Asset Purchase Agreement Term Sheet for the United States

Asset Purchase Agreement Term Sheet Template for United States

An Asset Purchase Agreement Term Sheet is a preliminary document used in U.S. business transactions that outlines the key terms and conditions for the purchase of specific assets from one entity by another. It serves as a foundation for the subsequent detailed purchase agreement and typically includes essential elements such as purchase price, asset description, assumed liabilities, and key conditions. While generally non-binding except for certain provisions, it's governed by U.S. federal and state laws and provides a framework for negotiation and due diligence.

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What is a Asset Purchase Agreement Term Sheet?

The Asset Purchase Agreement Term Sheet is a crucial preliminary document used when one entity intends to purchase specific assets from another. It serves as a roadmap for the transaction, outlining key commercial and legal terms while allowing parties to reach a preliminary understanding before investing in detailed due diligence and definitive agreements. Under U.S. jurisdiction, this document typically precedes the formal Asset Purchase Agreement and helps identify potential deal-breakers early in the negotiation process. While mostly non-binding, it sets expectations and guides the preparation of the final agreement.

What sections should be included in a Asset Purchase Agreement Term Sheet?

1. Parties: Identification of buyer and seller entities

2. Background/Recitals: Context of the transaction and purpose of the term sheet

3. Definitions: Key terms used throughout the document

4. Transaction Structure: Overview of the proposed asset purchase

5. Purchase Price: Consideration and payment terms

6. Assets to be Acquired: Description of assets included in the sale

7. Excluded Assets: Assets explicitly excluded from the transaction

8. Assumed Liabilities: Liabilities buyer will assume

9. Timing: Expected closing date and key milestones

What sections are optional to include in a Asset Purchase Agreement Term Sheet?

1. Due Diligence: Process and timeline for buyer's investigation of the assets and business

2. Financing Contingencies: Conditions related to buyer's financing arrangements and requirements

3. Employee Matters: Treatment of employees and related obligations post-closing

4. Regulatory Approvals: Required governmental and regulatory approvals for the transaction

What schedules should be included in a Asset Purchase Agreement Term Sheet?

1. Schedule A - Asset List: Detailed inventory of assets to be purchased

2. Schedule B - Excluded Assets: Detailed list of assets explicitly excluded from the transaction

3. Schedule C - Assumed Contracts: List of contracts to be assumed by buyer

4. Schedule D - Required Consents: List of third-party consents needed for the transaction

5. Schedule E - Purchase Price Allocation: Breakdown of purchase price across asset categories

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Securities Laws: Federal securities regulations including Securities Act of 1933, Securities Exchange Act of 1934, and SEC regulations that govern the sale and transfer of securities if applicable to the asset purchase

Antitrust Laws: Federal competition laws including Hart-Scott-Rodino Act, Clayton Act, and Sherman Antitrust Act to ensure the transaction doesn't create monopolistic conditions

Federal Tax Laws: Internal Revenue Code and related tax regulations governing the tax implications of asset transfers at the federal level

Federal Employment Laws: Employment-related regulations including WARN Act, COBRA, and ERISA that may apply if the transaction involves transfer of employees

Federal IP Laws: Intellectual property regulations including Patent Act, Copyright Act, Trademark Act, and Trade Secrets Act for protection and transfer of IP assets

State Corporate Laws: State-specific business entity regulations and bulk sales laws that govern corporate transactions within the state

State Contract Laws: State-specific contract formation requirements and statute of frauds provisions that affect the validity and enforceability of the agreement

State Property Laws: State regulations governing real property transfers and UCC provisions for personal property transfers

State Tax Laws: State-specific transfer taxes and sales and use taxes that may apply to the asset purchase transaction

State Licensing Requirements: State-specific industry permits, professional licenses, and regulatory approvals needed for the transfer of certain assets or business operations

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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