An asset purchase agreement ("APA") is the heart of an acquisition, the document where the terms of the deal are struck. The terms of an APA will impact, among other things, the actual cost to the buyer, the amount received by the seller and the parties' obligations to each other for possibly years after the consummation of the sale. This post will begin a discussion of the various provisions of an asset purchase agreement and how the terms agreed to can favor one party to a transaction over the other, beginning with a brief look at terms that concern assumed and excluded assets and liabilities.

A recent post discussed a few generalities on stock purchases and asset purchases. In a basic sense, the characteristics of a stock purchase and of an asset purchase will guide the parties in the earliest stages of negotiation over whether to structure the transaction as a stock or asset deal. This post and posts to follow will expand on certain aspects of both types of deals that the parties may face as negotiations progress, beginning with a few initial considerations for parties negotiating an asset purchase.