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[Music] an asset purchase agreement Apple is an agreement between a buyer and a seller that finalizes terms and conditions related to the purchase and sale of a company's assets it's important to note in a NAPA transaction it is not necessary for the buyer to purchase all of the assets of the company in fact it's common for a buyer to exclude certain assets in a NAPA provisions of a NAPA may include payment of purchase price monthly installments liens and encumbrances on the assets condition precedent for the closing etc and Abba differs from a stock purchase agreement spa where company shares title to assets and title to liabilities are also sold in an appeal the buyer must select specific assets and avoid redundant assets these assets are itemized in the schedule to the appa the buyer in the spas purchasing shares of the company in this case itemization is not necessary due to transfer of company's ownership occurs as is via is the legal mechanism for executing a corporate merger or acquisition the oil and gas industry does not distinguish between an asset and stock purchase and naming its related purchase agreement in this industry whether purchasing assets or stock the definitive agreement is referred to as the purchase and sale agreement PSA defining and controlling behavior is a major objective of the appa the buyer must represent its authority to purchase the asset the seller must represent its authority to sell the asset additionally the seller represents that the purchase price of the asset is equal to its value and that the seller is not in financial or legal trouble in the context of a merger or acquisition transaction asset purchase agreement have a distinct set advantages and disadvantages compared to using an equity or stock purchase agreement or a merger agreement in an equity or merger acquisition the purchaser is guaranteed to receive all of the targets assets without exception but also automatically assumes all of the targets liabilities an asset purchase agreement alternatively allows not only for a transaction where only some of the assets are transferred which is sometimes desired but also allows the parties to negotiate which liabilities of the target are expressly assumed by the purchaser and allows the purchaser to leave behind those liabilities it does not wish to accept or does not know about a disadvantage of an asset purchase agreement is that it can often result in a greater number of change of control issues for example contracts held by a target and acquired by a purchaser will often require the consent of the counterparty in the context of an asset deal whereas it is less common that such consent will be needed in connection with an equity sale or merger agreement [Music]