or omits to state any material fact required to be stated in order to make the statements contained herein or therein not misleading. To the best knowledge of Seller, there is no fact which has not been disclosed in writing to Buyer prior to the date hereof that materially adversely affects the prospects or the financial or other condition of the Business or the Assets.4.17 Compliance With Laws. To Seller's knowledge, Seller is in compliance with all laws, rules, regulations and orders applicable to the Business (including, without limitation, those relating to environmental protection, occupational safety and health and equal opportunity employment practices), except where the failure to comply therewith does not have a

Page 15: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

material adverse effect on the financial condition of the Business.4.18 Nonforeign Status. Seller is not a ''foreign person'' (i.e., a nonresident alien individual or foreign corporation) within the meaning of section 897(a) of the Internal Revenue Code. At Closing, Seller will furnish Purchaser, in accordance with Internal Revenue Code section 1445 and the regulations thereunder, with an affidavit stating, under penalty of perjury, that Seller is not a ''foreign person'' and stating Seller's taxpayer identification number.V Representations and Warranties of Buyer

Buyer represents and warrants to Seller that the following statements are true and correct on the date hereof and will be true and correct on the Closing Date as though made on such date:5.1 Organization, Corporate Power, and Authority. Buyer is a corporation duly organized, validly existing and in good standing under the laws of Washington, and has the requisite corporate power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.5.2 Authorization, Binding Effect and No Conflicts. The execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated thereby have been duly authorized by all necessary corporate action on the part of Buyer. This Agreement has been duly and validly executed and delivered by Buyer and constitutes the valid and binding obligation of Buyer, enforceable in accordance with its terms, subject to (i) applicable bankruptcy, insolvency or other similar laws relating to creditors' rights generally, and (ii) general principles of equity. The execution, delivery and performance by Seller of this Agreement and the consummation by Seller of the transactions contemplated hereby will not (x) violate any provision of law, rule or regulation to which Seller is subject, (y) violate any order, judgement or decree applicable to Seller, or (z) conflict with, or result in a breach or default under, any term or condition of the Articles of Incorporation or the Bylaws of Seller, or any agreement or other instrument to which Seller is a party or by which Seller may be bound; except in each case, for violations, conflicts, breaches or defaults which in the aggregate would not materially hinder or impair the consummation of the transactions contemplated hereby.5.3 Consents and Approvals. Neither the execution of this Agreement nor the consummation of the sale of the Assets requires the approval or consent of any governmental authority having jurisdiction over the business of Buyer nor of any party to any agreement with Buyer.5.4 Availability of Funds. Buyer has available and will have available on the Closing Date sufficient funds to enable it to consummate the transactions contemplated by this Agreement.5.5 No Broker. Buyer has not employed any broker, finder or agent, nor otherwise become obligated for any broker's, finder's or agent's or similar fee, with respect to the transaction contemplated by this Agreement, except for a fee payable to [PAYABLE COMPANY]., which shall be Buyer's sole responsibility.

Page 16: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

VI Covenants of Seller6.1 Investigation and Access. Throughout the period from the date of this Agreement until the Closing Date, Seller shall comply with Buyer's reasonable requests for information with respect to the Assets, and shall provide Buyer and its duly authorized representatives with reasonable access during regular business hours to Seller's offices, plants, records, files and books of account related to the Assets. Such access shall be provided for the limited purpose of allowing Buyer to conduct an investigation into the condition and operation of, and title to, the Assets, and completing the physical inventory of Tangible Personal Property required by [SECTION 2.3]. The investigation shall be conducted in a manner that does not unreasonably interfere with Seller's normal operations or with Seller's employee and customer relationships. After the investigation, Buyer may terminate this Agreement at any time prior to the Closing Date if it is not satisfied, in the reasonable exercise of its discretion, with the condition of the Assets. In case of such termination, neither Buyer nor Seller shall have any further obligation to the other party under this Agreement. Unless and until the purchase and sale contemplated by this Agreement is closed, Buyer and its representatives shall treat all information obtained in the investigation of Seller's Assets and otherwise not in the public domain as confidential, and shall return all books, records and documents made available to it by Seller.6.2 Operation of the Business by Seller. Seller covenants that prior to the Closing Date Seller will: (a) Continue to operate the Business in the usual and ordinary course of business, and in conformity with all applicable laws, ordinances, regulations, rules and orders;(b) File all applications and other documents required to be filed in connection with the operation of the Business and Assets;(c) Maintain its Assets and in their present good operating condition and repair, reasonable wear and tear and ordinary usage excepted;(d) Keep the Assets free of liabilities, liens, and encumbrances of any kind whatsoever, except for the Permitted Exceptions;(e) operate the Business diligently, in the ordinary course of business and consistently with past practice, and use its best efforts to preserve existing customer and agency relationships and the business reputation of Seller;(f) Pay, or cause to be paid, all income, property, sales, use, franchise, excise, social security, withholding, workmen's compensation and unemployment insurance taxes and all other taxes of or relating to the Business or the Assets that are due; and(g) Maintain complete and accurate books and records of the Assets.6.3 Negative Covenants of Seller Between the date of this Agreement and the Closing Date, except as contemplated by this Agreement, Seller will not, without the prior written consent of Buyer: (a) Create, assume or permit to exist any new mortgage, deed of trust, security interest or pledge, or subject to any lien or encumbrance any of the Assets, whether now owned or hereafter acquired;

Page 17: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

(b) Sell, assign, lease or otherwise transfer or dispose of any of the Assets, whether now owned or hereafter acquired, except for retirements in the usual and ordinary course of business in connection with the acquisition of similar property or assets.(c) Cancel any customer or agency relationship, except in the usual and ordinary course of business; renegotiate, modify, amend or terminate any Business Agreement listed on Schedule III; or fail to comply with all of the terms and conditions of said Business Agreements and all Licenses and Authorizations.6.4 Accounts Receivable. Seller shall promptly remit in cash to Buyer the proceeds of all checks and other payments for accounts receivable purchased by Buyer under this Agreement and coming into the possession of Seller.6.5 Further Assurances. At any time or from time to time after the Closing Date, Seller shall, at the request of Buyer and at Buyer's expense, execute and deliver any further instruments or documents and take all such further actions as Buyer may reasonably request in order to evidence the consummation of the transactions contemplated hereby.6.6 Covenant Not to Compete. For a period of [NUMBER OF BUSINESS YEARS] following the Closing Date, or for so long as Buyer is engaged in the Business, whichever is shorter, Seller shall not engage, whether directly or indirectly and whether or not for compensation, in any business or activity similar to the Business within 100 miles of the current location of the Business, without the written consent of Buyer. The obligation of Seller described in the preceding sentence to refrain from engaging in the Business includes the obligation to refrain from participating as a partner or as a holder of any beneficial interest in any entity or activity engaged in the Business in the State of Washington. Because the amount of damage which Buyer will suffer may be difficult or impossible to calculate (but may nevertheless be substantial) if Seller fails to observe this covenant not to compete, Buyer shall be entitled to injunctive relief or specific performance in the event of a breach of this covenant. The remedies provided Buyer by this [SECTION 6.6], shall be in addition to any other remedies that may be available to Buyer in law or equity.VII Conditions Precedent to Closing7.1 Seller's Performance. The obligation of Seller to close on the Closing Date is subject to the fulfillment at or prior to such date of each of the following conditions (any one or more of which may be waived in whole or in part by Seller in writing): (a) The representations and warranties of Buyer contained herein shall be true and correct in all material respects on the Closing Date with the same force and effect as though such representations and warranties had been made on and as of the Closing Date.(b) Buyer shall have performed and complied with all material terms, covenants and conditions of this Agreement that are required to be performed or complied with by it on or before the Closing Date.

Page 18: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

(c) No action, investigation, or proceeding shall have been instituted or threatened that would adversely affect the ability of Buyer to comply with the provisions of this Agreement.7.2 Buyer's Performance. The obligations of Buyer to close hereunder on the Closing Date are subject to the fulfillment at or prior such date of each of the following conditions (any one or more of which may be waived in whole or in part by it in writing): (a) The representations and warranties of Seller contained herein shall be true and correct in all material respects on the Closing Date with the same force and effect as though such representations and warranties had been made on and as of the Closing Date.(b) Seller shall have performed and complied with all material terms, covenants and conditions of this Agreement required to be performed or complied with by it on or before the Closing Date.(c) No action or proceeding shall have been instituted or, to the knowledge of Seller, threatened that would adversely affect or relate materially to the Assets, or adversely affect the ability of Seller to comply with the provisions of this Agreement.(d) No damage, destruction or loss shall have occurred that would entitle Buyer to terminate this Agreement, as provided in [SECTION 8.4].(e) Buyer's representative shall have completed a physical inventory of the Assets referred to in [SECTION 2.3] and shall have verified that all Assets listed on Schedule I are accounted for and available for delivery at Closing.(f) All actions, proceedings, instruments, signatures of Seller, and documents required to carry out this Agreement or incident thereto shall have been approved by counsel for Buyer. Such approval shall not be unreasonably withheld.(g) Buyer shall have received the written environmental audit of a firm with recognized expertise in environmental and regulatory compliance matters, covering all or any part of the Real Estate, showing that no environmental condition or Hazardous Substance exists on, above or under the Real Estate which could result in liability of Seller or Buyer, under applicable federal or state environmental laws currently in effect, for damages, remedial action and/or fines exceeding, in the aggregate, $[DOLLAR AMOUNT 5]. In the event this condition precedent is not satisfactorily met, Buyer shall have the option, in its sole discretion, to: (i) declare this Agreement null and void, (ii) proceed under this Agreement without waiving any other provision of this Agreement, and, in particular, without waiving any benefit or protection of [ARTICLE IV] hereof (relating to Seller's representations and warranties) and [SECTION 8.2] hereof (relating to Seller's duty to hold harmless, defend and indemnify Buyer); or (iii) require as a condition of Closing, without waiving any other provision of this Agreement, that Seller post a bond or letter of credit in an amount adequate to correct the deficiencies reported in the environmental audit. The selection of the firm to carry out the environmental audit and designation of those portions of the Real Estate to be subjected to the audit shall be made by

Page 19: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

Buyer in its sole discretion.(h) All governmental and other consents and approvals, if any, necessary to permit the consummation of the transactions contemplated by this Agreement shall have been received.VIII Indemnification: Risk of Loss8.1 Assets to Be Conveyed Free of Liabilities or Encumbrances. Except for performance of the Business Agreements expressly assumed by Buyer hereunder, Buyer assumes no liabilities or obligations of Seller of any kind whatsoever, whether fixed or contingent and whether known or unknown, in connection with the Business and the Assets. At Closing, Seller shall convey to Buyer title to all of the Assets free and clear of all liens, charges, claims and encumbrances, subject only to the Permitted Exceptions; and Seller shall, in accordance with [SECTION 8.2] hereof, indemnify and hold Buyer harmless from any and all such liabilities, liens, charges, claims and encumbrances to which the Assets are or may become subject.8.2 Indemnification of Buyer. (a) Seller agrees to indemnify and hold Buyer, its successors and assigns, harmless from and against: (i) Any and all claims, liabilities and obligations of every kind and description, contingent or otherwise, arising out of or related to the operation of the Business or to ownership of the Assets by Seller prior to the Closing. Such claims, liabilities and obligations include, but are not limited to, products liability claims, claims or liabilities arising out of the use or storage by Seller, or the presence on the Real Estate, of any Hazardous Substances, any and all claims, liabilities and obligations arising or required to be performed prior to the Closing under any contract, agreement, lease or instrument assumed by Buyer, except for performance of those Business Agreements and the Permitted Exceptions.(ii) Any and all damage or deficiency resulting from any misrepresentation, breach of warranty, or nonfulfillment of any agreement on the part of Seller under this Agreement, or from any misrepresentation in or omission from any certificate or other instrument furnished to Buyer pursuant to this Agreement or in connection with any of the transactions contemplated hereby.(iii) Any and all actions, suits, proceedings, damages, assessments, judgments, costs and expenses, including reasonable attorneys' fees incurred by Buyer as a result of Seller's failure or refusal to compromise or defend any claim incident to the foregoing provisions.(b) If any claim or liability shall be asserted against Buyer which would give rise to a claim by Buyer against Seller for indemnification under the provisions of this section, Buyer shall promptly notify Seller in writing of the same, and Seller shall, at its own expense, compromise or defend any such claim; provided, however, that Buyer may, at its own cost and expense, join and cooperate with Seller in depending or compromising such claim.(c) In the event Seller fails to indemnify Buyer as required under the terms of this [ARTICLE VIII], Buyer shall have the right to withhold any payment due under its Promissory Note until such time as Seller indemnifies Buyer or

Page 20: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

make other provisions satisfactory to Buyer for correction of any breach of this Agreement or disposition of any claim, lien, or other encumbrance giving rise to Seller's obligation to indemnify. Buyer shall give Seller prompt notice of any intention to withhold payment. Upon receipt by Seller of such notice from Buyer, Seller shall give Buyer notice of any disagreement Seller may have with Buyer's assertion of its right to indemnification. Thereafter, Buyer shall pay the amount in dispute (''Escrow Fund'') to the Escrow Agent. The Escrow Agent shall hold the Escrow Fund until the parties hereto give joint instructions as to its disposition or release, or until it receives a final court order or determination of arbitration pertaining to the Escrow Fund. The Escrow Fund shall be held in an interest-bearing account, with interest payable to Seller on the amount ultimately paid to Seller and interest payable to Buyer on the amount of the Escrow Fund ultimately paid to Buyer. The Escrow Agent shall have no obligation to determine the proper disposition of the funds held by it, and shall be entitled to rely solely upon joint instructions from Buyer and Seller or a final court order or determination of arbitration pertaining to such funds.8.3 Indemnification of Seller. (a) Buyer hereby agrees to indemnify and hold Seller and its successors and assigns harmless from and against: (i) Any and all claims, liabilities and obligations of every kind and description, contingent or otherwise, arising from or related to the ownership of the Assets by Buyer subsequent to the Closing. Such claims, liabilities, and obligations include, but are not limited to, any and all claims, liabilities and obligations arising or required to be performed subsequent to Closing under any Business Agreement assumed by Buyer pursuant to this Agreement.(ii) Any and all damage or deficiency resulting from any misrepresentations, breach of warranty, nonfulfillment of any agreement or obligation assumed or required to be assumed by Buyer under this Agreement, or from any misrepresentation in or omission from any certificate or other instrument furnished to Seller pursuant to this Agreement, or in connection with any of the transactions contemplated hereby.(iii) Any and all actions, suits, proceedings, damages, assessments, judgments, costs and expenses incident to any of the foregoing provisions, including reasonable attorneys' fees incurred by Seller as the result of Buyer's failure or refusal to defend or compromise any claim.(b) If any claim or liability shall be asserted against Seller which would give rise to a claim by Seller against Buyer for indemnification under the provisions of this section, Seller shall promptly notify Buyer of the same and Buyer shall, at its own expense, compromise or defend any such claim; provided that Seller may, at its own cost and expense, join and cooperate with Buyer in the defense or compromise of such claim.8.4 Risk of Loss. The risk of any loss, damage or destruction to any of the Assets to be transferred to Buyer pursuant to this Agreement from fire, casualty or other cause shall be borne by Seller at all times prior to the Closing Date. Upon the occurrence of any loss or damage to any material

Page 21: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

part of the Assets as a result of fire, casualty or other causes prior to Closing, Seller shall notify Buyer of same in writing immediately, stating with particularity the extent of loss or damage incurred, the cause thereof, if known, and the extent to which restoration, replacement and repair of the Assets lost or destroyed will be reimbursed under any insurance policy with respect thereto. Subject to the provisions hereof, Buyer shall have the option (but not the obligation) exercisable within [NUMBER OF DAYS] after receipt of such notice from Seller, in the event the loss exceeds Ten Thousand Dollars ($ 10,000) and the property cannot be substantially repaired or restored within [NUMBER OF DAYS] to:

(a) Terminate this Agreement.(b) Postpone the Closing until such time as the property has been

completely repaired, replaced or restored, unless the same cannot be reasonably effected within [NUMBER OF MONTHS] of notification.

(c) Elect to consummate the Closing and accept the property in its ''then'' condition, with an adjustment to the purchase price for the loss or destruction of any of the Assets. In the event Buyer elects to consummate the Closing, Seller shall assign to Buyer all rights under any insurance claim covering the loss and pay over to Buyer any proceeds under any such insurance policy theretofore received by Seller with respect thereto.IX Termination9.1 Right to Terminate Before Closing. This Agreement may be terminated at any time prior to Closing, and the transaction contemplated hereby may be abandoned at any such time: (a) by Buyer, as provided in [SECTION 6.1] or [SECTION 8.4];(b) by mutual consent of Buyer and Seller;(c) unilaterally by Buyer or Seller, if there has been a default by the other party in any material respect in the performance of any covenant herein, and such default has not been cured by the Closing Date;(d) unilaterally by Buyer or Seller, any representation or warranty of the other party is untrue in any material respect; or(e) unilaterally by Buyer or Seller if the Closing has not taken place by (the ''Termination Date'').9.2 Specific Performance in the Event of Seller's Failure to Close. If all the conditions precedent to the obligations of either party to close as set forth in this Agreement have been satisfied, but such party shall refuse to close as provided in [ARTICLE III] hereof, or in the event of a material breach by either party of its obligations hereunder which is not cured by the Closing Date, then the other party, in addition to any other right or remedy it may have at law or in equity, shall have the right to enforce the terms of this Agreement by decree of specific performance.X Miscellaneous10.1 Schedules and Exhibits. All schedules and exhibits attached to this Agreement shall be deemed part of this Agreement and incorporated herein, where applicable, as if fully set forth herein.10.2 No Assignment, Successors, Assigns, Etc., The terms and conditions of

Page 22: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

this Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto, their respective heirs, personal representatives, successors and assigns; provided, however, that this Agreement shall not be assigned or conveyed by any party to any person or entity without the prior written consent of the other party hereto, except that Buyer may assign this Agreement without consent to any corporation controlling or controlled by it (the term control shall mean an ownership and controlling interest of greater than 50.1%). In the event of an assignment, the assigning party shall not be relieved of any of its obligations and undertakings contracted for herein.10.3 Construction. This Agreement shall be construed and enforced in accordance with the laws of the State of Washington.10.4 Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.10.5 Survival of Representations and Warranties. All of Seller's and Buyer's representations and warranties contained herein shall survive the Closing for a period of one year from the Closing Date, after which they shall be null and void.10.6 Notices. Any notices or other communications shall be in writing and shall be considered to have been duly given on the earlier of (1) the date of actual receipt or [NUMBER OF DEPOSIT DAYS] after deposit in the first-class certified U.S. mail, postage prepaid, return receipt requested:

(a) If to Seller:[SELLER ADDRESS 1]

With a Copy To:[SELLER ADDRESS 2]

(b) If to BUYER:

[BUYER ADDRESS 1]

With a Copy To:[BUYER ADDRESS 2]

Amendment. This Agreement may be amended at any time prior to Closing by written instrument executed by the parties hereto.10.7 Entire Agreement. This agreement contains the entire understanding of the parties hereto relating to the subject matter herein.10.8 Waiver. Any default, misrepresentation or breach of any covenant or warranty by a party in connection with this Agreement may be waived in writing by the other party. No such waiver shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of any covenant or warranty, or affect any rights arising by virtue of any prior or subsequent default, misrepresentation or breach of any covenant or warranty.10.9 Governing Law. This Agreement shall be construed in accordance with,

Page 23: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business

and governed by, the law of the state of Washington applicable to agreements made and to be performed wholly within this jurisdiction.10.10Public Announcements. Neither Seller nor Buyer shall make any public statements, including, without limitation, any press releases, with respect to this Agreement and the transactions contemplated hereby without the prior written consent of the other party (which consent may not be unreasonably withheld), except as may be required by law.XI DisclaimerEXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, BUYER HAS AGREED TO PURCHASE THE ASSETS ''AS IS,'' ''WHERE IS,'' and ''WITH ALL FAULTS,'' AND SELLER DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE CONDITION, GRADE, SUITABILITY, ACCURACY OR PHYSICAL CONDITION OF THE ASSETS OR TANGIBLE PERSONAL PROPERTY; INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES THAT THE ASSETS ARE MERCHANTABLE OR FIT FOR A PARTICULAR PURPOSE.IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed by their/its duly authorized officers on the day and year first above written. [SELLER COMPANY]By: [SELLER SIGNATORY NAME][SELLER SIGNATORY TITLE][SELLER SIGNATORY DATE]

[BUYER COMPANY]By:[BUYER SIGNATORY NAME][BUYER SIGNATORY TITLE][BUYER SIGNATORY DATE]

Page 24: Web viewASSET PURCHASE AGREEMENT. CONTENTS. RECITALS. 1. Defined Terms. 1.1 Accounts Receivable. 1.2 Agreement. 1.3 Buyer. 1.4 Business Agreements. 1.5 Business. 1.6 Business