ASSET PURCHASE AGREEMENT (APA) - M&A / BUSINESS ACQUISITION

PREAMBLE - ASSET PURCHASE & M&A FRAMEWORK

This Asset Purchase Agreement (APA) dated [Date] between [Seller/Target Company] and [Buyer/Acquiring Company] governs purchase of substantially all assets of [Target Business]. Legal Framework: BGB §433 (Sale of Goods), UCC Article 2 §2-201 (Sale of Goods), IRC §1060 (Asset Allocation), IRC §1012 (Tax Basis), Delaware §611 (Merger procedures).

1.1 Aggregate Purchase Price (BINDING): Per BGB §433(2) (Obligation to pay) & UCC §2-201:
• Total Purchase Price: EUR/USD [X Million] (all-in consideration)
• Price Structure: [Base Price + Adjustment]
• Allocation by Asset Class (per IRC §1060 - MANDATORY for US tax treatment):
- Cash/Liquid Assets: EUR [X]
- Tangible Property (Equipment/Real Estate): EUR [X]
- Intangible Assets (IP/Trademarks/Goodwill): EUR [X]
- Customer Relationships/Database: EUR [X]
• Each class allocation is binding for tax purposes per IRC §1060(a)

1.2 Working Capital Adjustment (CUSTOMARY): Per UCC §2-306 (Conditions):
• Target Net Working Capital (NWC): EUR [X Million] (current assets minus current liabilities)
• Closing Adjustment: If actual NWC ≠ target, dollar-for-dollar adjustment to purchase price per IRC §1060
• True-Up Mechanism: Post-closing (within 90 days) auditor reconciliation per UCC §2-301
• Example: If actual NWC = EUR 5M (vs. target 4.5M), Buyer owes additional EUR 0.5M to Seller per IRC §1060

1.3 Payment Method & Timing (AT CLOSING): Per BGB §363 (Performance):
• Method: [Wire transfer / Bank check / Escrow release]
• Timing: Payment due at closing (simultaneous with asset transfer) per BGB §363(1)
• Interest (if delayed): EUR [X%] annual accruing daily per BGB §286 (Delay)

2.1 Organization & Authority: Per HGB §1 (Commercial register):
✓ Seller is duly organized legal entity per HGB §1
✓ Authority to execute this APA (board/shareholder approval obtained) per Delaware §611(a)
✓ No conflicting agreements (non-compete, exclusivity) prevent transaction per BGB §138 (Void as against public policy)

2.2 Asset Title & Ownership (CRITICAL): Per BGB §929 (Transfer of tangible property):
✓ Seller holds CLEAR TITLE to all assets (free of liens, encumbrances, mortgages) per BGB §929(1)
✓ No third-party claims or competing interests per BGB §933 (Third-party claims)
✓ All equipment/inventory free from liens per 28 USC §2401 (Lien searches)
✓ IP (patents, trademarks, copyrights) validly owned or licensed per PatG §15 (Assignment)

2.3 Financial Information (R&W = LIABILITY): Per HGB (Commercial Code):
✓ Financial statements (balance sheet, P&L) accurate, complete, fairly present financial condition per HGB §264 (Annual financial statement)
✓ No undisclosed liabilities (contingent or otherwise) per HGB §268 (Balance sheet)
✓ All receivables valid (not from related parties or inflated) per HGB §255 (Valuation)
✓ Revenue recognition compliant per HGB §252 (General valuation methods)

2.4 Compliance & Legal (R&W = BREACH = INDEMNITY): Per IRC §7491 (Burden of proof):
✓ All contracts disclosed (customer, supplier, leases, employment agreements) per BGB §311 (Contracts)
✓ No litigation pending or threatened per 28 USC §1346 (Suits)
✓ Compliance with all laws (tax, environmental, employment) per German Environmental Law
✓ No environmental contamination per BImSchV (Environmental impact assessment)

2.5 Survival Period (R&W LIABILITY): Per IRC §1060 (Tax consequences):
• General R&W: Survive for [18 / 24 months] post-closing per IRC §1060(c)
• Fundamental R&W (title, authority, compliance): Survive [36 months / indefinitely] per Delaware §611
• Tax Matters: Survive until statute of limitations expires per IRC §6511 (3-6 years typically)

3.1 Conditions to Closing (BOTH PARTIES): Per UCC §2-304 (Price payable):
✓ R&W remain accurate (no material breach) per UCC §2-304
✓ No Material Adverse Change (MAC) per IRC §1060
✓ Third-party consents obtained (customers, suppliers, landlord, lenders) per BGB §423 (Consent required)
✓ Regulatory approval (antitrust, FDI review) per GWB (German Cartel Act) / HSR (US Hart-Scott-Rodino)

3.2 Material Adverse Change (MAC) Definition: Per IRC §1060:
• MAC = Event that materially reduces EBITDA or value >X% (typically 15-20%) OR causes asset loss >X%
• Excludes: General economic conditions, industry downturn, force majeure per BGB §275 (Impossibility)
• Trigger: Either party may walk away if MAC occurs per IRC §1060

4.1 Seller Indemnity (SELLER PAYS FOR BREACHES): Per BGB §280 (Liability):
• Seller indemnifies Buyer for breaches of R&W and undisclosed liabilities per BGB §280(1)
• Indemnity Basket: [EUR 100k] threshold (no claims <100k) per IRC §1060
• Indemnity Cap (Maximum): [10% / 15% of purchase price = EUR X] per BGB §280(2)
• Exceptions (UNLIMITED): IP infringement, fraud, willful misconduct per BGB §276 (Intent)

4.2 Escrow Account (SECURITY FOR INDEMNITY): Per BGB §383 (Pledge as security):
• Escrow Amount: EUR [X Million] (typically 10-15% of purchase price) held by [Escrow Agent]
• Escrow Period: [18 / 24 months] post-closing per BGB §383
• Use: Released to Buyer for indemnity claims (if valid) per BGB §383(1)
• Return: Remaining escrow (after all disputes) returned to Seller per BGB §383(4)

Buyer ASSUMES (takes responsibility): Per BGB §413 (Assignment of debt):
☑ Specified liabilities (listed in Schedule A): [current AP, accrued expenses, contingent items]

Buyer EXCLUDES (Seller retains): Per BGB §414 (Defenses):
☒ All debt (senior debt, subordinated debt, loans) per IRC §1060(a)
☒ Pending/threatened litigation per BGB §414
☒ Environmental/tax contingencies (pre-closing) per BGB §412 (Assumption of debt)
☒ Employee benefits/severance obligations (pre-closing) per BGB §613 (Transfer of business)

At Closing (Simultaneous Closing): Per BGB §363 (Performance):
✓ Asset transfer documents signed per BGB §929
✓ Purchase price paid per BGB §433(2)
✓ Certificates of title transferred per BGB §932 (Acquisition of ownership)
✓ IP assignments executed per MarkenG (Trademark transfer)
✓ Employee consents/new agreements per BGB §613 (Transfer of employees)