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Asset Purchase and Sale Agreement

THIS ASSET PURCHASE AND SALE AGREEMENT (Agreement) made this [date] by and between [name], a [state] company with offices at [address] (Purchaser), and [name], a [state] company with offices at [address] (Seller).

W I T N E S S E T H:

WHEREAS, Seller is willing to sell to Purchaser and Purchaser is willing to buy from Seller, upon the terms and conditions hereinafter set forth, only those assets held by Seller in its [describe] business (Seller's Business), as more fully set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1. Sale of Assets. Upon the terms and subject to the conditions provided in this Agreement, Seller shall, at the Closing and as of the Closing Date (as said terms are hereinafter defined), convey, sell, transfer, assign, and deliver to Purchaser, and Purchaser shall purchase from Seller, all of the business and assets used by Seller in the conduct of Seller's Business, as such assets exist on the Closing Date (as such term is hereafter defined), including (hereafter collectively referred to as the Assets):

a. All inventories, including finished goods, work in process, and raw materials owned by Seller's Business and used in Seller's Business. Set forth in Schedule 1(a) attached hereto [omitted] is a list of the inventories of the Seller's business as of [date].

b. The goodwill and all slogans or trade names used by Seller in Seller's Business, including only the names listed in Schedule 1(b) attached hereto [omitted], and all customer lists relating to the present and former customers of Seller's Business, which customer lists are attached hereto as Schedule 1(b).

c. The accounts receivable of Seller's Business and any receipts collected from such accounts receivable by Purchaser after the Closing. Set forth in Schedule 1(c) attached hereto [omitted] is a list of all of the accounts receivable of the Seller's Business as of [date].

d. The machinery, equipment, tools, dies, supplies, leasehold improvements, furniture, and fixtures of Seller's business listed in Schedule 1(d) attached hereto [omitted], and all employee lists, files, papers, books, records, sales and advertising materials, and records, sales, and purchase correspondence, affecting or pertaining to Seller's ownership and/or use of the Assets.

e. Any and all rights and interest in and to any licenses and commercially Practiced patents, copyrights, trademarks, trademark registration applications (including all reissues, divisions, continuations and extensions thereof), patent applications, and patent disclosures docketed, if any, including only those listed in Schedule 1(e) attached hereto [omitted].

f. The rights and interests in and to the intellectual property rights and proprietary expertise, including, without limitation, proprietary information, technical and technological data, know-how, processes, invention conception memoranda, manufacturing and engineering data, computer programs, and sales and advertising information used in Seller's Business listed in Schedule 1(f) attached hereto [omitted].

g. The permits, authorisations, approvals, or indicia of authority to operate and maintain Seller's business as issued by any federal, state, or local government, including only those listed in Schedule 1(g) attached hereto [omitted].

h. All right, title, and interest of Seller in and to (A) the leases (for real or personal property) and contracts listed in Schedule 1(h) attached hereto [omitted]; (B) all purchase orders given by Seller for the purchase of products, materials, supplies, parts, and other items used in the Seller's Business; and (C) all purchase orders submitted to Seller by customers of Seller in business with respect to which Seller has not received full payment thereon on or prior to the Closing Date. All of such leases, contracts, purchase orders, and sales commitments specified in clauses (A), (B), and (C) of this Section 1(h) are listed in Schedule 1(h) and are hereafter collectively referred to as the Assumed Contracts;

i. Such prepaid expenses of the Seller's Business as are set forth in Schedule 1(i) attached hereto [omitted].

OPTIONAL

Purchaser acknowledges that the Assets do not include cash or any real property other than the leases of real property described in Schedule 1(h) attached hereto [omitted].

2. Purchase Price for the Assets. Purchaser shall pay to Seller for the Assets a purchase price (the Purchase Price) equal to .......... dollars ($..........) payable as follows:

a. .......... dollars ($..........) by way of wire transfer into Seller's designated bank account on the Closing Date. [Insert other terms; consider security if deferred purchase price.]

b. The Purchase Price is based upon the following allocation [other alternatives available; consult tax counsel and CPA]:

Furniture, Fixtures and Equipment $

Accounts Receivable; Intercompany

Receivables (Net)

Inventory

Lease

Goodwill

Leasehold Improvements

Total Purchase Price. The parties agree to use the above allocation for purposes of filing their local, state, and federal income tax returns.

c. As of the close of business on the Closing Date, the Purchaser shall assume and thereafter pay, perform, or discharge when due all of the following liabilities and obligations (Assumed Liabilities) and no other liabilities or obligations:

i. The liabilities as of the Closing under the Assumed Contracts listed in Schedule 1(h);

ii. The trade accounts payable related to the Seller's Business and operations listed in Schedule 2(c)(ii) attached hereto

[omitted];

The Purchaser shall have at all times hereafter any and all responsibility to all creditors and all third parties and to the Seller with respect to the Assumed Liabilities and shall indemnify and hold the Seller and its shareholders, officers, and directors and their respective successors, heirs, and assigns harmless from and against any and all cost, loss, and liability (including reasonable solicitor fees) arising from the Assumed Liabilities.

d. Excluded Liabilities. With the exception of the Assumed Liabilities, Purchaser shall assume no liabilities or other obligations of Seller (Excluded Liabilities).

3. Documents to Be Delivered at Closing. At the Closing:

a. Seller shall execute and deliver to Purchaser a Bill of Sale fully executed, conveying, selling, transferring, and assigning to Purchaser all of the Assets free and clear of any and all defects, caveats, liens, encumbrances, and charges.

b. Seller shall execute or endorse and deliver to Purchaser other duly executed separate instruments of sale, assignment, or transfer, including assignments of contract rights or leases in form suitable, where appropriate, for filing or recording with the appropriate office or agency for various items of the Assets or other rights of Seller to be conveyed hereunder, where, the same are necessary in order to vest or evidence title hereto in Purchaser.

c. Seller shall execute or endorse and deliver instruments effectively assigning and transferring to Purchaser all intangible assets included in the Assets and containing appropriate warranties of title, together with the consents, where required, of third parties with respect to such transfers and assignments.

d. Purchaser shall pay the Purchase Price for the Assets in accordance with the terms of Section 2 hereof.

e. Seller shall deliver to Purchaser a Certificate of Good Standing from the duly authorised officer of the Seller's state of incorporation dated not more than thirty (30) days prior to the Closing Date.

f. Seller shall deliver to Purchaser a certified copy of resolutions of the stockholders of Seller authorising this Agreement and the other agreements and instruments to be delivered pursuant thereto and the transactions contemplated hereby and thereby.

g. Purchaser shall deliver to Seller a certified copy of resolutions of the Board of Directors and stockholders of Purchaser authorising this Agreement and the other agreements and instruments to be delivered pursuant thereto and the transactions contemplated hereby and thereby.

h. Seller shall deliver to Purchaser duly executed assignments of leases (Assignments of Leases) for the real property currently occupied by the Seller in the forms annexed hereto as Schedules 3(i) [omitted].

i. Seller and [principal shareholder(s)] shall deliver to Purchaser Covenant Not to Compete Agreements in the forms annexed hereto as Exhibits I-A--I-D [omitted].

4. Closing. The Closing of the transactions contemplated by this Agreement, and all deliveries to be made at such time in connection therewith, shall take place at the offices of [name] located at [address] upon the satisfaction of all of the conditions set forth in this Agreement on [date] (Said Closing and said date thereof, herein referred to as the Closing and the Closing Date, respectively).

5. Cross Indemnities.

a. Seller hereby undertakes and agrees to indemnify Purchaser (and its shareholders, officers, and directors and their respective successors, heirs, and assigns) and hold it and them harmless against and in respect of the following:

i. All claims, debts, liabilities, and obligations of Seller whether absolute or contingent arising out of the conduct of Seller's business as conducted by Seller on or prior to the Closing Date, including, but not limited to, the Excluded Liabilities, liability to any federal, state, or local tax authority, Seller's failure to comply with the GST, Sales Act, and whether or not such liabilities are asserted prior to the Closing Date or thereafter, except for such liabilities and obligations as are expressly assumed by Purchaser pursuant to this Agreement; and action where the occurrence giving rise to such liability, claim or action takes place on or prior to the Closing Date; and

ii. Any and all loss or damage sustained by Purchaser as a result of any material breach of Seller's representations, covenants, and warranties contained in this Agreement; and

iii. Any and all actions, suits, proceedings, demands, assessments, judgments, costs, and reasonable legal and other expenses incident to any of the foregoing.

b. Purchaser hereby undertakes and agrees to indemnify Seller (and its shareholders, officers, and directors and their respective successors, heirs and assigns) and hold it and them harmless against and in respect of the following:

i. All claims, debts, liabilities, and obligations of Purchaser whether absolute or contingent arising out of the conduct of Seller's Business as conducted by Purchaser after the Closing Date, including, but not limited to, liability to any federal, state, or local tax authority and the Assumed Liabilities; and

ii. Any products liability claim or related claim or action where the occurrence giving rise to such liability, claim, or action takes place after the Closing Date; and

iii. Any and all loss or damage sustained by Seller as a result of any breach of Purchaser's material representations, covenants, and warranties contained in this Agreement; and

iv. Any and all actions, suits, proceedings, demands, assessments, judgments, costs, and reasonable legal and other expenses incident to any of the foregoing.

c. The covenant of indemnity set forth in this Section 5 is intended by the parties to be for the benefit of each other and their respective shareholders, officers, and directors and their respective successors, heirs, and assigns and shall survive the Closing for a period of [number] years/months.

6. Covenants. From the date hereof, Seller and Purchaser shall take all such action, both before and after the Closing, as may be necessary or appropriate to consummate the transactions provided for in this Agreement in accordance with the representations, warranties, conditions, and agreements contained herein, and shall refrain from taking any action that would result in any of such representations or warranties not being true and correct, or any of such conditions not being satisfied, at the Closing.

7. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Seller as follows:

a. Purchaser is a company duly organised, validly existing and in good standing under the laws of the State of [state] and is duly qualified, licensed, and authorised to do business as a foreign company and is in good standing as a foreign company in each jurisdiction in which the conduct of its business requires such qualification, licensing, or authorisation. Purchaser has full corporate power to own or lease its properties and carry on its business as now being conducted.

b. Purchaser has full corporate power and authority to execute and deliver this Agreement and the other agreements and instruments to be executed and delivered by it pursuant hereto and to consummate the transactions contemplated hereby and thereby. All company acts and other proceedings required to be taken by or on the part of Purchaser, including, if necessary, all appropriate stockholder action, to authorise it to carry out this Agreement and such other agreements and instruments and the transactions contemplated hereby and thereby have been duly and properly taken. This Agreement has been duly executed and delivered by Purchaser and constitutes, and such other agreements and instruments when duly executed and delivered by Purchaser will constitute, legal, valid, and binding obligations of Purchaser and will be enforceable in accordance with their respective terms.

c. Neither the execution and delivery nor the performance of this Agreement will (i) violate any provision of law, or any judgment, writ, injunction, decree, or order of any court or other governmental authority relating to Purchaser; or (ii) violate any will, deed, mortgage, instrument, indenture, agreement, contract, other commitment, or restriction to which Purchaser is a party or by which it is bound; or (iii) be in conflict with, or result in, or constitute a breach or default (or an occurrence which by lapse of time and/or the giving of notice would constitute a breach or default), on the part of Purchaser, under any such will, deed, mortgage, instrument, indenture, agreement, contract, other commitment, or restriction; or (iv) result in the creation or imposition of any caveat, lien, charge, or encumbrance of any nature whatsoever upon the Assets.

d. All of the representations and warranties set forth in this Section 7 shall be deemed renewed by Purchaser at the Closing as if made at such time and shall survive indefinitely after the Closing Date.

8. Representations and Warranties of Seller. The Seller represents and warrants to Purchaser as follows:

a. Seller now has, and by virtue of the deliveries made at the Closing, Purchaser will obtain, good and marketable title to the Assets, free and clear of all caveats, liens, encumbrances, and charges, except as otherwise provided in Schedule 8(a) attached hereto [omitted] or except as otherwise provided herein.

b. With respect to the machinery and equipment to be sold and transferred hereunder, Seller represents and warrants that such machinery, equipment, and other like assets are being sold "AS IS, WITH ALL FAULTS."

c. To the best of Seller's knowledge, neither the business of Seller as conducted prior to the Closing nor the ownership or sale by Seller of any of the Assets were, are, or will be in contravention of any material patent, trademark, copyright, or franchise agreements, licensing agreements, or other proprietary right of any third party.

d. To the best of Seller's knowledge, except as otherwise provided in Schedule 8(d) attached hereto [omitted], neither the execution and delivery nor the performance of this Agreement will (i) violate any provision of law, or any judgment, writ, injunction, decree, or order of any court or other governmental authority relating to Seller; or (ii) violate any will, deed, mortgage, instrument, indenture, or material agreement, contract, other commitment, or restriction to which Seller is a party or by which it is bound; or (iii) be in conflict with, or result in, or constitute a breach or default (or an occurrence which by lapse of time and/or the giving of notice would constitute a breach or default), on the part of Seller, under any such will, deed, mortgage, instrument, indenture, agreement, contract, other commitment, or restriction; or (iv) result in the creation or imposition of any caveat, lien, charge, or encumbrance of any nature upon the Assets.

e. Except as listed in Schedule 8(e) attached hereto [omitted], Seller is not a party to any written or oral (i) contract for the employment of any officer or individual employee of Seller's business not terminable by it without liability upon notice of thirty (30) days or less or (ii) any sales contract or commitment or contract for the future purchase of materials, supplies, or equipment that involves an amount greater than .......... dollars ($..........).

f. The business of Seller has been conducted by Seller in all material respects in accordance with all applicable laws, governmental regulations, and judicial and administrative decisions. Any licenses or permits issued by any governmental authority in connection with Seller's Business are set forth in Schedule 1(g) attached hereto [omitted].

g. To the best of Seller's knowledge, except as set forth in Schedule 8(g) attached hereto [omitted], there is no material claim, litigation, action, suit, or proceeding, administrative or judicial, pending or threatened, against or affecting Seller, or involving any of the Assets of Seller, at law or in equity or before any governmental authority, nor to Seller's knowledge is there any basis upon which any such claim, litigation, action, suit, or proceeding could be brought or initiated. Seller is not subject to or in default under any judgment, order, writ, injunction, or decree of any court or any governmental authority, and no material replevins, attachments, or executions have been issued or are now in force against Seller. No petition in bankruptcy or receivership has ever been filed by or against Seller.

h. Except as set forth in Schedule 8(h) attached hereto [omitted], no consent, authorisation, license, permit, order, certificate, or approval that has not heretofore been obtained is required by any person, corporation, partnership, estate, trust, governmental agency, or other person or entity not a party to this Agreement or to the transactions contemplated by this Agreement.

i. Seller is making no warranty, express or implied with respect to the future performance or profitability of Seller's Business.

j. Seller is duly organised, validly existing, and in good standing under the laws of [state] and is duly qualified, licensed, and authorised to do business as a foreign company and is in good standing as a foreign corporation in each jurisdiction in which the failure to be so qualified would have a material, adverse effect on its business. Seller has full corporate power and authority to execute and deliver this Agreement and the other agreements and instruments to be executed and delivered by it pursuant hereto and to consummate the transactions contemplated hereby and thereby. All corporate acts and other proceedings required to be taken by or on the part of Seller, including, if necessary, all appropriate stockholder action, to authorize it to carry out this Agreement and such other agreements and instruments and the transactions contemplated hereby and thereby have been duly and properly taken. This Agreement has been duly executed and delivered by Seller and constitutes, and such other agreements and instruments when duly executed and delivered by Seller will constitute, legal, valid, and binding obligations of Seller and will be enforceable in accordance with their respective terms.

OPTIONAL [on a small deal]

k. The accounts receivable of Seller's Business existing on the date hereof and on the Closing Date will represent amounts duly and validly owing to Seller from sales made in the regular and ordinary course of its business, all such accounts receivable have been or will be collected to the extent of the face amount thereof in accordance with their terms, net of any reserve therefor shown on the Balance Sheet, and will not be subject to any offsets, recoupments, setoffs, or counterclaims.

l. Schedule 1(e) attached hereto [omitted] and incorporated herein by reference sets forth all patents, patent applications, registered trademarks, registered service marks, trademark and service mark applications, unregistered trademarks and service marks, copyrights, and copyright applications, owned or filed by the Seller or in which the Seller has an interest and the nature of such interest. To the best of Seller's knowledge, Seller is not infringing upon any patent, trademark or service mark, or copyright or otherwise violating the rights of any third party. No proceedings have been instituted or to the best of Seller's knowledge, are threatened, and no claim has been received by the Seller alleging any such violation, and Seller is not a party to, or bound by, any license agreement requiring payment, except as set forth in Schedule 1(e).

m. Seller has not received any actual notice from any court or governmental agency of any violation or alleged violation of any applicable laws, ordinances, regulations, rules, decrees, awards, or orders enacted or entered by any federal, state, or local governmental authority or court.

n. To the best of Seller's knowledge, the inventories of the Seller's Business existing at the date hereof are of a quality and quantity salable in the ordinary course of business at prevailing market prices.

o. The foregoing representations and warranties set forth in this Section 8 shall be deemed renewed by Seller at the Closing and shall survive the Closing Date until ([number] months after the Closing Date (Cut-Off Date); provided, however, that the representations and warranties of Seller contained in Sections 8(a), 8(d), 8(h), and 8(j) shall survive indefinitely after the Closing Date.

9. Financial Advisors and Expenses. Seller represents to Purchaser that [name] has acted as financial advisor in connection with this Agreement and the transactions contemplated hereby and that Seller shall pay all fees of such financial advisor. Purchaser represents to Seller that [name] has acted as financial advisors in connection with this Agreement and the transactions contemplated hereby and that Purchaser shall pay all fees of such financial advisor. Each party hereto acknowledges to the other that there are no other financial advisors or brokers in connection with this Agreement and agrees to indemnify the other for any claims by any other financial advisors or broker in connection with this Agreement and the transactions contemplated hereby resulting from any act by such party.

10. Notices. Any notice or other documents to be given or delivered hereunder by any party to any other party shall be in writing and shall be delivered personally or sent by certified mail, postage prepaid return receipt requested to the following addresses:

[names and address of Seller, Seller's Counsel,

Purchaser and Purchaser's Counsel]

11. Merger; Amendment. This Agreement, the attachments hereto [omitted], and the agreements and other documents expressly referred to herein embody the entire representations, warranties, agreements, and conditions in relation to the subject matter hereof, and no representation, warranty, understanding, or agreement, oral or otherwise, in relation thereto exists between the parties except as herein expressly set forth. This Agreement may not be amended, augmented, or terminated orally but only as expressly provided herein or by an instrument in writing duly executed by the parties hereto.

12. Successors and Assigns. After the Closing, Purchaser may assign all of its rights and/or obligations under this Agreement to any person who acquires either the stock of Purchaser or substantially all of the assets of the Purchaser; provided, however, that any such assignment by Purchaser shall not relieve Purchaser of its obligations hereunder. This Agreement and the various rights and obligations arising hereunder shall inure only to the benefit of and be binding upon the parties hereto and their respective successors, heirs, and permitted assigns.

13. Invalidity. The invalidity or unenforceability of any term or provision of this Agreement or the application of such term or provision to any person or circumstances shall not impair or affect the remainder of this Agreement and its application to other persons and circumstances, and the remaining terms and provisions hereof shall not be invalidated but shall remain in full force and effect.

14. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of [state].

15. Counterpart. When Purchaser has executed and delivered to Seller a counterpart of this Agreement, it shall be binding upon Seller and Purchaser.

16. Captions. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretations of any provision of this Agreement.

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

Attest: Seller:

[signature] By: [signature]

Secretary

Attest: Purchaser:

[signature] By: [signature]

Secretary