This form is an Asset Purchase Agreement. The seller agrees to sell to the buyer certain assets which are listed in the agreement. The form also provides that the buyer will not be responsible for any unfilled orders from the customers of the seller.
Asset Purchase Buy With Earn-out Provision In King
Category:
State:
Multi-State
County:
King
Control #:
US-00419
Format:
Word;
Rich Text
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An earnout allows the buyer to pay a higher potential reward to the seller while simultaneously reducing the buyer's risk. An earnout provision makes the purchase price (typically, some part of it) payable in the future dependent on the buyer's financial performance.Earnout arrangements have important tax implications for both the buyer and seller. This article focuses on the buyer side of the equation. In short, an earnout provision allows the seller to maintain an interest in the company postclose while the buyer gets a lower purchase price. With an earnout provision, the buyer and the seller can get to a price arrangement more easily. An asset purchase agreement (APA) is a legally binding agreement used when a company wishes to buy or sell specific assets of another business.