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Asset Purchase Agreement
Define the sale, transfer, and terms of business assets with this Asset Purchase Agreement Template.
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Asset Purchase Agreement Template
This Asset Purchase Agreement (“Agreement”) is made effective as of [Date], by and between:
Seller: [Full Legal Name / Company Name]
Address: [Address]
Contact: [Phone, Email]
Buyer: [Full Legal Name / Company Name]
Address: [Address]
Contact: [Phone, Email]
Together referred to as the “Parties.”
1. Sale of Assets
The Seller agrees to sell, transfer, and deliver to the Buyer, and the Buyer agrees to purchase from the Seller, the following assets (collectively, the “Assets”):
[List all assets – equipment, inventory, real property, intellectual property, goodwill, licenses, contracts, etc.].
2. Excluded Assets
The following assets shall remain the property of the Seller and are excluded from this sale:
[List excluded items, e.g., cash, accounts receivable, personal property].
3. Purchase Price and Payment Terms
The total purchase price for the Assets is $[Amount].
Payment shall be made as follows:
☐ Lump sum at closing
☐ Installments of $[Amount] over [Period]
☐ Other agreed terms: [Details]
The Buyer shall also pay any applicable transfer taxes, filing fees, or registration costs.
4. Purchase Price Adjustments
The Purchase Price may be adjusted based on prorated expenses, prepaid accounts, and a closing balance sheet prepared within [X] days of the Closing Date. Any disputes regarding adjustments shall be resolved by an independent accountant.
5. Allocation of Purchase Price
The Parties agree to allocate the Purchase Price among the Assets in accordance with applicable tax laws (e.g., IRS Form 8594). Each Party agrees to file consistent tax returns.
6. Assumption of Liabilities
The Buyer shall assume only those liabilities expressly listed in Schedule A attached hereto. All other debts, obligations, and liabilities remain the responsibility of the Seller.
7. Employees and Contracts
The Parties shall determine which employees, if any, will be offered employment by the Buyer. The Buyer may assume certain contracts and leases identified in Schedule B. Seller shall remain liable for all obligations under non-assumed agreements.
8. Closing
The closing (“Closing”) shall take place on [Date], at [Location], or another time mutually agreed upon. At Closing:
Seller shall deliver bills of sale, assignments, IP transfers, and related documents.
Buyer shall deliver the Purchase Price in accordance with Section 3.
9. Representations and Warranties
By Seller: Seller has good and marketable title to the Assets, free of liens, and has authority to sell. No material lawsuits or claims are pending that would affect the Assets.
By Buyer: Buyer has authority and financial capacity to complete the purchase and has conducted necessary due diligence.
10. Non-Compete and Non-Solicitation
For a period of [X years] from the Closing Date, Seller shall not engage in or assist in a business that competes directly with the Buyer within [Geographic Area]. Seller shall not solicit customers or employees transferred under this Agreement.
11. Confidentiality
The Parties agree to keep all confidential information, including financial records, customer data, and proprietary processes, private both before and after Closing.
12. Transition Assistance
Seller agrees to provide transition support for [X days/months] after Closing, including introductions to key customers and suppliers, assistance with operational handover, and training as reasonably requested.
13. Indemnification
Each Party agrees to indemnify and hold the other harmless against any losses, damages, or claims resulting from breaches of this Agreement or undisclosed liabilities.
14. Dispute Resolution
Any dispute shall be resolved first through good-faith negotiations, then through mediation, and if unresolved, binding arbitration in [State/City].
15. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of [State/Country].
16. Notices
All notices shall be in writing and delivered personally, by certified mail, or by recognized courier service to the addresses listed above.
17. Entire Agreement
This Agreement, including all Schedules and Exhibits, constitutes the entire agreement between the Parties regarding the sale of the Assets and supersedes all prior oral or written agreements.
Signatures
Seller: ___________________________ Date: _________
Name/Title: [Full Name, Title]
Buyer: ___________________________ Date: _________
Name/Title: [Full Name, Title]
Details
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Asset Purchase Agreement
ASSET PURCHASE AGREEMENT FAQ
What is an Asset Purchase Agreement?
An Asset Purchase Agreement (APA) is a contract that governs the sale and transfer of specific business assets, such as equipment, intellectual property, inventory, or goodwill, from a seller to a buyer. Unlike a stock purchase, it does not transfer ownership of the entire company.
Why is an Asset Purchase Agreement important?
It protects both parties by specifying exactly what is being sold, the purchase price, representations and warranties, and liabilities assumed. This minimizes disputes and ensures a smooth transfer of ownership.
When should you use an Asset Purchase Agreement?
Use it when acquiring or selling part of a business rather than the entire company, particularly when both parties want to limit liability and control the scope of the transaction.
What should an Asset Purchase Agreement include?
It should include identification of the parties, a description of the assets, purchase price and payment terms, representations and warranties, closing conditions, and indemnification provisions.
How is an Asset Purchase Agreement different from a Stock Purchase Agreement?
In an APA, only selected assets are transferred, and liabilities may be excluded. In a stock purchase, the buyer acquires the entire company—including all assets and liabilities.
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