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Date Posted: 05:00:51 02/11/03 Tue
Author: agreement
Subject: agreement5

27
Short form business sale agreement1 between two unconnected companies-

no interval between exchange and completion
book debts excluded but to be collected as agent (short form)
short form warranties
[1300]
THIS AGREEMENT is made the ......... day of ............
BETWEEN:
(1) (seller of the business) whose registered office is at (address) (registered in England no......) (‘the Vendor’) and
(2) (purchaser of the business) whose registered office is at (address) (registered in England no ......) (‘the Purchaser’)
[1301]
NOW IT IS AGREED as follows:
1 Definitions
1.1 In this agreement the following words and expressions have the following meanings unless inconsistent with the context:
1.1.1 ‘the Assets’ means the assets referred to in clause 2.1
1.1.2 ‘the Book Debts’ means all book and other debts accrued or accruing due to the Vendor in respect of the Business as at the Transfer Date
1.1.3 ‘the Business’ means the business of (description of business) carried on by the Vendor at the Transfer Date including (where the context admits) the Assets
1.1.4 ‘Contracts’2 means the current contracts and engagements of the Vendor in relation to the Business [listed in [Part I of] the third schedule]
1.1.5 ‘Completion’ means the performance by the Parties of their respective obligations under clause 7
1.1.6 ‘the Disclosure Letter’3 means the letter bearing the same date as this agreement (including the documents appended to it) from the Vendor to the Purchaser
1.1.7 ‘the Employees’ means the persons engaged in the Business at the Transfer Date whose names are listed in the first schedule
1.1.8 ‘the Equipment’ means the plant machinery vehicles fittings office furniture equipment and loose tools of the Vendor relating to the Business at the Transfer Date [and listed in the second schedule]
1.1.9 ‘Excluded Assets’ means the assets listed in clause 3 which are owned by the Vendor but are excluded from the sale to the Purchaser
1.1.10 ‘the Goodwill’ means the goodwill of the Business and the exclusive right for the Purchaser to represent itself as carrying on the Business in succession to the Vendor
[1.1.11 ‘the Leasing Agreements’ means agreements relating to the plant and equipment leased or hired to the Vendor and used in the Business and specified in [Part II of] the third schedule]
[1302]
1.1.12 ‘the Property’ means the property short particulars of which are set out in the fourth schedule
1.1.13 ‘the Regulations’ means the Transfer of Undertakings (Protection of Employment) Regulations 19814
1.1.14 ‘the Stocks’ means the stock-in-trade and work-in-progress of the Business at the Transfer Date including (without limitation) current and usable components raw materials and stores
1.1.14a ‘the Systems’ means any computer systems products or software or any equipment and systems incorporating such computer systems products or software used by the Vendor in relation to the Business
1.1.15 ‘the Transfer Date’ means the close of business on (date)
1.1.16 ‘the Warranties’5 means the warranties representations and undertakings set out in the fifth schedule
1.1.17 ‘in the agreed terms’ means in the form of an annexed draft agreed between the parties prior to the date of this agreement and signed on behalf of each party
1.2 Reference to any statute or statutory provision includes a reference to:
1.2.1 that statute or statutory provision as from time to time amended, extended or re-enacted or consolidated and
1.2.2 all statutory instruments or orders made pursuant to it
1.3 Words denoting the singular number only shall include the plural and vice versa. Words denoting any gender include all genders and words denoting persons shall include firms and corporations and vice versa
1.4 Unless the context otherwise requires reference to any clause sub-clause or schedule is to a clause sub-clause or schedule (as the case may be) of or to this agreement
1.5 The headings in this document are inserted for convenience only and shall not affect the construction or interpretation of this agreement
[1303]
2 Sale and purchase of the Business
2.1 Subject to the provisions of this agreement the Vendor shall sell with full title guarantee and the Purchaser shall purchase free from all charges liens equities and incumbrances with effect from the Transfer Date the Business as a going concern comprising the following assets of the Vendor [for the following sums]6:
2.1.1 the Goodwill [for the sum of £...]7
2.1.2 the Property [for the sum of £...]8
2.1.3 the Equipment [for the sum of £...]
2.1.4 the Stocks [for the sum of £...]
2.1.5 the benefit (subject to the burden) of the Contracts so far as the Vendor can assign the same [for the sum of £...]
2.1.6 the benefit (subject to the burden) of the Leasing Agreements so far as the Vendor can assign the same [for the sum of £...]
2.1.7 without in any way limiting the generality of the foregoing all other assets (if any) of whatever nature employed in the Business at the Transfer Date but excluding the Excluded Assets
2.2 The aggregate consideration for the sale by the Vendor of the Business shall be the sum of £...
[1304]
3 Excluded Assets
There shall be excluded from the sale and purchase of the Business and retained by the Vendor:
3.1 all the statutory books and statutory records of the Vendor
3.2 the Book Debts and other debts9 of the Vendor together with all cheques bills notes and securities receivable for the same
3.3 any amounts recoverable by the Vendor in respect of taxation paid or payable by the Vendor in connection with matters or events occurring on or before the Transfer Date
3.4 all cash in hand or at the bank
[1305]
4 VAT10
4.1 The parties intend that the Value Added Tax Act 1994 Section 49 (‘Section 49’) and the Value Added Tax (Special Provisions) Order 1995/1268 Article 5 (‘Article 5’) shall apply to the transfer of the Business and the Parties shall use all reasonable endeavours to secure that pursuant to Section 49 and Article 5 the sale of the Business is treated as neither a supply of goods nor a supply of services for the purposes of VAT
4.2 On completion the Vendor shall deliver to the Purchaser all records relating to the Business referred to in Section 4911
4.3 In the event that VAT is chargeable on the transfer of the whole or any part of the Business pursuant to this agreement then the Purchaser shall pay to the Vendor (in addition to the consideration referred to in clause 2.2) an amount equal to the VAT payable in respect of the same together with any penalty or interest incurred for late payment of such tax
[1306]
5 Apportionment/prepayments
5.1 Upon Completion the Vendor shall account to the Purchaser for all prepayments received from customers in respect of any of the Contracts to the extent that such prepayments exceed the actual costs (if any) incurred by the Vendor in partially performing such Contracts prior to the Transfer Date
5.2 All rents rates water electricity telephone charges salaries wages accrued holiday pay and other outgoings and costs of a periodical nature which relate to periods commencing before the Transfer Date and ending after the Transfer Date shall be apportioned on a time basis and those referable to the period ended on the Transfer Date shall be borne by the Vendor and those referable to the period commencing on the day following the Transfer Date shall be borne by the Purchaser
[1307]
6 Risk
The assets rights and property to be sold pursuant to this agreement shall be at the risk of the Purchaser from the date of this agreement
7 Completion
7.1 Completion of the sale and purchase of the Business shall take place immediately after execution of this agreement by both parties at the offices of the Vendor’s Solicitors
7.2 At Completion the Vendor shall deliver or cause to be delivered to the Purchaser:
7.2.1 a duly executed assignment of the Goodwill in the agreed terms
7.2.2 duly executed conveyances transfers assignments and other documents in the agreed terms necessary to vest title in the Property in, or transfer the Property to, the Purchaser together with all deeds and documents relating to the title of the Vendor to the Property
7.2.3 all the Assets hereby agreed to be sold which are capable of passing by delivery
7.3 At Completion the Purchaser shall deliver to the Vendor’s Solicitors a banker’s draft in favour of the Vendor for £...
[1308]
8 Employees
8.1 The Employees’ contracts of employment shall at Completion be transferred to the Purchaser under the Regulations12
8.2 The Purchaser will be responsible for and undertakes to indemnify and keep the Vendor indemnified from and against all accrued holiday pay entitlements and accrued holiday entitlements of the Employees which have accrued at any time up to Completion
8.3 The Purchaser undertakes to indemnify and keep the Vendor indemnified from and against all liabilities obligations costs claims and demands arising from any change in the working conditions or terms of employment of the Employees (or any of them) occurring on or after Completion or from the change of employer occurring by virtue of the Regulations or from the termination of the employment of any of the Employees after Completion or as a result of any act or omission of the Purchaser arising after Completion
8.4 The Vendor undertakes to indemnify and keep the Purchaser indemnified from and against all liabilities obligations costs claims and demands arising from or in respect of any of the Employees insofar as and to the extent that the same was caused by any act or omission by the Vendor prior to the [date of Completion]
[1309]
9 Collection of Book Debts13
9.1 The Vendor will on Completion supply to the Purchaser full details of the Book Debts and the Purchaser will use its reasonable endeavours to collect the same as agent for the Vendor and will account to the Vendor at [monthly] intervals for the amounts so collected by it all such payments to be made to the Vendor not later than (number) days after the end of the relevant month
9.2 Notwithstanding clause 9.1:
9.2.1 the Purchaser shall cease to have any obligation to collect any Book Debts on the expiration of [3] months from the date of this agreement
9.2.2 the Purchaser shall not be obliged to commence legal proceedings to collect any Book Debts
9.3 On the expiry of the period of [3] months referred to in clause 9.2.1 the Vendor shall be at liberty to collect any Book Debts which are then outstanding provided that the Vendor will consult the Purchaser before commencing any legal proceedings for the recovery of any Book Debts
9.4 Any payment by a debtor who owes money to both the Vendor and the Purchaser shall (in the absence of a contrary intention of the debtor) be allocated firstly in relation to any Book Debt owing to the Vendor until the same has been paid in full
[1310]
10 The Property
The Property is sold and conveyed upon the terms of this agreement and of the[[ transfer or conveyance] in the agreed terms or Standard Conditions of Sale ((specify) Edition) so far as the same are applicable to a sale by private treaty and subject to the variations and conditions set out in the fourth schedule]. In the case of any conflict between [the [transfer or conveyance] or the Standard Conditions] and this agreement the provisions of [this agreement] shall prevail
[1311]
11 Contracts/Leasing Agreements

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