Document:

ex4-1june2008.htm

    EXHIBIT 4.1

     

    

      SHARE
PURCHASE AGREEMENT

       

      THIS AGREEMENT made as of the
3rd day of December, 2007, between Glencoe Skydome Holdings, L.P., a Delaware
limited partnership (“Purchaser”) and Consolidated
Mercantile Incorporated, an Ontario corporation (“CMI ”or “Seller”);

       

      WHEREAS Purchaser confirmed to
the Seller, by e-mail dated November 30, 2007, its  offer (the “Purchaser’s Offer”) to
purchase all of the outstanding common shares of Polyair Inter Pack Inc. (the
“Corporation”) owned
by  Seller at the Purchase Price (as defined herein).

       

      AND WHEREAS Seller confirmed
its acceptance of Purchaser’s Offer on December 3, 2007.

       

      AND WHEREAS Purchaser and
Seller wish to evidence the agreement resulting from Seller’s acceptance of the
Purchaser’s Offer.

       

      NOW, THEREFORE, in
consideration of the respective covenants and agreements, herein contained and
for other good and valuable consideration (the receipt and sufficiency of which
are acknowledged by each party), the parties covenant and agree as
follows:

       

      1. Interpretation

       

      1.1 Defined Terms.  For
the purpose 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:

       

      
        	
                (a)  

              	
                “Aggregate
      Purchase Price” means in respect of Seller the product obtained by
      multiplying the Purchase Price and the number of Purchased Shares as set
      out next to Seller’s name on Schedule
      2.1;

              

      

       

      
        	
                (b)  

              	
                “Agreement”
      or “this
      Agreement” means this Agreement and shall include any schedules or
      exhibits attached hereto;

              

      

       

      
        	
                (c)  

              	
                “Business
      Day” means a day other than a Saturday, a Sunday or a day when
      chartered banks are not open for business in Toronto,
    Ontario;

              

      

       

      
        	
                (d)  

              	
                “Claim”
      has the meaning set out in Section 7.2;

              

      

       

      
        	
                (e)  

              	
                “Closing”
      has the meaning set out in Section 6.1;

              

      

       

      
        	
                (f)  

              	
                “Closing
      Date” means the date hereof;

              

      

       

      
        	
                (g)  

              	
                “CMI”
      has the meaning set out in the
preamble;

              

      

       

      
        	
                (h)  

              	
                “Common
      Shares” means the common shares in the capital of the
      Corporation;

              

      

       

      
        	
                (i)  

              	
                “Contract”
      means any agreement, indenture, contract, lease, deed of trust, licence,
      option, instrument or other commitment, whether written or
      oral;

              

      

       

      
        	
                (j)  

              	
                “Corporation”
      has the meaning set forth in the
recitals;

              

      

       

      
        	
                (k)  

              	
                “Corporation’s
      Disclosure Documents” means the financial statements of the
      Corporation for the year ended October 31, 2006, the Annual Information
      Form dated January 30, 2007 and accompanying Management Discussion and
      Analysis, the Management Information Circular dated April 2, 2007 and the
      Material Change Reports as filed with the Ontario Securities Commission
      filed since November 1, 2006;

              

      

       

      
        	
                (l)  

              	
                “Direct
      Claim” has the meaning set out in Section 7.2;

              

      

       

      
        	
                (m)  

              	
                “dollar”
      and “$”
      means United States dollars.

              

      

       

      
        	
                (n)  

              	
                “Encumbrance”
      means any encumbrance, lien, charge, pledge, mortgage, title retention
      agreement, security interest of any nature, adverse claim, exception,
      reservation, option, privilege or any Contract to create any of the
      foregoing;

              

      

       

      
        	
                (o)  

              	
                 “Indemnified
      Party” has the meaning set out in Section 7.2;

              

      

       

      
        	
                (p)  

              	
                “Indemnifying
      Party” has the meaning set out in Section 7.2;

              

      

       

      
        	
                (q)  

              	
                “Losses”
      has the meaning set out in Section 7.1;

              

      

       

      
        	
                (r)  

              	
                “Mutual
      Release” means the mutual release of claims among Purchaser and
      Seller in the form attached hereto as Exhibit
      A;

              

      

       

      
        	
                (s)  

              	
                “Purchase
      Price” has the meaning set out in Section 2.2;

              

      

       

      
        	
                (t)  

              	
                “Purchased
      Shares” has the meaning set out in Section 2.1;

              

      

       

      
        	
                (u)  

              	
                “Purchaser”
      has the meaning set out in the
preamble;

              

      

       

      
        	
                (v)  

              	
                “Seller”
      has the meaning set out in
preamble;

              

      

       

      
        	
                (w)  

              	
                “Services
      Termination Agreement” means the agreement to terminate the
      agreements listed on Schedule 3.7(b) in the form
      attached hereto as Exhibit
      C.

              

      

       

      
        	
                (x)  

              	
                Shareholders’
      Agreement” means the Shareholders’ Agreement, dated March 10, 2004,
      by and among Purchaser, Seller and Henry
  Schnurbach.

              

      

       

      
        	
                (y)  

              	
                “Third
      Party” has the meaning set out in Section 7.4;

              

      

       

      
        	
                (z)  

              	
                “Third Party
      Claim” has the meaning set out in Section 7.2;

              

      

       

      
        	
                (aa)  

              	
                “Transaction
      Documents” means this Agreement, the Services Termination
      Agreement, the Mutual Release and all other documents or agreements
      contemplated hereby; and

              

      

       

      
        	
                (bb)  

              	
                “1996
      Shareholders Agreement” means the agreement dated February 20, 1996
      among the Corporation, CMI, Montreal Trust Company of Canada and other
      shareholders of the Corporation.

              

      

       

      1.2 Sections and
Headings.  The division of this Agreement into sections and the
insertion of headings are for convenience of reference only and shall not affect
the interpretation of this Agreement.  Unless otherwise indicated, any
reference in this Agreement to a section or a Schedule refers to the specified
section of, or schedule to, this Agreement.

       

      1.3 Number, Gender and
Persons.  In this Agreement, words importing the singular
number only shall include the plural and vice versa, words importing gender
shall include all genders and words importing persons shall include individuals,
corporations, partnerships, associations, trusts, unincorporated organizations,
governmental bodies and other legal or business entities.

       

      1.4 Time of
Essence.  Time shall be of the essence in this
Agreement.

       

      1.5 Applicable
Law.  This Agreement shall be construed, interpreted and
enforced in accordance with, and the respective rights and obligations of the
parties shall be governed by, the laws of the Province of Ontario and the
federal laws of Canada applicable therein, and each party hereby irrevocably and
unconditionally submits to the non-exclusive jurisdiction of the courts of such
Province and all courts competent to hear appeals therefrom.

       

      1.6 Entire
Agreement.  The Transaction Documents constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether written or oral.  There are no conditions, covenants,
agreements, representations, warranties or other provisions, express or implied,
collateral, statutory or otherwise, relating to the subject matter hereof except
as provided in the Transaction Documents.

       

      1.7 Severability.  If
any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.

       

      1.8 Successors and
Assigns.  This Agreement shall enure to the benefit of and
shall be binding on and enforceable by the parties and, where the context so
permits, their respective successors and permitted assigns.  Subject
to the next sentence, no party may assign any of its rights or obligations
hereunder without the prior written consent of the other
party.  Purchaser may assign the benefit of its rights under this
Agreement to an entity controlled by Purchaser provided that any such assignment
shall not relieve Purchaser from its obligations under this Agreement in respect
of the payment of the Purchase Price.

       

      1.9 Amendment and
Waivers.  No amendment or waiver of any provision of this
Agreement shall be binding on any party unless consented to in writing by such
party.  No waiver of any provision of this Agreement shall constitute
a waiver of any other provision, nor shall any waiver constitute a continuing
waiver unless otherwise expressly provided.

       

      1.10 Several
Obligations.  For greater certainty, the obligations,
representations, warranties, covenants, rights and obligations (including
indemnities) of Seller under this Agreement and those of Fred A. Litwin (“Litwin”) under an agreement
between Purchaser and Litwin dated as December 3, 2007, in respect of the sale
of his common shares of the Corporation to the Purchaser (the “Litwin Purchase Agreement”),
are several and not joint and several.

       

      1.11 Schedules and
Exhibits.  The following schedules and exhibits are attached
hereto and form part of this Agreement:

       

      Schedule
2.1 – Seller and Purchased Shares

      Schedule
3.8 – Affiliate Transactions

      Exhibit A
– Mutual Release

      Exhibit B
– Services Termination Agreement

      Exhibit C
– Domenic Marzano Waiver and Alan Castle Waiver

      

      1.12           Knowledge.                                When
any representation or warranty contained in this Agreement is expressly
qualified in some manner by reference to the knowledge of Seller, it shall be
deemed to refer only to the actual knowledge of Litwin.

      

      2. Purchase and Sale of
Purchased Shares

       

      2.1 Purchase and Sale of Purchased
Shares.  Subject to the terms and conditions hereof; Seller
confirms its covenant and agreement to sell, assign and transfer to Purchaser
and Purchaser confirms its covenant and agreement to purchase from Seller at the
Closing all of the right, title and interest to that number of Common Shares set
out in Schedule 2.1 next to Seller’s name (the “Purchased
Shares”).

       

      2.2 Purchase Price.  The
purchase price payable by Purchaser to Seller for each Purchased Share (the
“Purchase Price”) shall
be $3.98.  The Purchase Price payable to Seller in respect of all of
the Purchased Shares to be sold by Seller is set out in Schedule 2.1 next to
Seller’s name.

       

      2.3 Termination of Shareholders’
Agreement.  Upon payment by Purchaser of the Purchase Price,
Purchaser and Seller mutually consent to the termination of the Shareholders’
Agreement and that the Shareholders’ Agreement shall be of no further force and
effect without any further action by either party.

       

      3. Representations and
Warranties

       

      Seller
represents and warrants to Purchaser as follows and acknowledges that Purchaser
is relying on such representations and warranties in connection with its
purchase of the Purchased Shares:

       

      3.1 Authorization.  The
Transaction Documents have been duly authorized, executed and delivered by
Seller and are legal, valid and binding obligations of Seller, enforceable
against Seller by Purchaser in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency and other laws affecting
the rights of creditors generally and except that equitable remedies may be
granted only in the discretion of a court of competent
jurisdiction.

       

      3.2 Ownership of Purchased
Shares.  Seller is the record and beneficial owner of the
Purchased Shares set out next to its name in Schedule 2.1, with
good and marketable title thereto, free and clear of all Encumbrances and,
without limiting the generality of the foregoing, none of the Purchased Shares,
or any other Common Shares owned by Seller, are subject to any restrictions on
transfer, voting trust, shareholder agreement or voting
agreement.  Upon completion of the transactions contemplated by this
Agreement, all of the Purchased Shares will be owned by Purchaser as the record
and beneficial owner, with good and marketable title thereto.

       

      3.3 No Violation.  The
execution and delivery of the Transaction Documents by Seller and the
consummation of the transactions herein and therein provided for will
not:

       

      
        	
                (a)  

              	
                result
      in the breach or violation of any of the provisions of, or constitute a
      default under, or conflict with or cause the acceleration of any
      obligation of Seller under:

              

      

       

      
        	
                (i)  

              	
                any
      Contract to which Seller is a party or by which any of them is, or either
      of their properties are, bound;

              

      

       

      
        	
                (ii)  

              	
                any
      judgment, decree, order or award of any court, governmental body or
      arbitrator having jurisdiction over
Seller;

              

      

       

      
        	
                (iii)  

              	
                any
      applicable law, statute, ordinance, regulation or rule:
  or

              

      

       

      
        	
                (b)  

              	
                create
      or impose any Encumbrance on any of the Purchased
  Shares.

              

      

       

      3.4 Consents and
Approvals.  There is no requirement for Seller to make any
filing with, give notice to or to obtain any licence, permit, certificate,
registration, authorization, consent or approval of, any governmental or
regulatory authority as a condition to the lawful consummation of the
transactions contemplated by the Transaction Documents.

       

      3.5 Income Tax
Matters.  Seller is not a non resident of Canada for the
purposes of the Income Tax Act (Canada).

       

      3.6 Commissions,
etc.  No broker, agent or other intermediary acted for Seller
in connection with the sale of the Purchased Shares and no commission or other
remuneration is payable or alleged to be payable to any broker, agent or other
intermediary who purports to act or have acted for or on behalf of either
party.

       

      3.7 Disclosure with respect to the
Corporation.  To the best of the Seller’s knowledge, the
Corporation’s Disclosure Documents did not contain any misrepresentation on the
date each were filed with the securities regulatory authorities of Canada and
with the United States Securities and Exchange Commission and, other than as
disclosed in the Corporation’s Disclosure Documents, there have been no material
changes in the condition (financial or otherwise), assets, liabilities,
operations, earnings or business of the Corporation since the date of each of
the Corporation’s Disclosure Documents.

       

      3.8 Affiliate
Transactions.  Except as set forth on Schedule 3.8, none of
Seller or any of its affiliates has any Contract, agreement, rights of
observation, management rights or other arrangement with the
Corporation.

       

      3.9 1996 Shareholders
Agreement.  The waivers attached hereto as Exhibit C are the
only consent or other approval required to terminate the prior right to purchase
of the Shareholders (as such term is defined therein) under the 1996
Shareholders Agreement or any similar rights held by any other person or entity
to purchase the Purchased Shares. The 1996 Shareholders Agreement will
automatically terminate in accordance with its terms upon completion of the
purchase of the  Purchased Shares from CMI.

       

      4. Representations and
Warranties of Purchaser

       

      Purchaser
hereby represents and warrants to Seller as follows and acknowledges and
confirms that Seller is relying on such representations and warranties in
connection with the sale by the Seller of the Purchased Shares:

       

      4.1 Organization.  Purchaser
is a limited partnership validly subsisting under the laws of Delaware and it
has the power to enter into and perform its obligations pursuant to the
Transaction Documents.

       

      4.2 No Violation.  The
execution and delivery of the Transaction Documents by Purchaser and the
consummation of the transactions provided for herein and therein will not result
in the violation of, or constitute a default under, or conflict with or cause
the acceleration of any obligation of Purchaser under:

       

      
        	
                (a)  

              	
                any
      Contract to which Purchaser is a party or by which it is
      bound;

              

      

       

      
        	
                (b)  

              	
                any
      provision of the constitutional documents or by-laws or resolutions of the
      board of directors (or any committee thereof) or shareholders of
      Purchaser;

              

      

       

      
        	
                (c)  

              	
                any
      judgment, decree, order or award of any court, governmental body or
      arbitrator having jurisdiction over Purchaser;
  or

              

      

       

      
        	
                (d)  

              	
                any
      applicable law, statute, ordinance, regulation or
  rule.

              

      

       

      4.3 Authorization.  The
Transaction Documents have been duly authorized, executed and delivered by
Purchaser and are legal, valid and binding obligations of Purchaser, enforceable
against Purchaser by Seller in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency and other laws affecting
the enforcement of rights of creditors generally and except that equitable
remedies may only be granted in the discretion of a court of competent
jurisdiction.

       

      4.4 Consents and
Approvals.  There is no requirement for 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 the Transaction Documents.

       

      4.5 Commissions,
etc.  No broker, agent or other intermediary acted for
Purchaser in connection with the purchase of the Purchased Shares and no
commission or other remuneration is payable or alleged to be payable to any
broker, agent or other intermediary who purports to act or have acted for or on
behalf of either party.

       

      5. Survival of Representations
and Warranties

       

      5.1 Survival of Representations and
Warranties.  The covenants, representations and warranties of
Seller and Purchaser contained in this Agreement shall survive the closing of
the transactions contemplated hereby until the second anniversary of the Closing
Date.  Notwithstanding anything herein to the contrary, the
representations and warranties of Seller set out in Sections 3.1 and
3.2 and of
Purchaser set out in Section 4.3 shall
survive indefinitely.

       

      6. Closing

       

      6.1 Place of
Closing.  The closing of the transactions contemplated hereby
(the “Closing”) shall
take place at the offices of McDermott Will & Emery LLP, 227 West Monroe
Street, Chicago, Illinois at 10:00 a.m. local time on December 28,
2007.

       

      6.2 Conditions to the
Closing.  The obligations hereunder are subject to and
conditioned upon:

       

      
        	
                (a)  

              	
                Purchaser
      receiving the following agreements from
Litwin:

              

      

       

      
        	
                (i)  

              	
                agreement
      as to the termination of the Shareholders
  Agreement;

              

      

       

      
        	
                (ii)  

              	
                a
      mutual release between Fred A. Litwin, Purchaser and the Corporation in
      form similar to the Mutual Release;
and

              

      

       

      (iii)           the
Litwin Purchase Agreement.

       

      
        	
                (b)  

              	
                Forum
      Financial Corporation, Litwin, Daniel S. Tamkin (“Tamkin”) and the
      Corporation duly executing the Services Termination Agreement and the
      Corporation having paid amounts payable as specified
      thereunder.

              

      

       

      6.3 Closing
Deliveries.

       

      
        	
                (a)  

              	
                At
      the Closing, Seller shall deliver to
Purchaser:

              

      

       

      
        	
                (i)  

              	
                certificates
      representing the Purchased Shares accompanied by stock powers of attorney
      endorsed by the applicable Seller for transfer in blank with signatures
      guaranteed by a member of the “STAMP” Medallion
  Program;

              

      

       

      
        	
                (ii)  

              	
                the
      Mutual Release duly executed;

              

      

       

      
        	
                (iii)  

              	
                upon
      the request of Purchaser, resignations of any or all of the following
      individuals as directors of the Corporation with such effective dates as
      Purchaser shall request: Fred A. Litwin, Lawrence Dale, Sol D. Nayman and
      Sidney Greenberg;

              

      

       

      
        	
                (iv)  

              	
                a
      certified copy of the authorizing resolutions of Seller, where
      applicable;

              

      

       

      and such
other documents as Purchaser may reasonably request.

       

      
        	
                (b)  

              	
                At
      the Closing Purchaser shall deliver to each applicable the
      Seller:

              

      

       

      
        	
                (i)  

              	
                a
      wire transfer in an amount representing the Aggregate Purchase Price to
      the account designated by Seller;

              

      

       

      
        	
                (ii)  

              	
                the
      Services Termination Agreement duly
executed;

              

      

       

      
        	
                (iii)  

              	
                the
      Mutual Release duly executed; and

              

      

       

      
        	
                (iv)  

              	
                a
      certified copy of the authorizing resolutions of
  Purchaser;

              

      

       

      6.4 Further
Assurances.  Each party to this Agreement covenants and agrees
that, from time to time subsequent to the Closing Date, such party will, at the
request and expense of the requesting party, execute and deliver all such
documents, including, without limitation, all such additional conveyances,
transfers, consents, tax elections (or an amendment thereto) and other
assurances and do all such other acts and things as any other party hereto,
acting reasonably, may from time to time request be executed or done in order to
better evidence, perfect or effectuate any provision of any Transaction Document
or any of the respective obligations intended to be created hereby or
thereby.

       

      7. Indemnification

       

      7.1 Obligations to
Indemnify.  Subject to the terms and conditions hereof (a)
Seller agrees to indemnify and save harmless Purchaser and its affiliates from
all claims, demands, proceedings, losses, damages, liabilities, deficiencies,
costs and expenses (including, without limitation, all legal and other
professional fees and disbursements, interest, penalties and amounts paid in
settlement) (collectively “Losses”) suffered or incurred
by Purchaser as a result of or arising directly or indirectly out of or in
connection with any breach of Seller of any representation, warranty, obligation
or covenant of Seller contained in this Agreement and (b) Purchaser agrees to
indemnify and save harmless Seller from all Losses suffered or incurred by
Seller as a result of or arising directly or indirectly out of or in connection
with any breach by Purchaser of any representation, warranty, obligation or
covenant of Purchaser contained in this Agreement; provided that Seller shall
not have any obligation to indemnify or save harmless Purchaser or any of its
affiliates in respect of a breach of a representation or warranty contained in
Section
3.7   (Disclosure with respect to the Corporation) if
Louis Manetti had actual knowledge of the misrepresentation or material change
referred to in Section
3.7  at any time prior to the date of Closing.

       

      7.2 Notice of Claim.  In
the event that a party (the “Indemnified Party”) shall
become aware of any claim, proceeding or other matter (a “Claim”) in respect of which
another party (the “Indemnifying Party”) agreed to
indemnify the Indemnified Party pursuant to this Agreement, the Indemnified
Party shall promptly give written notice thereof to the Indemnifying
Party.  Such notice shall specify whether the Claim arises as a result
of a claim by a person against the Indemnified Party (a “Third Party Claim”) or whether
the Claim does not so arise (a “Direct Claim”), and shall also
specify with reasonable particularity (to the extent that the information is
available) the factual basis for the Claim and the amount of the Claim, if
known.  If, through the fault of the Indemnified Party, the
Indemnifying Party does not receive notice of any Claim in time to contest
effectively the determination of any liability susceptible of being contested,
the Indemnifying Party shall be entitled to set off against the amount claimed
by the Indemnified Party the amount of any Losses incurred by the Indemnifying
Party resulting directly from the Indemnified Party’s failure to give such
notice on a timely basis.  The parties acknowledge and agree that the
provisions of this Article 7 shall be
the sole remedy available to an Indemnified Party, in respect of Losses suffered
or incurred by such Indemnified Party, against an Indemnifying Party, resulting
from a breach by Purchaser of any representation, warranty, obligation or
covenant of the Indemnifying Party contained in this Agreement.

       

      7.3 Direct Claims.  With
respect to any Direct Claim, following receipt of notice from the Indemnified
Party of the Claim, the Indemnifying Party shall have 60 days to make such
investigation of the Claim as is considered necessary or
desirable.  For the purpose of such investigation, the Indemnified
Party shall make available to the Indemnifying Party the information relied upon
by the Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying party may reasonably request.  If both
parties agree at or prior to the expiration of such 60-day period (or any
mutually agreed upon extension thereof) to the validity and amount of such
Claim, the Indemnifying Party shall immediately pay to the Indemnified Party the
full agreed upon amount of the Claim.

       

      7.4 Third Party
Claims.  With respect to any Third Party Claim, the Indemnified
Party shall have the exclusive right, at the expense of the Indemnifying Party,
to contest, settle or pay the amount claimed and to retain counsel and other
experts or advisers selected by the Indemnified Party in its sole discretion in
connection therewith; provided, however, that the Indemnified Party shall not
settle any Third Party Claim without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed; provided,
however, that the Indemnifying Party shall remain liable for the settlement
amount even if any such consent is not obtained for any reason.  If
the Indemnified Party elects to assume such control, the Indemnifying Party
shall have the right, at its sole expense, to participate in the negotiation,
settlement or defence of such Third Party Claim.  If any Third Party
Claim is of a nature such that the Indemnified Party is required by applicable
law to make a payment to any person (a “Third Party”) with respect to
the Third Party Claim before the completion of settlement negotiations or
related legal proceedings, the Indemnified Party may make such payment and the
Indemnifying Party shall, forthwith after demand by the Indemnified Party,
reimburse the Indemnified Party for such payment.  If the amount of
any liability of the Indemnified Party under the Third Party Claim in respect of
which such payment was made, as finally determined, is less than the amount that
was paid by the Indemnifying Party to the Indemnified Party, the Indemnified
Party shall, forthwith after receipt of the difference from the Third Party, pay
the amount of such difference to the Indemnifying Party.

       

      7.5 Payment and
Cooperation.  The Indemnifying Party shall pay to the
Indemnified Party all amounts for which the Indemnifying Party is liable
pursuant to this section promptly after the Indemnified Party incurs the Loss in
respect of which such liability arises; provided that in no event shall the
maximum liability of a Seller exceed the Aggregate Purchase Price paid to
Seller. For the Purchased Shares.  The Indemnified Party and the
Indemnifying Party shall cooperate fully with each other with respect to Third
Party Claims, and shall keep each other fully advised with respect thereto
(including supplying copies of all relevant documentation promptly as it becomes
available).

       

      8. Miscellaneous

       

      8.1 Notices

       

      
        	
                (a)  

              	
                Any
      notice or other communication required or permitted to be given hereunder
      shall be in writing and shall be delivered in person, transmitted by
      telecopy or sent by registered mail, charges prepaid, addressed as
      follows:

              

      

       

      
        	
                (i)  

              	
                if
      to Seller: :

              

      

       

      
        	
                 
      

              	
                at
      the address set out in Schedule 2.1

              

      

       

      
        	
                (ii)  

              	
                if
      to Purchaser:

              

      

      
        	
                 
      

              	
                c/o

              	
                Glencoe
      Capital, LLC

              

      

      
        	
                 
      

              	
                222
      West Adams Street

              

      

      Suite
1000

      Chicago,
Illinois 60606

      Attention:  Louis
J. Manetti

      Facsimile:  (312)
795-0455

      

      with a
copy to:

       

      McDermott,
Will & Emery LLP

       

      227 West
Monroe Street

       

      Chicago,
Illinois 60606

       

      Attention:  Scott
M. Williams

       

      Facsimile:  (312)
984-7700

       

      
        	
                (b)  

              	
                Any
      such notice or other communication shall be deemed to have been given and
      received on the day on which it was delivered or transmitted (or, if such
      day is not a Business Day, on the next following Business Day), or, if
      mailed, on the third Business Day following the date of mailing; provided,
      however, that if at the time of mailing or within three Business Days
      thereafter there is or occurs a labour dispute or other event that might
      reasonably be expected to disrupt the delivery of documents by mail, any
      notice or other communication hereunder shall be delivered or transmitted
      by means of recorded electronic communication as
  aforesaid.

              

      

       

      
        	
                (c)  

              	
                Any
      party may at any time change its address for service from time to time by
      giving notice to the other parties in accordance with this Section 8.1.

              

      

       

      8.2 Disclosure.  Except
as required by any applicable law or regulatory requirement, none of the parties
to this Agreement shall issue any press release or make any other public
announcement with respect to this Agreement or the transactions contemplated
hereby without the prior written consent of the other parties
hereto.

       

      8.3 Binding Nature of the
Agreement.  The provisions of this Agreement shall enure to the
benefit of and shall be binding upon the parties hereto and their respective
heirs, legal personal representatives, successors and assigns.

       

      8.4 Amendment.  This
Agreement may not be amended except by an instrument signed by each of the
parties hereto.

       

      8.5 Counterparts.  This
Agreement may be executed by facsimile and in counterparts, each of which shall
be deemed an original, and all of which taken together shall constitute one and
the same instrument.

       

      [THE
REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]

       

      
        
          
            -  -

            

          

           

        

        
           

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF this
Agreement has been executed by the parties as of the date first written
above.

       

      

      PURCHASER:

      GLENCOE
SKYDOME HOLDINGS, L.P.

       

      By:                                                                           

      Name:                                                                           

      Title:                                                                           

       

      SELLER:

      CONSOLIDATED
MERCANTILE INCORPORATED

       

      By:                                                                           

      Name:                                                                           

      Title:                                                                           

       

      
        
          
            -  -

            

          

           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
2.1

       

      Seller
and Purchased Shares

       

      
        	
                Name and Address of Seller

              	
                Number of Common Shares of Polyair Inter Pack Inc.
      to be sold to

                Purchaser

                (Purchased Shares)

                 

              	
                Aggregate

                Purchase Price

                ($)

              
	
                Consolidated
      Mercantile Incorporated

                 

                106
      Avenue Road Toronto, Ontario

                M5R
      2H3

                 

              	
                1,549,845

              	
                $6,168,383.10

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
3.8

       

      Affiliate
Transactions

       

      The only
Contract, agreement, rights of observation, management rights or other
arrangements Seller or any of its affiliates has with the Corporation, (other
than the Shareholders Agreement and the 1996 Shareholders Agreement) is as
follows:

       

      
        	
                1.  

              	
                the
      disputed arrangement between the Corporation and Litwin and Tamkin
      pursuant to which Litwin and Tamkin have asserted a claim for CDN$375,000,
      before interest and Goods and Services Tax, of unpaid fees against the
      Corporation.ex4-2june2008.htm

    EXHIBIT 4.2

     

    

      THIS SECURITIES PURCHASE
AGREEMENT made as of the 29th day of
November, 2007.

      

      B E T W E
E N :

      

      CONSOLIDATED MERCANTILE
INCORPORATED,

      a company existing under
the

      laws of the Province of
Ontario,

      

      (hereinafter referred to as the "Vendor")

      

      OF THE FIRST PART;

      

      - and -

      

      337572 ONTARIO
LIMITED,

      a company existing under
the

      laws of the Province of
Ontario,

      

      (hereinafter referred to as the "Purchaser")

      

      OF THE SECOND PART;

      

      - and -

      

      ALAN KORNBLUM,

      of the Province of
Ontario,

      

      (hereinafter referred to as the "Principal")

      

      OF THE THIRD PART;

      

      - and -

      

      DISTINCTIVE DESIGNS FURNITURE
INC.,

      a company existing under
the

      laws of the Province of
Ontario,

      

      (hereinafter referred to as the "Company")

      

      OF THE FOURTH PART.

      

      

      WHEREAS the Vendor is the
registered and beneficial holder of certain debt and equity interests in the
Company, the particulars of which are detailed on Schedule “A” annexed hereto
(collectively, the “Securities”);

      

      AND WHEREAS the Purchaser has
agreed to purchase the Securities from the Vendor and the Vendor has agreed to
sell the Securities to the Purchaser on the terms and conditions hereinafter set
forth;

      

      AND WHEREAS the Principal is
the senior officer and significant shareholder of the Company as well as the
sole shareholder and officer and director of the Purchaser;

      

      NOW THEREFORE THIS AGREEMENT
WITNESSETH that, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged), the parties hereto covenant and
agree with each other as follows:

      

      

      ARTICLE
1:  PURCHASE OF SECURITIES

      

      1.1                      Agreement to Purchase
Securities.  Subject to the terms and conditions hereof, the
Vendor agrees to sell to the Purchaser and the Purchaser agrees to purchase from
the Vendor, at Closing, the Securities free and clear of all liens, charges and
encumbrances.

      

      

      ARTICLE
2:  PURCHASE PRICE

      

      
        	
                2.1  

              	
                Amount of Purchase
      Price.

              

      

      

      
        	
                (a)  

              	
                The
      purchase price payable by the Purchaser to the Vendor for the Securities
      purchased by the Purchaser hereunder shall be an amount equal to the
      following:

              

      

      

      
        	
                (b)  

              	
                as
      to the debt portion of the Securities, such amount as shall be equal to
      the total amount of the principal and accrued interest owing thereunder up
      to and including the Closing as detailed on Schedule “A” (the “Debt Purchase Price”);
      and

              

      

      

      
        	
                (c)  

              	
                as
      to the equity portion of the Securities, up to the amount of ONE MILLION
      DOLLARS ($1,000,000.00) (the “Equity Purchase
      Price”).

              

      

      

      
        	
                (d)  

              	
                The
      Debt Purchase Price and the Equity Purchase Price (collectively, “Purchase Price”) shall
      be paid by the Purchaser in accordance with Section 2.2
      herein.

              

      

      

      2.2                      Payment of Purchase
Price.  The Debt Purchase Price shall be paid and satisfied at
the Closing by the delivery to counsel for the Vendor, Messrs. Goldman, Spring,
Kichler & Sanders LLP, in trust, of a certified cheque or bank draft in an
amount equal to the Debt Purchase Price.  The Equity Purchase Price
shall be satisfied at the Closing by delivery to the Vendor of a promissory note
of the Purchaser and the Principal in form annexed hereto as Schedule “B” (the
“Closing
Note”).

      

      

      ARTICLE
3:  CLOSING ARRANGEMENTS

      

      3.1                      Closing.

      

      
        	
                (a)

              	
                Time
      shall be of the essence of this
Agreement.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      closing of this transaction (the "Closing") shall take
      place at 10:00 a.m. on the date which is thirty (30) days following the
      execution of this Agreement (the "Closing Date") at the
      offices of the Vendor’s counsel or at such other place or time as may be
      agreed in writing between the Vendor and each of the other parties
      hereto.

              

      

      

      3.2                      Closing
Procedures:  At or before Closing, the Vendor and the Purchaser
shall take or cause to be taken all actions, steps and corporate proceedings
necessary or desirable to validly and effectively approve or authorize the
completion of the transactions herein provided for; and, upon fulfillment of all
of the conditions set forth in section 7.2 which have not been waived in writing
as therein provided, the Vendor shall deliver to the Purchaser all documents
required to be delivered hereunder, and upon fulfilment of the foregoing
provisions of this section 3.2 and upon fulfilment of all of the conditions set
forth in section 7.1 which have not been waived in writing as therein provided,
the Purchaser and the Principal shall deliver to the Vendor or its counsel, as
the case may be, a certified cheque or bank draft in the amount of the Debt
Purchase Price along with the Closing Note and the Pledge (referred to
below).

      

      

      ARTICLE
4:  COVENANTS

      

      4.1                      Approvals.  The
parties hereto agree to obtain, on or before the Closing date, all necessary
regulatory approvals that are required to permit the purchase and sale of the
Securities hereunder.

      

      4.2                      Corporate
Authority.  The parties hereto agree to take all necessary
corporate steps and proceedings and shall take all necessary corporate steps and
proceedings to authorize the execution and delivery of this Agreement and to
authorize the sale and transfer of the Securities hereunder.

      

      4.3                      Insurance & Death of
Principal.  The Company, the Purchaser and the Principal
covenant and agree to maintain that certain life insurance policy on the life of
the Principal in the face amount of $500,000.00 issued by Manulife Financial
(the “Insurance Policy”) in good standing at all times until full payment of the
Closing Note in all respects.  Prior to Closing the Insurance Policy
shall be amended to note the interest of the Vendor thereon as a 50% beneficiary
thereof, subject to the terms of this Agreement.  The amount of
insurance assigned to the Vendor pursuant hereto shall be reduced on a dollar
for dollar basis once the amount due under the Closing Note is less than
$250,000.00.  Any amounts received by the Vendor pursuant to the
Insurance Policy shall be deducted from the outstanding balance of the Closing
Note.  Upon payment of the Closing Note in full, the Vendor shall sign
all documents and take all actions as necessary to reassign its interest in the
Insurance Policy to the Company or as the Company may direct.  The
Principal will provide all necessary cooperation and consents should the Vendor
wish, at its own expense, to obtain additional insurance on the life of the
Principal.

      

      In the
event of the death of the Principal prior to the Closing Note having been paid
in full, the Company and the Purchaser agree to cause the sale of all the shares
of the Company or all the assets of the Company as soon as possible for the fair
market value thereof.  The insurance proceeds received by the Company
and the Vendor in respect the Insurance Policy shall be added to the proceeds of
sale of the assets or shares or the Company, and the aggregate of such amounts
shall be paid in accordance with Section 7 of the Closing Note, which for
greater certainty shall be follows:

      

      
        	
                (a)  

              	
                firstly,
      to the secured creditors of the Company (including the Purchaser to the
      extent of the Purchaser’s secured debt upon the assets of the
      Company);

              

      

      

      
        	
                (b)  

              	
                secondly,
      to the Purchaser and the Vendor equally until all amounts owing in
      relation to the Closing Note have been paid in full;
  and

              

      

      

      
        	
                (c)  

              	
                any
      balance shall be paid to the
Purchaser.

              

      

      

      

      ARTICLE
5:  REPRESENTATIONS

      AND WARRANTIES OF THE
VENDOR

      

      The Vendor represents and warrants to
the Purchaser as follows, it being acknowledged that the Purchaser is relying
upon such representations and warranties in connection with the purchase of the
Securities pursuant to the provisions herein:

      

      5.1                      Organization.  The
Vendor is duly incorporated or otherwise registered and organized and validly
subsisting under the laws of the Province of Ontario and has the corporate power
to own or lease its property, to carry on its business as now being conducted by
it, to enter into this Agreement and all documentation flowing therefrom, and to
perform it obligations thereunder.

      

      5.2                      Authorization.  This
Agreement and all documentation flowing therefrom 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, except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally and except
that equitable remedies may be granted only in the discretion of a court of
competent jurisdiction.

      

      5.3                      Title.  The
Securities are owned by the Vendor free and clear of all liens, charges and
encumbrances.

      

      5.4                      Securities.  To
the best of the Vendor’s knowledge and belief:

      

      (a)           Schedule
“A” is true and accurate in all material respects;

      

      
        	
                 
      

              	
                (b)

              	
                The
      debt portion of the Securities detailed on Schedule “A” annexed hereto
      represents valid indebtedness due and owing by the Company to the Vendor
      as of the date of execution of this
Agreement;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                The
      GSA (as defined in Schedule “A”) creates a valid security interest in
      favour of the Vendor in all property and assets of the Company in which
      the Company now has rights or may hereafter acquire
  rights;

              

      

      

      
        	
                 
      

              	
                (d)

              	
                All
      necessary registrations have been made and maintained under the Personal Property Security Act
      (Ontario) in order to perfect and preserve thereunder the Vendor’s
      security interest under the GSA;
and

              

      

      

      
        	
                 
      

              	
                (e)

              	
                the
      Vendor has not done or permitted any act to be done to release, discharge,
      or invalidate the debt portion of the Securities or the
    GSA.

              

      

      

      

      ARTICLE
6:  REPRESENTATIONS AND WARRANTIES

      OF THE PURCHASER AND THE
PRINCIPAL

      

      6.1                      Purchasing as
Principal.  The Purchaser and the Principal, jointly and
severally, represent and warrant to the Vendor that the Purchaser is purchasing
the Securities to be purchased by it pursuant to the provisions
herein:

      

      6.2                      Organization.  The
Purchaser is duly incorporated or otherwise registered and organized and validly
subsisting under the laws of the Province of Ontario and has the corporate power
to own or lease its property, to carry on its business as now being conducted by
it, to enter into this Agreement and all documentation flowing therefrom, and to
perform it obligations thereunder.

      

      6.3                      Authorization.  This
Agreement and all documentation flowing therefrom 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, except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally and except
that equitable remedies may be granted only in the discretion of a court of
competent jurisdiction.

      

      6.4                      Schedule
“A”.  To the best of the Purchaser’s knowledge and belief,
Schedule “A” is true and accurate in all material respects.

      

      

      ARTICLE
7:  CONDITIONS OF CLOSING

      

      7.1                      Conditions for the Benefit
of the Purchaser.  The Purchaser shall not be obliged to
complete the purchase herein provided for unless, at or prior to Closing, each
of the following conditions shall have been satisfied, it being understood that
the said conditions are included for the exclusive benefit of the Purchaser and
may be waived in writing by the Purchaser at any time; and the Vendor covenants
and agrees with the Purchaser to use its best efforts to ensure that such
conditions are fulfilled at or prior to Closing:

      

      
        	
                (b)  

              	
                Compliance.  All
      of the items, covenants and agreements set forth in this Agreement to be
      complied with or performed by the Vendor at or prior to Closing shall have
      been complied with or performed by the Vendor at or prior to
      Closing.

              

      

      

      
        	
                (c)  

              	
                Representations and
      Warranties.  The representations and warranties of the
      Vendor contained in this Agreement shall be true and correct in all
      material respects as of the date of this Agreement, and shall also be true
      and correct in all material respects on and as of the Closing Date with
      the same force and effect as if such representations and warranties had
      been made on and as of such date.

              

      

      

      
        	
                (d)  

              	
                Deliveries.  The
      Vendor shall have delivered to the Purchaser the documents contemplated in
      section 3.2 and otherwise hereunder, including but not limited
      to:

              

      

      

      
        	
                (i)  

              	
                a
      share certificate evidencing the equity portion of the Securities duly
      endorsed for transfer to the Purchaser, along with a duly executed minute
      book transfer of such shares executed in favour of the
      Purchaser;

              

      

      

      
        	
                (ii)  

              	
                an
      assignment of the debt portion of the Securities and related GSA from the
      Vendor in favour of the Purchaser, and any other documents that the
      Purchaser reasonably considers necessary or desirable to validly and
      effectively transfer the debt portion of the Securities and related GSA to
      the Purchaser, all in a form reasonably satisfactory to the Purchaser;
      and

              

      

      

      
        	
                (iii)  

              	
                all
      documentation possessed by the Vendor evidencing the debt portion of the
      Securities and related GSA.

              

      

      

      
        	
                (e)  

              	
                Shareholders’
      Agreement.  The pre-existing shareholders agreement in
      place with respect to the Company shall have been terminated in all
      respects and each party thereto shall have been released from the
      provisions thereof.

              

      

      

      
        	
                (f)  

              	
                Mutual
      Releases.  The Vendor and Fred Litwin, on the one hand,
      and the Purchaser, the Principal and the Company, on the other hand, shall
      have executed and delivered mutual releases in favour of one another on
      mutually acceptable terms and
conditions.

              

      

      

      In case
of any of the foregoing conditions shall not have been fulfilled at or prior to
Closing, the Purchaser in its sole discretion may either:  (a)
terminate its obligation to purchase the Securities by notice in writing to the
Vendor, in which event the Purchaser shall be released from all obligations
under this Agreement, and unless the Purchaser can show that the condition for
which the Purchaser has terminated it obligations could reasonably have been
performed or complied with or caused to have been performed or complied with by
the Vendor, then the Vendor shall also be released from all obligations in
respect of the Purchaser hereunder; or (b) waive compliance with any such
condition if its shall see fit to do so, without prejudice to its right of
termination in the event of non-fulfillment of any other condition in whole or
in part.

      

      7.2                      Conditions for the Benefit
of the Vendor.  The Vendor shall not be obliged to complete the
sale herein provided for unless, at or prior to Closing, each of the following
conditions shall have been satisfied, it being understood that the said
conditions are included for the exclusive benefit of the Vendor and may be
waived in writing by the Vendor at any time; and the Purchaser and the Principal
covenant and agree with the Vendor to use their best efforts to ensure that such
conditions are fulfilled at or prior to Closing:

      

      
        	
                 
      

              	
                (1)

              	
                Compliance.  All
      of the items, covenants and agreements set forth in this Agreement to be
      complied with or performed by the Purchaser and the Principal at or prior
      to Closing shall have been complied with or performed by the Purchaser at
      or prior to Closing.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                Representations and
      Warranties.  The representations and warranties of the
      Purchaser and the Principal contained in this Agreement shall be true and
      correct in all material respects as of the date of this Agreement and
      shall also be true and correct in all material respects on and as of the
      Closing Date with the same force and effect as if such representations and
      warranties had been made on and as of such
date.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Deliveries.  The
      Purchaser shall have delivered to the Vendor certified cheques or bank
      drafts in an amount equal to the Debt Purchase Price along with the
      Closing Note and Pledge (referred to
below).

              

      

      

      
        	
                 
      

              	
                (4)

              	
                Shareholders
      Agreement.  The pre-existing shareholders agreement in
      place with respect to the Company shall have been terminated in all
      respects and each party thereto shall have been released from the
      provisions thereof.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                Mutual
      Releases.  The Vendor and Fred Litwin, on the one hand,
      and the Purchaser, the Principal and the Company, on the other hand, shall
      have executed and delivered mutual releases in favour of one another on
      mutually acceptable terms and
conditions.

              

      

      

      
        	
                 
      

              	
                (6)

              	
                Security for Closing
      Note.  As security for the Closing Note, the Purchaser
      and the Principal shall grant a first charge pledge of all the issued and
      outstanding shares of the Company in favour of the Vendor pursuant to a
      share pledge agreement in the form annexed hereto as Schedule “C” (the
      “Pledge”).

              

      

      

      
        	
                 
      

              	
                (7)

              	
                Insurance.  The
      Company shall have assigned to the Vendor one-half the proceeds of the
      Insurance Policy.

              

      

      

      In case
of any of the foregoing conditions shall not have been fulfilled at or prior to
Closing, the Vendor in its sole discretion may either:  (a) terminate
this Agreement in respect of the Purchaser by notice in writing to the
Purchaser, in which event the Vendor shall be released from all obligations
under this Agreement, and unless the Vendor can show that the condition for
which it terminated this Agreement could reasonably have been performed or
complied with by the Purchaser and the Principal, the Purchaser and the
Principal shall also be released from all obligations hereunder; or (b) waive
compliance with any such condition if it shall see fit to do so, without
prejudice to its right of termination in the event of non-fulfillment of any
other condition in whole or in part.

      

      

      ARTICLE
8:  GENERAL

      

      8.1                      Interpretation.

      

      
        	
                 
      

              	
                (1)

              	
                Schedules.  Schedules
      and other documents attached or referred to in this Agreement are an
      integral party of this Agreement.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                Section and
      Headings.  The division of this Agreement into Articles,
      sections and subsections and the insertion of headings are for convenience
      of reference only and shall not affect the construction of interpretation
      hereof.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Extended
      Meanings.  Words importing the singular number include
      the plural and vice-versa; words importing the masculine gender include
      the feminine and neuter genders.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                Funds.  All
      dollar amounts referred to in this Agreement are in lawful money of
      Canada.

              

      

      

      8.2                      Further
Assurances.  Each of the parties hereto from time to time at
the request and expense of any of the other parties hereto and without further
consideration, shall execute and deliver such other instruments of transfer,
conveyance and assignment and take such further actions as the other parties may
require to more effectively complete any matter provided for
herein.

      

      8.3                      Entire
Agreement.  This Agreement and any documents flowing therefrom,
constitutes the entire agreement(s) among the parties hereto and except as
herein stated and in the instruments and documents to be executed and delivered
pursuant hereto, contains all of the representations and warranties of the
parties hereto.  There are no oral representations or warranties of
any kind among the parties hereto.  This Agreement may not be amended
or modified in any respect except by written instrument signed by all the
parties hereto.

      

      8.4                      Non-Merger.  Each
party hereby agrees that all provisions of this Agreement shall survive the
execution and delivery of this Agreement, the completion of all transactions
contemplated hereby and delivery of all documents in connection
herewith.

      

      8.5                      Applicable
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable thereto.

      

      8.6                      Severability.  Any
covenant or provision hereof determined to be void or unenforceable in whole or
in part shall not be deemed to affect or impair the validity of any other
covenant or provision hereof and the covenants and provisions hereof are
declared to be separate and distinct.

      

      8.7                      Notices.  Any
notice required or permitted to be given hereunder shall be in writing and shall
be effectively given if (1) delivered personally or (ii) sent by prepaid courier
service, addressed, in the case of notice to parties as follows:

      

      (a)           To
the
Vendor:                                      106
Avenue Road

      Toronto,
Ontario  M5R 2H3

      

      Attn:  Fred
Litwin

      

      with a
copy to:

      

      Goldman,
Spring, Kichler & Sanders LLP

      Barristers
and Solicitors

      700 – 40
Sheppard Ave. W.

      Toronto,
Ontario  M2N 6K9

      

      Attn:  Mitchell
J. Sanders

      

      To Purchaser and/or

      the
Principal:                                      6
Tillingham Keep

      Toronto,
Ontario  M3H 6A2

      

      with a
copy to:

      

      Kronis,
Rotsztain, Margles, Cappel

      Barristers
and Solicitors

      700 - 25
Sheppard Ave. W.

      North
York, ON  M2N 6S6

      

      Attn:  Jules
N. Kronis, Q.C.

      

      Any
notice so given shall be deemed conclusively to have been given and received
when so personally delivered or on the second day following the sending thereof
by private courier.  Any party hereto or others mentioned above may
change any particulars of its address for notice by notice to the others in the
manner aforesaid.

      

      8.8                      Successors and
Assigns.  This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective successors and
assigns.  Notwithstanding the foregoing, this Agreement shall not be
assignable by the Vendor without the express written consent of the
Purchaser.

      

      8.9                      Survival.  The
covenants, representations and warranties of the parties as of the Closing
contained in Article 5 and 6 hereof shall survive the Closing and shall continue
in full force and effect until the Closing Note is paid in full.

      

      8.10                      Counterparts.  This
Agreement may be executed in one or more counterparts, each of which so executed
shall constitute an original and of which together shall constitute one and the
same instrument, provided that this Agreement may be treated by the Vendor as a
separate Agreement in respect of the Purchaser.

      

      IN WITNESS WHEREOF this Agreement has
been executed by the parties hereto.

      

      CONSOLIDATED MERCANTILE
INCORPORATED

      

      

      Per:                                                                

      Authorized Signing
Officer

      

      

      337572 ONTARIO LIMITED

      

      

      Per:                                                                

      Authorized Signing
Officer

      

      

      

      

      Witness                                                      ALAN KORNBLUM

      

      

      DISTINCTIVE DESIGNS FURNITURE
INC.

      

      

      Per:                                                                

      Authorized Signing
Officer

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
“A”

      

      

      Vendor’s
Equity and Debt Interest in the Company

      

      

      
        	
                 
      

              	
                EQUITY

              

      

      

      -           824,103
Common Shares (50.3% of Class)

      

      
        	
                -

              	
                645,000
      Class A Preferred Shares Series 2 (61.11% of Class), non voting, non
      participating, cumulative (1/2 prime + 1%) redeemable at $1 each, with a
      cumulative dividend as at November 30, 2007 of
  $213,358.00

              

      

      

      
        	
                 
      

              	
                -

              	
                100,000
      Class B Preferred Shares (50% of Class), non voting, non cumulative,
      redeemable at nominal value

              

      

      

      
        	
                -

              	
                53,100
      Class C Preferred Shares Series 2 (58.9% of Class), non voting, non
      participating, cumulative (2.5%) redeemable at $10 each with a cumulative
      dividend as at November 30, 2007 of
$109,583.00

              

      

      

      

      
        	
                 
      

              	
                DEBT

              

      

      

      
        	
                -

              	
                A
      $200,568 Secured Note Receivable bearing interest at prime plus 2% with no
      specific terms of repayment, postponed under terms of Distinctive Designs
      Furniture Inc.’s Bank Loan

              

      

      

      
        	
                -

              	
                A
      $547,500 Secured Note Receivable bearing interest at 10% per annum with no
      specific terms of repayment, postponed under terms of Distinctive Designs
      Furniture Inc.’s Bank Loan

              

      

      

      
        	
                -

              	
                $78,885.86
      Interest owing in respect of above two Secured Notes to November 30,
      2007

              

      

      

      
        	
                -

              	
                The
      two Secured Notes are secured pursuant to a General Security Agreement
      executed by the Company n favour of the Vendor dated August 17, 2005 (the
      “GSA”)

              

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
“B”

      

      PROMISSORY
NOTE

      DATED:    January 11, 2008

      

      This
Promissory Note is being delivered pursuant to subsection 2.2 of a certain
purchase agreement made the  29th day of November, 2007 (such purchase
agreement being herein referred to as the "Purchase Agreement") among
Consolidated Mercantile Incorporated, 337572 Ontario Limited, Alan Kornblum and
Distinctive Designs Furniture Inc.

      

      
        	
                1.

              	
                For
      value received, the undersigned, 337572 Ontario Limited and Alan Kornblum
      (collectively, the “Promisor”) hereby,
      jointly and severally, acknowledge themselves indebted to and promises to
      pay to Consolidated Mercantile Incorporated (“Holder”) up to the
      principal amount of ONE MILLION DOLLARS ($1,000,000.00) in lawful money of
      Canada (the "Principal Amount") on the terms and conditions set forth in
      this Promissory Note.

              

      

      

      
        	
                2.

              	
                The
      amounts due under this Promissory Note shall be due and payable in ten
      (10) equal consecutive annual instalments of ONE HUNDRED THOUSAND DOLLARS
      ($100,000.00) each (the “Annual Payments”), with
      the first of such annual payments becoming due and payable on the 15th
      day of January, 2009 and each anniversary date thereafter until paid in
      full; provided that such Annual Payments shall only be due and payable in
      any given year if Distinctive Designs Furniture Inc. continues to operate
      its business (provided that payment shall not be excused if the Purchaser,
      Alan Kornblum or members of his immediate family or persons otherwise
      non-arm’s length to them re-commence a similar business to Distinctive
      Designs Furniture Inc., directly or indirectly); and further provided that
      if the Promisor shall default in the payment of any Annual Payment
      hereunder, such amount in default shall bear interest at the rate of 18%
      per annum.

              

      

      

      
        	
                3.

              	
                To
      the extent that Distinctive Designs Furniture Inc. shall, at any time
      during the term of this Promissory Note, experience annual pre-tax
      earnings of at least TWO MILLION DOLLARS ($2,000,000.00) in any year, the
      Holder herein shall have the option by written notice to the Promisor to
      require that the Promisor increase the Annual Payment for that year by the
      sum of FIFTY THOUSAND DOLLARS ($50,000.00) for each ONE MILLION DOLLARS
      ($1,000,000.00) of pre-tax earnings of Distinctive Designs Furniture Inc.
      in excess of TWO MILLION DOLLARS ($2,000,000.00) in that year, provided
      that the maximum liability under this Promissory Note shall remain
      unchanged..

              

      

      

      
        	
                4.

              	
                If
      Distinctive Designs Furniture Inc. shall in any year pay to either 337572
      Ontario Limited and/or Alan Kornblum and members of their immediate family
      gross annual compensation (inclusive of any benefits which are over and
      above the benefits generally and reasonably available to the employees of
      Distinctive Designs Furniture Inc.) or dividends or any other
      extraordinary distributions whatsoever in excess of the Threshold
      Distribution (as defined below) for that year, then for each dollar of
      compensation, dividend or other distribution paid in excess of the
      Threshold Distribution, the Annual Payment due hereunder for that year
      shall be increased equally.  For greater clarity, it is
      understood and agreed that any sum paid to the Purchaser, Alan Kornblum or
      members of his immediate family as aforesaid in excess of the Threshold
      Distribution may only be paid if the Holder is paid each Annual Payment
      contemplated hereunder.

              

      

      

      
        	
                 
      

              	
                For
      the purposes hereof, the “Threshold Distribution”
      for 2008 shall be equal to THREE HUNDRED SEVENTY-TWO THOUSAND DOLLARS
      ($372,000.00) (consisting of gross compensation of $272,000.00 plus
      $100,000.00 annually to be paid to Alan Kornblum to equalize him with the
      Holder in respect of the Annual Payments due to him under this Promissory
      Note).  The Threshold Distribution for each subsequent year
      shall be increased by the annual inflation rate for that year, as
      specified by the increase in the Consumer Price Index for the City of
      Toronto.

              

      

      

      
        	
                5.

              	
                The
      Holder shall have the right at all times, upon reasonable notice, during
      the term of this Promissory Note to have free and unfettered access to
      such financial records of Distinctive Designs Furniture Inc. as shall be
      necessary to verify and support the terms of this Promissory Note,
      including but not limited to the annual financial statements of
      Distinctive Designs Furniture Inc., subject to the Holder agreeing to
      maintain all such information in
confidence.

              

      

      

      
        	
                6.

              	
                Notwithstanding
      anything herein contained to the contrary, but subject to Section 7
      herein, it is acknowledged and agreed by the Holder that the amounts due
      and payable under this Promissory Note shall no longer be due and payable
      and the Promisor, and each of them, shall immediately cease to have any
      further obligation to the Holder hereunder in the event that Distinctive
      Designs Furniture Inc. shall cease to carry on business or shall otherwise
      become bankrupt within the meaning of the Bankruptcy and Insolvency Act
      (Canada), provided that the Purchaser, Alan Kornblum, or members of
      his immediate family or persons otherwise non-arm’s length to them have
      not directly or indirectly recommenced a similar business
      thereafter.

              

      

      

      
        	
                7.

              	
                Notwithstanding
      anything herein contained to the contrary, if the Promisor shall sell
      their shares of Distinctive Designs Furniture Inc. during the term of this
      Promissory Note or if Distinctive Designs Furniture Inc. shall sell all or
      substantially all of its assets and undertaking during the term of this
      Promissory Note, and as a consequence of any such transaction the Promisor
      or Distinctive Designs Furniture Inc. realizes net proceeds of disposition
      in excess of the Promisor’s security upon the assets of Distinctive
      Designs Furniture Inc., then such surplus proceeds shall be paid, to the
      extent of fifty percent (50%) thereof, to the Holder up to the full amount
      of the unpaid principal sum due and owing hereunder as of the date of
      closing of such transaction of purchase and
  sale.

              

      

      

      
        	
                8.

              	
                Notwithstanding
      anything herein contained to the contrary, in the event that Alan Kornblum
      shall die during the term of this Promissory Note prior to the Principal
      Amount having been paid in full, Alan Kornblum (and his estate) shall
      cease to have any further liability hereunder, it being understood and
      agreed that the death of Alan Kornblum shall in no way alter or diminish
      the liability of 337572 Ontario Limited
  hereunder.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9.           The
Promisor hereby:

      

      
        	
                 
      

              	
                (a)

              	
                waives
      demand, diligence, presentment for payment, protest and demand, and notice
      of extension, dishonour, protest, demand and non-payment of this
      Promissory Note; and

              

      

      

      
        	
                 
      

              	
                (b)

              	
                agrees
      that Consolidated Mercantile Incorporated may extend the time for payment
      of all or any part of the amounts due and payable under this Promissory
      Note without diminishing or altering the liability of the Promisor under
      this Promissory Note.

              

      

      

      
        	
                10.

              	
                This
      Promissory Note shall be governed by and construed in accordance with the
      laws of the Province of Ontario and the federal laws of Canada applicable
      therein.

              

      

      

      11.           Time
is of the essence of this Promissory Note.

      

      
        	
                12.

              	
                In
      the event that the Holder shall negotiate, sell or assign this Promissory
      Note, it shall provide written notice thereof to the
    Promisor.

              

      

      

      
        	
                13.

              	
                To
      the extent there is any default hereunder, the Holder agrees to provide
      ten (10) days written notice of default prior to taking any action under
      any related security held by the Holder in respect of this Promissory
      Note.

              

      

      

      

      DATED this 11th day of
January, 2008.

      

      SIGNED,
SEALED AND
DELIVERED                                                                                     )           337572 ONTARIO
LIMITED

      in the
presence
of:                                                              )

      )

      )          Per:__________________________________

      )                  Alan Kornblum

      )

      )

      ____________________________                                                                       )          _____________________________________

      Witness                                                              )                  Alan Kornblum

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
“C”

      

      SHARE PLEDGE
AGREEMENT

      

      THIS AGREEMENT made the l
day of ___________, 2007.

      

      B E T W E
E N:

      

      337572 ONTARIO
LIMITED,

      a corporation existing under
the

      laws of the Province of
Ontario,

      

      (hereinafter called the
"Pledgor")

      

      OF THE FIRST PART;

      - and -

      

      CONSOLIDATED MERCANTILE
INCORPORATED,

      a corporation existing under
the

      laws of the Province of
Ontario,

      

      (hereinafter called the
"Pledgee")

      

      OF THE SECOND PART;

      - and -

      

      DISTINCTIVE DESIGNS FURNITURE
INC.,

      a corporation existing under
the

      laws of the Province of
Ontario,

      

      (hereinafter called the
"Corporation")

      

      OF THE THIRD PART;

       - and -

      

      GOLDMAN, SPRING, KICHLER &
SANDERS LLP,

      Barristers
and Solicitors

      700 – 40
Sheppard Ave. W.

      Toronto,
ON  M2N 6K9,

      by its
Partner, Mitchell Sanders,

      

      (hereinafter called the "Escrow
Agent")

      

      OF THE FOURTH PART.

      

      

      WHEREAS the Pledgor and Alan Kornblum
executed and delivered a Promissory Note dated the l
day of November, 2007, in favour of the Pledgee (the "Promissory
Note");

      

      AND WHEREAS as collateral security for
the complete and proper performance and satisfaction of all payments and
obligations under the Promissory Note, the Pledgor has agreed to pledge one hundred percent (100%) of the
outstanding shares in the capital stock of the Corporation (the "Pledged
Shares") in accordance with the provisions of this Agreement;

      

      AND WHEREAS concurrently with the
execution of this Agreement, the Pledgor has delivered to the Escrow Agent a
share certificate or certificates representing the Pledged Shares duly endorsed
in blank for transfer to be held and dealt with by the Escrow Agent in
accordance with this Agreement.

      

      WITNESSETH that in consideration of the
premises, and the mutual covenants hereinafter contained and the sum of TEN
DOLLARS ($10.00) now paid by each of the parties hereto to the other (the
receipt of which is hereby acknowledged by each of them) the parties hereto
covenant and agree as follows:

      

      1.                  The
foregoing recitals are absolutely true, correct and accurate in every
respect.

      

      2.                  As
collateral security for the complete and proper performance and satisfaction of
all payments and obligations under the Promissory Note, the Pledgor hereby
pledges, hypothecates, transfers, assigns and sets over to the Pledgee, the
Pledged Shares and all its right, title and interest therein and thereto to be
held by the Escrow Agent, all subject to and on the terms and conditions herein
set out.

      

      3.                  The
term "Pledged Shares" as used herein shall include any shares or other
securities or capital property which shall result from either:

      

      
        	
                 
      

              	
                (i)

              	
                a
      consolidation, change, classification, reclassification or subdivision, as
      the case may be, of any of the Pledged Shares;
  or

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                every
      organization, liquidation, dissolution, winding up, amalgamation, merger,
      arrangement, continuation or continuance, as the case may be, of the
      Corporation;

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      and in
any such event, all such shares or other securities or capital property and all
certificates or other instruments or documents representing any such shares or
other securities or capital property received in substitution for or in respect
of the Pledged Shares shall be immediately delivered to the Escrow Agent to be
held as part of the Pledged Shares on the terms and conditions herein set out,
and the Pledgor shall forthwith pledge, assign, hypothecate, transfer and set
over to the Pledgee any such shares and/or other securities and/or capital
property so received or substituted and delivered to such Pledgee, accompanied
by powers of attorney for transfer and assignment thereof, or other appropriate
instruments of transfer and assignment, duly executed in blank.

      

      
        	
                 
      

              	
                4.

              	
                (a)

              	
                Upon
      payment in full by the Pledgor of the Promissory Note to the Pledgee in
      accordance with its terms, the Escrow Agent shall forthwith return the
      Pledged Shares to the Pledgor free of the provisions of this Agreement and
      this Agreement shall then be
terminated.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                So
      long as there is no default under the Promissory Note, the Pledgor shall
      be entitled to vote the Pledged Shares as it deems advisable, and in the
      event of any dividends being declared or other distribution made upon or
      in respect of the Pledged Shares during the time they are held by the
      Escrow Agent in excess of the Threshold Distribution as outlined in
      Section 4 of the Promissory Note (the “Excess Distribution”), the payments
      due under the Promissory Note shall be increased on a  dollar
      for dollar basis up to the amount of the unpaid principal sum due and
      owing on the Promissory Note, and such increase shall be paid at the same
      time as the Excess dividend or Distribution made in respect of the Pledged
      Shares.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                In
      the event that payment is not made under the Promissory Note as required
      on the date any such payment is required to be made, subject in all cases
      to ten (10) days prior written notice of default thereunder, the Escrow
      Agent shall, upon the written direction of the Pledgee and upon receiving
      a statutory declaration of the Pledgee containing the circumstances of the
      default as aforesaid, deliver the Pledged Shares to or to the order of the
      Pledgee.

              

      

      

      5.                  In
the event that the Pledgee becomes entitled to the Pledged Shares pursuant to
this Agreement, the Pledgee shall be entitled to deal with the Pledged Shares in
the manner provided for in the Personal Property Security Act (Ontario) for the
dealing with collateral by a secured party.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.                  Any
notice or other document which is to be given hereunder shall be in writing and
shall be given by either personally delivering or mailing the same in a prepaid
registered envelope addressed to the relevant party or parties as
follows:

      

      If to the Pledgor
to:                                           6
Tillingham Keep

      Toronto,
Ontario  M3H 6A2

      

      Attn:  Alan
Kornblum

      

      If to the Pledgee
to:                                           106
Avenue Road

      Toronto,
Ontario  M5R 2H3

      

      Attn:  Fred
Litwin

      

      If to the Corporation
to:                                                      600
Clayson Road

      Toronto, ON  M9M
2H2

      

      Attn:  Alan
Kornblum

      

      If to the Escrow Agent
to:                                                      700
– 40 Sheppard Ave. W.

      Toronto, ON  M2N
6K9

      

      Attn:  Mitchell J.
Sanders

      

      any such
notice or other document, if delivered personally, shall be deemed to have been
delivered at the time of such delivery and, if mailed by prepaid registered post
as aforesaid, shall, in the absence of any intervening postal disruption, be
deemed to have been delivered on the third (3rd) business day following the day
of mailing.  Any party may change its address for service by written
notice to the other parties in the manner set out above.

      

      7.                  Time
shall be of the essence of this Agreement and every part thereof.

      

      8.                  No
waiver on behalf of any party or breach of any of the covenants, conditions and
provisions herein contained shall be effective or binding upon such party unless
the same shall be expressed in writing, and any waiver shall not limit or affect
such party's rights with respect to any other future breach.

      

      9.                  Each
of the parties hereto covenants and agrees to perform such further and other
acts and things and to execute such further and other documents as may be
necessary or desirable from time to time in order to give effect to this
Agreement and every part thereof.

      

      10.                  In
this Agreement words importing the singular number only shall include the plural
and vice versa and words importing the masculine gender shall include the
feminine gender and the neuter gender and vice versa and shall include one or
more persons, their heirs, executors, administrators, successor or assigns, as
the case may be.  To the extent the Pledgee shall assign any of its
rights hereunder, the Pledgee shall provide written notice thereof to all the
parties herein.

      

      11.                  This
Agreement shall enure to the benefit of and be binding upon the parties hereto
their heirs, executors, administrators, successor and assigns.

      

      IN WITNESS WHEREOF the parties have
hereto executed this Pledge Agreement.

      

      SIGNED,
SEALED AND
DELIVERED                                                                                     )           337572 ONTARIO
LIMITED

      in the
presence
of:                                                             )

      )

      )        Per:__________________________________

      )                    Alan Kornblum

      )

      )

      )        CONSOLIDATED
MERCANTILE

      )        INCORPORATED

      )

      )

      )        Per:___________________________________

      )                  Authorized
Signing Officer

      )

      )

      )        DISTINCTIVE DESIGNS FURNITURE
INC.

      )

      )

      )

      )        Per:__________________________________

      )               Alan Kornblum

      )

      )

      )        GOLDMAN, SPRING,

      )        KICHLER & SANDERS
LLP

      )

      )

      )

      )        Per:__________________________________

      )                  Mitchell J. Sanders –
Partner

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