casemark/asset-purchase-agreement

Asset Purchase Agreement

Draft a transaction-ready APA that precisely allocates assets, liabilities, and post-closing risk between buyer and seller.

Prerequisites

1. Parties and structure — legal names, entity types, jurisdictions, signing authority, deal structure
2. Asset and liability inventory — preliminary lists for Purchased Assets, Excluded Assets, Assumed Liabilities, Excluded Liabilities
3. Economic terms — purchase price, payment form, adjustments, earnouts, escrow/holdback, allocation
4. Key deal risks — regulatory approvals, consents, IP chain of title, material contracts, employee transition, environmental exposure
5. Timeline — signing/closing schedule, deliverables, conditions

If any prerequisite is missing, pause and ask — do not assume or fill gaps.

Output Structure

Step 1: Document Skeleton

Draft in this order:

1. Parties; Effective Date; Recitals
2. Definitions
3. Purchase and Sale of Assets
4. Excluded Assets
5. Assumed Liabilities
6. Excluded Liabilities
7. Purchase Price; Payment; Adjustments; Allocation
8. Closing; Closing Deliveries
9. Representations and Warranties of Seller
10. Representations and Warranties of Buyer
11. Covenants (Pre-Closing; Post-Closing)
12. Non-Competition / Non-Solicitation (if applicable)
13. Conditions to Closing
14. Indemnification
15. Miscellaneous; Signatures; Exhibits and Schedules

Step 2: Exhibits and Schedules

| Label | Purpose | Must Include | |---|---|---| | Exhibit A | Purchased Assets | Detailed categories and itemized lists | | Exhibit B | Excluded Assets | Cash, A/R (if excluded), retained contracts, corporate records | | Exhibit C | Assumed Liabilities | Specific obligations, amounts, contract IDs | | Exhibit D | Purchase Price Allocation | IRS Form 8594 class allocation | | Disclosure Schedules | R&W exceptions | Numbered to match each R&W subsection |

Step 3: Asset Scope and Exclusions

• Define "Purchased Assets" by category; cross-reference Exhibit A
• "As is, where is" only if consistent with negotiated reps/warranties
• Include books/records, data, IP, goodwill, domain names, social accounts if intended
• Catch-all exclusion: anything not in Exhibit A is excluded
• List retained corporate records, tax returns, insurance policies, non-assigned contracts

Step 4: Liability Allocation

• "Assumed Liabilities" strictly limited to Exhibit C items
• "Excluded Liabilities" covers pre-closing operations, taxes, employee obligations, litigation, environmental

Step 5: Price, Adjustments, and Tax Allocation

• Payment timing, wire instructions, escrow/holdback terms
• Working capital or inventory true-up: baseline, measurement method, dispute process, timing
• IRS Form 8594 allocation; covenant for consistent reporting by both parties

Step 6: Reps and Warranties

Seller R&W: Organization/authority; title to assets; financials; compliance; material contracts; litigation; taxes; IP; employees/benefits; environmental. Apply materiality and knowledge qualifiers where negotiated.

Buyer R&W: Organization/authority; enforceability; funds/financing; no conflicting approvals; governmental consents.

Number each R&W subsection to match its corresponding disclosure schedule.

Step 7: Covenants

• Pre-closing: ordinary-course operation; no asset transfers; no new debt; no material contract changes
• Post-closing: preserve goodwill; restrict Seller use of transferred name/marks
• Non-compete / non-solicit (if applicable): define restricted business, geography, duration, consideration; include reformation/severability clause

Step 8: Closing Conditions and Deliveries

| Party | Conditions | Deliveries | |---|---|---| | Seller | Accuracy of reps, covenant performance, no MAE, consents received | Bill of sale, assignments, lien releases, officer's certificate, good standing | | Buyer | Accuracy of reps, covenant performance | Payment, assumption agreement, officer's certificate |

Step 9: Indemnification

• Seller indemnifies for breaches, excluded liabilities, pre-closing operations
• Buyer indemnifies for breaches and assumed liabilities
• Include notice procedures, defense control, cooperation obligations
• Limits: basket (deductible vs. tipping), cap, survival periods, fraud carve-out, insurance offset

Step 10: Assignment and Assumption

• Reference separate assignment agreements for contracts and IP
• Identify third-party consent requirements; state non-assignment where prohibited by law or contract
• Carve out non-assignable items at closing

Guidelines

• Keep asset and liability schedules itemized and cross-referenced; never use "all assets" without categories
• Confirm third-party consent requirements before drafting assignment language
• Match disclosure schedule numbering to each R&W subsection exactly
• Use defined terms consistently; avoid duplicate definitions across exhibits
• Non-compete enforceability varies by state — tailor duration and geography to local law [VERIFY]
• Tax allocation must align with economics and both parties' reporting obligations
• If regulated assets or licenses are involved, add specific regulatory approval conditions
• If data or IP is included, confirm chain of title and include transfer instruments
• Output is draft work product requiring attorney review — not legal advice