Fillable Printable Asset Purchase and Sale Agreement Form

Asset Purchase and Sale Agreement Form

ASSET%PURCHASE%&%SALE%AGREEMENT%

A.%PARTIES%

This% agreement% (“agreement”)%is%entered%into%this%___

day% of% July,% 201_% by% and% between% XXX% LLC,% a%

California%limited%liability%company%(“The%LLC”%or%“buyer”)%and%YYY%Inc.%(“ X X X ”%o r %“s e ller ”),%a %C a lifo rn ia %

compa ny.%Buyer%and%seller%will%be%referred%to%at%times%as%“the%parties.”%

B.%RECITALS%AND%SUMMARY%

XXX%owns%the%business%assets%and%operates%two%_____________%businesses%located%at…………… …… …..%

The% LLC% is% purchasing,%o n% a%contingent%basis,%the%assets% o f% the% b usinesses%“free%and%clear,”%including,%but%

not% limited% to,%license%rights,%equipment,%furniture,%supplies,%personal%property%leases%(to%the%degree%

desired% by% buyer% and% transferable)% conditional% use% permits,% business% licenses% (to% the% degree%

transfera ble ),%clientele%contacts%and%contracts%(to%the%degree%desired%by%buyer),%cou rs e %and%instructional%

materials%(if%applicable),% staf f%and%independent%contractor%relationsh ips%(to%the%degree%desired),%

applicable% intellectual% property% (if% any),% accounts% receivable,% telephone% num bers% and% good% will.%

Collectively,%all%items%purchased%shall%be%referred%to%herein%as%the%“assets.”%This%agreement%will%also%be%

referred %to%h ere in% at%times%as% “this%transaction.”%A%copy%of%the%licensing% agreement%is%attached%hereto%as%

Exhibit%“A”%and%in corporated%herein%by%this%reference.%%

Buyer%may% specifically%decline%in%writing%to%purchase%a% portion%of%the%assets%described%above%prior%to%the%

conclusion% of% the% Due% Diligence% period% (see% section% D.% below).% This% includes,% but% is% not% limited% to,%

existing%employee,%client%and%independent%contractor%relationships,%as%well%as%the%licenses.%

Buyer%is%not%offering%to%purchase%any%debt%or%legal%obligation%of%seller,% exc e p t% as % m a y % be % ex p r e ss ly %

agreed%upon%prior%to%closing.%

%%%

C.%PURCHASE%& %SALE;%PRICE%A ND%TERMS;%CLOSING%

Purchase%& %Sale:%

Subject%to%the%contingencies%listed%in%section%D.,%and%other%terms%of%this%agreement,%seller%hereby%sells%

and%the%LLC%hereby%purchases%title%of%seller%to%the%assets.%Seller% represents%and%warrants%that%except%for%

the%items%atta che d%hereto%as%Exh ibit%“ B,”%or%as%deposited %in %e scro w %as%soon %a s%possible%a fter%the%esc row %

is%op en e d ,%th e re %ar e%n o %e n cu mbranc es %o f%a n y%n a tu re %o r%k in d%on%the%asse ts%an d%a ll%rights%of%a ny%n atu re%

thereto ,%and %furth er,%tha t%seller%is%conv eyin g%full%right%an d%title%to%th e%asse ts%an d%all%rights%o f%any %natu re%

thereto %to%th e%LLC%(devo id%of%a ny %legal%p rob lem s%and %with%no%claims%and%liens%b y%other%parties,%private%

and%governmental).%%

The% LLC,% in% acquiring%full% right%and%title% to% the% assets% and%all%rights%of%any% nature% thereto,%is% free% to% utilize%

all%such%rights%and%title%to%the%fullest%extent%permitted%by%law.%

Price%and%Terms:% %

Subject% to%D.%2.%and%D.%6.,% b elow,%the% purchase% price%of% the%assets%is% ________________________dollars%

($___ _ __ __ _ __ __ .00 ).%All%figures%are%in%United%States%funds.%%

_________________%dollars% ($_____________.00)% is%due%prior%to%closing,%by%certified,% cashier’s% check%or%

wire% transfer% or% as% otherwis e% dire ct ed % by% the % buy er’s % lend e r% and /o r% esc ro w % ho ld er% (if% d e p o site d % in%

escrow);%to%be%paid%at%closing.%

________________%dollars%($____________.00)%is%payable%as%follows:%

During% at% least% the% first% eighteen% months% immediately% following% closing,% buyer% will% make% no% interest%

monthly%payments%of%$_________.00.%This%p eriod%of%time% may% be% expanded% to% as%long% as%the% date% of%the%

expiration%of%the%___________ _%lease,%depending%on%circumstances%as%described%in%D.%2.%below.%These%

payments%are%due%no%later%than%the%10

%of%each%month%in%which%they%are%due.%These%payments%will%not%

be% accelerated% unless% buyer% becomes% at% least% 2% monthly% payments% delinquent.% There% w ill% be% no % preZ

payment%penalty.%There%is%a%5%%penalty%added%to%any%late%payment.%

%Immediat e ly % the re a ft e r,% the % remaining% balance% ($___________% m inus% all% payments% made% per% the%

previous%paragraph)%is%payable%in%coZequal%m onthly%payments%of%$_ _______% until%the%remaining%balance,%

plus% interest,% is% paid% in% full% (the% “note”).% The% note% is% p ayable% with% six% percent% (6%)% simple% inter es t,%

compo unded % annually.% Upon% the% timely% receipt% of% all% such% monthly% payments,% the% note% (and% the%

purchase%price%of%the%transaction)%will%be%paid%in%full.%These%payments%are%due%n o%later%than%the%10

%of%

each%month%in%which%they%are%du e.% The%note%will% not% b e % a c ce le rat ed % unles s% buyer % b e co mes%at % le a st % 2 %

monthly%payments%delinquent.%There%will%be%no%preZpayment%penalty.%There%is%a%5%%penalty%added%to%

any%late%payment.%%%%

A% promissory% note% template% in% accordance% with% this% agreement,% is% attached% hereto% and% incorporated%

herein%by%this%reference.%

The% purchase% price% of% the% assets% increases% by% ______________% dollars% ($___________.00)% upon% the%

occurrence%of%certain%events%as%described%in%D.%2.%below.%In%the %eve n t %the %pu r ch a s e%p ric e%in cr ea s es ,%the %

additional%sum%will%be%added%to%the%note%principal%due%at%that%time,%payable%at%the%same%interest%rate%

and%monthly%payment%until%the%entire%principal%am ount%is%paid.%

Buyer% will% deposit% the% sum% of% _______________% dollars% ($________.00)% as% “earnest% m oney”% upon%

buyer’s%entry%into%a%legally%binding%agreement%w ith%the%lessor%of%the%businesses%premises%(“lessor”)%to%

lease %th e %tw o %p re mises%on %te rms%agree ab le %to %b u ye r%(s h ou ld %th is %tra n sa c tio n %clo se ). %The%earnest%money%

is% re fu n d ab le ,%minu s %escrow%ex p en s es ,%if%th is %transa ct io n%does%not%close%and%refundable%in%full%to%buyer%if%

this%transa ction %closes .%

The% earnest% money% shall% b e% deposited% at% ZZZ! (“escrow % hold er” ),% ___ __ __ _ __ __ __ _ __ __ _ __ __ _ __ __ %

(addre ss).% Executed% escrow% instructions% (prepared% by% buyer% an d% reasonably% acceptable% to% the% parties%

and% the% escrow% h older)% shall% be% deposited% in% escrow% within% seven% (7)% days% after% the% signing% of% this%

Agreement.%Buyer%will%supply%contact%information%to%seller%for%ZZZ%upon%the%signing%of%this%Agreement.%

Closing:%%

This%transaction%is%subject%to%the%California%Uniform%Com mercial%Code%–%Bulk%Sales%statutes%(“Bulk%Sales%

Act”).% The% aforementioned% escrow% instructio ns% will% include% creditor% notice,% publication,% payment% and%

other% salient% provisions% in% accordance% with% the% Bulk% Sales% Act.% Seller% w ill% deposit% th e% req uired %

infor m a tio n %fo r%b u y er ’s%u se %u n d er%s e ct ion %6 1 0 4 %o f%th e %B u lk%S a les %A ct .%The%provisions%and%requirements%of%

the% B ulk% S ales % Ac t% are % all% m a terial% te rm s% o f% this%agreem en t% an d % are % inco rp ora ted%by%re fere nce % h ere in% an d %

inclu d ed %h e re w ith %a s %Ex h ib it%“ C ”%for%ease%of%reference.%

Tax%clearance%certificates,% e.g.%Franchise%Tax%Board%and% B oard%of%Equalization ,%to% the% extent%required,%

will%also% be%filed%in% escrow%prior% to% closing.%Sales%tax,%if%any,%and%an y%other%tax%due%from%the%purchase%of%

the%asse ts%will%be%paid%out%of%the%escrowed%purchase%price.%All%new%mem bership%fees%and%monthly%fees%

receive d% d urin g% the % Du e% D iligen ce % pe riod % no t% use d% in% th e% o rdin ary% c ou rse% o f% the % bu sine ss% sh all% be %

retaine d%in%th e%seller’s%ch ec king%a cco un ts%an d%tran sfe rred %directly %to%bu yer%upo n %closin g.%%%% %

This%transaction%shall%close%the%next%business%day%after%written%notice%of%the%release%of%all%contingencies%

listed %in%D.%belo w %is%receive d %by%Selle r%(“C los in g ”%or%“Clo s ing %Da te ” ). %The% “D ue% Diligence% period”%shall% not%

exceed% sixty% (60)% days% from% the% date% first% written% above% unless% m ore% time% is% need ed% to% com plete% all%

aspects% of% the% bulk% sales% portion% of% this% agreem ent,% any% other% governmental% clearance% or% approval%

and/or%anything%related%to%the%franchise%(and%as%contained%in%the%escrow%instruction s).%%%

D.%CONTINGENCIES;%DUE%DILIGENCE%

Contingencies:%

1.%This%Agreement%is%contingent%upon%buyer%securing%necessary%funding%to%purchase%th e%assets%prior%to%

closing.%Buyer’s%lender%w ill%likely%determine%the%method%of%paym ent,%into%escrow,% directly% to%seller%or%as%

otherwise%reasonably%arranged%by%the%parties.%

2.% Subject% to,% and% as% further% described% in% section% C.,% Price% and% Term s% (above),% this% Agreem ent%is%

contingent%upon%buyer%working%out%a%rental/lease/subZlease%arrangement%w ith%lessor%and/or%seller%(as%

defined% in% C.% above% and% within% section% K.% below)% for% the% _________________% premises% of% the%

businesses.%Any%such%agreement(s)% will% be% binding%upon% buyer% only%if% this% transaction%closes%and% shall%be%

deposited%with%the%escrow%holder%prior%to%closing.%The%terms%of%any%such%agreem ent(s)%are%as%reasonably%

acceptable%to%buyer.%%

In%the %cas e %of%th e %__ _ __ _ _ _ _ _ _ _ __ %p re mises%( cu r re n t%lea se %ex p ire s%in %ab o u t%3%ye a rs ),%bu y er %m u st %en te r%

into % a% leas e% o r % su bZlease % fo r% the% premises% p rio r% to % t h e% exp ira tio n % o f% th e % le a se % fo r% th e% a dd itiona l%

$_____________.00%to%the%purchase%price%to%apply.%The%lease%or%sublease%terms%shall%be%reasonable,%at%

least %10 %yea rs %an d%n o%m o r e%th an %$1 .7 5 %pe r%foo t .%If%the %__ _ _ _ _ __ _ _ _ _ %lea se %ex p ire s,%bu y e r%m a y%tra n s fe r%

any%an d%all%assets%therein%located%to%the%___________%location.%If%bu ye r %ent er s%int o %a%lease %or%su b Z le a se %

agreement%for%the%_________________%premises%prior%to%the%expiration%of%the%current%lease,%the%note%

shall%be%adjusted%to%take%into%account%these%chang es.%

3.%This%Agreement%is%contingent%upon%the%transfer%of,%or%assurance%of%transfer%of,%license%agreement(s),%

any% conditional% use% permits% (“CUPs”)% and% all% other% governm ental% licenses% and% permits% for% the%

businesses.% All% such% transfer% or% assurances% (or% w aiver% of% same% by% buyer)% shall% be% deposited%with%the%

escrow% holder% prior% to% closing.% It% is % unders to o d % tha t% t h e % C U P s % a re % “site% spe cific ” % a n d % d o% not% app ly% or%

transfer%to %any %othe r%loca tions %(redu cing %their%valu e%to%b uy er%significa ntly).%%

4.% This% Agreement% is% contingent% upon% the% placement% in% escrow% of %a%notice%from%buyer%releasing%all%

contingencies%and%a%final%list%of%assets%included%in%this%transaction%prior%to%closing.%

5.%This%Agreement%is%contingent%upon%the%placement%in%escrow%of%a%notice%from%buyer%stating%that%the%

Due% Diligence% effort% has% resulted,% within% the% necessary% time% frame,% in% buyer’s% satisfaction% with% all%

disclosed% information% and% m aterial,% and% with% any% necessary% adjustments% to% this% agreement% resulting%

therefro m .%

6.%This%Agreement%is%contingent%upon%proof%from%seller%that%the%purchase%price%is%fair%and%supported%by%

the% va lue% o f% th e% a ssets.% Such% p roof% is% to% be% provided% to% buyer% during% the% Due% Diligence% period.% The%

parties%agree%to%bargain%in%good%faith%to%reduce%the%purchase%price%of%the%assets%if%the%purchase%price%

above% is% not% supported% by%proof%supplied%by%seller%during%the%Due%Diligence%period%and/or%if%buyer%

decides%not%to%include%enough%of%the%assets,%thereby%w arranting%a%price%reduction.%

7.% This% Agreement% is% contingent% upon% the% paym ent% of% all% required% fees,% transfer% fees% taxes,% costs% of%

escrow%and%any%other%payment%or%amount%due%to%any%third%party%out%of%the%purchase%price. %

Due%Diligence:%

a.%Seller%shall%supply,%without%limitation%(except%as%to%reasonableness)%copies%of,%or%access%to%(as%the%case%

may% be),% all% documents,% materials% and% info rm a tion % nec ess ary% fo r% buy er% to% co n firm % the% d eta ils% of% this%

transac tion .%This%requirement%applies%to%the%seller%and%all%its%relevant%agents%and%associates%possessing%

any%such%information.%

b.% Buyer% w ill%utilize% the% Due%Diligence%period% to% investigate% all% factors%it% considers%relevant,% in%relation% to%

the%asse ts%an d%the %con du ct%o f%the%b usine sse s.%%%%%

E.%RESPONSIBILITIES%OF%THE%PARTIES%

The% parties% agree% to% complete% all% required% steps% toward% a% possible% conclu sion% of% this% proposed%

transac tion %in%a%goo d%faith ,%time ly %m a n n e r.%

The%parties%agree%to%hold,%protect%and%preserve%all%materials%and%information%received%in%the%course%of%

the% Du e% Dilig e n ce % p e rio d .%All%such%material%and%information%is%strictly%confidential%and%for%the%private%use%

of% the% parties% only,% to% be% viewed% and% utilized% only% by% the% pa rties% an d% th eir% resp ective % pro fessio na l%

advisors.%%

If%this%transaction%does%not%close,%the%parties%agree%to%expeditiously%return%all%materials%and%information%

receive d%by %them%from%the%o the r%party .%%

F.%MUTUAL%RELEASE%

The% parties% ackno w led ge % an% in de pe nd en t% contrac tor% relation ship % betw een % seller% and% the% buyer’s%

manager,% _________________(“Mr.% ____________”),% existing% prior% to% the% close% of% this% transaction.%

Upon% the% closing% of% this% transaction,% the%parties%agree% to%release%the%other%from% any%claim% of%damage%or%

damage%arising%out%of%the%tim e%in%which%Mr.%____________%was%an%independent%contractor%of%seller.%%

1.%Gen e ra l,%Mutua l%R e le a s e ;%NonJAdmission%of%Liability%

This%M utual%General%Release%shall%not%in%any% w ay%be% construed%as% an% admission%that% either%party%has%

acted% wrongfully% with% respect% to% the% other% party% or% any% other% person,% and% both% parties% specifically%

disclaim% any% liability% to% or% wrongful% acts% against% the% other% party% or% any% other% person,% on% the% part% of%

himself,% itself% and% their% respective% em ployees% or% agents,% if% any.% In % fa ct,% t h e% p a rt ie s% a re % n o t% a ware% of%

having%done%anything%to%harm%the%interests%of%the%other%party.%

2.%Complete%Release%by%Both%Parties.%

(a)% E xce pt% as% he rein% otherw ise% agreed,% each% p arty% hereby% irrevocably% and% unconditionally%

release s,% acqu its% and % fore ver% d ischa rge s% the% o ther% a nd % each % of% the ir% prese nt% an d % form er% a gen ts,%

directors,%officers,%employees,%representatives,%attorneys,%spouses,%other%family%members%and%anyone%

associated% with% the% other% having% anything% to% do% w ith% the% relationship% of% the% parties,% and% all% persons%

acting%by,%through,%under%or%in%con cert%w ith%any%o f%them%from%any%and%all%charges,%complaints,%claims,%

liabilitie s ,% o b lig a tio n s,% pro mises,% a gre e ments,% con tro v er sie s,% da m a g e s,% actio n s ,% c a u se s% of% action,% s uit s,%

rights,%dem an ds,%costs,%losses,%debts%and %expe nse s%(includin g%attorn eys'%fees%and %costs%actually%incu rred)%

of%any%nature%whatsoever,%known%or%unknow n,%suspected%or%unsuspected,%including,%but%not%limited%to,%

rights%a rising %o ut%of%a lleged %violations %of%a n y%con tra ct s,%expr es s%or%implie d ,%any%cove n an t %of%g oo d %faith%

and% fair%dealing,% express% or% implied,% or% an y% tort,% or% an y% federal,% state% or% o ther% governmental%statute,%

regulatio n,% o r% ord ina nce .% Th is% pa ragra ph % sha ll% ha ve% n o% a pp licab ility% to% C laim s,% if%any,%based%totally%on%

events%occurring%after%the%d ate%of%closing%of%this%Agreement%nor%affect%any%rights%or%obligations%arising%

from %this%A gree m e nt.%

% (b)% Ex cep t% a s% h ere in% otherwise% agreed,% ea ch % pa rty% hereby% irrevo ca bly% and% un con d itiona lly%

release s,% acq uits% an d% forever% d ischarges% the% oth er% from % any% an d% all% charges,% com plaints,% claims,%

liabilitie s ,% o b lig a tio n s,% pro mises,% a gre e ments,% con tro v er sie s,% da m a g e s,% actio n s ,% c a u se s% of% act io n ,% s u its ,%

rights,%dem an ds,%costs,%losses,%debts%and %expe nse s%(includin g%attorn eys'% fees%and% costs% a ctually% incurred)%

of%any%nature%whatsoever,%known%or%unknown,%suspected%or%unsuspected%as%of%the%date%of%the%execution%

of%this%Agreement,%by%reason%of%any%act%or%omission%concerning%any%matter,%cause,%or%thing.%

3.%Knowing%and%V oluntary%Waiver%by%the%Parties%

The%parties%expressly%waive%and %relinquish%all%rights%and%benefits%afforded%by%Section%1542%of%the%Civil%

Code% of% the% State% of% California,% and% do% so% understanding% and% acknowledging% the% significance% of% such%

specific%waiver%of%Section%1542.%Section%1542%of%the%Civil%Code%of%the%State%of%California%states%as%follows:%

% "A%gene ral%release%do es% no t%exten d% to% claims%w hich% th e%creditor% d oes% n ot% kn ow %or% su spect% to%

exist% in% his% favor% at% the% time% o f% executing% the% release,% w hich% if% know n% by% him% mu st% h ave % ma terially%

affected%his%settlement%with%the%debtor."%

Thus,%notwithstanding%the%provisions%of%Section%1542,%and%for%the%purpose%of%implementing%a%full%and%

complete% release,% the% parties% expressly% ackn owledge % that% this% Mutual%General% Release% is%intended% to%

inclu d e%in%its%effe ct ,%with o u t%lim it at ion ,%all%claims%which%the %part ies %do %not %kno w%or%su sp e ct %to%exis t%at%

the%time %of%exe cu tion%h ereo f,%and %tha t%this%M utu al%Ge ne ral%Rele ase%co n tem p lates%th e%extin guish m en t%of%

any%such%claim%or%claims%and% an y%right%to% su e% reg arding% any%such% claim%or% claims% (except%for%un cured%

breaches%of%this%Agreement%occurring%after%the%date%first%w ritten%above).%

G.%REPRESENTATIO NS%AND%WARRANTIES%OF%BUYER%

Buyer%represents%and%warrants%that%it%is%a%company%in%good%standing%in%the%state%of%California%and%has%

the% legal% right% a nd % autho rity,% including% all% n ec essa ry% appro va ls% from% its% m e m be rs,% to% e nte r% into% and%

conclude%this%transaction.%%

Buyer% represents% and% warrants% that% upon% the% receipt% of% all% due% diligence% m aterials% from% seller% it% will%

conduct%its%due%diligence%review%in%a%timely%and%good%faith%manner.%

Buyer%represents%and% warrants%that% it% w ill% use% its% best% efforts% in% a%timely%fashion%to%secure%necessary%

fund ing%for%this%prop ose d%trans actio n %and%to%the%exten t%neces sary %to%arrive%at%an%understanding%with%all%

third% p arties% regard ing% n ec essa ry% p ermits,% licens es,% lea ses ,% fran chise % a gree m en ts% a nd % o the r% p ertine nt%

matters.%

Buyer%represents%and%warrants%that%it%knows%of%no%reason%(economic,%legal%or%otherwise)%why%it%should%

not%enter%into%this%Agreement.%%

Buyer%agrees%to%provide%a%comprehensive%list%of%assets%being%purchased%in%this%transaction%and%deposit%

the%list%in%esc row %p rior%to %closin g.%General%categories%such%as,%but%not%limited%to,%“all%supplies”%may%be%

used%when%practical.%Any%assets%not%on%the%list%remain%the%property%and%responsibility%of%seller.%%

Buyer%agrees%to%comply%with%all%applicable%provisions%of%the%Bulk%Sales%Act.%

Buyer%will%com mission%a%UCC%search%and%deposit%the%results%in%escrow%prior%to%closing.%

H.%FURT HER%RE P RESEN T A T IONS%A N D%WARRANTIES%OF%SELLER%

Seller%agrees%to%maintain%its%normal%operations,%including,%but%not%limited%to,%maintaining%current%levels%

of%membership%sales%prices,%during%the%pendency%of%this%transaction%and%further%agrees%that%it%will%sign%

no%other%agreement%for%the%pu rch ase %or%oth er%d ispo sition %of%the %assets %durin g%the %Du e%D iligen ce %perio d.%

Upon% reasonable% notice,% seller% agrees% to% supply% reasonable% access,% during% regular% business% hours% to%

buyer%during%the%D ue%Diligence%period%to%all%of%its%usual%and%normal%business%records%for%its%operations%

during%the%three%(3)%years%immediately%prior%to%the%date%of%this%Agreement.%Usual%and%normal%business%

record s%includ e,%but%are %not%limite d%to%(in%the%po ssess ion %of%seller%and%an y%agen ts%and %profe ssio na ls),%all%

books% and%records%of%seller,%a ll%g en eral%ledgers,%b oo kke ep ing %re co rds,%audit%an d %a cco un ting %work%p ap ers%

and%notes,%financial%statements,%worksheets,%spreadsheets,%budgets,%projections,%price%lists,%client%lists,%

employee,% client% and% independent% contractor% agreement,% contrac ts% and% files,% ad ve rtising% and%

promotional%materials,%bank%records%and%statements,%business%licenses,%franchise%agreements,%real%and%

personal%property%leases,%conditional%use%and%other%permits,%professional%or%trade%licenses,%tax%returns,%

third%party %creditor% and%supplier% files;%correspondence%with% third%parties%regarding% b usiness% and/or%legal%

matters%of%seller;%equipment%sale,%lease,%maintenance%and%repair%records;%in%sum,%any%information%of%a%

material% nature%in% assisting%buyer%in%determining%whether% to%move%forward%with%this%transaction%and%to%

determine%w hat%assets%to%purchase.%

Seller% represents% and% w arrants% that% it% w ill% supply% buyer% with% all% relevant% du e% diligence% m aterials% in% a%

complete,%timely%and%go od%faith%m anner.%Seller%represents%and%warrants%that%it%w ill%revea l%(du ring%the%

Due%Diligence%period)%all%debts%and%legal%obligations%owed%to%anyone%or%anything%regarding%seller%and%

the% businesses % a nd % the%asse ts,% a s% w e ll%as % a ny% pend ing% or%threa ten ed % c laim s% o r% legal%action s,% in clud ing%

compliance%with%all%applicable%provisions%of%the%Bulk%Sales%Act.%

Seller%represents%and%warrants%that%seller%has%operated%and%is%operating%the%businesses%in%accordance%

with% all% applicable% laws% and% regulations% and% that% any% required% franchise% agreements,% licenses% and%

permits%are%currently%in%force%and%fully%transferable%(to%the%best%of%seller’s%knowledge)%to%Buyer.%%

Seller%represents%and%warrants%that%it%has%the%legal%right%to%enter%into%this%transaction%and%to%do%so%will%

not%infringe%upon% the%rights%of% any%other% person% or%entity,%and% further% that% there%are% no % outstanding%

law su its %o r%cla ims%again s t%it%o r%p e n d in g%(t o %its %kn o w le d g e)%r eg a rd in g%t h e%b u s ine s se s%a n d %th e %as s et s.%%

Seller%represents% and%warrants% that%it% will% take% n o%conscious% actions% (or% om issions)%that%will% intentionally%

devalue% the% assets,% the% prem ises% an d% the % b usinesses.% Seller% agrees% to% defend% and% protect% the% assets,%

premises%and%businesses%against%damage,%theft,%m isappropriation%and%other%forms%of%abusive%or%illegal%

use%or%activity%by%seller%or%others%until%this%transaction%close s .%

Seller%w ill%deliver%actual%possession%of%all%assets%an d%businesses%p urchased%by%seller.%

Subject% to% buyer’s% agreem ents% with% lessor,% seller% will% deliver% actual% possession% of% the% b usinesses%

premises%upon%closing.%

Except%as%disclosed%by%seller%to%b uyer%in%writing%during%the%Due%Diligence%period,%all%assets%of%seller%are%

undamaged%and%serviceable%for%normal%use%in%the%businesses,%and%except%for%reasonable%wear%and%tear,%

will%remain%in%such%condition%until%closing.%Any%asset%damaged%during%the%Due%Diligenc e%period %shall%b e %

repaire d%or%re plac ed ,%as%circumstances%w arra nt.%

Seller% agrees%to%act%as%a%liaison%(up%to%5%hours%per%week),%for%a%period%of%six%(6)%mo nths%from%the%date%of%

closing,%to%introduce%buyer%and%help%acclimate%b uyer%to%any%relationships%in%place%with%third%parties%in%

the% op eratio n% o f%th e% bu sine sse s.%These%relationships%include,%but%are%not%limited%to,%companies%providing%

services% a nd% pro ducts,% lessor% relationships% (businesses% prem ises,% equipme nt% and% oth er% personal%

property),%franchise%relationships%and%the%City%of%___________.%

Assuming%the% closing% of% this%transaction,%seller% agrees%to% vacate%the% businesses% premises%(along%with% any%

personal%property% not%included% in% buyer’s% asset%list)% in% an%orderly%and% timely% fashion,% with% no%damage%to%

the% premises%and%contents.% Seller%shall%deliver%possession%of%the% assets,%businesses%and% p remises%in%a%

clean,% functional% an d% serviceable% condition.% Seller% shall% send% a% notice% of% transfer% of% ownership% of% the%

businesses% to% the% membership% at% closing.% The% form% of% such% notice% shall% be% deposited% in% escrow% and%

reason ab ly%ap pro ve d%by %bu yer%p rior%to%clo sing .%

I.%CO N F IDENTIA L IT Y%

Seller% and% buyer% represent% and% warrant% that% they% w ill% hold% this% Agreement% in% confidence% and% in%

accordance%with%the%following:%

a. The% provisions% of% this% Agreem ent% are% con fidential% a nd% private% and % are% not% to% be% disclosed% to%

outside% parties% (except% on% a% reasonable% need% to% know% basis% only)% without% the% written% and%

express,%advance%consent%of%all%parties%hereto.%

b. Buyer%agrees%and%acknowledges%that%in%its%association% w ith% seller%under%this%Agreement%(and%

prior% to),% it%may%come%into,% or% has % suc h ,%possession%or%knowledge%of%confidential%and/or%

proprietary% information.% Such% confidential% and/or% proprietary% information% includes,% but% is% n ot%

limit ed %to:%information %regarding% agents,% contractors,%em ployees% and % all%affiliates%of% which% seller%

possesses% an% ownership% interest% of% ten% percent% (10%)% or% greater;% corporate% and/or% financial%

infor m a tio n %an d %rec o rd s%of %or%any%client,%customer%or%associate%of%seller;%cust o mer%information;%

client% information;% shareholder% information;% business% contacts;% investor% leads% and% contacts;%

employee%information;%franchisor%contacts,%documents%regarding%seller’s%website%(if%seller%has%a%

website)%and%any%product,%bus in e ss %p la n %o r %p re s e n ta tion%ma terials%of%seller.%

c. Seller% and% bu yer% represent% and% warrant% to% each% other% that% they%will%not%divulge%confidential,%

proprietary%information%of%seller%or%any%of%its%subsidiaries%(and%of%buyer%as%material%is%deposited%

in% escro w)%to%anyone%or%anything%without%the% written% and % express,% advance% con sent% of% the%

parties%during%the%Due%Diligence%period,%and%after.%

J.%FORCE%M AJEURE%

The%parties%are%not%responsible%for%any%delay%or%financial%loss%regarding%this%Agreement%caused%by%any%

unforeseen%event(s),%act(s)%or%omission(s)%of%others%not%within%their%control,%including,%but%not%limited%to,%

labo r%sto p p ag e s%or%strik e s,%lack %of%acc es s%to%loc a tio n s,%eq u ipment%or%facilit ies ,%inte rru p tio n %or%ces sa tio n %

of% any% public% services% or% utilities,% inclement% weather,% natural% disasters,% riots% or% civ il% disturb an ce s,%

terrorism % o r% h ara ssm e nt,% a cts% of% w ar% or% agg ressio n,% s ickne ss,% in jury,% d ea th,% incapa city,% co ntra ctu al%

disputes%and%adverse%econom ic%conditions.%

K.%ASSET%PURCHASE%AGREEMENT%

The%parties%entered%into%an%Asset%Purchase%Agreement%dated %on%o r%ab ou t%M arc h%12 ,%%%________.%Said%

agreement% is% attached% hereto% as% Exhibit% “D ”% and% incorporated% herein% by% this% reference% as% if% fully% set%

forth%h ere in.%If%there %is %a n y%discrep a n cy %o r %d iffe re n c e %in %the%term s %o f%the%As se t %P u rc h as e %A g re e m e n t%and%

this%agreement,%this%agreement%controls.%

L.%MISCELLANEOUS%LEGAL%CONSIDERATIONS%

1.%Modifications%and%Amendm ents.% The%terms%and %conditions%of%this%agreemen t%ma y%be% am ended% at%

any% time% and% from% time% to% time,% in% whole% and% in% part,% upon% written% agreement% signed% by% a%duly%

authorized%representative%of%the%buyer%and %seller.%

2.%Expenses.% Each% party% shall% bear% its% own% respective% costs,% fees% and% expenses% associated% w ith%

entering%into%and%executing%its%duties%under%this%agreement.%

3.%In d emnificat io n.%Each%party,%if%an%o ffending%party,%agrees%to%indemnify%and%hold%harmless%the%other%

party%from%any%claim%of%damage%of%any%party%or%nonZ party% arising% out% of% any% act% or% omission% of% the%

offending%party%arising%from%this%agreemen t.%

4.%Notices.%Any%notice,%request,%proposal,%statement%or%other%communication%required%or%permitted%to%

be% given% hereunder% shall% be% in% writing% and% shall% be% deemed% given% w hen% personally% delivered% or%

confirmed%by%facsim ile%or%five%(5 )%days%after%m aile d%by%ce rtified %mail,%p osta ge %prepaid,%to%the %parties%at%

their% respec tive% ad dre sses% first% set% forth% ab ov e% or% to% such % oth er% add ress % of% wh ich% a% party % shall% hav e%

thereto fore %n otified %th e%o the r%b y%a %n otice %give n%in%accordance%w ith%this%Paragraph%4 .,%togethe r%w ith %a%

courtesy%copy%to%the%receiving%party's%counsel,%as%follow s:%

If%to%the %Bu yer:%

And%to%Buyer’s%Attorney:%

Pete%Wilke,%Esq.%

_______________________%

% %

If%to%Seller:%

And%to%Seller’s%Attorney:%

Law%Offices%of%___________%

________________________%

5.%Breach.%In%the%event%of%a%breach%of%this%agreement,%the%breaching%p arty%sh all%be%notified%by%the%other%

party%by%w ritten%notice%within%ten%(10)%days%of%reasonable%discovery%of%the%breach.%The%breach%shall%be%

cured%within%fifteen%(1 5)%days%of%written%notice.%If%th e %bre a ch%is%n ot%cured%within%this%period,%the%nonZ

breaching%party%may%take%appropriate%legal%action%consistent%with%the%terms%of%this%agreement.%

6.%Assignment.%The%provisions%of%this%agreemen t%shall%be%binding%upon %and%inure%to%the%ben efit%of%the %

buyer% an d% seller%and% their% respective% successors,% assigns% and% personal% representatives.% If% the% buye r%

and/or% seller% shall% at% any% time% b e% m erged % or% consolidated% into% or% with% an y% o ther% co rporation % or% the%

compa ny’s%capital%ow nership% units%or%substantially%all%of%its%assets%are%transfe rred %to%another%entity,%th e %

provisions%of% this%agreem ent%shall% b e% b inding% up on%and%inure%to% the%benefit% of%the%buy er%or%the%seller%(as%

the%cas e%m ay %be)%and%the%entity%resulting%from%such%merger%or%consolidation%or%to%which%such%capital%

ownership% units%or%assets%shall%be%transferred,%and%this%provision%shall%apply%in%the%event%of%any%

subsequ ent%me rger,%consolidation%or%transfer.%

7.%Entire%Agreement.% This%agreement% is% the% full% an d% complete,% integrated% agreement% o f% the% parties,%

superseding%all%previous%written %and/or%oral%agree m en ts%and%rep res en tation s%betwee n%the%pa rties,%a nd %

is% ame n d ab le %only% as% provided% for% above.% This% agreement% shall% be% interpreted% as% if% the% parties%

participated%equally%in%its%drafting.%%

8.%Governing%Law.% This% agreem ent% sha ll% b e% governed% by% the% laws% of% the% State% of% California%

applicable%to%contracts%made%to%be%performed%entirely%therein,%and%each%party%agrees%to%subm it%to%the%

personal%jurisdiction%of%any%Court%of%competent%jurisdiction%and%venue%in%Los%Angeles%County%and%to%all%

the%rules%and%orders%of%such%Court,%and%the%laws%of%the% State%of%California.%

9.%Waiver.%Any% waiver%by%either%party%of%any%provision%of%this%agreement%or%a ny%right%hereun der%shall%not%

be%deemed%a% continuing% w aiver%and%shall%not%p rev en t%or%stop %such%party%from%thereafter%enforcing%such%

provision,% and% the% failure% of% either% party% to% insist% in% any% one% or% m ore% instances% upon% the% strict%

performance%of%any%of%the%provisions%of%this%Agreement%by%the%other%party%shall%not%be%construed%as%a%

waiver%or%relinquishment%for%the%future%performance%of%any%such%term%or%provision,%but%the%same%shall%

continue%in%full%force%and%effect.%

10.%Enforcement.% If% th e % p a rtie s % ca n n o t% s et tle % an y % d isp u t e% a ris in g % o u t% o f% o r% re la tin g % to % this%

Agreement,% or% the% breach% thereof,% in% a% reasonable% and% timely%fashion,%and%a%mediation%session%has%

failed,%eithe r%party %m ay%file%for%b ind ing%arbitration%within%Los%Angeles%County,%California.%Arbitration%shall%

be%governed%by% the% rules%of%ADR%Services,%Inc.%and% judgment%upon% the%aw ard%may% be%entered%in%any%

Court%within%Lo s%A ng e le s%Co u n ty %having%jurisdiction%thereof.%However,%the%parties%agree%to%reserve%the%

right%to%ob tain %a%prelim in ary%in jun ction %from %a%co u rt%of%comp eten t%jurisd iction %if%nece ssary %in%the %even t%

of%a%m aterial%breach%arising%from%this%agreement.%

11.%Headings.% The% headings% in% this% agreement% are% solely% for% convenience% of% reference% and % shall% not%

affect%its%interpretation.%

12.%Possible%In validity.% In% case % any % pro vis io n % of% this% agreement% should% be% held% to% be% contrary% to,% or%

inva lid%under,%the%law%of%any%state%or%other%jurisdiction%in%which%enforcement%is%sought%or%challenged,%

such%illegality% or%invalidity%shall%n ot%affect%in%any%way %any%of%the%othe r%provisions%hereo f,%th is%Agreem ent%

in%su c h%event%t o %b e%constru e d %a s%t h o ug h %t h e%offendin g %p ro v isio n %h a d %b e en %d e le t ed%or%mod ified% in%such% a%

manner% as% to% make% it% enforceable% to% the% maximum% extent% possible% to% reflect% the% parties'% intent%

hereunder,%and%all%of%the%provisions%hereof%nevertheless%shall%continue%unmodified%and%in%full% force%and %

effect%in%any%state%or%o ther%jurisdictio n.%

13.%Counterparts.% This% agreement% may% be% executed% in% counterparts,% each% of% which% shall% be%

deemed%an%original%and%all%of%which%together%shall%constitute%one%and%the%same%agreement.%Facsimile%

signatures%shall%be%considered%as%valid%and%binding%as%original%signatures.%