West 49 Inc. — Merger & Acquisition 2004

May 29, 2004

Execution copy

JUMBO ENTERTAINMENT INC.

as Vendor

and

9137-5055 QUÉBEC INC.

as Purchaser

LE SUPERCLUB VIDEOTRON LTÉE

as Guarantor

ASSET AND SHARE PURCHASE AGREEMENT

Dated as of May 20, 2004

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TABLE OF CONTENTS

ARTICLE 1	INTERPRETATION...................................................................................................1
1.1	Defined Terms. ........................................................................................................1
1.2	Gender and Number.................................................................................................1
1.3	Headings, etc............................................................................................................1
1.4	Currency...................................................................................................................1
1.5	Certain Phrases, etc..................................................................................................1
1.6	Accounting Terms....................................................................................................1
1.7	Non-Business Days..................................................................................................1
ARTICLE 2	PURCHASED ASSETS .............................................................................................1
2.1	Purchased Assets......................................................................................................1
2.2	Excluded Assets.......................................................................................................1
2.3	[Confidential]...........................................................................................................1
ARTICLE 3	PURCHASE PRICE ...................................................................................................1
3.1	Adjustments. ............................................................................................................1
3.2	Purchase Price..........................................................................................................1
3.3	Allocation.................................................................................................................1
3.4	Payment of the Purchase Price.................................................................................1
3.5	Starstruck Inventory Value. .....................................................................................1
3.6	Payment of Sales Taxes and Registration Charges on Transfer. .............................1
ARTICLE 4	ASSUMED LIABILITIES..........................................................................................1
4.1	Assumed Liabilities. ................................................................................................1
4.2	Excluded Liabilities. ................................................................................................1
4.3	Assumption of Contractual Liabilities.....................................................................1
ARTICLE 5	REPRESENTATIONS AND WARRANTIES OF THE VENDOR..........................1
5.1	Corporate Matters. ...................................................................................................1
5.2	General Matters Relating to the Purchased Business ..............................................1
5.3	Matters Relating to the Purchased Assets................................................................1
5.4	Financial Matters. ....................................................................................................1
5.5	No Liabilities. ..........................................................................................................1
5.6	Related Party Transactions. .....................................................................................1
5.7	Gift Certificates........................................................................................................1
5.8	Marketing and Advertising Funds. ..........................................................................1
5.9	Excluded Contracts..................................................................................................1
5.10	Employees................................................................................................................1
5.11	Employee Plans........................................................................................................1
5.12	Insurance..................................................................................................................1
5.13	Litigation..................................................................................................................1
5.14	Provincial Sales Taxes.............................................................................................1
5.15	Tax Numbers of Jumbo Entities. .............................................................................1
5.16	Fairness Opinion......................................................................................................1
5.17	Brokerage.................................................................................................................1

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5.18	Securities Filings......................................................................................................1
5.19	No Solicitation. ........................................................................................................1
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
AND THE GUARANTOR..................................................................................................1
6.1	Representations and Warranties of the Purchaser....................................................1
6.2	Representations and Warranties of the Guarantor. ..................................................1
ARTICLE 7 PRE-CLOSING COVENANTS OF THE PARTIES .................................................1
7.1	Conduct of Business Prior to Closing......................................................................1
7.2	Access for Due Diligence. .......................................................................................1
7.3	Actions to Satisfy Closing Conditions.....................................................................1
7.4	Reorganization.........................................................................................................1
7.5	Use of Names...........................................................................................................1
7.6	Transfer of the Purchased Assets.............................................................................1
7.7	[Confidential]...........................................................................................................1
7.8	Estoppel Certificates and Notices............................................................................1
7.9	Filings and Authorizations.......................................................................................1
7.10	Workers’ Compensation Certificate. .......................................................................1
7.11	Notice of Untrue Representation or Warranty.........................................................1
7.12	Exclusive Dealing and Third Party Offers...............................................................1
7.13	Shareholder Meeting................................................................................................1
7.14	Payment of Creditors. ..............................................................................................1
7.15	Rentrak.....................................................................................................................1
7.16	Liens.........................................................................................................................1
7.17	Securities..................................................................................................................1
7.18	Franchise Laws Disclosure. .....................................................................................1
ARTICLE 8 CONDITIONS OF CLOSING....................................................................................1
8.1	Conditions for the Benefit of the Purchaser.............................................................1
8.2	Conditions for the Benefit of the Vendor. ...............................................................1
ARTICLE 9 CLOSING ...................................................................................................................1
9.1	Date, Time and Place of Closing. ............................................................................1
9.2	Closing Procedures. .................................................................................................1
9.3	Risk of Loss. ............................................................................................................1
ARTICLE 10 TERMINATION.......................................................................................................1
10.1	Termination by Purchaser........................................................................................1
10.2	Termination by the Vendor......................................................................................1
10.3	Other Termination Rights. .......................................................................................1
10.4	Effect of Termination...............................................................................................1
10.5	Break Fee. ................................................................................................................1
ARTICLE 11 INDEMNIFICATION...............................................................................................1
11.1	Indemnification in Favour of the Purchaser.............................................................1
11.2	Indemnification in Favour of the Vendor. ...............................................................1
11.3	Time Limitations......................................................................................................1

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11.4	Procedure for Indemnification - Other Claims. .......................................................1
11.5	Indemnification Proceedings - Third Party Claim...................................................1
11.6	Exclusion of Other Remedies. .................................................................................1
ARTICLE 12	POST-CLOSING COVENANTS.............................................................................1
12.1	Access to Books and Records..................................................................................1
12.2	[Confidential]...........................................................................................................1
12.3	Assistance By Purchaser..........................................................................................1
12.4	Leaseco Filings. .......................................................................................................1
12.5	Non-Competition. ....................................................................................................1
12.6	Confidentiality. ........................................................................................................1
12.7	Further Assurances...................................................................................................1
ARTICLE 13	EMPLOYEES...........................................................................................................1
13.1	Employees................................................................................................................1
13.2	Employee Liability...................................................................................................1
ARTICLE 14	ARBITRATION........................................................................................................1
14.1	Dispute Settlement...................................................................................................1
14.2	Arbitration................................................................................................................1
14.3	Other Relief..............................................................................................................1
ARTICLE 15	MISCELLANEOUS .................................................................................................1
15.1	Notices. ....................................................................................................................1
15.2	Time of the Essence.................................................................................................1
15.3	Brokers.....................................................................................................................1
15.4	Announcements........................................................................................................1
15.5	Third Party Beneficiaries.........................................................................................1
15.6	Costs and Expenses..................................................................................................1
15.7	Amendments. ...........................................................................................................1
15.8	Waiver......................................................................................................................1
15.9	Non-Merger..............................................................................................................1
15.10	Entire Agreement.....................................................................................................1
15.11	Successors and Assigns............................................................................................1
15.12	Severability. .............................................................................................................1
15.13	Governing Law. .......................................................................................................1
15.14	Counterparts.............................................................................................................1
ARTICLE 16	GUARANTEE ..........................................................................................................1
16.1	Guarantee of Purchaser’s Obligations. ....................................................................1

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ASSET AND SHARE PURCHASE AGREEMENT

Asset and Share Purchase Agreement dated May 20, 2004 between Jumbo Entertainment Inc. (the “ Vendor ”), 9137-5055 Québec Inc. (the “ Purchaser ”) and Le SuperClub Vidéotron Ltée (the “ Guarantor ”).

ARTICLE 1 INTERPRETATION

1.1 Defined Terms.

As used in this Agreement, the following terms have the following meanings:

• 1.1.1 “ 2004 Financial Statements ” means the consolidated balance sheet of the Vendor for the one (1)-year period ending February 29, 2004 and the accompanying statements of income, retained earnings and changes in financial position for the year then ended and all notes thereto as reported upon by Deloitte & Touche, chartered accountants;

• 1.1.2 “ Accounts Receivable ” has the meaning specified in Section 2.2.2;

• 1.1.3 “ Acquisition Proposal ” has the meaning specified in Section 7.12.5(b);

• 1.1.4 “ Affiliate ” has the meaning ascribed thereto under the Canada Business Corporations Act , whether a body corporate or a partnership;

• 1.1.5 “ Agreement ” means this asset purchase agreement, the Disclosure Letter and all instruments in amendment or confirmation of it; and the expressions “ Article ” and “ Section ” followed by a number mean and refer to the specified Article or Section of this Agreement;

• 1.1.6 “ Ancillary Agreements ” means all agreements of, certificates of and other instruments delivered or given by a Jumbo Entity pursuant to this Agreement, including all documents executed in respect of the Reorganization;

• 1.1.7 “ Assumed Liabilities ” has the meaning specified in Section 4.1;

• 1.1.8 “ Authorization ” means, with respect to any Person, any order, permit, approval, waiver, licence or similar authorization of any Governmental Entity having jurisdiction over the Person;

• 1.1.9 “ Best Efforts ” means the efforts that a prudent Person who desires to complete the transaction would use in similar circumstances to ensure that a closing occurs as expeditiously as possible without the necessity of assuming or incurring any material obligations or paying any material amounts to an unrelated third party;

• 1.1.10 “ Books and Records ” means all books of account, personnel records (other than those of non-Transferred Employees), sales and purchase records, customer and supplier lists, lists of potential customers, referral sources,

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research and development reports and records, production reports and records, equipment logs, operating guides and manuals, business reports, plans and projections and all other documents files, correspondence and other information (whether in written, printed, electronic or computer printout form) relating to the Purchased Business, including the minute books and corporate records of Leaseco but excluding those of all other Jumbo Entities;

• 1.1.11

• “ Board of Directors ” has the meaning specified in Section 7.12.2;

• 1.1.12

• “ Break Fee ” has the meaning specified in Section 10.5;

• 1.1.13 “ Business Day ” means any day of the year, other than a Saturday, Sunday or any day on which banks are closed in Montreal, Quebec or Toronto, Ontario;

• 1.1.14 “ Closing ” means the completion of the transaction of purchase and sale contemplated in this Agreement;

• 1.1.15 “ Closing Date ” means July 6, 2004 or such earlier or later date as the Parties may mutually agree in writing, which in any event shall not be later than July 31, 2004;

• 1.1.16

• “ Common Shares ” has the meaning specified in Section 7.12.5(a);

• 1.1.17 “ Confidentiality Agreement ” means the confidentiality agreement dated January 16, 2004 between the Vendor and the Guarantor;

• 1.1.18 “ Consents ” means the consents of the contracting parties to the assignment of the Contracts, the Leases and the Subleases, if required by the terms of the Contracts, the Leases or the Subleases;

• 1.1.19

• [Confidential]

• 1.1.20

• “ Contracts ” has the meaning specified in Section 2.1.4;

• 1.1.21

• [Confidential]

• 1.1.22 “ Contractual Rights ” has the meaning specified in Section 2.3;

• 1.1.23

• “ Damages ” has the meaning specified in Section 11.1;

• 1.1.24 “ Deposits ” means all deposits made by future franchisees to or to the benefit of the Vendor pursuant to franchise reservation agreements or otherwise in connection with a proposed “Jumbo Video” or “Microplay” franchise as at the Closing Date and which remain unearned in the Books and Records on the Closing Date, subject to any right of or request for reimbursement of the franchisees with respect to such Deposits;

• 1.1.25 “ Disclosure Letter ” means the letter of even date herewith delivered by Jumbo to the Purchaser, in a form accepted by the Purchaser, with respect to

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certain matters in this Agreement, and “ Schedule ” followed by a number means a schedule to the Disclosure Letter;

• 1.1.26

• “ Dispute ” has the meaning specified in Section 14.1;

• 1.1.27

• “ Effective Time ” means 12:01 a.m. (Montreal time) on the Closing Date;

• 1.1.28 “ Employee Plans ” means all the employee benefit, fringe benefit, supplemental employment benefit, bonus, incentive, profit sharing, termination, change of control, pension, retirement, stock option, stock purchase, stock appreciation, health, welfare, medical, dental, disability, life insurance and similar plans, programmes, arrangements or practices relating to the current or former employees, officers or directors of the Jumbo Entities maintained, sponsored or funded by the Jumbo Entities in connection with the Purchased Business, whether written or oral, funded or unfunded, insured or self-insured, registered or unregistered;

• 1.1.29

• “ Environmental Laws ” has the meaning specified in Section 5.3.10;

• 1.1.30 “ Estimated Starstruck Inventory Value ” means the reasonable estimate of ninety percent (90%) of the Starstruck Inventory Value as determinable from the Books and Records;

• 1.1.31

• [Confidential]

• 1.1.32

• “ Excluded Assets ” has the meaning specified in Section 2.2;

• 1.1.33 “ Excluded Contracts ” means (i) all contracts, leases of personal property, licences, undertakings or commitments of any nature, written or oral, by or in favour of any Jumbo Entity and to which the Jumbo Entities are entitled in connection with the Purchased Business which require that the performance of obligations contained therein or in any other contract or agreement, where a Jumbo Entity is a party thereto or not, be guaranteed by a Jumbo Entity by way of a contractual guarantee, letter of credit, bank bond or otherwise, including those listed in Schedule 5.9, and (ii) the other contracts listed in Schedule 5.9, and including in each case all liabilities related thereto;

• 1.1.34

• “ Excluded Liabilities ” has the meaning specified in Section 4.2;

• 1.1.35 “ Financial Statements ” means the consolidated balance sheet of the Vendor for the one (1)-year period ending February 28, 2003 and the accompanying statements of income, retained earnings and changes in financial position for the year then ended and all notes thereto as reported upon by Deloitte & Touche, chartered accountants and the consolidated balance sheet of the Vendor for the three and nine month periods ending November 30, 2003 and the accompanying unaudited statements of income, retained earnings and changes in financial position for the year then ended and all notes thereto, it being understood that should the 2004 Financial Statements be made public by the Vendor prior to Closing, “Financial Statements” shall be deemed to mean

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the 2004 Financial Statements for the purposes of any representations and warranties to be made as at Closing, as per Sections 8.1.1 and 8.2.1;

• 1.1.36 “ Financial Statements Date ” means November 30, 2003, or February 29, 2004, as the case may be and in accordance with Section 1.1.35;

• 1.1.37 “ GAAP ” means at any time, accounting principles generally accepted in Canada including those set out in the Handbook of the Canadian Institute of Chartered Accountants, at the relevant time applied on a consistent basis;

• 1.1.38 “ Gift Certificates ” means all gift certificates sold to franchisees of the Purchased Business, including those listed in Schedule 5.7;

• 1.1.39

• “ Gift Certificates Value ” has the meaning specified in Section 3.2;

• 1.1.40 “ Governmental Entity ” means (i) any multinational, federal, provincial, state, municipal, local or other governmental or public department, central bank, court, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) any subdivision or authority of any of the foregoing, (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above, (iv) the Toronto Stock Exchange, and (v) and provincial franchise regulator or authority;

• 1.1.41 “ Guarantor ” means Le SuperClub Vidéotron Ltée;

• 1.1.42 “ Indemnified Party ” has the meaning specified in Section 11.5.1;

• 1.1.43

• “ Indemnifying Party ” has the meaning specified in Section 11.5.1;

• 1.1.44 “ Intellectual Property ” means (i) any trade marks, trade names, business names, brand names, World Wide Web addresses, uniform resource locators, domain names, service marks, owned computer software, owned computer programs, copyrights, including any performing, author or moral rights, designs, inventions, patents, franchises, formulas, processes, know-how, technology and related goodwill, (ii) any applications, registrations, issued patents, continuations in part, divisional applications or analogous rights or licence rights therefor, and (iii) other intellectual or industrial property, in each case, owned or used by the Jumbo Entities in connection with the Purchased Business, and whether registered or not, as well as all of the rights, title and interest of the Jumbo Entities, whether registered or not, in the Millennium POS Software;

• 1.1.45 “ Interim Period ” means the period between the close of business on this date and the Closing;

• 1.1.46

• “ Inventories ” has the meaning specified in Section 2.1.2;

• 1.1.47 “ Jumbo Corporate Stores ” means those Jumbo Video stores owned and operated by the Jumbo Entities, as listed in Schedule 1.1.47;

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• 1.1.48 “ Jumbo Entities ” means the Vendor and any and all Vendor Subsidiaries and Leaseco where applicable;

• 1.1.49 “ Knowledge ” , “ to the Knowledge of ” or phrases of similar import, with respect to an individual, means an individual shall be deemed to have Knowledge of a particular fact or other matter if (a) that individual is actually aware of that fact or matter; or (b) a prudent individual could reasonably be expected to discover or otherwise become aware of that fact or matter in the course of conducting a reasonably comprehensive investigation regarding the accuracy of any representation or warranty contained in this Agreement. With respect to a Person, other than an individual, “Knowledge” means a Person shall be deemed to have knowledge of a particular fact or other matter if any individual who is serving as a director or executive officer or any other similar capacity of that Person has, or at any time has had, knowledge of that fact or other matter (as set forth in (a) and (b) above), and any such individual will be deemed to have conducted a reasonably comprehensive investigation regarding the accuracy of the representation and warranties made herein by that Person.

• 1.1.50 “ Laws ” means any and all applicable laws including all statutes, codes, ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, ruling or awards, and general principles of common and civil law and equity, binding on or affecting the Person referred to in the context in which the word is used;

• 1.1.51 [Confidential]

• 1.1.52 “ Leaseco ” means such wholly-owned subsidiary of the Vendor to be incorporated pursuant to the Companies Act (Quebec) for the purposes of holding the Leases and the Subleases;

• 1.1.53 “ Leaseco Shares ” means all of the issued and outstanding shares of Leaseco;

• 1.1.54 “ Leased Properties ” means the premises listed and described in Schedule 1.1.54 by reference to their municipal address;

• 1.1.55 “ Leases ” means the leases of the Leased Properties, including the leases listed and described in Schedule 5.3.8;

• 1.1.56 “ Lien ” means any mortgage, charge, pledge, hypothecation, security interest, assignment, lien (statutory or otherwise), title retention agreement or arrangement, restrictive covenant or other encumbrance of any nature or any other arrangement or condition which, in substance, secures payment or performance of an obligation;

• 1.1.57 “ Marketing and Advertising Funds ” means the funds maintained by the Vendor for purposes of the marketing and advertising programs of the Purchased Business and which includes: (a) related cash contributions from franchisees; (b) related amounts owing by such franchisees; (c) related prepaid

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marketing and advertising expenses; (d) related accounts payable in respect of marketing and advertising; and (e) all other liabilities and obligations in respect of marketing and advertising which are to be satisfied and paid out of such fund;

• 1.1.58 “ Material Adverse Change ” or “ Material Adverse Effect ” means any change in, or effect on, the business, operations, assets, prospects or condition (financial or otherwise) of the Purchased Business which, when considered either individually or in the aggregate together with all other adverse changes or effects with respect to which such phrase is used in this Agreement, is, or is reasonably likely to be, materially adverse to the business, operations, assets, prospects or condition (financial or otherwise) of the Purchased Business, except as a result of changes or effects affecting the Canadian movie and video game rental and sale industry generally;

• 1.1.59

• “ Material Authorizations ” has the meaning specified in Section 5.2.4;

• 1.1.60 “ Material Contracts ” means (i) all Contracts involving aggregate payments to or by a Jumbo Entity of twenty-five thousand dollars ($25,000) or more, and (ii) all Contracts essential for the operation of the Purchased Business, including those contracts listed and described in Schedule 5.3.12;

• 1.1.61 “ Meeting ” has the meaning specified in Section 7.13;

• 1.1.62 Intentionally deleted;

• 1.1.63 “ Millennium POS Software ” means the software described in Schedule 1.1.63;

• 1.1.64 “ Ordinary Course ” means, with respect to an action taken by a Person, that such action is consistent with the past practices of the Person, and is taken in the ordinary course of the normal day-to-day operations of the Person;

• 1.1.65 “ Parties ” means the Vendor, the Purchaser and the Guarantor, and any other Person who may become a party to this Agreement;

• 1.1.66 “ Permitted Liens ” means (i) easements, encroachments and other minor imperfections of title which do not, individually or in the aggregate, detract from the value of or impair the use or marketability of any real property, and (ii) Liens listed and described in Schedule 1.1.66 but only to the extent such Liens conform to their description in Schedule 1.1.66; (iii) inchoate or statutory Liens of contractors, subcontractors, mechanics, workers, suppliers, materialmen, carriers and others in respect of the construction, maintenance, repair or operation of the Purchased Assets, provided that such Liens are related to obligations not due or delinquent, are not registered against title to any Purchased Assets and in respect of which adequate holdbacks are being maintained as required by applicable Law; and (iv) the right reserved to or vested in any Governmental Entity by any statutory provision or by the terms of any lease, licence, franchise, grant or permit of the Jumbo Entities, to

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terminate any such lease, licence, franchise, grant or permit, or to require annual or other payments as a condition of their continuance;

• 1.1.67 “ Person ” means a natural person, partnership, limited partnership limited liability partnership, corporation, joint stock company, trust, unincorporated association, joint venture or other entity or Governmental Entity, and pronouns have a similarly extended meaning;

• 1.1.68 Intentionally deleted;

• 1.1.69 “ Proceeding ” has the meaning specified in Section 11.5.2;

• 1.1.70 “ Proposed Agreement ” has the meaning specified in Section 7.12.4

• 1.1.71 “ Public Statement ” has the meaning specified in Section 15.4;

• 1.1.72 “ Purchase Price ” has the meaning specified in Section 3.2;

• 1.1.73

• “ Purchased Assets ” has the meaning specified in Section 2.1;

• 1.1.74 “ Purchased Business ” means the movie and video game rental and sale business of the Jumbo Entities as well as its franchise operations related thereto;

• 1.1.75

• “ Purchaser ” means 9137-5055 Québec inc.;

• 1.1.76 “ Purchaser’s Indemnified Persons ” has the meaning specified in Section 11.1;

• 1.1.77 “ Reorganization ” means the transfer and assignment by Jumbo Entities, to the satisfaction of the Purchaser and the Vendor, each acting reasonably, and subject to Section 2.3, of all the Purchased Assets to the Vendor and of all of the applicable Jumbo Entity’s rights and obligations under the Leases and the Subleases to Leaseco in the manner set forth in Schedule 1.1.77;

• 1.1.78

• “ Representatives ” has the meaning specified in Section 7.12;

• 1.1.79

• “ Securities Filings ” has the meaning specified in Section 5.18;

• 1.1.80

• “ Starstruck Inventory Value ” has the meaning specified in Section 3.2;

• 1.1.81 “ Starstruck Stores ” means those Starstruck Entertainment corporate stores listed and described in Schedule 1.1.81;

• 1.1.82 “ Subleases ” means any and all sublease agreements entered into by a Jumbo Entity as sublessor and another Person as sublessee with respect to any Lease, including those listed in Schedule 5.3.9;

• 1.1.83 “ SuperClub Guarantee ” has the meaning specified in Section 16.1.2;

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• 1.1.84 “ Superior Offer ” has the meaning specified in Section 7.12.5(a);

• 1.1.85 “ Third Party ” has the meaning specified in Section 7.12.2;

• 1.1.86 “ Trade Creditors ” has the meaning specified in Section 7.14;

• 1.1.87 “ Transferred Employees ” has the meaning specified in Section 13.1.1;

• 1.1.88 “ Vendor ” means Jumbo Entertainment Inc.;

• 1.1.89 “ Vendor Class A Shares ” means the Class A shares in the capital of the Vendor;

• 1.1.90 “ Vendor Common Shares ” means the common shares in the capital of the Vendor;

• 1.1.91 “ Vendor’s Indemnified Persons ” has the meaning specified in Section 11.2;

• 1.1.92 “ Vendor Shareholders ” means the holders of the Vendor Common Shares and holders of the Vendor Class A Shares; and

• 1.1.93 “ Vendor Subsidiaries ” means the direct and indirect subsidiaries of the Vendor which together own all of the Purchased Assets, including those listed in Schedule 1.1.92.

1.2

Gender and Number.

Any reference in this Agreement or any Ancillary Agreement to gender includes all genders and words importing the singular number only shall include the plural and vice versa.

1.3

Headings, etc.

The provision of a Table of Contents, the division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and are not to affect its interpretation.

1.4

Currency.

All references in this Agreement or any Ancillary Agreement to dollars, unless otherwise specifically indicated, are expressed in Canadian currency.

1.5

Certain Phrases, etc.

In this Agreement and any Ancillary Agreement (y) the words “including” and “includes” mean “including (or includes) without limitation”, and (z) the phrase “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”.

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1.6 Accounting Terms.

All accounting terms not specifically defined in this Agreement shall be interpreted in accordance with GAAP.

1.7 Non-Business Days.

Whenever payments are to be made or an action is to be taken on a day which is not a Business Day, such payment shall be made or such action shall be taken on or not later than the next succeeding Business Day.

ARTICLE 2 PURCHASED ASSETS

2.1 Purchased Assets.

Subject to the terms and conditions of this Agreement, the Vendor agrees to sell, assign and transfer to the Purchaser, and the Purchaser agrees to purchase from the Vendor on the Closing Date, effective as of the Effective Time and after giving effect to the Reorganization, the undertaking and all of the property, rights and assets of every kind and description and wheresoever situate, of the Purchased Business as a going concern, whether held by or to the benefit of the Vendor or any of the Vendor Subsidiaries, other than the Excluded Assets (collectively, the “ Purchased Assets ”), including:

• 2.1.1 Machine, Equipment and Supplies. All machinery, equipment, furniture, furnishings and accessories, hardware, transferable software and supplies of all kinds including office supplies, owned by the Jumbo Entities and used in connection with the Purchased Business, including, without limitation, those set forth in Schedule 2.1.1;

• 2.1.2 Inventories. All inventories of the Purchased Business (the “ Inventories ”), including all materials and supplies on hand to be used or consumed or which might be used or consumed in connection with the Purchased Business, but excluding any inventory owned by Rentrak Corporation;

• 2.1.3 Prepaid Expenses and Debtor Advances. All prepaid expenses and advances from debtors related to the Purchased Business, including, without limitation, those set forth in Schedule 2.1.3;

• 2.1.4 Contracts. The full benefit of all contracts, leases of personal property, licences, undertakings or commitments of any nature, written or oral, by or in favour of any Jumbo Entity and to which the Jumbo Entities are entitled in connection with the Purchased Business (the “ Contracts ”), including (i) forward commitments by the Jumbo Entities for supplies of materials entered into in the Ordinary Course (ii) all restrictive agreements and negative covenant agreements which a Jumbo Entity may have with its employees, past or present, as well as (iii) the benefit of all security interests in favour of a Jumbo Entity relating thereto, but excluding the Excluded Contracts, the Leases and the Subleases, Schedule 2.1.4 sets forth a complete list of all

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Contracts representing individually an aggregate undertaking by or in favour of a Jumbo Entity in excess of ten thousand dollars ($10,000);

• 2.1.5 Leaseco Shares. All rights, title and interest of the Vendor in the Leaseco Shares;

• 2.1.6 Authorizations. All Authorizations, owned, held or used by the Vendor in connection with the Purchased Business, to the extent transferable, including, without limitation, those set forth in Schedule 2.1.6;

• 2.1.7 Intellectual Property. The Intellectual Property;

• 2.1.8 Websites. All of the Jumbo Entities’ rights, title and interest in any website operated in connection with the Purchased Business;

• 2.1.9 Marketing and Advertising Funds. The Marketing and Advertising Funds;

• 2.1.10 Books and Records. The Books and Records;

• 2.1.11 Claims. All claims of the Jumbo Entities relating to the Purchased Business or the Purchased Assets, whether choate or inchoate, known or unknown, contingent or otherwise;

• 2.1.12 Goodwill. The goodwill of the Purchased Business, including the exclusive right to the Purchaser to (i) represent itself as carrying on the Purchased Business in continuation of and in succession to the Jumbo Entities, and (ii) use any words indicating that the Purchased Business is so carried on, including, without limitation, all of the Jumbo Entities’ right, title and interest in and to the names listed in Schedule 2.1.12 hereof, or any variation thereof, together with the rights, if any, to telephone and facsimile numbers and internet domain names used in connection with the Purchased Business; and

• 2.1.13 Deposits . The Deposits.

2.2 Excluded Assets.

The Purchased Assets shall not include any of the following assets (collectively, the “ Excluded Assets ”):

• 2.2.1 all cash and cash equivalents, save for each of (i) the Marketing and Advertising Funds, (ii) advances from debtors and (iii) the Deposits;

• 2.2.2 all accounts receivable, notes receivable and other debts due or accruing due to the Jumbo Entities in respect of the period prior to the Effective Time in connection with the Purchased Business or the Purchased Assets (the “ Accounts Receivable ”);

• 2.2.3 income tax and other tax refunds, losses and credits receivable by or corresponding to the Jumbo Entities;

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• 2.2.4 judgments in favour of the Jumbo Entities against others;

• 2.2.5 corporate and other prepaid expenses not related to the Purchased Business;

• 2.2.6 the minute books and the tax and corporate records of the Jumbo Entities, other than Leaseco;

• 2.2.7 all insurance policies of the Jumbo Entities;

• 2.2.8 all records and information regarding non-Transferred Employees;

• 2.2.9 the Employee Plans; and

• 2.2.10 the Excluded Contracts.

2.3 [Confidential]

ARTICLE 3 PURCHASE PRICE

3.1 Adjustments.

All prepaid expenses, utility costs, liabilities under the Contracts, the Leases and the Subleases, the Marketing and Advertising Funds, as well as the Deposits and all other benefits and payables related to the Purchased Business, where applicable, shall be calculated and adjusted accordingly so as to grant to the Vendor all benefits thereof and obligations related thereto up to and until the Closing Date, and to grant to the Purchaser all benefits thereof and obligations related thereto as of and from the Closing Date. This Section 3.1 shall not apply to any of the Excluded Assets.

3.2 Purchase Price.

The aggregate purchase price (the “ Purchase Price ”) payable by the Purchaser to the Vendor for the Purchased Assets shall be (a) six million dollars ($6,000,000), plus (b) the actual cost value of the inventory of the Starstruck Stores as at the Effective Time in accordance with the procedures set forth in Section 3.5 (the “ Starstruck Inventory Value ”), less (c) eighty percent (80%) of the book value of the Gift Certificates as at the Effective Time (the gross amount being the “ Gift Certificates Value ”).

3.3

Allocation.

The Vendor and the Purchaser agree to allocate the Purchase Price in accordance with the provisions of Schedule 3.3 and to execute and file all tax returns and prepare all financial statements, returns and other instruments on the basis of such allocations.

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3.4 Payment of the Purchase Price.

Subject to Section 7.14, the Purchase Price shall be paid and satisfied by the Purchaser as follows:

• (a) an amount of six million dollars ($6,000,000); and

• (b) an amount equal to the Estimated Starstruck Inventory Value less the Gift Certificates Value,

to be paid by the Purchaser at Closing by wire transfer or certified cheque to or to the order of, or as otherwise directed by the Vendor.

3.5 Starstruck Inventory Value.

• 3.5.1 The Purchaser and the Vendor shall, within five (5) Business Days following Closing, cause an independent third party chosen by the parties in a mutually agreeable manner, to conduct an inventory count of the inventories of the Starstruck Stores, and the Parties shall forthwith following such count determine together the Starstruck Inventory Value for the purpose of determining the Purchase Price as per Section 3.2.

• 3.5.2 All costs related to the conduct of the inventory count shall be borne by the Purchaser.

• 3.5.3 If the Starstruck Inventory Value as determined under Section 3.5.1 is:

• (a) is more than the Estimated Starstruck Inventory Value, then the Purchaser shall pay to the Vendor such difference; or

• (b) is less than the Estimated Starstruck Inventory Value, then the Vendor shall pay to the Purchaser such difference,

in each case within two (2) Business Days from the determination of the Starstruck Inventory Value, by wire transfer or certified cheque to or to the order of, or as otherwise directed by, the payee, and without interest.

3.6 Payment of Sales Taxes and Registration Charges on Transfer.

• 3.6.1 The Purchaser shall be liable for and shall pay all land transfer taxes, federal and provincial goods and services and sales taxes and all other taxes, duties, registration charges or other like charges properly payable by a buyer upon and in connection with the conveyance and transfer of the Purchased Assets by the Vendor to the Purchaser.

• 3.6.2 The Parties will use their Best Efforts in good faith to minimize (or eliminate) any taxes payable under the Excise Tax Act (Canada) in respect of the Closing by, among other things, making such elections and taking such steps as may be provided for under that Act (including, for greater certainty, making a joint

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election at Closing under Section 167 of that Act) as may reasonably be requested by the Purchaser in connection with the Closing.

ARTICLE 4 ASSUMED LIABILITIES

4.1 Assumed Liabilities.

Subject to Closing, Section 4.2 or as otherwise provided herein, the Purchaser agrees to discharge, perform and fulfil in respect of the period from and after the Effective Time all liabilities and obligations of the Jumbo Entities related to the Purchased Business in respect of Transferred Employees (but only insofar as the liabilities and obligations arising under the Purchased Assets are not related to any default existing prior to or as a consequence of Closing) and under transferred software, equipment leases, telephone numbers (other than numbers for mobile phones of non-Transferred Employees), customers and customer contracts, licenses and permits, Contracts and Leases (collectively, the “ Assumed Liabilities ”).

4.2 Excluded Liabilities.

The Purchaser shall not assume and shall have no obligation to discharge, perform or fulfil, and the Vendor will indemnify the Purchaser from and against, the following liabilities and obligations, contingent or otherwise, of the Vendor or related to the Purchased Business or the Purchased Assets (collectively, the “ Excluded Liabilities ”), including, without limitation:

• 4.2.1 liabilities, including accounts payable, incurred or accruing prior to the Effective Time under the Contracts and Leases;

• 4.2.2 any assessment or reassessment for income, corporate, capital, sales, excise or other taxes, duties or imposts of any kind whatsoever of the Jumbo Entities, if incurred or accruing prior to the Effective Time, relating to the Purchased Business or Purchased Assets;

• 4.2.3 any judgments against the Jumbo Entities;

• 4.2.4 any liability of the Jumbo Entities with respect to the employees of the Jumbo Entities which are not Transferred Employees, and with respect to the Employee Plans; and

• 4.2.5 any liability of the Jumbo Entities not related to the Purchased Business or the Purchased Assets, or liability described in Section 13.2.1.

4.3

Assumption of Contractual Liabilities.

Notwithstanding anything in this Agreement, the Purchaser shall not assume and shall have no obligation to discharge any liability or obligation under any Contract (i) which is not assignable in whole or in part without the Consent of the other party or parties thereto, unless such Consent has been obtained, or unless the Vendor shall have

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performed its obligations under Section 12.2 and the value of such Contracts and Contractual Rights shall have enured to the Purchaser.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE VENDOR

Representations and Warranties.

The Vendor hereby represents and warrants as follows to the Purchaser and acknowledges and confirms that the Purchaser is relying upon the representations and warranties in connection with the purchase by the Purchaser of the Purchased Assets and the assumption by the Purchaser of the Assumed Liabilities.

• 5.1 Corporate Matters.

• 5.1.1 Incorporation and Qualification. The Vendor and the Vendor Subsidiaries are corporations duly incorporated or amalgamated and existing under their respective incorporating laws and have the corporate power to own and operate their property, carry on their business and enter into and perform their obligations under this Agreement and each of the Ancillary Agreements to which they are a party. Leaseco will be, as of Closing, a corporation and duly incorporated and existing under its incorporating law and will have the corporate power to own and operate its property, carry on its business. The Jumbo Entities are duly qualified, licensed or registered to carry on business in the jurisdictions listed in Schedule 5.1.1. The jurisdictions listed in Schedule 5.1.1 include all jurisdictions in which the nature of the Purchased Assets or the Purchased Business makes such qualification necessary or where the Jumbo Entities own or lease any properties or assets or conducts any business relating to the Purchased Business.

• 5.1.2 Vendor Subsidiaries. The Vendor Subsidiaries are wholly-owned, direct or indirect subsidiaries of the Vendor and the Vendor is the record and beneficial, direct or indirect owner of all of the issued and outstanding shares of the Vendor Subsidiaries, free and clear of all Liens of any kind, except as set out in Schedule 5.12. No Jumbo Entity has granted any proxies or entered into any agreement, arrangement or understanding of any kind which limits or restricts its right to vote the shares of a Vendor Subsidiary. There are no voting trusts, proxies or other agreements or understandings to which a Jumbo Entity is a party with respect to the voting of capital stock of a Vendor Subsidiary.

• 5.1.3 Other Securities. Except as set out in Schedule 5.1.3, and except for this Agreement and the Ancillary Agreements, there are no outstanding subscriptions, agreements, arrangements, options, warrants, calls, convertible, exercisable or exchangeable securities or other rights or commitments of any character obligating any of the Jumbo Entities to issue, grant, award, purchase, acquire, sell or transfer any shares of or interests in any class of equity securities of any Jumbo Entity, or other securities of a Jumbo Entity and no Jumbo Entity shall issue, grant, award, purchase, acquire, sell or transfer such

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equity securities or other securities prior to Closing, other than as required following the exercise or conversion of the securities listed in Schedule 5.1.3.

• 5.1.4 Validity of Agreement. Except as disclosed in Schedule 5.1.4, the execution, delivery and performance by the Jumbo Entities of this Agreement and each of the Ancillary Agreements that have been signed and to which they are a party:

• (a) have been duly authorized by all necessary corporate action on the part of such Jumbo Entities;

• (b) do not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or a violation of, or conflict with, or allow any other Persons to exercise any rights under, any of the terms or provisions of its constating documents or by-laws or any contracts or instruments to which it is a party or pursuant to which any of its assets or property may be affected except where such breach, violation, conflict, or exercise of rights would not have a Material Adverse Effect;

• (c) will not result in a breach of, or cause the termination or revocation of, any Authorization held by the Jumbo Entities or necessary to the ownership of the Purchased Assets or the operation of the Purchased Business; except where such breach, termination, or revocation would not have a Material Adverse Effect; and

• (d) will not result in the violation of any Law.

• 5.1.5 Required Authorization. There is no requirement to make any filing with, give any notice to, or obtain any Authorization of, any Governmental Entity as a condition to the lawful completion of the transaction contemplated by this Agreement, except for the filings, notifications and Authorizations described in Schedule 5.1.5 or that relate solely to the identity of the Purchaser or the nature of the business carried on by the Purchaser prior to Closing.

• 5.1.6 Execution and Binding Obligation. This Agreement and each of the Ancillary Agreements to which they are a party and which have been signed have been duly executed and delivered by the Jumbo Entities parties thereto and constitute legal, valid and binding obligations of such Jumbo Entities, enforceable against such Person in accordance with their respective terms subject only to any limitation under applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other similar laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

• 5.1.7 Residence of the Jumbo Entities. None of the Jumbo Entities are, nor will be at Closing, a non-resident of Canada within the meaning of the Income Tax Act (Canada).

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• 5.2 General Matters Relating to the Purchased Business

• 5.2.1 Conduct of Business in Ordinary Course. Except as disclosed in Schedule 5.2.1, since the Financial Statements Date, the Purchased Business has been carried on in the Ordinary Course. Without limiting the generality of the foregoing, the Jumbo Entities have not, otherwise than as permitted hereunder:

  • (a) sold, transferred or otherwise disposed of any Purchased Assets except for (i) Purchased Assets which are obsolete and which individually or in the aggregate do not exceed ten thousand dollars ($10,000), and (ii) inventory sold in the Ordinary Course;

  • (b) made any capital expenditures or commitments therefor in respect of the Purchased Business in excess of the amount budgeted for same in the capital expenditure budget presented to the Purchaser;

  • (c) launched any new marketing or advertising campaign or renewed any existing marketing or advertising campaign except in the Ordinary Course;

  • (d) repriced or otherwise adjusted the cost value of any of the Inventories;

  • (e) discharged any secured or unsecured obligation or liability (whether accrued, absolute, contingent or otherwise) relating to the Purchased Business which individually or in the aggregate exceeded ten thousand dollars ($10,000) except in the Ordinary Course;

  • (f) increased its indebtedness for borrowed money or made any loan or advance, or assumed, guaranteed or otherwise became liable with respect to the liabilities or obligation of any Person in connection with the Purchased Business except in the Ordinary Course;

  • (g) made any distribution in kind to its shareholders;

  • (h) granted any general increase in the rate of wages, salaries, bonuses or other remuneration of employees of the Purchased Business except in the Ordinary Course;

  • (i) suffered any extraordinary loss in respect of the Purchased Business or any of the Purchased Assets, whether or not covered by insurance;

  • (j) cancelled or waived any material claims or rights in connection with the Purchased Business except in the Ordinary Course;

  • (k) compromised or settled any material litigation, material proceeding or other material governmental action relating to the Purchased Assets or the Purchased Business except in the Ordinary Course;

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• (l) cancelled or materially reduced any of its insurance coverage on the Purchased Business or any of the Purchased Assets; or

• (m) authorized, agreed or otherwise committed, whether or not in writing, to do any of the foregoing.

• 5.2.2 No Material Adverse Change. Other than as disclosed in Schedule 5.2.1 since the Financial Statements Date, there has not been any Material Adverse Change in the affairs, prospects, operations or condition (financial or otherwise) of the Purchased Assets or the Purchased Business and no event has occurred or circumstance exists which may result in such a Material Adverse Change.

• 5.2.3 Compliance with Laws. The Jumbo Entities are conducting and have always conducted the Purchased Business in material compliance with all applicable Laws, including without limitation the Arthur Wishart Act ( Franchise Disclosure), 2000 (Ontario) or similar legislation, of each jurisdiction in which the Purchased Business is carried on.

• 5.2.4 Authorizations. The Jumbo Entities own, hold, possess or lawfully use in the operation of the Purchased Business, all Authorizations which are reasonably necessary for them to conduct the Purchased Business as presently or previously conducted or for the ownership and use of the Purchased Assets. All Authorizations material to the Purchased Business are listed in Schedule 5.2.4 (the “ Material Authorizations ”). Each Material Authorization is valid, subsisting and in good standing, the Jumbo Entities are not in default or breach of any Material Authorization. All Material Authorizations are renewable by their terms or in the ordinary course of business without the need for the Jumbo Entities or the Purchaser to comply with any special rules or procedures, agree to any materially different terms or conditions or pay any amounts other than routine rules, procedures, terms and conditions and filing fees. No Affiliate of the Jumbo Entities not itself a Jumbo Entity owns or has any proprietary, financial or other interests (direct or indirect) in any Material Authorization which the Jumbo Entities own, possess or use in the operation of the Business as now or previously conducted.

5.3 Matters Relating to the Purchased Assets.

• 5.3.1 Sufficiency of Assets. The Purchased Assets include all rights and property (other than working capital) necessary to enable the Purchaser to carry on the Purchased Business after the Closing substantially in the same manner as it was conducted by the Jumbo Entities prior to the Closing. With the exception of inventory in transit, all of the tangible Purchased Assets are situate at the Leased Properties.

• 5.3.2 Title to the Purchased Assets. Except for the Excluded Assets, the property and assets included directly or indirectly (including the Leases) in the Purchased Assets (i) constitute all of the assets used by the Jumbo Entities in carrying on the Purchased Business, and (ii) include all of the assets set forth

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on or reflected on the Financial Statements, other than assets acquired since the Financial Statements Date or sold, transferred or otherwise disposed as contemplated by this Agreement since the Financial Statements Date. The Vendor will have on the Closing Date legal and beneficial ownership of the Purchased Assets free and clear of all Liens except for Permitted Liens subject to Section 7.16. No other Person owns any property and assets that are being used in the Purchased Business except for the Leased Property and personal property leased by the Jumbo Entities pursuant to the Contracts.

• 5.3.3 No Options, etc. Except for the Purchaser under this Agreement, no Person has any written or oral agreement, option, understanding or commitment, or any right or privilege, whether contractual or at Law, capable of becoming such for the purchase from the Jumbo Entities or the Purchaser of any of the Purchased Assets, other than (i) Purchased Assets which are obsolete and which individually or in the aggregate do not exceed ten thousand dollars ($10,000), or (ii) inventory sold in the Ordinary Course.

• 5.3.4 Governmental Entities. Except for Authorizations disclosed in Schedule 2.1.6, no Governmental Entity has any right reserved thereto or vested therein by any statutory provision or by the terms of any lease, licence, franchise, grant or permit of the Jumbo Entities, to terminate any such lease, licence, franchise, grant or permit, or to require annual or other payments as a condition of their continuance;

• 5.3.5 Condition of Tangible Assets. The vehicles, equipment and other tangible personal property of the Jumbo Entities that are Purchased Assets, are in good operating condition and repair having regard to their use and age and are adequate and suitable for the uses to which they are being put. None of such vehicles, equipment or other property are in need of maintenance or repairs, except for ordinary routine maintenance and repairs that are not material in nature or cost.

• 5.3.6 Real Property. The Jumbo Entities do not own any real property.

• 5.3.7 Leaseco Shares.

• (a) The authorized capital of Leaseco will consist solely of common shares, which issued common shares shall have been validly issued in compliance with all applicable Laws, as fully paid and non-assessable shares. The corporate books of Leaseco that will have been made available the Purchaser for its inspection will be true and complete, and will contain a record of all meetings and other corporate action taken by the board of directors and shareholders of Leaseco prior to Closing. True and complete copies of the Certificate of Incorporation and the By-laws of Leaseco will have been delivered or made available to the Purchaser.

• (b) Leaseco will be at all times prior to Closing a wholly-owned direct subsidiary of the Vendor, which will hold the Leaseco Shares, free and

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clear of all Liens of any kind. The Vendor will have at all times prior to Closing, the right to transfer the Leaseco Shares to the Purchaser and the delivery at Closing of certificates representing the Leaseco Shares, duly endorsed in blank, or accompanied by stock powers duly endorsed in blank, in proper form for transfer by the Vendor to the Purchaser will convey to the Purchaser good and valid title thereto, free and clear of all Liens. The Vendor will not, at any time prior to Closing, have granted any proxies or entered into any agreement, arrangement or understanding of any kind which limits or restricts its right to vote the Leaseco Shares. There will not exist, at any time prior to Closing, any voting trusts, proxies or other agreements or understandings to which the Vendor or any of its Affiliates will be a party with respect to the voting of Leaseco Shares.

• (c) Except for this Agreement, there will not exist, at any time prior to Closing, any outstanding subscriptions, agreements, arrangements, options, warrants, share-based or share-related awards, calls, convertible, exercisable or exchangeable securities or other rights or commitments of any character obligating the Vendor or any of its Affiliates to issue, grant, award, purchase, acquire, sell or transfer any shares of or interests in any class of equity securities of Leaseco, or other securities of Leaseco.

• (d) Leaseco will not, at any time prior to Closing, own, directly or indirectly, any equity, partnership, joint venture or other interest or investment (whether in equity or debt) in any Person.

• (e) From the time of incorporation until Closing, and with the exception of the completion of the Reorganization, Leaseco will have been operated in the ordinary course of business. Except for liabilities under the Leases to arise or become due after Closing, Leaseco will not have at Closing any liabilities unless the landlords under such Leases require Leaseco to be liable for past liabilities under such Leases, in which case the Vendor will indemnify Leaseco for such liabilities.

• (f) Leaseco will not have been at any time prior to Closing in violation of any applicable Law.

• 5.3.8 Leases. The Jumbo Entities are not a party to, or under any agreement to become a party to, any leases with respect to real property that is used or to be used in the Purchased Business other than the Leases, copies of which have been provided or made available to the Purchaser, and other than as disclosed in Schedule 5.3.8. Each Lease is in good standing, creates a good and valid leasehold estate in the Leased Properties thereby demised and is in full force and effect without amendment, except as disclosed in Schedule 5.3.8. With respect to each Lease, except as disclosed in Schedule 5.3.8 (i) all rents and additional rents have been paid, (ii) no waiver, indulgence or postponement of the lessee’s obligations has been granted by the lessor, (iii) there exists no

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event of default or event, occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default under the Lease, and (iv) to the Knowledge of the Vendor, all of the covenants to be performed by any other party under the Lease have been fully performed. Each of the Leased Properties is adequate and suitable for the purposes for which it is presently being used and the Jumbo Entities have adequate rights of ingress and egress into each of the Leased Properties for the operation of the Purchased Business in the Ordinary Course. Schedule 5.3.8 contains a list of all of the Leases setting out, in respect of each Lease, a description of the leased premises (by municipal address), the term of the Lease, the rental payments under the Lease (specifying any breakdown of base rent and additional rents), any rights of renewal and any restrictions on assignment. The representations and warranties in this Section 5.3.8 are to the Knowledge of the Vendor (without inquiry) in respect of those Leases indicated as such in Schedule 5.3.7.

• 5.3.9 Subleases. The Jumbo Entities are not a party to, or under any agreement to become a party to, any subleases with respect to a Lease, other than the Subleases, copies of which have been provided or made available to the Purchaser, and a complete and accurate list of which is contained in Schedule 5.3.9. Each Sublease is in good standing and is in full force and effect without amendment, except as disclosed in Schedule 5.3.9. With respect to each Sublease, except as disclosed in Schedule 5.3.9, to the Knowledge of the Vendor (without inquiry), (i) all rents and additional rents have been paid, (ii) no waiver, indulgence or postponement of the sublessee’s obligations has been granted by the relevant Jumbo Entity, and (iii) there exists no event of default or event, occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default under the Sublease.

• 5.3.10 Environmental. None of the Jumbo Entities is in material violation of any provision of any federal, provincial, state or local Law, relating to pollution, the protection of human health or the environment (collectively, “ Environmental Laws ”), and the Jumbo Entities have all permits, authorizations and approvals required under any applicable Environmental Laws. There are no pending or, to the Knowledge of the Vendor, threatened administrative, regulatory or judicial actions, suits, claims, liens, notices of non-compliance or violation, investigation or proceedings relating to any Environmental Law against the Jumbo Entities and there are no events or circumstances that could reasonably be expected to form the basis of an order for clean-up or remediation, action, suit or proceeding by any private party or governmental body or agency, against or materially affecting the Jumbo Entities relating to any Environmental Laws. The Vendor has provided the Purchaser with true and correct copies of all environmental reports and studies related to the Jumbo Entities’ current and past properties (whether owned or leased) and operations and Schedule 5.3.10 sets forth a complete and accurate list of all such reports and studies.

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• 5.3.11 Contracts. To the Knowledge of the Vendor, the Jumbo Entities have not violated or breached, in any respect, any of the terms or conditions of any Contract (other than the Material Contracts), except for such violation or breach which individually or collectively would not have a Material Adverse Effect, and to the Knowledge of the Vendor, all the covenants to be performed by any other party to such Contract have been fully performed. The Vendor has previously delivered or made available to the Purchaser true and complete copies (or a detailed summary in the case of an oral agreement).

• 5.3.12 No Breach of Material Contracts. Each of the Jumbo Entities has performed all of the material obligations required to be performed by it and is entitled to all benefits under, and is not alleged to be in default of, any Material Contract and each of the Material Contracts is in full force and effect, unamended, and there exists no default or event of default or event, occurrence, condition or act (including the purchase of the Purchased Assets) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default under any Material Contract other than any requirements to obtain the consent of the other party to the assignment or disclosure, other than defaults, events of default, events, occurrences, conditions or acts that would not have a Material Adverse Effect, and except as disclosed in Schedule 5.3.12. True, correct and complete copies of all Material Contracts have been delivered or made available to the Purchaser. Schedule 5.3.12 contains a list of the Material Contracts setting out, in respect of each Material Contract, the parties, the term and any restrictions on assignment.

5.3.13 Intellectual Property.

• (a) Schedule 5.3.13 sets forth a complete and accurate list of all material Intellectual Property owned by and software licensed to the Jumbo Entities in carrying on the Purchased Business. Schedule 5.3.13 also includes complete and accurate particulars of all registrations or applications for registration of the Intellectual Property. The Intellectual Property together with all intellectual property in the public domain comprises all industrial and intellectual property necessary to properly conduct the Purchased Business. The Jumbo Entities are as of the date hereof and the Vendor will be on the Closing Date the beneficial owner of the Intellectual Property (not including any licensed software), free and clear of all Liens other than Permitted Liens subject to Section 7.16, and the Jumbo Entities are not party to or bound by any Contract or other obligation whatsoever that limits or impairs their ability to sell, transfer, assign or convey, or that otherwise affects, the Intellectual Property except as disclosed in Schedule 5.3.13. Except as disclosed in Schedule 5.3.13, no Person has been granted any interest in or right to use all or any portion of the Intellectual Property. The Vendor has no Knowledge of a claim by any other Person of any infringement or breach of its industrial or intellectual property rights by the Jumbo Entities, nor have the Jumbo Entities received any notice

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that the conduct of the Purchased Business, including the use of the Intellectual Property, infringes upon or breaches any industrial or intellectual property rights of any other Person. The Vendor has no Knowledge of any infringement or violation of any of their rights in the Intellectual Property. To the Knowledge of the Vendor, the conduct of the Purchased Business does not infringe upon the patents, trade marks, licences, trade names, business names, copyright or other industrial or intellectual property rights, domestic or foreign, of any other Person. The Vendor has no Knowledge of any state of facts that casts doubt on the validity or enforceability of any of the Intellectual Property. All registrations and applications for registration of the Intellectual Property have been properly maintained and renewed in accordance with applicable provisions of Law and administrative regulations of the jurisdictions in which such registrations were made, and are, to the Knowledge of the Vendor, valid, subsisting and in full force and effect and (subject to the modifications of the registrations and applications with the proper Governmental Entity to reflect the transfer of the Intellectual Property to the Purchaser) will be valid, subsisting and in full force and effect on identical terms immediately following the Closing. The Vendor has provided the Purchaser with a true and complete copy of all Contracts that comprise or are related to the Intellectual Property.

• (b) To the extent that any intellectual property developed or created by a third party is incorporated into the Millennium POS Software or is currently expected to be incorporated therein, and such intellectual property is not owned by a Jumbo Entity, a Jumbo Entity has a written agreement with such third party with respect thereto and such Jumbo Entity thereby has obtained a perpetual, non-terminable license (sufficient for the current use of the Millennium POS Software and as proposed to be used) to all such third party’s intellectual property, and in each case such rights and licenses shall survive the completion of the transactions contemplated herein and be fully exercisable by the Purchaser thereafter.

• (c) Other than licensed software, no Person who has licensed any intellectual property to any of the Jumbo Entities has ownership rights or license rights to improvements, modifications or derivative works made by or for any of the Jumbo Entities in such intellectual property.

• 5.3.14 Inventory. The inventory included in the Purchased Assets, subject to a reasonable allowance for obsolete inventory (consistent with the allowances reflected in the Financial Statements), is good and usable and is capable of being rented or sold in the Ordinary Course at normal profit margins. The Jumbo Corporate Stores will have, on average, at Closing, at least 12,000 rental library units in inventory. The inventory levels of the Jumbo Corporate Stores have been maintained at levels sufficient for the continuation of the Purchased Business in the Ordinary Course.

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5.4 Financial Matters.

• 5.4.1 Books and Records. All accounting and financial Books and Records of the Jumbo Entities relating to the Purchased Business have been fully, properly and accurately kept and completed in all material respects. The Books and Records and other data and information relating to the Purchased Business are not recorded, stored, maintained, operated or otherwise wholly or partly dependent upon or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which would not be available to a purchaser of the Purchased Business in the Ordinary Course.

• 5.4.2 Financial Statements. The Financial Statements have been prepared in accordance with GAAP and present fairly:

• (a) the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the financial position of the Vendor as at respective dates of the relevant statements; and

• (b) the sales and earnings of the Vendor during the periods covered by the Financial Statements.

5.5 No Liabilities.

There are no liabilities, whether or not accrued and whether or not determined or determinable, in respect of the Purchased Business and in respect of which the Purchaser may become liable on or after consummation of the transactions contemplated by this Agreement that relate to the Purchased Business other than the Assumed Liabilities.

5.6 Related Party Transactions.

Schedule 5.6 sets forth a complete list (including the parties) of all Material Contracts (i) between any Jumbo Entity, on the one hand, and any Affiliate of the Vendor, on the other, (ii) between any Jumbo Entity, on the one hand, and any officer, director, or employee of any Jumbo Entity or such Person’s family members or any Affiliate of any of the foregoing, on the other, and that relate to the Purchased Business.

5.7 Gift Certificates.

The Gift Certificates Value was as of February 29, 2004 one hundred twenty-two thousand dollars ($122,000).

5.8 Marketing and Advertising Funds.

Schedule 5.8 provides a complete and accurate overview of the Marketing and Advertising Funds as of February 29, 2004, as well as complete information with respect to the aging of any amounts owing from franchisees included therein. The information contained in Schedule 5.8 fairly represents the situation of the Marketing and Advertising Funds as of the date hereof.

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5.9 Excluded Contracts.

Schedule 5.9 sets forth a complete and accurate list of the Excluded Contracts.

5.10 Employees.

Except as set forth in Schedule 5.10, with respect to the Purchased Business and employees of the Purchased Business:

• (a) the Jumbo Entities are in compliance, in all material respects, with all Laws respecting employment and employment practices, terms and conditions of employment, pay equity and wages and hours of work, occupational health and safety, human rights and workplace safety and insurance;

• (b) the Jumbo Entities have not and are not engaged in any unfair labour practice and no unfair labour practice complaint, grievance, arbitration or other employment related proceeding is pending or, to the Knowledge of the Jumbo Entities, threatened against the Jumbo Entities;

• (c) no collective bargaining agreement is currently in force with respect to the employees of the Jumbo Entities and no such agreement is currently being negotiated by the Jumbo Entities. No union representation question exists respecting the employees of the Jumbo Entities. There is no labour strike, dispute, work slowdown or stoppage pending or involving or, to the Knowledge of the Jumbo Entities, threatened against the Jumbo Entities and there is no union organization activity currently under way. No trade union has applied to have a Jumbo Entity declared a related employer pursuant to the Labour Relations Act (Ontario) or any similar legislation in any jurisdiction in which the Jumbo Entities carry on business;

• (d) all amounts due or accruing due for all salary, wages, bonuses, commissions, vacation with pay, pension benefits or other employee benefits due to Transferred Employees are reflected in the Books and Records and will be paid upon Closing; and

• (e) Schedule 5.10 contains a correct and complete list of all employees and independent contractors of the Jumbo Entities retained or employed in connection with the Purchased Business, whether actively at work or not, their salaries, wage rates, commissions and consulting fees, bonus arrangements, benefits, positions, ages, status as full-time or part-time employees and length of service. Except as set out in Schedule 5.11, no employee of the Purchased Business has any written employment or any agreement as to length of notice or severance payment required to terminate his or her employment, other than such as results by application of law from the employment of an employee without an agreement as to notice or severance.

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5.11 Employee Plans.

• 5.11.1 Schedule 5.11 lists and describes all Employee Plans. The Vendor has furnished or made available to the Purchaser true, correct and complete copies of all the Employee Plans as amended as of the date hereof, together with all summary plan descriptions and all material correspondence related thereto.

• 5.11.2 No commitments to improve or otherwise amend any Employee Plan have been made.

• 5.11.3 All employee data necessary to administer any plan that the Purchaser may establish will, at Closing, be provided by the Vendor to the Purchaser and be true and correct as of the Closing Date and the Vendor will notify the Purchaser of any changes thereto.

5.12 Insurance.

The Jumbo Entities maintain insurance policies with responsible insurers as are appropriate to the Purchased Business in such amounts and against such risks as are customarily carried and insured against by prudent owners of comparable businesses. All such policies of insurance coverage are in full force and effect. The Jumbo Entities are not in default in any material respect with respect to any of the provisions contained in any such insurance policy and have not failed to give any notice or present any material claim under any such insurance policy in due and timely fashion. The Jumbo Entities are not aware of any circumstances in respect of which any Person could make a material claim under any insurance policy.

5.13 Litigation.

Except as described in Schedule 5.13, there are no (i) actions, suits or proceedings, at law or in equity, by any Person, (ii) arbitration or alternative dispute resolution process, or (iii) administrative or other proceeding by or before (or to the Knowledge of the Jumbo Entities any investigation by) any Governmental Entity, pending, or, to the Knowledge of the Jumbo Entities, threatened against or affecting the Purchased Business or any of the Purchased Assets, and the Jumbo Entities do not know of any valid basis for any such action, suit, proceeding, arbitration or investigation. The Jumbo Entities are not subject to any judgment, order or decree entered in any lawsuit or proceeding nor have the Jumbo Entities settled any claim prior to being prosecuted in respect of it.

5.14 Provincial Sales Taxes.

All provincial sales taxes and assessments (including interest and penalties) that are or may become payable by or due from the Jumbo Entities in respect of the Purchased Business have been fully paid or fully provided for in the Books and Records and the Financial Statements. There are no outstanding agreements or waivers extending the statutory period providing for an extension of time with respect to the assessment or reassessment of such taxes or any payment of any such taxes by the Jumbo Entities, no notice of assessment or reassessment has been received. There are no claims, actions, suits or proceedings (or, to the Knowledge of the Vendor, any investigation) pending, or,

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to the Knowledge of the Vendor, threatened against the Jumbo Entities relating to such taxes and the Vendor knows of no valid basis for any such claim, action, suit, proceeding, investigation or discussion.

5.15 Tax Numbers of Jumbo Entities.

All Jumbo Entities hold valid Goods and Services Tax number and Ontario Sales Tax number to the extent they require such numbers. Schedule 5.15 lists the Goods and Services Tax number and the Ontario Sales Tax number of the Vendor.

5.16 Fairness Opinion.

The Vendor has received from LECG Canada Inc., acting as its financial advisor, a favourable fairness opinion with respect to the transactions contemplated in this Agreement, and the Board of Directors has determined to recommend that Vendor Shareholders approve the transactions contemplated herein, provided such transactions are substantially in accordance with the terms of this Agreement. The Vendor has obtained the consent of such financial advisor to the inclusion or reference to such fairness opinion in the information circular to be prepared in connection with the Meeting.

5.17 Brokerage.

No agent, broker, investment banker, or other firm or Person is or will be entitled to any broker’s or finder’s fee or other commission or similar fee incurred by the Vendor in connection with any of the transactions contemplated hereby.

5.18 Securities Filings.

The Financial Statements, the Management Proxy Circular in relation with its annual meeting of shareholders on August 28, 2003 that the Vendor filed with the Canadian securities regulatory authorities pursuant to applicable Canadian securities Laws (the “ Securities Filings ”) comply in all material respects as to form with all applicable securities Laws insofar as they relate to the Purchased Business. The Securities Filings do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading as of the date such statements were made insofar as they relate to the Purchased Business.

5.19 No Solicitation.

None of the Jumbo Entities are currently soliciting or encouraging, or have solicited or encouraged within the last two (2) years from the date hereof, any Acquisition Proposals from any competitor of the Guarantor.

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ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE GUARANTOR

6.1 Representations and Warranties of the Purchaser.

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

• 6.1.1 Incorporation . The Purchaser is a corporation incorporated and existing under the laws of the Province of Quebec and has the corporate power and authority to enter into and perform its obligations under this Agreement and each of the Ancillary Agreements to which it is a party.

• 6.1.2 Validity of Agreement . The execution, delivery and performance by the Purchaser of this Agreement and each of the Ancillary Agreements that have been signed and to which it is a party:

• (a) have been duly authorized by all necessary corporate action on the part of the Purchaser;

• (b) do not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or a violation of, or conflict with, any of the terms or provisions of its constating documents or by-laws or any contracts or instruments to which it is a party or pursuant to which any of its assets or property may be affected; and

• (c) will not result in the violation of any Law.

• 6.1.3 Execution and Binding Obligation . This Agreement and each of the Ancillary Agreements to which the Purchaser is a party have been duly executed and delivered by the Purchaser and constitute legal, valid and binding obligations of the Purchaser, enforceable against it in accordance with their respective terms subject only to any limitation under applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other similar laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

• 6.1.4 Brokerage. No agent, broker, investment banker, or other firm or Person is or will be entitled to any broker’s or finder’s fee or other commission or similar fee incurred by the Purchaser in connection with any of the transactions contemplated hereby.

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6.2 Representations and Warranties of the Guarantor.

The Guarantor represents and warrants as follows to the Vendor and acknowledges and confirms that the Vendor is relying on such representations and warranties in connection with the sale by the Vendor of the Purchased Assets:

• 6.2.1 Incorporation . The Guarantor is a corporation incorporated and existing under the laws of the Province of Quebec and has the corporate power and authority to enter into and perform its obligations under this Agreement and each of the Ancillary Agreements to which it is a party.

• 6.2.2 Validity of Agreement . The execution, delivery and performance by the Guarantor of this Agreement and each of the Ancillary Agreements that have been signed and to which it is a party:

• (a) have been duly authorized by all necessary corporate action on the part of the Guarantor;

• (b) have been duly authorized by all necessary corporate action on the part of Quebecor Media inc.;

• (c) do not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or a violation of, or conflict with, any of the terms or provisions of its constating documents or by-laws or any contracts or instruments to which it is a party or pursuant to which any of its assets or property may be affected; and

• (d) will not result in the violation of any Law.

• 6.2.3 Execution and Binding Obligation . This Agreement and each of the Ancillary Agreements to which the Guarantor is a party have been duly executed and delivered by the Guarantor and constitute legal, valid and binding obligations of the Guarantor, enforceable against it in accordance with their respective terms subject only to any limitation under applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other similar laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

• 6.2.4 Brokerage. No agent, broker, investment banker, or other firm or Person is or will be entitled to any broker’s or finder’s fee or other commission or similar fee incurred by the Guarantor in connection with any of the transactions contemplated hereby.

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ARTICLE 7 PRE-CLOSING COVENANTS OF THE PARTIES

• 7.1

Conduct of Business Prior to Closing.

• 7.1.1 During the Interim Period, the Jumbo Entities will conduct the Purchased Business in the Ordinary Course.

• 7.1.2 Without limiting the generality of Section 7.1.1, the Jumbo Entities will, subject to the transactions contemplated by this Agreement:

• (a) use their Best Efforts to preserve intact their current business organization, keep available the services of the present employees and agents of the Purchased Business and maintain good relations with, and the goodwill of, suppliers, customers, landlords, creditors, distributors and all other Persons having business relationships with the Vendor in connection with the Purchased Business;

• (b) confer with the Purchaser on a confidential basis concerning operational matters of a material nature relating to the Purchased Business;

• (c) retain possession and control of the Purchased Assets, except as otherwise occurring in the Ordinary Course, and preserve the confidentiality of any confidential or proprietary information of the Purchased Business;

• (d) obtain the Purchaser’s prior consent before agreeing or entering into, any of the matters listed in Section 5.2 or entering into, amending, reviewing, terminating or otherwise modifying any contract or lease for real property, including the Contracts and the Leases, but excluding the Excluded Contracts;

• (e) use their Best Efforts to conduct the Purchased Business so as not to cause or permit to exist a breach of any representations and warranties of the Vendor contained in the Agreement; and

• (f) otherwise periodically report to the Purchaser concerning the state of the Purchased Business and the Purchased Assets.

• 7.1.3 Nothing in this Agreement shall operate so as to restrict or prevent the Jumbo Entities to proceed with and execute the Reorganization.

7.2 Access for Due Diligence.

• 7.2.1 Subject to applicable Law, the Jumbo Entities shall (i) permit the Purchaser and its employees, counsel, accountants or other representatives, during the Interim Period, without undue interference to the ordinary conduct of the Purchased Business, to have reasonable access during normal business hours

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and upon reasonable notice to (a) the information with respect to the Millennium POS Software listed in Schedule 7.2.1, (b) the premises of the Jumbo Entities, (c) the Purchased Assets and, in particular to any information, including all Books and Records whether retained by the Jumbo Entities or otherwise, (d) all Contracts and Leases, and (e) senior personnel of the Jumbo Entities, and (ii) furnish to the Purchaser or its employees, counsel, accountants or other such representatives such financial and operating data and other information with respect to the Purchased Assets and the Purchased Business as the Purchaser shall from time to time reasonably request, provided that the Vendor shall not in any case be required to provide any personal information as regards the customers of the Purchased Business or of franchisees of the Purchased Business until the Closing.

• 7.2.2 No investigations made by or on behalf of the Purchaser, whether under Section 7.2 or any other provision of this Agreement or any Ancillary Agreement, shall have the effect of waiving, diminishing the scope of, or otherwise affecting, any representation or warranty made in this Agreement or any Ancillary Agreement.

• 7.2.3 In addition to any obligations under the Confidentiality Agreement, until the Closing and in the event of termination of this Agreement without Closing, the Purchaser will keep confidential and will not use for any purpose other than in respect of the transactions contemplated hereunder or disclose to any other Person any information obtained from the Jumbo Entities or their agents and representatives, unless such information (i) is or becomes generally available to the public other than as a result of a disclosure in violation of this Agreement, (ii) becomes available to the Purchaser on a non-confidential basis from a source other than the Jumbo Entities or their agents and representatives, unless the Purchaser knows that such source is prohibited from disclosing the information to the Purchaser by a contractual, fiduciary or other legal obligation to the Jumbo Entities, or (iii) was known to the Purchaser on a nonconfidential basis before its disclosure to the Purchaser by the Jumbo Entities or their agents and representatives. In the event the Purchaser is required by Law to disclose any confidential information, the Purchaser will, to the extent not prohibited by applicable Law, provide the Vendor with prompt notice of such requirements so that the Vendor may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Section 7.2.3. Subject to the remainder of this Section 7.2.3, if this Agreement is terminated, promptly after such termination the Purchaser will return or cause to be returned or destroyed all documents, work papers and other material (whether in written, printed or electronic form and including all copies) obtained from the Jumbo Entities or their agents and representatives in connection with this Agreement and not previously made public together with all derivative materials prepared or created by the Purchaser. The Purchaser may retain one copy of all such documents, work papers and other materials in a sealed envelope left with its solicitors, which sealed envelope is not to be opened except in circumstances where this Agreement or the transaction contemplated herein are the subject of litigation or otherwise with the consent

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of the Vendor. Notwithstanding the foregoing, the parties agree that, to the extent that electronic records containing such documents, work papers and other materials are retained by the Purchaser, its agents or representatives as data or records for the purposes of backup, recovery, contingency planning or business continuity planning or are otherwise not accessible in the ordinary course of business, such data or records, to the extent not otherwise permanently deleted or overwritten in the ordinary course of business, shall not be accessed except as required for backup, recovery, contingency planning or business continuity purposes and, if restored or otherwise becoming accessible, will be permanently deleted forthwith. If requested by the Vendor, the Purchaser shall provide a certificate certifying as to the complete return, destruction or deletion of all such documents, work papers and other materials and all copies and manifestations thereof, in accordance with the terms of Section 7.2.3. This Section 7.2.3 is in addition to, and not in substitution for, the Confidentiality Agreement.

7.3

Actions to Satisfy Closing Conditions.

• 7.3.1 Subject to Section Error! Reference source not found. , the Vendor agrees to take, or cause to taken all such actions as are within their power to control and use their Best Efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with all of the conditions set forth in Section 8.1, including, without limitation, ensuring that there has been no breach of any representations and warranties.

• 7.3.2 The Purchaser agrees to take all such actions as are within its power to control and use its Best Efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with all of the conditions set forth in Section 8.2, including, without limitation, ensuring that there has been no breach of any representations and warranties.

• 7.4

Reorganization.

The Jumbo Entities shall take all steps and proceedings as may be necessary (in a form to be approved by the Purchaser, acting reasonably, prior to Closing) to give effect to the Reorganization. The Reorganization shall be carried out by the Jumbo Entities without any impact on the Purchaser or on the Purchased Assets. All costs, including federal and provincial sales taxes and all other taxes, duties, registration charges and professional or other fees related thereto, save for the Consent Costs, shall be borne entirely by the Vendor.

7.5 Use of Names.

The Vendor shall, within thirty (30) days from the Closing Date, cease all use of the names listed in Schedule 2.1.12 for any purpose whatsoever, save for references to such names required by Law in filings with Governmental Entities, and shall remove any and all such names from its name and from those of the Vendor Subsidiaries. The Vendor shall further cause any of its Affiliates to cease such use of the names listed in Schedule 2.1.12, save for references to such names required by Law in Filings with

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Governmental Entities, and remove such names, whenever applicable, from their own name. The Vendor shall, at the request of the Purchaser, enter into a temporary royaltyfree license agreement with respect to such thirty (30)-day transition period.

7.6 Transfer of the Purchased Assets.

The Jumbo Entities shall take all necessary steps and proceedings to permit good title to the Purchased Assets to be duly and validly transferred and assigned to the Purchaser at the Closing, free of all Liens other than Permitted Liens subject to Section 7.16.

7.7 [Confidential]

• 7.7.1 [Confidential]

• 7.7.2 [Confidential]

• 7.7.3 [Confidential]

7.8 Estoppel Certificates and Notices.

The Vendor shall use its Best Efforts to obtain from each lessor under a Lease an estoppel certificate substantially in the form identified as Schedule 7.8, and to deliver to each lessor under a Lease, when applicable, any notice required pursuant to such Lease.

7.9 Filings and Authorizations.

The Vendor, as promptly as practicable after the execution of this Agreement, will use its Best Efforts to obtain, or cause to be obtained, all Authorizations necessary or advisable to be obtained by it in order to consummate such transfer. Subject to applicable Law, the Parties will coordinate and cooperate with one another in exchanging such information and supplying such assistance as may be reasonably requested by each in connection with the foregoing including, without limitation, providing each other with all notices and information supplied to or filed with any Governmental Entity (except for notices and information which the Vendor or the Purchaser, in each case acting reasonably, considers highly confidential and sensitive which may be filed on a confidential basis), and all notices and correspondence received from any Governmental Entity. Subject to the Purchaser’s right to be indemnified pursuant to Section 11.1(c), the Parties hereby waive compliance with the Bulk Sales Act (Ontario) and any other similar bulk sales Laws.

7.10 Workers’ Compensation Certificate.

On the Closing Date, the Vendor shall deliver or cause to be delivered to the Purchaser (i) a Purchase Certificate issued by the Ontario Workplace Safety and Insurance Board in respect of the Purchased Business bearing a date as close to the Closing Date as reasonably possible but not earlier than thirty (30) days prior to the Closing Date, and (ii) documentation in a form acceptable to the Purchaser from the workers’ compensation boards in the other jurisdictions in which the Purchased Business has employees, confirming that as at the Effective Time, the relevant boards have no claim against the

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Vendor in respect of any amounts payable under the relevant workers compensation legislation in respect of the Purchased Business.

7.11 Notice of Untrue Representation or Warranty.

The Vendor shall promptly notify the Purchaser and the Purchaser shall promptly notify the Vendor, upon any representation or warranty made by it contained in this Agreement or any Ancillary Agreement becoming untrue or incorrect during the Interim Period. Any such notification shall set out particulars of the untrue or incorrect representation or warranty and details of any actions being taken by the Vendor or the Purchaser, as the case may be, to rectify that state of affairs.

7.12 Exclusive Dealing and Third Party Offers.

The Vendor hereby covenants for and on behalf of each Vendor Subsidiary that from the date hereof until the earlier of (i) the Closing, or (ii) this Agreement having been terminated pursuant to its terms, as the case may be, the Vendor will, and shall cause each of the Vendor Subsidiaries to and, in the case of Section 7.12.1, shall cause any officer, director or employee of, or any investment banker, attorney or other adviser or representative (collectively, “ Representatives ”) of the Vendor and the Vendor Subsidiaries to:

• 7.12.1 not take any action of any kind which may prevent or delay the completion of the transactions contemplated herein including, but not limited to, any action to continue, solicit, initiate, assist or encourage enquiries, submissions, proposals or offers from any other person, entity or group relating to, and will not continue or participate in, and will effectively terminate, any discussions or negotiations regarding, or not enter into any agreement with or furnish to any other person, entity or group any information with respect to, or otherwise cooperate in any way with or assist or participate in, or facilitate or encourage any effort or attempt with respect to:

• (a) the direct or indirect acquisition or disposition of all or any Purchased Assets or any securities of the Jumbo Entities, or any sale or issuance by the Vendor of its equity securities, except in each case in the Ordinary Course; or

• (b) any amalgamation, merger, sale of any part of any Jumbo Entity’s assets (other than as permitted under Section 7.4 of this Agreement), take-over bid, plan of arrangement, reorganization, issuer bid, dividend or distribution, recapitalization, liquidation or winding-up of, reverse take-over or other business combination or similar transaction involving a Jumbo Entity or its assets, except in each case in the Ordinary Course.

• 7.12.2 The Vendor shall, as promptly as practicable, and in any event not later than the next day, provide notice to the Purchaser of any Acquisition Proposal (as hereinafter defined) received after the date hereof or any request for non-public information relating to the Purchased Assets or the Purchased Business or for

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access to the Purchased Business by any Person other than the Principal Shareholders or an Affiliate of the Vendor (a “ Third Party ”) that informs any member of the board of directors of the Vendor (the “ Board of Directors ”) that it is considering making, or has made, an Acquisition Proposal. Such notice to the Purchaser shall be made, from time to time, first immediately orally and then promptly in writing, and shall indicate the identity of the Third Party making such proposal, inquiry or contact, a description of all material terms thereof and such other details of the proposal, inquiry or contact known to the Vendor as the Purchaser may reasonably request.

• 7.12.3 Notwithstanding the foregoing, the Vendor shall be entitled, to the extent necessary to act in a manner consistent with the fiduciary obligations of the Board of Directors, as determined in good faith by the Board of Directors after consultation with its legal and financial advisors, to supply information to a third party in response to an Acquisition Proposal from any Third Party that was not solicited by the Vendor or any Vendor Subsidiary, any of the Principal Shareholders or the Representatives and that did not otherwise result from a breach of Section 7.12.1, if the Board of Directors concludes in good faith after consultation with its legal and financial advisors that there is a reasonable likelihood that such Acquisition Proposal could result in a Superior Offer (as hereinafter defined).

• 7.12.4 The Vendor covenants that it will not enter into any agreement pursuant to the proviso contained in Section 7.12.1 regarding any other Superior Offer except for a confidentiality agreement (a “ Proposed Agreement ”) without providing the Purchaser and its Affiliates with an opportunity to amend this Agreement or to substitute thereto such other agreement or offer, to provide for at least equivalent financial terms to those included in the Proposed Agreement as determined by the Board of Directors, acting in good faith and in accordance with its fiduciary duties. In particular, the Vendor covenants to provide the Purchaser with a copy of any Proposed Agreement that is proposed to be executed by the Third Party making such Superior Offer not less than five (5) Business Days prior to its proposed execution by the Vendor or prior to the date on which the Board of Directors proposes to withdraw or change its acceptance of the transaction contemplated herein. In the event that the Purchaser agrees to amend or make its substitution to this Agreement as provided above, the Vendor covenants not to enter into the Proposed Agreement. In the event that the Purchaser does not amend or make a substitution to this Agreement as provided above, the Vendor may terminate this Agreement, subject to the payment of the Break Fee as per Section 10.5.

• 7.12.5 For the purposes hereof,

• (a) “ Superior Offer ” means an unsolicited offer or a proposal made to the Principal Shareholders, the Vendor or any Vendor Subsidiary in writing and duly authorized by the board of directors of the person making the offer or proposal (i) to purchase or otherwise acquire all of the common shares of the Vendor (the “ Common Shares ”) or the shares of any

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Vendor Subsidiary or all or substantially all of their respective assets, (ii) that is made or proposed to be made by means of a take-over bid, amalgamation, plan of arrangement, merger or other similar means of acquisition or business combination and is available to the Vendor, a Vendor Subsidiary or to all holders of Common Shares (including Common Shares issuable upon the conversion or exchange of other securities, (iii) with conditions no more beneficial, taken as a whole, to the person making the offer or proposal than those contained in this Agreement for the benefit of the Purchaser, (iv) which the Board of Directors has determined, in its reasonable judgment, based on the advice of its financial advisor, provides or will provide consideration, on a cash equivalent basis, more favourable to the Vendor’s shareholders from a financial point of view at the time the Board of Directors proposes to withdraw or otherwise change its recommendation to support the transactions contemplated herein as provided for herein, and (v) that is reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects of the offer or proposal; and

• (b) “ Acquisition Proposal ” means a proposal or offer, from any Third Party relating to any liquidation, dissolution, recapitalization, merger, amalgamation, acquisition or purchase (directly or indirectly) of a material portion of the Purchased Assets from the Jumbo Entities or any Vendor Subsidiary or other similar transaction or business combination (including any sale or issue of securities, reorganization, issuer bid, plan of arrangement or reverse take-over bid) involving the Jumbo Entities or any Vendor Subsidiary.

7.13 Shareholder Meeting.

The Vendor shall, as soon as possible, call a meeting of the shareholders of the Vendor (the “ Meeting ”) scheduled no later than July 27, 2004 in order for the Vendor Shareholders to (i) approve the transactions contemplated hereunder and (ii) approve an amendment to the articles of the Vendor for the purposes of deleting all references to the Vendor in the name of such company, conditional upon and effective as of Closing. In connection with the Meeting, the Board of Directors intends, at the date hereof, to make a favourable recommendation to the Vendor Shareholders inviting them to approve the transactions contemplated hereunder. The content of the management proxy circular of the Vendor relating to the Meeting and any filing to be made with a securities commission relating to the Transaction shall be subject to the prior approval of the Purchaser, acting reasonably.

7.14 Payment of Creditors.

The Vendor shall deliver to the Purchaser at least five (5) Business Days prior to the Closing Date (i) a detailed list of all Persons to whom amounts are owing under the accounts payable of Jumbo Entities related to the Purchased Business (the “ Trade Creditors ”), as well as (ii) detailed directions of payment instructing the Purchaser to

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pay to the Trade Creditors identified therein at Closing all amounts owing under the accounts payable of the Jumbo Entities related to the Purchased Business. Such list and directions of payment shall clearly indicate the name and coordinates of the Trade Creditors, as well as a detailed description of the account payable of the Jumbo Entity corresponding to each Trade Creditor, and the amount to be paid to such Trade Creditor, which amount shall represent all sums due to such Trade Creditor calculated as of the Closing Date. All sums to be paid by the Purchaser as per the directions of payment of the Vendor delivered pursuant to this Section 7.14 shall be deducted from the payment to be made by the Purchaser to the Vendor pursuant to Section 3.4. The Purchaser shall pay such amounts at Closing.

7.15 Rentrak.

The Purchaser agrees that the termination of the contractual arrangements with Rentrak Corporation will not constitute a Material Adverse Change for purposes of Section 5.2.2 or otherwise give rise to any right or remedy in favour of the Purchaser. The Purchaser undertakes to comply with and fulfill any obligations of the Vendor pursuant to such contractual arrangements which may survive their termination.

7.16 Liens.

To the extent that any Trade Creditor is being paid by the Purchaser and holds a Lien over any of the Purchased Assets for such payment, or that another Person holds a Lien over any of the Purchased Assets in connection with an Excluded Contract, such Lien will not be required to be discharged for Closing to occur, but the Vendor hereby undertakes to obtain at its entire cost the discharge of such Lien immediately following Closing, and will indemnify the Purchaser for any Damages suffered as a result of such Lien not being discharged at Closing. Schedule 7.16 sets forth a complete and accurate list of all Liens affecting the Purchased Assets.

7.17 Securities.

The Vendor shall use its Best Efforts, without any obligation to obtain third party consents or amendments, in order that all Liens that can be registered which have been granted in favour of a Jumbo Entity by a Person in order to guarantee the performance of certain obligations under a Contract or a Sublease be, at Closing, in full force and effect and validly registered when such registration is necessary, and that the benefit thereof can validly be transferred to the Purchaser or to Leaseco, as the case may be, without any restriction, subject to the Purchaser or Leaseco, as the case may be, modifying or renewing any registration of such Liens when prescribed by Law. The Vendor shall provide at Closing a complete and accurate list of all such Liens granted in favour of a Jumbo Entity.

7.18 Franchise Laws Disclosure.

The Purchaser and the Guarantor will collaborate with the Vendor in fulfilling all disclosure requirements pursuant to applicable franchise Laws and hereby undertake to supply true and accurate information in compliance with such franchise Laws.

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ARTICLE 8 CONDITIONS OF CLOSING

8.1 Conditions for the Benefit of the Purchaser.

The purchase and sale of the Purchased Assets is subject to the following conditions to be fulfilled or performed at or prior to the Closing, which conditions are for the exclusive benefit of the Purchaser and may be waived, in whole or in part, by the Purchaser in its sole discretion:

• 8.1.1 Truth of Representations and Warranties. Except to the extent that such untruth or incorrectness does not have a Material Adverse Effect, the representations and warranties of the Vendor contained in this Agreement or in any Ancillary Agreement shall be true and correct as of the date hereof 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, and the Vendor shall have executed and delivered a certificate of a senior officer (without personal liability) to that effect. The receipt of such certificate and the Closing shall not constitute a waiver by the Purchaser of any of the representations and warranties of the Vendor which are contained in this Agreement or in any Ancillary Agreement. Upon the delivery of such certificate, the representations and warranties of the Vendor in Article 5 shall be deemed to have been made on and as of the Closing Date with the same force and effect as if made on and as of such date.

• 8.1.2 Performance of Covenants. The Vendor shall have fulfilled or complied with in all material respects all covenants contained in this Agreement, or in the Ancillary Agreements, to be fulfilled or complied with by it at or prior to the Closing, and the Vendor shall have executed and delivered a certificate of a senior officer (without personal liability) to that effect. The receipt of such certificate and the Closing shall not constitute a waiver of the covenants of the Vendor that are contained in this Agreement.

• 8.1.3 Approval of Shareholders. The Shareholders of the Vendor shall have lawfully approved the transactions contemplated herein in the requisite percentage.

• 8.1.4 [Confidential]

• 8.1.5 Transferred Employees. Substantially all of the Transferred Employees shall have accepted to continue their employment with the Purchaser upon substantially the same terms and conditions as those prevailing as at Effective Time, provided the Purchaser has complied with Section 13.1.

• 8.1.6 [Confidential]

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• 8.1.7 Deliveries. The Vendor shall deliver or cause to be delivered to the Purchaser the following in form and substance satisfactory to the Purchaser, acting reasonably:

• (a) certified copies of (i) the charter documents and extracts from the bylaws of the Vendor relating to the execution of documents, (ii) all resolutions of the board of directors of the Vendor and Leaseco approving the entering into and completion of the transaction contemplated by this Agreement and the Ancillary Agreements, and (iii) a list of the officers and directors of the Vendor authorized to sign agreements together with their specimen signatures;

• (b) a certificate of status, compliance, good standing or like certificate with respect to each of the Vendor and Leaseco issued by appropriate government officials of their respective jurisdictions of incorporation and of each jurisdiction in which the Vendor and Leaseco carry on business as listed in Schedule 5.1.1;

• (c) the certificates referred to in Section 8.1.1 and Section 8.1.2;

• (d) an opinion of Stikeman Elliott, counsel to the Vendor, on corporate and enforceability matters related to the Vendor and this Agreement, subject to reasonable qualifications;

• (e) the directions of payment to be delivered by the Vendor pursuant to Section 7.14;

• (f) copies of all notices sent to lessors as per Section 7.8 and copies of any non-disturbance agreements with secured creditors of the landlords in the possession of the Vendor;

• (g) a list of all Gift Certificates as at or approximately at the Closing Date setting forth the book value of the Gift Certificates as at the date of such list;

• (h) the list of Liens described in Section 7.17;

• (i) the source code of the Millennium POS Software;

• (j) the originals of the Books and Records; and

• (k) subject to Section 2.3 and Section 12.2, necessary deeds, conveyances, assurances, transfers and assignments and any other instruments necessary or reasonably required to transfer the Purchased Assets to the Purchaser, free and clear of all Liens other than Permitted Liens subject to Section 7.16.

• 8.1.8 Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement and any Ancillary Agreement shall be

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reasonably satisfactory in form and substance to the Purchaser, acting reasonably, and the Purchaser shall have received copies of all instruments and other evidence as it may reasonably request in order to establish the consummation of the transactions and the taking of all necessary proceedings in connection therewith.

• 8.1.9 Change in Law . During the Interim Period, no Law, proposed Law, any change in any Law, or the interpretation or enforcement of any Law shall have been introduced, enacted or announced (including the introduction, enactment or announcement of any Law respecting taxes), the effect of which will be to prevent or to increase materially the cost to the Purchaser of (i) completing the transactions contemplated in this Agreement, or (ii) operating the Purchased Business after Closing on substantially the same basis as currently operated.

• 8.1.10 No Legal Action. No action or proceeding shall be pending or threatened by any Person (other than the Purchaser or a Person related to the Purchaser) in any jurisdiction, to enjoin, restrict or prohibit any of the transactions contemplated by this Agreement or the right of the Purchaser to conduct the Purchased Business after Closing on substantially the same basis as heretofore operated.

8.2 Conditions for the Benefit of the Vendor.

The purchase and sale of the Purchased Assets is subject to the following conditions to be fulfilled or performed at or prior to the Closing, which conditions are for the exclusive benefit of the Vendor and may be waived, in whole or in part, by the Vendor in its sole discretion:

• 8.2.1 Truth of Representation and Warranties. The representations and warranties of the Purchaser and the Guarantor contained in this Agreement or in any Ancillary Agreement shall be true and correct as of the date hereof 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 and the Purchaser and the Guarantor shall each have executed and delivered a certificate of a senior officer (without personal liability) to that effect. The receipt of such certificates and the Closing shall not be a waiver of the representations and warranties of the Purchaser that are contained in this Agreement and the Ancillary Agreements. Upon the delivery of such certificate, the representations and warranties of the Purchaser and the Guarantor in Article 6 shall be deemed to have been made on and as of the Closing Date with the same force and effect as if made on and as of such date.

• 8.2.2 Performance of Covenants. The Purchaser shall have fulfilled or complied with in all material respects all covenants contained in this Agreement to be fulfilled or complied with by it at or prior to Closing and the Purchaser shall have executed and delivered a certificate of a senior officer (without personal liability) to that effect. The receipt of such certificate and the Closing shall not

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constitute a waiver by the Vendor of the covenants of the Purchaser that are contained in this Agreement.

• 8.2.3 Approval of Shareholders. The Vendor Shareholders shall have lawfully approved the transactions contemplated herein in the requisite percentage.

• 8.2.4 Deliveries. The Purchaser shall deliver or cause to be delivered to the Vendor the following, in form and substance satisfactory to the Vendor acting reasonably:

• (a) certified copies of (i) the charter documents and extracts from the bylaws of the Purchaser relating to the execution of documents, (ii) all resolutions of the Guarantor and the board of directors of the Purchaser approving the entering into and completion of the transactions contemplated by this Agreement and the Ancillary Agreements, and (iii) a list of its officers and directors authorized to sign agreements together with their specimen signatures;

• (b) a certificate of status, compliance, good standing or like certificate with respect to the Purchaser and the Guarantor issued by appropriate government official of the jurisdiction of its incorporation; and

• (c) the certificates referred to in Sections 8.2.1 and 8.2.2; and

• (d) the Purchase Price in accordance with Section 3.4.

• 8.2.5 Proceedings. All proceedings to be taken in connection with the transactions contemplated in this Agreement and any Ancillary Agreement shall be reasonably satisfactory in form and substance to the Vendor, acting reasonably, and the Vendor shall have received copies of all the instruments and other evidence as it may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

• 8.2.6 No Legal Action. No action or proceeding shall be pending or threatened by any Person (other than the Vendor) in any jurisdiction, to enjoin, restrict or prohibit any of the transactions contemplated by this Agreement.

• 8.2.7 Dissent Rights. The number of Vendor Common Shares held by Vendor Shareholders that have exercised dissent rights at or prior to the Meeting shall not exceed twenty percent (20%) of the number of Vendor Common Shares outstanding immediately prior to the Closing.

ARTICLE 9 CLOSING

9.1 Date, Time and Place of Closing.

The completion of the transaction of purchase and sale contemplated by this Agreement shall take place at the offices of Stikeman Elliott LLP (Toronto) at 9:00 a.m. (Montreal

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time) on the Closing Date or at such other place, on such other date and at such other time as may be agreed upon in writing between the Vendor and the Purchaser.

9.2

Closing Procedures.

Subject to satisfaction or waiver by the relevant Party of the conditions of Closing, at the Closing the Vendor shall deliver actual possession of the Purchased Assets and the instruments of conveyance described in Section 8.1 and upon such deliveries the Purchaser shall pay or satisfy the Purchase Price in accordance with Section 3.4. The transfer of possession of the Purchase Assets shall be deemed to take effect at the Effective Time.

9.3 Risk of Loss.

If, during the Interim Period, all or any material part of the Purchased Assets are destroyed or damaged by fire or any other casualty or are expropriated or seized by any Governmental Entity, the Purchaser shall have the option, exercisable by notice in writing given within four (4) Business Days of the Purchaser receiving notice in writing from the Vendor of such destruction, damage, expropriation or seizure:

• 9.3.1 to complete the transaction contemplated in this Agreement without reduction of the Purchase Price, in which event all proceeds of any insurance or compensation for expropriation or seizure shall be payable to the Purchaser and all right and claim of the Vendor to any such amounts not paid by the Closing Date shall be assigned to the Purchaser; or

• 9.3.2 to terminate this Agreement and not complete the purchase, in which case all obligations of the Parties hereunder save and except for their respective obligations under Sections 7.2.3, 15.3, 15.4 and 15.6 which shall survive, shall terminate immediately upon the Purchaser giving notice as required herein.

ARTICLE 10 TERMINATION

10.1 Termination by Purchaser.

If any of the conditions set forth in Section 8.1 have not been fulfilled or waived at or prior to Closing or any obligation or covenant of the Vendor to be performed or caused to be performed at or prior to Closing has not been observed or performed by such time, the Purchaser may terminate this Agreement by notice in writing to the Vendor, and in such event the Purchaser shall be released from all obligations hereunder save and except for its obligations under Sections 7.2.3, 15.3, 15.4 and 15.6 which shall survive. The Vendor shall only be released from its obligations if the condition or conditions for the nonperformance of which the Purchaser has terminated this Agreement are not reasonably capable of being performed or caused to be performed by the Vendor. If the Purchaser waives compliance with any of the conditions, obligations or covenants contained in this Agreement, the waiver will be without prejudice to any of its rights of termination in the event of non-fulfillment, non-observance or non-performance of any other condition, obligation or covenant in whole or in part.

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10.2 Termination by the Vendor.

If any of the conditions set forth in Section 8.2 have not been fulfilled or waived at or prior to Closing or any obligation or covenant of the Purchaser to be performed at or prior to Closing has not been observed or performed by such time, otherwise than as a result of receipt of a notice of an Acquisition Proposal or following receipt of such a notice, the Vendor may terminate this Agreement by notice in writing to the Purchaser, and in such event the Vendor and the Principal Shareholders shall be released from all obligations hereunder save and except for their respective obligations under Sections 7.2.3, 15.3, 15.4 and 15.6 which shall survive. The Purchaser shall only be released from its obligations if the condition or conditions for the non-performance of which the Vendor has terminated this Agreement are not reasonably capable of being performed or caused to be performed by the Purchaser. If the Vendor waives compliance with any of the conditions, obligations or covenants contained in this Agreement, the waiver will be without prejudice to any of its rights of termination in the event of non-fulfillment, nonobservance or non-performance of any other condition, obligation or covenant in whole or in part.

10.3 Other Termination Rights.

• 10.3.1 This Agreement may, by notice in writing given prior to or on the Closing Date, be terminated by mutual consent of the Vendor and the Purchaser and in such event, each Party shall be released from all obligations hereunder save and except for Sections 7.2.3, 15.3, 15.4 and 15.6 which shall survive.

• 10.3.2 This Agreement may also be terminated in the circumstances and upon the terms set out in Section 9.3, and in such event, each Party shall be released from all obligations hereunder save and except for Sections 7.2.3, 15.3, 15.4 and 15.6 which shall survive.

• 10.3.3 In the event of a termination of this Agreement under Section 7.12.4, each Party shall be released from all obligations hereunder save and except for Sections 7.2.3, 15.3, 15.4 and 15.6 which shall survive.

10.4 Effect of Termination.

Each Party’s right of termination under this Article 10 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. Nothing in Article 10 shall limit or affect any other rights or causes of action either the Purchaser or the Vendor may have with respect to the representations, warranties, covenants and indemnities in its favour contained in this Agreement.

Neither the Purchaser nor the Vendor may seek to rely upon any conditions precedent contained in Sections 8.1 or 8.2, or exercise any termination right arising therefrom, unless forthwith, the Purchaser or the Vendor, as the case may be, has delivered a written notice to the other specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Purchaser or the Vendor, as the case may be, are asserting as the basis for the non-fulfilment of the applicable condition

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precedent or the exercise of the termination right, as the case may be. If any such notice is delivered, provided that the Purchaser or the Vendor, as the case may be, is proceeding diligently to cure such matter, if such matter is capable of being cured, the other may not terminate this Agreement as a result thereof until the earlier of (i) the expiration of a period of fifteen (15) days from such notice, or (ii) the Closing Date. If any such matter is, by mutual agreement, acting reasonably, not capable of being cured, then, unless the other Party waives such matter (which shall not operate as a waiver of any other matter whatsoever) in writing within five (5) Business Days, this Agreement shall be automatically terminated (without prejudice to any liability for prior non-compliance).

• 10.5 Break Fee.

• 10.5.1 In recognition of the efforts of the Purchaser in entering into this Agreement, the Vendor shall pay to the Purchaser a break fee (the “ Break Fee ”) of three hundred and fifty thousand dollars ($350,000) in the event that:

• (a) the Board of Directors fails to recommend to the Vendor Shareholders that they approve the transaction contemplated herein, or fails to maintain such recommendation, unless as a result of the Purchaser having breached this Agreement;

• (b) the Vendor terminates this Agreement pursuant to Section 7.12.4; or

• (c) the Vendor has not used its Best Efforts to hold the Meeting by the end of business on July 27, 2004.

• 10.5.2 Should the Vendor terminate this Agreement pursuant to Section 10.2 as a result of the condition set forth at Section 8.2.7 not being fulfilled, the Vendor shall pay the Purchaser as a reimbursement of expenses incurred by the Purchaser the sum of one hundred seventy-five thousand dollars ($175,000).

• 10.5.3 If this Agreement is terminated in accordance with this Section 10.5, any obligation of the Vendor to pay any sums under this Section 10.5 shall survive such termination and such sums shall continue to be payable as provided hereunder.

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ARTICLE 11 INDEMNIFICATION

11.1 Indemnification in Favour of the Purchaser.

Subject to Section 11.3, the Vendor shall indemnify and save the Purchaser and each of its directors, officers, employees and shareholders, (collectively, the “ Purchaser’s Indemnified Persons ”) harmless of and from any loss, liability, claim, damage (including third-party claim), interest, penalties, including legal expenses (collectively, “ Damages ”) suffered by, imposed upon or asserted against any of the Purchaser’s Indemnified Persons as a result of, in respect of, connected with, or arising out of, under, or pursuant to:

• (a) any failure of the Vendor to perform or fulfil any covenant of the Vendor under this Agreement or any Ancillary Agreement;

• (b) any breach or inaccuracy of any representation or warranty given by the Vendor contained in this Agreement or in any Ancillary Agreement;

• (c) the failure of the Parties to comply with any applicable bulk sales Laws in respect of the transaction of purchase and sale contemplated under this Agreement;

• (d) (i) any claim by any employee of the Jumbo Entities that is not a Transferred Employee, and (ii) any claim by any Transferred Employee relating to such employee’s employment with the Jumbo Entities in respect of the period prior to the Closing Date, other than for liabilities or obligations expressly assumed by the Purchaser hereunder or for liabilities to the extent reflected on the Financial Statements.

11.2 Indemnification in Favour of the Vendor.

Subject to Section 11.3, the Purchaser shall indemnify and save the Vendor and each of its directors, officers, employees and shareholders (collectively, the “ Vendor’s Indemnified Persons ”) harmless of and from any Damages suffered by, imposed or asserted against any of the Vendor’s Indemnified Persons as a result of, in respect of connected with or arising out of, under or pursuant to:

• (a) any failure of the Purchaser to perform or fulfil any covenant of the Purchaser under this Agreement or any Ancillary Agreement;

• (b) any breach or inaccuracy of any representation or warranty given by the Purchaser contained in this Agreement or in any Ancillary Agreement;

• (c) any claim by a Transferred Employee relating to such employee’s employment with the Purchaser or the Guarantor or an Affiliate; and

• (d) the Assumed Liabilities.

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11.3 Time Limitations.

• 11.3.1 The representations and warranties of the Vendor contained in this Agreement or in any Ancillary Agreement shall survive the Closing and, notwithstanding the Closing and any investigation made by or on behalf of the Purchaser, shall continue for a period of eighteen (18) months after the Closing Date and any claim in respect thereof (except a claim based on fraud) shall be made in writing during such time period and shall be subject to Sections 11.4 and 11.5.

• 11.3.2 The representations and warranties of the Purchaser contained in this Agreement or in any Ancillary Agreement shall survive the Closing and, notwithstanding such Closing and any investigation made by or on behalf of the Vendor, shall continue in full force and effect for the benefit of the Vendor for a period of eighteen (18) months from the Closing Date and any claim in respect thereof (except a claim based on fraud) shall be made in writing within such time period and shall be subject to Sections 11.4 and 11.5 except that the representations and warranties set out in Section 5.14 (and the corresponding representations and warranties set out in the certificate to be delivered pursuant to Section 8.1.1) shall survive and continue in full force and effect until, but not beyond, the expiration of the period, if any, during which an assessment, reassessment or other form of recognized document assessing liability for provincial sales taxes, interest or penalties under applicable provincial sales taxes legislation in respect of any taxation year to which such representations and warranties extend could be issued under such provincial sales taxes legislation to the Purchaser.

11.4 Procedure for Indemnification - Other Claims.

A claim for indemnification for any matter not involving a third-party claim may be asserted by notice to the Party from whom indemnification is sought. Upon receipt of such notice, the provisions of Article 14 shall become applicable.

11.5 Indemnification Proceedings - Third Party Claim.

• 11.5.1 Promptly after receipt by an indemnified party (an “ Indemnified Party ”) under Section 11.1 or 11.2 of a notice of commencement of any proceeding against it by a third party, the Indemnified Party will, if a claim is to be made against an indemnifying party under such Section, give notice to the Indemnifying Party (an “ Indemnifying Party ”) of the commencement of such claim. The failure to notify the Indemnifying Party will not relieve the Indemnifying Party of any liability that it may have to any Indemnified Party, except to the extent that the Indemnifying Party demonstrates that the defense of such action is prejudiced by the Indemnified Party’s failure to give such notice.

• 11.5.2 If any proceeding referred to in Section 11.5.1 (a “ Proceeding ”) is brought against an Indemnified Party and it gives notice to the Indemnifying Party of the commencement of the Proceeding, the Indemnifying Party will be entitled to participate in the Proceeding as hereinafter provided. Subject to the next

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following sentence, to the extent that the Indemnifying Party wishes to assume the defense of the Proceeding with counsel satisfactory to the Indemnified Party, it may do so. The Indemnifying Party may not assume defence of the Proceeding if (i) the Indemnifying Party is also a party to the Proceeding and the Indemnifying Party determines in good faith that joint representation would be inappropriate, or (ii) the Indemnifying Party fails to provide reasonable assurance to the Indemnified Party to its financial capacity to defend the Proceeding and provide indemnification with respect to the Proceeding. After notice from the Indemnifying Party to the Indemnified Party of its election to assume the defense of the Proceeding as against the Indemnified Party, the Indemnifying Party will not, as long as it diligently conducts such defense, be liable to the Indemnified Party under this Section 11.5 for any fees of other counsel or any other expenses with respect to the defense of the Proceeding, in each case subsequently incurred by the Indemnified Party in connection with the defense of the Proceeding, other than reasonable costs of investigation. If the Indemnifying Party assumes the defense of a Proceeding as against the Indemnified Party no compromise or settlement of such claims may be made by the Indemnifying Party without the Indemnified Party’s consent unless (y) there is no admission of any violation of Laws or any violation of the rights of any Person and no adverse effect on any other claims that may be made against the Indemnified Party, and (z) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party, and (iii) the Indemnified Party will have no liability with respect to any compromise or settlement of such claims effected without its consent. If notice is given to an Indemnifying Party of the commencement of any Proceeding and the Indemnifying Party does not, within ten (10) days after receipt of such notice, give notice to the Indemnified Party of its election to assume the defense of the Proceeding, the Indemnifying Party will be bound by any determination made in the Proceeding or any compromise or settlement effected by the Indemnified Party acting in good faith.

• 11.5.3 Notwithstanding the foregoing, if an Indemnified Party determines in good faith that there is a reasonable probability that a Proceeding may adversely affect it or its Affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the Indemnified Party may, by notice of the Indemnifying Party, assume the exclusive right to defend, compromise, or settle the Proceeding. In such case, the Indemnifying Party will not be bound by any compromise or settlement effected without its consent (which may not be unreasonably withheld) but shall be bound by a final and conclusive judgment of a court of competent jurisdiction.

• 11.5.4 Where the defence of a Proceeding is being undertaken and controlled by the Indemnifying Party, the Indemnified Party will use its Best Efforts to make available to the Indemnifying Party those employees whose assistance, testimony or presence is necessary to assist the Indemnifying Party in evaluating and defending any such claims. However, the Indemnifying Party shall be responsible for the expense associated with any employees made available by the Indemnified Party to the Indemnifying Party pursuant to this

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Section 11.5.4, which expense shall be equal to an amount to be mutually agreed upon per person per hour or per day for each day or portion thereof that the employees are assisting the Indemnifying Party and which expenses shall not exceed the actual cost to the Indemnified Party associated with the employees.

• 11.5.5 With respect to any Proceeding at the request of the Indemnifying Party, the Indemnified Party shall make available to the Indemnifying Party or its representatives on a timely basis all documents, records and other materials in the possession of the Indemnified Party, at the expense of the Indemnifying Party, reasonably required by the Indemnifying Party of its use in defending any such claim and shall otherwise cooperate on a timely basis with the Indemnifying Party in the defence of such claim.

• 11.5.6 With respect to any Proceeding in respect of income, corporate, sales, excise, or other tax liability enforceable by Lien against the property of the Indemnified Party, the Indemnifying Party’s right to so defend the Proceeding shall only apply after payment of the re-assessment.

11.6 Exclusion of Other Remedies.

With the exception of (i) the Purchaser’s rights set forth in Article 9 and the Purchaser’s or the Vendor’s rights of termination as set forth in Article 10, (ii) remedies available with respect to the Intellectual Property, and (iii) any remedy of specific performance or injunction, the indemnities provided in Sections 11.1 and 11.2 shall constitute the only remedy of the Purchaser and the Vendor, respectively, against another Party in the event of any breach of a representation, warranty, covenant or agreement of any Party contained in this Agreement. The Purchaser and the Vendor expressly waive and renounce any other such remedy whatsoever, whether at law or in equity, to which it would otherwise be entitled as against any other Party.

ARTICLE 12 POST-CLOSING COVENANTS

12.1 Access to Books and Records.

For a period of six (6) years from the Closing Date or for such longer period as may be required by Law, the Purchaser shall retain all Books and Records relating to the Purchased Business for the period prior to the Closing Date, it being understood that the Purchaser shall not be responsible or liable to the Vendor for any accidental loss or destruction of or damage to any such Books and Records. So long as such Books and Records are retained by the Purchaser pursuant to this Agreement, the Vendor shall have the reasonable right to inspect and make copies (at its own expense) of them upon reasonable request during normal business hours and upon reasonable notice for any purpose and without undue interference to the business operations of the Purchaser. The Purchaser shall have the right to have its representatives present during any such inspection.

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12.2 [Confidential]

• 12.2.1 [Confidential]

• 12.2.2 [Confidential]

• 12.2.3 [Confidential]

• 12.3 Assistance By Purchaser.

• 12.3.1 The Purchaser shall, at no cost to the Jumbo Entities, use commercially reasonable efforts to collect any Accounts Receivable and remit forthwith to the Vendor all amounts collected in connection with the Accounts Receivable. Such covenant of the Purchaser shall not in any way affect the Jumbo Entities’ right to seek recovery of the Accounts Receivable from the corresponding debtors starting one hundred and twenty (120) days after the Closing Date. The Purchaser will provide such reasonable assistance in this regard as may be requested by the Vendor.

• 12.3.2 In addition to the provisions of Section 12.3.1, the Purchaser shall, upon a request to that effect from the Vendor, make the Transferred Employees available to act as witnesses in connection with any court or similar enforcement proceeding, provided that the Vendor shall reimburse any such employees of the Purchaser for their reasonable out-of-pocket expenses incurred thereby, and the Purchaser for the salary for such employees during such time.

12.4 Leaseco Filings.

The Vendor shall cooperate with the Purchaser in order to allow the Purchaser to cause Leaseco to prepare and file any documentation with Governmental Entities, including tax returns and other tax related documentation, that are required to be filed as a result of change of control of Leaseco.

12.5 Non-Competition.

• 12.5.1 For good and valuable consideration, and subject to Closing, the Vendor covenants with the Purchaser that it will not, without the Purchaser’s prior written consent, for a period of five (5) years from the Closing Date, directly or indirectly, in any capacity whatsoever including, as an employer, mandatory, principal, agent, joint venturer, partner, shareholder or other security holder, independent contractor, licensor, licensee, franchisor, distributor, consultant, adviser, supplier or trustee, or by and through any Affiliate or other Person or otherwise in connection with any Person, carry on or be engaged in, provide any assistance to or have any financial or other interest in or be otherwise involved in any endeavour, activity or business in all or part of Canada that is engaged in any activity competing with the Purchased Business; provided, however, that nothing in this Agreement shall restrict the Vendor’s right to:

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• (a) directly or indirectly own or acquire any equity interest in any corporation engaged in Competing Activities whose shares are listed on a recognized stock exchange, so long as (x) the number of shares held by the Vendor in such corporation does not exceed five percent (5%) of the outstanding shares of any class of such corporation and (y) the Vendor has no participation in the management or direction of such corporation other than as a shareholder; or

• (b) directly or indirectly own or acquire any franchise of the Purchased Business or any equity interest in or obligations issued by a Person owning or acquiring a franchise of the Purchased Business.

• 12.5.2 The Parties agree that irreparable damage would occur in the event that any of the provisions of this Section 12.5 are not performed in accordance with their specific terms or are otherwise breached. It is accordingly agreed that the Purchaser shall be entitled to an injunction or injunctions to prevent breaches of this Section 12.5 and to enforce specifically the terms and provisions of this Section 12.5 without having to post bond or other surety.

12.6 Confidentiality.

After the Closing, the Jumbo Entities will keep confidential all information in their possession or under their control relating to the Purchased Business and the Purchased Assets unless such information is or becomes generally available to the public other than as a result of a disclosure by the Jumbo Entities in violation of this Agreement and except in respect of the assets or liabilities of the Purchased Business not transferred hereunder or in respect of actions taken to enforce their rights hereunder.

12.7 Further Assurances.

From time to time after the Closing Date, each Party shall at the request of any other Party execute and deliver such additional conveyances, transfers and other assurances as may be reasonably required to effectively transfer the Purchased Assets to the Purchaser and carry out the intent of this Agreement and any Ancillary Agreement.

ARTICLE 13 EMPLOYEES

13.1 Employees.

• 13.1.1 Subject to the Closing, the Purchaser agrees to offer employment effective as of the Effective Time on substantially similar terms and conditions of employment existing as of the Closing Date (including the same location and substantially similar health care benefits) to all the employees of the Purchased Business listed in Schedule 13.1.1 who are not on short-term or long-term disability leave (the “ Transferred Employees ”), and agrees to recognize the prior services of the Transferred Employees for all purposes other than participation in any employee pension plan.

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• 13.1.2 The Jumbo Entities shall not terminate the employment of a Transferred Employee prior to Closing, other than in the Ordinary Course, or attempt in any way to discourage the Transferred Employees from accepting any offer of employment made by the Purchaser and shall not solicit the services of any of the Transferred Employees while they are employed by the Purchaser or an Affiliate thereof, for a three (3)-year period following the Closing Date, except by advertising in a newspaper or periodical of general circulation.

13.2 Employee Liability.

• 13.2.1 The Vendor shall be responsible for:

• (a) all liabilities for salary, wages, bonuses, commissions, vacation pay and other compensation and all liabilities under employee pension and benefit plans of the Vendor relating to employment of all Persons in the Purchased Business in respect of the period prior to the Closing Date;

• (b) all severance payments, damages for wrongful dismissal and all related costs in respect of the termination by a Jumbo Entity of the employment of any Person who does not accept the Purchaser’s offer of employment referred to in Section 13.1 and in respect of any Person who is not a Transferred Employee; and

• (c) all liabilities for claims for injury, disability, death or workers’ compensation arising from or related to employment in the Purchased Business in respect of the period prior to the Closing Date.

• 13.2.2 Without limiting the definition of Assumed Liabilities, the Purchaser shall be responsible for all liabilities for salary, wages, bonuses, commissions, vacation pay and other compensation and all liabilities for claims for injury, disability, death or workers’ compensation relating to employment of all Transferred Employees in respect of the period including and following to the Closing Date.

ARTICLE 14 ARBITRATION

14.1 Dispute Settlement.

In the event any dispute, claim, question or difference (a “ Dispute ”) arises with respect to this Agreement or its performance, enforcement, breach, termination or validity (other than disputes pursuant to Section 3.5 which will be resolved in the manner set forth therein, the Parties shall meet to determine if they can settle the Dispute.

14.2 Arbitration.

If the Parties do not reach a solution pursuant to Section 14.1 within a period of fifteen (15) Business Days following the first notice of the Dispute by any Party to the others, then upon written notice by any Party to the others, the Dispute shall be finally settled by

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arbitration in accordance with the provisions of the Arbitration Act (Ontario) based upon the following:

• 14.2.1 the arbitration tribunal shall consist of one arbitrator appointed by mutual agreement of the Parties, or in the event of failure to agree within ten (10) Business Days following delivery of the written notice to the arbitrate, any Party may apply to a judge of the Ontario Superior Court of Justice to appoint an arbitrator. The arbitrator shall be qualified by education and training to pass upon the particular matter to be decided;

• 14.2.2 the arbitrator shall be instructed that time is of the essence in the arbitration proceeding and, in any event, the arbitration award must, if at all possible, be made within thirty (30) days of the submission of the Dispute to arbitration;

• 14.2.3 after written notice is given to refer any Dispute to arbitration, the Parties will meet within fifteen (15) Business Days of delivery of the notice and will negotiate in good faith any changes in these arbitration provisions or the rules of arbitration which are herein adopted, in an effort to expedite the process and otherwise ensure that the process is appropriate given the nature of the Dispute and the values at risk;

• 14.2.4 the Parties agree that Section 52(1) of the Arbitrations Act (Ontario) does not apply to any Dispute submitted to arbitration;

• 14.2.5 the arbitration shall take place in Toronto, Ontario;

• 14.2.6 the arbitration award shall be given in writing and shall be final and binding on the Parties, not subject to any appeal, and shall deal with the question of costs of arbitration and all related matters;

• 14.2.7 judgment upon any award may be entered in any Court having jurisdiction or application may be made to the Court for a judicial recognition of the award or an order of enforcement, as the case may be;

• 14.2.8 all Disputes referred to arbitration (including the scope of the agreement to arbitrate, any statute of limitations, set-off claims, conflict of laws rules, tort claims and interest claims) shall be governed by the substantive law of Ontario; and

• 14.2.9 the Parties agree that the arbitration shall be kept confidential and that the existence of the proceeding and any element of its (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions and any awards) shall not be disclosed beyond the arbitrator, the Parties, their counsel and any Person necessary to the conduct of the proceeding, except as may lawfully be required in judicial proceedings relating to the arbitration or otherwise or as required by law or a Governmental Entity.

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14.3 Other Relief.

This Article 14 shall not preclude any of the Parties from applying to a court to enforce this agreement by way of specific performance or for injunctive relief.

ARTICLE 15 MISCELLANEOUS

15.1 Notices.

Any notice, direction or other communication given under this Agreement or any Ancillary Agreement shall be in writing and given by delivering it or sending it by facsimile or other similar form of recorded communication addressed:

(a) to the Vendor at:

Jumbo Entertainment Inc. 5500 North Service Road 10th Floor Burlington, Ontario L7L 5H7

Attention: President

Telephone: (905) 634-4244 Facsimile: (905) 632-2964

with a copy to:

Stikeman Elliott LLP Commerce Court West Suite 5300 199 Bay Street Toronto, Ontario M5L 1B9

Attention: Simon Romano and Gregory Hogan

Facsimile: (416) 861-0445

(b) to the Purchaser: 9137-5055 Québec inc. c/o Le SuperClub Vidéotron ltée 300 Viger Street East 6th Floor East Montréal, Quebec H2X 3W4 Attention: Legal Department

Telephone: (514) 380-1908 Facsimile: (514) 985-8834

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(c)

to the Guarantor:

Le SuperClub Vidéotron ltée 300 Viger Street East 6th Floor East Montréal, Quebec H2X 3W4

Attention: Legal Department

Telephone: (514) 380-1908 Facsimile: (514) 985-8834

Any such communications shall be deemed to have been validly and effectively given (i) if personally delivered, on the date of such delivery if such date is a Business Day and such delivery was made prior to 4:00 p.m. (Montreal time) and otherwise on the next Business Day, or (ii) if transmitted by facsimile on the Business Day following the date of transmission. Any Party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to such Party at its changed address.

15.2 Time of the Essence.

Time shall be of the essence of this Agreement.

15.3 Brokers.

The Vendor shall indemnify and save harmless the Purchaser from and against any and all claims, losses and costs whatsoever for any commission or other remuneration payable or alleged to be payable to any broker, agent or other intermediary who purports to act or have acted for the Jumbo Entities. The Purchaser shall indemnify and save harmless the Vendor from and against any and all claims, losses and costs whatsoever for any commission or other remuneration payable or alleged to be payable to any broker, agent or other intermediary who purports to act or have acted for the Purchaser. These indemnities shall not be subject to any of the limitations set out in Article 11 of this Agreement.

15.4 Announcements.

At all times prior to Closing, any press release or public statement or announcement (a “ Public Statement ”) with respect to the transaction contemplated in this Agreement shall be made only with the prior written consent and joint approval of the Vendor and the Purchaser unless such Public Statement is required by Law or by any stock exchange or is in respect of a Superior Offer, in which case the Party required to make the Public Statement shall use its Best Efforts to obtain the approval of the other Party as to the form, nature and extent of the disclosure. After the Closing, any Public Statement by the Vendor shall be made only with the prior written consent and approval of the Purchaser unless the Public Statement is required by Law or by any stock exchange, in which case the Vendor shall use its Best Efforts to obtain the approval of the Purchaser as to the form, nature and extent of the disclosure.

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15.5 Third Party Beneficiaries.

Except as otherwise provided in Section 11.1, the Vendor and the Purchaser intend that this Agreement shall not benefit or create any right or cause of action in, or on behalf of, any Person, other than the Parties to this Agreement and no Person, other than the Parties to this Agreement, shall be entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum. The Purchaser is and shall be deemed to be acting as agent on behalf of and for the benefit of each of the Purchaser’s Indemnified Persons. The Vendor is and shall be deemed to be acting as agent on behalf of and for the benefit of each of the Vendor’s Indemnified Persons.

15.6 Costs and Expenses.

• 15.6.1 Except as otherwise expressly provided in this Agreement, all costs and expenses (including the fees and disbursements of legal counsel, investment advisers and accountants) incurred in connection with this Agreement, the Ancillary Agreements and the transactions contemplated herein and therein shall be paid by the Party incurring such expenses.

• 15.6.2 The Purchaser shall be responsible for all sales and goods and services taxes, and other governmental transfer charges related to the transfer of the Purchased Assets to the Purchaser.

15.7 Amendments.

This Agreement may only be amended or otherwise modified by written agreement executed by the Vendor and the Purchaser, save for the terms of Sections 12.5, 15.10, 15.11 and 15.13 which may only be amended or otherwise modified by written agreement executed by the Vendor, the Purchaser and/or the Principal Shareholders, as applicable.

15.8 Waiver.

• 15.8.1 No waiver of any of the provisions of this Agreement or any Ancillary Agreement shall be deemed to constitute a waiver of any other provision (whether or not similar), nor shall such waiver be binding unless executed in writing by the Party to be bound by the waiver.

• 15.8.2 No failure on the part of the Vendor or the Purchaser to exercise, and no delay in exercising any right under this Agreement shall operate as a waiver of such right, nor shall any single or partial exercise of any such right preclude any other or further exercise of such right or the exercise of any other right.

15.9 Non-Merger.

Except as otherwise expressly provided in this Agreement, the covenants, representations and warranties shall not merge on and shall survive the Closing and, notwithstanding such Closing and any investigation made by or on behalf of any Party, shall continue in full force and effect. Closing shall not prejudice any right of one Party against any other

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Party in respect of anything done or omitted under this Agreement or in respect of any right to damages or other remedies.

15.10 Entire Agreement.

This Agreement together with the Ancillary Agreements constitute the entire agreement between the Parties with respect to the transactions contemplated in this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties, except the Confidentiality Agreement dated January 16, 2004 between the Vendor and the Guarantor (which will terminate at Closing) and the Millennium POS Side Letter. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth herein and therein and the Vendor and the Purchaser have not relied and are not relying on any other information, discussion or understanding in entering into and completing the transactions contemplated by this Agreement and the Ancillary Agreements. If there is any conflict or inconsistency between the provisions of this Agreement and the provisions of any Ancillary Agreement, the provisions of this Agreement shall govern.

15.11 Successors and Assigns.

• 15.11.1 This Agreement shall become effective when executed by the Vendor, the Principal Shareholders, the Purchaser and the Guarantor and after that time shall be binding upon and enure to the benefit of the Vendor, the Principal Shareholders, the Purchaser, the Guarantor and its respective successors and permitted assigns.

• 15.11.2 Except as provided in this Section 15.12, neither this Agreement nor any of the rights or obligations under this Agreement shall be assignable or transferable by the Vendor or the Purchaser without the prior written consent of the Vendor or the Purchaser, as the case may be. The Purchaser shall be entitled, upon giving notice to the Vendor at any time on or prior to the Closing Date, to assign this Agreement or any of the Purchaser’s rights and obligations under this Agreement to any Affiliate of the Purchaser subject to the following conditions:

• (a) the assignee shall become jointly and severally liable with the Purchaser, as a principal and not a surety, with respect to all of the representations, warranties, covenants, indemnities and agreements of the Purchaser; and

• (b) the assignee shall execute an agreement confirming the assignment and the assumption by the assignee of all obligations of the Purchaser under this Agreement.

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15.12 Severability.

If any provision of this Agreement shall be determined by an arbitrator or any court of competent jurisdiction to be illegal, invalid or unenforceable, that provision will be severed from this Agreement and the remaining provisions shall remain in full force and effect.

15.13 Governing Law.

This Agreement shall be governed by and interpreted and enforced in accordance with the laws applicable in the Province of Ontario and the federal laws of Canada applicable therein.

15.14 Counterparts.

This Agreement may be executed in any number of counterparts (including counterparts by facsimile) and all such counterparts taken together shall be deemed to constitute one and the same instrument.

ARTICLE 16 GUARANTEE

16.1 Guarantee of Purchaser’s Obligations.

• 16.1.1 The Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Vendor the punctual and complete fulfillment, payment and performance when due of all obligations of the Purchaser under the terms of this Agreement and any other Ancillary Agreements.

• 16.1.2 The liability of the Guarantor under the guarantee (the “ SuperClub Guarantee ”) contemplated by this Section 16.1 is absolute and unconditional and the SuperClub Guarantee shall be binding upon the Guarantor and its successors and assigns, shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim the Guarantor may have against the Vendor, hereunder or otherwise, and shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not the Guarantor shall have any Knowledge or notice thereof) which might otherwise constitute a legal or equitable discharge or defense of a guarantor, including insolvency or bankruptcy; provided that any claim hereunder against the Guarantor shall be subject to, and the Guarantor shall have available to it in defense of any such claim, any and all of the Purchaser’s rights and defenses, whether arising under the Ancillary Agreements or otherwise, in respect of any such claim other than any defense based on the insolvency or bankruptcy of the Purchaser.

• 16.1.3 The Guarantor shall pay all costs and expenses (including legal fees and expenses) reasonably incurred by or on behalf of the Vendor in enforcing the obligations of the Guarantor under the SuperClub Guarantee.

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• 16.1.4 To the extent of any payment by the Guarantor to the Vendor hereunder, the Guarantor shall succeed to all corresponding claims that the Vendor may have and otherwise shall be subrogated to the rights of the Vendor against the Purchaser in respect thereof.

• 16.1.5 The Vendor shall not be bound to exhaust its recourse against the Purchaser or any other Person before being entitled to payment or performance under this guarantee and the Guarantor renounces all benefits of discussion and division.

IN WITNESS WHEREOF the parties have executed this Asset Purchase Agreement.

JUMBO ENTERTAINMENT INC.

Per: “James Gormley” Name: James Gormley Title: President and Chief Executive Officer

9137-5055 QUÉBEC INC.

Per: “Richard Soly” Name: Richard Soly Title: President

LE SUPERCLUB VIDÉOTRON LTÉE

Per: “Richard Soly” Name: Richard Soly Title: President

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