make your free asset purchase agreement

asset purchase agreement

this asset purchase agreement is made on the last day of signature.

between

(1) , a company incorporated in  with registered number  whose registered office is at ,  (the seller); 

and 

(2) , a company incorporated in  with registered number  whose registered office is at ,  (the buyer). 

introduction

the seller has agreed to sell and the buyer has agreed to purchase the assets on the terms of this agreement.

definitions and interpretation

1. in this agreement, the following definitions are used:

1. in this agreement, unless the context means a different interpretation is needed:
   1. including means “including without limitation”;
   2. words denoting the singular include the plural and vice versa and words denoting one gender includes all genders;
   3. reference to a section, paragraph or schedule of or to this agreement (and the schedules form part of this agreement);
   4. reference to a statute or statutory provision includes any modification of or amendment to it, and all statutory instruments or orders made under it;
   5. reference to the time of day is to a time in london; and
   6. reference to writing or written includes faxes and email but not any other type of electronic communication.
2. the headings in this document are for convenience only and do not affect the interpretation of this agreement.

agreement to sell and purchase

1. upon the terms of this agreement and in order that the business is transferred as a going concern, the seller sells and assigns with  title guarantee and the buyer purchases with effect from and as at the transfer the following assets of the seller:
   1. the moveable assets;
   2. the fixed assets;
   3. the right to use the business name;
   4. the intellectual property; and
   5. the goodwill.

consideration

1. the total consideration payable by the buyer to the seller for the business (comprising the assets) pursuant to this agreement shall be £ uk pounds (the purchase price).

vat

1. the consideration is exclusive of all and any vat which may be payable.
2. the parties intend that section 49(1) of vata 1994 and paragraph 5 of the value added tax (special provisions) order 1995 shall apply to the transfer of the assets under this agreement.
3. the parties consider and shall use all reasonable endeavours to procure that the transfer provided for by this agreement is a transfer of the business as a going concern and neither a supply of goods nor a supply of services for the purposes of vat.
4. if, notwithstanding clauses 9 and 10, vat is chargeable in connection with the transfer of the assets under the agreement, the buyer shall pay the amount that vat immediately on receipt of the relevant invoice, together with a copy of the confirmation from hm revenue & customs that vat is payable.

completion

1. completion shall take place immediately on exchange of this agreement at the registered office of the parties or such other place as the parties may agree.
2. as soon as is reasonably practicable after the effective time, the seller shall place the buyer in effective possession and control of the business and shall deliver to the buyer:
   1. physical possession of all assets which are capable of transfer by delivery and which are in the seller’s possession including all discs, materials, documents and source code in whatever medium that embody the intellectual property rights and the it system;
   2. assignments in respect of any of the assets and intellectual property rights not capable of passing by delivery; and
   3. such documents to complete the sale and purchase of the assets and vest title to the assets in the buyer.
3. risk in the assets shall pass to the buyer upon the effective time.
4. to the extent that any items listed at clause 11 do not pass by delivery to the buyer, those items shall be held by the seller on trust for the buyer pending any necessary legal assignment.

period after completion

1. the seller shall and shall procure that any necessary party shall execute any necessary documents and do all such acts and things as may reasonably be required on or subsequent to the effective time by the buyer for securing to or vesting in the buyer the legal and beneficial ownership of the assets.
2. the buyer will assume full responsibility for the liabilities and the creditors for the effective time.

license of business name

1. the seller hereby grants an irrevocable, worldwide, royalty free, transferable, exclusive licence to the buyer to use the business name for any purpose that the buyer sees fit.

contracts

1. the seller shall, on and with effect from the effective time, assign to the buyer all of the contracts which are capable of assignment without the consent of the other parties.
2. in the event that a contract is not assignable, or cannot be assigned without liability or loss to the seller, the seller shall, at the option of the buyer upon service of four (4) weeks notice:
   1. procure that the existing arrangements with the seller be terminated and that the seller be released from its obligations and that the buyer be granted corresponding rights; and
   2. use all reasonable endeavours to procure that all relevant third parties waive the relevant provisions and otherwise deal with such contracts as the buyer may reasonably require.

employees

1. the parties agree that the sale pursuant to this agreement will constitute a relevant transfer for the purposes of tupe and, accordingly, that it will not terminate the contracts of employment of any of the employees, which shall be transferred to the buyer pursuant to tupe with effect from the effective time.
2. if any contract of employment of, or collective agreement relating to, any employee is found or alleged not to have transferred to the buyer at the effective time, the parties agree that they shall take all necessary steps to ensure that such contracts of employment or collective agreements shall have effect from the effective time as if originally made with the buyer.
3. the buyer agrees that it shall be responsible for all costs, expenses, liabilities, claims, rights of action, compensation, awards, damages, fines, penalties, costs, expenses, interests arising from or in connection with the employment of the employees, whether arising before or after the effective time.

warranties

1. the seller warrants to the buyer that each of the warranties is true, accurate and not misleading at the date of this agreement.
2. each of the warranties is separate and, unless otherwise specifically provided, is not limited by reference to any other warranty or any other provision in this agreement.

limitations on claims

1. the aggregate liability of the seller for all claims shall not exceed .
2. the seller shall not be liable for a claim unless notice in writing of the claim, summarising the nature of the claim (in so far as it is known by the buyer) and, as far as is reasonably practicable, the amount claimed has been given by the buyer to the seller:
   1. in the case of a claim made under the warranties in schedule 2, on or before the seventh anniversary of completion; or
   2. in any other case, on or before the second anniversary of the completion date.

data protection

1. the buyer undertakes to comply with the data protection laws in relation to its application to the business and assets after the completion date.

further assurance

1. each party (at its own cost) shall, and shall use its reasonable endeavours to procure, execute and perform all such further acts, deeds, documents and things as may be reasonably requested from time to time in order to implement all of the provisions of this agreement.

notices

1. all notices or other communications under or in connection with this agreement will be in writing and addressed to the other party.
2. notices will be sent:
   1. to the seller at: , .
   2. to the buyer at: , .
3. notices will be deemed received:
   1. by first-class post: 2 business days after posting;
   2. by airmail: 7 business days after posting;
   3. by hand: on delivery; and
   4. by facsimile: on receipt of a successful transmission report from the correct number.
4. either party may change the address or facsimile number to which such notices to it are to be delivered by giving not less than 5 business days’ notice to the other party.

time of the essence

1. each time, date or period referred to in this agreement (including any time, date or period varied by the parties) is of the essence.

expenses

1. the parties agree to pay all of their own costs and expenses in connection with the negotiation, preparation and implementation of this agreement (and any documents referred to in it).

confidential information

1. neither party shall, without the other party’s prior written consent (not to be unreasonably withheld), disclose:
   1. information pertaining to this agreement, including, but not limited to the terms of the agreement, the purchase price, the parties to this agreement and the subject matter of this agreement, as well as any written or oral information obtained about the respective parties that is not currently in the public domain;
   2. any business information or information relating to the customers, suppliers, methods, products, plans, finances, trade secrets or otherwise to the business or affairs or the other party; and
   3. any information developed by either party in performing its obligations under, or otherwise pursuant to this agreement, subclauses a, b and c together being the confidential information.
2. neither party will use the other party’s confidential information except to the extent necessary or required to perform this agreement.
3. disclosure of confidential information may be made to a party’s officers, employees and contractors, professional advisors, consultants and other agents if such disclosure is reasonably necessary, on the condition that the disclosing party is responsible for procuring that the relevant third party complies with its obligations under clause 17.
4. confidential information does not include information which is:
   1. publicly available, other than as a result of this agreement;
   2. lawfully available to a party from a third party who was not subject to any confidentiality restrictions prior to the disclosure of such confidential information; or
   3. required to be disclosed by law, regulation or by order or ruling of a court or administrative body.
5. each party agrees to indemnify the other against any and all harm suffered for any breach of confidentiality.
6. on termination of this agreement, all confidential information relating to or supplied by a party which is or should be in the other party’s possession will be returned to the other party or (at the first party’s option) destroyed and certified as destroyed.
7. the confidentiality restrictions in this agreement will continue to apply for a period of five years from the termination of this agreement.

general

1. no amendment or variation of this agreement shall be effective unless agreed in writing and signed by or on behalf of the parties, or by their authorised representatives.
2. each provision of this agreement is severable. if any provision of this agreement (wholly or partly) is or becomes illegal, invalid or unenforceable, that shall not affect the legality, validity or enforceability of any other provision of this agreement. where any provision of this agreement is found to be unenforceable, the buyer and the seller shall will make reasonable efforts to replace such a provision with a valid and enforceable substitute provision, the effect of which, is as close as possible to the intended effect of the original invalid or unenforceable provision.
3. no failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. no single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy. a waiver of any right or remedy under this agreement or by law is only effective if it is in writing.
4. this agreement may be executed in any number of counterparts, each of which when executed and delivered (receipt by email shall constitute delivery) shall constitute a duplicate original, but all counterparts together constitute the one agreement.
5. this agreement shall be binding on, and ensure for the benefit of, each party and their respective successors and assigns.
6. neither party shall without the prior written consent of the other party (such consent not to be unreasonably withheld) assign this agreement either in whole or in part.
7. this agreement and the documents referred to in it constitute the entire agreement and understanding between the parties and supersede all previous agreement between the parties in relation to such matters.
8. this agreement shall be governed by and construed in all respects in accordance with the laws of england and wales. each of the parties irrevocably submits to the exclusive jurisdiction of the english and welsh courts.

the parties have signed the agreement on the date(s) below:

schedule 1 - assets and values

the assets included in the sale pursuant to this agreement and their respective values are as follows:

schedule 2 - warranties

information supplied

1. all information contained in this agreement, all matters contained in the disclosure letter and all other information relating to the business given by or on behalf of the seller to the buyer, its advisers or agents are true, accurate and complete and are not misleading.
2. there is no information that has not been disclosed, which, if disclosed, might reasonably affect the willingness of the buyer to buy the business (comprising the assets) on the terms of this agreement.

the seller

1. the seller has all necessary power and authority, and has taken all necessary corporate action, to enable it to enter into and perform this agreement and all agreements and documents entered into, pursuant to the terms of this agreement.
2. the assets are sold by the seller to the buyer with such title as is available to the seller.

ownership of the assets

1. no option, right to acquire, mortgage, charge, pledge, lien (other than a lien arising by operation of law in the ordinary course of trading) or other form of security or encumbrance or equity on, over or affecting the assets is outstanding and, apart from those set out in this agreement, there is no agreement or commitment to give or create any of them, and no claim has been made by any person to be entitled to any of them.

records

1. all records:
   1. have been fully, properly and accurately prepared and have at all material times, been fully, properly and accurately maintained and are properly written up to date;
   2. are in the possession of the seller;
   3. constitute an accurate record of all matters that ought to appear in them; and
   4. do not contain any material accuracies or discrepancies.

accounts

1. the accounts have been properly prepared in accordance with generally accepted accounting principles applied in the united kingdom and in accordance with applicable laws and regulation in the united kingdom.
2. the accounts have been audited by an auditor or firm of accountants qualified to act as auditors in the united kingdom.
3. the accounts give a true and fair view of the state of affairs of the business as at the accounts date and of the profit or loss of the business for the financial year ended on that date.
4. since the accounts date, the business has been carried on in the ordinary and normal course so as to maintain it as a going concern.
5. since the accounts date, there has been no material reduction in the value of the fixed assets specified in the accounts, to the extent still owned by the seller.

title to the assets

1. the assets comprise all assets now used in the business and that are necessary for the continuation of the business as now carried on.
2. the seller has good title to each asset and each asset is legally and beneficially owned by the seller.
3. there are no encumbrances over any of the assets, and the seller has not agreed to create any encumbrances over the assets or any part of them.

the contracts

1. the contracts are the only contracts entered into, or which will have been entered into before the effective time or by or on behalf of the seller in connection with the business which at the effective time, will remain to be performed in whole or in part.
2. the contracts are valid and binding and no act or omission has occurred which would constitute a breach of any contract.

condition of the assets

1. where relevant, the fixed assets and movable assets:
   1. are in good repair, condition and working order and will continue to be capable of doing the work for which they were designed;
   2. have been regularly and properly maintained; and
   3. are used exclusively in connection with the business.

employees and agents

1. no person is employed or engaged in the business (whether temporary or permanent and whether under a contract of service or contract for services) other than the employees.
2. the employees are all employed by the seller and work wholly or mainly in the business.
3. the seller has disclosed:
   1. copies of all service contracts, policies, notices of termination and other documents (whether binding or not) which apply to the employees, identifying which applies to which employee;
   2. full particulars of the current terms of employment or engagement and benefits of all employees, whether or not recorded in writing, or implied by custom or practice or otherwise;
   3. copies of all agreements or arrangements with any trade union, employee representative or body of employees or their representatives (whether binding or not) and details of any such unwritten agreements or arrangements which made affect employees;
   4. details of any employee who has given or received notice to terminate their employment or who intends or is likely to terminate their employment as a result of this agreement; and
   5. all such particulars are accurate and complete in all respects.
4. the seller has provided the buyer with the information required under regulation 11 of tupe in relation to each of the employees.
5. the seller has not offered, promised or agreed to any future variation in any contract of employment of any one of the employees or any other person employed by the seller in respect of whom liability is deemed by tupe to pass to the buyer.
6. the seller is not engaged or involved in any dispute, claim or legal proceedings with any of the employees or any other person currently or previously employed by or engaged in the business, and so far as the seller is aware, there is no event which could give rise to such dispute, claim or proceedings.
7. there are no agents or distributors of the seller engaged in any work related to the business.
8. the seller has not (nor has any predecessor or owner of any part of the business) been a party to any relevant transfer for the purposes of tupe affecting any of the employees or any other persons engaged in the business and no event has occurred which may involve such persons in the future being a party to such a transfer. no such persons have had their terms of employment varied for any reason as a result of or connected with such a transfer.

litigation

1. the seller is not engaged in, subject to, or threatened by any:
   1. litigation, administrative, mediation or arbitration process in relation to the business or the assets or any of them; or
   2. is the subject of any investigation, inquiry or enforcement proceeds by any governmental, administrative or regulatory body.

solvency of the seller

1. the seller is solvent and able to pay its debts as they fall due.
2. no order has been made, petition presented or resolution passed for the winding-up of the seller, nor has any receiver been appointed in respect of the business or the assets.

compliance

1. all applicable laws and regulations, orders, provisions, directions and conditions relating to the assets or the conduct of the business (including vat) have been duly complied with in all respects.
2. all necessary licences, consents, permits, agreements, arrangements and authorities have been obtained to enable the seller to carry on the business.

intellectual property

1. all intellectual property is either:
   1. in the sole legal and beneficial ownership or the seller, free from all licences, charges or other encumbrances; or
   2. the subject of binding and enforceable licences from third parties in favour of the seller:
      1. of which no notice to terminate has been received;
      2. all parties to which have fully complied with all obligations in those licences; and
      3. in relation to which no disputes have arisen or are foreseeable.
2. in either case, nothing has been done, or omitted to be done which would jeopardise the validity, enforceability or subsistence of any intellectual property or any such licences.

property

1. the information set out in schedule 1 of this agreement and any particulars of the properties are true, complete and accurate.

it

1. the seller is the owner of the it system, free from encumbrances and all other rights exercisable by third parties.
2. the seller has obtained all necessary rights from third parties to enable it to make exclusive and unrestricted use of the it system. such rights are freely transferable to the buyer.
3. the it system is functioning properly and is not defective in any respect.

tax

1. all documents to which the seller is a party and which relate to the business, in the enforcement of which the buyer may be interested, have been duly stamped.
2. the seller has not opted to tax (or elected to waive exemption), or will before completion, opt to tax any of the properties.
3. the seller is a registered and taxable person for the purposes of the vata 1994.