CUSTOMER LIST PURCHASE AGREEMENT
This Customer List Purchase Agreement (“Agreement”) is entered into this XX day of XX 2018, by and between:
WHEREAS, both companies are managed service providers that offers IT outsourced services to businesses;
WHEREAS, the BUYER is desirable to obtain the client base of the SELLER by purchasing the Customer List of the SELLER and the SELLER is agreeable to sell the same.
NOW, IT IS AGREED:
- Purchase and Sale of Customer List. The SELLER agrees to sell, convey, assign, deliver and transfer to the BUYER, and the BUYER agrees to purchase and acquire from the SELLER its Customer List, together with its existing supply or maintenance agreements, subject to the provisions of this Agreement and the following:
- SELLER agrees to be available for advisory and knowledge of client info for 16 months with advanced notice.
- BUYER agrees to take ownership of vendors listed in Exhibit A. SELLER agrees to be responsible for any remaining vendors.
- SELLER agrees to make available for inspection and audit by the BUYER all of SELLER’s bank account particularly, but not limited to, bank accounts; and SELLER further agrees to deposit any checks received from clients thru the PO Box to the bank account shared with the BUYER.
- The Buyer will take over the Seller’s book of business who will merge with the Buyer, transitioning all their customers and systems over to follow the Buyer’s terms and standards; accounting, branding, operations, etc. The Seller and their existing personnel will continue to manage existing customers and will report to the Buyer’s VP of Sales as the Account Manager for their existing clients
- Due Diligence and Condition Precedent. The SELLER shall make available to the BUYER (together with its authorized representatives, legal counsel and accountants) for the BUYER’s review and copying all documents and information available to the SELLER regarding the Customer List, including, but not limited to, all supply agreements, sales invoices, sales registers, bank book and bank statements, maintenance agreements and all other disclosures that may be requested by the BUYER for verifying the turnover of the SELLER’s Customer List.
All the information and documents referred to above shall be immediately delivered to the BUYER on the next day after signing of this Agreement. The BUYER shall have a period of THREE (3) DAYS from the day of the receipt of the above- mentioned documents and information to verify the same.
- Term. This Agreement shall be effective for a period of 3 years viz;
- The 1st Agreement being that for existing clients and based on a $200k/yearly revenue;
- 30% for year 1;
- 15% for year 2;
- 10% for year 3; and
- 5% for year 4 onwards.
- 2nd Agreement being that for new clients; any new business;
- 10% for year 1;
- 5% for year 2; and
- 3% for year 3 and onwards.
Purchase Price and Payment. If after the due diligence and valuation undertaken by the BUYER and the BUYER is satisfied that the SELLER has a good and potential Customer List, as full payment and consideration for the purchase of the Customer List, including, without limitation to, the assignment of the existing supply or maintenance agreements, BUYER agrees to pay the SELLER the $60,000 in cash within six months from the execution date herein plus 15% of the MRR for the 1st year, 10% of the MRR for the 2nd year and 5% of the MRR provided the client remains a client of the Buyer.
- Closing Date. On the condition that BUYER is satisfied on the valuation of the Customer List, the Closing shall occur within THREE (3) days after the receipt of the documents and information as provided in the Second Paragraph of Section 2 or at such later date as the parties may mutually agree but no later than _________________, At the Closing, the Seller will deliver or cause to be delivered to the Buyer, a Good and marketable title to the Customer/Client List.
- Confidentiality. The parties agree that the financial terms and conditions of this Agreement including, but not limited to, any and all information provided by the BUYER to SELLER or vice versa are strictly confidential. Neither party shall knowingly publicize or disclose or cause or knowingly permit or authorize the publicizing or disclosure of the financial terms and conditions of this Agreement for any reason, at any time, without the prior written consent of the other party, except as required by law. Notwithstanding the above, the parties may disclose information to their counsel, personal tax advisor or as may be required by law. The parties agree, to the extent not prohibited by law, to instruct those to whom disclosure is allowed under this Agreement that its terms are confidential and must not be further disclosed.
- Obligation Not to Compete and Not to Solicit. The SELLER agrees to cease the business of TARGET COMPANY NAME and all the employment of its employees shall be terminated on the closing day after $100k is received. The SELLER shall be solely liable for the compensation which may be payable to his employees. The SELLER further agrees not to cause, encourage or attempt to encourage any current or former employee or account officer to become an employee or account officer of any other person or entity competing, directly or indirectly, with the BUYER.
The SELLER himself (Mr. XXX) shall not, directly or indirectly, whether alone or with any other person, (a) sell services comparable to the services BUYER provides to any of its customers, or that SELLER reasonably should know is undertaking to become engaged in competition with BUYER, or (b) own an interest in, operate, join, control, or participate as a partner, director, principal, officer, or agent of, enter into the employment of, or act as a consultant to, any entity other than the BUYER whose business consists of selling services similar to those services sold by the BUYER for a period of THREE (3) YEARS after closing without prior written consent.
The SELLER will not knowingly contact, solicit the business of, or accept orders from, any customer included in the Customer List for the purpose of moving such customer from the BUYER or switching such customer to another provider of similar service that competes with the BUYER. The obligation of SELLER not to compete and not to solicit as set forth in this Section shall continue for a period of THREE (3) YEARS from the Closing Date.
SELLER acknowledges that if SELLER breaches or threatens to breach SELLER’s covenants and agreements in this Section 6, then SELLER’s actions may cause irreparable harm and damage to BUYER that could not be adequately compensated in damages. Accordingly, if SELLER breaches or threatens to breach this Agreement, then BUYER will be entitled to suspend any payment during the two year period of payment, if applicable, and to injunctive relief in addition to any other rights or remedies of BUYER under this Agreement or otherwise.
If any restrictive covenant of this Section is held by court to be invalid, illegal or unenforceable, either in whole or in part, then such invalidity, illegality or unenforceability will not affect the validity, legality or enforceability of the remaining provisions or covenants of this Agreement, all of which will remain in full force and effect to the maximum extent allowed by law. Without limiting the foregoing, although the parties have, in good faith, used their best efforts to make the provisions of this Section reasonable in terms of geographic area, duration and scope of restricted activities in light of BUYER’s business activities, and it is not anticipated, nor is it intended, by any party hereto that a court of competent jurisdiction would find it necessary to reform the provisions hereof to make them reasonable in terms of geographic area, duration or otherwise, the parties understand and agree that if a court of competent jurisdiction determines it necessary to reform the scope of this Section or any part hereof in order to make it binding and enforceable, such provision shall be considered divisible in all respects and such lesser scope as any such court shall determine to be reasonable shall be effective, binding and enforceable.
- Notice to Creditors. If necessary, SELLER agrees that it will publish notice to creditors as required by and in the form and manner and within the time provided under California Law and otherwise comply with the Uniform Commercial Code, of any bulk transfer contemplated by this Agreement if required under California Law.
- Representations and Warranties of BUYER. BUYER warrants and represents to the SELLER:
- The BUYER is authorized and has the full power and ability to enter into and consummate this Agreement.
- The BUYER shall, at the Closing and every month for sixteen (16) months, have the funds necessary to consummate the transaction contemplated by this Agreement.
- BUYER acknowledges that if BUYER breaches or threatens to breach BUYER’s covenants and agreements in this Section, then BUYER’s actions may cause irreparable harm and damage to SELLER that could not be adequately compensated in damages. Accordingly, if BUYER
breaches or threatens to breach this Agreement, then SELLER will be entitled to injunctive relief in addition to any other rights or remedies of SELLER under this Agreement or otherwise.
- Representations and Warranties of SELLER. SELLER warrants and represents to BUYER:
- SELLER has the full power and authority to execute and deliver this Agreement and to perform the obligations hereunder. This Agreement, to which SELLER is a signatory, is duly authorized, executed and enforceable in accordance with their respective terms, and no further action, approvals or consents are necessary on the part of the SELLER, nor is it necessary for SELLER to obtain any actions, approvals or consents from any third person to make this Agreement valid and binding upon and enforceable against SELLER in accordance with their respective terms, or to enable the SELLER to perform this Agreement and the transactions contemplated thereby.
- The Customer List to be given by the SELLER is a full and complete list of the customers of the SELLER.
- SELLER has good and marketable title to the Customer List, free and clear of all liens, pledges, leases, charges, encumbrances, equities, claims, conditional sale contracts, security interests, or any other interests or imperfections of title of any nature whatsoever.
- SELLER has not been and is not now in violation of any federal, state or local laws, regulations or orders.
- There are no claims, actions, suits, proceedings or investigations, judicial or administrative, pending, involving or, to the best knowledge of the SELLER, threatened against or affecting either SELLER or the Customer List or that seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement or that might materially affect the right of BUYER to own the Customer List. SELLER does not know of any basis for any such action, suit, proceeding or investigation.
- SELLER acknowledges that if SELLER breaches or threatens to breach SELLER’s covenants and agreements in this Section, then SELLER’s actions may cause irreparable harm and damage to BUYER that could not be adequately compensated in damages. Accordingly, if SELLER breaches or threatens to breach this Agreement, then BUYER will be entitled to withhold payments during the two year period of payment and to injunctive relief in addition to any other rights or remedies of BUYER under this Agreement or otherwise.
- Attorneys, Brokers and Consultants. The parties hereto warrant that no person or entity can properly claim a right to a commission, finder’s fee, or other compensation based upon the acts of that party with respect to the purchase and sale contemplated herein and each party hereby agrees to mutually indemnify and hold the other harmless from any and all claims, liabilities, costs, including attorneys fees, expense and commissions, resulting from any claim for a commission, fee or other compensation by any party or entity based upon those acts.
- Indemnification. SELLER shall indemnify, defend, hold harmless BUYER and its representatives, stockholders, controlling persons and affiliates (“BUYER Indemnified Parties”) for, and will pay to the BUYER Indemnified Parties the amount of any loss, liability, claim, damage (including incidental and consequential damages), expense (including costs of investigation, defense and reasonable attorney’s fees) or diminution of value, whether or not involving a third-party claim (collectively “Damages”), arising, directly or indirectly, from or in connection with: (i) any breach of any representation or warranty made by SELLER in this Agreement
or any certificate or document delivered by SELLER pursuant to this Agreement; (ii) any breach by SELLER of any covenant or obligation of SELLER in this Agreement; (iii) any claim by any person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such person with SELLER (or any Person acting on its behalf) in connection with any of the transactions contemplated by this Agreement; or (iv) the failure of SELLER to assume, pay, perform and discharge SELLER’s liabilities.
SELLER shall indemnify BUYER from and against the entirety of any Adverse Consequences BUYER may suffer to the extent resulting from, arising out of, relating to, or caused by, any lawsuit or other legal proceeding to which SELLER is now, or may hereafter become, a party provided such lawsuit or legal proceeding relates to the business prior to closing and is not related to an obligation assumed by BUYER under this Agreement.
If the consent of any person or entity to the assignment of any of the contract by SELLER to BUYER as contemplated by this Agreement is required by the terms of such contract, and such consent has not been obtained by SELLER and delivered to BUYER at or prior to the Closing, SELLER will indemnify BUYER from and against the entirety of any Adverse Consequences BUYER may suffer to the extent resulting from, arising out of, relating to or caused by the failure of SELLER to obtain such consent prior to the Closing.
BUYER will indemnify the SELLER and its representatives, stockholders, controlling persons and affiliates (“SELLER Indemnified Parties”) from and against the entirety of any Damages incurred or suffered by the SELLER Indemnified Parties arising out of any misrepresentation or breach of warranty, covenant or agreement made or to be performed by BUYER pursuant to this Agreement.
- Binding Effect. All of the terms, covenants and conditions herein contained shall be for and shall inure to the benefit of and shall bind the respective parties hereto and their successors and assigns, respectively.
- Assignment to Corporation. This Agreement may be assigned by BUYER to a corporation or partnership controlled by BUYER in place and stead of BUYER; however, BUYER shall not, upon such assignment, be relieved of performance hereunder and pursuant to the provisions hereof.
- Governing Law. The parties hereto expressly agree that this Agreement will be governed by, interpreted under, and construed and enforced exclusively in accordance with the laws of the State of California.
- Either party may terminate this Agreement at any time and for any reason upon Service of no less than ________days’ termination notice in writing. If a party wishes to terminate the contract with less than these stated days, the other party reserves the right to charge costs they have already paid in advance or incurred.
- The Buyer may terminate this Agreement due to but not limited to the Seller not approving the Agreement within 14 days from the date of receipt of the Agreement.
- The termination of this Agreement shall not discharge the liabilities accumulated by either party.
- Any Clauses intended by the parties or this Agreement to survive the termination of this Agreement shall survive the termination of this Agreement by whatever cause.
- Entire Agreement. This Agreement constitutes the entire Agreement between the parties pertaining to the subject matter herein and expressly supersedes all prior written and oral agreements and understanding between the parties hereto with respect to the subject matter hereof. This Agreement may not be amended or modified unless so modified in writing by the parties.
- Severability. If any provision of this Agreement is, becomes, or is deemed invalid, illegal or unenforceable in any jurisdiction, such provision shall be deemed amended to conform to the applicable laws so as to be valid and enforceable, or, if it cannot be so amended without materially altering the intention of the parties, it shall be stricken and the remainder of this Agreement shall remain in full force and effect.
- Paragraph Headlines. The headings of the several paragraphs of this Agreement are inserted solely for convenience of reference and are not part of and are not intended to govern, limit or aid in the construction of any term or provision herein.
- Counterparts. This Agreement may be executed simultaneously in any number of counterparts and by facsimile, each of which shall be deemed an original but all of which together shall constitute one and the same agreement.
- Waiver. No waiver by a party of any breach of or default under this Agreement shall be deemed to be a waiver o any other breach or default of any kind or nature, whether or not such party knows of such breach or default at the time it accepts such payment or performance. No failure or delay on the part of a party to exercise any right it or he may have with respect to this Agreement shall prevent the exercise thereof by such party at any time such other party may continue to be so in default, and no such failure or delay shall operate as a waiver of any default. A failure by either party to insist upon the strict compliance with any of the terms of this Agreement in any instance shall not be construed as a waiver of such terms in the future.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement dated and effective as of the date first set forth above.
EXHIBIT A: SELLERList
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