EXHIBIT 4.2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT made the 4th day of August, 2005.
BETWEEN:
425001 ALBERTA LTD.
a body corporate duly incorporated and registered to carry
on business in the Province of Alberta
OF THE FIRST PART
- and -
WORLDWIDE PROMOTIONAL PRODUCTS 2004 CORPORATION
a body corporate duly incorporated and registered to carry
on business in the Province of Alberta
OF THE SECOND PART
WHEREAS:
- -------
A. the Vendor is in the Business;
B. the Purchaser is in the Business; and
C. the Vendor has agreed to sell to the Purchaser and the Purchaser has agreed
to purchase from the Vendor all or substantially all of the assets,
undertaking and property of and pertaining to the Business, upon and
subject to the terms and conditions hereinafter set forth in this
Agreement.
NOW THEREFORE THIS ASSET PURCHASE AGREEMENT WITNESSETH that in consideration of
the mutual covenants and agreements hereinafter expressed, and the payment of
the sum of One Hundred and Fifty Seven Thousand Six Hundred and Forty Seven
($157,647.33) Canadian Dollars and Thirty-Three Cents now paid by the Purchaser
to the Vendor, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each of the Vendor and the
Purchaser, the Vendor and the Purchaser agree each with the other as follows:
1. ARTICLE ONE - INTERPRETATION
a) Defined Terms
i) For the purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings set
out below, and grammatical variations of such terms shall have
corresponding meanings:
ii) "Act" means the Business Corporations Act (Alberta), as amended from
time to time and any successor legislation thereto;
1
1. ARTICLE ONE - INTERPRETATION - continued
iii) "Agreement" means this Asset Purchase Agreement between 425001 Alberta
Ltd., a body corporate duly incorporated and registered to carry on
business in the Province of Alberta, and Worldwide Promotional
Products 2004 Corporation, a body corporate duly incorporated and
registered to carry on business in the Province of Alberta, made
August 4, 2005;
iv) "Applicable Laws" means, with respect to any Person, any Canadian
(whether federal, territorial, provincial, municipal or local) or
foreign statute, law, ordinance, rule, administrative interpretation,
regulation, order, writ, injunction, directive, judgment, decree or
other requirement, all as in effect as of the Closing, of any
Governmental Authority applicable to such Person or any of their
respective properties, assets, officers, directors, employees,
consultants or agents;
v) "Assumed Liabilities" has the meaning set out in section 2.b) of this
Agreement;
vi) "Business" means the business of selling wholesale various promotional
products to various businesses and individuals throughout Canada;
vii) "Business Day" means any day, other than a Saturday or a Sunday, on
which the main branch of HSBC Bank of Canada located at Calgary,
Alberta is open for business;
viii)"Closing" and "Closing Date" has the meaning set out in Section 3.d)
of this Agreement;
ix) "Closing Time" has the meaning set out in Section 3.d) of this
Agreement;
x) "Contract" means any contract, agreement, indenture, leases of
personality, deed of trust, licence, option, instrument or other
commitment, whether written or oral to which the Vendor is a party or
by which the Vendor is bound;
xi) "Employees" means those employees of the Vendor who are employed in
the Business immediately prior to the Closing Date;
xii) "Encumbrance" means any encumbrance, lien, charge, hypothec, pledge,
mortgage, title retention agreement, security interest of any nature,
adverse claim, exception, reservation, easement, right of occupation,
matter capable of registration against title, option, right of
pre-emption, privilege or any Contract to create any of the foregoing;
xiii)"ETA" means the Excise Tax Act (Canada), as amended from time to time
and any successor legislation thereto;
xiv) "Excluded Assets" has the meaning set out in section 2.d) of this
Agreement;
xv) "Excluded Liabilities" has the meaning set out in Section 2.c) of this
Agreement;
xvi) "Governmental Authority" means any Canadian (whether federal,
territorial, provincial, municipal or local) or foreign government,
governmental authority, quasi-governmental authority, instrumentality,
2
1. ARTICLE ONE - INTERPRETATION - continued
court, government or self-regulatory organization, commission,
tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of
any of the foregoing; xvii) "GST" means all taxes payable under the
ETA;
xviii) "Liability" means with respect to any Person, any liability or
obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, secured or unsecured, joint or
several, due or become due, unvested or invested, executory,
determined, determinable or otherwise and whether or not the same is
required to be accrued on the financial statements of such Person;
xix) "Parent Company" means Worldwide Promotional Products Corporation, a
corporation incorporated pursuant to the laws of the State of Nevada,
United States of America;
xx) "Persons" shall include individuals, corporations, firms,
partnerships, limited liability companies, limited liability
partnerships, associations, syndications, trusts, estates,
unincorporated organizations, governmental bodies and other legal or
business entities of any kind whatsoever;
xxi) "Purchaser" means Worldwide Promotional Products 2004 Corporation, a
body corporate duly incorporated and registered to carry on business
in the Province of Alberta;
xxii)"Purchase Price" has the meaning set out in Section 3.a) of this
Agreement;
xxiii) "Purchased Assets" has the meaning set out in Section 2.a) of this
Agreement;
xxiv)"Tax" means all taxes imposed of any nature including any United
States (whether federal, territorial, state, municipal or local),
Canadian (whether federal, territorial, provincial, municipal or
local) or foreign income tax, alternative or add-on minimum tax,
profits or excess profits tax, franchise tax, gross income, adjusted
gross income or gross receipts tax, employment related tax (including
employee withholding or employer payroll tax or employer health tax),
capital tax, real or personal property tax or ad valorem tax, sales or
use tax, excise tax, stamp tax or duty, any withholding or back up
withholding tax, value added tax, GST, severance tax, prohibited tax,
premiums tax, occupation tax, customs and import duties, together with
any interest or any penalty, addition to tax or additional amount
imposed by any Governmental Authority responsible for the imposition
of any such tax or in respect of or pursuant to any United States
(whether federal, territorial, state, municipal or local), Canadian
(whether federal, territorial, provincial, municipal or local) or
other Applicable Laws; and
xxv) "Vendor" means 425001 Alberta Ltd., a body corporate duly incorporated
and registered to carry on business in the Province of Alberta.
b) Currency
Unless otherwise indicated, all dollar amounts referred to in this
Agreement or the use of the symbol "$" shall be deemed to refer to
Canadian dollars.
3
1. ARTICLE ONE - INTERPRETATION - continued
c) Sections, Heading and Party Drafting
The division of the Agreement into Articles, Sections and Paragraphs
and the insertion of headings are for convenience of reference only
and shall not affect the interpretation or Article, Section or
Paragraph of this Agreement. Each party to this Agreement acknowledges
that it and its legal advisors have reviewed and participated in
settling the terms of this Agreement and agrees that any rule of
construction or doctrine of interpretation which has the result of
construing or interpreting any ambiguity against the drafting party to
this Agreement shall not be applicable in the interpretation of this
Agreement.
d) Number, Gender and Person
In this Agreement, words imparting the singular number shall include
the plural and vice versa, and words importing the use of any gender
shall include all genders.
e) Entire Agreement
Except as herein provided and provided for, this Agreement constitutes
the entire agreement between the parties to this Agreement with
respect to the subject matter hereof and supersedes all prior
agreements, prior drafts of this Agreement, understandings,
negotiations and discussions, whether written or oral, between the
parties to this Agreement with respect to the subject matter of this
Agreement. There are no conditions, covenants, agreements,
representation, warranties or other provisions, express or implied,
collateral, statutory or otherwise, relating to the subject matter
hereof except as herein provided. Neither this Agreement nor any
provisions hereof is intended to confer upon any Person other than the
parties to this Agreement any rights or remedies hereunder.
f) Time of the Essence
Time shall be of the essence of this Agreement and of every part
hereof and no extension or variation to this Agreement shall operate
as a waiver of the provision.
g) Applicable Law
This Agreement shall be construed, interpreted and enforced in
accordance with and the respective rights and obligations of the
parties to this Agreement shall be governed by the laws of the
Province of Alberta and the federal laws of Canada applicable therein
without reference to any principles of conflicts of laws and each
party to this Agreement irrevocably and unconditionally attorns to the
non-exclusive jurisdiction of the Courts of Alberta and all courts
competent to hear appeals therefrom with respect to any matter arising
hereunder or related hereto to this Agreement.
h) Enurement
This Agreement shall enure to the benefit of and shall be binding on
and enforceable by the parties to this Agreement and, where the
context so permits, their successors and assigns.
i) Assignment
The Vendor may not assign either this Agreement or any of its rights,
interests or obligations hereunder without the prior written consent
of each other party to this Agreement, which consent may be
unreasonably withheld. The Purchaser may assign this Agreement and any
4
1. ARTICLE ONE - INTERPRETATION - continued
of its rights, interests and obligations hereunder without the written
consent of any other party to this Agreement.
j) Amendments; No Waivers
i) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in
the case of any amendment, by all parties to this Agreement, or
in the case of a waiver, by the party to this Agreement against
whom the waiver is to be effective.
ii) No waiver by a party to this Agreement of any default,
misrepresentation or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent occurrence. No
failure or delay by a party to this Agreement in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
2. ARTICLE TWO - PURCHASE AND SALE OF PURCHASED ASSETS
a) Purchased Assets
Subject to the provisions of this Agreement, the Vendor hereby sells
to the Purchaser and the Purchaser hereby purchases from the Vendor
effective as of the opening of business on the Closing Date the
undertaking, goodwill and all of the property and assets of the Vendor
used in connection with or otherwise relating to the Business, whether
real or personal, tangible or intangible, of every kind and
description and wheresoever situate as a going concern, including,
without limitation:
i) all machinery, computers, equipment, office equipment, tools,
furniture, furnishings, sample inventory, and other miscellaneous
items used in or relating to the Business as set forth and
described in Schedule "A" attached hereto (the "Office Equipment
and Furniture");
ii) all rights of the Vendor as purchaser of goods order but not yet
received or invoiced to the ultimate purchaser as of the Closing
Date (the "Ordered Goods");
iii) the Vendor's interest as tenant in a lease of a property located
at 2, 1212 - 38 Avenue NE, Calgary, Alberta;
iv) Vendor's interest in those items of leased personalty described
in Schedule "B" attached hereto, to the extent such leases are
assignable;
v) the right to retain and use the telephone numbers (403) 226-3840
and 1-866-226-3840, and the facsimile number (403) 226-3805 to
the extent that Telus or the Vendor's telephone service and
facsimile service provider's or its assigns or successors will
5
2. ARTICLE TWO - PURCHASE AND SALE OF PURCHASED ASSETS - continued
permit such use (the "Phone and Facsimile Numbers");
vi) all licenses, permits, approvals, consents, registrations,
certificates or authorizations of the Vendor relating to the
Business, if any (the "Licenses");
vii) all records, files and documents of the Vendor relating to the
Business (the "Records");
viii)the exclusive right to the continued use of the website domain
www.wesellu.com to the extent permitted by law that the website
domain www.wesellu.com can be assigned or used (the "Website");
ix) all rights and interest to the Western Financial Group contract
(the "Assumed Contracts");
but excluding from the foregoing the excluded assets.
b) Assumed Liabilities
Subject to the conditions in this Agreement, on the Closing Date, the
Purchaser shall not assume or thereafter pay, perform, discharge or
satisfy any liabilities of the Vendor incurred by the Vendor up to and
prior to the Closing Date or incurred by the Vendor after the Closing
Date except for the Vendor's liability pursuant to:
i) Any obligations, liabilities, claims, suits, demands, actions or
proceedings of any kind whatsoever in relation to the Vendor's
lease of a property located at 2, 1212 38 Avenue NE, Calgary,
Alberta;
ii) The leases of personalty described in Schedule "B", to the extent
such leases aer assignable to the Purchaser;
iii) The accounts payable of the Vendor in respect of the Ordered
Goods;
(collectively "the Assumed Liabilities").
c) Excluded Liabilities
For greater certainty, it is understood that the Purchaser is not
assuming nor shall it be liable for any liabilities or obligations of
the Business, whether accrued, absolute, contingent or otherwise, of
the Vendor, including, without limitation:
i) any and all claims, suits, demands, actions or proceedings with
respect to the Business prior to the Closing Date;
ii) any and all claims, suits, demands, actions or proceedings with
respect to the Excluded Assets;
iii) any and all claims, suits, demands, actions or proceedings
relating to the operations of the Business up to the Closing Date
including, without limitation, any breach by the Vendor of all
applicable statutes, orders, notices, ordinances, regulations,
permits, authorizations, approvals or laws;
6
2. ARTICLE TWO - PURCHASE AND SALE OF PURCHASED ASSETS - continued
iv) any obligations, liabilities, claims, suits, demands, actions or
proceedings of any kind whatsoever, including, without
limitation, any obligations, liabilities or claims for wages,
salary, bonus, vacation pay or other remuneration or any claims
pursuant to any worker's compensation or similar legislation by
any Employee of the Vendor (whether or not they become employees
of the Purchaser) related to any matter or event that occurred
during or arose out of or is attributable to such employee's
employment with the Vendor, except as otherwise provided for in
section 8 (c ) below;
v) any obligations, liabilities, claims or damages, including back
wages, employee benefits or insurance costs, expenses, any unfair
labour practice charges, legal fees and fines, arising out of or
relating to any employment termination, layoff or reduction in
hours of any Employee occurring prior to the Closing Date;
vi) any obligations, liabilities or claims whatsoever for any
commission or other remuneration payable or alleged to be payable
to any broker, agent or other person who has acted or purported
to act for the Vendor in connection with the sale of the
Purchased Assets;
vii) any sales commission payable by the Vendor at any time prior to
or on the Closing Date; and
viii) all liabilities not specified in Article 2.b) of this Agreement
(collectively the "Excluded Liabilities").
d) Excluded Assets
The Purchaser is not purchasing or acquiring the following assets
belonging to either the Vendor or the Business prior to but not
including the Closing Date:
i) all cash on hand or in banks or other depositories, insurance
proceeds receivable, income and other tax refunds and term
deposits;
ii) the exclusive right to the continued use of the tradenames
"Sportswise" and "Sportswise International";
iii) all claims and causes of action accruing to the benefit of the
Vendor; and
iv) all accounts receivable
(collectively the "Excluded Assets").
7
3. ARTICLE THREE - PURCHASE PRICE
a) Purchase Price
The purchase price payable by the Purchaser to the Vendor for the
Purchased Assets shall be One Hundred Fifty Seven Thousand Six Hundred
and Forty Seven ($157,647.33) Dollars and Thirty-Three Cents.
b) Payment of Purchase Price
i) The sum of $50,000.00, plus GST, shall be payable by cash, bank
draft or solicitor trust cheque on the Closing Date.
ii) The balance of the Purchase Price, plus GST, shall be payable by
cash, bank draft or solicitor trust cheque on the earlier of:
(A) November 30, 2005 and
(B) The date which is thirty (30) days after the Parent Company
becomes a publicly traded company on the Over The Counter
Bulletin Board Exchange or such other date as shall be
agreed upon in writing by the Vendor and the Purchaser,
which is after the Closing.
iii) Concurrent with the Purchaser's payment of the balance of the
Purchase Price, the Purchaser shall pay interest on that balance,
calculated from the Closing date to the date of payment at a rate
equal to the annual prime rate of interest of Bank of Montreal
plus 3%.
c) GST
The Purchaser shall pay GST to the Vendor concurrent with each payment
due pursuant to this agreement.
d) Closing
The Closing of the transaction (the "Closing") contemplated by this
Agreement shall take place at the offices of Sihvon, Carter, Fisher &
Berger, at Medicine Hat, Alberta on August 5, 2005 or such other date
as shall be agreed upon by the Purchaser and the Vendor in writing
(the "Closing Date") at 8:30 a.m. Alberta time or such other time as
shall be agreed upon by the Purchaser and the Vendor in writing (the
"Closing Time").
e) Allocation of Purchase Price
The Vendor and the Purchaser agree to allocate the Purchase Price
among the Purchased Assets as follows:
i) the Office Equipment and Furniture in the sum of $49,337.00
Dollars;
ii) the Ordered Goods, in an amount equal to the accounts payable in
respect of the Ordered goods;
iii) the leases of personalty in the sum of $86,500.80
iv) the Phone and Facsimile Numbers in the sum of $2,209.53;
v) the Licences in the sum of $7,100.00;
vi) the Website in the sum of $7,500.00; and;
vii) the Assumed Contracts in the sum of $5,000.00.
8
4. ARTICLE FOUR - REPRESENTATIONS AND WARRANTIES OF THEVENDOR
The Vendor represents and warrants as at the date hereof to the Purchaser
as follows and acknowledges that the Purchaser is relying on such
representations and warranties in connection with its purchase of the
Business and the Purchased Assets:
a) Organization
The Vendor is a corporation duly incorporated and organized and
validly subsisting under the laws of the Province of Alberta and has
the corporate power to own or lease its property, to carry on the
Business as now being conducted by it and to enter into this Agreement
and to perform its obligations hereunder. The Vendor is duly qualified
as a corporation to do business in the Province of Alberta, being the
only jurisdiction in which the nature of the Business or the Purchased
Assets makes such qualification necessary.
b) Authorization
This Agreement has been duly authorized, executed and delivered by the
Vendor and is a legal, valid and binding obligation of the Vendor,
enforceable against the Vendor by the Purchaser in accordance with its
terms.
c) No Violation
The execution, delivery and performance of this Agreement by the
Vendor and the consummation of the transactions herein provided for
will not, to the best of the knowledge of the Vendor, result in:
i) the breach or violation in any material respect of any of the
provisions of, or constitute a default under, or conflict with or
cause the acceleration of any obligation of the Vendor under:
(1) any Contract to which the Vendor is a party to or by which
it is or its properties are bound;
(2) any provision of the constating documents or by-laws or
resolutions of the board of directors (or any committee
thereof) or shareholders of the Vendor;
(3) judgment, decree, order or award of any court, governmental
body or arbitrator having jurisdiction over the Vendor;
(4) any licence, permit, approval, consent or authorization held
by the Vendor;or
(5) any applicable law, statute, ordinance, regulation or rule;
nor
ii) the creation or imposition of any Encumbrance on any of the
Purchased Assets.
d) Condition of Purchased Assets
To the best of the knowledge of the Vendor, the Purchased Assets owned
and used by the Vendor in connection with the Business are in
reasonable operating condition.
9
4. ARTICLE FOUR - REPRESENTATIONS AND WARRANTIES OF THEVENDOR - continued
e) Title to Purchased Assets
The Purchased Assets are owned legally and beneficially by the Vendor
with a good and valid title thereto, free and clear of all
Encumbrances.
f) Location of the Purchased Assets
The Purchased Assets are located at 2, 1212 - 38 Avenue NE, Calgary,
Alberta.
g) Compliance with Laws; Governmental Authorization
To the best of the knowledge of the Vendor, the Vendor has complied in
all material respects with all laws, statutes, ordinances,
regulations, rules, judgments, decrees or orders applicable to the
Business or the Purchased Assets, including all licences, permits,
approvals, consents, certificates, registrations and authorizations
necessary to carry on the Business or to own or lease any of the
Purchased Assets.
h) No Other Agreements to Purchase
No Person other than the Purchaser has any written or oral agreement
or option or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an agreement or option for the
purchase or acquisition from the Vendor of any of the Purchased
Assets.
i) Residency
The Vendor is a resident of Canada for the purposes of the Income Tax
Act (Canada).
j) GST Registration
The Vendor is a registrant for purposes of the ETA whose registration
number is 122122229RT-0001.
k) Employees
No notice has been received by the Vendor which remains outstanding of
any complaint filed by any of the employees against the Vendor
claiming that the Vendor has violated the Employment Standards Code
(Alberta), the Human Rights, Citizenship and Multiculturism Act
(Alberta), the Human Rights Act (Canada), the Unemployment Insurance
Act (Canada), the Canada Labour Code, the Workers' Compensation Act
(Alberta) or the Occupational Health and Safety Act (Alberta) or any
other applicable employee, workers' compensation, health and safety or
human rights legislation or of any complaints or proceedings of any
kind involving the Vendor or, to the best of the Vendor's knowledge,
any of the employees of the Vendor before any labour relations board.
l) Employee Accruals
All accruals for unpaid vacation pay, premiums for unemployment
insurance, health premiums, Canada Pension Plan premiums, accrued
wages, salaries, overtime, bonuses and commissions and employee
benefit plan payments have been reflected in the books and records of
the Vendor and the Vendor has made all remittances with respect to
such matters as are legally required for all periods up to and
including the Closing Date.
10
4. ARTICLE FOUR - REPRESENTATIONS AND WARRANTIES OF THEVENDOR - continued
m) Buyers and Suppliers
There has been no te rmination or cancellation of and no material
modification or change in the Vendor's business relationship with any
suppliers or buyers of the Business or any group of suppliers or
buyers of the Business. The Vendor has no knowledge that the benefits
of any relationship with any of the suppliers or buyers of the
Business will not continue after the Closing Date in substantially the
same manner as prior to the Closing Date.
5. ARTICLE FIVE - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Vendor as follows and
acknowledges and confirms that the Vendor is relying on such
representations and warranties in connection with the sale of the Business
and the Purchased Assets:
a) Organization
The Purchaser is a corporation duly incorporated and organized and
validly subsisting under the laws of the Province of Alberta and has
the corporate power to own or lease its property, to carry on the
Business now being conducted by it and to enter into this Agreement
and to perform its obligations hereunder. The Purchaser is duly
qualified as a corporation to do business in the Province of Alberta,
being the only jurisdiction in which the nature of its business makes
such qualification necessary
b) Authorization
This Agreement has been duly authorized, executed and delivered by the
Purchaser and is a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser by the Vendor in
accordance with its terms.
c) No Violation
The execution, delivery and performance of this Agreement by the
Purchaser and the consummation of the transactions herein provided for
will not, to the best of the knowledge of the Purchaser, result in:
i) the breach or violation in any material respect of any of the
provisions of, or constitute a default under, or conflict with or
cause the acceleration of any obligation of the Purchaser under:
(1) any contract to which the Purchaser is a party to or by
which it is or its properties are bound;
(2) any provision of the constating documents or by-laws or
resolutions of the board of directors (or any committee
thereof) or shareholders of the Purchaser;
(3) judgment, decree, order or award of any court, governmental
body or arbitrator having jurisdiction over the Purchaser;
(4) any licence, permit, approval, consent or authorization held
by the Purchaser, or
(5) any applicable law, statute, ordinance, regulation or rule.
11
5. ARTICLE FIVE - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER - continued
d) Consents and Approvals
There is no requirement for the Purchaser to make any filing with,
give any notice to or obtain any licence, permit, certificate,
registration, authorization, consent or approval of, any government or
regulatory authority as a condition to the lawful consummation of the
transactions contemplated by this Agreement.
e) GST Registration
The Purchaser is a registrant for the purposes of the ETA whose
registration number is 897789400RT-0001.
6. ARTICLE SIX - SURVIVAL OF COVENANTS, REPRESENTATIONSAND WARRANTIES
a) Survival of Covenants, Representations and Warranties
All representations, warranties, covenants and agreements contained in
this Agreement on the part of each of the parties shall survive the
Closing, the execution and delivery hereunder of any bills of sale,
instruments of conveyance, assignments or other instruments of
transfer of title to any of the Purchased Assets and the payment of
the consideration contemplated under this Agreement, except that the
representations and warranties contained in this Agreement shall only
survive for one (1) year following Closing.
7. ARTICLE SEVEN - SUPPLIERS AND BUYERS PARTICULARS
a) The Vendor shall provide to the Purchaser all books, records, files
and documents relating to the suppliers and buyers of the Business,
including, without limitation, a list of their suppliers and buyers on
the Closing Date.
8. ARTICLE EIGHT - EMPLOYEES
a) Pre-Closing Obligations
Immediately before the Closing, the Vendor shall pay all of the
Employees' accruals for unpaid vacation pay, premiums for unemployment
insurance, health premiums, Canada Pension Plan premiums, accrued
wages, salaries, overtime, bonuses and commissions and employee
benefit plan payments up to the Closing Date..
b) The Purchaser shall enter into employment agreements with Lenora
Sheppard and Doug Whitten on terms satisfactory to the Vendor, the
Purchaser, and each of Lenora Sheppard and Doug Whitten. The Purchaser
acknowledges that it is a successor employer of Lenora Sheppard and
Doug Whitten for the purposes of s. 5 of the Employment Standards Code
(Alberta).
c) Should the Purchaser terminate the employment of either Lenora
Sheppard or Doug Whitten within the first five years after the
Closing, and become obliged to pay compensation for wrongful dismissal
to such terminated employee, the provided that the amount of
compensation paid was reasonable in the circumstances, the Vendor
shall reimburse the Purchaser for a portion of the compensation paid,
such portion being equal to the result produced by the formula A X
B/C, where A is the amount paid, B is the number of months of
continuous employment of the terminated employee by Vendor and C is
12
8. ARTICLE EIGHT - EMPLOYEES - continued
the number of months of continuous employment of the terminated
employee by Vendor and Purchaser.
9. ARTICLE NINE - CLOSING
a) Deliveries to the Purchaser
At the Closing Time, the Vendor shall deliver to the Purchaser actual
possession of the Purchased Assets and shall deliver to the Purchaser
the following duly executed documents or do the following acts or
things:
i) the bills of sale, assurances, transfers, assignments and other
documentation necessary or reasonably required to transfer the
Purchased Assets to the Purchaser with a good and valid title,
free and clear of all Encumbrances whatsoever;
ii) a Non-Competition Covenant in favour of the Parent Company duly
executed by Jean Bundschuh;
iii) a Non-Competition Covenant in favour of the Parent Company duly
executed by Jeff Fearn;
iv) a Management Services Agreement between the Purchaser and the
Vendor duly execute by the Vendor; and
v) all other documents and instruments as may be required by the
Purchaser or its counsel, acting reasonably.
b) Deliveries to the Vendor
At the Closing Time, the Purchaser shall deliver to the Vendor the
following documents duly executed or do the following acts or things:
i) Payment of the portion of the Purchase Price due upon Closing
ii) The written undertaking of the Purchaser to pay the balance of
the Purchase Price pursuant to section 3(b)(ii);
iii) Certified Director's Resolution authorizing the purchase of the
Purchased Assets;
iv) a Management Services agreement between Purchaser and Vendor duly
executed by the Purchaser;
v) a General Security Agreement duly executed by the Purchaser in
favor of the Vendor;
vi) a Guarantee by the Parent Company of the undertaking given by the
Purchaser to pay the balance of the Purchase Price pursuant to
section 3(b)(ii); and
vii) all other documents and instruments as may be required by the
Vendor or its counsel, acting reasonably.
13
9. ARTICLE NINE - CLOSING - continued
c) Closing Deliveries
The parties acknowledge that the form and content of several of the
documents contemplated to be delivered at closing has not been settled
as of the date of this agreement. It is a condition precedent of this
agreement, therefore, that the delivery of all closing documents and
the closing of the transaction contemplated by this agreement shall
only occur if the form and content of all closing documents is settled
and all such closing documents are duly executed and delivered at
Closing. If this condition precedent is not satisfied, then neither
party has any further obligation to the other with respect to the
matters contemplated by this agreement.
10. ARTICLE TEN - INDEMNIFICATION
a) Agreement to Indemnify
i) The Purchaser shall be indemnified and held harmless by the
Vendor in respect of any and all damages incurred by the
Purchaser as a result of any inaccuracy or misrepresentation or
in breach of any representation, warranty, covenant or agreement
made in this Agreement by the Vendor and any matters relating to
the Business prior to the Closing.
ii) The Vendor shall be indemnified and held harmless by the
Purchaser in respect of any and all damages incurred by the
Vendor as a result of any inaccuracy or misrepresentation or in
breach of any representation, warranty, covenant or agreement
made in this Agreement by the Purchaser and any matters relating
to the Business after the Closing.
11. ARTICLE ELEVEN - MISCELLANEOUS
a) Notices
Any notice required or permitted under this Agreement can be sent by
any means, but it is not effective until the first weekday (that is
not a statutory holiday in Alberta) after the day it is delivered, and
"delivered" means actual arrival at the address provided for in this
Agreement for the addressee, in legible form (or where sent by fax or
e-mail, produced and printed).
Notice may be given:
If to the Vendor: 44 Church Raches Close NW Calgary AB T3R 1C1
If to the Purchaser: 499 - 1 Street SE, Medicine Hat, Alberta, T1A 0A7
Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail
or electronic mail), but no such notice request, demand, claim or
other communication shall be deemed to have been duly given unless and
until it actually is received by the individual for whom it is
intended. Any party may change the address to which notices, requests,
demands, claims and other communications hereunder are to be delivered
by giving the other parties notice in the manner herein set forth.
14
11. ARTICLE ELEVEN - MISCELLANEOUS - continued
b) Reasonable Commercial Efforts
The parties acknowledge and agree that, for all purposes of this
Agreement, an obligation of any party to use its reasonable commercial
efforts to obtain any waiver, consent, approval, permit, licence or
document shall not require such party to make any payment to any
person for the purpose of procuring the same, other than payments for
amounts due and payable to such person, payments for incidental
expenses incurred by such person and payments required by any
Applicable Laws.
c) Non-Merger
Except as otherwise expressly provided in this Agreement, the
covenants, representations and warranties of the parties contained in
this Agreement shall not merge on and shall survive the Closing, and,
notwithstanding such Closing, or any investigation made by or on
behalf of any party, shall continue in full force and effect. Closing
shall not prejudice any right of one party against any other party in
respect of anything done or admitted hereunder or under any or in
respect of any right to damages or other remedies.
d) Counterparts and Effectiveness
This Agreement and the documents relating to the transactions
contemplated by this Agreement may be signed in any number of
counterparts and the signatures delivered by telecopy, each of which
shall be deemed to be an original, with the same effect as if the
signatures thereto were upon the same instrument and delivered in
person. This Agreement and such documents shall become effective when
each party thereto shall have received a counterpart thereof signed by
the other parties thereto. In the case of delivery by telecopy by any
party, that party shall forthwith deliver a manually executed original
to each of the other parties.
e) Transmission by Facsimile
The parties hereto agree that this Agreement may be transmitted by
facsimile or such similar device and that the reproduction of
signatures by facsimile or such similar device will be treated as
binding as if originals and each party hereto undertakes to provide
each and every other party hereto with a copy of the Agreement bearing
original signatures forthwith upon demand.
f) Costs
The Purchaser shall pay for all legal costs for this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the Vendor and the
Purchaser.
WORLDWIDE PROMOTIONAL
PRODUCTS 2004 CORPORATION
/s/_________________________
/s/_________________________
425001 ALBERTA LTD.
/s/_________________________
/s/_________________________
15