ASSET SALE/PURCHASE AGREEMENT (Example #1)

Disclaimer: This sample is provided as a starting point or template upon

which you can build. Certain provisions may have been omitted and
others included for discussion purposes only. Users must ensure that the
material is appropriate to the circumstances of use.

Asset Purchase Agreement dated _________________________,

Between
_____________________
(the “Vendor”)
and

_____________________
(the “Purchaser”).

RECITALS

The Vendor is the legal and beneficial owner of certain assets.

The Vendor wishes to sell and the Purchaser wishes to purchase certain
assets upon the terms and conditions contained in this Agreement.

In consideration of the foregoing and the mutual agreements contained in

this Agreement (the receipt and adequacy of which are acknowledged),
the parties agree as follows.

Section 1 Defined terms

As used in this Agreement, the following terms have the following

meanings:

“Agreement” means this asset purchase agreement and all schedules

attached to it and the expression “section” followed by a number means
and refers to the specified Section of this Agreement.
“Authorization” means, with respect to any Person or any order, permit,
approval, waiver, license or similar authorization of any Governmental
Entity having jurisdiction over the Person.

“Governmental Entity” means any (i) international, multinational, national,

federal, provincial, state, municipal, local or other governmental or public
department, central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign, or (ii) any subdivision or authority of
any of the above.

“Laws” means any and all applicable laws including all statutes, codes,
ordinances, decrees, rules, regulations, municipal by-laws, judicial or
arbitral or administrative or ministerial or departmental or regulatory
judgments, orders, decisions, rulings or awards, policies, guidelines, and
general principles of common and civil law and equity, binding on or
affecting the Person referred to in the context in which the word is used.

“Lien” means any mortgage, charge, pledge, hypothecation, security

interest, assignment, lien (statutory or otherwise), charge, title retention
agreement or arrangement, restrictive covenant or other encumbrance of
any nature or any other arrangement or condition that, in substance,
secures payment or performance of an obligation.

“Person” means a natural person, partnership, limited partnership, limited

liability partnership, corporation, limited liability corporation, joint stock
company, trust, unincorporated association, joint venture or other entity
or Governmental Entity, and pronouns have a similarly extended meaning.

“Purchased Assets” has the meaning specified in Section 2.

“Purchased Contracts” has the meaning specified in Section 2.

Section 2 Purchase and sale

(1) Subject to the terms and conditions of this Agreement, the Vendor
sells, assigns and transfers to the Purchaser and the Purchaser
 purchases from the Vendor the following property and assets
(collectively, the “Purchased Assets”):

[List assets and refer to a schedule if necessary]

(2) Nothing in this agreement shall be construed as an attempt to

assign to the Purchaser any Purchased Contract which, as a matter
of law or by its terms, is not assignable in whole or in part without
the consent of the other party or parties to the Purchased Contract,
unless such consent has been given. In order that the Purchaser
may receive and realize the full benefit of the non-assigned
Purchased Contracts, the Vendor shall hold such Purchased
Contracts in trust for the Purchaser and all benefits derived from
such Purchased Contracts shall be for the account of the Purchaser.
The Vendor shall take such action and do or cause to be done such
things as are necessary or proper to ensure that the obligations of
the Vendor under the non-assigned Purchased Contracts are
performed and that the value of all of the Purchased Contracts are
preserved and enure to the benefit of the Purchaser. The Vendor
shall use its [reasonable] [best] efforts to obtain all consents necessary
to assign the Purchased Contracts to the Purchaser.

Section 3 Liabilities

(1) The Purchaser covenants with the Vendor that it will, as and from
the date of this Agreement, discharge, perform and fulfill all the
obligations and liabilities on the part of the Vendor under the
Purchased Contracts arising on or after the date of this Agreement
and not related to any default existing prior to or as a consequence
of the completion of the transaction contemplated by this
Agreement. The Purchaser shall not assume and shall have no
obligation to discharge any liability or obligation under any
Purchased Contract which is not assignable in whole or in part
without the consent of the other party or parties to the Purchased
Contract, unless such consent has been given or unless the Vendor
 has performed its obligations under Section 2(2) and the value of
such Purchased Contracts have enured to the benefit of the
Purchaser.
(2) The Purchaser shall not assume and shall have no obligation to
discharge, perform or fulfill, any liabilities and obligations,
contingent or otherwise, of the Vendor or related to the Purchased
Assets except as described in this Agreement.

Section 4 Purchase price

The purchase price payable by the Purchaser to the Vendor for the
Purchased Assets is $__________. The purchase price shall be paid by the
Purchaser by certified cheque, bank draft or wire transfer of immediately
available funds to or to the order of the Vendor or as it may otherwise
direct in writing.

Section 5 Vendor’s representations and warranties

The Vendor represents and warrants as follows to the Purchaser at the

date of this Agreement and acknowledges and confirms that the
Purchaser is relying upon such representations and warranties in
connection with the purchase of the Purchased Assets:

(a) Incorporation and qualification. The Vendor is a corporation

incorporated and existing under the laws of [jurisdiction of
incorporation] and has the corporate power to enter into and perform
its obligations under this Agreement;
(b) Corporate authority. The execution and delivery of and
performance by the Vendor of this Agreement and the transfer of
the Purchased Assets by the Vendor to the Purchaser have been
authorized by all necessary corporate action on the part of the
Vendor; [NTD: shareholder approval is required for sale of all or substantially
all of the assets of Vendor.]
(c) No violation or breach. The execution and delivery of and
performance by the Vendor of this Agreement:
(i) Will not (or would not with the giving of notice, the lapse of time
or the happening of any other event or condition) result in a
 breach or violation of or a conflict with, or allow any other
Person to exercise any rights under, any of the terms or
provisions of the Vendor’s constating documents or by-laws;

(ii) Will not (or would not with the giving of notice, the lapse of time
or the happening of any other event or condition) result in a
breach or violation of or a conflict with, or allow any other
Person to exercise any rights under, any contracts or
instruments to which the Vendor is a party or under which any
of the Vendor’s assets or property may be affected; and

(iii)Will not result in the violation of any Law;

(d) Authorizations and consents. There is no requirement on the
part of the Vendor to make any filing with or give any notice to any
Governmental Entity or obtain any Authorization, in connection with
the completion of the transactions contemplated by this
Agreement. There is no requirement on the part of the Vendor to
obtain any consent, approval or waiver of any Person under any
contracts or instruments to which the Vendor is a party or under
which any of the Vendor’s assets or property may be affected in
connection with the completion of the transactions contemplated
by this Agreement, except for the consents, approvals and waivers
listed in Schedule 5(d); [list contractual consents required]
(e) Execution and binding obligation. This Agreement has been
duly executed and delivered by the Vendor and constitutes a legal,
valid and binding agreement of the Vendor enforceable against it in
accordance with its terms subject only to any limitation under
applicable laws relating to (i) bankruptcy, winding-up, insolvency,
arrangement and other laws of general application affecting the
enforcement of creditors’ rights, and (ii) the discretion that a court
may exercise in the granting of equitable remedies such as specific
performance and injunction;
(f) Title to the purchased assets. The Vendor has legal and
beneficial ownership of the Purchased Assets free and clear of all
Liens;
(g) Condition of purchased assets. The Purchased Assets are in
good operating condition and repair having regard to their use and
age and are adequate and suitable for the uses to which they are
being put;
(h) No options, etc. Except for the Purchaser’s right under this
Agreement, no Person has any written or oral agreement, option,
understanding or commitment, or any right or privilege capable of
becoming such for the purchase from the Vendor of any of the
Purchased Assets other than inventory sold in the ordinary course;
(i) No action. The Vendor is not aware of any action, suit or
proceeding, at law or at equity, for or by any court or any federal,
provincial, municipal or other governmental department,
commission, board, agency or instrumentality which would prevent
or materially adversely affect the transactions contemplated by this
Agreement; and
(j) Residence. The Vendor is not a non-resident of Canada for
the purposes of the Income Tax Act, RSC 1985 c 1 (5th Supp).

Section 6 Purchaser’s representations and warranties

The Purchaser represents and warrants to the Vendor at the date of this
Agreement and at the Closing Date and acknowledges and confirms that
the Vendor is relying on such representations and warranties in
connection with the sale by the Vendor of the Purchased Assets:

(a) Incorporation and qualification. The Purchaser is a corporation

incorporated and existing under the laws of [jurisdiction of
incorporation] and has the corporate power to enter into and perform
its obligations under this Agreement;
(b) Corporate authority. The execution and delivery of and performance by
the Purchaser of this Agreement have been authorized by all
necessary corporate action on the part of the Purchaser;
(c) No violation or breach. The execution and delivery of and performance
by the Purchaser of this Agreement:
(i) Will not (or would not with the giving of notice, the lapse of
time or the happening of any other event or condition) result
 in a breach or violation of or a conflict with, or allow any
other Person to exercise any rights under, any of the terms
or provisions of the Purchaser’s constating documents or by-
laws;

(ii) Will not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or violation of or a conflict with,
or allow any other Person to exercise any rights under any
contracts or instruments to which the Purchaser is a party;
and

(iii)Will not result in the violation of any Law.

(d) Execution and binding obligation. This Agreement has been duly
executed and delivered by the Purchaser and constitutes a legal,
valid and binding agreement of the Purchaser enforceable against it
in accordance with its terms subject only to any limitation under
applicable laws relating to (i) bankruptcy, winding-up, insolvency,
arrangement and other laws of general application affecting the
enforcement of creditors’ rights, and (ii) the discretion that a court
may exercise in the granting of equitable remedies such as specific
performance and injunction; and
(e) Investment Canada Act. The Purchaser is not a non-Canadian within
the meaning of the Investment Canada Act, RSC 1985 c 28 (1st
Supp).

Section 7 Deliveries

(1) Deliveries to the Purchaser. Upon execution of this Agreement, the

Vendor shall deliver the following to the Purchaser:
(i) A certified copy of the resolution of the directors [and
shareholders] of the Vendor approving the transfer of the
Purchased Assets to the Purchaser,
(ii) Copies of all consents, approvals and waivers required to
transfer the Purchased Assets to the Purchaser on terms
acceptable to the Purchaser, acting reasonably, and
 (iii) Actual possession of the Purchased Assets and all deeds,
conveyances, assurances, transfers and assignments and
other instruments, in form and substance satisfactory to the
Purchaser, necessary or reasonably required to transfer the
Purchased Assets to the Purchaser with a good title, free and
clear of all Liens.
(2) Receipt by Purchaser. By executing this Agreement, the Purchaser
acknowledges receipt of the documents delivered under section
7(1).
(3) Deliveries to the Vendor. Upon execution of this Agreement, the
Purchaser shall deliver the following to the Vendor:
(4) Receipt by Vendor. By executing this Agreement, the Vendor
acknowledges receipt of the documents delivered under section
7(3) and acknowledges that the purchase price for the Purchased
Assets has been paid in full.

Section 8 Survival of covenants, representations and warranties

(a) The covenants, representations and warranties of the Vendor

contained in this Agreement and in any certificates or documents
delivered under or in connection with the transactions
contemplated by this Agreement shall survive the closing of the
purchase and sale of the Purchased Assets and, notwithstanding
such closing, and regardless of any investigation by or on behalf of
the Purchaser, shall continue in full force and effect for the benefit
of the Purchaser without limitation of time, subject only to
applicable limitation periods imposed by Law.
(b) The covenants, representations and warranties of the Purchaser
contained in this Agreement and in any certificates or documents
delivered under or in connection with the transactions
contemplated by this Agreement shall survive the closing of the
purchase and sale of the Purchased Assets and, notwithstanding
such closing, and regardless of any investigation by or on behalf of
the Vendor, shall continue in full force and effect for the benefit of
 the Vendor without limitation of time, subject only to applicable
limitation periods imposed by Law.

Section 9 Time of the essence

Time shall be of the essence of this Agreement.

Section 10 Enurement

This Agreement shall become effective when executed by the Vendor and
the Purchaser and after that time shall be binding upon and enure to the
benefit of the parties and their respective heirs, executors, personal legal
representatives, successors and permitted assigns. Neither this
Agreement nor any of the rights or obligations under this Agreement shall
be assignable or transferable by either party without the consent of the
other party.

Section 11 Entire agreement

This Agreement constitutes the entire agreement between the parties

with respect to the transactions contemplated in this Agreement and
supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties with respect to the
subject matter of this Agreement. There are no representations,
warranties, covenants, conditions or other agreements, express or
implied, collateral, statutory or otherwise, between the parties in
connection with the subject matter of this Agreement, except as
specifically set out in this Agreement. The parties have not relied and are
not relying on any other information, discussion or understanding in
entering into and completing the transactions contemplated by this
Agreement.

Section 12 Waiver

(1) No waiver of any of the provisions of this Agreement shall be

deemed to constitute a waiver of any other provision (whether or
not similar), nor shall such waiver be binding unless executed in
writing by the party to be bound by the waiver.
 (2) No failure on the part of the Vendor or the Purchaser to exercise,
and no delay in exercising, any right under this Agreement shall
operate as a waiver of such right; nor shall any single or partial
exercise of any such right preclude any other or further exercise of
such right or the exercise of any other right.

Section 13 Further assurances

Each of the parties covenants and agrees to do such things, to attend

such meetings and to execute such further conveyances, transfers,
documents and assurances as may be deemed necessary or advisable
from time to time in order to effectively transfer the Purchased Assets to
the Purchaser and carry out the terms and conditions of this Agreement in
accordance with their true intent.

Section 14 Severability

If any provision of this Agreement shall be determined to be illegal, invalid

or unenforceable, that provision shall be severed from this Agreement and
the remaining provisions shall continue in full force and effect.

Section 15 Governing law

This Agreement shall be governed by and interpreted and enforced in

accordance with the laws of the Province of Alberta and the federal laws
of Canada applicable therein.

Section 16 Counterparts

This Agreement may be executed in any number of counterparts

(including counterparts by facsimile), and all such counterparts taken
together shall be deemed to constitute one and the same instrument.

IN WITNESS WHEREOF the parties have executed this Asset Purchase

Agreement.

[VENDOR]
By:
 Name:
Title:

[PURCHASER]
By:
Name:
Title: