An asset purchase agreement (APA) is a definitive agreement that finalizes all terms and conditions related to the purchase and sale of a company’s assets. It is different from a stock purchase agreement where company shares, including title to the assets and liabilities, are being bought/sold.

An APA usually covers the following: it provides the definitions for all major terms used in the overall body of the agreement; representations and warranties of the seller and buyer; matters related to employees; indemnifications for any costs that may arise post transaction as a result of conditions that existed prior to the deal closing; and tax matters.