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In an asset purchase, the buyer agrees to purchase specific assets and liabilities. This means that they only take on the risks of those specific assets. This could include equipment, fixtures, furniture, licenses, trade secrets, trade names, accounts payable and receivable, and more.
The purpose of an "as is" clause is to force the buyer to rely upon its own investigation, rather than upon the seller's representations, in determining whether or not to purchase the property.
Indemnity clauses may burden the purchaser with the obligation to take, and to procure the company to take, all reasonable steps to avoid or mitigate any loss or damage incurred by it, prior to directing a claim against the seller.
Meaning of "As Is" and "As Available" At its most simple definition, it refers to products in stock or real estate that remain on the market. Once purchased, there are no guarantees because the product is no longer available. It also refers to store or office hours with a bricks-and-mortar business.
The purpose of an asset purchase agreement It lets your business get exactly the assets it wants without purchasing anything it does not. It also helps a business limit the potential liabilities it could face. For example, asset purchase agreements are commonly used to purchase: Intellectual property.
There are two core methods to buy or sell a business: an asset purchase or a share purchase. An asset purchase requires the sale of individual assets. A share purchase requires the purchase of 100 percent of the shares of a company, effectively transferring all of the company's assets and liabilities to the purchaser.
The Middle Ground: The Condition and Sufficiency of Assets representation asserts that each asset being transferred is in good operating condition and, other than the need for ordinary maintenance and non-material repairs, is suitable for use in the same way as it was being used in the Business prior to the transaction ...
What Must You Include in an Asset Purchase Agreement? Party information. Include the full legal names of the business, buyer, and seller in the opening paragraph. Definitions. ... Purchase price. ... Purchased assets. ... Representations and warranties. ... Dispute Resolution. ... Indemnification. ... Closing conditions.