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asset purchase agreement definition

What is the definition of "asset purchase agreement"? 
An asset purchase agreement is a legal contract for the sale and purchase of the assets only of a business, and not the stock. The subject assets, including physical as well as intellectual property, are clearly identified in the agreement along with the compensation and other terms.

The asset purchase agreement serves to transfer control of all or part of a business while transferring only those liabilities that are specified in the agreement as assumed liabilities.

Purchasing the assets instead of the stock creates a break from the past history of the business being acquired, including any past or contingent liabilities, such as environmental, legal, safety, product or employee liabilities. 
Brain Trust contributor: Author of Instant Profits: Making Your Business Pay
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