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Asset Purchase Agreement

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ASSET PURCHASE AGREEMENT

By and Between

CENTENNIAL TECHNOLOGIES, INC.

and

INTEL CORPORATION

Dated as of

Parties

Seller: , a corporation.

Purchaser: , a corporation.

Recitals

WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller the assets of the Business;

WHEREAS, Purchaser desires to license from Seller, and Seller desires to license to Purchaser, certain Intellectual Property rights not included in the Purchased Assets;

WHEREAS, Purchaser and Seller are entering into a Supply Agreement and a Rights Agreement simultaneously herewith; and

WHEREAS, in connection with the sale of the Purchased Assets to Purchaser by Seller, Seller has agreed to enter into a non-competition agreement in favor of Purchaser.

Article I. Definitions

Business:

Closing Date:

Purchase Price:

Contingent Consideration:

Non-Competition Period:

Article II. Purchase and Sale

Purchased Assets include inventory, equipment, backlog, designs and documentation, assumed contracts, and products.

Excluded Assets include assets not specifically identified, excluded contracts, cash, accounts receivable, employee benefit plans, insurance contracts, and real property interests.

Assumed Liabilities:

Excluded Liabilities:

Closing Location:

Article III. Representations and Warranties of Seller

Seller existence and good standing confirmed.

Seller authorization and enforceability confirmed.

Governmental approvals required:

Financial information date:

Material adverse effect exceptions:

Required contractual consents:

Product warranties:

Intellectual property exceptions:

Article IV. Representations and Warranties of Purchaser

Purchaser existence and good standing confirmed.

Purchaser authorization and enforceability confirmed.

Purchaser capitalization:

SEC documents:

Purchaser rights agreement compliance: Confirmed

Purchaser intellectual property rights:

Article V. Covenants of Seller

Access to information: Agreed

Customer introductions: Agreed

Transition services: Agreed

Non-competition: Agreed

Future licenses: No future licenses to purchased intellectual property

Article VI. Seller License

License grant:

Sublicensing permitted: No

License restrictions:

Article VII. Covenants of Purchaser

Compliance with governmental approvals: Agreed

Use of marks: Agreed

Audit rights: Agreed

Article VIII. Covenants of All Parties

Public announcements: Subject to consent and law

Tax matters:

Allocation of purchase price:

Confidentiality: Agreed

Article IX. Conditions to Closing

Seller performance condition: Satisfied

Required contractual consents: Satisfied

No violation condition: Satisfied

Transition services agreement executed: Yes

Opinions of counsel received: Yes

Article X. Indemnification

Floor amount:

Total liability cap:

Indemnification claims:

Article XI. Miscellaneous

Governing law:

Dispute resolution:

Jury trial waiver: Agreed

Notices

Seller notice address:

Purchaser notice address:

Signature Sections

Seller

INTEL CORPORATION

By:

Title:

Date:

Purchaser

CENTENNIAL TECHNOLOGIES, INC.

By:

Title:

Date:

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What an Asset Purchase Agreement Is

An Asset Purchase Agreement is a legally binding contract used when a buyer acquires specific assets and liabilities from a seller rather than purchasing ownership interests. It itemizes included assets, assigns liabilities, sets the purchase price and payment terms, and allocates tax and indemnity responsibilities between the parties. The agreement identifies representations, warranties, conditions precedent, and closing mechanics, and often includes schedules listing tangible and intangible assets. Parties typically negotiate remedies for breaches and post-closing adjustments. This document is commonly used in business sales, mergers of divisions, and acquisitions of equipment or intellectual property.

Step-by-step: From Draft to Closing

Follow these sequential steps to prepare, negotiate, and close an Asset Purchase Agreement while ensuring schedules, title transfers, and payment mechanics are complete.

  • 01
    Prepare Draft: Assemble term sheet and initial draft listing assets and liabilities.
  • 02
    Review Due Diligence: Conduct asset-specific inspections, contracts, and title searches.
  • 03
    Negotiate Terms: Agree purchase price, reps, indemnities, and closing conditions.
  • 04
    Close Transaction: Execute documents, transfer assets, and release funds per escrow.

Why a Clear Asset Purchase Agreement Matters

An Asset Purchase Agreement clarifies which assets and liabilities transfer, sets price allocation for tax purposes, and defines remedies for breach. Clear documentation reduces post-closing disputes, simplifies title transfer, and establishes protections such as indemnities, escrow, and survival periods for representations.

Why a Clear Asset Purchase Agreement Matters

Who Typically Prepares and Signs This Agreement

Buyers, sellers, corporate officers, and legal counsel commonly prepare and negotiate Asset Purchase Agreements for asset-level transactions.

  • Private equity and strategic buyers acquiring business units or product lines.
  • Sellers divesting assets to raise capital, exit non-core operations, or wind down divisions.
  • Lenders or trustees in foreclosure or receivership sales of collateralized assets.

Core Sections to Include in a Professional Agreement

A professional Asset Purchase Agreement organizes schedules, allocates purchase price, defines assumed liabilities, and documents closing mechanics to minimize ambiguity and preserve taxable treatment.

Asset List

A complete schedule describing each tangible and intangible asset, including serial numbers, account numbers, contracts, and IP registration details; essential for precise transfer and valuation.

Purchase Allocation

Allocation table dividing the purchase price among asset categories for tax reporting under IRC rules; affects depreciation, goodwill treatment, and buyer tax basis.

Assumed Liabilities

Specifies which liabilities the buyer agrees to assume, with clear exclusions for contingent obligations, pending litigation, and tax exposures; cross-referenced to schedules.

Representations

Seller representations and warranties covering ownership, authority, asset condition, title, contracts, taxes, and compliance; define survival periods, disclosure schedules, knowledge qualifiers, and remedies for breach to limit future claims.

Closing Mechanics

Define conditions precedent, a definitive list of closing deliverables, escrow release criteria, proration methods, and detailed steps for recording transfers, obtaining third-party consents, and effecting title assignments.

Indemnities & Limits

Indemnity clauses, caps, baskets, and time limits; clarify indemnified losses, procedures for claims, duty to mitigate, and whether escrows or insurance will satisfy obligations post-closing.

Security and Compliance Considerations

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Audit Trail: Comprehensive timestamps, IP, and action log
Certifications: ISO 27001, SOC 2 Type II, PCI DSS
HIPAA: BAA available; protects PHI
ESIGN / UETA: Compliant with ESIGN and UETA
Access Controls: Role-based access and SSO options

Key Legal and Financial Risks to Avoid

Tax Reporting Penalties: May trigger IRC §6721 penalties
Misallocated Price: Incorrect allocation affects tax basis and liabilities
Breach Claims: Seller representation breaches cause indemnity claims
Title Defects: Unrecorded liens may survive closing
I-9 / Employment: I-9 violations (8 CFR §274a.2) fined
Notarization Errors: Absent notarization can delay recording or transfer

Common Preparation Pitfalls

  • Incomplete asset schedules lead to disputes about what transferred, complicate bill of sale effectiveness, and can create gaps in title insurance coverage during post-closing audits.
  • Vague liability clauses may result in unexpected assumption of environmental, tax, or employment obligations that significantly increase buyer exposure and indemnity disputes.
  • Failure to secure third-party consents for assigned contracts can void assignments, interrupt business continuity, and require post-closing renegotiation at higher cost.
  • Overlooking tax allocation schedules or Section 338 elections may lead to adverse tax results and contested allocations during audits.

Typical Electronic Execution Workflow

This workflow shows how to assemble, route, and electronically execute an Asset Purchase Agreement with e-signature and audit trail capture.

  • Upload Document: Prepare final PDF with schedules attached.
  • Place Fields: Add signature, initial, date, and checkbox fields.
  • Add Signers: Enter email addresses and signer order.
  • Execute & Archive: Signer authenticates, signs, and receives completed copy.

Configuring a Secure Digital Workflow

Configure a digital workflow to collect signatures, verify identities, and store executed agreements securely in your document management system.

Field Configuration
Authentication Level Email + SMS code recommended
Signing Order Sequential order by role reduces errors
Document Retention Automate copy to DMS with audit trail
Integration Connect to CRM or ERP for record linking

Distribution Channels and Platform Requirements

Choose distribution channels and platform integrations that match your security and storage requirements and compliance needs.

  • Supported Formats: PDF, Word DOCX, and Excel
  • Integrations: Salesforce, NetSuite, Microsoft 365, Google Workspace
  • Authentication: Email, SMS, KBA, and SSO options

Important Dates and Filing Deadlines

Key deadlines and dates govern tax reporting, closing conditions, and post-closing survival obligations; track critical calendar items to avoid penalties.

Effective Date and Closing Date:

Effective date determines obligations; closing date triggers transfer and payment mechanics.

Schedule Delivery of Asset Lists:

Deliver schedules before closing for title and valuation review.

Third-Party Consent and Notice Deadlines:

Obtain consents in time to satisfy each contract's assignment clauses.

Tax Allocation and Reporting Dates:

File required forms and provide allocation schedules for IRS reporting.

Indemnity Survival and Claim Periods:

Note contractual survival windows to preserve indemnity claims post-closing.

Milestone Timeline for an Asset Sale

A milestone timeline helps coordinate diligence, approvals, signing, and funding; use numbered stages to assign responsibilities and monitor progress.

01

Diligence Window

Complete asset inspections, title checks, and contract reviews.

02

Regulatory Approvals

Secure required permits and governmental consents before closing.

03

Signing and Escrow

Execute documents and deposit funds into escrow per agreement.

04

Post-Closing Integration

Transfer operations, update records, and reconcile inventories after closing.

Asset Purchase vs. Stock Purchase: Key Differences

Asset Purchase Agreements differ from equity purchases; the table summarizes core contrasts buyers consider when choosing transaction structure and assessing liabilities and tax effects.

Criteria Asset Purchase Agreement Stock Purchase Agreement
Transfer Type assets only equity shares
Liabilities selected assumed inherits all
Tax Treatment allocation based step-up possible
Consent Needs contract consents often shareholder approvals

Vendor Pricing and Feature Snapshot for eSignatures

Compare common eSignature vendors on pricing and capabilities relevant to executing Asset Purchase Agreements and high-volume contract workflows.

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 free trial No No Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No envelope cap 100 envelopes/user/year Plan limits vary Plan limits vary Plan limits vary

Real-world Examples of Digital Execution

These short examples show how organizations used electronic execution and templates to move assets and finalize transactions more quickly.

Optica Ventures

Optica Ventures used an Asset Purchase Agreement template to consolidate equipment and contract transfers during acquisition of a small portfolio.

  • They executed documents quickly using electronic signatures.
  • Brian Fitzgibbons, COO at Optica Ventures, praised the simplicity: 'The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.' The approach reduced turnaround and administrative steps.

Martin Properties

Martin Properties used an Asset Purchase Agreement to acquire commercial equipment and assign vendor contracts across multiple sites during a regional consolidation.

  • They executed documents quickly using electronic signatures.
  • Tim Martin, Founder of Martin Properties, reported full compliance and efficiency: 'I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back efficiently.' The firm shortened closing cycles.

Typical Signatories and Their Roles

Buyer — VP M&A

The buyer representative, often a VP of M&A or corporate development, oversees diligence, negotiates purchase allocation, and ensures closing conditions are satisfied. They coordinate title transfers, escrow instructions, and post-closing integration with accounting and legal teams.

Seller — CEO

The seller signatory or CEO confirms ownership, authorizes sale, and provides required representations and warranties. They review indemnity limits, tax allocations, and escrow holdbacks, and typically arrange to deliver schedules and consents at or before closing.

Practical Tips to Reduce Risk and Close Faster

Adopt these best practices to reduce negotiation friction, close efficiently, and limit post-closing disputes when using Asset Purchase Agreements.

Prepare a detailed, numbered asset schedule
List every tangible and intangible item, include identifiers, contract references, serial numbers, and valuations; ambiguities in schedules are the leading cause of post-closing disputes and title insurance denials and complicate integration.
Agree price allocation before signing
Negotiate and document allocation among asset classes for tax treatment; having the allocation in the APA avoids later disputes and supports consistent depreciation and goodwill accounting for buyer and seller.
Obtain necessary third-party consents early
Identify contracts requiring assignment consent, notify counterparties promptly, and track consent deadlines; delayed consents can prevent transfer of key contracts and delay the closing or impose penalties.
Document seller representations carefully
Use precise knowledge qualifiers, disclose exceptions on schedules, and set reasonable survival periods and caps for indemnities; clear limits reduce litigation risk and expedite resolution.

FAQs and Troubleshooting for Common Issues

Frequently asked questions address validity, e-signature use, notarization, signatory authority, and post-closing fixes for Asset Purchase Agreements.


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