Asset Purchase Agreement — Buyer-Protective Extended Form

For Informational Purposes Only

Comprehensive buyer-side asset purchase agreement with full representations, covenants, indemnification, closing conditions, and post-closing adjustment mechanics. Designed for negotiated private-company acquisitions. Form ID FMA-001 · Version 1.1.0

Download Template (.docx)

Matter Completion Sheet — Not Part of the Agreement

Complete every row before releasing an execution copy. Enter the selected term, document name, date, amount, or responsible person in the final column. Do not leave a row blank. If an item does not apply, enter “N/A” and the reason. A checked drafting box means only that the drafting input is complete; it is not legal approval.

A. Parties, scope, and timing

Status	Required completion	Matter-specific input, owner, or approval
☐	Confirm Buyer’s and Seller’s exact legal names, entity types, jurisdictions, good-standing status, and signatory authority.	[COMPLETE]
☐	Define the Business and Purchased Assets precisely; identify Excluded Assets, shared assets, licensed assets, records, cash, receivables, deposits, insurance rights, and avoidance actions.	[COMPLETE]
☐	Identify each Assumed Liability and Excluded Liability; test Taxes, employees, deferred revenue, customer credits, warranty claims, products, privacy, environmental matters, and successor-liability exposure.	[COMPLETE]
☐	Select simultaneous or deferred signing and closing; state Closing mechanics, required third-party consents, regulatory filings, Outside Date, and allocation of delay risk.	[COMPLETE]

B. Economics and founder outcomes

Status	Required completion	Matter-specific input, owner, or approval
☐	State enterprise value, Closing payment, Cash, Debt, Transaction Expenses, Target Working Capital, every holdback, and the no-double-count rule in a reviewed funds-flow model.	[COMPLETE]
☐	Attach accounting principles, included line items, sample calculation, estimate process, objection period, expert procedure, and recovery source for the post-Closing adjustment.	[COMPLETE]
☐	Complete each escrow, earnout, seller note, rollover, retention, employment, consulting, restrictive-covenant, release, and Founder Representative term in a separate identified document.	[COMPLETE]
☐	Approve purchase-price allocation, transfer-Tax allocation, withholding, payroll-Tax treatment, and any Section 1060 methodology with Tax counsel.	[TAX COUNSEL / DATE]

C. Diligence, schedules, and closing record

Status	Required completion	Matter-specific input, owner, or approval
☐	Complete the Disclosure Schedules; reconcile them to the data room and agreement; identify the disclosure cutoff and whether later updates cure a breach.	[COMPLETE]
☐	Complete capitalization, option, warrant, SAFE, note, profits-interest, change-in-control, 280G, 409A, and Section 1202 workstreams affecting founder or holder proceeds.	[COMPLETE]
☐	Complete IP chain-of-title, employee and contractor PIIA, open-source, AI model/data, privacy, cybersecurity, export, sanctions, permit, real-property, environmental, and product-liability diligence.	[COMPLETE]
☐	Finalize the Closing checklist, consents, payoff and lien releases, bills of sale, assignments, transition documents, final data-room index, archive copy, and verified funds flow.	[COMPLETE]

D. Risk allocation and remedies

Status	Required completion	Matter-specific input, owner, or approval
☐	Select Knowledge Persons and inquiry standard; Material Adverse Effect formulation; bring-down standard; materiality scrape; sandbagging rule; survival; basket; cap; special indemnities; and Fraud definition.	[COMPLETE]
☐	Select traditional indemnity, RWI, or hybrid recovery; state retention, exclusions, subrogation, underwriting cooperation, recovery order, setoff limits, and sole-source escrows.	[COMPLETE]
☐	For a deferred Closing, complete interim operating covenants, access limits, no-shop/exclusivity, fiduciary or board exceptions if required, termination rights, fees, and specific-performance conditions.	[COMPLETE]
☐	Confirm governing law, exclusive forum, jury waiver, equitable-relief standard, notice addresses, assignment limits, and conflict-waiver or transaction-privilege treatment.	[COMPLETE]

E. Review and release control

Status	Required completion	Matter-specific input, owner, or approval
☐	Corporate lead completed the bracket, election, defined-term, cross-reference, schedule, exhibit, signature, and funds-flow checks.	[LAWYER / DATE]
☐	Required specialists approved their sections: Tax; benefits; employment; antitrust; CFIUS; IP; privacy; cyber; environmental; real estate; industry regulation.	[LAWYER(S) / DATE OR N/A—REASON]
☐	Counterparty-position review completed; each nonstandard protection is necessary, obtainable, capped, triggered, and explained in the issues list.	[LAWYER / DATE]
☐	Execution copy released only after all open items are resolved or listed in a written release memorandum approved by the responsible lawyer.	[RELEASED BY / DATE / VERSION]

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is entered into as of [DATE] by and among [SELLER], a [JURISDICTION] [ENTITY TYPE] (“Seller”), [BUYER], a [JURISDICTION] [ENTITY TYPE] (“Buyer”), and, solely for the provisions that expressly bind that person, [FOUNDER / EQUITYHOLDER REPRESENTATIVE] (“Founder Representative”). Buyer and Seller are each a “Party” and together the “Parties.”

Recitals

A. Seller operates [DESCRIPTION] (the “Business”).

B. Buyer desires to purchase substantially all [or the specified portion] of the assets used in the Business and assume only the liabilities expressly identified in this Agreement, and Seller desires to sell those assets on the terms below.

C. The governing bodies and, if required, equityholders of each Party have approved this Agreement and the transactions contemplated by it.

The Parties therefore agree as follows.

1. Definitions; Interpretation

1.1 Selected definitions

“Affiliate” means, with respect to a Person, another Person that directly or indirectly controls, is controlled by, or is under common control with that Person. No portfolio company of a financial sponsor is an Affiliate of Buyer unless Buyer controls it operationally.

“Business Day” means a day other than Saturday, Sunday, or a day on which commercial banks in [CITY] are authorized or required to close.

“Cash” means cash and cash equivalents determined under the Accounting Principles, net of issued but uncleared checks and plus deposits in transit, excluding restricted, trapped, customer, and custodial cash unless Schedule 1.1 states otherwise.

“Closing Working Capital” means the current assets included in the Purchased Assets minus the current liabilities included in the Assumed Liabilities, in each case limited to the line items and calculated under the hierarchy, classifications, policies, practices, and sample calculation in Exhibit A. Closing Working Capital excludes Cash, Debt, Transaction Expenses, income-tax assets and liabilities, deferred tax assets and liabilities, and items otherwise counted in the purchase-price adjustment.

“Contract” means a legally binding contract, lease, license, purchase order, statement of work, commitment, or other agreement, whether written or oral.

“Debt” means, without duplication, indebtedness for borrowed money; obligations evidenced by notes, bonds, or similar instruments; drawn letters of credit; capitalized lease obligations and finance leases under the Accounting Principles; deferred purchase price for property or services other than ordinary-course trade payables included in Closing Working Capital; declared but unpaid distributions; unpaid seller bonuses or change-in-control payments to the extent not included in Transaction Expenses; accrued interest, premiums, breakage, and prepayment amounts; and guarantees of the foregoing. Debt excludes operating-lease liabilities and any item included in Transaction Expenses or Closing Working Capital.

“Fraud” means actual common-law fraud under the governing law committed by a Person with respect to an express representation or warranty in this Agreement; it excludes constructive fraud, equitable fraud, negligent misrepresentation, and fraud imputed from another Person except as governing law requires.

“Knowledge of Seller” means the actual knowledge of each person listed on Schedule 1.1 after reasonable inquiry of that person’s direct reports with primary responsibility for the relevant subject.

“Material Adverse Effect” means any event, circumstance, development, condition, or change that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the Business, Purchased Assets, results of operations, or financial condition, taken as a whole, or on Seller’s ability to consummate the transactions. It excludes general economic, market, industry, political, pandemic, cyber, or legal changes, except to the extent the Business is disproportionately affected relative to similarly situated participants, and excludes effects resulting from announcement of the transaction, Buyer’s identity, or Seller’s compliance with Buyer’s written direction.

“Permitted Encumbrances” means liens for current Taxes not yet due; mechanics’ and similar statutory liens arising in the ordinary course for amounts not delinquent; nonexclusive licenses to customers in the ordinary course; and zoning, easements, and other nonmonetary encumbrances that do not materially impair present use, in each case only as specifically disclosed on Schedule 1.1. Permitted Encumbrances do not include liens securing Debt.

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

“RWI Policy” means any buyer-side representation-and-warranty insurance policy identified on Schedule 1.1.

“Transaction Expenses” means unpaid fees and expenses incurred by Seller or the Business in connection with the transactions, including banker, legal, accounting, consulting, data-room, equityholder-representative, retention, sale bonus, change-in-control, employer payroll-tax, and plan-termination amounts, in each case to the extent payable by Seller or the Business and unpaid at Closing. Transaction Expenses exclude amounts included in Debt or Closing Working Capital.

1.2 Interpretation

The Disclosure Schedules qualify the representations only to the extent a disclosed item is described with enough detail to identify its nature and reasonably apparent relevance. Disclosure in one schedule qualifies another only where the relevance is reasonably apparent on the face of the disclosure. “Including” is nonexclusive, “or” is inclusive, and “will” has the same force as “shall.” References to law include amendments and implementing rules. The Parties negotiated this Agreement with counsel; no presumption against a drafter applies.

2. Purchase and Sale

2.1 Purchased Assets

At Closing, Seller will sell, assign, transfer, convey, and deliver to Buyer, free and clear of all Encumbrances other than Permitted Encumbrances, all of Seller’s right, title, and interest in the assets primarily used or held for use in the Business, wherever located, including: accounts receivable; inventory; equipment and other personal property; Assigned Contracts; transferable permits; Business IP; owned and licensed software, websites, domains, social accounts, telephone numbers, and repositories; books and records; goodwill; claims against third parties other than Excluded Claims; prepaid expenses and deposits; rights under warranties; and the assets listed on Schedule 2.1 (the “Purchased Assets”).

2.2 Excluded Assets

Seller retains only: Cash; organizational and tax records unrelated to the Business, subject to Buyer’s access rights; rights under this Agreement; insurance policies and claims other than assigned proceeds relating to Purchased Assets; Tax refunds for Pre-Closing Tax Periods except to the extent included in the price calculation; equity interests in Seller; employee-benefit plans except expressly assumed; the assets listed on Schedule 2.2; and claims relating exclusively to Excluded Liabilities (the “Excluded Assets”). If an asset is necessary to operate the Business as conducted at Closing and is not expressly excluded, it is a Purchased Asset.

2.3 Assumed Liabilities

Buyer assumes only: executory performance obligations arising after Closing under Assigned Contracts, excluding liabilities caused by a pre-Closing breach; specified current liabilities included in Final Closing Working Capital; and the liabilities listed with reasonable specificity on Schedule 2.3 (the “Assumed Liabilities”).

2.4 Excluded Liabilities

Seller retains every liability other than an Assumed Liability, including all liabilities for: pre-Closing operation of the Business; Debt; Transaction Expenses; Taxes of Seller or attributable to a Pre-Closing Tax Period; Excluded Assets; employees and contractors arising at or before Closing, including termination, wage, classification, benefit, WARN, payroll-tax, and change-in-control liabilities; product, privacy, cybersecurity, environmental, litigation, infringement, or regulatory matters arising from pre-Closing acts or omissions; and any equity security, option, warrant, SAFE, convertible instrument, phantom equity, profit interest, or other right to Seller’s securities.

2.5 Nonassignable Assets

This Agreement does not constitute an assignment that would violate law or a Contract. Seller will use commercially reasonable efforts, at its expense, to obtain each required consent before Closing. Until transfer occurs, Seller will hold the economic benefit of the affected asset for Buyer, enforce it at Buyer’s reasonable direction, and provide an arrangement giving Buyer substantially equivalent benefits, while Buyer performs only the post-Closing obligations it would have assumed. This Section does not waive a closing condition or require Buyer to pay consideration, commence litigation, or accept a materially adverse amendment.

2.6 Misdirected payments and retained property

After Closing, each Party will promptly remit to the proper Party any payment or property it receives that belongs to the other. Seller will preserve and forward Business communications and will not knowingly use transferred trade names, domains, accounts, or goodwill.

3. Purchase Price; Adjustments; Founder Economics

3.1 Consideration

The aggregate consideration equals: (a) $[BASE PRICE], plus (b) Closing Cash included by express election, minus (c) Closing Debt, minus (d) Transaction Expenses, plus or minus (e) the amount by which Closing Working Capital exceeds or is less than the Target Working Capital, minus (f) the Adjustment Escrow Amount, Indemnity Escrow Amount, Representative Expense Fund, and other holdbacks, plus (g) any expressly assumed consideration stated on Schedule 3.1 (the “Purchase Price”).

3.2 Estimated closing statement

At least [five] Business Days before Closing, Seller will deliver a good-faith estimated closing statement with reasonable supporting detail, wire instructions verified through an agreed callback procedure, a debt and transaction-expense payoff schedule, and a proceeds waterfall showing the amount payable to Seller, each creditor, each escrow, and each other payee. Buyer may comment, and Seller will consider comments in good faith. Acceptance of an estimate does not limit the post-closing adjustment.

3.3 Closing payments

At Closing, Buyer will pay the estimated Purchase Price according to the agreed funds-flow memorandum. Buyer may withhold amounts required by law. No amount is payable personally to a founder unless the funds flow and applicable tax reporting identify the legal basis for that payment.

3.4 Post-closing adjustment

Within [90] days after Closing, Buyer will deliver its proposed calculation of Cash, Debt, Transaction Expenses, and Closing Working Capital, with supporting workpapers. Seller has [30] days to object in reasonable detail and may inspect relevant records subject to confidentiality. Undisputed items are final. The Parties will negotiate disputed items for [20] days; unresolved accounting items go to [INDEPENDENT ACCOUNTING FIRM], acting as an expert and not an arbitrator, limited to the disputed amounts and the range asserted by the Parties. Its fees are allocated in inverse proportion to success. Payment follows within [five] Business Days, first from the Adjustment Escrow and then from Seller if Buyer is owed more.

3.5 Accounting hierarchy

The calculation must follow Exhibit A in this order: (a) specific definitions and policies in Exhibit A; (b) the sample calculation; (c) Seller’s consistently applied historical practices used in the Reference Balance Sheet, but only if compliant with the Accounting Principles; and (d) [GAAP]. No new reserves, purchase-accounting adjustments, changes based on post-Closing events, or duplicate counting are permitted.

3.6 Earnout, rollover, and founder arrangements

No earnout, rollover equity, employment, consulting, retention, restrictive covenant, release, or other founder-specific arrangement changes the Purchase Price unless Schedule 3.6 expressly says so. Each such arrangement must be documented separately, state its tax and securities treatment, and identify whether a breach affects the earnout, escrow, indemnification, or employment remedies. If an earnout applies, Exhibit B must address operating covenants, information and audit rights, calculation examples, allocation of shared costs, extraordinary transactions, successor assumption, acceleration, setoff, and dispute resolution.

3.7 Allocation; transfer Taxes

Within [120] days after Closing, Buyer will prepare an allocation of consideration and Assumed Liabilities among the Purchased Assets under applicable Tax law. Seller may comment within [20] days. The Parties will negotiate in good faith and, if unresolved, submit disputed valuation matters to an independent appraiser. Each Party will file consistently with the final allocation unless law requires otherwise. [Buyer / Seller / equally] will pay transfer, sales, use, stamp, registration, and similar Taxes, and the Parties will cooperate on exemptions.

4. Closing

4.1 Time and place

Closing will occur remotely through electronic exchange at [TIME] on the [third] Business Day after satisfaction or waiver of the conditions, or on another agreed date (the “Closing Date”). The transfer is effective at [12:01 a.m. / the time of Closing] local time.

4.2 Seller deliverables

Seller will deliver: a bill of sale; assignment and assumption agreement; IP assignment; real-property and lease instruments; third-party consents; payoff letters and lien-release authorizations; certified board and equityholder approvals; officer and secretary certificates; good-standing certificates; a FIRPTA certificate or other withholding documentation; completed Disclosure Schedules; employee and contractor transition materials; source-code, credential, repository, domain, and data-transfer evidence; D&O tail evidence if applicable; the escrow agreement; and each item listed on Schedule 4.2.

4.3 Buyer deliverables

Buyer will deliver the closing payments, executed assumption and escrow instruments, its closing certificates and approvals, and each item listed on Schedule 4.3.

5. Seller Representations and Warranties

Except as fairly disclosed in the Disclosure Schedules, Seller represents to Buyer as of signing and Closing:

5.1 Organization; authority; enforceability

Seller is duly organized, validly existing, and in good standing where applicable; has power to own the Purchased Assets and operate the Business; has authorized the transaction; and this Agreement is a valid obligation enforceable against Seller, subject to bankruptcy and equitable-remedy limitations.

5.2 No conflict; consents

Execution, performance, and consummation do not violate Seller’s organizational documents or applicable law, breach or accelerate a Material Contract, create an Encumbrance on a Purchased Asset, or require a consent, filing, or notice, except as listed on Schedule 5.2.

5.3 Title; sufficiency; condition

Seller has good and transferable title to the Purchased Assets, free of Encumbrances other than Permitted Encumbrances. The Purchased Assets, together with the rights and services expressly supplied under the transition documents, constitute all assets reasonably necessary to operate the Business immediately after Closing in substantially the manner operated during the prior [12] months. Tangible assets are in operating condition and repair, ordinary wear excepted, subject to disclosed maintenance needs.

5.4 Financial statements; records; no undisclosed liabilities

Schedule 5.4 contains the specified financial statements. They were prepared from the books and records, fairly present in all material respects the financial position and results for the periods shown, and follow the stated accounting basis consistently. The Business has no liabilities required to be reflected or reserved under that basis except those shown, incurred in the ordinary course since the balance-sheet date, or disclosed on Schedule 5.4. Books and internal controls are sufficient to prepare reliable statements and preserve asset accountability.

5.5 Absence of changes

Since [DATE], Seller has operated the Business in the ordinary course, no Material Adverse Effect has occurred, and Seller has not taken any action that Section 7.2 would prohibit without Buyer’s consent.

5.6 Customers; suppliers; receivables; inventory

Schedule 5.6 identifies material customers and suppliers, material notices of termination or reduction, aging of receivables, reserves, and material inventory. Receivables arose from bona fide transactions and are collectible subject only to recorded reserves. Inventory is usable and salable in the ordinary course, subject to reserves for obsolete or excess items.

5.7 Contracts

Schedule 5.7 lists each Material Contract, including revenue, vendor, debt, lease, IP, data, cloud, open-source, employment, restrictive-covenant, related-party, exclusivity, most-favored-nation, change-of-control, partnership, and government Contract meeting the stated thresholds. Each is in force; Seller and, to Seller’s Knowledge, each counterparty are not in material breach; and Seller has not received an unresolved default or termination notice.

5.8 Intellectual property; open source; AI

Schedule 5.8 identifies registered and material unregistered Business IP, inbound and outbound licenses, source-code escrow, material open-source software, and AI systems used in products or material operations. Seller owns or has valid rights to use the Business IP and to transfer or continue those rights as contemplated. Current and former personnel who created material Business IP executed enforceable confidentiality and present-assignment agreements, subject to disclosed exceptions. Seller has taken reasonable steps to protect trade secrets. The Business has not knowingly infringed, misappropriated, or otherwise violated another Person’s IP, and no written claim is pending or threatened.

Seller has a documented process reasonably designed to identify and comply with open-source licenses and has not used code in a manner requiring disclosure or licensing of proprietary source code except as disclosed. Schedule 5.8 describes material AI models, training and evaluation data, third-party model terms, output restrictions, human-review controls, and ownership or use rights. Seller has not knowingly used data or content to train or operate a material model without the rights or lawful basis necessary for the use described.

5.9 Privacy; data protection; cybersecurity

Seller has complied in all material respects with applicable privacy and data-protection laws, contractual requirements, and published notices. It maintains a written security program proportionate to the Business and has conducted reasonable risk assessments, access controls, vendor oversight, backup, incident response, and vulnerability management. Schedule 5.9 identifies material security incidents, regulatory inquiries, contractual notices, and unresolved remediation. No undisclosed incident has required notice to a Person or authority. Seller may lawfully transfer Business data to Buyer or has disclosed required consents and restrictions.

5.10 Employees; contractors; benefits

Schedule 5.10 lists employees, material contractors, compensation, accrued paid time off, work location, classification, leave, and status; each benefit plan; collective-bargaining or labor matter; pending claim; and transaction, retention, severance, bonus, equity, or change-in-control obligation. Seller has complied in all material respects with wage, hour, classification, immigration, leave, discrimination, harassment, retaliation, labor, and WARN-type laws. Each material contractor has been properly classified or the exposure is disclosed. Schedule 5.10 identifies all payments or benefits that could implicate Sections 280G or 409A and all equity awards, profits interests, phantom equity, SAFEs, warrants, or similar rights affected by the transaction. Schedule 5.10 also identifies each written or, to Seller’s Knowledge, substantiated allegation during the prior [five] years that a founder, director, executive officer, or senior manager engaged in sexual harassment, sexual assault, or material workplace misconduct, and states the disposition of each matter and any related settlement, confidentiality, or separation obligation.

5.11 Taxes

Seller has timely filed all material Tax returns relating to the Business or Purchased Assets and paid all Taxes due. No audit, lien other than a Permitted Encumbrance, closing agreement, extension, or unresolved assessment exists except as disclosed. Seller has properly collected and remitted sales, use, payroll, and withholding Taxes and has not created a permanent establishment or nexus not reflected in filed returns. Schedule 5.11 identifies tax elections, credits, grants, Section 1202 analyses or representations supplied to founders, and allocation-sensitive items. No representation guarantees a founder’s Section 1202 treatment unless expressly stated in a separate tax certificate.

5.12 Compliance; permits; trade controls

Seller and the Business comply in all material respects with applicable law and hold all material permits. Schedule 5.12 identifies material notices, investigations, settlements, and permit transfer requirements. Seller has maintained policies reasonably designed for anti-corruption, sanctions, export controls, government contracting, and other regulations applicable to the Business and has not knowingly made a prohibited payment or dealt with a sanctioned Person.

5.13 Litigation; product; environmental; insurance

Schedule 5.13 identifies pending or threatened litigation, orders, product or service claims, recalls, environmental matters, and material insurance policies and claims. No proceeding would reasonably be expected to prevent Closing. Seller has not received an unresolved written allegation of material product defect, bodily injury, environmental release, or uninsured loss relating to the Business.

5.14 Related-party and founder matters

Schedule 5.14 identifies all Contracts, assets, liabilities, payments, loans, IP, services, and arrangements between the Business and any founder, equityholder, director, officer, employee, family member, or Affiliate. At Closing, each such arrangement terminates without liability to Buyer except as expressly assumed. No founder owns material Business IP, domain, repository, credential, or asset outside Seller except as disclosed and transferred at Closing.

5.15 Brokers; full disclosure

No broker or adviser is entitled to a fee from Buyer or the Business based on an arrangement by Seller except as included in Transaction Expenses. No representation in this Agreement or the Disclosure Schedules contains an untrue statement of material fact or omits a material fact necessary to make the express statements, in context, not misleading; this sentence does not create a representation about projections except that assumptions supplied were made in good faith.

6. Buyer Representations and Warranties

Buyer represents that it is duly organized and validly existing, has authorized the transaction, this Agreement is enforceable against it subject to customary limitations, execution and Closing do not violate its organizational documents or applicable law, it has sufficient funds to pay the Purchase Price, and no broker engaged by Buyer creates liability for Seller. Buyer acknowledges that, except for the express representations in this Agreement and transaction documents, neither Seller nor another Person makes a representation about the Business; however, this acknowledgment does not limit Fraud or Buyer’s rights concerning an express covenant.

7. Covenants

7.1 Access and cooperation

Before Closing, Seller will give Buyer and its advisers reasonable access to personnel, properties, systems, Contracts, and records, subject to law, privilege, and safety. Seller will use a reasonable clean-team or redaction process rather than withholding competitively sensitive information entirely. Access does not waive a condition or remedy.

7.2 Conduct before Closing

Seller will operate in the ordinary course, preserve relationships and assets, maintain insurance and security controls, and obtain Buyer’s consent before material actions, including amendments to organizational documents, issuances or redemptions, dividends, material Contracts, compensation changes, workforce reductions, capital expenditures outside budget, acquisitions, dispositions, liens, settlements, Tax elections, privacy-policy changes, or material changes to AI models, datasets, source code, or cybersecurity architecture. Buyer’s consent will not be unreasonably withheld for actions reasonably necessary to preserve the Business, except for the enumerated fundamental actions.

7.3 Efforts; filings; consents

Each Party will use [reasonable best efforts] to obtain required approvals and consummate the transaction. Buyer is not required to divest assets, accept a conduct remedy, litigate, or agree to a material restriction unless Schedule 7.3 expressly states otherwise. The Parties will coordinate antitrust, CFIUS, sectoral, and other filings and promptly share material communications, subject to privilege and legal limits.

7.4 Employees and benefit transition

Buyer may offer employment to selected employees listed on Schedule 7.4 on terms determined by Buyer, subject to any expressly stated commitments. Seller remains responsible for all pre-Closing employment and benefit liabilities unless expressly assumed. The Parties will coordinate payroll, benefits, immigration, worker notices, accrued leave, records, and communications. Nothing creates third-party beneficiary rights or guarantees employment.

7.5 Equity and founder cleanup

Before Closing, Seller will deliver evidence of the treatment, cancellation, conversion, exercise, or payoff of every option, warrant, SAFE, convertible note, phantom-equity right, profit interest, and similar instrument. Seller will obtain releases reasonably satisfactory to Buyer and complete any required Section 280G waiver and vote. Founder employment, rollover, restrictive-covenant, and release documents must not expand Seller’s representations or reduce Buyer’s rights unless this Agreement expressly says so.

7.6 Confidentiality; announcements

The existing confidentiality agreement remains in effect until Closing and survives termination as stated in it. After Closing, Seller will keep nonpublic Business information confidential, subject to protected disclosure and legal-process exceptions. No public announcement may be made without mutual approval, except as law requires after reasonable consultation.

7.7 Data, credentials, and records transition

Seller will deliver an inventory and controlled transfer of domains, repositories, code-signing keys, administrator accounts, cloud tenants, certificates, models, data stores, vendor consoles, and security records. The Parties will not transmit credentials in the funds-flow email or another insecure channel. At Closing, Seller will deliver a fixed, indexed archive of the final electronic data room, with access logs and a certification of the last date on which materials could be added or altered. Seller may retain records only as required by law or reasonably necessary for retained liabilities, subject to confidentiality and deletion controls.

7.8 D&O; founder and officer protection

For [six] years after Closing, [Seller / Buyer] will maintain the agreed tail coverage for pre-Closing acts of directors and officers or provide equivalent coverage. Nothing releases a founder or officer from a negotiated indemnity obligation, Fraud, or a restrictive covenant. Any separate release must preserve rights under this Agreement and applicable D&O insurance.

7.9 Exclusivity; acquisition proposals

[Include only for a deferred Closing.] Until Closing or termination, Seller will not, and will cause its controlled representatives not to, solicit, initiate, knowingly encourage, or enter an agreement concerning an acquisition of the Business or Purchased Assets outside the ordinary course. Seller will stop existing discussions and promptly notify Buyer of a material unsolicited proposal. This Section does not require a director or officer to violate a nonwaivable fiduciary duty, but any permitted response, information sharing, or change in recommendation must follow the specific procedure, notice, matching right, and termination consequence in Schedule 7.9.

7.10 Disclosure Schedule updates

Seller will notify Buyer promptly of a fact arising after signing that makes a representation inaccurate or would require a new disclosure. Unless Schedule 7.10 expressly selects a cure right for a stated category, an update does not cure a signing-date breach, reset a survival period, or waive a closing condition. Buyer’s written acceptance of a specified update may waive only the identified condition or claim and does not amend another provision unless it says so expressly.

7.11 Transaction communications and privilege

Schedule 7.11 states who owns and may assert privilege after Closing over communications concerning the negotiation, documentation, or consummation of the transaction. It also identifies joint representations, required conflict waivers, files that transfer with the Business, files that may be retained, and the protocol for inadvertently produced privileged material. This Section does not transfer privilege over ordinary-course advice concerning operation of the Business unless Schedule 7.11 states that result expressly.

8. Conditions to Closing

Buyer’s obligations are conditioned on: accuracy of fundamental representations in all respects and other representations under the stated materiality standard, giving effect to any negotiated materiality scrape; performance of Seller’s covenants in all material respects; no Material Adverse Effect; receipt of specified consents and approvals; absence of injunction; delivery of closing instruments; completion of the equity and lien cleanup; and [if elected] satisfactory RWI binding. Seller’s obligations are conditioned on Buyer’s representation accuracy, covenant performance, absence of injunction, and Buyer’s deliverables. Only the benefited Party may waive a condition, and no waiver of Closing conditions waives a separate remedy unless express.

9. Termination

Before Closing, this Agreement may be terminated by mutual written consent; by either Party if Closing has not occurred by [OUTSIDE DATE], unless that Party’s breach primarily caused the failure; by either Party after a final nonappealable legal prohibition; or by the nonbreaching Party for an uncured breach that would cause a closing condition to fail. Termination ends future obligations except confidentiality, expenses, publicity, governing law, and liability for pre-termination breach or Fraud. [Insert any reverse termination fee, financing failure, or regulatory-risk allocation only after transaction-specific review.]

10. Indemnification and Remedies

10.1 Survival

Fundamental representations survive until [six years / 60 days after the applicable limitation period]; general representations survive [18] months; specified Tax, employment, benefits, IP, privacy, cybersecurity, environmental, and special matters survive for the stated period in Schedule 10.1; covenants survive according to their terms. A timely Claim Notice preserves only the reasonably identified claim.

10.2 Seller indemnification

Seller will indemnify Buyer, its Affiliates, and their representatives against Losses arising from: breach of Seller’s representations, warranties, or covenants; Excluded Liabilities; pre-Closing Taxes; inaccuracy in the proceeds waterfall; and each special matter in Schedule 10.2. Losses include reasonable enforcement costs but exclude punitive damages except to the extent awarded to a third party, duplicate recovery, and amounts actually recovered under insurance net of collection costs and premium increases.

10.3 Limitations

General representation claims are subject to a [tipping / deductible] basket of $[AMOUNT] and cap of $[AMOUNT OR %]. Fundamental, title, capitalization, authority, Taxes, Excluded Liabilities, special indemnities, covenants, and Fraud are subject only to the separate limits stated on Schedule 10.3. Materiality and Material Adverse Effect qualifiers are disregarded [for determining breach and Losses / for Losses only]. Buyer may recover from the escrow, Seller, and, if applicable, the RWI Policy in the agreed order. No limitation protects a Person from that Person’s Fraud.

10.4 Third-party claims

Buyer will give prompt notice, but delay reduces liability only to the extent of material prejudice. Seller may control a third-party defense with qualified counsel if Seller acknowledges coverage, the claim seeks only money within available limits, no conflict exists, and no admission or injunctive relief could bind Buyer. Buyer may participate at its expense. Seller may not settle without a full release and Buyer’s consent, not unreasonably withheld for a cash settlement meeting these conditions.

10.5 Direct claims; mitigation; subrogation

A direct Claim Notice must describe the basis and a good-faith estimate if practicable. The Parties will mitigate Losses as required by law without taking commercially unreasonable action. Upon payment, the indemnifying Person is subrogated to recoveries for the paid Loss, without impairing the indemnified Person’s remaining claim.

10.6 Exclusive remedy; RWI; setoff

Except for Fraud, equitable relief, the purchase-price adjustment, transaction-document claims, and matters expressly excluded, this Article is the exclusive monetary remedy. If RWI is used, Schedule 10.6 must state retention responsibility, subrogation limits, policy exclusions, underwriting cooperation, claims control, and whether Seller has residual liability. Buyer will not amend, waive, or replace the policy in a manner that expands recourse against Seller, and the insurer’s subrogation rights against Seller must be waived except for Seller’s actual common-law Fraud to the extent finally determined. Buyer may set off finally determined amounts against an earnout or seller note [and disputed amounts only if placed into a separate escrow], but may not impair wages or other protected compensation.

10.7 Sandbagging

Buyer’s investigation, knowledge, or opportunity to investigate does not waive a claim for breach of an express representation, except to the extent Buyer expressly waived the identified breach in a signed writing before Closing. This Section does not expand any representation.

11. Tax Matters

Seller bears Taxes attributable to ownership or operation of the Business and Purchased Assets through Closing; Buyer bears post-Closing Taxes, with periodic Taxes apportioned under applicable law and the chosen convention. The Parties will cooperate on returns, audits, transfer-tax filings, amended returns, Tax contests, and records. Neither Party will take a position inconsistent with the final purchase-price allocation absent legal requirement. Buyer may withhold as required by law after reasonable notice when practicable. No founder may rely on this Agreement as a representation that proceeds qualify for Section 1202, capital-gain, rollover, or other treatment.

12. Miscellaneous

12.1 Notices

Notices must be in writing and delivered by personal delivery, nationally recognized overnight courier, or email with confirmation, to the addresses in Schedule 12.1. Legal process must comply with applicable procedural law.

12.2 Expenses

Each Party bears its own transaction expenses except as expressly included in the Purchase Price or otherwise stated. Seller will not cause Buyer or the Business to bear Seller’s Transaction Expenses after Closing.

12.3 Assignment; successors; no third-party beneficiaries

Seller may not assign this Agreement without Buyer’s consent. Buyer may assign to an Affiliate, financing source, or successor to the acquired Business, but remains liable unless Seller expressly releases it. This Agreement binds permitted successors. Except for indemnified parties and expressly protected directors and officers, no other Person is a third-party beneficiary.

12.4 Entire agreement; amendment; waiver

This Agreement, its schedules and exhibits, and the specified transaction documents are the entire agreement on their subject and supersede prior discussions. An amendment or waiver must be signed by the Party against whom it is enforced. A delay is not a waiver.

12.5 Severability; specific performance

If a provision is unenforceable, it is enforced to the maximum lawful extent and severed only as necessary. The Parties acknowledge that a breach may cause irreparable harm and that, subject to equitable defenses and any agreed remedy limits, specific performance and injunctive relief may be available without proving money damages are inadequate or posting bond to the extent law permits.

12.6 Governing law; forum; jury waiver

This Agreement is governed by [STATE] law without regard to conflicts principles. Each Party submits to exclusive jurisdiction in state and federal courts in [COUNTY, STATE] and waives objection to venue. EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY TO THE MAXIMUM EXTENT LAWFUL. [Add arbitration only through a conformed replacement clause.]

12.7 Counterparts; electronic signatures

Counterparts, electronic signatures, and electronically transmitted copies form one instrument and have the effect of originals to the extent permitted by law.

Signature Page

The Parties have executed this Agreement as of the date first written above.

SELLER [LEGAL NAME] By: ______________________________ Name: [NAME] Title: [TITLE]	BUYER [LEGAL NAME] By: ______________________________ Name: [NAME] Title: [TITLE]
FOUNDER REPRESENTATIVE, solely for Sections [LIST] By: ______________________________ Name: [NAME]

Schedules and Exhibits

Disclosure and transaction schedules

• Schedule 1.1 — Additional Definitions; Knowledge Parties; Permitted Encumbrances; RWI Policy

• Schedule 2.1 — Purchased Assets

• Schedule 2.2 — Excluded Assets

• Schedule 2.3 — Assumed Liabilities

• Schedule 3.1 — Purchase Price and Funds Flow

• Schedule 3.6 — Founder, Rollover, Earnout, Employment, and Retention Arrangements

• Schedule 4.2 — Seller Closing Deliverables

• Schedule 4.3 — Buyer Closing Deliverables

• Schedules 5.1–5.15 — Seller Disclosure Schedules

• Schedule 7.3 — Regulatory-Risk Allocation

• Schedule 7.4 — Employee Transition

• Schedules 7.9–7.11 — Exclusivity, Disclosure Updates, and Transaction Privilege

• Schedules 10.1–10.3 — Survival, Special Indemnities, and Limits

• Schedule 10.6 — RWI and Recovery Waterfall

• Schedule 12.1 — Notices

Exhibits

• Exhibit A — Net Working Capital Principles, Hierarchy, and Sample Calculation

• Exhibit B — Earnout Terms and Sample Calculations, if applicable

• Exhibit C — Bill of Sale

• Exhibit D — Assignment and Assumption Agreement

• Exhibit E — Intellectual Property Assignment

• Exhibit F — Escrow Agreement

• Exhibit G — Form of Officer’s Certificate

• Exhibit H — Form of Secretary’s Certificate

• Exhibit I — Restrictive Covenant Agreement, if applicable

• Exhibit J — Founder Release, if applicable

• Exhibit K — Transition Services Agreement, if applicable

Website Posting README — Not Part of the Agreement

Purpose. This buyer-protective extended form is a structured starting point for an acquisition of selected operating assets. It is designed to keep unassumed liabilities with the seller, make the purchase-price bridge auditable, and surface founder-specific economics and transition arrangements.

Use when. Use for a negotiated private-company asset acquisition where the buyer needs a full representation, covenant, condition, closing, adjustment, and indemnity framework.

Do not use when. Do not use as a stock or LLC-interest purchase agreement, a statutory merger agreement, a simple IP assignment, or an execution document without jurisdictional and specialist review. An asset deal may require material third-party consents and can create distinct tax, employee, permit, bulk-sale, successor-liability, and transfer issues.

Founder-critical decisions. Identify what consideration belongs to the selling company versus a founder; reconcile options, SAFEs, notes, bonuses, rollover, earnout, and employment terms; protect the proceeds waterfall; confirm whether founders give personal covenants or indemnities; address D&O and release rights; and validate IP, contractor, open-source, AI, privacy, and data-transfer ownership.

Customization checklist. Complete every bracket and schedule; choose the accounting hierarchy and risk structure; conform all defined terms; create an asset-by-asset transfer plan; verify consents, liens, permits, employees, benefits, Taxes, and data transfer; add industry-specific provisions; and remove the control sheet, banner, alternatives, and this README from any execution copy.

Public-use disclaimer. This practitioner master is for educational and drafting-reference purposes. It is not legal advice, does not create an attorney-client relationship, and is not matter-cleared. A qualified lawyer must adapt it to the parties, structure, assets, liabilities, economics, jurisdictions, and current law.

Need help customizing this template for your business? Contact Montague Law to schedule a consultation and get this document reviewed by our team.

This template is provided by Montague Law for informational and educational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in your jurisdiction before using any legal document.