Asset Purchase Agreement — Seller-Protective Extended Form

For Informational Purposes Only

Seller-side asset purchase agreement with capped indemnity, anti-sandbagging protections, RWI architecture, and founder-protective economics. Structured to limit seller exposure while preserving deal certainty. Form ID FMA-002 · 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, asset perimeter, and timing

Status	Required completion	Matter-specific input, owner, or approval
☐	Confirm Seller’s and Buyer’s exact legal names, entity types, jurisdictions, good-standing status, authority, and any guarantor or acquisition vehicle.	[COMPLETE]
☐	Define the Business and Purchased Assets; list Excluded Assets affirmatively, including cash, Tax refunds, insurance, privileged files, corporate records, employee plans, causes of action, and shared assets.	[COMPLETE]
☐	Define Assumed Liabilities narrowly and Excluded Liabilities comprehensively; allocate Taxes, employees, deferred revenue, customer credits, warranties, product claims, privacy, environmental, and successor-liability risk.	[COMPLETE]
☐	Select simultaneous or deferred Closing; complete required consents, regulatory filings, interim covenants, access limits, Outside Date, and consequences of failure to close.	[COMPLETE]

B. Economics and founder proceeds

Status	Required completion	Matter-specific input, owner, or approval
☐	Approve enterprise value, Cash, Debt, Transaction Expenses, Target Working Capital, Closing payment, escrows, representative fund, and a no-double-count funds-flow model.	[COMPLETE]
☐	Attach seller-protective accounting principles, sample calculation, review rights, objection procedure, expert scope, deadline consequences, and sole-source adjustment recovery.	[COMPLETE]
☐	Complete earnout, seller note, rollover, employment, consulting, retention, restrictive covenant, release, and D&O arrangements; identify which obligations are independent and which may be set off.	[COMPLETE]
☐	Approve Section 1060 allocation, transfer Taxes, payroll Taxes, withholding, 280G, 409A, Section 1202, and transaction-bonus treatment with Tax and benefits counsel.	[SPECIALIST / DATE]

C. Diligence, schedules, and closing record

Status	Required completion	Matter-specific input, owner, or approval
☐	Complete Disclosure Schedules, cross-reference them to each representation, reconcile them to the data room, and decide whether updates supplement disclosure or cure a breach.	[COMPLETE]
☐	Confirm capitalization cleanup and required equityholder approvals; address options, warrants, SAFEs, notes, profits interests, drag rights, appraisal rights, releases, and proceeds allocation.	[COMPLETE]
☐	Complete IP, PIIA, open-source, AI, data, privacy, cybersecurity, trade-control, employment, benefits, permit, real-property, environmental, and product diligence.	[COMPLETE]
☐	Finalize the Closing checklist, payoff and lien releases, transfer documents, consents, transition documents, final data-room index and archive, funds flow, and wire verification.	[COMPLETE]

D. Seller risk architecture

Status	Required completion	Matter-specific input, owner, or approval
☐	Select RWI/no-seller-indemnity, capped indemnity, or hybrid treatment; complete retention, exclusions, subrogation, underwriting cooperation, escrow, recovery order, and no-double-recovery terms.	[COMPLETE]
☐	Complete survival, basket, cap, several liability, special indemnities, materiality scrape, loss exclusions, mitigation, anti-sandbagging, setoff limits, and narrowly defined Fraud.	[COMPLETE]
☐	For deferred Closing, complete no-shop/exclusivity, specified board exceptions, termination triggers, reverse fee or expense treatment, financing risk, and conditions to specific performance.	[COMPLETE]
☐	Confirm Knowledge Persons and inquiry limits, Material Adverse Effect formulation, bring-down thresholds, privilege treatment, governing law, forum, jury waiver, notices, and assignment.	[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, funds-flow, and internal-consistency 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]
☐	Buyer-position review completed; each seller protection is necessary, market-defensible, specific, and unlikely to create an avoidable closing obstacle.	[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 in the limited representative capacity stated here, [SELLER REPRESENTATIVE] (“Seller Representative”). Seller and Buyer are each a “Party.”

Recitals

Seller operates [BUSINESS DESCRIPTION] (the “Business”). Buyer desires to purchase the Purchased Assets and assume the Assumed Liabilities, and Seller desires to complete that sale on the terms below. The Parties have approved the transaction through the corporate or other process required by their organizational documents and applicable law.

1. Definitions and Construction

“Accounting Principles” means the specific policies, classifications, estimates, reserves, and procedures in Exhibit A, applied in the order stated there. General references to GAAP do not override those agreed transaction-specific principles.

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

“Closing Working Capital” means the included current assets minus included current liabilities, limited to the line items in Exhibit A and excluding Cash, Debt, Transaction Expenses, deferred Taxes, and any item counted elsewhere in the Purchase Price.

“Debt” means the indebtedness and debt-like items expressly listed in Exhibit A. Debt excludes operating leases, ordinary-course trade payables included in Closing Working Capital, undrawn letters of credit, deferred revenue to the extent included in Closing Working Capital, and any item counted in Transaction Expenses.

“Fraud” means actual and intentional common-law fraud under the governing law by a Party concerning an express representation in this Agreement. It excludes constructive fraud, equitable fraud, recklessness, negligent misrepresentation, and fraud imputed from another Person, and no Seller Representative is liable for another Person’s Fraud.

“Knowledge of Seller” means the actual current knowledge, without imputation, of the individuals listed on Schedule 1 after reasonable inquiry of the employees who directly report to them and have primary operational responsibility for the relevant subject. It does not require a patent, title, regulatory, or other professional search.

“Material Adverse Effect” means a change that has had a material adverse effect on the Business, taken as a whole, but excludes general economic, financial-market, industry, political, legal, public-health, natural-disaster, cyber, war, or terrorism effects; failures to meet projections; transaction announcement or Buyer identity effects; and actions required by this Agreement or requested in writing by Buyer, except for materially disproportionate effects relative to similarly situated businesses.

“Permitted Encumbrances” means the liens and nonmonetary encumbrances listed on Schedule 1; current Taxes not yet due; statutory liens arising in the ordinary course for amounts not delinquent; nonexclusive customer licenses in the ordinary course; and easements, restrictions, and zoning matters that do not materially interfere with current use.

“RWI Policy” means the buyer-side representation-and-warranty insurance policy, binder, and endorsements described on Schedule 1.

“Transaction Expenses” means the transaction expenses specifically identified in Exhibit A and unpaid immediately before Closing. No cost is both Transaction Expense, Debt, and a Working Capital liability.

The Disclosure Schedules qualify the corresponding representations and any other representation to which the relevance of the disclosure is reasonably apparent. A disclosure is not an admission of materiality or liability. Headings do not affect construction; “including” is nonexclusive; and no drafting presumption applies.

2. Purchased Assets and Liabilities

2.1 Purchased Assets

At Closing, Seller will transfer to Buyer the assets listed or described on Schedule 2.1, including the specified inventory, receivables, equipment, Assigned Contracts, transferable permits, Business IP, records, deposits, prepaid items, claims, and goodwill (the “Purchased Assets”), free of Encumbrances other than Permitted Encumbrances. An asset not listed or within an expressly stated category remains an Excluded Asset.

2.2 Excluded Assets

Seller retains Cash; equity interests in Seller; tax and organizational records; privileged communications concerning the transaction or Excluded Liabilities; insurance policies and rights except assigned proceeds; benefit plans; rights under this Agreement; refunds relating to retained Taxes; claims relating to Excluded Assets or Excluded Liabilities; records Seller must retain by law; and the assets in Schedule 2.2. Seller may retain copies of transferred records for legal, tax, insurance, and retained-liability purposes subject to confidentiality.

2.3 Assumed Liabilities

Buyer assumes and will timely perform the liabilities listed on Schedule 2.3, including post-Closing executory obligations under Assigned Contracts that do not arise from a pre-Closing breach and the specified liabilities included in Final Closing Working Capital (the “Assumed Liabilities”).

2.4 Excluded Liabilities

Seller retains liabilities not expressly assumed, including Debt, Transaction Expenses, retained Taxes, liabilities associated exclusively with Excluded Assets, and those listed on Schedule 2.4. No doctrine of successor liability expands the contractual assumption between the Parties, without limiting rights of third parties under nonwaivable law.

2.5 Consents and delayed transfer

Neither this Agreement nor a transfer instrument assigns a right if assignment without consent would violate law or materially breach the applicable Contract. Seller will use commercially reasonable efforts to seek material consents; Seller need not pay a consent fee, commence litigation, grant an economic concession, or retain liability unless agreed in writing. Pending consent, the Parties will cooperate in a lawful arrangement that provides Buyer the economic benefits and burdens of the asset. Failure to obtain a consent is not a breach if Seller complied with this Section, but does not waive an express closing condition.

2.6 Post-closing receipts

Each Party will hold in trust and promptly forward money or property received after Closing that belongs to the other. Buyer will give Seller reasonable access to acquired records needed for retained Taxes, claims, insurance, and legal obligations.

3. Purchase Price and Payment

3.1 Purchase Price

The Purchase Price equals $[BASE PRICE], plus or minus the adjustments expressly stated in Exhibit A, less the agreed Adjustment Escrow, Indemnity Escrow, Seller Representative Fund, and specified holdbacks. The calculation will not duplicate any asset, liability, reserve, Tax, expense, or cash flow.

3.2 Estimated statement and funds flow

Seller will deliver an estimated closing statement at least [five] Business Days before Closing. Buyer may comment in reasonable detail, but Seller controls the good-faith estimate subject to post-closing adjustment. The agreed funds flow will identify the legal payee and payment character of each amount, including debt payoffs, transaction expenses, escrows, founder payments, rollover subscriptions, employment or retention payments, and Seller proceeds. Buyer will use dual-channel verification for wire changes.

3.3 Adjustment procedure

Within [90] days after Closing, Buyer will deliver a proposed final statement and reasonable supporting workpapers. If Buyer does not deliver it on time, Seller’s estimate becomes final. Seller has [45] days to object and may access records, relevant personnel, and workpapers. Items not specifically disputed are final. The Parties will negotiate for [30] days, after which disputed accounting items go to [ACCOUNTING FIRM] as an expert limited to the asserted range. The firm must follow Exhibit A and may not decide legal questions. Fees will be allocated based on relative success. A payment is due within [five] Business Days after final determination, from the Adjustment Escrow first; Seller has no liability beyond that escrow except for manifest calculation error or Fraud.

3.4 Accounting protections

Closing Working Capital will be prepared as if the Business remained a going concern and consistently with Seller’s historical practices reflected in the reference statement, subject to the specific principles in Exhibit A. It excludes purchase accounting, Buyer’s post-Closing plans, post-Closing events, new reserves, changes in estimates based on hindsight, intercompany elimination methods not historically used, and liabilities caused by Buyer. The sample calculation controls over a general accounting reference.

3.5 Earnout and rollover separation

Any earnout, rollover, seller note, founder employment, consulting, retention, restrictive covenant, release, or equity grant is governed solely by its separate signed instrument. A termination of employment does not forfeit an earnout unless the earnout instrument clearly and lawfully says so. Buyer may not set off an unliquidated claim against wages, protected compensation, or rollover equity. An earnout exhibit must include operational discretion limits, anti-avoidance protections, reporting, inspection, allocation of shared costs and opportunities, successor assumption, acceleration events, examples, and an expedited dispute process.

3.6 Allocation; Taxes

Seller will prepare the initial purchase-price allocation within [90] days after final adjustment, consistently with applicable Tax law and any agreed valuation. Buyer may comment within [20] days. Unresolved valuation matters go to an independent appraiser. The Parties will report consistently with the final allocation unless a contrary position is required by a final determination. [Buyer] pays transfer, sales, use, stamp, and registration Taxes, other than Seller income Taxes, and the Parties will cooperate on available exemptions.

4. Closing and Deliverables

Closing occurs remotely on [DATE] or the [third] Business Day after satisfaction or waiver of conditions. Seller will deliver the transfer instruments, required consents, payoff and lien-release documents, approvals, good-standing and incumbency evidence, tax certificates, the Disclosure Schedules, escrow agreement, and items in Schedule 4. Buyer will deliver the estimated Purchase Price, assumption instruments, escrow funding, approvals, and items in Schedule 4. Deliveries are deemed simultaneous; none is effective until all required deliveries are made or waived.

5. Seller Representations and Warranties

Except as disclosed, Seller represents as of signing and Closing:

5.1 Organization, authority, and title

Seller is duly organized, validly existing, and in good standing where applicable; has authorized the transaction; and this Agreement is enforceable against Seller subject to bankruptcy and equitable-remedy limitations. Seller has good title to the Purchased Assets, free of Encumbrances other than Permitted Encumbrances.

5.2 No conflict and consents

The transaction does not violate Seller’s organizational documents, materially violate applicable law, or materially breach a Material Contract, except as disclosed. Schedule 5.2 lists governmental and contractual consents Seller has identified as required.

5.3 Financial statements; no undisclosed liabilities

The scheduled financial statements were prepared from Seller’s books and records, follow the stated basis, and fairly present in all material respects the Business for the periods shown, subject in interim statements to normal year-end adjustments and absence of footnotes. The Business has no liabilities required to be recorded under that basis except those shown, incurred in the ordinary course after the balance-sheet date, or disclosed.

5.4 Absence of certain changes

Since [DATE], no Material Adverse Effect has occurred, and Seller has operated the Business in the ordinary course in all material respects, except for transaction preparation and disclosed actions.

5.5 Assets; real property; contracts

The tangible Purchased Assets are in operating condition sufficient for their present use, ordinary wear and disclosed maintenance excepted. Seller owns no real property [except as disclosed] and Schedule 5.5 lists material leases. Schedule 5.5 lists Material Contracts based on objective thresholds; each is in effect, and neither Seller nor, to Seller’s Knowledge, the counterparty is in material default after any notice and cure period. No representation guarantees renewal or future customer or supplier activity.

5.6 Intellectual property; AI; data

Schedule 5.6 identifies registered Business IP, material proprietary software, material inbound and outbound licenses, and material open-source and AI components. Seller owns or has a valid right to use the Business IP as currently used. To Seller’s Knowledge, current operation of the Business does not materially infringe another Person’s IP, and no unresolved written infringement claim is pending. Seller has obtained confidentiality and invention-assignment agreements from personnel in the forms generally used by Seller, subject to listed exceptions. Seller has policies reasonably designed for open-source use and identifies known copyleft obligations affecting material proprietary code.

Schedule 5.6 describes material third-party AI systems and internally developed models used in customer-facing products. Seller makes no representation that an AI output is copyrightable or that a third-party model provider will not change its terms, but represents that it has not knowingly used a material dataset in violation of an express contractual prohibition disclosed to responsible management.

5.7 Privacy and cybersecurity

Seller has complied in all material respects with privacy and cybersecurity laws applicable to the Business and its published privacy notices, except as disclosed. It maintains safeguards reasonably appropriate to the nature of the systems and data. Schedule 5.7 lists material incidents during [three] years that required legal notice or caused material business interruption, and unresolved written regulatory or contractual claims. Seller has not received a written notice alleging a material violation that remains unresolved.

5.8 Personnel and benefits

Schedule 5.8 lists employees and individual service providers, work location, compensation, accrued paid time off, and status, and identifies material benefit plans and transaction-related payments. Seller has complied in all material respects with applicable employment, wage, classification, leave, immigration, discrimination, harassment, retaliation, labor, and benefit laws. Schedule 5.8 identifies payments reasonably expected to implicate Sections 280G or 409A. Schedule 5.8 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, together with the disposition and any related settlement, confidentiality, or separation obligation. Seller does not represent that Buyer’s post-Closing employment decisions comply with law.

5.9 Taxes

Seller has timely filed material Tax returns required for the Business and Purchased Assets and paid material Taxes due, except for contested amounts adequately reserved. Schedule 5.9 lists pending audits, written assessments, and Tax liens other than Permitted Encumbrances. Seller has materially complied with sales, use, payroll, and withholding obligations. No representation is made regarding Buyer’s post-Closing Tax attributes or any founder’s qualification under Section 1202 except in an express, separate certificate.

5.10 Compliance, permits, litigation, and insurance

Seller materially complies with laws applicable to the Business and holds material permits required for current operation. Schedule 5.10 lists material written violation notices, proceedings, orders, environmental claims, product claims, and insurance policies. No proceeding is pending that would reasonably be expected to prevent Seller from Closing. This representation is qualified by the specific representations in Sections 5.6 through 5.9, which control their subjects.

5.11 Related parties; capitalization instruments; brokers

Schedule 5.11 lists material arrangements between the Business and a founder, director, officer, equityholder, or Affiliate that will continue after Closing. Schedule 5.11 identifies options, warrants, SAFEs, convertible instruments, phantom rights, and profit interests requiring transaction treatment; none gives its holder a claim against Buyer or a Purchased Asset after Closing except as assumed. No broker engaged by Seller creates liability for Buyer other than amounts included in Transaction Expenses.

5.12 Exclusivity of representations

The representations in this Article and the other transaction documents are Seller’s only representations. Seller disclaims representations concerning projections, estimates, budgets, data-room materials, management presentations, quality of earnings, market size, and other information not expressly incorporated, except that nothing limits liability for Fraud. Buyer acknowledges that estimates are uncertain and that actual results may differ.

6. Buyer Representations and Warranties

Buyer represents that it is duly organized and validly existing; has authority and approval; this Agreement is enforceable against it; the transaction does not violate its organizational documents or applicable law; it has and at Closing will have sufficient immediately available funds without a financing condition; its execution will not require Seller or a founder to register securities except as disclosed for rollover; no broker engaged by Buyer creates liability for Seller; and Buyer is sophisticated and has conducted the investigation it considers appropriate.

Buyer is relying only on the express representations in the transaction documents and its own investigation. Buyer waives any claim based on another statement or omission, including in the data room or a management presentation, except for Fraud as narrowly defined. Buyer’s recourse is subject to Article 10 and the RWI Policy.

7. Covenants

7.1 Pre-closing operation and access

Seller will operate in the ordinary course in all material respects and use commercially reasonable efforts to preserve the Business. Seller will not take the fundamental actions listed on Schedule 7.1 without consent, not to be unreasonably withheld, conditioned, or delayed. Buyer will respond within [three] Business Days; silence constitutes consent only if the request conspicuously states that result. Seller may act without consent to comply with law or address an emergency after notice when practicable.

Buyer may conduct reasonable diligence during normal business hours without unreasonable disruption. Seller may redact privileged, personal, competitively sensitive, export-controlled, or third-party restricted information and use a clean team. Buyer may not contact customers, suppliers, landlords, regulators, or employees without Seller’s prior consent.

7.2 Efforts and approvals

Each Party will use commercially reasonable efforts to close. Buyer will control regulatory strategy after consultation but will not require Seller to make a filing, admission, divestiture, or concession not stated in Schedule 7.2. [Insert negotiated HSR/CFIUS remedy standard.] Each Party will keep the other reasonably informed and preserve privilege.

7.3 Employee and founder arrangements

Buyer is responsible for its employment offers and post-Closing workforce decisions. Seller remains responsible only for pre-Closing liabilities and obligations expressly retained. Separate employment, rollover, earnout, restrictive-covenant, and release agreements do not amend this Agreement unless they expressly identify the amendment. A founder’s refusal to sign an arrangement is a closing condition only if Schedule 8 expressly makes it one and the form was attached at signing.

7.4 Confidentiality; announcements; records

The existing confidentiality agreement remains effective according to its terms. Announcements require mutual approval except where law requires disclosure after consultation. Buyer will preserve acquired records for [seven] years and give Seller reasonable access for Taxes, insurance, retained claims, and legal compliance. 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 protected copies subject to confidentiality.

7.5 D&O, release, and insurance

[Buyer / Seller] will obtain the agreed [six]-year D&O tail for pre-Closing acts. Buyer will not cause the acquired Business to amend indemnification rights retroactively for former directors and officers, except as law requires. These protections do not cover Fraud, a founder’s separate covenant breach, or an express indemnity. Seller may pursue assigned insurance proceeds relating to Excluded Liabilities without impairing Buyer’s coverage.

7.6 Exclusivity; acquisition proposals

[Include only for a deferred Closing.] Until Closing or termination, Seller will not solicit or enter an agreement concerning a competing acquisition of the Business or Purchased Assets. Seller may respond to an unsolicited proposal only to the minimum extent required by a nonwaivable fiduciary duty and only under the notice, information, matching-right, expense, and termination procedure in Schedule 7.6. No obligation in this Section requires Seller to accept a lower-value transaction, disclose privileged material, or keep this Agreement in effect after Buyer fails to satisfy an agreed matching or financing condition.

7.7 Disclosure Schedule updates

Seller will notify Buyer promptly of a fact arising after signing that makes an express representation inaccurate or would require a new disclosure. An update supplements the Disclosure Schedules only for the Closing bring-down and does not admit breach, create a new representation, or cure a signing-date breach unless Buyer rejects the update within [five] Business Days after receiving reasonable detail. Buyer’s failure to object is not a waiver of a claim that could not reasonably be identified from the update.

7.8 Transaction communications and privilege

Schedule 7.8 allocates control of privilege after Closing over communications concerning the negotiation, documentation, and consummation of the transaction; identifies joint representations and required conflict waivers; and states which files transfer or may be retained. Buyer will not use or seek production of retained transaction communications against Seller or a founder, except to resolve a dispute over the communication’s privileged status or as nonwaivable law requires. Ordinary-course advice concerning the Business transfers only to the extent it is included in the Purchased Assets.

8. Closing Conditions

Buyer’s conditions are: Seller’s fundamental representations are accurate in all material respects [or all respects, subject to de minimis exceptions], other representations are accurate without a Material Adverse Effect standard, Seller performed covenants in all material respects, no Material Adverse Effect occurred, required approvals and specified consents were obtained, no injunction exists, and Seller delivered the agreed items. Seller’s conditions are: Buyer’s representations are accurate in all material respects, Buyer performed covenants, no injunction exists, RWI is bound if it is a material element of Seller’s risk allocation, and Buyer delivered payment and instruments. Neither Party may rely on a condition failure caused primarily by its material breach.

9. Termination

The Parties may terminate by mutual consent, outside-date failure not caused by the terminating Party, final legal prohibition, or uncured material breach causing a condition failure. The breaching Party has [ten] Business Days to cure if curable. Termination preserves confidentiality, publicity, expenses, governing law, and liability for willful material breach or Fraud. No consequential or lost-premium damages are available for a failed closing except as expressly stated in a negotiated termination-fee provision.

10. Remedies and Risk Allocation

10.1 RWI-first structure

If Schedule 10.1 elects RWI, Buyer’s sole recourse for a general representation breach is the RWI Policy, except for the retention amount expressly borne by Seller and Fraud by the Person from whom recovery is sought. Buyer will not amend, waive, or replace the policy in a manner that expands recourse against Seller; it will preserve the insurer’s waiver of subrogation against Seller except for Seller’s actual common-law Fraud to the extent finally determined; and it will provide reasonable underwriting and claim cooperation without disclosing privileged or unrelated information. Policy exclusions do not create Seller liability unless expressly listed as special indemnities.

10.2 Seller indemnification

Subject to this Article, Seller indemnifies Buyer for breaches of Seller’s express representations and covenants, Excluded Liabilities, retained Taxes, and the special matters listed on Schedule 10.2. General representation claims are subject to a deductible basket of $[AMOUNT], an aggregate cap of $[AMOUNT OR %], and survival of [12–18] months. Fundamental representation claims are capped at [PURCHASE PRICE / SPECIFIED %] and survive [three–six] years. Covenants survive according to their terms. Special indemnities have the specific survival and cap stated in Schedule 10.2.

10.3 Loss limitations

Losses exclude punitive, exemplary, special, consequential, multiple-of-earnings, diminution-in-value, and lost-profit damages, except to the extent payable to a third party or reasonably foreseeable direct damages under governing law. Losses are net of insurance and Tax benefits actually realized, recovery costs, and reserves or accruals included in the final price calculation. No Party receives duplicate recovery. The indemnified Party must mitigate as required by law.

10.4 Claims process

A Claim Notice must describe the claim and estimated Loss in reasonable detail. Delay reduces liability only to the extent of material prejudice. Seller may control a third-party defense if it acknowledges coverage, retains qualified counsel, the claim seeks money within available limits, and no conflict, admission, criminal exposure, or injunctive relief affects Buyer. No settlement may impose nonmonetary relief, an admission, or an unreleased obligation on Buyer without consent.

10.5 Sandbagging; exclusive remedy; setoff

Buyer may not recover for a breach that the individuals listed on Schedule 10.5 actually knew before Closing and nevertheless expressly accepted in a signed waiver. Constructive or imputed knowledge does not apply. Except for Fraud, equitable relief, the final price adjustment, and a separate transaction document, this Article is the exclusive monetary remedy. Buyer has no setoff right against rollover equity, employment compensation, or an earnout except for a finally determined amount and only if the applicable instrument expressly permits it.

10.6 Seller Representative

Each participating seller irrevocably appoints the Seller Representative for notices, objections, settlements, escrow instructions, and other post-Closing matters within the authority stated in the seller joinder. The representative owes only the duties expressly stated, may rely on counsel and advisers, and is reimbursed from the representative fund. No representative action may increase an individual seller’s liability beyond that seller’s agreed limit or settle a Fraud claim against that seller without consent.

11. Tax and Employee Matters

Seller bears Taxes attributable to Seller or pre-Closing ownership and operation; Buyer bears post-Closing Taxes, subject to allocation of periodic Taxes under the agreed convention. The Parties will cooperate on returns, audits, refunds, transfer Taxes, allocation filings, and records. Buyer will give Seller notice before an action reasonably expected to increase retained Taxes and will not amend a pre-Closing return or make a retroactive election affecting Seller without consent, not unreasonably withheld. Withholding requires reasonable advance notice when practicable and cooperation on exemption documentation.

The Parties will separately analyze employee transfer, termination, accrued leave, benefits, payroll, WARN, immigration, classification, Sections 280G and 409A, and any founder compensation. Nothing in this Agreement promises employment or guarantees Tax treatment.

12. General Terms

Notices must be written and delivered to Schedule 12 addresses by personal delivery, recognized overnight courier, or email with confirmation. Each Party bears its expenses except as stated. Seller may not assign without Buyer’s consent; Buyer may assign to an Affiliate or financing source but remains liable. Except for indemnified parties and protected former directors and officers, no third party benefits. This Agreement and identified transaction documents are the entire agreement; amendment or waiver requires a signed writing. Invalid provisions are narrowed or severed only as law permits.

This Agreement is governed by [STATE] law without conflicts principles. The Parties submit to exclusive jurisdiction in [COUNTY, STATE]. EACH PARTY KNOWINGLY WAIVES JURY TRIAL TO THE MAXIMUM EXTENT LAWFUL. Equitable relief remains available subject to defenses and agreed remedy limits. Counterparts and electronic signatures are effective.

Signature Page

SELLER [LEGAL NAME] By: ______________________________ Name: [NAME] Title: [TITLE]	BUYER [LEGAL NAME] By: ______________________________ Name: [NAME] Title: [TITLE]
SELLER REPRESENTATIVE, solely in that capacity By: ______________________________ Name: [NAME]

Schedules and Exhibits

• Schedule 1 — Definitions, Knowledge Parties, Permitted Encumbrances, and RWI

• Schedules 2.1–2.4 — Purchased Assets, Excluded Assets, Assumed Liabilities, Excluded Liabilities

• Schedule 4 — Closing Deliverables

• Schedules 5.1–5.12 — Disclosure Schedules

• Schedules 7.1–7.8 — Conduct, Regulatory Matters, Exclusivity, Disclosure Updates, and Transaction Privilege

• Schedule 8 — Required Consents and Closing Conditions

• Schedules 10.1–10.5 — RWI, Indemnities, Caps, Survival, and Knowledge Parties

• Schedule 12 — Notices

• Exhibit A — Accounting Principles, Working Capital, Debt, Transaction Expenses, and Sample Calculation

• Exhibit B — Bill of Sale

• Exhibit C — Assignment and Assumption Agreement

• Exhibit D — IP Assignment

• Exhibit E — Escrow Agreement

• Exhibit F — Seller Joinder and Representative Appointment

• Exhibit G — Founder Release or Restrictive Covenant, if applicable

• Exhibit H — Earnout or Rollover Terms, if applicable

Website Posting README — Not Part of the Agreement

Purpose. This seller-protective extended form is a starting point for selling selected business assets while controlling retained liabilities, post-closing price disputes, and seller or founder exposure.

Use when. Use in a negotiated private asset sale where the seller needs a detailed definition of the asset and liability perimeter, an objective adjustment process, express non-reliance, and calibrated survival and remedies.

Do not use when. Do not use for a stock sale, LLC-interest sale, merger, distressed transaction, or simple asset assignment without restructuring the form. Do not assume an asset sale eliminates successor, tax, employee, permit, environmental, or data-transfer exposure.

Founder-critical decisions. Separate company sale proceeds from founder compensation, rollover, and earnout; protect the waterfall and tax reporting; decide whether founders give personal covenants or indemnities; coordinate 280G, equity-award, D&O, release, and restrictive-covenant terms; and avoid cross-defaults that unintentionally put rollover equity or earned compensation at risk.

Customization checklist. Complete all schedules; state the accounting hierarchy and worked example; select the RWI or indemnity structure; define Fraud and knowledge deliberately; conform consent and employee-transfer mechanics; add specialist provisions; and remove the control sheet, banner, alternatives, and this README before execution.

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 must be reviewed for the particular parties, transaction, 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.