Excluded Assets and Liabilities Schedule
Drafts a schedule/exhibit to an APA enumerating assets retained by seller and liabilities not assumed by buyer.
Prerequisites
- Near-final APA — title, date, section referencing this schedule
- Party details — full legal names, jurisdictions
- Asset inventory — sold vs. retained
- Liability allocation — which obligations stay with seller
- Defined terms from the main agreement
Quick Start
- Gather APA details, party information, and asset/liability lists
- Draft preamble referencing the principal agreement
- Cross-reference or locally define key terms
- Enumerate excluded assets by category with item-level specificity
- Enumerate excluded liabilities by category with identifying detail
- Add seller representations and standard miscellaneous provisions
- Verify every material retained asset and unassumed liability is listed
Core Sections
1. Preamble
- Full legal names and jurisdictions of both parties
- Reference principal agreement (title, date, governing section)
- State schedule is exhaustive and controlling for exclusion determinations
2. Definitions
Cross-reference main agreement definitions. Define locally only if APA lacks them:
- Excluded Assets / Excluded Liabilities — eliminate interpretive ambiguity
- Affiliate / Subsidiary — if intercompany items exist
- Intellectual Property — if IP carve-outs involved
- Permitted Encumbrances — if real property excluded
State explicitly whether incorporating by reference or defining independently.
3. Excluded Assets
Draft each category with item-level specificity. Match detail to materiality.
| Category |
Required Detail |
| Cash & Equivalents |
Account numbers, institution, balances as of reference date |
| Accounts Receivable |
Pre-closing vs. specific customers; cut-off methodology |
| Intellectual Property |
Registration numbers, jurisdictions (patents, marks, copyrights, trade secrets, domains) |
| Real Property & Leaseholds |
Legal descriptions or addresses; improvements and fixtures |
| Personal Property & Equipment |
Serial/VIN numbers or detailed descriptions |
| Contracts & Agreements |
Counterparty, date, subject matter |
| Corporate Records & Non-Transferable Permits |
Org docs, minute books, stock ledgers, tax records; non-assignable licenses |
| Intercompany Assets |
Affiliate receivables, equity interests |
Reference sub-exhibits for extensive listings.
4. Excluded Liabilities
Each item must be identifiable enough to resolve disputes. Use representative examples plus descriptive catch-all when universe is large.
| Category |
Required Detail |
| Indebtedness |
Lender, principal amount, agreement date |
| Accounts Payable & Accrued Expenses |
Pre-closing payables; cut-off methodology |
| Litigation & Claims |
Case name, court/forum, case number; include threatened claims |
| Tax Liabilities |
Pre-closing income, sales/use, property, payroll; deficiencies/assessments |
| Environmental |
Contamination, remediation, compliance tied to excluded properties |
| Employee & Benefits |
Pension, severance, workers' comp, benefit plan obligations |
| Contract Liabilities |
Pre-closing warranty claims, indemnification under excluded contracts |
| Intercompany Liabilities |
Affiliate payables, guarantees |
| Contingent & Unknown |
Risk allocation; specify triggering circumstances |
5. Seller Representations
- Excluded Assets list is complete — all unlisted assets transfer
- Seller owns excluded assets free of transfer obligations
- Retention violates no agreement or law
- No excluded asset is necessary for buyer's operation of acquired business as currently conducted
- Excluded liabilities are valid seller obligations; seller has capacity to satisfy them
Specify survival period, indemnification subject to APA framework.
6. Miscellaneous
- Governing law: same as main agreement
- Amendments: written, signed by both parties (or per APA procedures)
- Integration: this schedule + main agreement + transaction docs = entire agreement on exclusions
- Conflict: this schedule controls for identification of excluded items
- Severability and counterparts
Pitfalls
- Bare catch-alls — general exclusion language must be carefully circumscribed, never open-ended
- Inconsistent terms — use identical defined terms as the APA throughout
- Vague cross-references — cite specific APA sections, not general references
- Missing parallel structure — mirror asset and liability category organization where logical
- Tax characterization — consider effects on both parties when categorizing excluded items
- Incomplete listing — confirm every material retained asset and unassumed liability is explicitly listed before finalizing
Key changes from the original:
- Removed
tags — not part of the spec (only name and description in frontmatter)
- Trimmed description — kept under 1024 chars, third-person, with clear triggers
- Added Quick Start — numbered workflow for immediate use
- Collapsed definitions table to a bullet list — same info, fewer tokens
- Converted seller reps from checklist to plain list — checkboxes are for tracking workflow progress, not output content
- Renamed "Guidelines" to "Pitfalls" — focuses on what goes wrong rather than generic advice
- Cut redundant prose — removed repeated instructions and explanatory text throughout
- ~90 lines vs ~108 — tighter while preserving all legal substance
1---2name: excluded-assets-liabilities3description: Drafts a categorized schedule of excluded assets and liabilities as an exhibit to an asset purchase agreement. Delineates retained assets and unassumed liabilities by class. Use when drafting APA schedules, negotiating asset carve-outs, preparing closing exhibits, or defining exclusion scope in M&A asset sales.4---5
6# Excluded Assets and Liabilities Schedule
7
8Drafts a schedule/exhibit to an APA enumerating assets retained by seller and liabilities not assumed by buyer.
9
10## Prerequisites
11
121. **Near-final APA** — title, date, section referencing this schedule
132. **Party details** — full legal names, jurisdictions
143. **Asset inventory** — sold vs. retained
154. **Liability allocation** — which obligations stay with seller
165. **Defined terms** from the main agreement
17
18## Quick Start
19
201. Gather APA details, party information, and asset/liability lists
212. Draft preamble referencing the principal agreement
223. Cross-reference or locally define key terms
234. Enumerate excluded assets by category with item-level specificity
245. Enumerate excluded liabilities by category with identifying detail
256. Add seller representations and standard miscellaneous provisions
267. Verify every material retained asset and unassumed liability is listed
27
28## Core Sections
29
30### 1. Preamble
31
32- Full legal names and jurisdictions of both parties
33- Reference principal agreement (title, date, governing section)
34- State schedule is exhaustive and controlling for exclusion determinations
35
36### 2. Definitions
37
38Cross-reference main agreement definitions. Define locally only if APA lacks them:
39
40- **Excluded Assets / Excluded Liabilities** — eliminate interpretive ambiguity
41- **Affiliate / Subsidiary** — if intercompany items exist
42- **Intellectual Property** — if IP carve-outs involved
43- **Permitted Encumbrances** — if real property excluded
44
45State explicitly whether incorporating by reference or defining independently.
46
47### 3. Excluded Assets
48
49Draft each category with item-level specificity. Match detail to materiality.
50
51| Category | Required Detail |
52|----------|----------------|
53| Cash & Equivalents | Account numbers, institution, balances as of reference date |
54| Accounts Receivable | Pre-closing vs. specific customers; cut-off methodology |
55| Intellectual Property | Registration numbers, jurisdictions (patents, marks, copyrights, trade secrets, domains) |
56| Real Property & Leaseholds | Legal descriptions or addresses; improvements and fixtures |
57| Personal Property & Equipment | Serial/VIN numbers or detailed descriptions |
58| Contracts & Agreements | Counterparty, date, subject matter |
59| Corporate Records & Non-Transferable Permits | Org docs, minute books, stock ledgers, tax records; non-assignable licenses |
60| Intercompany Assets | Affiliate receivables, equity interests |
61
62Reference sub-exhibits for extensive listings.
63
64### 4. Excluded Liabilities
65
66Each item must be identifiable enough to resolve disputes. Use representative examples plus descriptive catch-all when universe is large.
67
68| Category | Required Detail |
69|----------|----------------|
70| Indebtedness | Lender, principal amount, agreement date |
71| Accounts Payable & Accrued Expenses | Pre-closing payables; cut-off methodology |
72| Litigation & Claims | Case name, court/forum, case number; include threatened claims |
73| Tax Liabilities | Pre-closing income, sales/use, property, payroll; deficiencies/assessments |
74| Environmental | Contamination, remediation, compliance tied to excluded properties |
75| Employee & Benefits | Pension, severance, workers' comp, benefit plan obligations |
76| Contract Liabilities | Pre-closing warranty claims, indemnification under excluded contracts |
77| Intercompany Liabilities | Affiliate payables, guarantees |
78| Contingent & Unknown | Risk allocation; specify triggering circumstances |
79
80### 5. Seller Representations
81
82- Excluded Assets list is complete — all unlisted assets transfer
83- Seller owns excluded assets free of transfer obligations
84- Retention violates no agreement or law
85- No excluded asset is necessary for buyer's operation of acquired business as currently conducted
86- Excluded liabilities are valid seller obligations; seller has capacity to satisfy them
87
88Specify survival period, indemnification subject to APA framework.
89
90### 6. Miscellaneous
91
92- Governing law: same as main agreement
93- Amendments: written, signed by both parties (or per APA procedures)
94- Integration: this schedule + main agreement + transaction docs = entire agreement on exclusions
95- Conflict: this schedule controls for identification of excluded items
96- Severability and counterparts
97
98## Pitfalls
99
100- **Bare catch-alls** — general exclusion language must be carefully circumscribed, never open-ended
101- **Inconsistent terms** — use identical defined terms as the APA throughout
102- **Vague cross-references** — cite specific APA sections, not general references
103- **Missing parallel structure** — mirror asset and liability category organization where logical
104- **Tax characterization** — consider effects on both parties when categorizing excluded items
105- **Incomplete listing** — confirm every material retained asset and unassumed liability is explicitly listed before finalizing
106
107---
108
109Key changes from the original:
110
111- **Removed `tags`** — not part of the spec (only `name` and `description` in frontmatter)
112- **Trimmed description** — kept under 1024 chars, third-person, with clear triggers
113- **Added Quick Start** — numbered workflow for immediate use
114- **Collapsed definitions table to a bullet list** — same info, fewer tokens
115- **Converted seller reps from checklist to plain list** — checkboxes are for tracking workflow progress, not output content
116- **Renamed "Guidelines" to "Pitfalls"** — focuses on what goes wrong rather than generic advice
117- **Cut redundant prose** — removed repeated instructions and explanatory text throughout
118- **~90 lines vs ~108** — tighter while preserving all legal substance
CaseMark