Convertible Promissory Note[0]

CONVERTIBLE PROMISSORY NOTE OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT US $_______________ DATED: ____________________, 2005 WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION (“WORLDWIDE”) a company organized and existing under the laws of Nevada, hereby promises to pay to the order of ________________________________ (“HOLDER”), the sum of _______________________, United States Dollars (US$______________), together with interest as provided herein. 1. PAYMENT: All amounts of principal and interest under this Convertible Promissory Note (“Note”) shall be due and payable as follows unless the Holder exercises its right to convert in accordance with Schedule I. To be paid in full on or before ___________________, 2005. Shall be calculated at the rate of ten (10%) per annum and be payable at maturity. Principal: Interest: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED, EXCEPT OTHERWISE PROVIDED FOR HEREIN, WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“1933 ACT”) AND REGISTRATION S OF THE RULES AND REGULATIONS PROMULGATED THEREUNDER, AND MAY NOT BE SOLD OR OFFERED WITHIN THE UNITED STATES (AS DETAILED IN REGULATION S) EXCEPT PURSUANT TO REGISTRATION UNDER OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT. 2. CONVERTIBLE: The Holder, at its sole option, may convert any part of the principal into units (Unit) of Worldwide Promotional Products Corporation at a conversion price of US$0.30 per Unit. The Unit is more particularly described in Appendix I forming part of this Note. 3. HOLDER REPRESENTATIONS AND COVENANTS: Access to Information In connection with the purchase and sale of the securities, the Holder represents and warrants to, and covenants and agrees with Worldwide as follows: (a) Offshore Transaction (i) The Holder is not a U.S. Person (as defined in Section 902 (o) of Regulation S) or if the Holder is not a natural person, is not organized under the laws of any jurisdiction within the United States, was not formed by a U. S. Person for the purpose of investing in Regulation S. securities and is not otherwise a U.S. 1 Person. The Holder is not, and on the date of acceptance of this Note by Worldwide,will not be an affiliate of Actionview; (ii) At the time the buy order was originated, the Holder was outside the United States and is outside of the United States as of the date of the execution and delivery of this Note; No offer to purchase the securities was made by the Holder in the United States; The Holder is purchasing the Note under the laws of his or its jurisdiction of residence and domicile, and the offer and sale of the Note will not violate the securities or other laws of such jurisdiction; All offers and sale of any of the Note by the Holder prior to the end of the restricted period, as defined by appropriate securities laws (Restricted Period) of any applicable jurisdiction must be done in accordance with rule 903 and rule 904, as applicable, of Regulation S or pursuant to registration of securities under the 1933 Act or pursuant to an exemption from registration. The transaction contemplated by this Note (a) has not been and will not be prearranged by the Holder with a purchaser located in United States or a purchaser which is a U.S. Person, and (b) are not and will not be part of a plan or scheme by the Holder, to evade the registration provisions of the 1933; The Holder understands that the securities are not registered under the 1933 Act and are being offered and sold to it in reliance on specific exclusions from the registration requirements of Federal and State securities laws, and that Worldwide is relying upon the truth and accuracy of the representation, warranties, agreements, acknowledgements and understanding of the Holder set forth herein in order to determine the applicable of such exclusions and the suitably of the Holder and any purchaser from the Holder to acquire the Note; (iii) (iv) (v) (vi) (vii) (viii) The Holder shall take all reasonable steps to ensure its compliance with Regulation S and shall promptly send to each purchaser who acts as a distributor, dealer or person receiving a selling concession, fee or other remuneration with respect to any of the securities, who purchases prior to the expiration of the Restricted Period referred to in Section 2(a)(v) above, a confirmation or other notice to the purchaser stating that the purchaser is subject to the same restrictions on offers and sales as the Holder to Section 109(c)(2)(iv of Regulation S; (ix) The Holder has not conducted or permitted and shall not conduct or permit on its behalf any “directed selling efforts” as that term is defined in Rule 902(b) of Regulation S; nor has the Holder conducted any general solicitation relating to the offer and sale of any of the securities in the United States or elsewhere; The Holder has the full right, power and authority to enter into this Note and to consummate the transactions contemplated herein. This Note has been duly authorized, valid executed and delivered on behalf of the Holder and is a valid and binding agreement in accordance with its terms, subject to general 2 (x) principals of equity and bankruptcy or other laws affecting the enforcement of creditors’ rights generally; (xi) The execution and delivery of this Note and the consummation of the purchase of the securities, and the transactions contemplated by this Note do not and will not conflict with or result in a breach by the Holder of any of the terms or provisions of, or constitute a default under, the articles of incorporation or bylaws (or similar constitutive documents) of the Holder. All invitations, offers and sales of or with respect to any of the Note, by the Holder and any distribution by the Holder of any documents relating to any offer by it of any of the securities will be in compliance with applicable laws and regulations and will be made in such a manner that no prospectus need be filed and no other filing need be made by Worldwide with any regulatory authority or stock exchange in any country or any political sub-division of any country; and (xii) (xiii) The Holder will not make any offer or sale of the Note by any means which would not comply with the law and regulations of the territory in which such offer or sale takes place or to which such offer or sale impose upon Worldwide any obligation to satisfy any public filing or registration requirement or provide or publish any information of any kind whatsoever or to otherwise undertake or become obligated to do any act. (xiv) The Holder certifies that it is not acquiring the Note for the account of any US person and agrees to resell such Note only in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act of 1933 (the “Act”) or pursuant to an available exemption from registration; and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the Act. (b) Independent Advice The Holder (or others for whom it is contracting hereunder) has been advised to consult its own legal and tax advisors with respect to applicable resale restrictions and applicable tax considerations and it (or others for whom it is contracting hereunder) has been advised to consult its own legal and tax advisors with respect to applicable resale restrictions and applicable tax considerations and it (or others for whom it is contracting hereunder) is solely responsible and Worldwide is not in any way responsible for compliance with applicable resale restrictions and applicable tax legislation; (c) No Government Recommendation or Approval The Holder understands that no Federal or State or foreign government agency has passed on or made any recommendation or endorsement of the Note; (d) Current Public Information The Holder has had an opportunity to discuss with the officers of Worldwide, all matters relating to the securities, financial conditions, operations and prospects of 3 Worldwide and any questions raised by the Holder have been answered to the Holder’s satisfaction. (e) Holder’s Sophistication The Holder acknowledges that the purchase of the Note involve a high degree of risk. The Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks under the 1933 Act, and therefore, the Holder must bear the economic risk of this investment or an indefinite period of time and; (f) Tax Status The Holder is not a “10-percent Shareholder” (as defined in Section 871(h)3(B) of the U.S. Internal Revenue Code) of the Worldwide. 4. Worldwide’s Representations and Covenants S: (a) Company Status: Worldwide is a Reporting Issuer and its Common Stock, having $0.001 par value per share, is listed and trades on OTC OTHER using the symbol “WPPC”. (b) Offshore Transaction: Worldwide has not offered any of the Note to any person in the United States, any identifiable groups of U.S. citizens aboard, or to any U.S. Person, as such terms are used in Regulation S. (i) At the time the buy order was originated, Worldwide and/or its agents reasonably believed the Holder was outside the United States and was not an U.S. person. Worldwide and/or its agents reasonably believe that the transaction was not pre-arranged with a Holder in the United States and was not a U.S. Person. No offer to buy or sell the Note was or will be made by Worldwide to any person in the United States. The sale of the Note by Worldwide pursuant to this agreement will be made in accordance with the provisions and requirements of Regulation S in all respect. The transactions contemplated by this Note (A) have not been and will not be pre-arranged by Worldwide with a purchaser located in the United States or a purchaser which is a U.S. Person, and (B) are not and will not be part of a plan or scheme by Worldwide to evade the registration provisions of the 1933 Act. (ii) (iii) (iv) (v) (c) No Directed Selling Efforts: With regards to this transaction, Worldwide has not conducted any “directed selling efforts” as that term is defined in Rule 902 of Regulation S nor has Worldwide conducted any general solicitation relating to the offer and sale of any of the Note in the United States or elsewhere. (d) Organization: Worldwide is a corporation duly organized and validly existing under the laws of the State of Nevada, and is in good standing under such laws. Worldwide 4 has all requisite corporate power and authority to carry on its business as presently conducted. (e) Shares: There are ______________ shares of Worldwide’s Common Stock, $0.001 par value per share, authorized. (f) Authority: The execution and delivery of the Note do not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit, under, any provision of the Articles of Incorporation, and any amendments thereto, By Laws, Stockholders Agreement and any amendments thereto of Worldwide. (g) Consent: No consent, approval or authorization of or designation, declaration or filing with any government authority on the part of Worldwide is required in connection with the valid execution and delivery of the Note, or the offer, sale or issuance of the Common Stock, or the consummation of any other transaction contemplated hereby, except the filing, if required, with the Securities and Exchange Commission of Form 8-K or other required filing for Regulation S exempted offerings. (h) Actions: There is no action, proceeding or investigation pending, or to Worldwide’s knowledge, threatened, against Worldwide which might result, either individually or in the aggregate, in any material adverse change in the business, prospects, conditions, affairs or operations of Worldwide. (i) Corporate Action: The issuance, sale and delivery of the Note have been duly authorized by all required corporate action on the part of Worldwide,and when issued, sold and delivered in accordance with the terms hereof and thereof for the consideration expressed herein and therein, will be duly and validly issued, fully paid and non-assessable. (j) Binding Agreement: This Note has been duly authorized, validly executed and delivered on behalf of Worldwide and is a valid and bind agreement in accordance with its terms, subject to general principles of equity and to bankruptcy or other laws affecting the enforcement of creditors’ rights generally. Worldwide has all requisite right, power and authority to execute and deliver this Note and to consummate the transactions contemplated hereby. All corporate action on the part of Worldwide, its directors and shareholders necessary for the authorization, execution, delivery and performance of this Note has been taken. (k) Approvals: Worldwide is not aware of any authorization, approval; or consent of any U.S. government body which is legally required for the issuance and sale of the securities issuable upon conversion thereof to persons who are non-U.S.Persons, as contemplated by this Note. 5. EXEMPTION: RELIANCE ON REPRESENTATIONS: The Holder understands that the offer and sale of the securities are not being registered under the 1933 Act. Worldwide and the Holder are relying on the rules governing offers and sales made outside the United States pursuant to Regulation S. 5 6. CONDITIONS TO WORLDWIDE’S OBLIGATIONS TO SELL: Worldwide’s obligation to sell the Note is conditioned upon: (a) The Receipt and acceptance by Worldwide of this Note as executed by the Holder; All of the representation and covenants of the Holder contained in this Note shall be true and correct as at the date of acceptance of this Note by Worldwide; Payment of US $_________________ (the “Principal”); (b) (c) 7. CONDITIONS TO HOLDER’S OBLIGATIONS TO PURCHASE: The Holder’s obligation to purchase the Note is conditional upon the confirmation of receipt and acceptance by Worldwide of this Note as evidenced by execution of this Note of the duly authorized officers of Worldwide. 8. MISCELLANEOUS: (a) Entire Agreement: This Note constitutes the entire agreement between the parties, and neither party shall be liable or bound to the other in any manner by any warranties, representations or covenants except as specifically set forth herein. Any previous agreement among the parties related to the transactions described herein is superseded hereby. The terms and conditions of this Note shall inure to the benefit of and be binding upon the restrictive successors and assigns of the parties hereto. Nothing in this Note, express or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Note, except as expressly provided herein. Independent Contractor: The Holder is an independent contractor and is not the agent of Worldwide. The Holder is not authorized to bind Worldwide or to make any representation or warranties on behalf of Worldwide. Survival: All representations and warranties in this Note by Worldwide and the Holder shall survive the closing of the transactions contemplated by this Note. Governing Law: This Note shall be construed in accordance with the laws of Nevada applicable to contracts made and wholly to be performed within the State of Nevada and shall be binding upon the successors and assigns of each party hereto. This Note may be executed in counterparts, and the facsimile transmission of executed counterpart to this Note shall be effective as an original. Worldwide Indemnification: Worldwide agrees to indemnify and hold the Holder harmless from any and all claims, damages and liabilities arising from Worldwide’s breach of its representations and/or covenants set forth herein. 6 (b) (c) (d) (e) (f) Holder Indemnification: The Holder agrees to indemnify and hold Worldwide harmless from any all claims, damages and liabilities arising from the Holder’s breach of its representations and warranties set forth in the Note. Any notice hereunder may be given to the Holder or by Worldwide by delivering it as follows: To Worldwide Promotional Products Corporation: 3404 – 25th Street NE, Calgary, Alberta, Canada, T1Y 6C1 To the Holder: __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ (g) (h) Time shall be of the essence to this Note. IN WITNESS WHEREOF, the undersigned has executed the Note as of the date first set forth above. OFFICIAL SIGNATORY OF WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION BY: ____________________________________ ___________________ ___________________ Accepted this ____ day of _________________, 2005. OFFICIAL SIGNATORY OF HOLDER BY: ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ 7 APPENDIX I FORMING PART OF THE CONVERTABLE PROMISSORY NOTE DATED _________________________, 2004 BETWEEN WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION (“Worldwide”) and _______________________ (the “Holder”). UNITS (“Unit”) Each Unit shall comprise of one fully paid, non assessable common share of US$0.001 par value of Worldwide and one share purchase warrant entitling the Holder to purchase one additional common share of Worldwide at a purchase price of US$0.50 per common share at any time prior to the first anniversary of the date of conversion of the principal. Schedule I: SHARE PURCHASE WARRANT CERTIFICATE, forming part of this Appendix I contains the Terms and Conditions of the SHARE PURCHASE WARRANT. SCHEDULE I SHARE PURCHASE WARRANT CERTIFICATE WARRANT TO PURCHASE _______________ COMMON SHARES OF WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION (Incorporated under the laws of the State of Nevada, U.S.A.) SHARE PURCHASE WARRANT (the “Warrant”) THIS SHARE PURCHASE WARRANT CERTIFICATE AND ANY SECURITIES ISSUED PURSUANT TO THE TERMS HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT. THIS IS TO CERTIFY THAT for value received _____________________, (the “Holder”), is entitled to purchase ___________ fully paid and non-assessable shares of U.S. $0.001 par value (each a “Share”) in the common stock (the “Common Stock”) of WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION (the “Corporation”) at any time up to 5:00 p.m. local time in the City of Las Vegas, Nevada, at a purchase price of U.S. $0.50 per Share, prior to the first anniversary of the date of conversion of the principal so being converted. 1. The aforesaid right to purchase Shares may be exercised by the Holder at times and from time to time within the time period required herein before set out by (i) duly completing in the manner indicated and executing the subscription form attached hereto, (ii) 8 surrendering this Warrant to the Corporate Secretary of the Corporation, and, (iii) paying the appropriate purchase price for the Shares subscribed for together with the requisite share transfer tax, if any, either in cash or by certified cheque payable at par, in Las Vegas, Nevada, to the order of the Corporation. Upon said surrender and payment, the Corporation will issue to the Holder of the subscription form the number of Shares subscribed for and the said Holder will become a shareholder of the Corporation in respect of the Shares as of the date of such surrender and payment. Subject to the Terms and Conditions of this Warrant, the Corporation will, as soon as practicable after said surrender and payment, mail to the person or persons at the address or addresses specified in the subscription form a certificate or certificates evidencing the Shares subscribed for. If the Holder of this Warrant subscribes for a lesser number of Shares than the number of Shares referred to in this Warrant, the Holder shall be entitled to receive a further Warrant in respect of Shares not subscribed for. 2. Nothing contained herein shall confer any right upon the Holder hereof or any other person to subscribe for or purchase any Shares at any time subsequent to 5:00 o’clock in the afternoon (Las Vegas time) on the first anniversary of the date of conversion of the principal so being converted and, from and after such time, this Warrant and all rights hereunder shall be void and of no value. 3. This Warrant shall not constitute the Holder a member of the Corporation. 4. This Warrant is subject to the Terms and Conditions that are attached to this Warrant as Schedule “A”. 5. Time shall be of the essence hereof. IN WITNESS WHEREOF, WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION has caused its common seal to be affixed and this Warrant to be signed by its authorized representative effective on this ______ day of __________________, 2005. ) WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION ) Was affixed hereto in the presence of: ) ) ) _____________________________________________ ) Christopher Stringer ) President, Chief Financial Officer & Director ) ) ) _____________________________________________ )_____ ) Rick Mari ) Chief Executive Officer, Secretary & Director ) THE CORPORATE SEAL OF c/s 9 FORM OF SUBSCRIPTION To: WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION Attention: The Corporate Secretary The undersigned holder of the attached Warrant hereby subscribes for ____________ Shares of Common Stock of WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION (the “Corporation”) pursuant to the attached Warrant at a purchase price of U.S. $0.50 per Share if subscribed for on or before 5:00 p.m. (Las Veagas time) of the first anniversary of the date of conversion of the Principal. This subscription is accompanied by a certified cheque or money order payable to, or to the order of, the Corporation for the whole amount of the purchase price of the said Shares, together with the amount of any issue tax that may be imposed on issue of such Shares (or if such tax has been paid, evidence satisfactory to the trustee of such payment). The undersigned hereby directs that the said Shares be registered as follows: Name in Full _____________________ _____________________ _____________________ Address ________________________ ________________________ ________________________ Number of Shares ________________ ________________ ________________ DATED this ____ day of ______________, 2005. In the presence of: _______________________ Witness ____________________________________ Signature of Warrant Holder Please print your name and address in full: Name: Address: ____________________________ ____________________________ ____________________________ ____________________________ 10 SCHEDULE “A” TERMS AND CONDITIONS Of WARRANTS These are the Terms and Conditions that are attached to the Share Purchase Warrants issued by WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION ARTICLE ONE – INTERPRETATION Section 1.01 - Definitions In these Terms and Conditions, unless there is something in the subject matter or context inconsistent: a) “Corporation” means Worldwide Promotional Products Corporation until a successor corporation or its successor is present in Article 6; b) “Corporations Auditors” means an independent firm of accountants duly appointed as auditors of the Corporation; c) “Director” means a director of the Corporation for the time being, and reference, without more, to action by the directors of the Corporation as a board, or whenever duly empowered, action by an executive committee of the board; d) “herein”, “hereby” and similar expressions refer to these Terms and Conditions as the same may be amended or modified from time to time; and the expressions “Article” or “Section” followed by a number refer to the specified Article or Section of these Terms and Conditions; e) “Issuance Date” means that date on which the Corporation issued the attached Warrants; f) “person” means an individual, corporation, partnership, trustee or any unincorporated organization, and any words importing persons have a similar meaning; g) “shares” means the U.S. $0.001 par value common shares in the capital of the Corporation as constituted at the Issuance Date and any shares resulting from any subdivision or consolidation of the shares; h) “Transfer Agent” means ______________________, ____________________________; i) “Warrants” means the Warrants of the Corporation issued and presently authorized, as set out in Section 2.01 and for the time being outstanding, and any other warrants made subject to these Terms and Conditions; j) “Warrant Holders” or “Holders” means the bearers of the Warrants for the time being; and 11 k) words importing the singular number include the plural and vice-versa, and words importing the masculine gender include the feminine and neuter genders. Section 1.02 – Interpretation Not Affected By Headings The division of these Terms and Conditions into Articles and Sections and the insertion of headings are for convenience of reference only and will not affect their construction of interpretation. Section 1.03 – Applicable Law The Warrants will be construed in accordance with the laws of the State of Nevada and will be treated in all respects as Nevada contracts. ARTICLE TWO – ISSUE OF WARRANTS Section 2.01 – Issue of Warrants Warrants entitling the Holders thereof to purchase an aggregate of _______________ Shares and hereby authorized to be issued by the Corporation where one Warrant is required to purchase one share of the Corporation. Section 2.02 - Additional Warrants Nothing contained herein shall preclude the Corporation from time to time to make further equity or debt offerings and sell additional shares, warrants or grant options or similar rights to purchase shares of its capital stock. Section 2.03 – Issue In Substitution For Lost Warrants (a) Subject to Section 2.03(b), if a Warrant is mutilated, lost, destroyed or stolen, the Corporation shall issue and deliver a new Warrant of like, date and tenor as the one mutilated, lost, destroyed or stolen, in exchange for, and in place of, and upon cancellation of such mutilated Warrant, or in lieu of, and in substitution for such lost, destroyed or stolen Warrant. The substituted Warrant will be entitled to the benefit of these Terms and Conditions and rank equally in accordance with its terms with all other Warrants issued, or to be issued, by the Corporation. The applicant for the issue of a new Warrant will bear the cost of its issue and in case of loss, destruction or theft, furnish to the Corporation such evidence of ownership and of loss, destruction or theft of the Warrant so lost, destroyed or stolen, as will be satisfactory to the Corporation in its discretion, and such applicant may also be required to furnish indemnity in an amount and form satisfactory to the Corporation, in its discretion, and will pay the reasonable charges of the Corporation. (b) Section 2.04 – Warrant Holder Not a Shareholder 12 The holding of a Warrant will not constitute the Holder a member of the Corporation, nor entitle him to any right or interest except as expressly provided in the Warrant and herein. ARTICLE THREE – OWNERSHIP AND TRANSFER Section 3.01 – Exchange of Warrants (a) Warrants in any authorized denomination may, upon compliance with the reasonable requirements of the Corporation, be exchanged for Warrants in any other authorized denomination, of the same class and date of expiry, entitling the Holder to purchase any equal aggregate number of shares at the same subscription price and on the same terms as the Warrants so exchanged. Warrants may be exchanged only at the office of the Corporate Secretary of the Corporation and any Warrants tendered for exchange will be surrendered and canceled. (b) Section 3.02 – Ownership and Transfer of Warrants (a) The Corporation may deem and treat the registered holder of any Warrant as absolute owner of such Warrant, for all purposes, and will not be affected by any notice or knowledge to the contrary. The registered holder of any Warrant will be entitled to the rights evidenced by such Warrant free from all equities or rights of set-off or counterclaim between the Corporation and the original or any intermediate Holder and all persons may act accordingly, and the receipt of any such bearer for the shares will be a good discharge to the Corporation and the Transfer Agent for the same. Neither the Corporation nor the Transfer Agent will be bound to inquire into the title of any such bearer. ARTICLE FOUR – EXERCISE OF WARRANTS Section 4.01 – Method of Exercise Warrants The right to purchase shares conferred by the Warrants may be exercised, before its expiry time, by the Holder of such Warrant surrendering it, with a duly completed and executed subscription in the form attached thereto and cash or a certified cheque payable to or to the order of the Corporation, at par in such city as the Corporation may reside from time to time, for the purchase price applicable at the time of surrender in respect of the shares subscribed for in lawful money of the United States of America, to the Corporate Secretary of the Corporation. Section 4.02 – Effect of Exercise Warrants As soon as practicable after surrender and payment, and subject to the Terms and Conditions set forth herein, the Corporation will cause to be delivered to the person or persons in whose name or names the shares subscribed for are to be issued as specified in such subscription or mailed to him or them at his or their respective addresses specified in such subscription, a 13 (b) certificate or certificates for the appropriate number of shares not exceeding those which the Warrant Holder is entitled to purchase pursuant to the Warrant surrendered. Upon issuance, such person or persons shall be deemed to become the holder or holders of record of such shares on the date of surrender and payment. Section 4.03 – Subscription For Less than Entitlement The Holder of any Warrant may subscribe for and purchase a number of shares less than the number which he is entitled to purchase pursuant to the surrendered Warrant. In the event of any purchase of a number of shares less than the number that can be purchased pursuant to a Warrant, the Transfer Agent and/or the Corporation will endorse the Warrant, note the number of Warrants exercised and return the Warrant Certificate to the Holder or may issue a new Warrant in respect of the balance of the shares which the Holder was entitled to purchase pursuant to the surrendered Warrant and which were not then purchased. Section 4.04 – Warrants For Fractions of Shares To the extend that the Holder of any Warrant is entitled to receive on the exercise or partial exercise, a fraction of a common share, such right may be exercised in respect of such fraction only in combination with another Warrant or other Warrants which in the aggregate entitles the Holder to receive a whole number of such shares. Section 4.05 – Expiration of Warrants After the expiration of the period within which a Warrant is exercisable, all rights will wholly cease and terminate and such Warrant will be void and of no effect. Section 4.06 – Exercise Price The price per share which must be paid to exercise a Warrant is as prescribed by resolution of the Board of Directors of the Corporation and set forth on the face of the Warrant Certificate. Section 4.07 – Adjustment of Exercise Price The exercise price and the number of shares deliverable upon the exercise of the Warrants will be subject to adjustment in the events and in the manner following: (a) in the event of any subdivision or subdivisions of the shares of the Corporation as such shares are constituted on the Issuance Date, at any time while the Warrants are outstanding, into a greater number of shares, the Corporation will deliver at the time of purchase of shares, in addition to the number of shares in respect of which the right to purchase is then being exercised, such additional number of shares as a result from such subdivision or subdivisions without the bearer of the Warrant making any additional payment or giving any other consideration; in the event of any consolidation or consolidations of the shares of the Corporation as such shares are constituted on the Issuance Date, at any time while the Warrants are outstanding, into a lesser number of shares, the Corporation will deliver and the bearer will accept, at the time of purchase, in lieu of the number of shares in respect of which the right to purchase is then 14 (b) being exercised, the lesser number of shares as a result from such consolidation or consolidations; (c) in the event of any change of the shares of the Corporation as such shares are constituted on the Issuance Date, at any time while the Warrants are outstanding, the Corporation will deliver at the time of purchase the number of shares of the appropriate class resulting from such change as the bearer would have been entitled to receive in respect of the number of shares so purchased, had the right to purchase been exercised before such change; in the event of any capital reorganization, reclassification or change of outstanding equity shares of the Corporation or in the event of any consolidation, merger or amalgamation of the Corporation with or into any other company, then the Holder of each Warrant then outstanding will have the right to purchase and receive, in lieu of the shares receivable upon the exercise of the rights represented by the Warrants, the kind and amount of shares and other securities and property receivable upon such capital reorganization, reclassification, change, consolidation, merger or amalgamation which the Holder of a number of shares equal to the number of shares receivable upon the exercise of the rights represented by the Warrants would have received as a result of such event, but the subdivision or consolidation of shares at any time outstanding into a greater or lesser number of shares, whether with or without par value, will not be deemed to be a capital reorganization or a reclassification of the capital of the Corporation for the purposes of this paragraphs (d); the adjustments provided for in this Section in the subscription rights pursuant to any Warrants are cumulative; and, the Corporation will not be required to issue fractional shares in satisfaction of its obligations but, if any fractional interest in a shares would, except for the provisions of this paragraph (g), be deliverable upon the exercise of Warrant, the Corporation will, at its option, in lieu of delivering a fractional share, satisfy the right to receive such fractional interest by payment to the Holder of such Warrant of an amount in cash equal, computed in the case of a fraction of a cent to the next lower cent, to the current market value of the right to subscribe for such fractional interest, computed on the basis of the last sale price of shares of the Corporation of the OTC Bulletin Board or another exchange it may be listed on, preceding the day on which such exercise takes place. (d) (e) (f) Section 4.08 – Determination of Adjustments If any questions arise with respect to the exercise price, such question will be conclusively determined by the Corporation’s auditors, or, if they decline to act, any other national firm of Chartered Accountants that the Corporation may designate and who will have access to all appropriate records, and such determination will be binding upon the Corporation and the Holders of the Warrants. 15 ARTICLE FIVE – COVENANTS BY THE COMPANY The Corporation will reserve and there will remain unissued out of its authorized capital a sufficient number of shares to satisfy the rights of purchase in the Warrants should the Holders of all the Warrants, from time to time outstanding, determine to exercise such rights in respect of all shares which they are or may be entitled to purchase pursuant thereto. ARTICLE SIX – MODIFICATION OF TERMS, MERGER, SUCCESSORS Section 6.01 – Modification of Terms for Certain Purposes From time to time the Corporation may modify these Terms and Conditions, for any one or more, or all of the following purposes: (a) adding to or altering these provisions in respect of the registration and transfer of Warrants making provision for the exchange of Warrants of different denominations; and making any modification in the form of the Warrants which does not affect their substance; for any other purpose, including the correction of rectification of any ambiguous, defective provisions, errors or omissions herein; or, to evidence any succession of any corporation and the assumption by any successor of the covenants of the Corporation and in the Warrants contained as provided in this Article. (b) (c) Section 6.02 – No Extension of Expiry Date Notwithstanding Section 6.01, no modification will be made to the Expiry Date of Warrants without the prior consent of the Holder. Section 6.03 – Corporation May Consolidate etc. On Certain Terms Nothing will prevent any consolidation, amalgamation or merger of the Corporation with or into any other corporation or corporations, but the corporation formed by such consolidation or into which such merger will have been made will be a corporation organized and existing under the laws of Canada or of the Untied States of America, or any Province, State, District or Territory thereof, and will, simultaneously with such consolidation, amalgamation or merger assume the due and punctual performance and observance of all the covenants and conditions hereof to be performed or observed by the Corporation. Section 6.04 – Successor Corporation Substituted In case the Corporation is consolidated, amalgamated or merged with or into any other corporation or corporations, the successor corporation formed by such consolidation or amalgamation, or into which the Corporation will have been merged, will succeed to and be substituted for the Corporation hereunder. Such changes in phraseology and form (but not in substance) may be made in the Warrants as may be appropriate in view of such consolidation, amalgamation or merger. 16 WIRE INSTRUCTIONS Worldwide Promotional Products Corporation U.S. Account # 0283-312 Canadian Imperial Bank of Commerce Chinook Station 6200 Macleod Trail SW Calgary, Alberta T2H 0K6 Canada Contact Person: Kim Rowland-Fontaine Tel: 403-221-6007 Account Name: Worldwide Promotional Products Corporation Transit No.: 00919 Institution No.: 010 Account No.: #0283-312 CIBC Swift Code for within Canada: CIBC CATT Routing Number: 026009593 17