Asset Purchase Agreement (Software)
Dated as of [Insert Date]
Between
and
This ASSET PURCHASE AGREEMENT (“Agreement”), dated [Insert Date] (“Effective Date”), is between (the “Purchaser”), a [Purchaser State of Incorporation] corporation, and , a [Seller State of Incorporation] corporation (the “Seller”). The Purchaser and the Seller are collectively referred to herein as the “Parties”.
Background
WHEREAS, both the Purchaser and the Seller are engaged in the business of developing and selling software and services.
WHEREAS, the Seller wishes to sell to Purchaser, and Purchaser wishes to acquire from Seller, the nonexclusive ownership of all of Seller’s Tangible and Intangible Assets (collectively the “Assets”) with respect to the software described in Section 1.1 below.
SALE OF ASSETS
The Parties agree as follows:
Assets to be Sold
Upon the terms and conditions and in reliance on the representations, warranties and covenants set forth in this Agreement, Seller agrees to sell, assign, transfer, and convey to Purchaser at the Closing, a non-exclusive right, title, and interest in and to the Assets, which are composed of a copy of . In addition, the software also includes [Feature or Component Description]. The Purchaser’s purchase of the non-exclusive right, title, and interest in and to the software will result in Purchaser’s incorporation of the software into its own software offering that shall be the exclusive property of the Purchaser, known as . will be subject to further development, changes, and improvements, exclusively at the Purchaser’s discretion.
The Purchaser will have exclusive right, title, and interest to all amendments, additions, or improvements made to the software purchased, including the new and any developments made further on the original software purchased (collectively, the “Developments”). The Purchaser will own all intellectual property rights and interests, including, without limitation, any software, hardware, and firmware relating to the Developments, in object and source code form, patents, copyrights, trademarks, trade secrets, and other applications relating to the Developments. This sale is only a conveyance of nonexclusive rights in the purchased Assets to the Purchaser as set out above. Aside from the transfer of these nonexclusive rights to the Purchaser, the Seller retains its own non-exclusive right, title, and interest in its copy of the Assets transferred.
The Seller agrees to train the appointed employees of the Purchaser and provide the Purchaser’s developers with all [Access Information Description] to enable the Purchaser to assume further development and/or hosting of the platform in the future. However, the Purchaser agrees that the Seller may perform website development and hosting pertaining to the software’s use as long as the Seller delivers the level of service agreed to in the Service Level Agreement contained in Exhibit 1 hereto.
Purchase Terms
The purchase terms are:
At closing, the Purchaser shall pay the Seller [Purchase Compensation Terms]. The Purchaser will not transfer ownership of the Assets or the Developments to any other entity without providing Seller compensation equal to [Compensation Amount/Terms].
The Seller’s compensation shall be locked up for [Lockup Period Terms]. After the Lockup Period, the Stock Compensation shall be subject to the following dribble-out terms:
The Seller will not transfer, sell, or dispose of the Shares received, except for conducting open market sales of a maximum of [Percentage] per month following the Lockup Period.
Here’s the revised version of the provided section with appropriate placeholders replacing specific details while preserving the structure and content.
Should the Seller’s shares constitute more than [Insert Percentage]% of the Purchaser’s outstanding shares, the Seller may be under further restrictions if deemed an insider, including that the Seller may be deemed presumptively an insider solely for holding more than [Insert Percentage]% of the Purchaser’s outstanding shares.
The full purchase price or shares of the Acquisition shall be fully refundable if the Seller breaches the Agreement pursuant to [Confidentiality/Trading in Securities Clauses] and/or any of the following:
(i) Material misrepresentations or omissions by the Seller, or should Seller not have full marketable title to all of the Assets;
Material breach of this Agreement or other agreements pertaining to the purchase of the Assets by the Seller, excluding the Service Level Agreement attached hereto;
Seller's material failure to comply with any of the covenants in this Agreement, but not including the Service Level Agreement attached hereto; or
Fraud by the Seller.
If written notice of any of the preceding [(ii), (iii), or (iv)] is provided by Purchaser to Seller within [Insert Number] days of the signing of this Agreement, Purchaser has [Insert Period] to bring an action against Seller seeking declaratory relief that such actions occurred. The shares can only be voided upon the final, non-appealable decision of a Court of competent jurisdiction finding that the specified conduct occurred.
At the Closing, the Seller shall have no liabilities with respect to the Assets.
Website Hosting and Development
In addition to the Stock Compensation for the Assets, the Seller has been providing since [Insert Start Date] and will continue to provide, web-hosting services to Purchaser. These will continue at the existing rates, described as follows:
Website design and hosting.
Basic Website setup.
Websites created for customers of [Purchaser Entity Name], referred to hereafter as [Customer Descriptor]. Each site will include:
Selection from a list of available website templates.
Page management and editing features.
User management.
Picture galleries.
File libraries.
Testimonials.
[Plugin/Integration Name] and related features.
[Insert Number] Standard Pages.
All the latest functionality.
Customizations included:
Logo changes (clients must provide logos; if unavailable, a text-based logo will be used).
Custom colors to match the customer’s brand image.
Page text customization by clients on their new site.
Full use of features for additional setup and modifications.
In exchange for the website design and setup services, Purchaser will pay Seller [Insert Fee] for each website that the Seller creates. Purchaser grants the Seller a first right of refusal providing that the Purchaser will purchase these services from the Seller before anyone else. Should Seller reject such offer by written notification the Purchaser is free to purchase the services from others. Payment will be made when the initial setup services for a particular website are completed. This fee is payable to Seller for so long as Seller can tender performance by providing the services to the Purchaser within the time specified in any applicable Service Level Agreement. Seller and Purchaser have signed a Service Level Agreement (“SLA) attached hereto as Exhibit 1 that provides for expected service levels and related remedies for the protection of each party.
Hosting will be provided by Seller for all websites and the Seller will have first a right of refusal to provide the service if it meets the security, performance and storage expectations agreed upon herein. Hosting fees will be paid by the [Customer Descriptor], but such payment will be guaranteed by Purchaser if the [Customer Descriptor] makes use of the hosting service.
Hosting will be governed by the provisions of the SLA.
In exchange for the hosting services, Seller is due the amount of [Insert Hosting Fee] per month per website, to be billed annually. The Purchaser will require that the hosting service of the Seller be used by the [Purchaser's Customers], and agrees that such fee will be paid to Seller for each website for as long as Seller is in the business of hosting websites and is ready, willing, and able to do so, even if Purchaser or a third party hosts such website(s), as long as the Seller maintains the agreed level of service as set out in the Service Level Agreement in Exhibit 1, with the only exception being clients that have specific regulatory requirements, such as ones that require them to host within a specific banking hardware.
Domain names are also available: [Domain Extensions, e.g., .com, .net, .org] extensions are priced at [Insert Domain Fee] per year. Prices vary for specialty extensions.
Seller can also provide a complete customized web design service. After initial discussion with Purchaser about its brand image and website goals, Seller will provide mockup images via email, showing how the site will look with sample content. This design can be discussed and changed as needed with different functionality and workflow where applicable. Once approved, Seller will send the Purchaser a detailed quote for consideration. Upon acceptance of the quote, the Seller will build the website using this design. All pages and content will be created. All original artwork will be provided upon request. This complete web design service is available at a price to be agreed to between Seller and Purchaser. All functionality identified as possible additions to the existing base offering of [Software Name, e.g., Theme Studio], will be added to the main base [Software Name] software and become part of [Software Name] in a modular way where it can be activated or deactivated by means of business rules, so that it can be used for similar clients with similar needs in the future, without having to do the custom development for similar clients again in the future.
CONDITIONS PRECEDENT
The Purchaser shall have completed a due diligence review of the Assets and be satisfied with the results thereof.
No material adverse changes shall have occurred in the Assets of the Seller, other than changes set forth in this Agreement, changes occurring in the ordinary course of business, or changes caused by Purchaser’s use of and development of the Assets.
All [Equipment/Source Code/Documentation] and other Assets sold by the Seller to the Purchaser are free from encumbrances, liens, and are uncollateralized.
COVENANTS OF SELLER
Confidentiality
In connection with the transactions contemplated herein, each party will be providing information to the other. As a condition to the furnishing of such information, all parties agree, as set forth below, to treat confidentially such information and all analyses, compilations, studies, and other material (collectively, the “Evaluation Material”).
Notwithstanding the foregoing, Evaluation Material shall not include:
Material that was publicly available prior to disclosure to the other party.
Material that becomes generally available after the date hereof, not as a result of a breach of this Agreement by the other party hereto.
Material that was independently developed by the other party hereto without reference to the Evaluation Material.
Each party agrees that it will not use the Evaluation Material in any way detrimental to the other party and that such information will be kept confidential by such party, its [Agents/Representatives]; provided, however, that any of such information may be disclosed to [Directors/Officers/Employees/Representatives], and to individuals acting in similar capacities who need to know such information for the purpose of evaluating a possible transaction (it being understood that such individuals shall be informed of the confidential nature of such information and shall be directed to treat such information confidentially).
Without the prior written consent of the other party, no party will disclose to any person the fact that discussions or negotiations are taking place concerning a possible transaction or the status thereof.
Trading in Securities
The Seller acknowledges and agrees to advise their [Directors/Officers/Employees/Agents/Representatives] who are informed as to the matters which are the subject of this Agreement, that the [Relevant Jurisdiction] securities laws prohibit any person who has material, non-public information concerning a publicly traded company from:
Purchasing or selling securities of such company.
Communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller that all the following statements are true, accurate, and correct:
Due Organization
Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of [Purchaser's State of Incorporation]. Purchaser has all necessary power and authority to enter into this Agreement and all other documents that Purchaser is required to execute and deliver hereunder, and holds or will timely hold all permits, licenses, orders, and approvals of all federal, state, and local governmental or regulatory bodies necessary and required for its operations.
Power and Authority; No Default
Purchaser has all requisite power and authority to enter into and deliver this Agreement and to perform its obligations hereunder. The signing, delivery, and performance by Purchaser of this Agreement, and the consummation of all the transactions contemplated hereby, have been duly and validly authorized by Purchaser. This Agreement, when signed and delivered by Purchaser, will be duly and validly executed and delivered and will be the valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to laws relating to [Bankruptcy/Insolvency/Relief of Debtors] and laws governing specific performance, injunctions, and other equitable remedies.
Authorization for this Agreement
Apart from required [Regulatory Filings, e.g., Securities and Exchange Commission Filings], no authorization, approval, consent of, or filing with any governmental body, department, bureau, agency, public board, authority, or other third party is required for the consummation by Purchaser of the transactions contemplated by this Agreement.
Litigation
To the best of Purchaser’s knowledge, there is no [Litigation/Inquiry/Proceeding] pending or, to Purchaser’s knowledge, threatened, before any court, agency, or other governmental body against Purchaser (or any affiliated corporation or entity) that seeks to enjoin, prohibit, or otherwise prevent the transactions contemplated hereby.
No Conflicts
The execution, delivery, and performance of this Agreement, and the consummation of the transactions contemplated hereby, will not result in:
A violation or constitute, with or without the passage of time and giving of notice, a default under any provision of Purchaser’s [Constitutive Documents];
A breach or violation in any material respect of any material agreement, judgment, order, writ, or decree;
The creation of any material lien, charge, or encumbrance upon any assets of Purchaser; or
The suspension, revocation, impairment, forfeiture, or non-renewal of any material permit, license, authorization, or approval applicable to Purchaser, its business, or its operations or any of its assets or properties.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that all the following statements are true, accurate, and correct:
Corporate Organization.
Seller is a company duly organized, validly existing, and in good standing under the laws of [Seller's State of Incorporation].
Power and Authority; No Default Upon Transfer.
Seller has all requisite power and authority to enter into and deliver this Agreement and to perform its obligations hereunder. The signing, delivery, and performance by Seller of this Agreement, and the consummation of all the transactions contemplated hereby, have been duly and validly authorized by Seller. Neither the signing and delivery of this Agreement by Seller, nor the performance by Seller of its obligations under this Agreement, will:
Violate Seller’s [Corporate Documents]; or
To the best of Seller’s knowledge, violate any law, statute, rule, regulation, order, judgment, injunction, or decree of any court, administrative agency, or governmental body applicable to Seller.
Title.
To the best of Seller’s knowledge after reasonable inquiry, Seller has good and marketable title to all of the Assets.
Condition of Assets
Seller is not aware of any Assets provided to Purchaser that are not in good working order and condition. To the best of Seller's knowledge, all software and software codes conform in all material respects to industry standards and comply with all applicable laws, codes, or regulations.
Laws, Regulations, Licenses, and Permits
To the best of Seller's knowledge, Seller has complied with all applicable laws, statutes, orders, rules, regulations, and requirements relating to the Assets. Seller has not received any notice of alleged violations that would adversely impact the Assets.
Absence of Undisclosed Liabilities
Seller is not aware of any liabilities or obligations of any nature, whether secured or unsecured, disclosed or undisclosed, accrued, absolute, contingent, or otherwise, that would materially affect the Assets.
Disclaimer of Additional Warranties
Except for the representations and warranties expressly set forth in this Agreement or established by applicable law as rights that cannot be waived or limited by contract, each party disclaims all representations and warranties, including any implied warranty of merchantability or fitness for a particular purpose.
CONDITIONS TO CLOSING
Conditions to Purchaser’s Obligations.
The obligations of the Seller hereunder are subject to the satisfaction and fulfillment of the following conditions, unless Purchaser expressly waives the same in writing:
Accuracy of Representations and Warranties on Closing Date
The representations and warranties made herein by Seller shall be true, correct, and not misleading in all material respects on the date given and on the Closing Date with the same force and effect as though made on the Closing Date.
Compliance
As of the Closing Date, Seller shall have complied in all material respects with, and fully performed, all conditions, covenants, and obligations of this Agreement imposed on Seller and required to be performed or complied with by Seller at or prior to the Closing Date.
Delivery of Assets
Seller shall have delivered the Assets to Purchaser.
Delivery of Closing Documents
Seller shall have delivered, and Purchaser shall have received, the documents identified in [Section Reference, e.g., "Assets to be Sold"].
Conditions to Seller’s Obligations
The obligations of Purchaser hereunder are subject to the satisfaction and fulfillment of the following conditions, unless Seller expressly waives the same in writing:
Accuracy of Representations and Warranties on Closing Date
The representations and warranties made herein by Purchaser in [Section Reference, e.g., "Section 4"] shall be true, correct, and not misleading in all material respects on the date given and on the Closing Date with the same force and effect as though made on the Closing Date.
Compliance
Purchaser shall have complied in all material respects with, and fully performed, the terms, conditions, covenants, and obligations of this Agreement imposed on Purchaser to be performed or complied with by Purchaser at or prior to the Closing Date.
Payment
Purchaser shall have transmitted payment by issuing a stock certificate for [Insert Number of Shares] shares (the “Stock Certificate”) issued by Purchaser’s transfer agent.
CLOSING OBLIGATIONS
Purchaser’s Closing Obligations
Prior to or at the Closing, Purchaser shall deliver or effect the delivery to Seller of the stock certificate reflecting the [Stock Compensation Terms].
Seller’s Closing Obligations
At the Closing, Seller shall deliver the Assets to Purchaser.
SURVIVAL OF WARRANTIES AND INDEMNIFICATION
Survival of Warranties
All representations and warranties made by Seller or Purchaser herein, or in any certificate, schedule, or exhibit delivered pursuant hereto, shall survive the Closing for a period of [Insert Time Period, e.g., one (1) year] after the Closing.
Indemnified Losses
For the purpose of this section and when used elsewhere in this agreement, “Loss” shall mean and include any and all liability, loss, damage, claim, expense, cost, fine, fee, penalty, obligation, or injury, including without limitation, those resulting from any and all actions, suits, proceedings, demands, assessments, judgments, awards, or arbitration, together with reasonable costs and expenses, including reasonable attorneys’ fees and other legal costs and expenses relating thereto.
No Indemnification by Seller
Seller is selling to Purchaser the right, title, and interest in and to the Assets defined in this Agreement “as is” and “where is”, with no representations or warranties as to merchantability, fitness, usability, or in any other regard (except for the limited representations and warranties specifically set forth above). Seller does not agree to defend, indemnify, or hold harmless Purchaser, any parent, subsidiary, or affiliate of Purchaser, or any director, officer, employee, stockholder, agent, or attorney of Purchaser or any of its affiliates, from and against any Loss which arises out of or results from the transaction described herein.
Exception: Nothing in this section shall relieve Seller of any liability for breach of this Agreement.
Indemnification by Purchaser
Subject to the provisions and limitations set forth in this Section [Insert Section Number, e.g., Section 10], Purchaser agrees to defend, indemnify, and hold harmless Seller, any parent, subsidiary, or affiliate of Seller, and any director, officer, employee, stockholder, agent, or attorney of Seller or its affiliates (collectively, the “Seller Indemnitees”) from and against any Loss which arises out of or results from:
Any breach by Purchaser of any covenant, or the inaccuracy or untruth of any representation or warranty of Purchaser made herein; or
The use of the Assets after the Closing.
MISCELLANEOUS
Expenses
Each of the parties hereto shall bear its own expenses (including, without limitation, attorneys’ fees) in connection with the negotiation and consummation of the transaction contemplated hereby.
Notices
Any notice required or permitted under this Agreement shall be in writing and personally delivered, sent by certified or registered U.S. mail (postage prepaid), or sent via nationally recognized overnight courier to the following addresses:
If to Seller:
[Seller Entity Name]
[Seller Address Line 1]
[Seller Address Line 2]
If to Purchaser:
[Purchaser Entity Name]
[Purchaser Address Line 1]
[Purchaser Address Line 2]
Entire Agreement
This Asset Purchase Agreement, along with any agreements executed and delivered in connection herewith, constitutes the entire agreement and understanding between the parties. It supersedes any prior agreements or understandings with respect to the transactions contemplated herein.
Amendment; Waiver
This Agreement may only be amended in writing, signed by both Seller and Purchaser. Waivers of any term or provision must also be in writing and signed by the party waiving the term. No waiver of a breach shall constitute a waiver of any subsequent breach.
No Third-Party Beneficiaries
Nothing expressed or implied in this Agreement is intended to confer upon any third party any rights or remedies under this Agreement.
Execution in Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument.
Benefit and Burden
This Agreement shall bind and benefit the parties hereto and their respective successors and permitted assigns.
Governing Law/Forum/Jurisdiction/Injunctive Relief
Governing Law
The substantive laws of [State Governing Law] shall govern this Agreement, without regard to conflicts of law provisions.
Forum and Jurisdiction
All claims or disputes shall be heard exclusively in [County, State, or Jurisdiction], U.S.A. Each party consents to the exclusive jurisdiction and venue of such courts, waiving objections based on inconvenience or lack of jurisdiction.
Injunctive Relief
In the event of a breach or threatened breach of this Agreement, the non-breaching party is entitled to seek equitable relief, including temporary or permanent injunctions, without needing to show actual damages or post bond. Such relief does not limit the availability of other damages.
Severability
If any provision is deemed invalid or unenforceable, it shall be enforced to the maximum extent permitted by law, and the remainder of the Agreement shall remain in full force and effect.
Attorneys’ Fees
In any suit or arbitration to enforce or interpret this Agreement, the prevailing party is entitled to recover reasonable attorneys’ fees, costs, and expenses, including those incurred during appeals.
IN WITNESS WHEREOF, the parties execute and deliver this Asset Purchase Agreement by their duly authorized representatives as of the Effective Date.
EXHIBIT 1 - Service Level Agreement
The SLA will cover the following areas:
New Website Setup - The creation of new websites for [Purchaser's Customers] includes [Purchaser’s Software Name, e.g., Theme Studio].
Hosting - Website hosting for [Purchaser's Customers].
Customer Support - Support services related to website setup, hosting, and maintenance.
Levels of Service Agreed
New Website Setup [Insert Setup Fee] per site:
New sites will be set up within [Insert Setup Timeframe].
Client may select from a list of available website templates.
Features include:
Page management and editing features.
User management.
Picture galleries.
File libraries.
Testimonials.
[Plugin/Integration Name, e.g., ACPAS Plugin].
[Insert Number] Standard pages.
All the latest [Purchaser’s Software Name, e.g., Theme Studio] functionality.
Customizations Included:
Logos can be changed (Client must provide logos; if unavailable, a text-based logo will be used).
Custom colors (Templates will have a default color scheme that can be customized to match the client’s brand).
Page text can be customized by clients on their new site.
Clients can use all features in [Purchaser’s Software Name] for additional changes, including adding pages and pictures.
Hosting Package [Insert Monthly Hosting Fee] per month:
[Insert Uptime Percentage] service uptime guaranteed by [Seller’s Hosting Provider Name].
Includes hosting of [Purchaser's Customers] websites, including [Purchaser’s Software Name].
Hosting features:
Website storage space up to [Insert Storage Limit].
Additional storage space available at [Insert Cost] per GB.
Application document storage up to [Insert Document Storage Limit].
Additional document storage space available at [Insert Cost per Additional Storage Unit].
Data transfer up to [Insert Transfer Limit] per month.
Additional data transfer available at [Insert Cost per GB].
Includes SSL Certificate.
Includes [Insert Number of Email Accounts] email addresses.
Customer Support
Monitoring Alerts
Seller will notify [Purchaser Entity Name] via email at [Insert Support Email Addresses] within [Insert Notification Timeframe] of any Monitoring Alerts on the server(s) to inform about service issues, including downtime.
Support Availability
Normal support hours: [Insert Support Hours, e.g., Monday-Friday, 9am-5pm EST].
On-demand support: Available during any downtime experienced on [Purchaser’s or Purchaser’s Customers’ sites].
Support Channels
Phone support: [Insert Support Phone Number].
Email support: [Insert Support Email Address].
