Offer to purchase

Ef Bancorp offers to purchase all the __assets __ (shares or assets) of ring a wing 2004 ltd.
Price____CAD$368000____ (EBITA multiple 4x) $92000

Terms:
- Pay 60% upfront, remaining 40% will paid evenly each quarter within 2 years if sales hits
certain target with 2% interest
- The Purchaser is responsible for paying all applicable taxes, including federal sales tax,
provincial sales tax, duties, and any other taxes or charges payable pursuant to the
transfer of the Assets from the Seller to the Purchaser.

Reps and Warranties:

- financial statement is true to their best knowledge
- The Seller is exclusively entitled to possess and dispose of the Assets.
- there is no pending or anticipated claim against the Assets or against the Seller's
ownership
- no third-party contract is outstanding that could result in a claim against or affecting the
Assets in whole or in part either now or in the future
- the Seller does not have any outstanding contracts, agreements, or commitments of any
kind, written or oral, with any third party regarding the Business or the Assets

Info required for due diligence:

- Organization: corporate documents such as articles of incorporation, bylaws, minute
books and organization charts.
- Financials: audited financial statements for 5 years, communications with auditors, credit
reports, financial analyst reports and the company’s budget. Review schedules of debts,
liabilities, inventory and accounts receivable.
- Assets: detailed description of each asset, as well as its location and any documents
related to the transaction involved in acquiring it. Copies of related U.C.C. filings,
mortgages, leases, zoning variances, permits and deeds.
- Intellectual Property: review schedules of copyrights, trademarks, existing and pending
patents.
- Employees: Review lists of employees, including their positions, salaries and longevity.
Company policy addressing hiring, promotion, compensation and benefits is also
essential to review.
- Tax Records: Look through all tax returns going back several years, including provincial,
federal and local tax.
- Contracts: Review all types of contracts entered into by the company. Typically, a
business may have contracts with banks, distributors, employees, other corporations,
contractors and shareholders. Your due diligence should include bank agreements, loans,
collateral pledges, warranties, installment sales, distribution contracts, stock purchases,
mergers, acquisitions or noncompetition agreements.
- Insurance: whether the company’s risks are appropriately covered by insurance.
- tax planning: has he use his capital gain exemption?
-
Prior to close the vendor shall:
- the Seller will provide the Purchaser with duly executed forms and documents evidencing
transfer of the Assets, where required including, but not limited to, bills of sale,
assignments, assurances, and consents.
- The Seller will also co-operate with the Purchaser as needed in order to effect the
required registration, recording, and filing with public authorities of the transfer of
ownership of the Assets to the Purchaser.
- This Agreement may be terminated at any time prior to the Closing by the mutual written
consent of each of the parties
- hold in strict confidence all, and not divulge or disclose any information of any kind
concerning the Company and its business
- be introduced to suppliers and employees
- enter into consulting contract with Barbara for two months and Chris
- enter into the non-compete agreement (chick wing restaurant in London for 2 years)
- Non-Solicitation: the seller will not hire any of their former employees away
-

Purchaser shall have ___45___ days for due diligence and upon waiving this condition shall
close___14__ days thereafter.
Offer valid for ___5___ days. Agreed at London this ___25__ day of January 2022
________________________ _____________________
EF Bancorp Ring a wing

share vs asset:
share: assume any liabilities, including any contingent liability, such as contract disputes from
suppliers, employee lawsuits, have tax advantage
asset: can buy any asset (entire company including any brand name), does not have the legal
liabilities
typical will buy asset if not enough information
buy share in the case of the company has non-transferable license
pension fund is not allowed to buy share, only buy asset
compete with them, then take risks, buy shares and help seller use capital gain exemption

Price:
- not a lot of buyers
- always want a vendor note to be secure
- something goes back: claw back policy

offer valid: 2-5 days

due diligence: 45-90 days
close: 14 days