ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of December 31, 1996, by and among CAN-AM INTERNATIONAL INVESTMENT
CORP., a British Columbia corporation ("Buyer"), COLIN A. JONES ("Jones"), and
J&M WHOLESALE, LTD., a British Columbia corporation ("Seller").
RECITALS
WHEREAS, the Seller desires to sell to Buyer, and Buyer desires to
purchase from the Seller certain assets of the Seller; and
WHEREAS, Jones is the sole shareholder of Seller;
NOW, THEREFORE, in consideration of the covenants, agreements,
warranties and representations contained in this Agreement, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:
1. Transfer of Cigar Business Assets. Subject to the terms and
conditions set forth in this Agreement, at the closing of this transaction (the
"Closing"), Buyer shall acquire from Seller, and Seller shall sell, transfer,
assign and convey to Buyer, all of that portion of Seller's cigar business and
operations, including, without limitation, all properties, inventory and assets
of every kind, nature and description, tangible or intangible relating to the
distribution of cigars, humidors and related items, along with all related
contract rights, security deposits, rights to related accounts receivable as of
December 31, 1996, related funds in bank accounts of the Seller, and all cigar
and humidor related trademarks and trade names owned by the Seller; including,
without limitation, those specific assets identified in Exhibit "A" attached
hereto and made a part hereof (the foregoing are collectively referred to as the
"Assets") free and clear of any liens or encumbrances. Seller has examined the
condition of the Assets and accepts them "as is," but free and clear of any
liens or encumbrances. Contemporaneously with such transfer, assignment and
conveyance, Seller shall deliver to Buyer possession of the Assets. All Assets
which are personal property shall be transferred, assigned and conveyed by a
Bill of Sale substantially in the form attached hereto as Exhibit "B". Seller
shall deliver and execute all documents and instruments which Buyer shall
reasonably request in order to comply with any statute, rule, regulation or law
applicable to the transfer of the Assets or which are necessary to complete or
perfect the transfer of title to the Assets.
2. Assumption of Liabilities. Buyer shall all liabilities of Seller
relating to the cigar business, including the following:
a. Barton Loan. Buyer specifically assumes liability for that
"Business Loan Agreement" dated September 5, 1996 for $110,000 among
Greg P. Lambrecht, Colin A. Jones, ROSE HEARTS, INC., CAN-AM
INTERNATIONAL INVESTMENT CORP. and J&M WHOLESALE LTD.
Seller will remain liable for all non-Cigar related liabilities.
3. Assignment of Contract Rights and Licenses.
a. Contracts Assigned. The contracts identified on Exhibit "C"
shall be assigned by Seller to Buyer by an Assignment of Contract
Rights substantially in the form attached as Exhibit "D".
b. Contracts Not Assumed. The contracts identified on Exhibit
"E" shall not be assumed by Buyer and according to the dispositions
indicated in Exhibit "E" shall be either cancelled by Seller as of the
Closing or continued in Seller's name at Seller's discretion. Seller
specifically shall not assign its lease to Buyer and Buyer shall assume
no liability under such lease.
c. Cigar-Related Licenses and Permits. Seller shall assign to
Buyer all of its cigar-related licenses, permits or arrangements or
approvals with any governmental authority, including, but not limited
to, any license to do business, collect taxes, and all licenses
relating to the sale of tobacco products. If, because of governmental
regulation, such licenses are non-assignable, Seller shall take all
steps necessary to obtain such new licenses or permits required for
Buyer to continue the cigar-related operations which were conducted by
Buyer prior to the date of this Agreement.
4. Contact with Seller's Customers. As soon as possible following
execution of this Agreement, Seller shall contact each of its cigar-related
customers to inform them that their accounts have been transferred to Buyer.
Such contact shall be made in writing in the form set forth on Exhibit "F"
hereto (the "Customer Message"). The Customer Message shall inform Seller's
customers that their existing contracts will be honored by Buyer and will
provide Seller's customers with the name of a contact person designated by Buyer
who will be able to answer questions and will provide all necessary additional
information to Seller's customers to enable them to become customers of Buyer
with no interruption in service.
5. Consideration. As consideration for the agreements and the transfer
of Assets as set forth herein, Buyer shall issue to Jones, Seller's sole
shareholder:
a. Ninety-Five (95) shares of the issued and outstanding Class
"A," non- voting, no-par value common stock of Buyer representing
approximately forty-seven percent (47%) of such Class "A" shares;
b. One (1) share of the issued and outstanding Class "B,"
voting, no-par common stock of Buyer representing fifty percent (50%)
of such Class "B" shares; and
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c. The parties acknowledge that Jones will subsequently, but
also on December 31, 1996, transfer the shares referred to in Sections
5.a. and 5.b. to Premium Cigars International, Inc., an Arizona
corporation ("PCI"), in exchange for shares of PCI in a transaction in
which PCI will acquire all of the issued and outstanding shares of
Buyer.
6. Inventory. That portion of the Assets which consist of inventory
shall be identified as of the date hereof and each specific item of inventory
shall be valued based upon Seller's cost for such inventory as evidenced by
written invoices and purchase orders. The invoices and purchase orders
evidencing the inventory shall be delivered to Buyer at or before Closing.
7. Books and Records. Seller shall make available to Buyer, during
regular business hours all of the books and records of Seller and Buyer shall be
permitted to make copies and extracts therefrom.
8. Covenant Not to Compete.
a. Interest to be Protected. The parties acknowledge that
during the time in which Seller owned the Assets, Seller and Jones had
the opportunity to meet, work with and develop close working
relationships with the clients of the business in which the Assets were
used on a first-hand basis and gained valuable insight as to the
clients' operations, personnel and need for services. In addition,
Seller and Jones were exposed to, had access to, and were required to
work with, a considerable amount of confidential and proprietary
information, including but not limited to: information concerning
methods of operation, financial information, strategic planning,
operational budget and strategies, computer systems, marketing plans
and strategies and customer lists related to this Assets. The parties
expressly recognize that should Seller compete with the Buyer in any
manner whatsoever, it could seriously impair the goodwill and otherwise
diminish the value of the Assets. The parties acknowledge that the
covenant not to compete contained in this section has an extended
duration; however, they agree that this covenant is reasonable and it
is necessary for the protection of Buyer's investment in the Assets.
For these and other reasons, the parties are in full and complete
agreement that the following restrictive covenants are fair and
reasonable and are freely, voluntarily and knowingly entered into.
Further, each party was given the opportunity to consult with
independent legal counsel before entering into this Agreement.
b. Restrictions on Competition. Seller and Jones agree that
they shall not, during the term of this Agreement and for a period of
two (2) years from the date of Closing, directly or indirectly, either
as principal, partner, shareholder, joint venturer, officer, director,
consultant, member, employee or otherwise, own any interest in, manage,
control, participate in, consult with, render services for, or in any
manner engage in any business competing, directly or indirectly, with
the business of Buyer in
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any state of the United States or foreign country in which the Company
is conducting business. At any time and from time to time, each party
agrees, at its expense, to take action and to execute and deliver
documents as may be reasonably necessary to effectuate the purposes of
this Covenant. Notwithstanding the foregoing, Seller or Jones may,
without violating this Section 8, act as an officer, director, agent or
shareholder of Buyer or any parent corporation or affiliate of Buyer.
Seller or Jones may, without violating this Section 8, own up to two
percent (2.0%) or less of the total outstanding ownership of any
entity, regardless of competitive relationship.
c. Management Agreement. Notwithstanding the foregoing, Buyer
shall, effective January 1, 1997, enter a Management Agreement with
Seller whereby Seller shall provide certain services to Buyer and be
reimbursed for certain expenses or percentages of Buyer's sales until
such Management Agreement is terminated in accordance with its terms.
Seller's activities pursuant to such Management Agreement shall not be
deemed a violation of this Section 8.
d. Judicial Amendment. If the scope of any provision of this
Section of this Agreement is found by any Court to be too broad to
permit enforcement to its full extent, then such provision shall be
enforced to the maximum extent permitted by law. The parties agree that
the scope of any provision of this Section of this Agreement may be
modified by a judge in any proceeding to enforce this Agreement, so
that such provision can be enforced to the maximum extent permitted by
law. If any provision of this Agreement is found to be invalid or
unenforceable for any reason, it shall not affect the validity of the
remaining provisions of this Agreement.
e. Injunction; Remedies for Breach. Since a breach of the
provisions of this section of this Agreement could not adequately be
compensated by money damages, the Buyer shall be entitled, in addition
to any other right or remedy available to it at law or equity, to an
injunction restraining the breach or threatened breach and to specific
performance of any provision of this section of this Agreement, and, in
either case, no bond or other security shall be required in connection
therewith, and the parties hereby consent to the issuance of such an
injunction and to the ordering of specific performance.
9. Closing Costs and Prorations.
a. Personal property taxes and other special assessments,
shall be prorated as of the Closing, based upon the latest available
information. Seller shall pay all prior year taxes, interest and
penalties, if any.
b. All insurance on the Assets shall be cancelled by Seller
effective as of the Closing.
10. Closing Date. The purchase and sale of the Assets shall be
consummated and become effective as of December 31, 1996 (the "Closing Date").
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11. Deliveries at Closing.
a. Buyer's Deliveries. On the Closing Date, Buyer shall
deliver to Seller the following items:
i. A resolution of Buyer approving the transactions
set forth in this Agreement.
ii. Certificate Number 4 for Ninety-Five (95) shares
of the issued and outstanding Class "A," non-voting, no-par
value common stock of Buyer representing approximately
forty-seven percent (47%) of such Class "A" shares; and
iii. Certificate Number 2 for One (1) share of the
issued and outstanding Class "B," voting, no-par common stock
of Buyer representing fifty percent (50%) of such Class "B"
shares.
b. Seller's Deliveries. On the Closing Date, Seller shall
deliver to Buyer the following items:
i. The signed Bill of Sale;
ii. The signed Assignment of Contract Rights;
iii. Proof satisfactory to Buyer that the Customer
Message was sent;
iv. The Assets identified on Exhibit "A" attached
hereto.
v. All other documents to be signed by the parties as
provided herein.
12. Conditions to Closing. The following items shall be conditions to
the closing of this transaction and must be satisfied as of the Closing Date:
a. The parties shall be in full compliance with and shall have
performed or be prepared to perform, as applicable, all covenants and
pre-closing agreements contained in this Agreement and all of the
representations, warranties and covenants contained in this Agreement
shall be true and correct in all material respects.
b. Each item required to be delivered by each party pursuant
to Section 11 hereof is signed and delivered to Escrow Agent.
c. There shall be no judgment, decree, injunction, ruling or
order of any court agency or other instrumentality outstanding against
Seller which prohibits or materially restricts or delays the
consummation of the closing.
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d. Seller shall send the Customer Message to its customers and
provide proof thereof to Buyer.
13. Professional Fees. Unless specifically provided otherwise in this
Agreement, each party shall bear its own costs related to the preparation of
this Agreement and the consummation of the transactions contemplated hereby,
including but not limited to attorneys' and accountants' fees.
14. Representations, Warranties and Covenants.
a. Subject to information that Seller could not have known
with reasonable diligence, Seller hereby represents, warrants and
covenants to Buyer the following:
i. This Agreement and all documents required hereby
to be executed by Seller are and shall be valid, legally
binding obligations of and enforceable against Seller in
accordance with their terms;
ii. The execution, delivery and performance of this
Agreement by Seller and the compliance with the terms hereof
by Seller do not and will not violate any statute, order, rule
or regulation applicable to Seller of any court, regulatory
authority or governmental body and, do not conflict with or
result in the breach of any of the terms of, or constitute a
default under, any note, indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to
which it is a party or by which it may be bound which
conflict, breach or default would have a material adverse
effect on Seller's ability to consummate the transactions
contemplated hereby;
iii. There is no suit, action, claim, investigation,
or legal or administrative proceeding pending or threatened
against Seller or its Assets which might have a materially
adverse effect on Seller's ability to consummate the
transactions contemplated hereby;
iv. Any representations or warranties made or to be
made by Seller are true and correct;
v. The Assets are lawfully owned by Seller and that
Seller has the right to sell the Assets free and clear from
any and all encumbrances and liens. Seller shall provide
written documentation to Buyer satisfactory to Buyer from each
of Seller's vendors to the effect that each vendor has been
paid in full and has no claim to any of the Assets.
vi. There is no financing statement now on file
covering any of the Assets or in which Sellers are named as or
sign as debtors;
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vii. With respect to each account receivable
transferred hereunder; (1) each account represents a bona
fide, existing, valid and legally enforceable indebtedness of
the customer named therein, payable in the amount, time and
manner stated in the invoice therefor; (2) each account,
delivery receipt and invoice represents a bona fide sale in
the ordinary course of Seller's business and represents the
kind, quality and quantity of the goods or services described
therein; that said goods or services described therein have
been completely delivered or performed and, at the time of
delivery has been accepted by the Seller's customer; (3) each
account is free from any claim for credit, deduction,
discount, allowance, dispute, defense, set-off or
counterclaim;
viii. The customer list attached hereto as Exhibit
"G" is complete and accurate;
ix. There are no pending actions, proceedings,
investigations or claims of any nature pending or threatened
which question the validity of this Agreement or the
transactions contemplated herein, or which might result,
either individually or in the aggregate, in any change in the
Assets, condition, affairs or prospects of Seller's business;
x. Seller has no service or maintenance contracts or
any other agreements with any other party which in any way
affect the Assets and Seller is not in default of any contract
listed on Exhibits "C" or "E" and the contracts on Exhibits
"C" and "E" constitute all of the contractual obligations of
Seller;
xi. Seller is not currently in default of any lease
to which Seller is a party. Seller shall obtain certification
from Seller's landlord which is acceptable to Buyer that
Seller is not currently in default under any lease. Seller
also represents that there has been no event which has
occurred which may result in a landlord's lien being imposed
on some or all of the Assets; and
xii. Seller has not complied with the Bulk Sales
provisions of the Arizona Uniform Commercial Code, A.R.S.
ss.47-6101 et. seq.
b. Buyer hereby represents and warrants to Seller as follows:
i. Buyer has the legal power, right and authority to
enter into this Agreement and the documents referenced herein
and, as of the Closing Date, to consummate the transactions
contemplated hereby;
ii. All requisite action has been taken by Buyer in
connection with the entering into this Agreement, the
documents referenced herein, and the consummation of the
transactions contemplated hereby;
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iii. The individuals executing this Agreement and the
documents referenced herein on behalf of Buyer have the legal
power, right and actual authority to bind Buyer to the terms
and conditions hereof and thereof;
iv. This Agreement and all documents required hereby
to be executed by Buyer are and shall be valid, legally
binding obligations of and enforceable against Buyer in
accordance with their terms;
v. The execution, delivery and performance of this
Agreement by Buyer and the compliance with the terms hereof by
Buyer do not and will not violate any statute, order, rule or
regulation applicable to Buyer of any court, regulatory
authority or governmental body and, do not conflict with or
result in the breach of any of the terms of, or constitute a
default under, any note, indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to
which it is a party or by which it may be bound which
conflict, breach or default would have a material adverse
effect on Buyer's ability to consummate the transactions
contemplated hereby;
vi. There is no suit, action, claim, investigation,
or legal or administrative proceeding pending or threatened
against Buyer which might have a materially adverse effect on
Buyer's ability to consummate the transactions contemplated
hereby; and
vii. Any representations or warranties made or to be
made by Buyer are true and correct.
15. Survival of Representations and Warranties; Indemnification.
a. Survival. The parties hereto agree that the
representations, warranties and covenants contained in this Agreement
or in any document, certificate, instrument, schedule or exhibit
delivered in connection herewith shall survive the Closing and continue
to be binding regardless of any investigation made at any time by the
parties.
b. Seller's Indemnification. Seller shall indemnify and
protect, defend and hold Buyer and its officers, directors, employees,
agents or representatives harmless from and against any and all loss,
cost, damage, injury or expenses including, without limitation,
attorney fees which Buyer or any of its past or present officers,
directors, employees, agents or representatives may sustain by reason
of or arising out of (i) any obligation or contract of Seller or claim
against Seller which Buyer has not specifically assumed hereunder, (ii)
any liability or obligation relating to any service rendered by Seller
prior to the Closing Date, (iii) the breach or inaccuracy of or failure
to comply with, or the existence of any facts resulting in the
inaccuracy of, any of the warranties, representations or covenants of
Seller contained in this Agreement, (iv) any performance required under
Seller's lease prior to the Closing or for any liability which arose
prior
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to Closing; (v) any liability arising from Seller's failure to comply
with the Bulk Sales provisions of the Arizona Uniform Commercial Code,
A.R.S. ss.47-6101 et. seq. or (vi) any and all claims or rights to any
of the assets by any third party. If any claim is asserted against
Buyer or Buyer is made a party defendant in any action involving a
matter covered by this indemnification, then Buyer shall give prompt
notice of such claim or action to Seller, and Seller shall have the
right to assume control of the defense thereof at the Seller's sole
cost provided Buyer approves of Seller's counsel, except that, in such
case, Buyer shall have the right to join in the defense thereof at its
own cost. Whether or not Seller assumes control of the defense of any
such action, Seller will be bound by any final judgment against Buyer
in any such action and Seller shall be liable for any such judgment. If
Seller does not join in the defense thereof, Seller will be bound by
any settlement which Buyer may make of such action.
c. Buyer's Indemnification. Buyer shall indemnify and protect,
defend and hold Seller and its officers, directors, employees, agents
or representatives harmless from and against any and all loss, cost,
damage, injury or expenses including, without limitation, attorney fees
which Seller or any of its past or present officers, directors,
employees, agents or representatives may sustain by reason of or
arising out of (i) any liability or obligation relating to Buyer's
conduct of its business after the Closing Date or (ii) the breach or
inaccuracy of or failure to comply with, or the existence of any facts
resulting in the inaccuracy of, any of the warranties, representations
or covenants of Buyer contained in this Agreement. If any claim is
asserted against Seller or Seller is made a party defendant in any
action involving a matter covered by this indemnification, then Seller
shall give prompt notice of such claim or action to Buyer, and Buyer
shall have the right to assume control of the defense thereof at the
Buyer's sole cost provided Seller approves of Buyer's counsel, except
that, in such case, Seller shall have the right to join in the defense
thereof at its own cost. Whether or not Buyer assumes control of the
defense of any such action, Buyer will be bound by any final judgment
against Seller in any such action and Buyer shall be liable for any
such judgment. If Buyer does not join in the defense thereof, Buyer
will be bound by any settlement which Seller may make of such action.
16. Events of Default. This Agreement shall be deemed to have been
defaulted (an "Event of Default") in the event that any of the following have
occurred, and the occurrence thereof has not been cured within the later of ten
days after written notice of that Event of Default or the applicable cure period
set forth in the referenced agreement: (a) either Buyer or Seller has failed to
perform any of its covenants or agreements set forth in this Agreement; or (b)
any of the representations or warranties contained in this Agreement shall have
been materially untrue as of either the date of execution or the Closing Date,
as applicable. Upon the occurrence of an Event of Default by Seller, Buyer may
exercise any of the remedies or rights specifically granted to Buyer in this
Agreement and/or all rights and remedies otherwise available at law or equity.
Upon the occurrence of an Event of Default by Buyer, Jones shall be entitled to
retain the certificates of stock referred to in Section 5 as liquidated damages,
both parties acknowledging that actual damages would be difficult or impossible
to determine and
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both parties agreeing that this amount represents a fair estimate of such
damages. Seller shall have no further liability hereunder.
17. Notices. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered when delivered, if delivered, or two business
days after depositing the same in the United States mail, postage prepaid,
return receipt requested, and addressed to the appropriate party at the
following addresses:
If to the Buyer: CAN-AM Investments Corp.
15651 North 83rd Way
Building C, Suite 3
Scottsdale, Arizona 85260
Copy to Counsel: Kurt M. Brueckner, Esq.
Titus, Brueckner & Berry, P.C.
Scottsdale Centre, Suite B-252
7373 North Scottsdale Road
Scottsdale, Arizona 85253
If to Seller: J&M Wholesale, Ltd.
102, 4463 Byrne Road
Burnaby, British Columbia, Canada
V5J 3H6
If to Jones: Colin A. Jones
102, 4463 Byrne Road
Burnaby, British Columbia, Canada
V5J 3H6
Any party may change its address for notice by written notice given to each
other party.
18. Attorneys' Fees. In any action or proceedings brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
19. Risk of Loss. Seller shall bear the risk of any loss to the Assets
through the Close of Escrow.
20. Entirety and Amendments. This instrument and the instruments
referred to herein embody the entire agreement between the parties, supersede
all other agreements and understandings, if any, relating to the subject matter
hereof or to which Buyer or Seller are parties, and may be amended only by an
instrument in writing executed by all parties, and
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supplemented only by documents delivered or to be delivered in accordance with
the express terms hereof.
21. Multiple Counterparts. This Agreement may be executed in a number
of identical counterparts, each of which constitutes collectively, one
agreement; but in making proof of this Agreement, it shall not be necessary to
produce or account for more than one counterpart.
22. Parties Bound; Severability. This Agreement shall be binding upon,
and inure to the benefit of, each of the parties hereto to the extent applicable
to them and their respective successors and assigns and other legal
representatives. If any provision hereof is invalid or unenforceable in any
jurisdiction, the other provisions hereof shall remain in full force and effect
in such jurisdiction and the remaining provisions will be enforced to the
maximum extent permitted by law and construed in a fashion to effectuate best
the provisions hereof, and the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
any such provision in any other jurisdiction to the extent that the remaining
enforceable and valid provisions of this Agreement may be construed in a fashion
and act independently of the invalid or unenforceable provisions to effectuate
the intent of the parties as evidenced by this Agreement.
23. Descriptive Headings; Gender. The headings, captions and
arrangements used in this Agreement are for convenience only and shall not be
deemed to limit, amplify or modify the terms of this Agreement, nor affect the
meaning thereof. Whenever the context shall so require, all words herein in the
male gender shall be deemed to include the female or neuter gender, and all
singular words shall include the plural, and all plural words shall include the
singular.
24. Assignment. Buyer shall be entitled to assign its rights and
obligations hereunder to any third party in its sole and absolute discretion.
25. Additional Documents. Buyer and Seller agree to execute such
additional documents and to do such things as may be reasonably required by the
other parties to implement the purposes of this Agreement.
26. Governing Law. This Agreement is being executed and delivered and
is intended to be performed in the State of Arizona and the laws of such State
shall govern the validity, construction, enforcement and interpretation of this
Agreement.
27. Mediation; Arbitration. If a dispute arises out of or relates to
this Agreement, or the breach thereof, and if the dispute cannot be settled
through negotiation, the parties agree first to try in good faith to settle the
dispute by mediation administered by the American Arbitration Association under
its Commercial Mediation Rules. If the dispute cannot be settled through
negotiation or mediation, the Parties agree to submit the dispute to arbitration
administered by the American Arbitration Association under its Commercial
Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof.
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28. Brokerage. If any other person shall assert a claim to a finder's
fee, brokerage commission or other compensation on account of alleged employment
as a finder or broker or performance of services as a finder or broker in
connection with this transaction, the party under whom the finder or broker is
claiming shall indemnify and hold the other party harmless for, from and against
any such claim and all costs, expenses and liabilities incurred in connection
with such claim or any action or proceeding brought on such claim, including,
but not limited to, counsel and witness fees and court costs in defending
against such claim. This indemnity shall survive the Closing or the cancellation
of this Agreement.
The parties hereto have executed this Agreement as of the date first
above written.
"BUYER" "SELLER"
CAN-AM INTERNATIONAL INVESTMENT CORP. J&M WHOLESALE, LTD.
a British Columbia corporation a British Columbia corporation
By: /s/ Colin A. Jones By: /s/ Colin A. Jones
-------------------------------- --------------------------------
Colin A. Jones, President Colin A. Jones, President
"JONES"
/s/ Colin A. Jones
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Colin A. Jones
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EXHIBITS
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A. Assets
B. Bill of Sale
C. List of Contracts Assigned
D. Assignment of Contract Rights
E. List of Contracts Not Assigned
F. Customer Message
G. Customer List
EXHIBIT "A"
ASSETS
EXHIBIT "B"
BILL OF SALE
J&M WHOLESALE, LTD., a British Columbia corporation ("Seller"), in
consideration of the sum of Ten Dollars ($10.00), and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, do
hereby sell, convey and transfer to CAN-AM INTERNATIONAL INVESTMENT CORP., a
British Columbia corporation ("Buyer"), its successors and assigns, all of
Seller's properties, inventories, trademarks, tradenames, funds in bank
accounts, furniture, furnishings, fixtures, goodwill, list of current customers,
supplies, services, covenants not to compete, equipment, and all other assets of
every kind, nature and description, tangible or intangible, used by Seller in
connection with its business of distributing cigars, humidors and related items
including, but not limited to, those specific assets identified in Exhibit "A"
attached hereto and made a part hereof (the foregoing are collectively referred
to as the "Assets") to have and to hold the same unto Purchaser, its successors
and assigns, forever.
Seller hereby covenants with and warrants to Purchaser its successors and
assigns, that the Seller is the lawful owner of the Assets and has the right to
sell such Assets, and that the Assets are free and clear from all encumbrances
or liens. Seller agrees to indemnify and hold Purchaser, its successors and
assigns, harmless from and against any and all claims to and rights in the
Assets of any third party, including any and all costs and attorneys' fees in
connection therewith.
DATED this 13th day of June, 1997.
"SELLER"
J&M WHOLESALE, LTD.
a British Columbia corporation
By: /s/ Colin A. Jones
------------------------------
Colin A. Jones, President
EXHIBIT "C"
LIST OF CONTRACTS ASSIGNED
EXHIBIT "D"
ASSIGNMENT OF CONTRACT RIGHTS
This Assignment of Contract Rights (the "Agreement") is entered into as
of the 13th day of June, 1997, by and between J&M WHOLESALE, LTD., a British
Columbia corporation ("Assignor"), and CAN-AM INTERNATIONAL INVESTMENT CORP., a
British Columbia corporation ("Assignee").
RECITALS
WHEREAS, concurrent with the execution hereof, Assignor is selling
substantially all of its assets to Assignee pursuant to that certain Asset
Purchase Agreement of even date herewith;
WHEREAS, Assignor's assets include rights pursuant to contracts with
third parties; and
WHEREAS, Assignor desires to assign its contract rights to Assignee.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Assignor hereby assigns, transfers, conveys, sells and sets over
unto Assignee all of Assignor's right, title and interest in, to and under those
certain contracts identified on Exhibit "1" hereto (the "Contracts").
2. Assignor hereby represents and warrants that the Contracts are
valid, enforceable obligations of the parties thereto and that no default exists
pursuant to any contract. Assignor shall indemnify, defend, and hold Assignee
harmless for, from and against all liabilities, obligations, covenants and
agreements of Assignor under the Contracts.
3. No consent of any third party to the foregoing assignment on the
terms and conditions specified above is required, and if such consent is
required, Assignor represents and warrants that it has obtained such consent.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first set forth above.
ASSIGNEE: OAN-AM Intl, Inv. Corp.
/s/ Colin A. Jones
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a(n)
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By: /s/ Colin A. Jones
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Its: President
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ASSIGNOR:
J & M Wholesale LTD
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a(n)
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By: /s/ Colin A. Jones
--------------------------------
Its: President
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EXHIBIT "E"
CONTRACTS WHICH WILL NOT BE ASSIGNED TO BUYER
AND WHICH WILL BE CANCELLED BY SELLER PRIOR TO CLOSING
EXHIBIT "F"
CUSTOMER MESSAGE TEXT
EXHIBIT "G"
CUSTOMER LIST