When a person wants to acquire all or a substantial part of a business without being responsible for its liabilities, that person will seek to acquire the company's assets. This type of acquisition will proceed differently depending on the particular circumstances of the transaction. Some sales begin with a simple letter of intent (see template Y02200) that summarizes the main aspects of the transaction, which is then followed by an asset purchase agreement (see template Y02500) that contains all details concerning the terms of sale. Others are initiated by submitting a very detailed offer that binds the potential buyer and is followed by a closing certificate (see template Y02600) and the execution of all other documents required to complete the transfer of ownership of the assets.

This template sets out, in a detailed manner, all the financial, legal and other elements usually found in an asset purchase offer.

We recommend using this template as part of a proposed acquisition, when the offeror wants the offeree to be able to immediately accept the contractual terms of the offer. This strategy helps reduce the risk that the transaction be aborted should a disagreement arise regarding any unspecified term, which can happen when the process is commenced by a simple letter of intent (see template Y02200).

This offer is usually followed by a closing certificate (see document Y02.600 of the Business Precedents), rather than a sale of business agreement containing the full text of the offer (see document Y02.500 of the Business Precedents), which rather complements the letter of intent described above.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Accounts Payable
0.01.02 Accounts Receivable
0.01.03 Activities
0.01.04 Adverse Event
0.01.05 Best Efforts
0.01.06 Breach
0.01.07 Clients
0.01.08 Closing Certificate
0.01.09 Closing Date
0.01.10 Confidential Information
0.01.11 Creditor
0.01.12 Domain Name
0.01.13 Effective Date
0.01.14 Employees
0.01.15 Encumber or Encumbrance
0.01.16 Equipment
0.01.17 Force Majeure
0.01.18 Fundamental Provisions
0.01.19 Hazardous Materials
0.01.20 Indemnification Warranty
0.01.21 Intellectual Property
0.01.22 Interim Period
0.01.23 Law
0.01.24 Legal Representatives
0.01.25 Notice of Acceptance and Disclosure
0.01.26 Offer
0.01.27 Ordinary Course of Business
0.01.28 PARTY
0.01.29 Person
0.01.30 Prime Rate
0.01.31 Products
0.01.32 Related Person
0.01.33 Services
0.01.34 Subject Assets
0.01.35 Supplier
0.01.36 Transaction
0.01.37 Vehicles
0.01.38 Year
0.02 Precedence
0.03 Jurisdiction
0.03.01 Governing Law
0.03.02 Non-Compliance
a) Severability
b) Substitute Provision
0.04 Miscellaneous
0.04.01 Cumulative Rights
0.04.02 No Waiver
0.04.03 Time Limits
a) Time of the Essence
b) Computation of Time
c) Delays
0.04.04 Financial References
0.04.05 Cross-References
0.04.06 Gender and Number
0.04.07 Headings
0.04.08 Presumptions
0.04.09 Knowledge
0.04.10 Approval
0.04.11 Accounting Standards
1.00 PURPOSE
1.01 Offer to Purchase
1.02 Conditions
1.02.01 Required by the OFFEROR
1.02.02 Election
2.00 CONSIDERATION
2.01 Amount Offered
2.02 Adjustment
2.03 Allocation
2.04 GST/QST
3.00 TERMS OF PAYMENT
3.01 Deposit
3.01.01 Remittance
3.01.02 Cashing
3.01.03 Penalty
3.01.04 Refunded
3.02 Reserve for Unpaid Creditors
3.03 Initial Instalment
3.04 Balance
3.05 Third-Party Claim
3.06 Interest
3.07 Promissory Note
3.08 Expiry of Term
3.09 Advance Payment
3.10 Third-Party Owner
3.11 Loss of Term
4.00 SECURITY
4.01 In Favour of OFFEROR
4.01.01 Indemnification Warranty
4.02 In Favour of OFFEREE
4.02.01 Movable Hypothec Without Delivery
4.02.02 Immovable Hypothec
4.02.03 Suretyship
a) Intervention and Undertaking
b) Solidary Liability
c) Waiver
d) Presumption
e) Scope
f) Jurisdiction
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Status
5.02 Authority
5.03 Binding Agreement
5.04 Canadian Resident
5.05 Canadian Status
5.06 Commission
5.07 Insurance
5.08 Nominee
5.09 Fundamental Provisions
5.10 Disclosure
5.11 Legal Proceedings
6.00 REPRESENTATIONS AND WARRANTIES OF OFFEROR
6.01 Status
6.02 Authority
6.03 Binding Agreement
6.04 Canadian Resident
6.05 Canadian Status
6.06 Commission
6.07 Insurance
6.08 Nominee
6.09 Fundamental Provisions
6.10 Disclosure
6.11 Legal Proceedings
7.00 REPRESENTATIONS AND WARRANTIES OF OFFEREE
7.01 Status/Incorporation
7.01.01 Status
7.01.02 Authority
7.01.03 Binding Agreement
7.01.04 Canadian Resident
7.01.05 Canadian Status
7.01.06 Commission
7.01.07 Insurance
7.01.08 Nominee
7.01.09 Fundamental Provisions
7.01.10 Disclosure
7.01.11 Insolvency
7.02 Subject Assets
7.02.01 Ownership
a) Exclusivity
b) Relationships
c) Extraordinary Loss
7.02.02 Quality
7.02.03 Safety
7.02.04 Quiet Enjoyment
7.02.05 Encumbrance
a) Current Situation
b) Undertaking
7.02.06 Inventory
7.03 Human Resources
7.03.01 Labour Standards
7.03.02 Health and Safety
7.03.03 Collective Labour Agreement
7.03.04 Group Plans
7.03.05 Pay Equity
7.03.06 Key Employees
7.04 Corporate Finance
7.04.01 Loan Agreements
7.04.02 Default
7.04.03 Breach
7.05 Financial Management
7.05.01 Financial Statements
7.05.02 Financial Position
7.05.03 Suretyship and Guarantees
7.05.04 Accounting Methods
7.05.05 Advances
7.05.06 Arrears
7.06 Tax Status
7.06.01 Taxation
7.06.02 Deductions at Source
7.07 Occupancy Titles
7.07.01 Valid Titles
7.07.02 Lease
7.08 Procurement
7.08.01 Equipment
a) Ownership
b) Condition
c) Maintenance and Warranties
d) Encumbrance
7.08.02 Material Agreements
7.08.03 Relations with Suppliers
7.08.04 Parts
7.09 Operations
7.09.01 Material Agreements
7.09.02 Clients
7.09.03 Warranties
a) List
b) Claims
7.09.04 Conduct of Business
7.09.05 Discriminatory Practices
7.09.06 Behaviour
7.10 Permits and Licences
7.10.01 List
7.10.02 Situation
7.10.03 Compliance
7.10.04 Restriction
7.11 Environment
7.11.01 Hazardous Materials
7.11.02 Compliance with Environmental Laws
7.11.03 Location of Use
7.11.04 Notice of Default
7.12 Intellectual Property
7.12.01 List
7.12.02 Copyrights
7.12.03 Trademarks
7.12.04 Patents
7.12.05 Trade Secrets / Know-How
7.13 Information Communication Technologies
7.13.01 Computer and Automation Equipment
7.13.02 Software
7.13.03 Domain Names
7.13.04 Electronic Commerce
7.14 Advertising and Promotional Means
7.15 Marketing
7.15.01 Commercial Pratices
7.15.02 Consumer Protection
7.16 Customer Credit
7.16.01 Accounts Receivable
7.16.02 Consignment
7.17 Insurance
7.17.01 List of Policies
7.17.02 Coverage
7.17.03 Good Standing
7.17.04 Claims
7.18 Legal Proceedings
7.19 Miscellaneous
7.19.01 Creditors
7.19.02 Sufficiency
7.19.03 Use
7.19.04 Waiver and Discharge
7.19.05 Reason for Sale
7.19.06 Disclosure
8.00 MUTUAL DUTIES AND OBLIGATIONS
8.01 Confidential Information
8.01.01 Undertaking
8.01.02 End of Agreement
8.02 Disclosure of Offer
9.00 DUTIES AND OBLIGATIONS OF OFFEROR
9.01 Prior to Closing Date
9.01.01 Penalty
9.01.02 Conditions
9.01.03 Continuous Information
9.02 After Closing Date
9.02.01 Release and Discharge or Indemnification
9.02.02 Inventory
9.02.03 Insurance
9.02.04 Contributions
9.02.05 Lease
9.02.06 Staff
9.02.07 Taxes
9.02.08 Claims Assumed by OFFEROR
10.00 DUTIES AND OBLIGATIONS OF OFFEREE
10.01 Prior to Closing Date
10.01.01 Audit
a) Access to Documents
b) Default
10.01.02 Encumbrance
10.01.03 Taking of Inventory
10.01.04 Payment of Suppliers
10.01.05 Assignment of Lease
10.01.06 Alcohol Licence
10.02 After Closing Date
10.02.01 Transition
10.02.02 Delivery
10.02.03 Non-Competition
a) Scope
b) Adjustment
c) Penalty
d) Other Remedy
10.02.04 Non-Solicitation of Clients
a) Undertaking
b) Penalty
10.02.05 Non-Solicitation of Employees
a) Scope
b) Penalty
10.02.06 No Allocation
a) No Consideration for a Restrictive Covenant
b) Allocation in respect of Tax Authorities
c) Allocation in respect of Provincial Tax Authorities
d) Indemnification
10.02.07 Dismissal
10.02.08 Leases and Leasing Agreements
10.02.09 Corporate Name
10.02.10 List of Creditors
10.03 Indemnification
10.03.01 “Loss”
10.03.02 Scope
10.03.03 Procedure
10.03.04 Deductible
10.03.05 Prescriptive Period
10.03.06 Limitation on Claims
10.03.07 Exemption from Liability
11.00 SPECIAL PROVISIONS
11.01 Assignment
11.01.01 Prohibition
11.01.02 Effect of Breach
11.01.03 Exception
11.02 Force Majeure
11.02.01 No Default
11.02.02 Duty
11.02.03 Rights of Other PARTY
11.03 Drafting Fees
11.04 Registration of the Offer
11.05 Further Assurances
11.06 Remedies
11.06.01 Election
11.06.02 No Limitations
11.07 Closing Session
11.08 Taking of Inventory
11.09 Prescriptive Period
11.10 Pre-Incorporation Agreement
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Dispute Resolution
12.02.01 Good Faith Negotiations
12.02.02 Mediation
12.02.03 Arbitration
a) Notice
b) Reply
c) Appointment of a Third Arbitrator
d) Confidentiality
e) Hearing
f) Ruling
g) Costs
h) Supplementary Rules
12.03 Election
12.04 Counterparts
12.05 Amendment
12.06 No Waiver of Rights
12.07 Electronic Transmission
12.08 Language
13.00 TERMINATION OF OFFER
14.00 EFFECTIVE DATE
14.01 Acceptance
14.02 Closing Session
14.03 Time Limit
15.00 DURATION
16.00 SCOPE


SCHEDULE A – EXCERPT OF A RESOLUTION OF THE OFFEROR
SCHEDULE B – EXCERPT OF A RESOLUTION OF THE OFFEREE
SCHEDULE 0.01.25 – NOTICE OF ACCEPTANCE AND DISCLOSURE
SCHEDULE 0.01.34 (a) – IMMOVABLE
SCHEDULE 0.01.34 (c) – EQUIPMENT OTHER THAN VEHICLES, OFFICE FURNITURE, AND COMPUTER AND AUTOMATION EQUIPMENT
SCHEDULE 0.01.34 (d) – VEHICLES
SCHEDULE 0.01.34 (e) – OFFICE FURNITURE
SCHEDULE 0.01.34 (f) – COMPUTER AND AUTOMATION EQUIPMENT
SCHEDULE 0.01.34 (j) – PERMITS AND LICENCES
SCHEDULES 0.01.34 (k) – INTELLECTUAL PROPERTY
SCHEDULE 0.01.34 (l) – LEASE
SCHEDULE 3.07 – PROMISSORY NOTE
SCHEDULE 4.02.01 – MOVABLE HYPOTHEC WITHOUT DELIVERY
SCHEDULE 4.02.03 – INTERVENTION OF SURETY
SCHEDULE 4.02.03 (a) – INTERVENTION OF SURETY
SCHEDULE 7.05.01 – FINANCIAL STATEMENTS