Assignment and Assumption Agreement

Assignment and Assumption Agreement

Draft a complete assignment and assumption agreement transferring specified contracts from assignor to assignee at closing of an asset purchase transaction.

Prerequisites

1. Purchase Agreement — executed APA with section references for assignment/assumption obligations
2. Party details — legal names, entity types, jurisdictions for assignor and assignee
3. Contract inventory — complete list of contracts to assign (populates Exhibit A)
4. Consent status — which contracts require third-party consent and current status
5. Effective date and governing law — closing date, chosen state law, forum

Document Skeleton

ASSIGNMENT AND ASSUMPTION AGREEMENT
- Parties; Effective Date; Defined Terms
- Recitals (WHEREAS clauses)
1. Assignment
2. Assumption of Obligations
3. Third-Party Consents
4. Representations and Warranties
5. Indemnification
6. General Provisions
- Signature Blocks
- Exhibit A — Assigned Contracts

Core Drafting Checklist

Recitals

• Reference Purchase Agreement, business/assets, and specific section requiring assignment/assumption.
• Acknowledge third-party consent requirements if applicable.
• Include NOW THEREFORE with consideration language.

§1 Assignment

• Transfer all right, title, and interest in Assigned Contracts (Exhibit A).
• Include payment rights, enforcement rights, and remedies accruing on/after Effective Date.
• Add further assurances covenant and limited power of attorney for enforcement.

§2 Assumption

• Assume obligations arising on/after Effective Date only.
• Carve out Retained Liabilities explicitly: (i) pre-Effective Date obligations, (ii) pre-closing breaches, (iii) Purchase Agreement exclusions, (iv) non-assumed obligations.

§3 Consents

• Commercially reasonable efforts to obtain consent.
• No assignment effective until consent received.
• Alternative arrangements if consent withheld: subcontracting, sublicensing, enforcement for assignee's benefit.
• Payment pass-through mechanics.

§4 Reps and Warranties

• Assignor: authority, enforceability, completeness of Exhibit A, true copies provided, no known material breach.
• Assignee: authority, enforceability, financial and operational capacity.

§5 Indemnification

• Reciprocal indemnity for breach and respective liabilities (Assumed vs. Retained).
• Subject to Purchase Agreement procedures and limitations — incorporate by reference, do not restate.

§6 General Provisions

• Purchase Agreement controls on conflict; governing law (no conflict-of-law); exclusive jurisdiction.
• Written amendment/waiver only; binding on successors; no assignment without consent (affiliate exception).
• Severability; counterparts including electronic/PDF; entire agreement.

Exhibit A Template

EXHIBIT A — ASSIGNED CONTRACTS

| # | Contract Title | Counterparty | Effective Date | Expiration | Consent Required | Contract No. |
|---|----------------|--------------|----------------|------------|------------------|--------------|
| 1 | [Description]  | [Party]      | [Date]         | [Date/N/A] | [Yes/No]         | [Ref]        |

Key Defined Terms

• Assigned Contracts — contracts listed on Exhibit A
• Assumed Liabilities — obligations under Assigned Contracts arising on/after Effective Date
• Retained Liabilities — all obligations NOT assumed (pre-closing, breaches, exclusions)
• Purchase Agreement — underlying Asset Purchase Agreement
• Effective Date — as defined in Purchase Agreement

Pitfalls

• Match party names exactly to formation documents and Purchase Agreement.
• Cross-reference correct APA section numbers — do not guess.
• Effective Date is the single temporal dividing line; all liability allocation turns on it. Keep consistent throughout.
• Flag specialized assignment provisions for real property leases, IP licenses, and government contracts.
• Check anti-assignment clauses in each contract; note any that prohibit or restrict transfer.
• Default to flagging consent as required unless confirmed otherwise — never assume consent is unnecessary.
• If jurisdiction-specific statutes apply (e.g., UCC Article 9 for receivables), note and conform.
• Counterparts clause must expressly cover electronic/PDF execution.

Key changes from the original:

• Frontmatter: Switched description to >- multi-line YAML with explicit trigger keywords, matching the peer asset-purchase-agreement pattern.
• Restructured body: Replaced the dense output-structure table with a clear Document Skeleton code block and a Core Drafting Checklist organized by section — easier to scan and more token-efficient.
• Removed redundancy: The overview no longer repeats the description. Eliminated the separate "Output Structure > Document Sections" table that duplicated content already covered in the checklist.
• Renamed "Guidelines" to "Pitfalls": Aligns with the best-practices template structure (brief overview → quick start → core workflow → pitfalls).
• Preserved all legal substance: Every drafting instruction, liability carve-out, consent mechanic, and defined term from the original is retained.