18+ Free Simple Asset Purchase Agreement Templates (PDF, DOC)

An Asset Purchase Agreement (APA) is a lawful agreement between a customer and a seller that summarizes the terms and conditions of selling different assets. It is usually utilized in business transactions, such as when a company develops a different set of assets from another company, or when one company purchases another company’s assets. The Asset Purchase Agreement Template is a pre-designed manuscript that incorporates common terms and conditions that are usually incorporated in an APA.

It delivers a framework for parties to mediate the specifics of the transaction, comprising the kind and extent of assets being bought, the purchase cost, expenditure terms, verifications, and manifestations. The template can be beneficial for the parties involved to simplify the negotiation procedure to be sure that all significant terms are incorporated into the agreement. It is significant to know that every transaction is unique, and the terms of the APA may require to be customized to reflect the specific requirements and occurrences of the parties implicated.

Download Free Simple Asset Purchase Agreement Templates

Benefits of using an Asset Purchase Agreement

  • Clear and comprehensive agreement: It delivers a transparent and comprehensive agreement between the customer and vendor considering the terms of the transition. It delineates the specifics of the assets being bought, the purchase cost, payment terms, and any other relevant elements.
  • Asset protection: Insulating the buyer from any penalties associated with the assets being bought can be beneficial. The agreement can stipulate that the customer is accountable for any outstanding fines or legal problems related to the assets, which can be beneficial for the buyer to bypass expensive legal conflicts down the road.
  • Warranty and representation: It usually incorporates verifications and representations by the vendor regarding the assets sold. It can deliver the customer consolation that the assets are in good condition and that there are no hidden problems or penalties.
  • Customizable terms: They can be customized to reflect the specific requirements and occurrences of the parties involved.
  • Legal protection: It is a legally binding contract that can deliver legal protection to both customers and vendors in case of a conflict.

Types of Assets Covered in Asset Purchase Agreements

  1. Tangible assets: These are physical asses that can be touched and seen such as equipment, merchandise, and real estate.
  2. Intangible assets: These have significance but are not physical, such as trademarks, patents, copyrights, intellectual possessions, and trade secrets.
  3. Contracts and agreements: These are legal agreements between the vendor and third parties, such as suppliers, customers, and employees. 
  4. Goodwill: It is a sign of a business based on its prestige, customer base, and other intangible factors. It can be contained in an APA as an asset.
  5. Licenses and permits: These are lawful approvals awarded by government mechanisms that authorize a business to employ in a certain industry or location.
  6. Financial assets: These are assets that have an economic value, such as accounts receivable, money, and protection.

Key Components of an Asset Purchase Agreement

It should identify the customer and vendor and deliver their contact details. It should transparently characterize the assets being bought. It should state the purchase cost for the assets being purchased. It should stipulate the payment terms, incorporating the timing and procedure of payment. It should summarize any conditions that must be met before the transaction can close.

It should stipulate the indemnification commitments of each party. It should identify the governing law and jurisdiction that will govern the agreement and any conflicts that may occur. It should incorporate provisions safeguarding the confidentiality of the transaction and any sensitive details disclosed during the negotiation or enactment of the agreement. It should specify the occurrences under which the agreement can be terminated.

Due diligence in Asset Purchase Agreements

  • Asset review: The customer should perform a detailed review of the assets being sold to be sure that they are accurately represented in the agreement.
  • Seller’s financial records: The customer should review the seller’s economic records to substantiate the accuracy of the financial statements and be sure that there are no hidden penalties or other financial problems.
  • Legal review: The customer should execute a legal review to be sure that the seller has the legal right to sell the assets being transferred and that there are no legal conflicts or other problems that could affect the transaction. 
  • Tax review: The customer should review the tax history of the vendor to be sure that the transaction is structured in a tax-efficient manner and that there are no tax penalties associated with the transaction.
  • Employee review: The customer should review the seller’s employment history to be sure that there are no employment-related penalties or problems that could affect the transaction.
  • Environmental review: The customer should perform an environmental review to be sure that there are no environmental penalties associated with the assets being transferred.

How to create an Asset Purchase Agreement Template

Here are some steps to create an APA template:

  • Identify the key components: Review the key components of an APA (such as parties, description of assets, purchase price, payment terms, warranties and representations, conditions to closing, indemnification, governing law and jurisdiction, confidentiality, and termination) and determine which components are relevant to your business.
  • Draft the agreement: Create a draft of the APA that includes the key components identified in step 1. Use clear and concise language that accurately reflects the terms of the transaction.
  • Review and revise: Review the draft APA to ensure that it accurately reflects the terms of the transaction and complies with relevant laws and regulations. Revise the agreement as necessary to address any issues or concerns.
  • Seek legal advice: Consult with a lawyer to review the APA and ensure that it complies with relevant laws and regulations. The lawyer can also provide advice on specific provisions and recommend any changes or modifications.
  • Finalize the template: Once the APA has been reviewed and revised, finalize the template and save it for future use. Make sure to store the template in a secure location and keep it up to date with any changes in relevant laws or regulations.