IMPORTANT NOTICE: The contract outline presented below is for
illustrative purposes only, and should be used purely as a guideline
for identifying and resolving issues relevant to the sale and
protecting the buyer's interests. Typically, the seller will present
the buyer with a draft agreement, which the buyer must then review
or have reviewed by legal counsel.
It is helpful to formulate ideas and issues around sale issues
beforehand, and then expressing these issues with your advisors.
This will help to extract additional value from your professional
advisors, concurrently reducing the costs of such services.
CONTRACT FOR SALE AND PURCHASE OF BUSINESS
This contract for sale and purchase, hereinafter referred to as
"Contract" or "Agreement", is executed this ____ day of 200_ ,
by and between ________, hereinafter referred to as "Seller",
and _______, hereinafter referred to as "Buyer".
WHEREAS, Seller is the owner of Seller's property, situated and
located in (Name of Province), Republic of South Africa, more
particularly described in Exhibit "A" attached hereto and made
a part hereof, hereinafter referred to as the "Property"; and
WHEREAS, Buyer desires to purchase Seller's property and Seller
desires to sell said property to Buyer;
NOW, THEREFORE, for and in consideration of the mutual covenants
and promises hereinafter contained, the Seller agrees to sell
and the Buyer agrees to buy the "Property" upon the following
terms and conditions.
1. PURCHASE PRICE AND METHOD OF PAYMENT. Buyer shall pay and Seller
shall accept the purchase price for the property in the manner
of payment therefor set forth in Exhibit "B" attached hereto and
made a part hereof.
2. CLOSING. The closing of the transactions contemplated by this
agreement, hereinafter referred to as "The Closing", shall be
held at (specify location) on the __ day of (month), 200_ , at
(time) a.m./p.m. or at such other place, date and time as the
parties hereto may otherwise agree (such date to be referred to
in this agreement as the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents
and warrants to Buyer the correctness, truthfulness and accuracy
of the matters shown on Exhibit "C" attached hereto, all of which
shall survive closing. In addition, Seller represents and warrants
to Buyer that the documents enumerated in Exhibit "D" attached
hereto and made a part hereof, are true, authentic and correct
copies of the original, or, if appropriate, the originals themselves,
and no alterations or modifications thereof have been made.
4. REPRESENTATIONS AND WARRANTIES. Buyer and Seller hereby represent
and warrant the following:
a. Brokers. There has been no act or omission by Buyer or Seller
which would give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee, or other like
payment in connection with the transactions contemplated hereby.
5. TRANSACTIONS PRIOR TO CLOSING. Seller hereby covenants the
a. Conduct of Seller's Business Until Closing. Except as Buyer
may otherwise consent in writing prior to the Closing Date, Seller
will not enter into any transaction, take any action or fail to
take any action which would result in, or could reasonably be
expected to result in or cause any of the representations and
warranties of Seller contained in this Agreement to be void, invalid
or false on the Closing Date.
b. Resignations. Seller shall deliver to Buyer prior to the Closing
Date, such resignations of officers or employees of the business
as Buyer shall indicate, each such resignation to be effective
on the Closing Date.
c. Satisfactions. Seller shall deliver to Buyer on the Closing
Date a satisfaction of any encumbrance or lien on the property
satisfactory in form and substance to the Buyer indicating that
the then outstanding unpaid principal balance of any promissory
note secured thereby has been paid in full prior to or simultaneously
with the closing.
d. Advice of Changes. Between the date hereof and the Closing
Date, Seller will promptly advise Buyer in writing of any fact
which, if existing or known at the date hereof, would have been
required to be set forth herein or disclosed pursuant to this
e. Documents. Seller shall deliver to Buyer at closing such documents
which are, in Buyer's sole discretion, necessary to fully satisfy
the objectives of this Agreement in content and form reasonably
intended to do so.
6. EXPENSES. Each of the parties hereto shall pay its own expenses
in connection with this Agreement and the transactions contemplated
hereby, including the fees and expenses of its counsel and its
a. Survival of Representations and Warranties. Each of the parties
to this Agreement covenants and agrees that their respective representations,
warranties, covenants, statements, and agreements contained in
this Agreement shall survive the Closing Date and terminate on
the second anniversary of such date. Except as set forth in this
Agreement, the exhibits hereto or in the documents and papers
delivered by Seller to Buyer in connection herewith, there are
no other agreements, representations, warranties, or covenants
by or among the parties hereto with respect to the subject matter
b. Waivers. No action taken pursuant to this Agreement, including
any investigation by or on behalf of any party shall be deemed
to constitute a waiver by the party taking such action of compliance
with any representation, warranty, covenant or agreement contained
herein or therein and in any documents delivered in connection
herewith or therewith. The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach.
c. Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered
or mailed, first class mail, postage prepaid,
or to such other address as such party shall have specified by
notice in writing to the other party.
d. Sections and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretations of this Agreement.
e. Governing Law. This agreement, and all transactions contemplated
hereby, shall be governed by, construed and enforced in accordance
with the laws of the Republic of South Africa. The parties herein
agree to submit to the personal jurisdiction and venue of a court
of subject matter jurisdiction located in _______________. In
the event that litigation results from or arises out of this Agreement
or the performance thereof, the parties agree to reimburse the
prevailing party's reasonable attorney's fees, court costs, and
all other expenses, whether or not taxable by the court as costs,
in addition to any other relief to which the prevailing party
may be entitled. In such event, no action shall be entertained
by said court or any court of competent jurisdiction if filed
more than one year subsequent to the date the cause(s) of action
actually accrued regardless of whether damages were otherwise
as of said time calculable.
f. Conditions Precedent. The Conditions Precedent to the enforceability
of this Agreement are outlined more fully in Exhibit "E", attached
hereto and made a part hereof. In the event that said Conditions
Precedent are not fulfilled by the appropriate dates thereof,
then this Agreement shall be deemed null and void and any deposits
paid at said time shall be returned to the Buyer forthwith.
g. Captions. The Captions of this contract are for convenience
and reference only and in no way define, describe, extend, or
limit the scope or intent of this contract, or the intent of any
h. Typewritten or Handwritten Provisions. Hand-written provisions
inserted in this contract and typewritten provisions initialed
by both parties shall control over the typewritten provisions
in conflict therewith.
i. Time of the Essence. Time and timely performance are of the
essence of this contract and of the covenants and provisions hereunder.
j. Successors and Assigns. Rights and obligations created by this
contract shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns. Whenever used, the
singular number shall include the plural, the plural the singular,
and the use of any gender shall include all genders.
k. Contractual Procedures. Unless specifically disallowed by law,
should litigation arise hereunder, service of process therefore
may be obtained through certified mail, return receipt requested;
the parties hereto waiving any and all rights they may have to
object to the method by which service was perfected.
l. Extraordinary Remedies. To the extent cognizable at law, the
parties hereto, in the event of breach and in addition to any
and all other remedies available thereto, may obtain injunctive
relief, regardless of whether the injured party can demonstrate
that no adequate remedy exists at law.
8. AMENDMENTS OR ADDENDA. All amendments, addenda, modifications,
or changes to this contract are shown on Exhibit "F", attached
hereto and made a part hereof.
9. INITIALS AND EXHIBITS. This contract shall not be valid and
enforceable unless it is properly executed by Buyer and Seller
and their initials affixed to each page of the exhibits attached
hereto and made a part hereof.
IN WITNESS WHEREOF, this Agreement has been executed by each of
the individual parties hereto and signed by an officer thereunto
duly authorized and attested under the corporate seal of the Secretary
of the Corporate party hereto, if any, all on the date and year
first above written.
Signed, sealed and delivered in the presence of:
(CORPORATE SEAL) (CORPORATE NAME)
Witness Its President/Vice President
Attest: Its Secretary
(CORPORATE SEAL) (CORPORATE NAME)
Witness Its President/Vice President
Attest: Its Secretary
All assets associated with or relating to that certain business
establishment known and commonly referred to as ___, located at
in , including, but not limited to: the trade name " ," all leasehold
improvements, inventory, fixtures, utility deposits, telephone
deposits, any and all other security deposits, good will (which
has no value), and any and all other items normally considered
and commonly referred to as assets, except those specifically
excepted hereinafter: .
AMOUNT AND PAYMENT OF PURCHASE PRICE
a. CONSIDERATION As total consideration for the purchase and sale
of the property, the Buyer shall pay to the Seller the sum of
(R ), such total consideration to be referred to in this Agreement
as the "Purchase Price".
b. PAYMENT. The Purchase Price shall be paid as follows:
i. Rands (R ) to be paid to Seller upon execution of this contract;
ii. Cashier's or certified check from Buyer in the sum of Rands
(R ) to be delivered to Seller at closing.
c. ALLOCATION. The Purchase Price shall be allocated for tax purposes
i. Inventory R
ii. Fixtures R
iii. Leasehold Improvements R
iv. Goodwill R
v. Non-Competition Provision R
vi. Other (specify) R
REPRESENTATIONS AND WARRANTIES OF SELLER
a. Organization and Standing. Corporation is a corporation duly
organized, validly existing and in good standing under the laws
of South Africa and has the corporate power and authority to carry
on its business as it is now being conducted.
b. Authority Relative to this Agreement. Except as otherwise stated
herein, the Seller has full power and authority to execute this
Agreement and carry out the transactions contemplated by it and
no further action is necessary by the Seller to make this Agreement
valid and binding upon Seller and enforceable against it in accordance
with the terms hereof, or to carry out the actions contemplated
hereby. The execution, delivery and performance of this Agreement
by the Seller will not (i) constitute a breach or a violation
of the Corporation's Certificate of Incorporation, By-Laws, or
of any law, agreement, indenture, deed of trust, mortgage, loan
agreement or other instrument to which it is a party, or by which
it is bound; (ii) constitute a violation of any order, judgment
or decree to which it is a party or by which its assets or properties
is bound or affected; or (iii) result in the creation of any lien,
charge or encumbrance upon its assets or properties, except as
c. Tax Matters. The Seller has timely prepared and filed all tax
returns and reports as are and have been required to be filed
and all taxes shown thereon to be due have been paid in full,
including but not limited to, value added tax, withholding tax
and all other taxes of every nature.
d. Properties. The Seller has good and merchantable title to all
of its properties and assets which are those properties and assets
as set out in Exhibit "A" annexed hereto and made a part hereof.
At Closing, such properties and assets will be subject to no mortgage,
pledge, lien, conditional sales agreement, security agreement,
encumbrance or charge, secured or unsecured, except for those
taxes which shall be pro-rated as of the date of Closing. Seller
has or will pay all debts incurred by it up to the date of occupancy
by Buyer including all employee compensation and utilities.
e. Compliance with Applicable Laws. None of the Seller's actions
in transferring good and merchantable title to those assets and
properties set out in Exhibit "A" are prohibited by or have violated
or will violate any law in effect on the date of this Agreement
or on the date of closing.
f. Documents for Review. The Seller's documents enumerated in
Exhibit "D" attached hereto and made a part hereof, are true,
authentic, and correct copies of the originals, or, as appropriate,
the originals themselves, and no alterations and modifications
thereof have been made.
g. The lease currently operative on the premises, if applicable,
is in good standing and all payments required to be made under
the lease have been made by Seller.
h. All rent averages, rent, maintenance expenses and prorations
relating to the lease, including any real property tax obligations
and insurance obligations up to occupancy by Buyers, are the responsibility
i. will pay any and all fees charged by the Landlord for processing
any assignment of the lease to the Buyer.
DOCUMENTS FOR REVIEW
i. Leasehold Agreement(s)
ii. Financial and Operating Statement(s)
iii. VAT Return(s)
iv. Income Tax Return(s)
v. Accounts Payable/Receivables Ledger
vi. If Seller is a Corporation:
a. Corporate Articles of Incorporation
b. Corporate Bylaws
c. Corporate Minutes and Resolutions
a. Buyer obtaining the full transfer and assumption of the leasehold
interest and the leasehold agreement(s) currently in force between
Seller and Seller's landlord.
b. The full payment of all liabilities and obligations currently
outstanding on the business, except those specifically enumerated
hereinafter and assumed by Buyer as a part of this transaction:
AMENDMENTS AND ADDENDA
During the term of this Agreement, upon its termination for any
Seller will not, directly or indirectly, enter the employment
of, or render services to, any other person, partnership, association,
or corporation engaged in the same or substantially similar business
covered by this agreement in any area which can be reasonably
termed competitive to the Buyer; and during such term of two (2)
years, the Seller will not within such territory engage in such
business on his own account, or become interested therein, directly
or indirectly, as an individual, partner, shareholder, director,
consultant, independent contractor, officer, clerk, principal,
agent, employee, trustee, or in any relation or capacity whatsoever.