Texas Asset Purchase Agreement

TEXAS ASSET PURCHASE AGREEMENT

Governed by Texas Business and Commerce Code, Texas Tax Code, and Texas Common Law

TABLE OF CONTENTS

1. Parties and Recitals
2. Definitions — Texas-Specific Terms
3. Purchase and Sale of Assets
4. Excluded Assets
5. Assumed Liabilities
6. Excluded Liabilities
7. Purchase Price, Allocation, and Payment
8. Texas Tax Clearance and Successor Liability
9. Texas Sales and Use Tax on Transferred Assets
10. Franchise Tax Compliance
11. Closing and Deliverables
12. Representations and Warranties of Seller
13. Representations and Warranties of Buyer
14. Pre-Closing Covenants
15. Texas Non-Compete and Non-Solicitation (§ 15.50)
16. Employee Matters — Texas Labor Code Considerations
17. Conditions Precedent to Closing
18. Post-Closing Adjustments
19. Indemnification, Basket, and Cap
20. Limitation of Liability
21. Termination
22. Dispute Resolution — Texas Venue, Jurisdiction, Jury Waiver
23. General Provisions
24. Execution
25. Schedules and Exhibits Index

1. PARTIES AND RECITALS

This Texas Asset Purchase Agreement (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

SELLER:
Name: [________________________________]
Entity Type: [________________________________] organized under the laws of [________________________________]
Principal Office: [________________________________]
Texas Registered Agent: [________________________________]
Texas Comptroller Taxpayer ID: [________________________________]
Texas SOS File Number: [________________________________]
("Seller")

BUYER:
Name: [________________________________]
Entity Type: [________________________________] organized under the laws of [________________________________]
Principal Office: [________________________________]
Texas Registered Agent: [________________________________]
Texas Comptroller Taxpayer ID: [________________________________]
("Buyer")

Each a "Party" and collectively the "Parties."

Recitals

A. Seller owns and operates the business known as "[________________________________]" (the "Business") in the State of Texas and desires to sell substantially all assets used in the Business.

B. Buyer desires to purchase the Assets and assume only the Assumed Liabilities, subject to the terms herein.

C. The Parties acknowledge that under Texas law:

• Buyer may be liable for Seller's unpaid sales taxes as a successor under Tex. Tax Code § 111.020 unless a Certificate of No Tax Due is obtained from the Texas Comptroller before Closing;
• Although Texas repealed UCC Article 6 (Bulk Transfers), common law successor liability may apply in certain circumstances;
• Any non-compete covenant must comply with Tex. Bus. & Com. Code § 15.50; and
• Texas has no state-level WARN Act, but the federal Worker Adjustment and Retraining Notification Act (29 U.S.C. § 2101) may apply.

D. The Parties intend that the Transactions qualify as a sale of assets for all tax and legal purposes, with purchase price allocation governed by 26 U.S.C. § 1060.

NOW, THEREFORE, for good and valuable consideration, the Parties agree:

2. DEFINITIONS — TEXAS-SPECIFIC TERMS

"Accounts Receivable" means all trade accounts, notes, and amounts receivable arising from Business operations before Closing.

"Affiliate" has the meaning in 17 C.F.R. § 230.405.

"Assets" has the meaning in Section 3.

"Assumed Liabilities" has the meaning in Section 5.

"Business Day" means any day other than Saturday, Sunday, or a day on which Texas state offices are closed.

"Certificate of No Tax Due" means the certificate issued by the Texas Comptroller of Public Accounts under Tex. Tax Code § 111.020 confirming that Seller has no outstanding sales, use, or franchise tax liabilities — a critical closing condition under Section 17.

"Closing" / "Closing Date" has the meaning in Section 11.1.

"Excluded Assets" has the meaning in Section 4.

"Excluded Liabilities" has the meaning in Section 6.

"Franchise Tax" means the Texas franchise tax imposed under Tex. Tax Code Ch. 171 on entities doing business in Texas.

"Governmental Authority" means any federal, Texas state, or local government body, agency, or instrumentality.

"Intellectual Property" means all trademarks (including Texas Secretary of State registrations under Ch. 16), copyrights, patents, trade secrets (per TUTSA), domain names, and other IP used in the Business.

"Law" means any statute, law, ordinance, regulation, rule, code, order, or requirement of any Governmental Authority.

"Losses" has the meaning in Section 19.

"Material Adverse Effect" means any change materially adverse to the Assets or Business, excluding: (i) general economic conditions; (ii) industry-wide changes; (iii) changes in Texas or federal law of general applicability; and (iv) natural disasters affecting Texas generally.

"Permits" means all licenses, permits, and approvals from Governmental Authorities used in the Business, including any Texas-specific occupational licenses.

"Purchase Price" has the meaning in Section 7.1.

"Successor Liability" means the liability that may attach to Buyer under Tex. Tax Code § 111.020 or Texas common law for Seller's pre-Closing obligations.

"Tax" / "Taxes" means all federal, Texas state, and local taxes, including income, franchise, sales, use, property, payroll, and excise taxes.

3. PURCHASE AND SALE OF ASSETS

3.1 Assets. Subject to this Agreement, at Closing Seller shall sell, transfer, assign, convey, and deliver to Buyer all right, title, and interest in substantially all assets used in the Business (the "Assets"), including:

(a) Accounts Receivable;
(b) inventory, raw materials, work-in-process, finished goods, and supplies;
(c) machinery, equipment, vehicles, tools, furniture, fixtures, computers, and tangible personal property (title passing under Tex. Bus. & Com. Code § 2.401);
(d) Contracts listed on Schedule 3.1(d);
(e) Intellectual Property and associated goodwill, including Texas trademark registrations;
(f) Permits listed on Schedule 3.1(f), to the extent transferable under Texas law;
(g) books, records, and files relating to the Business;
(h) prepaid expenses, deposits, and security deposits;
(i) all customer lists, vendor lists, and marketing materials;
(j) all domain names, social media accounts, and digital assets;
(k) all goodwill associated with the Business; and
(l) all rights under warranties received from third parties.

3.2 Personal Property Transfer. To the extent Assets constitute "goods" under UCC Article 2 (Tex. Bus. & Com. Code Ch. 2), title passes to Buyer at Closing under § 2.401. Risk of loss passes at Closing under § 2.509.

3.3 Real Property. If the Assets include real property in Texas, transfer shall be by general warranty deed in recordable form, subject to the requirements of Tex. Prop. Code Ch. 5. Buyer shall obtain owner's title insurance from a Texas-licensed title company.

4. EXCLUDED ASSETS

The Assets exclude (the "Excluded Assets"):

(a) Seller's organizational documents, minute books, tax records, and corporate records;
(b) cash, cash equivalents, and bank accounts;
(c) Seller's rights under this Agreement;
(d) Seller's insurance policies and claims thereunder;
(e) any tax refunds attributable to pre-Closing periods;
(f) employee benefit plan assets; and
(g) assets listed on Schedule 4.

5. ASSUMED LIABILITIES

Buyer assumes only (the "Assumed Liabilities"):

(a) obligations arising after Closing under Contracts included in the Assets (not relating to pre-Closing breach or default);
(b) trade payables incurred in the ordinary course reflected on the Closing Balance Sheet;
(c) obligations under Permits transferred to Buyer; and
(d) liabilities expressly listed on Schedule 5.

6. EXCLUDED LIABILITIES

Buyer does not assume (the "Excluded Liabilities"):

(a) Pre-Closing Taxes — all Taxes attributable to periods ending on or before Closing, including Texas sales/use tax, franchise tax, and payroll taxes;
(b) Employee Liabilities — all obligations under employee benefit plans, accrued vacation, sick pay, and workers' compensation claims arising before Closing;
(c) Product Liability — claims arising from products sold or services performed before Closing;
(d) Environmental — liabilities from pre-Closing environmental conditions at Texas facilities;
(e) Litigation — pending or threatened claims arising from pre-Closing conduct;
(f) Seller's Debt — all indebtedness, notes payable, and guaranties of Seller;
(g) DTPA Claims — any claims under the DTPA (Tex. Bus. & Com. Code § 17.41 et seq.) arising from Seller's pre-Closing conduct; and
(h) all other liabilities not expressly assumed.

7. PURCHASE PRICE, ALLOCATION, AND PAYMENT

7.1 Purchase Price. The aggregate consideration for the Assets consists of:

(a) Cash Consideration: $[________________________________];
(b) assumption of the Assumed Liabilities; and
(c) contingent earn-out payments per Schedule 7.1(c) (if applicable).

(The "Purchase Price.")

7.2 Deposit. Within [____] Business Days after execution, Buyer shall deposit $[________________________________] (the "Deposit") with [________________________________] (the "Escrow Agent") under the escrow agreement in Exhibit A.

7.3 Payment at Closing. Buyer shall deliver the Cash Consideration (less the Deposit) by wire transfer of immediately available funds to Seller's designated account. The Deposit shall be released per the Escrow Agreement.

7.4 Purchase Price Allocation. Within ninety (90) days after Closing, Buyer shall deliver to Seller a schedule allocating the Purchase Price among the Assets in accordance with 26 U.S.C. § 1060 and the regulations thereunder. The Parties shall file IRS Form 8594 consistently with the agreed allocation. If the Parties cannot agree, the dispute shall be resolved by an independent accountant.

7.5 Withholding. Buyer may withhold from the Purchase Price amounts required under applicable tax law.

7.6 Holdback (Optional). Buyer shall retain $[________________________________] of the Cash Consideration in escrow for [____] months after Closing (the "Indemnity Holdback") to secure Seller's indemnification obligations. Release per Section 19.

8. TEXAS TAX CLEARANCE AND SUCCESSOR LIABILITY

8.1 Successor Liability Warning. Under Tex. Tax Code § 111.020, if a person liable for sales tax sells their business or stock of goods, the successor is liable for the seller's unpaid sales tax up to the value of the purchase price unless the successor obtains a Certificate of No Tax Due before Closing. This is a critical Texas-specific closing requirement.

8.2 Joint Request for Certificate of No Tax Due. At least [____] days before the anticipated Closing Date, Seller and Buyer shall jointly submit Texas Comptroller Form 86-114 (Joint Request for Certificate of No Tax Due) to the Texas Comptroller of Public Accounts.

8.3 Closing Condition. Receipt of the Certificate of No Tax Due (or a Statement of Account listing all amounts owed, with Seller's payment thereof) is a condition precedent to Buyer's obligation to close under Section 17.

8.4 Escrow for Unpaid Taxes. If the Comptroller issues a Statement of Account showing taxes owed rather than a clean certificate, an amount equal to the taxes shown (plus a 15% buffer for penalties and interest) shall be withheld from the Cash Consideration and deposited in escrow until Seller resolves the liability with the Comptroller.

8.5 Franchise Tax Clearance. Seller shall provide evidence of current franchise tax compliance under Tex. Tax Code Ch. 171, including a current-dated Tax Account Status from the Comptroller showing "Right to Transact Business in Texas — Active."

8.6 Abolished Bulk Transfers — Residual Successor Liability. Texas repealed UCC Article 6 (Bulk Transfers). However, Texas common law may impose successor liability if: (a) the buyer expressly or impliedly assumes liabilities; (b) the transaction constitutes a de facto merger or consolidation; (c) the buyer is a mere continuation of the seller; or (d) the transaction is fraudulent. Buyer should conduct thorough due diligence and the Parties expressly agree that Buyer does not assume liabilities except as stated in Section 5.

9. TEXAS SALES AND USE TAX ON TRANSFERRED ASSETS

9.1 Taxable Assets. The sale of tangible personal property, including equipment, inventory, furniture, and computer software (Tex. Tax Code § 151.009), is subject to Texas sales and use tax at 6.25% state plus up to 2% local, unless exempt.

9.2 Occasional Sale Exemption. If Seller is not engaged in the business of selling the type of property being transferred, the transaction may qualify for the "occasional sale" exemption under Tex. Tax Code § 151.304. The Parties shall evaluate and document applicability.

9.3 Sale for Resale. If Buyer purchases inventory for resale, Buyer shall provide a valid Texas resale certificate (Form 01-339).

9.4 Exempt Property. The following may be exempt from sales tax:

☐ Manufacturing equipment (Tex. Tax Code § 151.318)
☐ Items purchased for resale (with valid certificate)
☐ Intangible assets (goodwill, patents, trade secrets — generally not subject to sales tax)
☐ Real property (subject to property tax transfer, not sales tax)

9.5 Responsibility. Unless the occasional sale exemption or another exemption applies, Seller shall collect and remit Texas sales tax on taxable Assets. If a Comptroller audit later determines additional tax is due, the responsible Party shall indemnify the other.

9.6 Motor Vehicles and Titled Assets. Transfer of titled vehicles is subject to Texas motor vehicle sales tax under Tex. Tax Code Ch. 152 (currently 6.25%). The Parties shall complete TxDMV Form VTR-130-SOF (Application for Texas Title and/or Registration).

10. FRANCHISE TAX COMPLIANCE

10.1 Seller Compliance. Seller represents that all Texas franchise tax reports have been filed and all franchise taxes paid through the Closing Date. Seller shall file a final franchise tax report covering the period through Closing.

10.2 Buyer Compliance. If Buyer is a foreign entity, Buyer shall register with the Texas Secretary of State and obtain a Texas franchise tax account before operating the Business in Texas.

10.3 Tax Account Status. As a Closing deliverable, Seller shall provide a Texas Comptroller Tax Account Status printout showing "Active" status, dated within ten (10) days of Closing.

11. CLOSING AND DELIVERABLES

11.1 Closing. The Closing shall occur on [__/__/____] (the "Closing Date") at [____] [a.m./p.m.] Central Time, at [________________________________] or remotely via electronic exchange.

11.2 Seller Closing Deliverables.

(a) Bill of Sale (Exhibit B), duly executed;
(b) Assignment and Assumption Agreements for Contracts, IP, and Permits;
(c) Texas Comptroller Certificate of No Tax Due or Statement of Account (Section 8);
(d) Texas Comptroller Tax Account Status showing "Active" franchise tax status;
(e) Certificate of Good Standing from the Texas Secretary of State dated within ten (10) days;
(f) IP assignments (Exhibit D), including Texas trademark assignment forms for TX SOS filings;
(g) certificates of title for titled assets, endorsed for transfer;
(h) FIRPTA certificate (if applicable — 26 U.S.C. § 1445);
(i) real property deeds (if applicable — general warranty deed per Tex. Prop. Code Ch. 5);
(j) landlord estoppel certificates and consents to assignment for Texas leases;
(k) keys, access codes, and possession of tangible Assets;
(l) officer's certificate confirming representations and covenants; and
(m) other instruments reasonably requested.

11.3 Buyer Closing Deliverables.

(a) Cash Consideration per Section 7.3;
(b) Assumption Agreements, duly executed;
(c) Certificate of Good Standing from Buyer's jurisdiction, dated within ten (10) days;
(d) Texas Secretary of State registration (if foreign entity);
(e) officer's certificate confirming representations and covenants; and
(f) other instruments reasonably requested.

12. REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants as of the Effective Date and Closing Date:

12.1 Organization. Seller is duly organized, validly existing, and in good standing under Texas law (or registered to do business in Texas if a foreign entity), with Texas franchise tax "Active" status.

12.2 Authority. Seller has full power to execute and perform this Agreement. All necessary approvals (board, member, or shareholder) have been obtained.

12.3 Title to Assets. Seller has good and marketable title to the Assets, free of all liens except Permitted Liens on Schedule 12.3. Seller has paid all personal property taxes assessed by Texas taxing authorities on the Assets through the Closing Date.

12.4 No Conflicts. Execution does not violate any Law, organizational documents, or Contract, except as on Schedule 12.4.

12.5 Financial Statements. Seller has provided Buyer with financial statements that fairly present the Business's financial position.

12.6 No Undisclosed Liabilities. Except on Schedule 12.6, there are no material undisclosed liabilities.

12.7 Tax Compliance. All Texas sales/use tax returns have been timely filed and all taxes paid. No outstanding Comptroller audits or assessments exist except as on Schedule 12.7. Seller has collected and remitted all required Texas sales tax. All franchise tax reports have been filed and all franchise taxes paid.

12.8 Permits. Seller holds all Texas-required Permits, all current and in good standing, listed on Schedule 3.1(f).

12.9 Intellectual Property. Schedule 12.9 lists all registered IP. Seller owns or has valid licenses. No pending or threatened IP claims. Texas trademark registrations are current.

12.10 Contracts. All material Contracts are listed on Schedule 3.1(d), are in full force, and Seller is not in material breach.

12.11 Litigation. Except on Schedule 12.11, no pending or threatened litigation, including DTPA claims.

12.12 Compliance with Laws. Seller is in material compliance with all applicable Texas and federal laws, including the DTPA, environmental regulations, and employment laws.

12.13 Employees. Schedule 12.13 lists all employees with compensation, benefits, and employment terms. Seller is in compliance with Tex. Lab. Code Ch. 61 (Payment of Wages) and all applicable federal employment laws.

12.14 Environmental. To Seller's knowledge, no environmental contamination exists at Texas facilities; no pending environmental claims or regulatory actions.

12.15 Real Property. Schedule 12.15 lists all real property. No encumbrances except Permitted Liens. All Texas property taxes current.

12.16 Insurance. Seller maintains adequate insurance for the Business. Schedule 12.16 lists all policies.

12.17 Brokers. No brokerage or finder's fees owed.

12.18 Survival. Representations survive Closing for [____] months, except Fundamental Representations (Organization, Title, Taxes, and Brokers) survive until expiration of the applicable statute of limitations plus sixty (60) days.

13. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants as of the Effective Date and Closing Date:

13.1 Organization. Buyer is duly organized, validly existing, and in good standing. If a foreign entity, Buyer will register with the Texas Secretary of State before operating in Texas.

13.2 Authority. Full power and authority; binding agreement.

13.3 No Conflicts. No violations of law, organizational documents, or contracts.

13.4 Financing. Buyer has sufficient funds or committed financing to pay the Purchase Price and consummate the Transactions.

13.5 Solvency. After giving effect to the Transactions, Buyer will be solvent.

13.6 Brokers. No brokerage fees owed.

13.7 Survival. [____] months after Closing.

14. PRE-CLOSING COVENANTS

14.1 Ordinary Course. From Effective Date to Closing, Seller shall operate the Business in the ordinary course consistent with past practice, including timely filing of Texas tax returns and remitting sales tax.

14.2 Maintenance of Assets. Seller shall maintain Assets in good condition (normal wear excepted).

14.3 Access. Seller shall provide Buyer reasonable access to Assets, Contracts, books, records, Texas facilities, and key employees.

14.4 Confidentiality. Both Parties shall keep non-public information regarding the Business and this Agreement confidential.

14.5 Governmental Filings. The Parties shall cooperate in making all required filings with Texas Governmental Authorities, including the Texas Comptroller (Form 86-114) and the Texas Secretary of State (entity registration, trademark assignments).

14.6 No Shop. During the period from Effective Date to Closing (or earlier termination), Seller shall not solicit, encourage, or accept any competing offer for the Business or Assets.

14.7 Notification. Seller shall promptly notify Buyer of any event that would cause a representation to be materially untrue or a condition to be unsatisfied.

15. TEXAS NON-COMPETE AND NON-SOLICITATION (§ 15.50)

15.1 Enforceability Standard. The Parties acknowledge that under Tex. Bus. & Com. Code § 15.50, a covenant not to compete is enforceable only if it is:

(a) ancillary to or part of an otherwise enforceable agreement at the time the agreement is made (the sale of business goodwill constitutes adequate consideration — see Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011)); and
(b) reasonable as to time, geographic area, and scope, and does not impose a restraint greater than necessary to protect the purchaser's goodwill and business interest.

15.2 Non-Competition. For [____] years following Closing, Seller (and its principals listed on Schedule 15.2) shall not, directly or indirectly:

(a) own, manage, operate, or control any business that competes with the Business within [________________________________] (geographic area); or
(b) serve as an employee, officer, director, consultant, or advisor to a competing business within the same geographic area.

15.3 Non-Solicitation. For [____] years following Closing, Seller shall not:

(a) solicit or attempt to divert any customer or supplier of the Business; or
(b) solicit, recruit, or hire any employee of Buyer who was employed by Seller on the Closing Date.

15.4 Court Reformation. Under Tex. Bus. & Com. Code § 15.51(c), if a court finds the restrictions overbroad, the court shall reform the covenant to make it enforceable rather than striking it entirely.

15.5 Injunctive Relief. Seller acknowledges that breach of this Section 15 would cause irreparable harm to Buyer, and Buyer shall be entitled to injunctive relief without the necessity of posting bond, in addition to other remedies.

16. EMPLOYEE MATTERS — TEXAS LABOR CODE CONSIDERATIONS

16.1 No Obligation to Hire. Buyer may, but is not obligated to, offer employment to Seller's employees. Seller shall provide Buyer with a complete employee roster (Schedule 12.13) at least [____] days before Closing.

16.2 Seller Responsibilities (Pre-Closing).

(a) Final Paychecks: Under Tex. Lab. Code § 61.014, Seller must pay terminated employees all wages due within six (6) days of discharge (or at the next regular payday if voluntarily resigned under § 61.014(b)).
(b) Accrued Benefits: Seller is solely responsible for all accrued vacation, PTO, sick leave, bonuses, and commissions earned before Closing.
(c) COBRA: Seller shall provide COBRA continuation notices for terminated employees with group health coverage.
(d) Workers' Compensation: Seller retains all workers' compensation liabilities for pre-Closing injuries.

16.3 Federal WARN Act. Texas has no state-level WARN Act. However, if the Business has 100 or more employees, the federal WARN Act (29 U.S.C. § 2101) may require sixty (60) days' notice before a "plant closing" or "mass layoff." The Parties shall cooperate to determine WARN applicability and ensure compliance.

16.4 Employee Non-Competes. If Buyer assumes employment relationships, any existing non-compete agreements must comply with Tex. Bus. & Com. Code § 15.50. Buyer should review all employee restrictive covenants for enforceability under Texas law.

17. CONDITIONS PRECEDENT TO CLOSING

17.1 Buyer's Conditions.

(a) Seller's representations true in all material respects at Closing;
(b) Seller has performed all material covenants;
(c) receipt of Texas Comptroller Certificate of No Tax Due or satisfactory resolution of tax liabilities (Section 8);
(d) Seller's Texas franchise tax status is "Active";
(e) all required third-party consents obtained (Schedule 17.1(e));
(f) no injunction or legal restraint prohibiting Closing;
(g) no Material Adverse Effect has occurred since the Effective Date;
(h) Seller has delivered all Closing deliverables (Section 11.2); and
(i) completion of Buyer's due diligence to Buyer's reasonable satisfaction (including review of Texas-specific permits and licenses).

17.2 Seller's Conditions.

(a) Buyer's representations true in all material respects;
(b) Buyer has performed all material covenants;
(c) no injunction prohibiting Closing;
(d) Buyer has delivered Cash Consideration and Closing deliverables; and
(e) Buyer has registered with the Texas Secretary of State (if foreign entity).

18. POST-CLOSING ADJUSTMENTS

18.1 Closing Balance Sheet. Within sixty (60) days after Closing, Buyer shall prepare and deliver an unaudited balance sheet as of Closing.

18.2 Dispute. If Seller disputes, written notice within thirty (30) days. The Parties shall attempt resolution; if unsuccessful, submit to [________________________________] (independent accountant) for binding determination.

18.3 Proration. Texas property taxes, rents, utilities, and other periodic charges shall be prorated as of the Closing Date based on the most recent tax assessments and paid amounts.

18.4 Payment of Adjustment. Due within five (5) Business Days of final determination, with interest at [____]% per annum (not to exceed Texas usury limits under Tex. Fin. Code § 302.001).

19. INDEMNIFICATION, BASKET, AND CAP

19.1 Seller Indemnification. Subject to this Section 19, Seller shall indemnify Buyer and its Affiliates from Losses arising from:

(a) breach of Seller's representations or warranties;
(b) breach of Seller's covenants;
(c) Excluded Liabilities;
(d) pre-Closing Taxes (including Texas sales/use tax and franchise tax); and
(e) pre-Closing DTPA claims.

19.2 Buyer Indemnification. Buyer shall indemnify Seller from Losses arising from:

(a) breach of Buyer's representations or warranties;
(b) breach of Buyer's covenants; and
(c) Assumed Liabilities.

19.3 Definition of Losses. "Losses" means all losses, damages, liabilities, costs, expenses, judgments, fines, penalties, and reasonable attorney's fees (including fees recoverable under Tex. Civ. Prac. & Rem. Code § 38.001).

19.4 Basket and Cap.

(a) Basket: Seller is not liable under Section 19.1(a) unless aggregate Losses exceed $[________________________________] (the "Basket"), at which point Seller is liable for all Losses exceeding the Basket (tipping basket) / Losses from dollar one (first-dollar basket). [Select one.]
(b) Cap: Seller's aggregate liability under Section 19.1(a) shall not exceed $[________________________________] (the "Cap"), which is [____]% of the Purchase Price.
(c) Exclusions from Basket/Cap: The Basket and Cap do not apply to: (i) breaches of Fundamental Representations; (ii) breaches of covenants (including the non-compete in Section 15); (iii) Excluded Liabilities; (iv) fraud or intentional misrepresentation; or (v) pre-Closing Texas tax liabilities.

19.5 Indemnification Procedures.

(a) Claim Notice. The Indemnified Party shall promptly notify the Indemnifying Party in writing (a "Claim Notice"). Late notice relieves only to the extent of prejudice.
(b) Third-Party Claims. The Indemnifying Party may assume the defense with counsel reasonably acceptable to the Indemnified Party.
(c) Cooperation. The Indemnified Party shall cooperate and provide records as requested.
(d) Settlements. No settlement without the Indemnified Party's written consent (not unreasonably withheld).

19.6 Exclusive Remedy. Except for fraud or intentional misrepresentation, the indemnification provisions constitute the exclusive post-Closing remedy.

19.7 Treatment of Payments. Indemnity payments are Purchase Price adjustments for tax purposes unless otherwise required by Law.

19.8 Holdback Claims. Buyer may satisfy Seller indemnification obligations from the Indemnity Holdback (Section 7.6) before requiring direct payment.

20. LIMITATION OF LIABILITY

20.1 Consequential Damages. Except for fraud, intentional misrepresentation, or indemnification under Section 19, neither Party is liable for punitive, special, or consequential damages, including lost profits.

20.2 DTPA Damages. These limitations do not limit DTPA damages to the extent applicable and non-waivable under Texas law.

20.3 Reinforcement. The limitations in Sections 19.4 and 20 reflect the negotiated risk allocation.

21. TERMINATION

21.1 Termination Events. This Agreement may be terminated before Closing:

(a) by mutual written consent;
(b) by either Party if Closing has not occurred by [__/__/____] (the "Outside Date"), provided the terminating Party is not in breach;
(c) by Buyer if the Certificate of No Tax Due reveals material unpaid tax liabilities that Seller fails to resolve before Closing;
(d) by Buyer if a Material Adverse Effect occurs;
(e) by Buyer if any condition in Section 17.1 is incapable of fulfillment; or
(f) by Seller if any condition in Section 17.2 is incapable of fulfillment.

21.2 Effect. Upon termination, this Agreement becomes void except Sections 14.4 (Confidentiality), 21.2, 22, and 23, which survive.

21.3 Deposit.

(a) If terminated due to Seller's breach or failure to obtain tax clearance: Deposit returned to Buyer.
(b) If terminated due to Buyer's breach: Deposit released to Seller as liquidated damages.
(c) If terminated by mutual consent or Outside Date (no fault): Deposit returned to Buyer.

22. DISPUTE RESOLUTION — TEXAS VENUE, JURISDICTION, JURY WAIVER

22.1 Governing Law. This Agreement is governed by Texas law without regard to conflict-of-laws principles.

22.2 Exclusive Jurisdiction. The Parties submit to the exclusive jurisdiction of the Texas District Court in [________________________________] County, Texas, or the United States District Court for the [________________________________] District of Texas.

22.3 Venue. [________________________________] County, Texas. Mandatory venue provisions under Tex. Civ. Prac. & Rem. Code Ch. 15 control if in conflict.

22.4 Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY TEXAS LAW, EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.

22.5 Injunctive Relief. Available for non-compete violations (Section 15), IP disputes, and confidentiality breaches without bond.

22.6 Attorney's Fees. Prevailing Party recovers reasonable fees under Tex. Civ. Prac. & Rem. Code § 38.001. Presentment required thirty (30) days before suit (§ 38.002).

22.7 Prejudgment Interest. Accrues under Tex. Fin. Code § 304.003 at the Federal Reserve prime rate (floor 5%, ceiling 15%).

22.8 Statute of Limitations. Four (4) years under Tex. Civ. Prac. & Rem. Code § 16.004 for contract claims.

22.9 ADR (Optional).

☐ Binding arbitration: [________________________________], Texas. American Arbitration Association Commercial Rules. Judgment entered in any Texas court.

☐ Pre-suit mediation: [________________________________], Texas. Up to sixty (60) days.

☐ No ADR — proceed directly to litigation.

23. GENERAL PROVISIONS

23.1 Notices. Written; effective upon receipt via personal delivery, overnight courier, certified mail (return receipt), or email with delivery confirmation, to addresses on Schedule 23.1 or as updated.

23.2 Amendment. In writing, signed by the Party to be bound.

23.3 Assignment. Neither Party may assign without consent, except Buyer may assign to an Affiliate or financing source (Buyer remains liable).

23.4 Severability. Invalid provisions reformed to minimum extent; remainder in full force.

23.5 Entire Agreement. This Agreement, Schedules, and Exhibits are the complete agreement.

23.6 Electronic Signatures. Valid under Tex. Bus. & Com. Code Ch. 322 (Texas UETA).

23.7 Counterparts. Each an original; all together one instrument.

23.8 Construction. "Including" = "including without limitation." Headings for convenience. No presumption against drafter.

23.9 Further Assurances. Each Party shall execute additional documents and take further actions as reasonably necessary.

23.10 Public Announcements. Neither Party shall issue a public announcement regarding this Agreement without the other's prior written consent, except as required by Law.

24. EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Texas Asset Purchase Agreement as of the Effective Date.

SELLER:

[________________________________]

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

BUYER:

[________________________________]

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

25. SCHEDULES AND EXHIBITS INDEX

Schedules

Exhibits

Sources and References

• Tex. Tax Code § 111.020 — Successor Liability
• Texas Comptroller — Buying an Existing Business (Pub. 98-117)
• Texas Comptroller — Requesting Tax Certificates
• Tex. Tax Code Ch. 171 — Franchise Tax
• Tex. Tax Code § 151.009 — Software as Tangible Personal Property
• Tex. Bus. & Com. Code § 15.50 — Non-Compete Enforceability
• Tex. Bus. & Com. Code § 17.41 et seq. — DTPA
• Tex. Civ. Prac. & Rem. Code Ch. 134A — TUTSA
• Tex. Civ. Prac. & Rem. Code § 38.001 — Attorney's Fees
• Tex. Civ. Prac. & Rem. Code § 16.004 — Four-Year SOL
• Tex. Fin. Code § 302.001 — Usury
• Tex. Fin. Code § 304.003 — Prejudgment Interest
• Tex. Lab. Code Ch. 61 — Payment of Wages
• Tex. Prop. Code Ch. 5 — Conveyances
• Tex. Bus. & Com. Code Ch. 2 — UCC Article 2
• Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011)
• Texas Comptroller — Sales Tax Successor Liability
• Federal WARN Act (29 U.S.C. § 2101)
• 26 U.S.C. § 1060 — Purchase Price Allocation

This document is a template only. It does not constitute legal advice and should not be used without review by a licensed Texas attorney familiar with asset purchase transactions, Texas tax law, and the specific business being acquired.

END OF DOCUMENT