"Asset Purchase Agreement Template"

What Is an Asset Purchase Agreement?

An Asset Purchase Agreement is a document that outlines the details surrounding either a business being bought out completely, or a large part of it. This will include the buying party to take on some of the liabilities associated with running the business. An asset purchase could also include but is not limited to properties, machines, specific equipment and even licensing.

Alternate Names:

  • Assets Purchase Agreement;
  • Business Purchase Agreement;
  • Asset Sale Agreement;
  • APA.

An Asset Purchase Agreement template can be downloaded by clicking the link below.

In order to commence proceedings, a business (the buying party) must first notify the company selling their assets by submitting a Letter of Intent. This document can trigger negotiations.

There are several advantages of drafting an Asset Purchase Agreement which include:

  • Outlining how the exchange will be organized;
  • Prevents issues with minority investors;
  • Resources can be sold at a fair and honest price;
  • Prevents time wasters and draws in genuine sellers and buyers.
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How to Write a Purchase Agreement for a Business?

Depending on what asset the buying party is purchasing, the Asset Purchase Agreement will vary. However, a simple Asset Purchase Agreement will include all of the following points:

  1. The date of the agreement. This should be the date when everything will be signed and finalized.
  2. Identifying the buying party. The buying party must be identified as the buyer. Usually, they will also submit a fee for the assets in question for an agreed price. Include the name of the company with any legal names along with their full address.
  3. Identifying the selling party. The party that holds the right to sell assets must be identified as the seller. The name of the company with any legal names and their full address must be included in this section.
  4. Assets can be tangible (physical) or intangible. The buying party must outline all the assets being purchased and indicate the type of assets. All of these assets must be noted down and a full description of each asset must be written out.
  5. Include the price of the assets sold in full. This is the total sum that the buying party will pay in order to gain rights to the assets outlined in the agreement.
  6. Information regarding deposits. Sometimes this is compulsory to act as a reservation. This section must state whether or not a deposit is required. If required, the agreement must state whether this deposit is refundable or not.
  7. Inspection period. If assets need to be inspected, this should be specified along with the time period in which the inspection will last. If inspection is not required, this should also be specified.
  8. Financial agreement. This section of the agreement needs to include the agreed date for the financial transaction. If the purchase is not paid in full but rather than installments, an installment plan with the dates, duration, and fee (along with any interest rates) should be included.
  9. Approve, sign, and date.

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Asset Purchase Agreement
This Asset Purchase Agreement (hereinafter referred to as the “Agreement”) is entered
into as of ____________________ (hereinafter referred to as the “Effective Date), by and
between ____________________, with a mailing address of _______________________
_____________________________________________________ (hereinafter referred to
as the “Seller”) and ____________________, with a mailing address of ______________
______________________________________________________________ (hereinafter
referred to as the “Buyer”), collectively referred to as the “Parties,” both of whom agree
to be bound by this Agreement.
The following instrument shall summarize the Agreement in accordance with our
previous discussions held on _______________. This Agreement was preceded through
prior negotiations which took place by _______________.
1. Topic of Agreement. The Seller and the Buyer are in agreement with regards to the
following:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
2. Tangible Assets. As part of this Agreement, the Buyer agrees to buy while the Seller
agrees to sell (check one):
No tangible assets.
Tangible assets as described below:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
3. Intangible Assets. As part of this Agreement, the Buyer agrees to buy while the Seller
agrees to sell (check one):
No intangible assets.
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Asset Purchase Agreement
This Asset Purchase Agreement (hereinafter referred to as the “Agreement”) is entered
into as of ____________________ (hereinafter referred to as the “Effective Date), by and
between ____________________, with a mailing address of _______________________
_____________________________________________________ (hereinafter referred to
as the “Seller”) and ____________________, with a mailing address of ______________
______________________________________________________________ (hereinafter
referred to as the “Buyer”), collectively referred to as the “Parties,” both of whom agree
to be bound by this Agreement.
The following instrument shall summarize the Agreement in accordance with our
previous discussions held on _______________. This Agreement was preceded through
prior negotiations which took place by _______________.
1. Topic of Agreement. The Seller and the Buyer are in agreement with regards to the
following:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
2. Tangible Assets. As part of this Agreement, the Buyer agrees to buy while the Seller
agrees to sell (check one):
No tangible assets.
Tangible assets as described below:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
3. Intangible Assets. As part of this Agreement, the Buyer agrees to buy while the Seller
agrees to sell (check one):
No intangible assets.
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Intangible assets as described below:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
The “tangible assets” in Section 2 and the “intangible assets” in Section 3 shall be
collectively referred to as the “Assets.”
4. Purchase Price. The purchase price of the Assets is $_______________ (hereinafter
referred to as the “Purchase Price).
5. Deposit. Check one:
As part of this Agreement, a deposit by the Buyer is not required.
As part of this Agreement, a deposit of $_________________ (hereinafter referred
to as the “Deposit”) is required.
Check one:
The Deposit shall be non-refundable except in the case of Section 15 (B).
The Deposit shall be refundable within the Inspection Period mentioned in
Section 6 or in the case of Section 15 (B).
6. Inspection. Check one:
The Parties agree that there shall be an inspection period. The Buyer shall have a
period of ____ days to review the Assets and shall have the option to terminate
this Agreement for any reason. If terminated, the Buyer shall have no obligations
to perform under this Agreement and any refundable Deposit shall be returned to
the Buyer within ____ days (hereinafter referred to as the “Inspection Period”).
The Parties agree that there shall not be an inspection period.
7. Financing. Check one:
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This Agreement is not contingent on the Buyer obtaining financing. The Buyer
must provide proof of funds within ____ days from the Effective Date of this
Agreement.
Contingent on the Buyer’s ability to obtain financing from a third party. The Buyer
has ____ days to obtain such financing and to show evidence in the form of a
pre-approval letter from a credible lender.
Contingent on the Buyer’s ability to obtain financing from the Seller. The Buyer
has ____ days to obtain approval from the Seller.
8. Approval of Third Party. Check one:
For the Assets to be sold, there is no requirement for consent or approval from any
third party.
For the Assets to be sold, there is a requirement for consent or approval to sell the
Assets by _______________.
9. Closing. This transaction shall be closed on _______________ at _______________
or earlier at an agreed-upon location by the Parties. (hereinafter referred to as the
“Closing”). Any extension of the Closing must be agreed upon, in writing, by the Buyer
and the Seller.
All costs associated with the Closing shall be the responsibility of (check one):
Buyer.
Seller.
Both Parties bearing their own expenses.
10. Payment. The Purchase Price shall be paid in the following manner:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
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11. Seller’s Representations. The Seller covenants and represents the following:
A. Fiduciary Duty. The Seller agrees that during the purchase process to hold a
fiduciary duty in the best interests of the Buyer. The Seller shall in no way conduct
any action that would disrupt the ongoing status of the Assets’ value or condition.
This obligation shall continue until the Closing.
B. Rights and Ownership. The Seller makes the claim that they are the sole
owner of the Assets with full rights to sell as stated in this Agreement. No other
person has any claim, right, title, interest, or lien in, to, or on the Assets.
C. Outstanding Liabilities. The Seller has no outstanding liabilities, liens,
judgments, or obligations that directly or indirectly affect the Assets.
D. Taxes. The Seller claims that all taxes related to the Assets have been
paid-in-full.
E. Insurance. If there is any insurance on the Assets, the Seller agrees to provide
the Buyer with a copy of the current insurance policy, if any, to the Buyer within a
reasonable time period. The Buyer has the option to assume the policy subject to
the insurer’s approval.
F. Outstanding Suits. There are no actions, suits, proceedings, or investigations
pending or, to the knowledge of the Seller, threatened against or involving the
Seller or brought by the Seller or affecting any of the Assets at law or in equity or
admiralty or before any Federal, State, Municipal, or other governmental
departments, commission, board, agency, or instrumentality, domestic or foreign,
nor has any such action, suit, proceeding, or investigation been pending during the
preceding date hereof.
12. Parties’ Representations. The Parties represent and agree to the following:
A. Compliance with Agreement. The representations and warranties of the Seller
contained in this Agreement or any certificate or document delivered pursuant to
the provisions hereof or in connection with the transactions contemplated hereby
shall be true on and as of the Closing as though such representations and
warranties were made at and as of such date, except if such representations and
warranties shall be true as of such date.
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B. Injunction. On the day of Closing, there shall be no effective injunction, writ,
preliminary restraining order, or any order of any nature issued by a court of
competent jurisdiction directing that the transactions provided for herein or any of
them not to be consummated as herein provided.
C. Buyer’s Approval. All actions, proceedings, instruments, and documents
required to carry out this Agreement, or incidental thereto, and all other related
legal matters shall have been approved by counsel for the Buyer.
D. Casualty. The Assets, or any substantial portion thereof, shall not have been
adversely affected in any material way as a result of any fire, accident, flood, or
other casualty or act of God or public enemy, nor shall any substantial portion of
the purchased property have been stolen, taken by eminent domain, or subject to
condemnation. If the Closing occurs hereunder despite such casualty as a result of
the waiver of this condition by the Buyer, the Seller shall assign or pay over to the
Buyer the proceeds of any insurance or any condemnation proceeds with respect to
any casualty involving the Assets that occur after the date hereof.
E. Adverse Change. Between the date of this Agreement and the Closing, there
shall be no material adverse change of the Assets.
13. Seller’s Indemnification. The Seller agrees to jointly and severally indemnify and
hold the Buyer, and assigns, harmless from any and all claims of any nature whatsoever,
including without limitation:
A. Claims. Tort claims and claims made by creditors; and
B. Taxes. Claims that may be made hereinafter on account of Federal and State
taxes, including, but not limited to, sales taxes, franchise taxes, unemployment
taxes, Social Security taxes, excise taxes, and any other taxes of any nature or
form on account of the Buyer ending on and accruing up to the Closing.
14. Access to Information. After the execution of this Agreement, the Buyer shall have
full access to any and all information in reference to the Assets. The Buyer shall maintain
a fiduciary duty to keep the information that it obtains confidential and agrees to not
share with any third party unless the Seller gives their written consent.
15. Transfer of Assets. The Seller makes the following covenants to the Buyer:
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