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Asset Purchase Agreement Best Option Business Sale

Asset Purchase Agreement is entered between the business Asset buyer and seller of such Assets, without a sale of stock or transfer. This type of sale and purchase transaction is basically entered, when one business or company buys another company. The Agreement defines the assets and liabilities that are sold by the seller or purchased by the buyer.

But, there are also certain exceptions in the sale transaction, as few specific assets and liabilities can be excluded form the purchase and sale transactions. In case of Stock Purchase Agreements, this type of assets and liabilities segregation is basically not possible or allowed.

The Assets that are to be sold may include real estate, office supplies, professional services, intellectual property, machineries, furniture or any other assets. The liabilities are connected to the assets and are termed accordingly.

The more important aspect of the Asset Purchase Agreement stipulates, effective or starting and closing date of the sale and purchase deal, the seller’s representations and warranties that, he has the authority to sell assets, value shown for the assets sale are correct and assets are free from any legal or financial tangles. The buyer proves that, he has authority to buy and all details about the purchase assets have been made known to him. The buyer, if so desire, can check pre and post audit for value confirmation. The agreement also contain indemnity clause to protect each party from any type of mistakes or malfeasance.

The basic content of Asset Purchase Agreement includes following clauses and provisions along with other numerous provisions:

  • Contact details of both parties, date and location
  • Liabilities
  • Non-Compete and a Non-Disclosure provision
  • Indemnity Clause
  • Purchase Price
  • Condition and value of Assets
  • Seller’s Representation and Warranties
  • Effective Opening and Closing date of the deal
  • Seller Disclosure List
  • Conditions on behavior of the parties
  • Termination of the Agreement clause
  • Non diminish the value of business during agreement period
  • Terms and modes of payments
  • Excluded Assets
  • Breach of Contract
  • Additional Clauses

Asset Purchase Agreement is widely used and termed as best and easiest option for both parties for sale and purchase of the Assets.

Below given Asset Purchase Agreement template will help you in formulating, your own Agreement with the buyer:

ASSET PURCHASE AGREEMENT

THIS AGREEMENT made this________day of__________(year)_______by and between__________________(Seller), and_________________I (Purchaser).
In consideration of the mutual covenants contained herein, it is agreed by and between the parties as follows:
1. Seller shall sell and Purchaser shall purchase, free and clear of all liens, encumbrances and liabilities, those assets of Seller’s business, commonly known as ________________ consisting of________________and equipment, all of which are more fully described and enumerated in Schedule A which is attached and by this reference made a part hereof.

2. Purchaser shall pay the Seller as the purchase price for the foregoing the sum of_______________dollars ($). The total purchase price shall be payable in cash at closing.
For Purchaser, the closing of this Agreement is contingent upon Purchaser’s obtaining a firm commitment for a loan of at least $_____________payable with interest not to exceed__________and payable over a_____year period and otherwise on terms customarily required by the lender for commercial loans.

3. Seller shall sell, assign, transfer, and convey to Purchaser the assets, free of all liabilities.

4. All equipment included in the sale shall be in good working condition at the time of sale. Purchaser shall accept the assets "as is" without warranty as to their condition and operation.

5. The actions to be taken by the parties hereto to close the transaction as provided shall take place on or before _____________, ______ at the office of___________________________Attorney at Law, located at__________________________________(address) hereinafter referred to as the ("Closing Date"). At the closing, Seller shall deliver to Purchaser possession of the assets, and good and sufficient instruments of transfer, conveying and transferring the assets to Purchaser. Such delivery shall be made against payment and delivery to the Seller of the price as set forth herein above. The instruments of transfer shall contain covenants and warranties that Seller has good and marketable title in and to the assets.

6. Seller covenants, warrants and represents:
(a) He is not presently involved in any activity or outstanding dispute with any taxing authority as to the amount of any property taxes due, nor has he received any notice of any deficiency, credit or other indication of deficiency from any taxing authority.

(b) He is the owner of and has good and marketable title to all of the assets enumerated in the attached Exhibit A, free from all encumbrances, except

(c) Purchaser waives the benefit of the___________________________(applicable statute); provided,
however, that Seller shall indemnify and hold harmless Purchaser from any and all claims of its creditors and such assets shall transfer to Purchaser, free and clear of all liens and encumbrances.

All representations and warranties made by Seller shall survive the Closing.

7. Seller hereby assumes all risk of loss, damage or destruction resulting from fire or other casualty to the time of transfer of assets and Closing.

8. This Agreement shall be binding upon the personal representatives, successors and assignees of the parties. This Agreement and any accompanying instruments and documents include the entire transaction between the parties and there are no representations, warranties, covenants or conditions, except those specified herein or in accompanying instruments and documents.

9. All covenants, warranties and representations herein shall survive this Agreement and the Closing Date.

10. This Agreement shall be governed in all respects by the laws of the State of_________________.

IN WITNESS WHEREOF, the parties hereto have set their hands and seals, the date and place first above written.

Seller__________________________________

Purchaser_______________________________