Asset Purchase Agreement (US)
Asset Purchase Agreement template for US-based startups and SMEs
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as of [effective date] (the "Effective Date") by and between [seller legal name], a [seller entity type] organized under the laws of [seller state of formation], with its principal place of business at [seller address] ("Seller"), and [buyer legal name], a [buyer entity type] organized under the laws of [buyer state of formation], with its principal place of business at [buyer address] ("Buyer"). Seller and Buyer are referred to individually as a "Party" and together as the "Parties".
RECITALS
WHEREAS, Seller is engaged in the business of [business description] (the "Business") and owns the Purchased Assets (defined below);
WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, the Purchased Assets and to assume only the Assumed Liabilities, on the terms set out in this Agreement; and
WHEREAS, this Agreement is structured as an asset sale, not a stock or membership-interest sale.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the Parties agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Defined terms. Capitalized terms used in this Agreement have the meanings given to them in this Section 1, in Exhibit A (Key Commercial Terms), or in the Section in which they first appear.
Note: This template uses plain-English definitions inline rather than a long defined-terms schedule. If you need a separate defined-terms schedule, you can add one as an Exhibit.
1.2 "Purchased Assets" means the assets listed in Exhibit B, owned by Seller and used primarily in the Business.
1.3 "Excluded Assets" means the assets listed in Exhibit C, which Seller is retaining and not selling under this Agreement.
1.4 "Assumed Liabilities" means only the liabilities expressly listed in Exhibit D. All other liabilities of Seller are Excluded Liabilities.
1.5 "Excluded Liabilities" means all liabilities of Seller other than the Assumed Liabilities, including (a) any liability arising from Seller's ownership or operation of the Business before Closing; (b) Taxes of Seller, except as expressly stated in this Agreement; (c) liabilities to Seller's employees and contractors for periods before Closing; and (d) liabilities arising from any litigation, investigation, fine, or claim relating to periods before Closing.
1.6 "Material Contracts" means the contracts listed in Exhibit E.
1.7 "IP" means the intellectual property listed in Exhibit F, including registered and unregistered trademarks, copyrights, patents, domain names, and trade secrets used primarily in the Business.
1.8 "Permitted Liens" means the liens, security interests, and encumbrances listed in Exhibit G, plus liens for current Taxes not yet due and payable, statutory mechanics' or warehouse liens, and other minor encumbrances that do not materially impair the value or use of the affected Purchased Asset.
1.9 "Closing" means the completion of the purchase and sale of the Purchased Assets under this Agreement.
1.10 "Closing Date" means [closing date], or such other date as the Parties agree in writing.
1.11 "Knowledge" of a Party means the actual knowledge of the individuals listed for that Party in Exhibit A, after reasonable inquiry of their direct reports.
1.12 Interpretation. In this Agreement: (a) headings are for convenience only and do not affect interpretation; (b) "including" means "including without limitation"; (c) references to a statute include any successor statute and any regulations issued under it as in force on the Effective Date; (d) singular includes plural and vice versa; and (e) no rule of construction applies against the drafter.
2. PURCHASE AND SALE OF ASSETS
2.1 Purchase and sale. On the terms of this Agreement, at Closing Seller shall sell, assign, transfer, convey, and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller's right, title, and interest in and to the Purchased Assets, free and clear of all liens, security interests, and encumbrances other than Permitted Liens.
2.2 Excluded Assets. The Purchased Assets do not include the Excluded Assets, which Seller is retaining.
2.3 Assumed Liabilities. At Closing, Buyer shall assume and agree to perform only the Assumed Liabilities. Buyer is not assuming, and shall have no responsibility for, any Excluded Liabilities.
2.4 Excluded Liabilities retained by Seller. Seller shall remain solely responsible for, and shall pay and discharge when due, all Excluded Liabilities.
Note: Even with clear language allocating liabilities, courts in some states may apply 'successor liability' doctrines (de facto merger, mere continuation, fraudulent transfer, or product-line continuity) to hold a buyer responsible for certain pre-Closing liabilities — most commonly product liability and unpaid wages or benefits. Risk is higher when the buyer keeps the same name, location, employees, and management. You may want to consider a representations and warranties insurance policy or a sufficient holdback for high-risk industries.
2.5 Non-assignable assets. If a Purchased Asset (including any contract or permit) cannot be assigned or transferred to Buyer at Closing because the assignment requires a third-party consent that has not been obtained, the Closing shall still occur with respect to the other Purchased Assets, and the Parties shall use commercially reasonable efforts after Closing to obtain the missing consent or, if it cannot be obtained, to put Buyer in substantially the same economic position through a sublicense, subcontract, or pass-through arrangement permitted by the applicable contract.
3. PURCHASE PRICE; PAYMENT; TAX ALLOCATION
3.1 Purchase Price. The aggregate consideration for the Purchased Assets is [purchase price] (the "Purchase Price"), payable as follows: [payment mechanics — e.g., wire at closing; promissory note; escrow holdback amount and release schedule], subject to any adjustment expressly set out in this Agreement.
Note: Common payment structures for SME/startup deals: (a) full cash at Closing (cleanest); (b) cash plus a short-term holdback or escrow (5–15% of Purchase Price held back for 6–18 months as security for indemnity claims) — this is the simplest substitute for a working capital adjustment; (c) seller note (deferred payment) for part of the price. Holdbacks of 10% for 12 months are a common SME benchmark; lower amounts and shorter periods are aggressive, longer periods are conservative.
3.2 Deposit. If a deposit applies, Buyer shall pay Seller a deposit of [deposit amount] on [deposit date]. The deposit shall be [refundable / non-refundable treatment] and credited against the Purchase Price at Closing.
3.3 Tax allocation. The Parties shall allocate the Purchase Price (plus Assumed Liabilities, to the extent treated as consideration for tax purposes) among the Purchased Assets in a manner consistent with Section 1060 of the Internal Revenue Code and the Treasury Regulations under it. The Parties shall each file IRS Form 8594 (Asset Acquisition Statement) consistently with that allocation. The allocation is: [allocation — list by asset class, or state 'to be agreed in good faith within 60 days after closing'].
Note: The Internal Revenue Code Section 1060 requires both Parties to file IRS Form 8594 if the transferred assets constitute a 'trade or business' and the transferee's basis is determined wholly by the consideration paid. The Parties' allocations on Form 8594 must be consistent. Allocation impacts both sides' tax treatment: Buyer prefers allocations that maximize basis in depreciable assets (e.g., equipment, inventory) for faster write-offs; Seller prefers allocations to capital-gain assets (e.g., goodwill) over ordinary-income assets (e.g., inventory, receivables). Get tax advice before agreeing on allocation.
3.4 Transfer Taxes. Sales, use, transfer, registration, and similar Taxes arising out of the transfer of the Purchased Assets (Transfer Taxes) shall be paid [transfer tax allocation — e.g., "by buyer", "by seller", or "split equally"]. The Parties shall cooperate to minimize Transfer Taxes and to file all required Tax returns.
Note: Most states impose sales tax on the transfer of tangible personal property, even in an asset sale, unless an exemption (e.g., 'occasional sale' or 'bulk sale') applies. Real-property transfers may trigger separate documentary or transfer Taxes. Some states (e.g., Pennsylvania) impose a realty transfer tax even on long-term lease assignments. Check the governing state's Department of Revenue rules and apply for any available exemption certificate.
4. CLOSING
4.1 Closing. The Closing shall occur on the Closing Date, remotely by exchange of electronic signatures and wire transfers, or at [closing location] if the Parties prefer in-person closing.
4.2 Seller's Closing deliverables. At Closing, Seller shall deliver to Buyer:
(a) a Bill of Sale in the form of Exhibit I, executed by Seller, transferring the tangible Purchased Assets to Buyer;
(b) an Assignment of Intellectual Property in the form of Exhibit J, executed by Seller, transferring the IP to Buyer;
(c) an Assignment and Assumption Agreement covering the Material Contracts being assigned to Buyer, executed by Seller;
(d) evidence of any third-party consents obtained for the transfer of Purchased Assets;
(e) evidence of release (or pay-off letters and UCC-3 termination authorizations) for any liens on the Purchased Assets that are not Permitted Liens;
(f) a certificate of an officer of Seller confirming that Seller's representations and warranties are true and correct as of Closing in all material respects, and that Seller has performed in all material respects its covenants required to be performed at or before Closing;
(g) possession or control of the Purchased Assets, including transfer of access credentials, domain registrar logins, code repositories, and similar control-based assets; and
(h) any other documents reasonably necessary to give effect to this Agreement.
4.3 Buyer's Closing deliverables. At Closing, Buyer shall deliver to Seller:
(a) the Purchase Price (less any deposit credited and any agreed holdback) by wire transfer of immediately available funds;
(b) the Assignment and Assumption Agreement, executed by Buyer;
(c) a certificate of an officer of Buyer confirming that Buyer's representations and warranties are true and correct as of Closing in all material respects; and
(d) any other documents reasonably necessary to give effect to this Agreement.
5. SELLER'S REPRESENTATIONS AND WARRANTIES
5.1 General. Seller represents and warrants to Buyer, as of the Effective Date and as of Closing (unless a representation is expressly stated as of a different date), that the following statements are true and correct.
5.2 Organization and authority. Seller is duly organized, validly existing, and (where applicable) in good standing under the laws of its state of formation, and has full power and authority to own the Purchased Assets, conduct the Business as presently conducted, and enter into and perform this Agreement.
5.3 Authorization; enforceability. This Agreement and the other documents to be executed by Seller at Closing have been duly authorized, executed, and delivered by Seller and constitute legal, valid, and binding obligations of Seller, enforceable against Seller in accordance with their terms, subject to bankruptcy and similar laws and to general principles of equity.
5.4 Title to Purchased Assets; sufficiency. Seller has good and valid title to, or a valid leasehold or license interest in, the Purchased Assets, free and clear of all liens, security interests, and encumbrances other than Permitted Liens. The Purchased Assets, together with the rights granted under this Agreement, constitute the assets reasonably required for Buyer to operate the Business immediately after Closing in substantially the same manner as Seller operates the Business as of the Effective Date.
5.5 No conflict; required consents. Subject to the consents listed in Exhibit E, the execution and performance of this Agreement by Seller do not (a) violate Seller's organizational documents; (b) violate any law or governmental order applicable to Seller; or (c) result in a breach or default under any Material Contract or any other contract to which Seller is a party that would have a material adverse effect on the Purchased Assets or the Business.
5.6 Material Contracts. Exhibit E sets forth a true and complete list of all Material Contracts. Each Material Contract is in full force and effect and is enforceable against Seller and, to Seller's Knowledge, the other parties to it. Seller is not in material breach of any Material Contract, and to Seller's Knowledge no other party is in material breach of any Material Contract.
5.7 Intellectual Property. Seller owns or has valid rights to use the IP. To Seller's Knowledge, Seller's use of the IP for the Business as currently conducted does not infringe the intellectual property rights of any third party. There is no pending or, to Seller's Knowledge, threatened claim that Seller's use of the IP infringes any third-party intellectual property rights, except as disclosed in Exhibit H.
Note: Common SME issue: Seller's IP may include code, designs, or content created by independent contractors who never executed a written assignment. Under 17 U.S.C. Section 204(a), a copyright transfer is not valid unless it is in writing and signed by the rights owner. Without that written assignment, Seller may not actually own the IP it is purporting to sell, even if Seller paid for the work. Buyer may want to require, as a condition to Closing, that Seller produce signed contractor IP assignments — or have contractors execute confirmatory assignments at Closing.
5.8 Litigation. Except as disclosed in Exhibit H, there is no pending or, to Seller's Knowledge, threatened lawsuit, arbitration, or governmental proceeding against Seller that, if adversely determined, would materially affect the Purchased Assets or Seller's ability to perform this Agreement.
5.9 Compliance with laws. To Seller's Knowledge, Seller is in material compliance with the laws applicable to the Business as currently conducted, except as disclosed in Exhibit H. Seller has not received any written notice from a governmental authority alleging a material violation of law that has not been resolved.
5.10 Taxes. Seller has timely filed all material Tax returns required to be filed and has paid all material Taxes shown as due on those returns. There are no liens for Taxes on any Purchased Asset other than liens for current Taxes not yet due and payable.
5.11 Employees and contractors. Exhibit A identifies, by category, the employees and independent contractors engaged by Seller in the Business as of the Effective Date. Seller has paid all wages, benefits, and other amounts due to its employees and contractors with respect to periods through the most recent payroll cycle, except for amounts accrued but not yet payable in the ordinary course.
5.12 Brokers. Except for [seller broker — or "none"], whose fees Seller will pay, no broker, finder, or investment banker is entitled to a fee or commission in connection with this transaction based on arrangements made by or on behalf of Seller.
5.13 No other representations. Except for the representations and warranties expressly set out in this Section 5, Seller makes no representation or warranty, express or implied, regarding the Purchased Assets or the Business. Buyer acknowledges that, except for these express representations, the Purchased Assets are sold "AS IS" and "WHERE IS" and that Buyer has conducted (or had the opportunity to conduct) its own due diligence.
6. BUYER'S REPRESENTATIONS AND WARRANTIES
6.1 Organization and authority. Buyer is duly organized, validly existing, and (where applicable) in good standing under the laws of its state of formation, and has full power and authority to enter into and perform this Agreement.
6.2 Authorization; enforceability. This Agreement and the other documents to be executed by Buyer at Closing have been duly authorized, executed, and delivered by Buyer and constitute legal, valid, and binding obligations of Buyer, enforceable against Buyer in accordance with their terms, subject to bankruptcy and similar laws and to general principles of equity.
6.3 No conflict. The execution and performance of this Agreement by Buyer do not violate Buyer's organizational documents or any law or governmental order applicable to Buyer.
6.4 Sufficiency of funds. Buyer has, or at Closing will have, sufficient funds to pay the Purchase Price and perform its obligations under this Agreement.
6.5 Independent investigation. Buyer has conducted its own independent investigation of the Purchased Assets and the Business and is relying on that investigation and on the express representations of Seller in this Agreement.
6.6 Brokers. Except for [buyer broker — or "none"], whose fees Buyer will pay, no broker, finder, or investment banker is entitled to a fee or commission in connection with this transaction based on arrangements made by or on behalf of Buyer.
7. PRE-CLOSING COVENANTS
Note: If signing and Closing occur on the same day, this Section is largely irrelevant — you can delete it. Use these covenants when there is a gap between signing and Closing (for example, to obtain consents or regulatory approvals).
7.1 Conduct of Business. From the Effective Date until the earlier of Closing or termination of this Agreement, Seller shall (a) operate the Business in the ordinary course consistent with past practice; (b) preserve the Purchased Assets in their current condition (ordinary wear and tear excepted); (c) not sell, lease, license, or otherwise dispose of any material Purchased Asset outside the ordinary course; (d) not knowingly create any new lien on any Purchased Asset other than a Permitted Lien; (e) not enter into, materially modify, or terminate any Material Contract without Buyer's prior written consent (not to be unreasonably withheld); and (f) not increase the compensation or benefits of any employee outside the ordinary course.
7.2 Access and cooperation. From the Effective Date until Closing, Seller shall give Buyer and its representatives reasonable access during business hours to the Purchased Assets, books and records relating primarily to the Business, and Seller's personnel, subject to reasonable confidentiality and operational constraints. Seller is not required to disclose information protected by attorney-client privilege or that would breach a binding confidentiality obligation owed to a third party.
7.3 Notice of changes. Each Party shall promptly notify the other Party in writing of any event or condition arising before Closing that would cause any of its representations and warranties to become materially inaccurate, or that would constitute a material breach of any of its covenants.
8. THIRD-PARTY CONSENTS AND ASSIGNMENT OF CONTRACTS
8.1 Consents. Where assignment of a Material Contract or transfer of a Purchased Asset (including a permit or license) requires the consent of a third party, Seller shall use commercially reasonable efforts to obtain that consent before Closing. Buyer shall reasonably cooperate, including by providing financial and operational information reasonably requested by the third party.
Note: Many SaaS, vendor, customer, lease, and franchise agreements either prohibit assignment without consent or terminate automatically on a change of control or asset sale. Asset sales are often treated as 'assignments by operation of law' under such clauses. Buyer should review the Material Contracts list early to identify high-priority consents — major customer contracts, lease assignments, and sole-source vendor contracts are the typical pinch points.
8.2 If consent not obtained. If a required consent is not obtained by Closing, the Parties shall choose one of the following with respect to that contract or asset (mark the choice for each affected contract):
(a) exclude that contract or asset from the Purchased Assets and proceed with Closing on the remaining Purchased Assets;
(b) postpone Closing for a specified period (no more than [consent postponement period — e.g., 30 days]) to continue seeking the consent; or
(c) enter into a sublicense, subcontract, or pass-through arrangement under which Seller continues to hold the contract for Buyer's benefit, to the extent permitted by the underlying contract.
9. EMPLOYEES AND CONTRACTOR TRANSITION
Note: Use either Option A, Option B, or Option C. Delete the unselected options before execution.
Note: Use Option A if Seller is keeping its workforce after Closing and Buyer is not hiring anyone. Use Option B if Buyer is offering employment or contractor engagement to some or all of Seller's people. Use Option C if Buyer is acquiring substantially all of Seller's workforce — in this case, federal and state WARN Act analysis is required.
Option A — No transfer of personnel: Seller is solely responsible for all of Seller's employees and contractors, including all wages, benefits, paid time off, severance, payroll Taxes, and similar obligations through and including the Closing Date. Buyer is not offering employment or engagement to any of Seller's employees or contractors in connection with this Agreement.
Option B — Selective transition: Seller may, at or before Closing, terminate some or all of its employees and contractors. Buyer may, in its sole discretion, offer employment or contractor engagement to specified individuals on terms determined by Buyer. Seller remains responsible for all wages, benefits, paid time off, severance, payroll Taxes, and similar obligations attributable to periods through and including the Closing Date, regardless of whether the individual is later engaged by Buyer.
Option C — Workforce acquisition: Buyer intends to offer employment or contractor engagement to substantially all of Seller's [number of employees / contractors transitioning] employees and contractors of the Business effective on or after the Closing Date. Seller shall remain responsible for all pre-Closing wages, benefits, accrued paid time off (except where assumed by Buyer in writing), and payroll Taxes, and shall provide Buyer reasonable cooperation to effect the transition.
9.1 WARN Act and state equivalents. Seller shall comply with the federal Worker Adjustment and Retraining Notification Act (29 U.S.C. Section 2101 et seq.) and any analogous state law (collectively, the "WARN Acts") with respect to any termination of Seller's employees in connection with this transaction. Seller shall indemnify Buyer for any liability arising from Seller's failure to comply with the WARN Acts. Buyer shall not, during the 90 days following Closing, take any action that would, when aggregated with Seller's pre-Closing terminations, trigger a WARN Act notice obligation that would not otherwise apply, without giving Seller advance written notice.
Note: The federal WARN Act (29 U.S.C. Section 2101) generally requires 60 days' advance written notice before a 'plant closing' or 'mass layoff' affecting 50 or more employees at a single site. Several states (e.g., California, New York, New Jersey, Illinois) have 'mini-WARN' laws with stricter thresholds (sometimes 25 or 50 employees and up to 90 days' notice). In an asset sale, federal WARN treats the seller as the employer until the sale's effective date and the buyer as employer thereafter — so seller-side terminations on or before closing are usually seller's WARN obligation, while buyer-side reductions afterward are buyer's. Plan timing carefully when total layoffs near a WARN threshold.
9.2 COBRA. Seller shall be responsible for offering and administering continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA, 29 U.S.C. Section 1161 et seq.) and any state-law equivalent ("mini-COBRA") to any employee of Seller (and qualifying beneficiary) who experiences a qualifying event in connection with this transaction, except to the extent Buyer expressly agrees in writing to assume that obligation.
Note: COBRA generally requires employers with 20 or more employees to offer 18 months of continuation coverage to qualifying employees who lose group health coverage due to a qualifying event (including involuntary termination). In an asset sale, IRS regulations make Seller responsible for COBRA obligations to its M&A Qualified Beneficiaries unless Seller ceases to maintain a group health plan, in which case Buyer's plan may pick up the obligation. State mini-COBRA laws extend similar rules to smaller employers in some states. Confirm allocation with benefits counsel.
10. WORKER CLASSIFICATION (POST-CLOSING ENGAGEMENTS)
Note: This Section applies only if Buyer engages individuals as contractors after Closing. Use Option A if any contractor will perform work in California. Use Option B if any contractor will perform work in Massachusetts or New Jersey. Use Option C for all other states.
Note: Misclassifying a worker as an independent contractor when they should be an employee can lead to back wages, unpaid payroll Taxes, penalties, and lawsuits. The applicable test depends on where the work is performed, not where the company is based.
Option A — California (ABC test): If Buyer engages any individual as an independent contractor to perform work in California after Closing, Buyer shall apply the ABC test under California Labor Code Section 2775 (codifying the rule of Dynamex Operations W. v. Superior Court (Cal. 2018) and AB 5). Under this test, an individual is presumed to be an employee unless Buyer demonstrates that: (a) the individual is free from Buyer's control and direction in performing the work; (b) the individual performs work outside Buyer's usual course of business; and (c) the individual is customarily engaged in an independently established trade, occupation, or business of the same nature. If Buyer cannot meet all three prongs, Buyer shall classify the individual as an employee.
Option B — Massachusetts / New Jersey (ABC test): If Buyer engages any individual as an independent contractor to perform work in Massachusetts (M.G.L. c. 149 Section 148B) or New Jersey (N.J.S.A. 43:21-19(i)(6)) after Closing, Buyer shall apply the applicable state's ABC test. Both states presume an individual is an employee unless the engaging party can demonstrate freedom from control, work outside the usual course of the engaging party's business, and an independently established trade. If Buyer cannot meet all three prongs in the applicable state, Buyer shall classify the individual as an employee.
Option C — All other states (IRS / common-law test): If Buyer engages any individual as an independent contractor in a state other than those listed in Options A and B, Buyer shall apply the applicable state's worker-classification test (typically a common-law right-to-control test or a multi-factor balancing test) and the IRS common-law test under Internal Revenue Service guidance (including the considerations summarized in IRS Publication 15-A and historically known as the 20-factor test). Buyer may submit Form SS-8 to the IRS for a determination in cases of doubt. If Buyer cannot establish independent contractor status under the applicable test, Buyer shall classify the individual as an employee.
11. PRE-CLOSING IP ASSIGNMENTS FROM INDIVIDUALS
Note: Use Option A if Seller's Business has employees, contractors, or founders based in California, or if any of the IP being sold was created in California. Use Option B if individuals are based in another state with similar invention-assignment limits (Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah, Washington). Use Option C otherwise.
Note: Why this Section matters: under the Copyright Act, 17 U.S.C. Section 204(a), a copyright transfer is not valid unless it is in writing and signed by the rights owner. If Seller's contractors or employees never signed a written IP assignment, Seller may not own the IP it is purporting to sell. Buyer should confirm chain of title through signed assignments before Closing — paying for work alone is not enough.
Option A — California (Section 2870 carve-out): Seller represents and warrants that, with respect to each individual who has contributed to the IP while based in California, Seller has obtained from that individual a written IP assignment that complies with California Labor Code Section 2870(a) (which prevents assignment of inventions developed entirely on the individual's own time, without using employer resources, and unrelated to the employer's business or anticipated research) and a written notification under California Labor Code Section 2872. Copies of such assignments and notifications shall be made available to Buyer prior to Closing. The Section 2872 notification form may follow Exhibit K to this Agreement.
Option B — Other states with invention-assignment limits: Seller represents and warrants that, with respect to each individual who has contributed to the IP, Seller has obtained from that individual a written IP assignment that complies with applicable state-law limits on invention assignment (including Delaware Code title 19 Section 805, Illinois Employee Patent Act 765 ILCS 1060, Kansas K.S.A. 44-130, Minnesota Statutes Section 181.78, North Carolina General Statutes Section 66-57.1, Utah Code Section 34-39, and Washington RCW 49.44.140, as applicable). Copies of such assignments shall be made available to Buyer prior to Closing.
Option C — All other states: Seller represents and warrants that, with respect to each individual who has contributed to the IP, Seller has obtained from that individual a written IP assignment sufficient under applicable state law (including 17 U.S.C. Section 204(a) for copyrightable works) for Seller to own and to transfer the IP to Buyer free and clear of that individual's rights. Copies of such assignments shall be made available to Buyer prior to Closing.
12. NON-COMPETITION AND NON-SOLICITATION
Note: Use this Section only if Buyer is paying meaningful value for goodwill or customer relationships and needs post-Closing protection. Choose the Option that matches the governing-law state. Non-compete enforceability differs sharply by state; California voids most non-competes outright (subject to a narrow sale-of-business exception). The federal FTC Non-Compete Rule was vacated by the Northern District of Texas (Aug 20, 2024) in Ryan LLC v. FTC, and the FTC abandoned its appeal on Sept 5, 2025 — the rule is therefore not in force, but several states have enacted their own non-compete restrictions (Minnesota, Colorado, Illinois, Washington, and others).
Note: Use Option A (California), Option B (Texas), or Option C (other states). Delete unselected options.
Option A — California (sale-of-business exception under Bus. & Prof. Code Section 16601): Seller acknowledges that this Agreement is a sale of all (or substantially all) of the operating assets and goodwill of the Business, and that the parties intend to rely on the sale-of-business exception in California Business and Professions Code Section 16601. For [non-compete period — typically not exceeding the period during which the buyer continues to carry on a like business in the same geographic area] after the Closing Date, Seller shall not, directly or indirectly, carry on a business similar to the Business within [geographic area — the area in which the business has been carried on, e.g., the state of california]. For the same period, Seller shall not solicit any customer or employee of the Business as transferred to Buyer.
Note: California Business and Professions Code Section 16600 voids non-competes in the employment context. Section 16600.5 (added by SB 699, effective Jan. 1, 2024) makes void contracts unenforceable regardless of where or when signed. Section 16600.1 (added by AB 1076, effective Jan. 1, 2024) makes inclusion of a void non-compete in an employment contract unlawful and required employers to provide individualized written notice by Feb. 14, 2024 to current and former California employees employed after Jan. 1, 2022 that any such clause is void.
Note: Sections 16601 and 16602.5 provide narrow exceptions for non-competes executed in connection with (a) the sale of the goodwill of a business or substantially all of its operating assets, (b) the sale of an ownership interest in a business entity, or (c) the dissolution of, or dissociation of an owner from, a partnership or LLC. A Seller in an asset sale of substantially all operating assets may be validly bound by a sale-linked non-compete under Section 16601. The Section 16600 ban applies to employment-context non-competes only. Verify at https://leginfo.legislature.ca.gov.
Option B — Texas (Bus. & Com. Code Section 15.50): For [non-compete period — typically 2 to 5 years for sale-of-business non-competes] after the Closing Date, Seller shall not, directly or indirectly, engage in any business that competes with the Business in [geographic area], or solicit any customer or employee of the Business as transferred to Buyer. The Parties agree that this restriction is ancillary to and part of an otherwise enforceable agreement (the sale of the Purchased Assets) and is reasonable in time, geographic area, and scope of activity to protect Buyer's legitimate business interest in the goodwill and other assets purchased. If a court determines that any portion of this restriction exceeds what is reasonable, the court may reform the restriction to the extent necessary to make it enforceable, consistent with Texas Business and Commerce Code Section 15.50.
Note: Texas Business and Commerce Code Section 15.50 enforces non-competes that are 'ancillary to or part of an otherwise enforceable agreement' and contain reasonable limits on time, geographic area, and scope. A sale-of-business non-compete typically meets the ancillary-agreement requirement easily. Texas courts have authority to reform overly broad restrictions. Verify at https://statutes.capitol.texas.gov/Docs/BC/htm/BC.15.htm#15.50.
Option C — All other states: For [non-compete period — typical sme range 1 to 3 years] after the Closing Date, Seller shall not, directly or indirectly: (a) engage in or have a material interest in any business that competes with the Business in [geographic area — limit to the area in which the business has been carried on]; (b) solicit any customer of the Business as transferred to Buyer for a competing purpose; or (c) hire or solicit for hire any employee of the Business who joins Buyer at or after Closing, except pursuant to a general solicitation not directed at that employee or after the employee has not been engaged by Buyer for at least [cooling-off period — e.g., 6 or 12 months]. The Parties intend these restrictions to be no broader than reasonably necessary to protect Buyer's legitimate business interest in the goodwill and Purchased Assets, and a court may reform any portion that exceeds what is reasonable, to the extent permitted by applicable law.
Note: State non-compete law varies widely. Several states have enacted recent restrictions: Minnesota (near-total ban on employee non-competes effective July 2023, but sale-of-business non-competes are exempted); Colorado (high-wage threshold and narrow purposes effective Aug 2022); Illinois Freedom to Work Act (income thresholds); Washington (income thresholds and disclosure rules). Sale-of-business non-competes are generally treated more leniently than employee non-competes, but the rules differ. Confirm with counsel in the governing state before relying on a non-compete.
13. CUSTOMER DATA AND PRIVACY
Note: Use Option A if the Purchased Assets include personal information of California residents in volumes that bring Seller (or the Business) within the scope of the CCPA/CPRA. Use Option B if personal data of residents of other states with comprehensive privacy laws (e.g., Virginia VCDPA, Colorado CPA, Connecticut CTDPA, Texas TDPSA) is included. Use Option C if personal data is minimal or limited to B2B contact information.
Option A — California (CCPA/CPRA): If the Purchased Assets include personal information of California residents within the meaning of the California Consumer Privacy Act of 2018 (Cal. Civ. Code Section 1798.100 et seq., as amended by the California Privacy Rights Act, "CCPA/CPRA"): (a) the Parties shall structure the transfer to comply with applicable CCPA/CPRA obligations, including any disclosure or notice requirements applicable to a 'sale' or 'sharing' of personal information, or to a transfer in connection with a merger, acquisition, bankruptcy, or other transaction in which a third party assumes control under Cal. Civ. Code Section 1798.140(ad)(2)(C); (b) Seller shall provide Buyer with copies of Seller's current privacy notices applicable to the data being transferred; and (c) Buyer shall use the personal information after Closing in a manner consistent with the disclosures made to consumers at the time the information was collected, or shall provide consumers with notice and any required choice before any materially inconsistent use.
Note: The CCPA/CPRA defines 'sale' broadly and treats some merger and acquisition transfers as 'sales' or 'sharing' triggering disclosure and opt-out obligations. Section 1798.140(ad)(2)(C) excludes certain M&A transfers from the definition of 'sale' provided the transferred personal information remains used in a manner consistent with the original notices. Buyer should not change its post-Closing data uses materially without giving consumers notice and any opt-out required by law. Verify at https://leginfo.legislature.ca.gov.
Option B — Other states with comprehensive privacy laws: If the Purchased Assets include personal data of residents of states with comprehensive privacy laws (including Virginia VCDPA, Colorado CPA, Connecticut CTDPA, Utah UCPA, Texas TDPSA, Oregon OCPA, and similar laws as in effect on the Closing Date), the Parties shall structure the transfer to comply with applicable obligations, including any disclosure, opt-out, or notice requirements arising from a 'sale' or transfer of personal data. Seller shall provide Buyer with copies of Seller's current privacy notices.
Option C — Minimal personal data / B2B contact data: The Parties shall transfer only the customer and vendor information reasonably necessary to operate the Purchased Assets and shall take reasonable steps to protect that information and to comply with any contractual confidentiality obligations applicable to the transferred data.
13.1 Existing data protection obligations. Seller shall continue to comply with its existing data protection obligations under applicable law and contract through Closing, and shall transfer to Buyer any records of consents, opt-outs, and data subject requests reasonably required for Buyer to continue compliant processing after Closing.
14. CONFIDENTIALITY
14.1 Mutual confidentiality. Each Party shall hold in confidence all non-public information of the other Party disclosed in connection with this transaction (including the existence and terms of this Agreement) and shall use it only for purposes of evaluating, negotiating, and performing this Agreement. The obligation does not apply to information that (a) is or becomes generally available to the public through no fault of the receiving Party; (b) was lawfully in the receiving Party's possession before disclosure; (c) is lawfully obtained from a third party without breach; or (d) is independently developed without use of the disclosing Party's confidential information.
14.2 Post-Closing confidentiality of Business information. From and after Closing, Seller shall hold in confidence all non-public information relating primarily to the Business and the Purchased Assets, treating that information as Buyer's confidential information. The exceptions in Section 14.1 apply.
14.3 Compelled disclosure. If a Party is compelled by law or legal process to disclose confidential information of the other Party, it shall give prompt written notice (to the extent legally permissible) so the other Party may seek a protective order, and shall disclose only the portion legally required.
14.4 DTSA Immunity Notice. Pursuant to the federal Defend Trade Secrets Act, 18 U.S.C. Section 1833(b), each individual signing this Agreement on behalf of a Party, and each employee or contractor of either Party who receives trade secret information under this Agreement, is hereby notified that:
(a) An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(b) An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual: (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.
Note: The Defend Trade Secrets Act (DTSA), 18 U.S.C. Section 1833(b)(3), requires this immunity notice in any agreement with an employee or contractor that governs the use of trade secrets or other confidential information. If the notice is omitted, the employer cannot recover exemplary damages or attorney's fees under the DTSA against an employee to whom notice was not provided (Section 1833(b)(3)(C)). 'Employee' under Section 1833(b)(4) includes any individual performing work for the employer, so this captures contractors. Do not delete this clause — preserve it in the operative text. Verify at https://uscode.house.gov.
14.5 Trade secret protection generally. Each Party acknowledges that the other Party's trade secrets are protected under the Defend Trade Secrets Act and applicable state trade secret law (typically the Uniform Trade Secrets Act as adopted in the governing state, except in New York, which relies on common-law trade secret protection). Nothing in this Agreement limits either Party's rights under those laws.
15. ANTI-CORRUPTION COMPLIANCE
15.1 FCPA and similar laws. Each Party represents and warrants that, in connection with the Business and this transaction, neither it nor any person acting on its behalf has offered, paid, given, or authorized any payment of money or anything of value, directly or indirectly, to any foreign or domestic government official, political party, or candidate to obtain or retain business or to secure any improper advantage, in violation of (a) the U.S. Foreign Corrupt Practices Act of 1977, 15 U.S.C. Section 78dd-1 et seq. ("FCPA"); (b) any state or local U.S. anti-bribery law; or (c) any other applicable anti-corruption law in any jurisdiction.
Note: Even small businesses can have FCPA exposure if they sell internationally, work with foreign distributors, or have non-U.S. customers or vendors. Penalties under the FCPA include civil and criminal fines and disgorgement, and successor liability has been applied in M&A contexts where the buyer fails to conduct adequate diligence. Verify at https://uscode.house.gov.
16. CONDITIONS TO CLOSING
Note: Use this Section only if there is a gap between signing and Closing. If the Parties sign and close on the same day, you can delete it.
16.1 Conditions to Buyer's obligation to close. Buyer's obligation to close is subject to: (a) Seller's representations and warranties being true and correct in all material respects as of Closing; (b) Seller having performed in all material respects its covenants required at or before Closing; (c) receipt of any third-party consents identified in writing by the Parties as required to close; (d) release of all liens (other than Permitted Liens) on the Purchased Assets; and (e) delivery of the Closing deliverables set out in Section 4.2.
16.2 Conditions to Seller's obligation to close. Seller's obligation to close is subject to: (a) Buyer's representations and warranties being true and correct in all material respects as of Closing; (b) Buyer having performed in all material respects its covenants required at or before Closing; and (c) delivery of the Closing deliverables set out in Section 4.3, including payment of the Purchase Price.
17. INDEMNIFICATION
17.1 Survival. The representations and warranties of the Parties shall survive Closing for [survival period — typical sme range 12 to 24 months], except that (a) the representations and warranties relating to organization, authority, title to Purchased Assets, and brokers (the "Fundamental Representations") shall survive for [fundamental survival — e.g., 6 years or indefinitely]; and (b) the representations and warranties relating to Taxes shall survive until 60 days after the expiration of the applicable statute of limitations. Covenants shall survive until performed in accordance with their terms.
17.2 Seller's indemnification. Subject to the limits in Section 17.4, Seller shall indemnify and hold harmless Buyer and its officers, directors, managers, employees, and agents (the "Buyer Indemnified Parties") from and against losses, damages, liabilities, and reasonable out-of-pocket expenses (including reasonable attorneys' fees, the "Losses") arising out of: (a) any breach or inaccuracy of Seller's representations or warranties; (b) any breach by Seller of its covenants; (c) any Excluded Liability; or (d) Seller's ownership or operation of the Business before Closing.
17.3 Buyer's indemnification. Subject to the limits in Section 17.4, Buyer shall indemnify and hold harmless Seller and its officers, directors, managers, employees, and agents (the "Seller Indemnified Parties") from and against Losses arising out of: (a) any breach or inaccuracy of Buyer's representations or warranties; (b) any breach by Buyer of its covenants; (c) any Assumed Liability; or (d) Buyer's ownership or operation of the Purchased Assets after Closing.
17.4 Limits. Except for indemnification arising out of fraud, intentional misconduct, breach of a Fundamental Representation, breach of the Tax representation, or any Excluded Liability:
(a) No indemnification is owed until aggregate Losses exceed [basket — typical sme range 0.5% to 1% of purchase price] (the "Basket"), after which the indemnifying Party shall pay [basket treatment — "all losses from the first dollar" or "only losses above the basket"].
(b) The indemnifying Party's aggregate liability shall not exceed [cap — typical sme range 10% to 25% of purchase price; up to 100% for breaches of fundamental representations] (the "Cap").
(c) Claims must be brought within the applicable survival period in Section 17.1.
Note: Indemnification market benchmarks for SME deals: basket 0.5%–1% of purchase price (deductible-style is more buyer-friendly than tipping-basket); cap 10%–25% for general reps, and either uncapped or capped at the full purchase price for fundamental reps and excluded liabilities; survival 12–24 months for general reps; tax reps survive the statute of limitations plus a buffer. Holdback or escrow of 5%–15% for the survival period is the simplest funding mechanism for an SME deal — much cheaper than reps and warranties insurance for deals under ~$10M.
17.5 Process. The Indemnified Party shall give the indemnifying Party prompt written notice of any claim, with reasonable detail. Failure to give prompt notice does not relieve the indemnifying Party of its obligations except to the extent the indemnifying Party is materially prejudiced. The indemnifying Party may assume the defense of any third-party claim with counsel reasonably acceptable to the Indemnified Party, provided that the indemnifying Party may not settle a claim that imposes any non-monetary obligation on the Indemnified Party, or that does not include a full release of the Indemnified Party, without the Indemnified Party's prior written consent.
17.6 Tax treatment. Indemnification payments under this Agreement shall be treated as adjustments to the Purchase Price for Tax purposes, except as otherwise required by law.
17.7 Exclusive remedy. Except for (a) claims arising out of fraud, intentional misconduct, or criminal activity; (b) claims for specific performance or other equitable relief; and (c) any remedy expressly provided elsewhere in this Agreement, indemnification under this Section 17 is each Party's sole and exclusive monetary remedy for any claim arising out of this Agreement.
18. LIMITATION OF LIABILITY
Note: Use Option A if Massachusetts or New Jersey law governs (these states sometimes restrict broad consequential-damages waivers in certain contexts). Use Option B if California law governs (and you want a more balanced approach). Use Option C in all other states.
Option A — Massachusetts / New Jersey: To the extent permitted by applicable law, neither Party shall be liable to the other for special, incidental, indirect, punitive, exemplary, or consequential damages arising out of this Agreement, except (a) to the extent awarded to a third party in a third-party claim covered by indemnification under Section 17; (b) for damages caused by fraud, intentional misconduct, or criminal activity; or (c) where applicable Massachusetts or New Jersey law renders such a limitation unenforceable in the particular context (in which case the limitation shall apply to the maximum extent permitted).
Option B — California: To the extent permitted by applicable law, neither Party shall be liable to the other for punitive or exemplary damages arising out of this Agreement, except for damages caused by fraud, intentional misconduct, or criminal activity. The Parties may, by indicating below, also exclude special, incidental, indirect, and consequential damages: [consequential damages choice — "excluded" or "not excluded"].
Option C — All other states: To the maximum extent permitted by applicable law, neither Party shall be liable to the other for special, incidental, indirect, punitive, exemplary, or consequential damages (including lost profits, lost revenue, or loss of business opportunity) arising out of this Agreement, except (a) to the extent awarded to a third party in a third-party claim covered by indemnification under Section 17; or (b) for damages caused by fraud, intentional misconduct, or criminal activity.
Note: 'Consequential damages' is often argued to include lost profits, which can be the largest category of recovery in a breach. Excluding consequential damages limits recovery even if the other side breaches. For asset sales, consequential damages exclusions are typically softer than in services agreements because the bargain centers on a fixed transfer of assets rather than ongoing performance.
19. TERMINATION
19.1 Termination rights. This Agreement may be terminated before Closing: (a) by mutual written agreement of the Parties; (b) by either Party if Closing has not occurred by [outside date] (the "Outside Date") and the failure to close is not due to the terminating Party's breach; (c) by either Party if the other Party has materially breached this Agreement and has not cured the breach within [cure period — e.g., 15 or 30 days] after written notice; or (d) by either Party if a governmental authority issues a final, non-appealable order prohibiting Closing.
19.2 Effect of termination. On termination, this Agreement shall be of no further force or effect, except that (a) Sections 14 (Confidentiality), 17 (Indemnification, with respect to pre-termination breaches), 20 (Governing Law), and 22 (Miscellaneous) shall survive; and (b) termination shall not relieve any Party of liability for any breach occurring before termination.
20. GOVERNING LAW AND VENUE
Note: Use Option A (New York), Option B (Delaware), or Option C (other state). For commercial deals between sophisticated parties, New York and Delaware are the most common choices regardless of where the parties are physically located. But certain issues (worker classification, real estate, local licensing) are typically governed by the law of the state where the work or property is located, regardless of the choice-of-law clause.
Option A — New York: This Agreement and any dispute arising out of or relating to it (whether in contract, tort, or otherwise) shall be governed by and construed under the laws of the State of New York, without regard to its conflict-of-laws principles. Each Party submits to the exclusive jurisdiction of the state and federal courts located in [new york county], New York, for any such dispute, and waives any objection to venue in those courts.
Option B — Delaware: This Agreement and any dispute arising out of or relating to it (whether in contract, tort, or otherwise) shall be governed by and construed under the laws of the State of Delaware, without regard to its conflict-of-laws principles. Each Party submits to the exclusive jurisdiction of the state and federal courts located in [new castle county], Delaware, for any such dispute, and waives any objection to venue in those courts.
Option C — Other state: This Agreement and any dispute arising out of or relating to it (whether in contract, tort, or otherwise) shall be governed by and construed under the laws of [governing law state], without regard to its conflict-of-laws principles. Each Party submits to the exclusive jurisdiction of the state and federal courts located in [venue county], [governing law state], for any such dispute, and waives any objection to venue in those courts.
20.1 Jury trial waiver. To the extent permitted by applicable law, each Party irrevocably waives the right to a trial by jury in any action arising out of or relating to this Agreement.
Note: Pre-dispute jury trial waivers are enforceable in federal court and in most states (with Texas being one of several where pre-dispute waivers may be unenforceable as a matter of state law in some contexts). California courts have held that pre-dispute jury waivers in contracts are unenforceable under the California Constitution (Grafton Partners v. Superior Court, 36 Cal. 4th 944 (2005)) — if California law governs and the dispute is heard in a California state court, this waiver may not be enforceable, although it may still be enforceable in federal court applying federal procedural rules.
21. COUNTERPARTS AND ELECTRONIC SIGNATURES
Note: Use Option A (New York), Option B (California), or Option C (other states). Differences are minimal in substance — the ESIGN Act and UETA make electronic signatures broadly enforceable in nearly all states.
Option A — New York: This Agreement may be executed in counterparts and delivered by electronic signature. The Parties intend that electronic signatures shall have the same legal effect as original signatures, consistent with the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. Section 7001) and New York's Electronic Signatures and Records Act (ESRA, N.Y. State Technology Law Article III).
Option B — California: This Agreement may be executed in counterparts and delivered by electronic signature. The Parties intend that electronic signatures shall have the same legal effect as original signatures, consistent with the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. Section 7001) and the California Uniform Electronic Transactions Act (Cal. Civ. Code Section 1633.1 et seq.).
Option C — All other states: This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one instrument, and may be delivered by electronic signature, which shall have the same legal effect as an original signature consistent with the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. Section 7001) and the Uniform Electronic Transactions Act as adopted in the governing state.
22. MISCELLANEOUS
22.1 Notices. Notices under this Agreement shall be in writing and delivered by (a) personal delivery; (b) nationally recognized overnight courier; or (c) email to the addresses set out in Exhibit A (with email constituting effective notice when a non-automated reply confirms receipt). A Party may change its notice address by written notice given in accordance with this Section.
22.2 Amendments and waivers. This Agreement may be amended only by a writing signed by both Parties. A waiver is effective only if in writing and signed by the waiving Party, and a single waiver does not constitute a continuing waiver.
22.3 Assignment. Neither Party may assign this Agreement without the other Party's prior written consent (not to be unreasonably withheld), except that either Party may assign to (a) an affiliate; or (b) a successor in connection with a merger, reorganization, or sale of substantially all assets, provided in each case that the assigning Party remains responsible for performance unless the other Party expressly releases it in writing.
22.4 Entire Agreement. This Agreement (together with all Exhibits and the documents executed at Closing) is the entire agreement of the Parties on its subject matter and supersedes all prior negotiations, term sheets, letters of intent, and discussions on that subject.
22.5 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in effect, and the Parties shall in good faith replace the invalid provision with a valid provision that most closely reflects the original intent.
22.6 No third-party beneficiaries. Except for the Buyer Indemnified Parties and Seller Indemnified Parties (with respect to Section 17), this Agreement is for the benefit of the Parties only and confers no rights on any third party.
22.7 Further assurances. Each Party shall execute and deliver such further documents and take such further actions as the other Party reasonably requests to give effect to this Agreement.
22.8 Expenses. Except as otherwise provided in this Agreement, each Party shall bear its own legal, accounting, and other transaction expenses.
22.9 Specific performance. Each Party acknowledges that monetary damages may be inadequate for a breach of this Agreement, and that the other Party shall be entitled to seek specific performance and injunctive relief in addition to any other remedy available at law or in equity, without the requirement to post a bond (except where required by applicable law).
22.10 Headings; construction. Headings are for convenience only and do not affect interpretation. This Agreement was negotiated by the Parties at arm's length, and no rule of construction shall apply against either Party as drafter.
[signature page follows]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
SELLER: [seller legal name]
Signature:
Printed Name:
Title:
Date:
Address:
Email:
BUYER: [buyer legal name]
Signature:
Printed Name:
Title:
Date:
Address:
Email:
EXHIBIT A — KEY COMMERCIAL TERMS
Note: Complete this Exhibit before execution. In case of conflict between this Exhibit and the body of this Agreement, this Exhibit prevails.
Effective Date: [effective date]
Seller Legal Name: [seller legal name]
Seller Entity Type: [seller entity type]
Seller State of Formation: [seller state of formation]
Seller Address: [seller address]
Seller Email for Notices: [seller email]
Seller Knowledge Individuals: [seller knowledge individuals — names]
Buyer Legal Name: [buyer legal name]
Buyer Entity Type: [buyer entity type]
Buyer State of Formation: [buyer state of formation]
Buyer Address: [buyer address]
Buyer Email for Notices: [buyer email]
Buyer Knowledge Individuals: [buyer knowledge individuals — names]
Business Description: [business description]
Closing Date: [closing date]
Closing Location: [closing location — or 'remote']
Outside Date: [outside date]
Purchase Price: [purchase price]
Payment Mechanics: [payment mechanics]
Deposit Amount: [deposit amount — or 'none']
Deposit Date: [deposit date]
Refundable / Non-Refundable Treatment: [refundable / non-refundable treatment]
Tax Allocation: [tax allocation]
Transfer Tax Allocation: [transfer tax allocation]
Number of Employees / Contractors Transitioning: [number of employees / contractors transitioning — or 'n/a']
Consent Postponement Period: [consent postponement period]
Non-Compete Period: [non-compete period]
Geographic Area: [geographic area]
Cooling-Off Period: [cooling-off period]
Survival Period (general reps): [survival period]
Fundamental Survival: [fundamental survival]
Basket: [basket]
Basket Treatment: [basket treatment]
Cap: [cap]
Cure Period: [cure period]
Consequential Damages Choice (CA only): [consequential damages choice]
Governing Law State: [governing law state]
Venue County: [venue county]
New York County (if Option A): [new york county]
Delaware County (if Option B): [new castle county]
Seller Broker (or 'none'): [seller broker]
Buyer Broker (or 'none'): [buyer broker]
EXHIBIT B — PURCHASED ASSETS
Note: List specifically. Examples: equipment with serial numbers, inventory SKUs and quantities, furniture, computers, tooling, vehicles, customer lists (subject to Section 13), domain names, social media accounts, phone numbers, software licenses (if transferable), books and records relating to the Business, goodwill.
[list of purchased assets — be specific]
EXHIBIT C — EXCLUDED ASSETS
Note: Common excluded assets: cash and cash equivalents (unless deal is locked-box); accounts receivable up to Closing (sometimes excluded, sometimes included); Seller's corporate minute books, tax returns, and Tax workpapers; insurance policies; rights under this Agreement; assets unrelated to the Business.
[list of excluded assets]
EXHIBIT D — ASSUMED LIABILITIES
Note: Be precise. Common assumed liabilities: post-Closing performance obligations under Material Contracts that are assigned to Buyer; specific accounts payable assumed in writing; prorated portions of rent, utilities, and similar accrued items as of Closing. If empty, write 'None other than post-Closing obligations under Assigned Material Contracts.'
[list of assumed liabilities]
EXHIBIT E — MATERIAL CONTRACTS
Note: List each Material Contract by counterparty, contract title, date, and whether assignment requires consent (yes / no / unclear). Include: customer contracts above a materiality threshold, vendor contracts, real-property leases, equipment leases, employment-style agreements (noting they may not be assignable), software licenses, partnership/JV agreements, and licenses-in / licenses-out of IP.
[list of material contracts — counterparty, title, date, consent required yes/no]
EXHIBIT F — INTELLECTUAL PROPERTY
Note: List by category. Trademarks (registered and common-law, with USPTO serial / registration numbers); copyrights (registered and unregistered, with U.S. Copyright Office numbers if registered); patents (with USPTO numbers); domain names (with registrar); software / source code repositories (with hosting platform); trade secrets and know-how (described in general terms — do not disclose the secret itself in this Exhibit); and any other IP.
[list of ip]
EXHIBIT G — PERMITTED LIENS
Note: List specific liens that will remain after Closing. Common: equipment finance leases that buyer is assuming; landlord liens under real-property leases; minor mechanics' or warehousemen's liens. Run UCC-1 searches in Seller's state of formation and any state where major Purchased Assets are located before signing — undisclosed UCC-1 filings are a common surprise. Liens not listed must be released at Closing.
[list of permitted liens — or 'none']
EXHIBIT H — DISCLOSED ISSUES (LITIGATION / COMPLIANCE / IP)
Note: Disclose any matters that would otherwise breach Seller's representations in Section 5 — pending or threatened lawsuits or investigations, governmental orders, alleged compliance issues, alleged IP infringement, customer disputes, etc. Items disclosed here are 'carved out' of the relevant representations (the Buyer takes them on notice). Be specific — vague disclosures may not protect Seller.
[disclosed issues — or 'none']
EXHIBIT I — FORM OF BILL OF SALE
Note: A short stand-alone bill of sale executed at Closing. If you do not want a separate document, you can rely on Section 2.1 of this Agreement plus a Closing certificate. A typical bill of sale includes: identification of Parties, recital of the Asset Purchase Agreement, transfer language ('Seller hereby sells, assigns, and transfers'), reference to the asset list (Exhibit B), and signatures.
"Seller hereby sells, assigns, transfers, and conveys to Buyer all of Seller's right, title, and interest in and to the Purchased Assets described in Exhibit B to the Asset Purchase Agreement dated [effective date], as of the Closing Date."
EXHIBIT J — FORM OF INTELLECTUAL PROPERTY ASSIGNMENT
Note: A separate IP assignment is needed for recordation with the U.S. Patent and Trademark Office (for patents and trademarks) and the U.S. Copyright Office (for registered copyrights). Use the standard 'hereby irrevocably assigns' language to satisfy 17 U.S.C. Section 204(a) (which requires copyright transfers to be in a signed writing). A typical IP assignment includes: identification of Parties, list of IP being assigned (refer to Exhibit F), express assignment of all right, title, and interest including goodwill associated with trademarks, and signature with notarial acknowledgment if required for recording.
"Seller hereby irrevocably assigns, transfers, and conveys to Buyer all of Seller's right, title, and interest, throughout the world, in and to the intellectual property described in Exhibit F to the Asset Purchase Agreement dated [effective date], including all goodwill associated with the trademarks listed therein, all causes of action for past, present, and future infringement, and all rights to sue and recover for such infringement. This assignment is intended to satisfy the writing requirement of 17 U.S.C. Section 204(a)."
EXHIBIT K — NOTICE TO EMPLOYEES PURSUANT TO CALIFORNIA LABOR CODE SECTION 2872
Note: Include this Exhibit only if Section 11 Option A (California) was selected. The notice must be given to each affected California employee at the time the IP assignment agreement is made. Verify at https://leginfo.legislature.ca.gov.
Notice to [employee/contractor]: Your agreement to assign inventions to [employer] does not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870. Section 2870(a) provides that an invention assignment provision in an employment agreement does not apply to an invention that the employee developed entirely on their own time without using the employer's equipment, supplies, facilities, or trade secret information except for inventions that either (1) relate at the time of conception or reduction to practice to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) result from any work performed by the employee for the employer.
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