ASSET PURCHASE AND SALE AGREEMENT

This Asset Purchase and Sale Agreement (“Agreement”) is entered into as of ___________, 20 (“Effective Date”) by and between [SELLER ENTITY NAME], a [State of Incorporation] [Type of Entity] (“Seller”), and [BUYER ENTITY NAME], a [State of Incorporation] [Type of Entity] (“Buyer”).

RECITALS

WHEREAS, Seller owns and operates [description of business] (the “Business”);

WHEREAS, Seller desires to sell, and Buyer desires to purchase, substantially all of the assets of the Business used in connection with the operation thereof, subject to the terms and conditions set forth herein;

WHEREAS, the parties have conducted appropriate due diligence and negotiations regarding the proposed transaction;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

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ARTICLE I – DEFINITIONS AND INTERPRETATION

1.1 Definitions

For purposes of this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.

“Business Day” means any day that is not a Saturday, Sunday, or other day on which commercial banks in [City, State] are authorized or required by law to remain closed.

“Closing” means the consummation of the transactions contemplated by this Agreement.

“Closing Date” means the date on which the Closing occurs.

“Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, preemptive right, community property interest, or restriction of any nature.

“GAAP” means United States generally accepted accounting principles.

“Governmental Authority” means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision.

“Knowledge” means, with respect to any party, the actual knowledge of such party’s executive officers and senior management after reasonable inquiry.

“Material Adverse Effect” means any event, occurrence, fact, condition, or change that is, or could reasonably be expected to be, materially adverse to (a) the business, results of operations, condition (financial or otherwise), or assets of the Business, or (b) the ability of the parties to consummate the transactions contemplated hereby.

“Person” means an individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association, or other entity.

“Purchased Assets” has the meaning set forth in Section 2.1.

“Purchase Price” has the meaning set forth in Section 3.1.

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ARTICLE II – PURCHASE AND SALE OF ASSETS

2.1 Assets to be Sold

Subject to the terms and conditions set forth herein, Seller agrees to sell, assign, transfer, convey, and deliver to Buyer, and Buyer agrees to purchase from Seller, free and clear of all Encumbrances (other than Permitted Encumbrances), all of Seller’s right, title, and interest in and to the following assets (collectively, the “Purchased Assets”):

(a) Tangible Personal Property: All machinery, equipment, furniture, fixtures, vehicles, tools, supplies, and other tangible personal property owned by Seller and used in the Business;

(b) Real Property: All real property owned by Seller and used in the Business, including the real property described in Schedule 2.1(b) attached hereto;

(c) Leased Real Property: All of Seller’s right, title, and interest in and to the leases for real property used in the Business, as set forth in Schedule 2.1(c);

(d) Intellectual Property: All intellectual property owned by Seller and used in the Business, including:

• Patents, patent applications, and invention disclosures;
• Trademarks, service marks, trade names, and applications therefor;
• Copyrights and copyrightable works;
• Trade secrets, know-how, and confidential information;
• Software, databases, and data collections;
• Domain names and social media accounts;

(e) Contracts: All contracts, agreements, commitments, and understandings to which Seller is a party that relate to the Business, as set forth in Schedule 2.1(e);

(f) Licenses and Permits: All licenses, permits, approvals, and authorizations issued by Governmental Authorities that are necessary for the operation of the Business;

(g) Books and Records: All books, records, files, and documents relating to the Business, including customer lists, supplier lists, marketing materials, and operating procedures;

(h) Goodwill: All goodwill and going concern value of the Business;

(i) Accounts Receivable: All accounts receivable, notes receivable, and other receivables arising from the Business;

(j) Inventory: All inventory, including raw materials, work-in-process, and finished goods;

(k) Prepaid Expenses: All prepaid expenses, deposits, and similar assets.

2.2 Excluded Assets

Notwithstanding Section 2.1, the following assets shall be excluded from the Purchased Assets and shall remain the property of Seller (the “Excluded Assets”):

(a) All cash and cash equivalents;

(b) All equity interests in other entities;

(c) All assets specifically set forth in Schedule 2.2 attached hereto;

(d) All rights under this Agreement and related transaction documents;

(e) All Tax refunds relating to periods prior to the Closing Date;

(f) All insurance policies and proceeds thereof;

(g) All employee benefit plans and assets thereof.

2.3 Assumed Liabilities

Buyer agrees to assume and perform only the following liabilities and obligations of Seller (the “Assumed Liabilities”):

(a) All liabilities and obligations under the Assigned Contracts arising from and after the Closing Date;

(b) All liabilities and obligations relating to the Purchased Assets arising from and after the Closing Date;

(c) All specific liabilities set forth in Schedule 2.3 attached hereto.

2.4 Excluded Liabilities

Buyer shall not assume or become liable for any liabilities or obligations of Seller other than the Assumed Liabilities. All such other liabilities and obligations shall remain the sole responsibility of Seller (the “Excluded Liabilities”).

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ARTICLE III – PURCHASE PRICE AND PAYMENT

3.1 Purchase Price

The aggregate consideration for the Purchased Assets shall be $[AMOUNT] (the “Purchase Price”), subject to adjustment as provided herein.

3.2 Payment of Purchase Price

The Purchase Price shall be paid as follows:

(a) Cash at Closing: $[AMOUNT] shall be paid in cash at the Closing by wire transfer of immediately available funds;

(b) Promissory Note: $[AMOUNT] shall be evidenced by a promissory note in the form attached hereto as Exhibit A;

(c) Escrow Amount: $[AMOUNT] shall be deposited into an escrow account with [ESCROW AGENT NAME] pursuant to an escrow agreement in the form attached hereto as Exhibit B.

3.3 Purchase Price Adjustments

The Purchase Price shall be subject to adjustment as follows:

(a) Inventory Adjustment: The Purchase Price shall be increased or decreased on a dollar-for-dollar basis for any increase or decrease in the value of inventory as of the Closing Date compared to $[BASELINE AMOUNT];

(b) Working Capital Adjustment: The Purchase Price shall be increased or decreased on a dollar-for-dollar basis for any increase or decrease in working capital as of the Closing Date compared to $[BASELINE AMOUNT];

(c) Accounts Receivable Adjustment: The Purchase Price shall be decreased by any accounts receivable that become uncollectible within [NUMBER] days after the Closing Date.

3.4 Allocation of Purchase Price

The Purchase Price shall be allocated among the Purchased Assets as set forth in Schedule 3.4 attached hereto. The parties agree to file all Tax returns consistently with such allocation.

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ARTICLE IV – REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of Seller

Seller represents and warrants to Buyer that:

(a) Corporate Existence and Power: Seller is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization and has all requisite corporate power and authority to own its properties and conduct its business as currently conducted;

(b) Authorization: Seller has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby;

(c) No Conflicts: The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not and will not conflict with or violate any provision of Seller’s organizational documents or any agreement to which Seller is a party;

(d) Financial Statements: The financial statements of the Business delivered to Buyer fairly present the financial condition and results of operations of the Business as of the dates and for the periods indicated;

(e) No Material Adverse Change: Since the date of the most recent financial statements, there has been no Material Adverse Effect with respect to the Business;

(f) Title to Assets: Seller has good and marketable title to all Purchased Assets, free and clear of all Encumbrances except for Permitted Encumbrances;

(g) Intellectual Property: Seller owns or has the right to use all intellectual property necessary for the operation of the Business;

(h) Compliance with Laws: The Business is in compliance with all applicable laws, regulations, and governmental requirements;

(i) Litigation: There are no pending or threatened legal proceedings against Seller or the Business;

(j) Environmental Matters: The Business is in compliance with all applicable environmental laws and regulations;

(k) Employee Matters: The Business is in compliance with all applicable labor and employment laws;

(l) Tax Matters: All Tax returns required to be filed by or with respect to the Business have been timely filed, and all Taxes have been paid when due;

(m) Insurance: The Business maintains adequate insurance coverage for its operations;

(n) Contracts: All material contracts relating to the Business are in full force and effect, and no party thereto is in material default;

(o) Customers and Suppliers: Schedule 4.1(o) contains a complete list of the ten largest customers and suppliers of the Business.

4.2 Representations and Warranties of Buyer

Buyer represents and warrants to Seller that:

(a) Corporate Existence and Power: Buyer is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization;

(b) Authorization: Buyer has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby;

(c) No Conflicts: The execution and delivery of this Agreement do not conflict with Buyer’s organizational documents or any agreement to which Buyer is a party;

(d) Financing: Buyer has sufficient funds available to pay the Purchase Price and consummate the transactions contemplated hereby;

(e) Due Diligence: Buyer has conducted its own independent investigation and analysis of the Business and the Purchased Assets.

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ARTICLE V – COVENANTS

5.1 Conduct of Business Prior to Closing

From the date hereof until the Closing Date, Seller shall:

(a) Conduct the Business in the ordinary course consistent with past practice;

(b) Maintain the Purchased Assets in good working order and condition;

(c) Not enter into any material contracts without Buyer’s prior written consent;

(d) Not make any capital expenditures exceeding $[AMOUNT] without Buyer’s prior written consent;

(e) Provide Buyer with reasonable access to the Business and its records.

5.2 Non-Competition

For a period of [NUMBER] years following the Closing Date, Seller shall not, directly or indirectly, engage in any business that competes with the Business within [GEOGRAPHIC AREA].

5.3 Non-Solicitation

For a period of [NUMBER] years following the Closing Date, Seller shall not solicit or hire any employees of the Business or solicit customers of the Business.

5.4 Confidentiality

Seller shall maintain the confidentiality of all confidential information relating to the Business and shall not use such information for any purpose other than performance of this Agreement.

5.5 Transition Services

Seller shall provide reasonable transition services to Buyer for a period of [NUMBER] days following the Closing Date to facilitate the orderly transfer of the Business.

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ARTICLE VI – CONDITIONS TO CLOSING

6.1 Conditions to Buyer’s Obligations

Buyer’s obligations to consummate the transactions contemplated hereby are subject to the satisfaction of the following conditions:

(a) All representations and warranties of Seller shall be true and correct in all material respects;

(b) Seller shall have performed all covenants and agreements required to be performed by it hereunder;

(c) No Material Adverse Effect shall have occurred;

(d) All required third-party consents shall have been obtained;

(e) All required governmental approvals shall have been obtained;

(f) Buyer shall have received evidence of Seller’s authority to enter into this Agreement;

(g) Buyer shall have received all documents and certificates required hereunder.

6.2 Conditions to Seller’s Obligations

Seller’s obligations to consummate the transactions contemplated hereby are subject to the satisfaction of the following conditions:

(a) All representations and warranties of Buyer shall be true and correct in all material respects;

(b) Buyer shall have performed all covenants and agreements required to be performed by it hereunder;

(c) Seller shall have received evidence of Buyer’s financing for the Purchase Price;

(d) Seller shall have received all documents and certificates required hereunder.

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ARTICLE VII – INDEMNIFICATION

7.1 Indemnification by Seller

Seller shall indemnify, defend, and hold harmless Buyer from and against any and all losses, damages, liabilities, costs, and expenses arising from or relating to:

(a) Any breach of Seller’s representations, warranties, or covenants hereunder;

(b) Any Excluded Liabilities;

(c) Any liabilities relating to the Business arising prior to the Closing Date;

(d) Any environmental liabilities relating to the Purchased Assets;

(e) Any Tax liabilities relating to periods prior to the Closing Date.

7.2 Indemnification by Buyer

Buyer shall indemnify, defend, and hold harmless Seller from and against any and all losses, damages, liabilities, costs, and expenses arising from or relating to:

(a) Any breach of Buyer’s representations, warranties, or covenants hereunder;

(b) Any Assumed Liabilities;

(c) The operation of the Business following the Closing Date.

7.3 Limitations on Indemnification

The indemnification obligations set forth herein shall be subject to the following limitations:

(a) No indemnification shall be available unless the aggregate amount of all claims exceeds $[AMOUNT] (the “Basket”), after which the indemnifying party shall be liable for all damages;

(b) The maximum aggregate liability for indemnification shall not exceed $[AMOUNT] (the “Cap”);

(c) Claims must be brought within [NUMBER] years after the Closing Date, except for claims relating to Taxes, environmental matters, and fundamental representations, which may be brought within [NUMBER] years.

7.4 Indemnification Procedures

Any party seeking indemnification hereunder shall provide prompt written notice to the indemnifying party and shall allow the indemnifying party to assume the defense of any third-party claims.

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ARTICLE VIII – TERMINATION

8.1 Termination Rights

This Agreement may be terminated:

(a) By mutual written consent of the parties;

(b) By either party if the Closing has not occurred by [DATE];

(c) By either party if there is a material breach by the other party that is not cured within [NUMBER] days after written notice;

(d) By either party if any required governmental approval is denied.

8.2 Effect of Termination

If this Agreement is terminated, all obligations of the parties shall cease except for obligations that expressly survive termination.

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ARTICLE IX – GENERAL PROVISIONS

9.1 Expenses

Each party shall bear its own expenses incurred in connection with this Agreement and the transactions contemplated hereby.

9.2 Notices

All notices hereunder shall be in writing and delivered personally, by certified mail, or by reputable overnight courier to the addresses set forth below.

9.3 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE], without regard to conflicts of law principles.

9.4 Dispute Resolution

Any disputes arising hereunder shall be resolved through binding arbitration in [CITY, STATE] in accordance with the Commercial Arbitration Rules of the American Arbitration Association.

9.5 Entire Agreement

This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof.

9.6 Amendments

This Agreement may be amended only by written agreement signed by both parties.

9.7 Assignment

This Agreement may not be assigned by either party without the prior written consent of the other party.

9.8 Severability

If any provision of this Agreement is held to be invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect.

9.9 Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

9.10 Survival

The representations, warranties, and covenants contained herein shall survive the Closing for the periods specified in the indemnification provisions.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

SELLER:

[SELLER ENTITY NAME]

By: _________________________________ Name: [Name] Title: [Title]

BUYER:

[BUYER ENTITY NAME]

By: _________________________________ Name: [Name] Title: [Title]

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SCHEDULES AND EXHIBITS

Schedule 2.1(b) – Real Property Schedule 2.1(c) – Leased Real Property
Schedule 2.1(e) – Assigned Contracts Schedule 2.2 – Excluded Assets Schedule 2.3 – Assumed Liabilities Schedule 3.4 – Purchase Price Allocation Schedule 4.1(o) – Major Customers and Suppliers

Exhibit A – Form of Promissory Note Exhibit B – Form of Escrow Agreement Exhibit C – Form of Bill of Sale Exhibit D – Form of Assignment and Assumption Agreement Exhibit E – Form of Non-Competition Agreement

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This template is for informational purposes only and should be customized by qualified legal counsel to meet the specific requirements of each transaction and applicable law.