Ontario Offer to Purchase Business Assets by Megadox

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									                                        OFFER TO PURCHASE
                                     (BUSINESS ASSET PURCHASE)
[PURCHASER] (the “Purchaser”) hereby offers to purchase from [VENDOR] (the “Vendor”), all of the
undertaking, property and assets of the Vendor of every kind and description and wherever situated
used in its [location] business (the “Business”), which it carries on from rented premises at [address] (the
“Premises”), as a going concern, including but not limited to the assets described in Schedule “A” hereto
(the “Purchased Assets”), upon and subject to the following terms and conditions, provided that the
Business assets set out in Schedule “B” shall be excluded from this Agreement (the “Excluded Assets”):

1   Purchase Price. The purchase price payable by the Purchaser to the Vendor for the Purchased Assets
    shall be $______________, plus such other sums payable under the terms of this Agreement (the
    “Purchase Price”). In addition to the Purchase Price, the Purchaser will assume the liabilities of the
    Business outlined in Schedule “C” on Closing (“Assumed Liabilities”).

2   Inventory and Supplies. In addition to the other sums payable under this Agreement, the Purchaser
    will pay the Vendor on Closing the value of the then current inventory and supplies of the Business
    on hand as of the Closing Date, valued at lower of cost and net realizable value, as determined by the
    Vendor and Purchaser by conducting of a physical inventory thereof on or immediately before the
    Closing Date, and excluding opened cases or obsolete or unusable inventory and supplies. If the
    Vendor and the Purchaser cannot agree on the value of inventory or supplies the average of their
    assessments shall be used on Closing, the parties shall undertake to readjust following Closing, and
    an independent appraiser of such inventory agreeable to both parties shall be hired and his or her
    decision shall be final and binding.

3   Payment of Purchase Price. The Purchase Price shall be paid and satisfied at Closing by the
    Purchaser as follows:

    (a) immediately upon acceptance of this Offer the Purchaser will deliver to the Vendor’s solicitors a
        certified cheque or bank draft payable to the Vendor’s solicitors in trust in the amount of
        $___________ as a deposit (the “Deposit”); and

    (b) on Closing the Vendor will pay the balance of the Purchase Price, subject to the usual
        adjustments and any adjustments set out in this Agreement, by certified cheque or bank draft.

4   Deposit. If the Purchaser fails to complete this transaction as a result of the breach by the Purchaser
    of any of its obligations in this Offer, the Deposit together with interest thereon (if any) may be
    retained by the Vendor as liquidated damages without prejudice to any other claims of the Vendor
    against the Purchaser, and the Deposit shall be obtained by the Vendor making the requisite demand
    upon the Vendor’s Solicitors. If the Purchaser fails to complete this transaction for any other reason,
    including but not limited to the non-fulfillment of any of the conditions for the Purchaser’s benefit set
    forth in this Offer, the Vendor shall not be entitled to the Deposit and it shall be forthwith released to
    the Purchaser with any accrued interest thereon.

5   Assumed Liabilities: The Vendor represents that the Assumed Liabilities are accurately and
    completely set out in Schedule “C” attached, and hereby indemnifies and saves the Purchaser and the
    Business harmless from any claims of the said creditors in excess of the limits set out in Schedule “C”.
    The Purchaser agrees to assume the Assumed Liabilities on Closing, and hereby indemnifies the
    Vendor from any and all liability and obligation therefore accruing or arising following Closing.
                                                    -2-


6   Adjustments. The Purchase Price shall be subject to adjustment for insurance, rent, utilities,
    Purchaser’s maximum obligations under s. 9 of the Employment Standards Act (if any), deposits,
    prepaid items being transferred to Purchaser and utility deposits, such adjustments being made to
    the amount payable at the time of Closing. If any adjustments are made for the Purchaser’s
    obligations under s. 13 of the Employment Standards Act, then the Purchaser will assume all such
    obligations for and on behalf of the Vendor to the extent therein set out and hereby indemnifies the
    Vendor from all liabilities or obligations to those employees to the extent adjusted.

7   Allocation. The Purchase Price and Assumed Liabilities shall be allocated between the Purchased
    Assets by the parties prior to Closing. If the parties cannot agree on the allocation prior to Closing,
    the accountants for the parties shall make such determination acting together; if they cannot agree, a
    Chartered Accountant acceptable to both shall make the determination and his/her decision shall be
    final and binding. The Vendor and the Purchaser agree that the amounts so attributed to the Assets
    are the respective fair market values thereof, and shall file in mutually agreeable form all elections
    required or desirable under the Income Tax Act (Canada) in respect of the foregoing allocations.

8   Harmonized Sales Tax. The Purchase Price does not include HST. The Purchaser shall pay and remit
    all HST exigible as a result of this transaction, and hereby indemnifies the Vendor in that regard. The
    parties shall each be HST registrants at the time of Closing, and shall complete and execute a valid
    joint election in accordance with section 167 of The Excise Tax Act (Canada). The Purchaser shall file
    such election with Canada Revenue Agency with the Vendor’s GST HST return for the reporting
    period in which the Closing occurs.

9   Investigation. After fulfillment or waiver of all conditions in this Offer which are intended for the
    benefit of the Purchaser, the Purchaser and its advisers shall during business hours have reasonable
    access to the Premises, books, leases and other records of the Business for the purpose of
    investigating the business and affairs of the Business. Within ___ days following acceptance of this
    Offer the Vendor shall deliver copies of the following documentation and information to the
    Purchaser:

    (a) [list documents].

    The Purchaser shall keep all such information confidential. If this transaction closes through not fault
    of the Vendor, all such information and all copies thereof shall be returned to the Vendor.

10 Lease of Business Premises. Within five (5) days after acceptance of this Offer, the Vendor shall
    deliver to the Purchaser a copy of the lease of the Premises (“Lease”). This Offer and any agreement
    arising herefrom shall be conditional until Closing on the Purchaser being able to arrange to assume
    the Lease for the Premises on the same terms as currently set out in the Lease, and on the landlord
    releasing the Vendor from any post-Closing liabilities under the Lease, failing which this agreement
    shall be terminated and null and void. The Vendor and the Purchaser agree to co-operate with each
    other to obtain the requisite consent and release from the Landlord.

11 Third Party Consents. The Purchaser acknowledges that, besides the landlord for the Premises, the
    consents of the following third parties are required for the completion of this Agreement:

    (a) [list].

    The Vendor shall use its best efforts to obtain consents of all persons prior to Closing, and the Vendor
    shall pay the cost of soliciting and obtaining such consents (to a maximum of $_______________). The
    Purchaser will cooperate in obtaining such consents. If any such third party consents are not obtained
                                                   -3-


   prior to Closing, either the Vendor or the Purchaser may terminate this Agreement, in which case the
   Deposit (and any interest thereon) shall be paid to the Purchaser without deduction or setoff.

12 Corporate Resolutions. The Vendor shall comply with the provisions of Ontario or Canada Business
   Corporations Act (as applicable), and shall provide a certified copy of a unanimous Shareholders’
   Resolution of the Vendor on Closing authorizing the entering into and completion of this Agreement.

13 Vendor Representations and Warranties. The Vendor represents and warrants to the Purchaser as
   follows:

   (a) The Vendor is now and on the Closing Date will be a resident of Canada within the meaning of
       the Income Tax Act (Canada).

   (b) All financial statements provided to the Purchaser, as attached hereto and marked as Schedule
       “D”, have been prepared in accordance with generally accepted accounting principles applied on
       a consistent basis and present fairly and completely the financial position of the Business as at the
       date thereof and include and disclose the material liabilities (either actual, accrued or contingent
       and whether direct or indirect) of the Business as of such date.

   (c) The Business is not now, nor at Closing will be bound by any agreement whether written or oral
       with any employee providing for a specified period of notice of termination nor providing for
       any fixed term of employment; and has now and at Closing will have no employees who cannot
       be dismissed upon such notice as is required by statutory or common law. None of the
       employees of the Business are subject to a collective agreement or collective bargaining process
       and the Vendor is not aware of any current attempts to organize the employees under the Labour
       Relations Act or any provincial or federal legislation. All employees of the Business, and their
       current position, compensation and length of service, are set out in Schedule “E”.

   (d) The Closing of this Agreement will not require the approval of any third parties except as
       expressly set out in this Agreement in writing.

   (e) The Vendor now has and at Closing will have a good and marketable title to the Purchased
       Assets, free and clear of any and all claims, liens, encumbrances, deemed trusts and security
       interests whatsoever.

   (f) The tangible Purchased Assets are now and shall at the time of closing be in good condition,
       subject only to reasonable wear and tear incurred in the ordinary course of business.

   (g) The parties in each Assumed Liability are in good standing thereunder.

   (h) Except for the Assumed Liabilities, none of the assets of the Business as listed in the schedules
       attached to this agreement are leased, on consignment, or subject to any conditional sales
       contract.

   (i) Except for the Assumed Liabilities, the Business will not party to any contract or agreement, and
       neither Purchaser nor Business will be subject to any liability or obligation, of the Vendor’s after
       Closing.

   (j) The Business is not now and at Closing will not be in arrears or in default in respect of the filing
       of any required federal, provincial or municipal tax or other return, including income taxes, HST,
                                                    -4-


        source deductions, CPP, UIC, WCB and EHT, and at each of such times (i) all taxes, filing fees
        and other assessments due and payable or collectable from the Business shall have been paid or
        collected, (ii) no claim for additional taxes, filing fees or other amounts and assessments has been
        made which has not been paid, and (iii) to the best of the Vendor’s knowledge, no such return
        shall have contained any misstatement or concealed any statement that should have been
        included therein. The Business has withheld and will withhold up to Closing from each payment
        made to any employee the amount of all taxes (including but not limited to income tax) and other
        deductions required to be withheld therefrom and have paid or will pay such amounts to the
        proper tax or other receiving authority.

    (k) The Business is not subject to any outstanding or threatened litigation, government investigations
        or administrative proceedings of any kind whatsoever.

    (l) The Vendor is not aware of any outstanding orders, directions, notices, requirements, deficiencies
        investigations or proceedings involving the Premises or under the Environmental Protection Act or
        any other legislation of an environmental nature, the Occupational Health and Safety Act, the
        Workplace Safety and Insurance Act, the Employment Standards Act, the Labour Relations Act, the
        Ontario or Canada Human Rights Codes, the Criminal Code, the Building Code Act, the Fire Marshall's
        Act, the Municipal Act or any other legislation regulating the obligations of the Premises to the
        employees of the Business or the use or occupation of the Premises, including but not limited to
        any property standards by-laws.

    (m) To the best of the Vendor's knowledge, information and belief: A. the Premises and the use,
        maintenance and operation thereof have been and are in compliance with all municipal,
        provincial and federal environmental laws related thereto; B. the Vendor has complied with all
        reporting, licensing and monitoring requirements under all environmental laws; C. the Vendor
        has not received any notice of any non-compliance with any environmental laws; D. the Vendor
        has never been convicted of an offence for non-compliance with any environmental laws or been
        fined or otherwise sentenced or settled such prosecution short of conviction with respect to the
        Premises; E. there are no hazardous substances located on or in any of the Premises, and no
        release of any hazardous substances has occurred on or from the Premises and assets of the
        Vendor in question herein or has resulted from the operation of the Premises and the conduct of
        all other activities of the Vendor related thereto; F. the Vendor has not used any of the Premises
        or the 
								
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