Asset Purchase Agreement (APA) Template

This Asset Purchase Agreement ("Agreement") is entered into as of [DATE] by and between:

SELLER: [SELLER LEGAL NAME], a [ENTITY TYPE — e.g., "sole proprietor / LLC / corporation"] organized under the laws of [STATE] ("Seller"), and

Buyer: [BUYER LEGAL NAME], a [ENTITY TYPE] organized under the laws of [STATE] ("Buyer").

RECITALS: Seller desires to sell, and Buyer desires to purchase, certain assets of the business known as [BUSINESS NAME] ("Business"), on the terms and conditions set forth herein.

1.1 PURCHASED ASSETS. Subject to the terms hereof, Seller agrees to sell, assign, transfer, and deliver to Buyer, and Buyer agrees to purchase and accept from Seller, all right, title, and interest in the following assets (collectively, "Purchased Assets"):

(a) Tangible Personal Property: All equipment, machinery, furniture, fixtures, tools, and vehicles listed on Schedule 1.1(a);
(b) Inventory: All inventory, raw materials, work-in-progress, and finished goods as of the Closing Date, valued per Schedule 1.1(b);
(c) Intellectual Property: All trademarks, trade names, service marks, domain names, websites, software, customer data, and trade secrets listed on Schedule 1.1(c);
(d) Customer Contracts: All customer contracts, purchase orders, and customer relationships listed on Schedule 1.1(d), subject to required consents;
(e) Vendor Contracts: All vendor, supplier, and service contracts listed on Schedule 1.1(e), subject to required consents;
(f) Permits and Licenses: All transferable business licenses, permits, and approvals listed on Schedule 1.1(f);
(g) Goodwill: All goodwill associated with the Business;
(h) Books and Records: All business records, customer lists, supplier lists, and operational documentation relating to the Purchased Assets.

1.2 EXCLUDED ASSETS. The following assets are expressly excluded from this transaction ("Excluded Assets"):
(a) All cash, bank accounts, and cash equivalents as of the Closing Date;
(b) Accounts receivable arising prior to the Closing Date (unless otherwise specified in Schedule 1.2);
(c) All personal property of Seller not used in the Business;
(d) Real property (if any, addressed in a separate Purchase and Sale Agreement);
(e) Any assets listed on Schedule 1.2.

2.1 ASSUMED LIABILITIES. Buyer assumes only the following liabilities ("Assumed Liabilities"):
(a) Obligations under assigned contracts arising after the Closing Date;
(b) Obligations listed on Schedule 2.1.

2.2 EXCLUDED LIABILITIES. Buyer does not assume, and Seller retains full responsibility for, all liabilities not specifically listed above, including:
(a) All trade payables, accrued expenses, and accounts payable as of the Closing Date;
(b) All tax liabilities for periods ending on or before the Closing Date;
(c) All employee-related liabilities arising before the Closing Date (wages, benefits, workers' compensation, WARN Act obligations);
(d) Any litigation or regulatory matters arising from pre-closing operations;
(e) Environmental liabilities arising from pre-closing conditions;
(f) Any warranty or product liability claims relating to products sold before closing.

3.1 TOTAL PURCHASE PRICE: $[TOTAL AMOUNT] ("Purchase Price"), payable as follows:
- Cash at Closing: $[AMOUNT]
- Seller Note: $[AMOUNT] per the Promissory Note attached as Exhibit A (if applicable)
- Earn-Out: Up to $[AMOUNT] per the Earn-Out Schedule attached as Exhibit B (if applicable)
- Escrow: $[AMOUNT] deposited into escrow per the Escrow Agreement (Exhibit C)

3.2 PURCHASE PRICE ALLOCATION. The parties shall allocate the Purchase Price among the Purchased Assets in accordance with IRS Section 1060 and complete IRS Form 8594 within 90 days of closing. The agreed allocation is set forth on Schedule 3.2.

3.3 WORKING CAPITAL ADJUSTMENT.
- Target Working Capital: $[AMOUNT]
- Working Capital = Current Assets (excluding cash) minus Current Liabilities (excluding debt), calculated as of the Closing Date using the accounting policies described in Schedule 3.3.
- If Closing Working Capital exceeds Target: Buyer pays Seller the difference.
- If Closing Working Capital is below Target: Seller pays Buyer the difference.
- Adjustment payable within [30] days of final determination.

Seller represents and warrants to Buyer as of the date hereof and as of the Closing Date:

4.1 ORGANIZATION AND AUTHORITY. Seller is duly organized, validly existing, and in good standing. Seller has full power and authority to execute this Agreement and consummate the transaction.

4.2 TITLE TO ASSETS. Seller owns all Purchased Assets free and clear of all liens, encumbrances, and claims, except as listed on Schedule 4.2.

4.3 FINANCIAL STATEMENTS. The financial statements provided to Buyer (Exhibit D) fairly present the financial position and results of operations of the Business for the periods indicated, prepared in accordance with [GAAP / accrual basis / cash basis] accounting.

4.4 ABSENCE OF UNDISCLOSED LIABILITIES. There are no material liabilities or obligations of the Business not reflected in the financial statements or disclosed in the Disclosure Schedule, except for liabilities incurred in the ordinary course of business since the date of the most recent financial statements.

4.5 CONTRACTS. Schedule 1.1(d) and 1.1(e) list all material contracts. Each is in full force and effect. Seller is not in default under any material contract. No material contract requires third-party consent for assignment, except as noted in Schedule 4.5.

4.6 EMPLOYEES. Schedule 4.6 lists all employees, compensation, and benefits. There are no pending or threatened labor disputes, union certifications, or employment claims. Seller has complied with all applicable employment laws.

4.7 INTELLECTUAL PROPERTY. Seller owns or has valid licenses for all Intellectual Property used in the Business. No third party has asserted any claim of infringement or invalidity against any Business IP.

4.8 TAXES. All tax returns required to be filed by the Business have been timely filed. All taxes shown as due have been paid. There are no pending audits or tax claims.

4.9 LITIGATION. There is no pending or threatened litigation, arbitration, or governmental proceeding against the Business, except as disclosed on Schedule 4.9.

4.10 PERMITS AND COMPLIANCE. The Business holds all permits and licenses required for its operations. The Business is in material compliance with all applicable laws and regulations.

4.11 ENVIRONMENTAL. The Business has not generated, released, or disposed of hazardous materials in violation of applicable environmental laws, except as disclosed on Schedule 4.11.

4.12 NO MATERIAL ADVERSE CHANGE. Since the date of the most recent financial statements, there has been no material adverse change in the Business, its operations, financial condition, or prospects.

Buyer represents and warrants to Seller:

5.1 ORGANIZATION AND AUTHORITY. Buyer is duly organized and has full authority to execute this Agreement and consummate the transaction.

5.2 FINANCING. Buyer has or will have at closing sufficient funds to pay the Purchase Price and consummate the transaction.

5.3 NO CONFLICTS. The execution and performance of this Agreement does not conflict with Buyer's organizational documents or any agreement to which Buyer is a party.

6.1 SELLER INDEMNIFICATION. Subject to Section 6.3, Seller shall indemnify, defend, and hold harmless Buyer and its affiliates from and against all losses, claims, damages, costs, and expenses arising out of:
(a) Any breach of Seller's representations, warranties, covenants, or obligations;
(b) Any Excluded Liability;
(c) Any fraud or willful misconduct of Seller.

6.2 BUYER INDEMNIFICATION. Buyer shall indemnify, defend, and hold harmless Seller from and against all losses arising out of:
(a) Any breach of Buyer's representations or obligations;
(b) Any Assumed Liability.

6.3 LIMITATIONS.
- BASKET: Seller has no indemnification obligation until Buyer's aggregate losses exceed $[BASKET AMOUNT] (the "Basket"), after which Seller is liable for all losses including the Basket amount. [OR: Seller is liable only for losses exceeding the Basket — this is a "deductible" vs. "tipping basket" — negotiate which applies.]
- CAP: Seller's aggregate liability for breaches of general representations shall not exceed $[CAP AMOUNT] ([___]% of Purchase Price).
- EXCEPTIONS: The Basket and Cap do not apply to fraud, willful misconduct, or breaches of fundamental representations (title, authority, tax, environmental).

6.4 SURVIVAL. Representations and warranties survive closing as follows:
- Fundamental reps (title, authority, tax): [indefinitely / statute of limitations]
- General reps: [18 months] after closing
- Environmental, IP reps: [3 years] after closing
- Fraud/willful misconduct: no time limit

7.1 CLOSING DATE. Closing shall occur on [TARGET DATE], or such other date as the parties agree in writing, at [LOCATION / via electronic signature].

7.2 SELLER'S DELIVERABLES AT CLOSING:
(a) Bill of Sale for all tangible Purchased Assets;
(b) Assignment and Assumption Agreement;
(c) Assignment of Intellectual Property;
(d) Assignment of Contracts (with required consents);
(e) Disclosure Schedule, certified as accurate as of Closing;
(f) Officer's Certificate certifying representations and warranties;
(g) Executed Non-Compete Agreement;
(h) Executed Transition Services Agreement;
(i) All keys, access codes, passwords, and operational documentation.

7.3 BUYER'S DELIVERABLES AT CLOSING:
(a) Payment of Cash at Closing via wire transfer;
(b) Executed Promissory Note (if applicable);
(c) Signed counterpart of Assignment and Assumption Agreement;
(d) Escrow deposit confirmation.

8.1 GOVERNING LAW. This Agreement shall be governed by the laws of [STATE], without regard to conflict of law principles.

8.2 DISPUTE RESOLUTION. Any dispute arising under this Agreement shall be resolved by [binding arbitration in [CITY] under AAA Commercial Rules / litigation in the courts of [STATE]].

8.3 ENTIRE AGREEMENT. This Agreement, including all schedules and exhibits, constitutes the entire agreement of the parties and supersedes all prior negotiations and understandings.

8.4 AMENDMENTS. This Agreement may only be amended by a written instrument signed by both parties.

8.5 SEVERABILITY. If any provision is held invalid, the remaining provisions remain in full force.

8.6 COUNTERPARTS. This Agreement may be executed in counterparts, including by electronic signature, each of which shall constitute an original.

IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement as of the date first written above.

SELLER:
______________________________________
[SELLER SIGNATURE]
[SELLER PRINTED NAME & TITLE]
Date: _______________

Buyer:
______________________________________
[BUYER SIGNATURE]
[BUYER PRINTED NAME & TITLE]
Date: _______________