PURCHASE AND SALE OF PARTNERSHIP INTEREST AGREEMENT
THIS AGREEMENT made [this/as of the] [date of agreement];
B E T W E E N :
, a corporation existing under the laws of the Province of and having a business address at , ,
(the “Vendor”)
OF THE FIRST PART
- and -
, a corporation existing under the laws of the Province of and having a business address at , ,
(the “Purchaser”)
OF THE SECOND PART
WHEREAS the Vendor, (“ ”) and (“ ”) have until now conducted the business of [describe the nature of the business carried on by the Partnership] (the “Business”) as a general partnership under the name [name of Partnership] (the “Partnership”);
AND WHEREAS the Vendor, and are parties to a partnership agreement dated [date of partnership agreement] and relating to the business and affairs of the Partnership (the “Partnership Agreement”);
AND WHEREAS the Vendor wishes to sell, and the Purchaser wishes to purchase, all of the Vendor‘s partnership interest in the Partnership together with the underlying undivided interest of the Vendor in the net assets of the Partnership represented by such partnership interest (the “Partnership Interest”), on and subject to the terms and conditions of this Agreement;
AND WHEREAS the parties intend that this Agreement will be entered into simultaneously with an agreement of even date between the Vendor, and providing for the withdrawal of the Vendor from the Partnership (the “Withdrawal Agreement”);
AND WHEREAS the respective partnership interests in the Partnership at the date hereof are as follows:
Vendor – per cent ( %)
– per cent ( %)
– per cent ( %)
AND WHEREAS it is intended that following the completion of the transactions contemplated by this Agreement the respective partnership interests in the Partnership will be as follows:
Purchaser – per cent ( %)
– per cent ( %);
– per cent ( %)
AND WHEREAS the parties wish to enter into this Agreement to give effect to the purchase and sale of the Partnership Interest;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the respective covenants and agreements of the parties contained herein, the sum of one dollar paid by each party to the other, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. INTERPRETATION
1.1 Definitions. In this Agreement, the following terms shall have the following meanings:
(a) “ ” means , a/an corporation;
(b) “ ” means , a/an corporation;
(c) “Agreement” means this Purchase and Sale of Partnership Interest Agreement, any schedules or appendices attached to this Purchase and Sale of Partnership Interest Agreement and any amendments incorporated by reference into this Purchase and Sale of Partnership Interest Agreement and signed by both parties;
(d) “Business” shall have the meaning attributed to such term in the recitals to this Agreement;
(e) “Business Day” means any day, other than a Saturday, Sunday or statutory holiday, on which banks are customarily open for business in , ;
(f) “Closing” shall have the meaning attributed to such term in section 2.1 of this Agreement;
(g) “Confidential Information” means all information relating to the Business or the Partnership which is provided to the Purchaser or which the Purchaser learns about as a result of the negotiations entered into pursuant to this Agreement, including without limitation all information relating to customers, suppliers, personnel, strategy, finances, marketing, plans, designs, developments, operations, results, pricing and performance;
(h) “Encumbrances” means mortgages, charges, pledges, security interests, liens, encumbrances, actions, claims, demands and equities of any nature whatsoever or howsoever arising and any rights or privileges capable of becoming any of the foregoing;
(i) “Financial Statements” means the [audited/unaudited] financial statements of the Partnership for the fiscal period ended [insert date of financial statements which should be the same as in (u) below], consisting of a balance sheet, an income statement, a distribution of net income/loss statement, and a statement of partnership capital, together with notes thereto, as of the Statements Date;
(j) “Generally Accepted Accounting Principles” means the accounting principles so described and promulgated by the Canadian Institute of Chartered Accountants which are applicable in Canada as at the date on which any calculation made hereunder is to be effective or as at the date of any financial statements referred to herein, as the case may be;
(k) “Interim Period” means the period between the date of this Agreement and Closing;
(l) “Leased Premises” means all premises leased by the Partnership under the Leases;
(m) “Leases” means the leases and the agreements to lease under which the Partnership leases any real property;
(n) “Licenses” means all of the licenses, registrations and qualifications that the Partnership requires in order to carry on the Business;
(o) “Partnership” shall have the meaning attributed to such term in the recitals to this Agreement;
(p) “Partnership Agreement” shall have the meaning attributed to such term in the recitals to this Agreement;
(q) “Partnership Interest” shall have the meaning attributed to such term in the recitals to this Agreement;
(r) “Person” includes any individual, corporation with or without share capital, general or limited partnership, limited liability partnership, trust, trustee, joint venture, association, government tribunal, government agency or organization or entity of any kind;
(s) “Purchase Price” shall have the meaning attributed to such term in section 2.3 of this Agreement;
(t) “Purchaser” shall mean Jones Limited;
(u) “Statements Date” means [insert date of financial statements which should be the same as in (i) above];
(v) “Vendor” shall mean ; and
(w) “Withdrawal Agreement” shall have the meaning attributed to such term in the recitals to this Agreement;
1.2 Schedules. The following schedules are attached to this Agreement and form a part thereof:
Schedule “A” – Promissory Note
Schedule “B” – Security Agreement
Schedule “C” – Guarantee
Schedule “D” – Financial Statements
Schedule “E” – Real Property
Schedule “F” – Licenses
Schedule “G” – Employees
Schedule “H” – Bank Accounts
1.3 Best of Knowledge. Any reference in this Agreement to “the best of the knowledge of the Vendor” shall be deemed to mean either the actual knowledge of the Vendor or the knowledge which the Vendor would have had if the Vendor had conducted a reasonably diligent inquiry into the relevant subject matter.
1.4 Headings and Subheadings. The inclusion in this Agreement of headings and subheadings is for convenience of reference only and shall not affect the construction or interpretation of this Agreement.
1.5 Gender and Number. In this Agreement, unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing one gender include all genders.
1.6 Currency. In this Agreement, all amounts are stated and payable in Canadian currency.
1.7 Invalidity of Provisions. Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision of this Agreement.
1.8 Entire Agreement. This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement and there are no warranties, representations or agreements between the parties in connection with the subject matter of this Agreement except as specifically set forth or referred to in this Agreement.
1.9 Modification and Waiver. This Agreement may not be modified unless agreed to in writing by all of the parties hereto. No extension of any time limit granted by a party shall constitute an extension of any other time limit or any subsequent instance involving the same time limit. No consent by a party to, nor waiver of, a breach by the other party, whether express or implied, shall constitute a consent to or waiver of or excuse for any other different or subsequent breach, unless such waiver or consent is in writing and signed by the party claimed to have so waived or consented. Except as otherwise provided herein, no term or provision of this Agreement shall be deemed waived and no breach shall be excused.
1.10 Counterparts. This Agreement may be signed in counterparts and each of such counterparts shall constitute an original document and such counterparts, when taken together, shall constitute one and the same instrument.
1.11 Facsimile or Electronic Transmission. Each party shall be entitled to rely upon delivery of an executed copy of this Agreement by facsimile or other means of electronic transmission.
2. TRANSFER OF PARTNERSHIP INTEREST
2.1 Closing. The transactions contemplated by this Agreement shall be completed on [insert closing date] or such other date upon which the Purchaser and the Vendor shall mutually agree (“Closing”), at the offices of [insert address for Closing].
2.2 Transfer of Partnership Interest. The Vendor hereby agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase from the Vendor, on Closing, the Partnership Interest, all of which constitutes the entire right, title and interest of the Vendor in and to the Partnership, upon and subject to the terms and conditions set out in this Agreement.
2.3 Purchase Price. The purchase price for the Vendor’s Partnership Interest (the “Purchase Price”) shall be the sum of [insert purchase price].
2.4 Payment of Purchase Price. The Purchase Price shall be paid by the Purchaser to or to the order of the Vendor as follows:
(a) the sum of [insert amount payable on Closing] by certified cheque on Closing; and
(b) the sum of [insert amount payable following Closing] in [number of installments] equal monthly installments of [amount of each installment] with interest on all outstanding amounts to be calculated [semi-annually] at the rate of [interest rate] per annum, commencing on [commencement date of payments].
2.5 Promissory Note. In order to evidence the obligation of the Purchaser to pay the portion of the Purchase Price described in section 2.4(b) of this Agreement, the Purchaser agrees to execute and deliver, to or to the order of the Vendor, on Closing, a promissory note substantially in the form of Schedule “A” attached hereto.
2.6 Security for Payment. In order to secure the payment of the portion of the Purchase Price described in section 2.4(b) of this Agreement, the Purchaser agrees to grant to the Vendor a security interest in the Partnership Interest, together with the underlying undivided interest of the Purchaser in the net assets of the Partnership represented by the Partnership Interest, in respect to which the Purchaser will execute and deliver a security agreement, substantially in the form of Schedule “B” attached hereto, in favour of the Vendor.
2.7 Guarantee. In order to guarantee the payment of the portion of the Purchase Price described in section 2.4(b) of this Agreement, the Purchaser agrees to deliver to the Vendor, on Closing the executed guarantee of [insert particulars of guarantor], substantially in the form of Schedule “C” attached hereto.
3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Vendor. The Vendor hereby represents and warrants to the Purchaser as follows, and acknowledges that the Purchaser is relying on the accuracy of each of such representations and warranties in connection with the completion of the transactions contemplated by this Agreement:
(a) Corporate Authority and Binding Obligation. The Vendor is a corporation duly incorporated, organized and subsisting under the laws of [the Province of Ontario], and the Vendor has good right, full corporate power and absolute authority to enter into this Agreement and to sell the Partnership Interest to the Purchaser in the manner contemplated by this Agreement and to perform all of the Vendor’s obligations pursuant to this Agreement.
(b) No Other Purchase Agreements. No Person other than the Purchaser has any agreement, understanding, option or commitment, or any right or privilege capable of becoming an agreement, option or commitment, for:
(i) the purchase of any partnership interest in the Partnership,
(ii) the purchase of the Partnership Interest, or
(iii) the purchase of the Partnership, its undertaking, assets or business, except in the ordinary course of business.
(c) Right to Carry on Business. The Partnership has the lawful right to carry on the Businesses as such Business is presently carried on.
(d) Binding Agreement. This Agreement has been duly executed by the Vendor and constitutes a valid and binding obligation of the Vendor enforceable in accordance with its terms.
(e) Legal and Beneficial Interest. The Vendor is the legal and beneficial owner of the Partnership Interest, with good and marketable title thereto, free of all liens, charges or Encumbrances whatsoever.
(f) No Other Interest. The Vendor has no right, title or interest in or to the Partnership or the assets of the Partnership except for the Partnership Interest.
(g) No Breach of Default. Neither the entering into of this Agreement nor the performance by the Vendor of its obligations hereunder will contravene, breach or result in any default under any mortgage, lease, agreement, other legally binding instrument, licence, permit, statute, regulation, order, judgment, decree or law to which the Vendor is or may be bound, and there are no agreements or restrictions which in any way limit or restrict the sale or transfer of the Partnership Interest to the Purchaser.
(h) Partnership Capital. The partners of the Partnership and their respective partnership interests in the Partnership are correct as set out in the recitals to this Agreement.
(i) Partnership Agreements. There are no partnership agreements among the partners of the Partnership, except for the Partnership Agreement, which the parties will cause to have terminated or amended on Closing pursuant to the Withdrawal Agreement.
(j) Financial Statements. The Financial Statements are attached hereto as Schedule “D”; the Financial Statements have been prepared in accordance with Generally Accepted Accounting Principles applied on a basis consistent with that of the previous fiscal period; the Financial Statements are true, correct and complete in all material respects; and the Financial Statements present fairly and accurately in all material respects the financial condition of the Partnership for the periods indicated on the Financial Statements as of the Statements Date.
(k) Financial Records. All material financial transactions of the Partnership have been recorded in the financial books and records for the Partnership in accordance with good business practice, and such financial books and records accurately reflect in all material respects the basis for the financial condition and the revenues, expenses and results of operations of the Partnership shown in the Financial Statements.