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Purchase Agreement

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Asset Purchase Agreement

This Agreement (the "Agreement"), dated as of , by and between , a Delaware corporation, ("Buyer"), and , a Delaware corporation, having its principal place of business at ("Seller").

RECITALS

WHEREAS, Seller owns certain assets that it uses in the conduct of the Business (as defined below); and

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, such assets upon the terms and subject to the conditions of this Agreement.

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

ARTICLE I — DEFINITIONS

1.1 Defined Terms. As used herein, the terms below shall have the following meanings.

ACT shall mean the United States Food, Drug and Cosmetic Act of 1938, as amended.

AFFILIATE shall have the meaning set forth in the Securities Exchange Act of 1934, as amended.

ANCILLARY AGREEMENTS shall mean the Transition Agreement, the Indemnity Escrow Agreement, the LTS Escrow Agreement and the Sanofi Side Letter.

ASSETS shall mean all of Seller's right, title and interest in and to the business, properties, contracts, claims, assets and rights of any kind, whether tangible or intangible, real or personal and constituting, or used or useful in connection with, or related to, the Business.

ASSUMED CONTRACTS shall mean the Contracts listed on Exhibit A.

ASSUMED LIABILITIES shall mean the obligations and liabilities assumed by Buyer pursuant to Section 2.2.

BOOKS AND RECORDS shall mean records, lists, plans, books, ledgers, files, accounts, reports, correspondence, drawings, operating records, drug master files and other regulatory files pertaining to the Business or Assets.

BUSINESS shall mean the drug delivery business of Seller as described more fully on Exhibit C.

BUYER'S NDA shall mean an NDA filed by Buyer with respect to the Products.

EMPLOYEE BENEFIT PLAN shall mean any nonqualified deferred compensation, qualified contribution, qualified benefit retirement plan, or Employee Welfare Benefit Plan or fringe benefit plan or program.

ENCUMBRANCE shall mean any claim, lien, pledge, option, charge, security interest, deed of trust, mortgage, encumbrance or other right of third parties.

ENVIRONMENTAL, HEALTH AND SAFETY LAWS shall mean applicable environmental and occupational safety laws and related regulations.

ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.

ESCROW AGENT shall have the meaning set forth in Section 2.4.

ESCROW AMOUNT shall mean all amounts to be deposited with the Escrow Agent pursuant to Section 2.4.

EVRA shall mean the contraceptive transdermal product which is the subject of the Existing Supply Agreement.

EXCLUDED ASSETS shall mean all the assets of Seller other than the Assets, including certain liabilities and obligations, cash, accounts receivable, prepaid expenses and deposits.

EXCLUDED BUSINESS shall mean the business conducted by Seller other than the Business.

EXISTING SUPPLY AGREEMENT shall mean the existing Product, Development and Supply Agreement dated as of June 8, 1994.

ARTICLE II — PURCHASE AND SALE OF ASSETS

2.1 Transfer of Assets. Upon the terms and subject to the conditions contained herein, at the Closing, Seller shall sell, convey, transfer, assign and deliver to Buyer, and Buyer shall acquire from Seller, the Assets.

2.2 Assumption of Liabilities. Buyer shall assume all obligations and liabilities accruing after the Closing under the Assumed Contracts or with respect to the operation of the Business after the Closing.

2.3 Excluded Liabilities. Buyer shall not assume any liabilities or obligations of Seller except as expressly provided.

2.4 Purchase Price.

(a) Initial Payment: payable by wire transfer to an account designated by Seller.

(b) Additional Contingent Payments: contingent payments may be due upon certain milestones and events.

2.5 Allocation. Allocation of purchase price among the Assets and non-compete consideration shall be in accordance with the schedule provided by Buyer.

2.6 Right of Setoff. Buyer may set off certain amounts from Additional Payments subject to notice and agreement terms.

2.7 Acknowledgement of Contingencies. The parties acknowledge the Additional Payments are contingent and may never become due.

2.8 Closing Costs; Transfer Taxes and Fees. Applicable sales, transfer and other taxes and fees shall be borne by Seller.

ARTICLE III — CLOSING

3.1 Closing. The Closing shall take place on the Closing Date at a place agreed to by the parties.

3.2 Conveyances at Closing.

(a) Seller will deliver bills of sale, assignments, copies of manuals and other instruments reasonably requested by Buyer.

(b) Buyer shall deliver the Assumption Document.

(c) Documents shall be in form and substance reasonably satisfactory to Buyer.

(d) Buyer and Seller shall deliver certificates, agreements and other matters described in Articles VII and VIII.

(e) Seller shall deliver all Permits and consents listed on Schedule 4.7.

ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF SELLER

4.1 Organization of Seller. Seller is a corporation duly organized, validly existing and in good standing under the laws of Delaware.

4.2 Subsidiaries. Seller does not have any Subsidiaries used in the Business or owning Assets.

4.3 Authorization. Seller has full power and authority to execute and deliver this Agreement.

4.4 Absence of Certain Changes or Events. Since September 30, 1999, the Business has been operated in the ordinary course.

4.5 Assets. Seller will transfer valid title to the Assets free and clear of Encumbrances.

4.6 Contracts and Commitments. Schedule 4.6 lists all Contracts of the specified categories.

4.7 Permits. Seller has all Permits required to conduct the Business as now being conducted.

4.8 No Conflict or Violation. Execution of this Agreement will not materially violate applicable agreements or laws.

4.9 Books and Records. Seller has made and kept Books and Records accurately reflecting the Business.

4.10 Litigation. No pending or threatened Actions materially affecting the Business are known except as disclosed.

4.11 Labor Matters. Seller is in compliance with applicable employment laws.

4.12 Liabilities. No liabilities exist except as reflected on the Balance Sheet dated September 30, 1999 or incurred in the ordinary course.

4.13 Compliance with Law. The Business has been conducted in compliance with applicable laws.

4.14 No Brokers. No broker or finder has been employed that would obligate Buyer to pay fees.

4.15 No Other Agreements to Sell the Assets. No other commitments exist to sell the Assets or Business.

4.16 Proprietary Rights. Seller owns and has disclosed applicable Proprietary Rights.

4.17 Material Misstatements or Omissions. No representation or schedule contains any material misstatement or omission.

4.18 Inventory. The Inventory is of good, usable and merchantable quality.

4.19 FDA and Other Regulatory Matters. Regulatory filings and Products comply with applicable requirements, except as disclosed.

4.20 Environmental, Health and Safety Laws. Seller has complied with environmental and safety laws in material respects.

4.21 Powers of Attorney. There are no outstanding powers of attorney relating to the Business.

ARTICLE V — REPRESENTATIONS AND WARRANTIES OF BUYER

5.1 Organization of Buyer. Buyer is a corporation duly organized and in good standing under the laws of Delaware.

5.2 No Conflict or Violation. Buyer’s execution and performance will not materially violate law or governing documents.

5.3 Consents and Approvals. No approvals are required except as may be needed under the HSR Act.

5.4 Authorization. Buyer has full power and authority to execute and deliver this Agreement.

5.5 No Brokers. Buyer has not employed any broker or finder that would obligate Seller to pay fees.

ARTICLE VI — COVENANTS OF SELLER AND BUYER

6.1 Further Assurances. The parties agree to take necessary actions to consummate the transactions.

6.2 No Solicitation. Seller shall not solicit alternative transactions concerning the Assets or Business.

6.3 Notification of Certain Matters. Seller shall give prompt notice of certain events and failures to comply.

6.4 Access to Information. Seller shall afford Buyer access to Assets, Contracts and related information.

6.5 Conduct of Business. Seller shall operate in the ordinary course and not take inconsistent actions.

6.6 Confidentiality. The parties shall keep information confidential subject to stated exceptions.

6.7 Proprietary Rights. Buyer may consult with employees and representatives regarding Proprietary Rights.

6.8 Covenant Not to Compete. Seller and its Affiliates shall not compete with the Business for the stated period.

6.9 Ancillary Agreements. Each party shall negotiate in good faith the terms of each Ancillary Agreement.

6.10 Confidentiality Agreements. Seller shall enforce certain confidentiality agreements at Buyer’s request.

ARTICLE VII — CONDITIONS TO SELLER'S OBLIGATIONS

7.1 Representations, Warranties and Covenants. Buyer’s representations and covenants must remain true and satisfied.

7.2 No Proceedings or Litigation. No injunction or order may prevent consummation of the transactions.

7.3 Certificates. Buyer shall furnish requested certificates evidencing compliance.

7.4 Assumption Document. Buyer shall have executed and delivered the Assumption Document.

7.5 Consents and Approvals. All necessary Permits and consents must have been obtained or waived.

7.6 Ancillary Agreements. Buyer shall have executed and delivered each of the Ancillary Agreements.

ARTICLE VIII — CONDITIONS TO BUYER'S OBLIGATIONS

8.1 Representations, Warranties and Covenants. Seller’s representations and covenants must remain true and satisfied.

8.2 Consents and Approvals. Required Permits, consents and waiting periods must be satisfied.

8.3 No Proceedings or Litigation. No injunction or order may adversely affect Buyer’s rights.

8.4 Certificates. Seller shall furnish requested certificates evidencing compliance.

8.5 Confidential Treatment Requested. Seller must terminate or indemnify Buyer regarding certain agreements.

8.6 Conveyancing Documents; Release of Encumbrances. Seller shall deliver documents releasing the Assets from Encumbrances.

8.7 Ancillary Agreements and LTS Supply Agreements. Seller shall execute the Ancillary Agreements and LTS Supply Agreement must remain effective.

8.8 Employment Agreements. Buyer may offer employment to listed persons and solicitation restrictions apply.

8.9 Release of Security Interest. Seller shall deliver a release of security interests on Proprietary Rights.

8.10 Drug Master File. Seller shall transfer the drug master file for EVRA and related work in progress.

8.11 Opinions of Counsel. Buyer shall receive an opinion of counsel regarding stockholder approval requirements.

8.12 Leases. Seller shall assign the leases described on Schedule 8.12.

8.13 Confidential Treatment Requested Non-Compete. Seller shall cause the specified party to sign a Non-Competition Agreement.

8.14 Resolutions. Seller shall deliver certified Board resolutions authorizing the transaction.

ARTICLE IX — RISK OF LOSS

9.1 Risk of Loss. Risk of loss to the Assets shall be borne by Seller until Closing and thereafter by Buyer.

ARTICLE X — ACTIONS BY SELLER AND BUYER AFTER THE CLOSING

10.1 Books and Records; Tax Matters. The parties shall cooperate regarding books, records, taxes, audits and related matters.

10.2 Survival of Representations, Etc. Representations and warranties survive Closing for two years, except Section 4.20 which survives in perpetuity.

10.3 Indemnification. Each party shall indemnify the other as described in this Section.

10.4 Bulk Sales. Seller agrees the indemnity provisions apply to any failure to comply with bulk sales laws.

10.5 Arbitration. Disputes shall be resolved by arbitration under CPR rules in San Francisco, CA.

10.6 Mediation. Certain disputes shall first be mediated in San Francisco, CA.

10.7 Retention Bonus Payments. Buyer and Seller shall each be responsible for specified retention bonus obligations.

ARTICLE XI — MISCELLANEOUS

11.1 Termination. This Agreement may be terminated under the circumstances described herein.

11.2 Assignment. Neither party may assign without consent except as stated for Buyer’s affiliated assignee.

11.3 Notices; Transfer of Funds. Notices shall be sent to the parties at the addresses below.

Seller Notice Information

Cygnus, Inc.


Attention:
Tel:
Fax:

Buyer Notice Information

Ortho-McNeil Pharmaceutical, Inc.


Attention:
Telecopy:

11.4 Choice of Law. This Agreement shall be governed by the laws of the State of New Jersey.

11.5 Entire Agreement; Amendments and Waivers. This Agreement and the Ancillary Agreements constitute the entire agreement.

11.6 Multiple Counterparts. This Agreement may be executed in one or more counterparts.

11.7 Expenses. Each party shall pay its own legal and out-of-pocket expenses except as otherwise specified.

11.8 Invalidity. Invalid provisions shall not affect the remaining provisions to the extent permitted by law.

11.9 Titles. Titles and headings are for convenience only.

11.10 Public Statements and Press Releases. Public announcements require prior written consent except as required by law.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, by their respective officers thereunto duly authorized, all as of the day and year first above written.

ORTHO-MCNEIL PHARMACEUTICAL, INC.

By:

Name:

Title:

CYGNUS, INC.

By:

Name:

Title:

EXHIBITS

EXHIBIT A: Assumed Contracts

EXHIBIT B: Form of Confidentiality Agreement

EXHIBIT C: Description of Business

EXHIBIT D: Form of Indemnity Escrow Agreement

EXHIBIT E: Form of LTS Escrow Agreement

EXHIBIT F: Products

EXHIBIT G: Sanofi Side Letter

EXHIBIT H: Form of Transition Agreement

EXHIBIT I: Form of Bill of Sale

EXHIBIT J: Form of Assignment and Assumption

EXHIBIT K: Form of Assignment of Patent and Trademarks

EXHIBIT L: Form of Non-Competition Agreement

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What a Purchase Agreement Is and when it applies

A Purchase Agreement is a legally binding contract that records the terms under which one party agrees to buy goods, services, or real property from another. It sets price, payment terms, delivery or closing dates, condition precedents, representations, warranties, and remedies for breach. For real property it commonly precedes deed transfer and escrow instructions; for goods or business assets it can include inventory lists, acceptance criteria, and risk-of-loss allocation. Properly drafted, the Purchase Agreement clarifies obligations, reduces disputes, and creates an enforceable record for courts and regulators.

Why a clear Purchase Agreement matters

A clear Purchase Agreement reduces uncertainty about price, timing, and obligations, and preserves legal remedies if a party fails to perform. It creates a written record that supports enforcement, financing, insurance claims, and tax reporting while allocating key risks between buyer and seller.

Why a clear Purchase Agreement matters

Who typically prepares and signs a Purchase Agreement

Parties, advisors, and organizations commonly involved with Purchase Agreements.

  • Buyers and Sellers — Individual buyers, companies, or trustees that negotiate terms and commit to performance under the contract.
  • Real Estate Professionals — Brokers, listing agents, and title companies that coordinate contingencies, disclosures, and closing logistics.
  • Corporate Counsel and Procurement — Legal teams, purchasing managers, and contract administrators who draft, review, and approve contractual language.

Essential sections every professional Purchase Agreement should include

Well-structured Purchase Agreements group related terms into clear sections so parties can quickly locate rights, obligations, and remedies during performance or dispute resolution.

Parties

Identify buyer and seller by full legal name, entity type, and address; include state of formation for entities and signing authority details.

Price & Payment

Specify total purchase price, deposit/earnest money, payment schedule, escrow instructions, and conditions for release of funds.

Subject Matter

Describe goods, assets, or real property precisely, including serial numbers, legal description, exhibits, or attached schedules.

Conditions & Contingencies

List inspections, financing, due diligence, clear title, or regulatory approvals required before closing or transfer.

Representations & Warranties

State factual promises about condition, title, authority, and compliance; include survival periods and remedies for breach.

Closing & Remedies

Define closing procedures, transfer mechanics, remedies for default, indemnities, limitation of liability, and dispute resolution.

Required information commonly included in a Purchase Agreement

Buyer Identity: Full legal name
Seller Identity: Full legal name
Price: Total purchase amount
Effective Date: MM/DD/YYYY
Property Description: Legal or asset description
Signatures: All authorized signers

Step-by-step: completing and executing a Purchase Agreement

Follow this sequential checklist to prepare, review, and finalize a Purchase Agreement with clear responsibilities and timing.

  • 01
    Draft Terms: Record price, assets, contingencies, and deadlines in draft form.
  • 02
    Review & Negotiate: Legal and finance review; adjust language and request clarifications.
  • 03
    Attach Exhibits: Add schedules, inspection reports, and title documents.
  • 04
    Execute & Exchange: Obtain all signatures, date the document, and distribute fully executed copies.

Configure an online signing workflow for a Purchase Agreement

Use a predictable routing and authentication setup so each signer completes their step in the correct order with evidence captured.

Field Configuration
Signing Order Sequential or parallel routing depending on approvals
Authentication Method Email link, SMS code, or stronger ID verification
Required Fields Make price, date, and signature fields mandatory
Audit Trail Record IP, timestamp, and signer actions

Where to send, file, and retain an executed Purchase Agreement

After signatures, route copies to stakeholders, escrow/title, accounting, and records so responsibilities and filings are clear.

  • Buyer Counsel: Retain original for closing and tax records.
  • Seller Counsel: Keep executed copies for warranty and indemnity claims.
  • Title/Escrow: Provide documents needed to prepare deed or transfer instruments.
  • Accounting: Store for tax basis and reporting purposes.

Digital signing and platform needs for Purchase Agreements

Select a platform that captures signatures, audit trails, and optional stronger authentication without altering contract terms.

  • File Formats: PDF, DOCX supported
  • Integrations: Salesforce, NetSuite, Google Workspace
  • Security: TLS in transit; AES-256 at rest

Common timing considerations and deadlines

Purchase Agreements often create interim deadlines for inspections, financing, closing, and delivery; track these dates clearly to avoid default.

Inspection Period:

Typically 7–30 days; defined in contract

Financing Contingency:

Deadline for loan approval; dates vary

Closing Date:

Date when title transfers and funds are released

Title Objection Period:

Short window to resolve title defects

Post-Closing Deliverables:

Deadlines for final payments or documents

Common mistakes to avoid when preparing a Purchase Agreement

  • Using vague descriptions for the subject matter, which can leave the transfer scope open to dispute and enforcement difficulty.
  • Omitting a clear closing mechanism or escrow instructions, causing conflicting expectations about who holds funds and when they transfer.
  • Failing to specify survival periods for representations and warranties, which can bar later recovery for latent defects.
  • Ignoring authentication and audit-trail requirements for electronic signatures, creating uncertainty about enforceability under ESIGN or UETA.

Key risks and legal consequences of an incorrect Purchase Agreement

Breach Liability: Monetary damages or specific performance
Title Defects: Loss of ownership or title claim exposure
Tax Consequences: Incorrect basis or reporting penalties
Escrow Disputes: Delayed closings and additional costs
Invalid Signature: Enforceability challenges under ESIGN/UETA
Regulatory Fines: Industry-specific compliance penalties

Example eSignature vendor comparison for executing Purchase Agreements

This comparison highlights common commercial plans and capabilities relevant to signing and managing Purchase Agreements; signNow is listed first per platform alignment rules.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial Yes, 7-day trial Yes, limited trial Yes, limited trial Yes, limited trial Yes, limited trial
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently asked questions about Purchase Agreements and eSigning

Answers to common concerns about validity, signatures, authentication, and post-signature handling when using electronic tools to execute Purchase Agreements.


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