VHQ Entertainment Inc – ‘20-F’ for 5/31/02 – EX-10

On:  Tuesday, 12/17/02, at 3:32pm ET   ·   For:  5/31/02   ·   Accession #:  949353-2-538   ·   File #:  0-31112

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Annual Report of a Foreign Private Issuer   —   Form 20-F
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 20-F        Form 20-F Annual Report                              122    550K 
 2: EX-4        Ex. 2-1 Debenture                                     20     72K 
 3: EX-10       Exh 4-18 Asset Purchase Agreement                     10     19K 
 4: EX-99       Exh 10-1 Certification                                 2      6K 
 5: EX-99       Exh 10-2 Certification                                 2      6K 

EX-10   —   Exh 4-18 Asset Purchase Agreement
Exhibit Table of Contents

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EXHIBIT 4.18

ASSET PURCHASE AGREEMENT BETWEEN
INTEGRATED RETAIL CORP. AND SOFTECH 002 LIMITED PARTNERSHIP 
DATED SEPTEMBER 29TH, 1999

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ASSET PURCHASE AGREEMENT

                  THIS AGREEMENT made effective as of the 29th day of September,
1999.                                                                           

BETWEEN:                                                                        

        INTEGRATED RETAIL CORP., an Alberta corporation (the
"Vendor")                                   

                                                               OF THE FIRST PART

AND                                                                             

       SOFTECH 002 LIMITED PARTNERSHIP, an Alberta limited
partnership (the "Purchaser")               

                                                              OF THE SECOND PART

WHEREAS:                                    

A.                The Vendor beneficially  owns or controls  through its Rentrak
Corporation revenue sharing agreement the Property as defined herein;           

B.                The  Vendor  desires to  sell and the Purchaser  has agreed to
purchase the Property on the terms and conditions hereinafter set forth.        

                  NOW  THEREFORE the Vendor and the Purchaser covenant and agree
as follows:                                                                     

 ARTICLE I
 DEFINITIONS

1.01              For the purpose of this agreement:                            

         (a)      "CLOSING DATE" shall mean the date of execution hereof or such
later date as the parties shall agree upon; 

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         (c)      "PROPERTY" shall be the property described and located as more
particularly set out in Schedule "A" hereto 

         (d)      "RENTRAK PROPERTY"  shall  be  those  items  of  the  Property
                  subject to the terms of an  agreement  between  the Vendor and
        Rentrak Corproation as set out in Schedule A hereto.

ARTICLE II
SALE OF PROPERTY

2.01              The Vendor  hereby sells all of his right  and interest in and
to the Property for $4,000,000 (the "Purchase Price").                          

2.02              As  consideration for the  sale of the  Property the Purchaser
shall deliver a cheque or promissory note in an amount equal to $4,000,000.     

 ARTICLE III
FURTHER ASSURANCES

3.01              This  agreement is  intended to and shall operate as an actual
transfer of the  Property and the  Purchaser  shall be the owner of the Property
from the Effective Time. The Vendor shall execute all documents and shall do all
such other acts and things which are  convenient  or necessary and which counsel
may advise,  for more completely and  effectually  carrying out the intention of
this agreement and for vesting the Property in the Purchaser.                   

ARTICLE IV
VENDOR'S COVENANTS AND REPRESENTATIONS

4.01              The  Vendor  covenants with and represents and warrants to the
Purchaser that the following shall be true as of the Effective Date:            

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ARTICLE IV
VENDOR'S COVENANTS AND REPRESENTATIONS

4.01              The Vendor covenants with  and represents and warrants  to the
Purchaser that the following shall be true as of the Effective Date:            

         (a)      subject  only  to the Rentrak  Property, the  Vendor has  good
                  title and absolute authority  to  sell  the  Property  to  the
Purchaser;                                  

         (b)      the  Vendor  has  not  assigned,  mortgaged,  hypothecated  or
                  pledged the Property and the Property is free and clear of all
                  encumbrances  (excepting only the claim of Rentrak Corporation
on the Rentrak Property);                   

         (c)      the  Vendor shall and will, from time to time and at all times
                  hereafter,  at the  request  and  cost  of the  Purchaser  but
                  without  further  consideration,  do and perform all such acts
                  and things and execute all such deeds,  documents and writings
                  and  give  all  such  further  assurances  in  respect  of the
     Property as the Purchaser may reasonably require;

         (d)      the  Vendor  has  complied  with,  performed,  observed    and
                  satisfied all terms, conditions,  obligations and liabilities,
                  if any,  which  have  heretofore  arisen  with  respect to the
Property;                                   

         (e)      there is no  litigation now pending against the Vendor nor, to
                  the  knowledge of the Vendor,  has any  application  been made
                  under the bankruptcy laws of Canada, nor is there any material
                  proceeding   which  has  been   commenced  or  is  pending  or
                  threatened,   either  in  the   courts   or  by   governmental
authorities, which may affect the Property; 

         (f)      the  Vendor  is  not  now, nor will  he be as at the Effective
                 Time, a non-resident of Canada within the meaning of the Act;

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         (g)      the  Vendor  is not  an agent or  trustee for  anyone with  an
                  interest in the Property who is or will be as at the Effective
                Time a non-resident of Canada within the meaning of the Act;

         (h)      no  person, firm  or corporation holds  any option or right to
                  acquire or cause to be granted any  interest in the  Property,
                  excepting only Rentrak Corporation with respect to the Rentrak
Property;                                   

         (i)      the  Vendor  has not  entered into  or incurred, and shall not
                  enter into or incur before the Effective Time, any obligations
                  or liabilities  which would materially or adversely affect the
Property;                                   

         (j)      the Vendor has not incurred any obligation or liability of any
                  kind,  for  brokers'  or  finders'  fees  in  respect  of this
                  transaction  for which the Purchaser shall have any obligation
or liability.                               

4.02              The  covenants  and representations  contained in  this clause
shall survive the Effective Time of this agreement for six months therefrom.    

 ARTICLE V
PURCHASER'S WARRANTIES

5.01              The  Purchaser covenants  with and represents  and warrants to
the Vendor that the following shall be true as at the Effective Time:           

(a)      the Purchaser is a duly constituted partnership;     

         (b)      the Purchaser has the power to hold its assets and to carry on
                  its business in all jurisdictions in which it hold such assets
or carries on such business;                

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         (c)      there  are  not now any actions  suits, proceedings or  claims
                  against the Purchaser  either at law or in equity or before or
                  by any government  authority,  board or other agency involving
     the possibility of any judgment or liability; and

         (d)      the  Purchaser is  not a non-eligible  person as  that term is
defined under the INVESTMENT CANADA ACT.    

5.02              The  covenants and  representations  contained in this  clause
shall survive the Effective Time of this agreement for six months therefrom.    

ARTICLE VI
 INDEMNITIES

6.01              The Vendor  hereby  assumes and  agrees to indemnify  and save
harmless the Purchaser from and against all valid and binding obligations of the
Purchaser which arise by virtue of the Vendor's  interest in the Property to the
extent  that such  obligations  and  liabilities  are  attributable  to a period
commencing prior to the Effective Time.                                         

6.02              The  Purchaser hereby assumes and agrees to indemnify and save
harmless  the Vendor  from and against  all valid and  binding  obligations  and
liabilities of the Vendor which arise by virtue of the  Purchaser's  interest in
the  Property  to the  extent  that the said  obligations  and  liabilities  are
attributable to a period commencing on or after the Effective Time.             

 ARTICLE VII
CONDITIONS

7.01              The  completion of  the  transfer  herein is  subject  to  the
condition  precedent that as of the Effective Time, the Vendor is the beneficial
owner of the Property and the  Property  shall be located at the retail  outlets
more particularly set out in Schedule "A" hereto.                               

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ARTICLE VIII
 CLOSING PROCEDURE

8.01              As  soon  as  is  reasonably  practical  before  or after  the
Effective Time the Vendor shall procure from itself and any relevant third party
and, as necessary,  execute and deliver to and in favour of the  Purchaser  such
documentation  as is reasonably  satisfactory  to the Purchaser  evidencing  the
transfer of the Property.                                                       

8.02              The parties  hereto confirm and agree that notwithstanding the
generality  of the  foregoing  they will  obtain or  prepare  the  following  in
connection with the transaction:                                                

(a)      GST Election Form #44 (90/12);                       

(b)      consent of Parkland Savings Credit Union;            

         (c)      assignment  of  the  agreement  with  Rentrack  Corporation in
                  respect  to  the  Rentrak  Property  consented  to  by Rentrak
Corporation;                                

  (d)      a bill of sale evidencing the transfer of the Property.

ARTICLE IX
EXPENSES

9.01              The  Purchaser shall  pay all expenses incurred by the parties
incidental to the negotiations  preliminary hereto, including the preparation of
and completion of this agreement and carrying the same into effect.             

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 ARTICLE X
 MISCELLANEOUS

10.01             Any  notice or communication required or permitted to be given
by this  agreement  shall be deemed to have been  sufficiently  given if sent by
registered mail or hand delivered or by telex or telegram to the address for the
respective  parties as set forth below.  Any notice or  communication  delivered
personally  or by telex or telegram  shall be deemed to be received by and given
to the addressee on the day of delivery.  Any notice or communication  mailed as
aforesaid shall be deemed to have been received three days following the date on
which the same is posted by registered  mail except in the event of a disruption
in  postal  service,  in which  event  such  notice  or  communication  shall be
delivered personally or given by telex or telegram:                             

     Vendor:                   Integrated Retail Corp.
                          6201 - 46th Avenue
                         Red Deer, Alberta
               T4N 6Z1

             Purchaser:                Softech 002 Limited Partnership
                                       c/o 1900, 715 - 5th Avenue S.W.
                        Calgary, Alberta
               T2P 2X6

Any party may change its address for service by notice served as set out above. 

10.02             This  agreement shall be deemed to have been made and shall be
construed in  accordance  with the laws of the Province of Alberta,  and, to the
extent  applicable,  the laws of Canada, in relation to contracts made and to be
performed in Alberta.                                                           

10.03             The  paragraph  headings  in  this  agreement   shall  not  be
considered as interpreting the text.                                            

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10.04             This agreement shall enure  to  the  benefit of and be binding
                  upon the parties and their respective heirs,  successors   and
assigns.                                    

                IN WITNESS WHEREOF the parties have executed this agreement.

               INTEGRATED RETAIL CORP.

                   Per:    /S/  TREVOR HILLMAN
                                           -------------------------------------

                       SOFTECH 002 LIMITED PARTNERSHIP

                    Per:    /S/   DENNIS NERLAND
                                           -------------------------------------

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SCHEDULE "A"

PROPERTY

LOCATION                         NUMBER OF UNITS    

Sylvan Lake                            8909           

Wetaskiwin                             7811           

Leduc                                7846         

Blackfalds                             7099           

Drayton Valley                           8411             

Red Deer - North                          11090             

Rocky Mountain House                        9248                

Whitecourt                              8577            

Lloydminister                            9567             

Lacombe                                8390           

Lethbridge - North                          10133               

Fort Saskatchewan                           9701                

Airdrie                                8270           

Edmonton - Northwood                        9021                

Lethbridge - South                         7511               

Yellowknife                             9584            

Red Deer - South                           7310               

Edmonton - Millwoods                         7054                 

Total                               155,532       

All as more particularly  set  out  in the  4 binder Inventory Schedule included
with and made part of this Agreement.