SHARE PURCHASE AGREEMENT
THIS AGREEMENT made April 3, 2014
Between:
XXXXX XXXXXX XXXXXX, an individual residing at the City of Xxxxxxx, Province of Ontario (hereinafter called “Xxxxx”)
-and-
XXXXXXXX XXXXXX, an individual residing at the City of Toronto, Province of Ontario (hereinafter called “Xxxxxxxx”)
-and-
GOUDAS FOOD PRODUCTS & INVESTMENTS LIMITED. a corporation incorporated pursuant to the laws of the Province of Ontario (hereinafter called “Goudas”)
-and-
BLVD HOLDINGS INC., a corporation incorporated pursuant to the laws of the State of Nevada (hereinafter called the “Purchaser”)
WHEREAS, Goudas is a distributor and producer in the food industry;
AND WHEREAS, Xxxxx and Xxxxxxxx, either directly or indirectly, are the sole shareholders of Goudas;
AND WHEREAS Xxxxx and Xxxxxxxx have agreed to sell and transfer all their shares in Goudas (the “Shares”) to the Purchaser, and the Purchaser has agreed to purchase the Shares for the purchase price set out herein;
AND WHEREAS, each member of Goudas consents to such sale and transfer;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the covenants and agreements herein contained the parties hereto agree as follows:
ARTICLE 1 - INTERPRETATION
1.1
Definitions
In this Agreement, unless something in the subject matter or context is inconsistent therewith:
(a)
“Agreement” means this agreement and all amendments made hereto by written agreement between the Vendor and the Purchaser;
(b)
“Business Day” means a day other than a Saturday, Sunday or statutory holiday in Ontario;
(c)
“Closing Date” means February 28, 2014 or such other date as may be agreed to in writing between the Vendor and the Purchaser;
(d)
“Financial Statements” means the audited financial statements Goudas for the period ended October 31, 2013
(e)
“Going Public Transaction” means a transaction or series of transactions following which the capital stock of the Purchaser, or the capital stock of a reporting issuer under the securities legislation of one or more of the provinces of Canada or one or more States in the United States of America received in exchange for capital stock of the Purchaser, are traded on a stock exchange or quoted on an over-the-counter market in Canada or the United States of America;
(f)
“Purchase Price” has the meaning set out in Section 2.01(1);
(g)
“Representation Date” February 1, 2014;
(h)
“Seller” means Goudas and any and all related corporations and business entities operated, controlled or affiliated with the Vendor or Goudas;
(i)
“Shares” of the Seller; and,
(j)
“Vendor” means Xxxxx and Xxxxxxxx.
1.2
Headings
The division of this Agreement into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion hereof and include any agreement supplemental hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and Sections are to Articles and Sections of this Agreement.
1.3
Extended Meanings
In this Agreement words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine and neuter genders and vice versa and words importing persons shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations.
1.4
Currency
All references to currency herein are to lawful money of United States of America unless otherwise stated.
ARTICLE 2 -
PURCHASE AND SALE
2.1
Purchase and Sale and Purchase Price
(1) The Vendor shall sell their respective Shares of Seller to the Purchaser and the Purchaser shall purchase the Shares from the Vendor for a total purchase price as shown below to be paid in cash and common stock and preferred shares of the Purchaser (“Convertible Preferred Shares”) valued at market price at Closing and subject to the adjustment below (hereinafter referred to as the “Purchase Price”) upon and subject to the terms and conditions hereof, to be paid as follows:
(a)
$2,500,000 USD deposit to be paid by the Purchaser to the Seller within five (5) business days following the completion of an internal audit of the Seller to be carried out by Purchaser following Closing.
(b)
$4,000,000 USD to be paid by the Purchaser to Xxxxx in the form of common shares of the Purchaser subject to a six month escrow and such further regulatory escrow or hold as may be required by securities regulators and subject to liquidity in market;
(c)
$1,491,463 CDN paid in cash to P&P Goudas Holdings Inc. at Closing to fully repay P&P Goudas Holdings Inc. outstanding shareholder loan to the Seller, subject to bank approval from the $2,500,000 USD cash injection;
(d)
$57,125 CDN paid to Xxxxxxxx in cash at Closing to fully repay Patricia’s outstanding shareholder loan to the Seller, subject to bank approval from the $2,500,000 USD cash injection;
(e)
$1,672,000 USD in Convertible Preferred Shares payable to Xxxxx at a 6% coupon rate, non-cumulative, paid in arrears annually, to repay Peter’s outstanding shareholder loan to the Seller. Said convertible preferred shares shall not be convertible before the first anniversary of closing of until such time as Xxxxx and the Purchaser agree in writing.
(2) The shares portion of the Purchase Price shall be paid and satisfied by delivery to the Vendor of a share certificate or certificates evidencing the common shares and Convertible Preferred Shares duly endorsed for transfer to the Vendor at the Time of Closing against delivery to the Purchaser of a share certificate or certificates evidencing the Shares duly endorsed for transfer to the Purchaser.
(3) Xxxxx shall cooperate and take necessary steps to enable the Purchaser to continue Peter’s life insurance policy and to l name the Purchaser as beneficiary to same.
(4) Each member of Seller hereby consents to the sale of the Shares and shall take all such corporate action as may be required to transfer the Shares to the Purchaser as at the Time of Closing.
2.2
Closing
The sale and purchase of the Shares shall be completed at the Time of Closing at the offices of the Purchaser, Xxxxx 000, 0000 Xxxx Xxxx, Xxxx Xxxx, Xxxxxxx X0X 0X0.
ARTICLE 3 -
REPRESENTATIONS AND WARRANTIES
3.1
Vendor’s Representations and Warranties
The Seller and Vendor represents and warrants to the Purchaser, which representations and warranties shall survive Closing by one year, that to the best of their knowledge, information and belief:
(a)
Each member of Seller is a corporation duly incorporated, organized and subsisting under the laws of Ontario as a private company as that erm is defined in the Securities Act (Ontario) with the corporate power to own its assets and to carry on its business and has made all necessary filings under all applicable corporate, securities and taxation laws or any other laws to which the corporation is subject;
(b)
One hundred common shares of the Seller are validly issued and outstanding as fully paid and non-assessable, and no other shares or rights to buy shares of the Seller are issued or outstanding;
(c)
the Vendor is the sole, beneficial and registered owner of all Shares free and clear of all liens, charges, encumbrances and any other rights of others;
(d)
there are no outstanding orders, notices or similar requirements relating to the Seller or any member thereof issued by any building, environmental, fire, health, labour or police authorities or from any other federal, provincial or municipal authority and there are no matters under discussion with any such authorities relating to orders, notices or similar requirements;
(e)
no dividends have been declared or paid on or in respect of the Shares and no other distribution on any of its securities or shares has been made by Seller or any member thereof since Representation Date and all dividends which to the date hereof have been declared or paid by Seller or any member thereof have been duly and validly declared or paid;
(f)
the Seller and each member thereof does not have any liability, obligation or commitment for the payment of income taxes, corporation taxes or any other taxes or duties of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed in their Financial Statements, or such taxes or duties not yet due as have arisen since the Representation Date in the usual and ordinary course of business and for which adequate provision in the accounts of Seller or any member thereof has been made, and the Seller or any member thereof is not in arrears with respect to any required withholdings or instalment payments of any tax or duty of any kind and has not filed any waiver for a taxation year of Seller or any member thereof under the Income Tax Act (Canada) or any other legislation imposing tax on Seller or any member thereof;
(g)
no member of the Seller is a party to any contract or commitment outside the usual and ordinary course of business; and none is a party to or bound by any contract or commitment to pay any royalty, licence fee or management fee;
(h)
there are no actions, suits or proceedings (whether or not purportedly on behalf of Seller or any member thereof) pending or threatened against or materially
adversely affecting, or which could materially adversely affect, Seller or any member thereof;
(i)
all trade marks, trade names, patents and copyrights, both domestic and foreign, related to, used in or required for the proper carrying on of Seller or any member thereof’s business are validly and beneficially owned by Seller or any member thereof with the sole and exclusive right to use the same and are in good standing and duly registered in all appropriate offices to preserve the right thereof and thereto, and none are beneficially owned directly or indirectly by either of the Vendors or related persons;
(j)
the conduct of Seller or any member thereof does not infringe upon the trade marks, trade names, patents or copyrights, domestic or foreign, of any other person; and
(k)
the Vendor is not a non-resident person within the meaning of section 116 of the Income Tax Act (Canada).
(2) The covenants of the Vendor set forth in this Agreement shall survive the completion of the sale and purchase of the Shares herein provided for and, notwithstanding such completion, shall continue in full force and effect for the benefit of the Purchaser in accordance with the terms thereof.
3.2
Purchaser’s Representations and Warranties
The Purchaser represents and warrants to the Vendor, which representations and warranties shall survive Closing by one year, that:
(a)
the Purchaser is a corporation duly incorporated, organized and subsisting under the laws of the State of Nevada;
(b)
the Purchaser has good and sufficient power, authority and right to enter into and deliver this Agreement and to complete the transactions to be completed by the Purchaser contemplated hereby.
ARTICLE 4 - COVENANTS
4.1
Taxes
The Purchaser does not assume and shall not be liable for any taxes under the Income Tax Act (Canada) or any other taxes whatsoever which may be or become payable by the Vendor including, without limiting the generality of the foregoing, any taxes resulting from or arising as a consequence of the sale by the Vendor to the Purchaser of the Shares herein contemplated, and the Vendor shall indemnify and save harmless the Purchaser from and against all such taxes.
4.2
Covenants of the Vendor
(1) The Vendor shall indemnify and save harmless the Purchaser, Seller or any member thereof and the officers and directors of Seller or any member thereof from and against all liabilities (whether accrued, actual, contingent or otherwise), claims and demands whatsoever including, without limiting the generality of the foregoing, liabilities, claims and demands for income, sales, excise or other taxes, of or in connection with Seller or any member thereof
existing or incurred as at or subsequent to the Representation Date and up to the Closing Date which are not disclosed in the Financial Statements, have not arisen in the usual and ordinary course of Seller or any member thereof’s business since the Representation Date or have arisen in the usual and ordinary course of Seller or any member thereof’s business since the Representation Date but for which adequate provision in Seller or any member thereof’s accounts has not been made. This indemnification will be valid for a period of 6 months following the Closing Date.
(2) The Vendor shall ensure that the representations and warranties of the Vendor set out in Section 3.01 over which the Vendor has reasonable control are true and correct at the Time of Closing and that the conditions of closing for the benefit of the Purchaser set out in Section 5.01(1) over which the Vendor has reasonable control have been performed or complied with by the Time of Closing.
(3) The Vendor shall indemnify and save harmless the Purchaser from and against all losses, damages or expenses directly or indirectly suffered by the Purchaser resulting from any breach of any covenant of the Vendor contained in this Agreement or from any inaccuracy or misrepresentation in any representation or warranty set forth in Section 3.01.
4.3
Covenants of the Purchaser
(1) The Purchaser shall ensure that the representations and warranties of the Purchaser set out in Section 3.02 over which the Purchaser has reasonable control are true and correct at the Time of Closing and that the conditions of closing for the benefit of the Vendor set out in Section 5.02(1) over which the Purchaser has reasonable control have been performed or complied with by the Time of Closing.
(2) The Purchaser shall indemnify and save harmless the Vendor from and against all losses, damages or expenses directly or indirectly suffered by the Vendor resulting from any breach of any covenant of the Purchaser contained in this Agreement or from any inaccuracy or misrepresentation in any representation or warranty set forth in Section 3.02.
ARTICLE 5 - CONDITIONS
5.1
Conditions for the Benefit of the Purchaser
(1) The closing of the transactions contemplated herein is subject to the following conditions which are for the exclusive benefit of the Purchaser to be performed or complied with at or prior to the Time of Closing:
(a)
the representations and warranties of the Vendor set forth in Section 3.01 shall be true and correct at the Time of Closing with the same force and effect as if made at and as of such time;
(b)
the Vendor shall have performed or complied with all of the terms, covenants and conditions of this Agreement to be performed or complied with by the Vendor at or prior to the Time of Closing;
(c)
the Vendor and all directors, officers of Seller or any member thereof shall release Seller or any member thereof from any and all possible claims against Seller or any member thereof arising from any act, matter or thing arising at or prior to the Time of Closing;
(d)
there shall be a non-competition agreement entered into between the Purchaser, Seller or any member thereof and the Vendor substantially in the form attached hereto as Schedule “A”;
(e)
the Purchaser shall have obtained a notice from the Minister under the Investment Canada Act (Canada) that he is satisfied, or deemed to be satisfied, that the transactions contemplated herein are likely to be of net benefit to Canada; and
(f)
the Purchaser shall have given the requisite notice of the proposed transaction under the Competition Act (Canada) and any waiting periods prescribed thereunder shall have expired.
(2) In case any term or covenant of the Vendor or condition to be performed or complied with for the benefit of the Purchaser at or prior to the Time of Closing shall not have been performed or complied with at or prior to the Time of Closing, the Purchaser may, without limiting any other right that the Purchaser may have, at its sole option, either:
(a)
rescind this Agreement by notice to the Vendor, and in such event the Purchaser shall be released from all obligations hereunder; or
(b)
waive compliance with any such term, covenant or condition in whole or in part on such terms as may be agreed upon without prejudice to any of its rights of rescission in the event of non-performance of any other term, covenant or condition in whole or in part;
and, if the Purchaser rescinds this Agreement pursuant to Section 5.01(2)(a) and the term, covenant or condition for which the Purchaser has rescinded this Agreement was one that the Vendor had covenanted, pursuant to Section 4.02(2), to ensure had been performed or complied with, the Vendor shall be liable to the Purchaser for any losses, damages or expenses incurred by the Purchaser as a result of such breach.
5.2
Conditions for the Benefit of the Vendor
(1) The sale by the Vendor and the purchase by the Purchaser of the Shares is subject to the following conditions which are for the exclusive benefit of the Vendor to be performed or complied with at or prior to the Time of Closing:
(a)
the representations and warranties of the Purchaser set forth in Section 3.02 shall be true and correct at the Time of Closing with the same force and effect as if made at and as of such time;
(b)
the Purchaser shall have performed or complied with all of the terms, covenants and conditions of this Agreement to be performed or complied with by the Purchaser at or prior to the Time of Closing;
(c)
the Vendor shall be furnished with such certificates, affidavits or statutory declarations of the Purchaser or of officers of the Purchaser as the Vendor or the Vendor’s counsel may reasonably think necessary in order to establish that the terms, covenants and conditions contained in this Agreement to have been performed or complied with by the Purchaser at or prior to the Time of Closing have been performed and complied with and that the representations and warranties of the Purchaser herein given are true and correct at the Time of Closing;
(d)
employment contracts on terms reasonable in the industry, including the usual car allowances, benefits, non-competition and non-solicitation provisions, shall be reached as set out below:
Name
Position
Annual Salary
Term
Xxxxx Xxxxxx President of Goudas Foods
$110,000
3 years
Xxxxx Xxxxxx
$45,000
3 years
Xxxxxxxx Xxxxxx
$35,000 3 years
Niki Stomatakos
$70,000
3 years
ARTICLE 6 - GENERAL
6.1
Further Assurances
Each of the Vendor and the Purchaser shall from time to time execute and deliver all such further documents and instruments and do all acts and things as the other party may, either before or after the Closing Date, reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Agreement.
6.2
Time of the Essence
Time shall be of the essence of this Agreement.
6.3
Commissions
The Vendor shall indemnify and save harmless the Purchaser from and against any claims whatsoever for any commission or other remuneration payable or alleged to be payable to any person in respect of the sale and purchase of the Shares, whether such person purports to act or have acted for the Vendor or the Purchaser in connection with the sale of the Shares.
6.4
Legal Fees
Each of the parties hereto shall pay their respective legal and accounting costs and expenses incurred in connection with the preparation, execution and delivery of this Agreement and all documents and instruments executed pursuant hereto and any other costs and expenses whatsoever and howsoever incurred.
6.5
Public Announcements
No public announcement or press release concerning the sale and purchase of the Shares shall be made by the Vendor or the Purchaser without the prior consent and joint approval of the Vendor and the Purchaser.
6.6
Benefit of the Agreement
This Agreement shall enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the parties hereto.
6.7
Entire Agreement
This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and cancels and supersedes any prior understandings and agreements between the parties hereto with respect thereto. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the parties other than as expressly set forth in this Agreement.
6.8
Amendments and Waiver
No modification of or amendment to this Agreement shall be valid or binding unless set forth in writing and duly executed by both of the parties hereto and no waiver of any breach of any term or provision of this Agreement shall be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided, shall be limited to the specific breach waived.
6.9
Assignment
This Agreement may not be assigned by the Vendor without the written consent of the Purchaser but may be assigned by the Purchaser without the consent of the Vendor to an affiliate of the Purchaser, provided that such affiliate enters into a written agreement with the Vendor to be bound by the provisions of this Agreement in all respects and to the same extent as the Purchaser is bound and provided that the Purchaser shall continue to be bound by all the obligations hereunder as if such assignment had not occurred and perform such obligations to the extent that such affiliate fails to do so.
6.10
Notices
Any demand, notice or other communication to be given in connection with this Agreement shall be given in writing and shall be given by personal delivery, by registered mail or by electronic means of communication addressed to the recipient as follows:
To the Vendor:241 Xxxxxxxxxxx Xx
Xxxxxxx, XX X0X 0X0
[Fax No.]: 905-660-7628Attention: Xxxxx Xxxxxx
To the Purchaser:3565 Xxxx Xxxx, Xxxx 000
Xxxx Xxxx, XX X0X 1M3[Fax No.]: 905-833-9847Attention: Xxxx X. Xxxxxxxx
or to such other address, individual or electronic communication number as may be designated by notice given by either party to the other. Any demand, notice or other communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof and, if given by registered mail, on the 5th Business Day following the deposit thereof in the mail and, if given by electronic communication, on the day of transmittal thereof if given during the normal business hours of the recipient and on the Business Day during which
such normal business hours next occur if not given during such hours on any day. If the party giving any demand, notice or other communication knows or ought reasonably to know of any difficulties with the postal system which might affect the delivery of mail, any such demand, notice or other communication shall not be mailed but shall be given by personal delivery or by electronic communication.
6.11
Independent Legal Advice
Each of the parties hereto acknowledges that he or she has obtained independent legal advice in connection with the negotiation and execution of this Agreement or, having been advised to do so, has declined to obtain independent legal advice, and further acknowledges and agrees that he has read, understands, and agrees to be bound by all of the terms and conditions contained herein.
6.12
Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada and the laws of the United States of America applicable therein.
6.13
Attornment
For the purpose of all legal proceedings this Agreement shall be deemed to have been performed in the State of Nevada and the courts of the State of Nevada shall have jurisdiction to entertain any action arising under this Agreement. The Vendor and the Purchaser each hereby attorns to the jurisdiction of the courts of the State of Nevada.
IN WITNESS WHEREOF the parties have executed this Agreement
SIGNED, SEALED AND DELIVERED
In the presence of:
/s/ Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx Xxxxxx February 28, 2014
Witness
XXXXX XXXXXX XXXXXX
/s/ Xxxxx Xxxxxxxx
/s/ Xxxxxxxx Xxxxxx February 28, 2014
Witness
XXXXXXXX XXXXXX
/s/ Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx Xxxxxx February 28, 2014
Witness
GOUDAS FOOD PRODUCTS &
INVESTMENTS LIMITED
/s/ Xxxxx Xxxxxxxx /s/ Xxxx X. Xxxxxxxx February 28, 0000
Xxxxxxx
XXXX HOLDINGS INC.
FINALIZED MARCH 25, 2014
