Offer to Purchase
[Buyer Name] (the “Buyer”) hereby offer to purchase from [Seller Name] (the “Seller”), all of the
undertaking, property and assets of the Seller of every kind and description and wherever situated
used in its [Business Name] business (the “Business”), which it carries on from rented premises at
[Business 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 Irrevocable Period. This Offer shall be irrevocable by the Buyer until 5:00 on [Irrevocable
Date], after which time, if not accepted, this Offer shall be null and void and the Deposit
returned to the Buyer without interest or deduction. Upon written acceptance of this Offer by the
Seller, this Offer to Purchase shall constitute a binding agreement of purchase and sale between
the Buyer and the Seller on the terms herein set out.
2 Closing Date. Time shall be of the essence. The closing of this transaction shall take place on
[Closing Date], or such earlier or later date as may be mutually agreed to between the parties
(the “Closing Date” or “Closing”) at the office of the Buyer’s solicitors or at such other place as
may be approved in writing by the parties or their respective solicitors.
3 Purchase Price. The purchase price for the Purchased Assets shall be $[Purchase Price], plus
inventory under paragraph 442 and such other sums payable under the terms of this Agreement
(the “Purchase Price”).
4 Inventory and Supplies. In addition to the other sums payable under this Agreement, the Buyer
will pay the Seller on Closing the value of liquor, food and beverages on hand as of the Closing
Date (“Inventory”), valued at lower of cost and net realizable value, as determined by the Seller
and Buyer by conducting a physical inventory on or immediately before the Closing Date. If the
Seller and the Buyer cannot agree on the value of Inventory, the average of their assessments
shall be used on Closing, the parties shall undertake to readjust following Closing, and an
independent appraiser of Inventory agreeable to both parties shall be hired and his or her decision
shall be final and binding. The Buyer shall not be required to purchase: (a) Inventory which was
purchased more than two months prior to Closing; or (b) Inventory which is damaged, unsaleable
or unusable, as the case may be; or (c) more than $[Inventory Maximum] in Inventory in the
total aggregate. All Inventory not acquired by the Buyer under this Agreement shall remain the
property of the Seller and shall be removed from the Premises by the Seller on or before Closing
or within seven days after Closing.
5 Payment of Purchase Price. The Purchase Price shall be paid as follows:
(a) Immediately upon acceptance of this Offer, the Buyer will deliver to the Buyer’s solicitors a
cheque or bank draft payable to the Buyer’s solicitors in trust in the amount of $[Deposit
Amount] as a deposit (the “Deposit”), to be held in a non-interest bearing account pending
completion or termination of this Agreement; and
(b) On Closing the Seller will pay the balance of the Purchase Price, subject to the usual
adjustments and any adjustments set out in this Agreement, by certified funds.
6 Deposit. If the Buyer fails to complete this transaction as a result of the breach by the Buyer of
any of its obligations in this Offer, the Deposit together with interest thereon (if any) shall be
delivered to the Seller as liquidated damages and in final settlement of any and all claims of the
Seller against the Buyer of any kind whatsoever arising out of such failure to complete including
costs, expenses and damages under any theory or rule of law, and the Deposit shall be obtained
by the Seller making the requisite demand upon the Buyer’s solicitors. If the Buyer fails to
complete this transaction for any other reason, including but not limited to the non-fulfillment of
any of the conditions for the Buyer’s benefit set forth in this Offer or the Seller’s default, the
Seller shall not be entitled to the Deposit and it shall be immediately released to the Buyer
without deduction or setoff.
7 Adjustments. The Purchase Price shall be subject to adjustment for rent, utilities, Buyer’s
maximum obligations under s. 9 of the Employment Standards Act (if any), and any other
adjustments on a transaction of this kind as appropriate, such adjustments being made to the
amount payable at the time of Closing. If any adjustments are made for the Buyer’s obligations
under s. 9 of the Employment Standards Act, then the Buyer will assume all such obligations for
and on behalf of the Seller to the extent therein set out and hereby indemnifies the Seller from all
liabilities or obligations to those employees to the extent adjusted.
8 Assumed Liabilities: The Buyer shall not assume any liabilities of the Seller of any kind, except
for as included in the adjustments under paragraph 776.
9 Allocation. The Purchase Price shall be allocated between the Purchased Assets by the parties
prior to Closing, provided no more than $1.00 will be allocated to goodwill. If the parties can not
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 or her decision shall be final and binding. The Seller and
the Buyer 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.
10Goods and ServicesHarmonized Sales Tax. The Purchase Price does not include GSTHST. The Formatted: Bullets and Numbering
Buyer shall pay and remit all GSTHST exigible as a result of this transaction, and indemnifies
the Seller in that regard. The Seller and the Buyer shall each be GSTHST registrants at the time
of Closing, and shall complete and execute a valid joint election as provided in subsection 167(1)
of The Excise Tax Act (Canada). The Buyer shall file such election with Revenue Canada Canada
Revenue Agency with the Seller’s GSTHST return for the reporting period in which the Closing
10 Formatted: Outline numbered + Level: 1 +
Numbering Style: 1, 2, 3, … + Start at: 1 +
11RST. The Purchase Price does not include Retail Sales Tax (“RST”). On Closing the Seller shall Alignment: Left + Aligned at: 0" + Tab after:
collect and the Buyer shall pay such RST, as may be exigible on the Purchased Assets. The 0.25" + Indent at: 0.25", Tab stops: 0.5", List
Buyer shall pay and remit all RST exigible as a result of this transaction, and indemnifies the
Seller in that regard. Formatted: Bullets and Numbering
1211 Bulk Sales Act. This transaction will be completed under and pursuant to the Bulk Sales Act Formatted: Bullets and Numbering
(Ontario), and the Seller will comply with the requirements of that Act at its expense.
1312 Investigation. The Buyer and its advisers shall during business hours have reasonable access Formatted: Bullets and Numbering
to the Premises, books, leases and other records of the Business for the purpose of investigating
the business and affairs of the Business. Within one week following acceptance of this Offer the
Seller shall deliver copies of the following documentation and information to the Buyer, or shall
make the following available for inspection including the right to inspect originals, make notes
(a) Franchise agreement and documents (if any);
(b) Lease or sublease;
(c) Liquor license files and documents (if any);
(d) List of employees by name including date of first hire, current position held, hours of work,
and rate of pay, compensation or benefits, and all employee files;
(e) List of all suppliers including name, address, contact particulars, and copies of any relevant
(f) List of all fixtures, furnishings, equipment and leasehold improvements;
(g) Preliminary list of Inventory;
(h) All tax or government returns or assessments of any kind, including income tax, source
deduction, WSIB, RST and GSTHST, and all government or regulatory correspondence or
files, for the past two years;
(i) Cash register tapes and bank deposits for the past twelve months;
(j) Expenses by month for the past twelve months;
(k) Cash journal and general ledger for the past twelve months;
(l) All franchisor reports (if any) for the past twelve months;
(m) Any internal or accountant prepared financial statements since the location opened for
business, including access to accountant working papers;
(n) A balance sheet and income statement as of each of the last two fiscal year ends;
(o) A year to date balance sheet and income statement; and
(p) Such other documentation as the Buyer shall reasonably request.
The Buyer shall keep all such information confidential. If this transaction closes through not fault
of the Seller, all such information and all copies thereof shall be returned to the Seller.
1413 Third Party Consents. The Buyer acknowledges that, besides the landlord for the Premises Formatted: Bullets and Numbering
and the franchisor, and assignment of the liquor license for the Premises, no other consents of
third parties are required for the completion of this Agreement.
1514 Franchisor and Landlord Approval. This Agreement and the obligations of the Buyer Formatted: Bullets and Numbering
hereunder shall be conditional as set out in sub-paragraphs 23(b)24(b)23(b) and 23(c)24(c)23(c)
until on the Buyer being approved by the franchisor and the landlord to the extent required by the
franchise agreement and lease in question, on terms satisfactory to the Buyer in its sole and
absolute discretion. The Seller and Buyer shall work together and use their best efforts to obtain
consents of the franchisor and landlord prior to Closing. The Seller shall pay all transfer or
assignment fees or expenses charged by the franchisor or the landlord.
1615 Transfer of Liquor License. The Seller will ensure that the current liquor license for the Formatted: Bullets and Numbering
Premises (“Liquor License”) is in good standing up to and including Closing. The Seller and
Buyer agree they will work together to have the Liquor License transferred to the Buyer, and
agree that on acceptance of this Offer they will each immediately thereafter execute an
Application to Transfer the Liquor License and an Application for Authorization to Contract Out
to be delivered to the Alcohol and Gaming Commission by the Buyer immediately thereafter.
This Agreement and the obligations of the Buyer hereunder shall be conditional until Closing on
the Buyer obtaining an Authorization to Contract Out and satisfying itself in its sole and absolute
discretion that it will be able to have the Liquor License transferred to the Buyer following
Closing on terms and conditions satisfactory to it in its sole and absolute discretion.
1716 Corporate Resolutions. The Seller shall comply with the provisions of Ontario or Canada Formatted: Bullets and Numbering
Business Corporations Act (as applicable), and shall provide a certified copy of a unanimous
Shareholders’ Resolution of the Seller on Closing authorizing the entering into and completion
of this Agreement.
1817 Seller Representations and Warranties. The Seller represents and warrants to the Buyer as Formatted: Bullets and Numbering
(a) The Seller is now and on the Closing Date will be a resident of Canada within the meaning of
the Income Tax Act (Canada).
(b) The Seller will, immediately upon execution of this Agreement, apply for clearance
certificates under the Retail Sales Tax Act and Workplace Safety and Insurance Act and will
keep the Buyer fully informed of all communications in that regard;
(c) All financial information provided to the Buyer, including all Bulk Sales Act documentation,
accurately, fairly and completely presents the financial position of the Business as at the
dates thereof and includes and discloses the material liabilities (either actual, accrued or
contingent and whether direct or indirect) of the Business as of such date.
(d) The Seller is financially solvent and will be able to comply with the requirements of the Bulk
Sales Act, including delivering the Statement required under s. 4 of that Act, without having
to obtain consents or waivers from any unsecured creditors or a court order approving this
transaction, and without relying upon any receivership or insolvency based exceptions.
(e) 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 Seller 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,
will be set out in the disclosure documents required under paragraph 121312 above.
(f) The Closing of this Agreement will not require the approval of any third parties except as
expressly set out in this Agreement in writing.
(g) The Seller 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
(h) 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.
(i) 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.
(j) Except as expressly set out in this Agreement, the Buyer will not after Closing be bound to or
by any Seller contract, agreement, liability or obligation.
(k) The Seller 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,
GSTHST, RST, source deductions, CPP, UIC, WSIB and EHT, and at each of such times (i)
all taxes, filing fees and other assessments due and payable or collectable from the Seller
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
Seller’s knowledge, no such return shall have contained any misstatement or concealed any
statement that should have been included therein. The Seller 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.
(l) The Seller is not subject to any outstanding or threatened litigation, government
investigations or administrative proceedings of any kind whatsoever.
(m) The Seller 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.
(n) To the best of the Seller'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 Seller has complied with all
reporting, licensing and monitoring requirements under all environmental laws; C. the Seller
has not received any notice of any non-compliance with any environmental laws; D. the
Seller 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 ha