SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 8th day of July, ▇▇▇▇
▇▇▇▇▇:
B&D FOOD CORP., a corporation formed pursuant to the
laws of the State of Delaware and having an office for
business located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇-▇▇-▇▇▇▇▇▇-▇▇▇▇▇-▇▇▇
("B&D")
AND:
BDFC BRASIL ALIMENTOS LTDA., a company formed pursuant
to the laws of Brazil and having an office for business
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, Conjunto 81,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Sao Paulo-S.P.-Brazil-CEP:01309-901
("BDFC")
AND:
The shareholders of BDFC, each of whom are set forth on
the signature page of this Agreement
(the "BDFC Shareholders")
WHEREAS:
A. The BDFC Shareholders own 4,242,908 BDFC Shares, being 100% of the
presently issued and outstanding BDFC Shares;
B. B&D is a reporting company whose common stock is quoted on the NASD
"Bulletin Board"; and
C. The respective Boards of Directors of B&D, and BDFC deem it advisable and
in the best interests of B&D and BDFC that BDFC become a wholly-owned subsidiary
of B&D (the "Acquisition") pursuant to this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
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ARTICLE 1
DEFINITIONS AND INTERPRETATION
DEFINITIONS
1.1 In this Agreement the following terms will have the following meanings:
(a) "ACQUISITION" means the Acquisition, at the Closing, of BDFC by B&D
pursuant to this Agreement;
(b) "ACQUISITION SHARES" means the 95,344,688 B&D Common Shares to be
issued to the BDFC Shareholders at Closing pursuant to the terms of
the Acquisition;
(c) "AGREEMENT" means this share purchase agreement among B&D, BDFC, and
the BDFC Shareholders;
(d) "BDFC ACCOUNTS PAYABLE AND LIABILITIES" means all accounts payable
and liabilities of BDFC, due and owing or otherwise constituting a
binding obligation of BDFC (other than a BDFC Material Contract) as
of March 31, 2005 as set forth in Schedule "A" hereto;
(e) "BDFC ACCOUNTS RECEIVABLE" means all accounts receivable and other
debts owing to BDFC, as of March 31, 2005 as set forth in Schedule
"B" hereto;
(f) "BDFC ASSETS" means the undertaking and all the property and assets
of the BDFC Business of every kind and description wheresoever
situated including, without limitation, BDFC Equipment, BDFC
Inventory, BDFC Material Contracts, BDFC Accounts Receivable, BDFC
Cash, BDFC Intangible Assets and BDFC Goodwill, and all credit
cards, charge cards and banking cards issued to BDFC;
(g) "BDFC BANK ACCOUNTS" means all of the bank accounts, lock boxes and
safety deposit boxes of BDFC or relating to the BDFC Business as set
forth in Schedule "C" hereto;
(h) "BDFC BUSINESS" means all aspects of the business conducted by BDFC;
(i) "BDFC CASH" means all cash on hand or on deposit to the credit of
BDFC on the Closing Date;
(j) "BDFC DEBT TO RELATED PARTIES" means the debts owed by BDFC and its
subsidiaries to the BDFC Shareholders or to any family member
thereof, or to any affiliate, director or officer of BDFC or the
BDFC Shareholders as described in Schedule "D";
(k) "BDFC EQUIPMENT" means all machinery, equipment, furniture, and
furnishings used in the BDFC Business, including, without
limitation, the items more particularly described in Schedule "E"
hereto;
(l) "BDFC FINANCIAL STATEMENTS" means collectively, the audited
consolidated financial statements of BDFC for the period from
inception to December 31, 2004, together with the reviewed financial
statements for the three month period ended March 31, 2005, true
copies of which are attached as Schedule "F" hereto;
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(m) "BDFC GOODWILL" means the goodwill of the BDFC Business together
with the exclusive right of B&D to represent itself as carrying on
the BDFC Business in succession of BDFC subject to the terms hereof,
and the right to use any words indicating that the BDFC Business is
so carried on including the right to use the name "BDFC" or "BDFC
International" or any variation thereof as part of the name of or in
connection with the BDFC Business or any part thereof carried on or
to be carried on by BDFC, the right to all corporate, operating and
trade names associated with the BDFC Business, or any variations of
such names as part of or in connection with the BDFC Business, all
telephone listings and telephone advertising contracts, all lists of
customers, books and records and other information relating to the
BDFC Business, all necessary licenses and authorizations and any
other rights used in connection with the BDFC Business;
(n) "BDFC INSURANCE POLICIES" means the public liability insurance and
insurance against loss or damage to BDFC Assets and the BDFC
Business as described in Schedule "G" hereto;
(o) "BDFC INTANGIBLE ASSETS" means all of the intangible assets of BDFC,
including, without limitation, BDFC Goodwill, all trademarks, logos,
copyrights, designs, and other intellectual and industrial property
of BDFC and its subsidiaries;
(p) "BDFC INVENTORY" means all inventory and supplies of the BDFC
Business as of March 31, 2005 as set forth in Schedule "H" hereto;
(q) "BDFC MATERIAL CONTRACTS" means the burden and benefit of and the
right, title and interest of BDFC in, to and under all trade and
non-trade contracts, engagements or commitments, whether written or
oral, to which BDFC is entitled in connection with the BDFC Business
whereunder BDFC is obligated to pay or entitled to receive the sum
of $10,000 or more including, without limitation, any pension plans,
profit sharing plans, bonus plans, loan agreements, security
agreements, indemnities and guarantees, any agreements with
employees, lessees, licensees, managers, accountants, suppliers,
agents, distributors, officers, directors, attorneys or others which
cannot be terminated without liability on not more than one month's
notice, and those contracts listed in Schedule "I" hereto;
(r) "BDFC RELATED PARTY DEBTS" means the debts owed by the BDFC
Shareholders or by any family member thereof, or by any affiliate,
director or officer of BDFC or the BDFC Shareholders, to BDFC as
described in Schedule "J";
(s) "BDFC SHARES" means all of the issued and outstanding shares of
BDFC's equity stock;
(t) "B&D ACCOUNTS PAYABLE AND LIABILITIES" means all accounts payable
and liabilities of B&D, on a consolidated basis, due and owing or
otherwise constituting a binding obligation of B&D and its
subsidiaries (other than a B&D Material Contract) as of March 31,
2005 as set forth is Schedule "K" hereto;
(u) "B&D ACCOUNTS RECEIVABLE" means all accounts receivable and other
debts owing to B&D, on a consolidated basis, as of March 31, 2005 as
set forth in Schedule "L" hereto;
(v) "B&D ASSETS" means the undertaking and all the property and assets
of the B&D Business of every kind and description wheresoever
situated including, without limitation, B&D Equipment, B&D
Inventory, B&D Material Contracts, B&D Accounts Receivable, B&D
Cash, B&D Intangible Assets and B&D Goodwill, and all credit cards,
charge cards and banking cards issued to B & D;
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(w) "B&D BANK ACCOUNTS" means all of the bank accounts, lock boxes and
safety deposit boxes of B&D and its subsidiaries or relating to the
B&D Business as set forth in Schedule "M" hereto;
(x) "B&D BUSINESS" means all aspects of any business conducted by B&D
and its subsidiaries;
(y) "B&D CASH" means all cash on hand or on deposit to the credit of B&D
and its subsidiaries on the Closing Date;
(z) "B&D COMMON SHARES" means the shares of common stock in the capital
of B & D;
(aa) "B&D DEBT TO RELATED PARTIES" means the debts owed by B&D to any
affiliate, director or officer of B&D as described in Schedule "N"
hereto;
(bb) "B&D EQUIPMENT" means all machinery, equipment, furniture, and
furnishings used in the B&D Business, including, without limitation,
the items more particularly described in Schedule "O" hereto;
(cc) "B&D FINANCIAL STATEMENTS" means, collectively, the audited
consolidated financial statements of B&D for the fiscal year ended
December 31, 2004, together with the unqualified auditors' report
thereon, and the unaudited consolidated financial statements of B&D
for the three month period ended March 31, 2005, true copies of
which are attached as Schedule "P" hereto;
(dd) "B&D GOODWILL" means the goodwill of the B&D Business including the
right to all corporate, operating and trade names associated with
the B&D Business, or any variations of such names as part of or in
connection with the B&D Business, all books and records and other
information relating to the B&D Business, all necessary licenses and
authorizations and any other rights used in connection with the B&D
Business;
(ee) "B&D INSURANCE POLICIES" means the public liability insurance and
insurance against loss or damage to the B&D Assets and the B&D
Business as described in Schedule "Q" hereto;
(ff) "B&D INTANGIBLE ASSETS" means all of the intangible assets of B&D
and its subsidiaries, including, without limitation, B&D Goodwill,
all trademarks, logos, copyrights, designs, and other intellectual
and industrial property of B&D and its subsidiaries;
(gg) "B&D INVENTORY" means all inventory and supplies of the B&D Business
as of March 31, 2005, as set forth in Schedule "R" hereto;
(hh) "B&D MATERIAL CONTRACTS" means the burden and benefit of and the
right, title and interest of B&D and its subsidiaries in, to and
under all trade and non-trade contracts, engagements or commitments,
whether written or oral, to which B&D or its subsidiaries are
entitled whereunder B&D or its subsidiaries are obligated to pay or
entitled to receive the sum of $10,000 or more including, without
limitation, any pension plans, profit sharing plans, bonus plans,
loan agreements, security agreements, indemnities and guarantees,
any agreements with employees, lessees, licensees, managers,
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accountants, suppliers, agents, distributors, officers, directors,
attorneys or others which cannot be terminated without liability on
not more than one month's notice, and those contracts listed in
Schedule "S" hereto;
(ii) "CLOSING" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 9
hereof;
(jj) "CLOSING DATE" means the day on which all conditions precedent to
the completion of the transaction as contemplated hereby have been
satisfied or waived;
(KK) "CONVERTIBLE NOTE" means an note in the aggregate principal amount
of Ten Million Dollars ($10,000,000) in the form of Exhibit "A"
hereto (as amended, modified or supplemented from time to time); and
(ll) "PLACE OF CLOSING" means the offices of Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ LLP, or such other place as B&D and BDFC may mutually agree
upon.
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
CAPTIONS AND SECTION NUMBERS
1.2 The headings and section references in this Agreement are for convenience
of reference only and do not form a part of this Agreement and are not intended
to interpret, define or limit the scope, extent or intent of this Agreement or
any provision thereof.
SECTION REFERENCES AND SCHEDULES
1.3 Any reference to a particular "Article", "section", "paragraph", "clause"
or other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement.
The Schedules to this Agreement are as follows:
Information concerning BDFC
Schedule "A" BDFC Accounts Payable and Liabilities
Schedule "B" BDFC Accounts Receivable
Schedule "C" BDFC Bank Accounts
Schedule "D" BDFC Debts to Related Parties
Schedule "E" BDFC Equipment
Schedule "F" BDFC Financial Statements
Schedule "G" BDFC Insurance Policies
Schedule "H" BDFC Inventory
Schedule "I" BDFC Material Contracts
Schedule "J" BDFC Related Party Debts
Information concerning B&D
Schedule "K" B&D Accounts Payable and Liabilities
Schedule "L" B&D Accounts Receivable
Schedule "M" B&D Bank Accounts
Schedule "N" B&D Debts to Related Parties
Schedule "O" B&D Equipment
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Schedule "P" B&D Financial Statements
Schedule "Q" B&D Insurance Policies
Schedule "R" B&D Inventory
Schedule "S" B&D Material Contracts
SEVERABILITY OF CLAUSES
1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
ARTICLE 2
THE ACQUISITION
SALE OF SHARES
2.1 The BDFC Shareholders hereby agree to sell to B&D the BDFC Shares in
exchange for the Acquisition Shares and the Convertible Note on the Closing Date
and to transfer to B&D on the Closing Date a 99.85% undivided interest in and to
the BDFC Shares free from all liens, mortgages, charges, pledges, encumbrances
or other burdens with all rights now or thereafter attached thereto.
ALLOCATION OF CONSIDERATION
2.2 The Acquisition Shares shall be allocated to the BDFC Shareholders, in
accordance with Exhibit "B" hereto, on the basis of 22.▇▇▇▇▇▇▇▇▇▇ Acquisition
Shares for each one BDFC Share held by a BDFC Shareholder and the Convertible
Note shall be issued to the BDFC Shareholders who held preferred BDFC Shares.
ADHERENCE WITH APPLICABLE SECURITIES LAWS
2.2 The BDFC Shareholders agree that they are acquiring the Acquisition Shares
for investment purposes and will not offer, sell or otherwise transfer, pledge
or hypothecate any of the Acquisition Shares issued to them (other than pursuant
to an effective Registration Statement under the Securities Act of 1933, as
amended) directly or indirectly unless:
(a) the sale is to B & D;
(b) the sale is made pursuant to the exemption from registration under
the Securities Act of 1933, as amended, provided by Rule 144
thereunder; or
(c) the Acquisition Shares are sold in a transaction that does not
require registration under the Securities Act of 1933, as amended,
or any applicable United States state laws and regulations governing
the offer and sale of securities, and the vendor has furnished to
B&D an opinion of counsel to that effect or such other written
opinion as may be reasonably required by B&D.
The BDFC Shareholders acknowledge that the certificates representing the
Acquisition Shares shall bear the following legend:
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NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED
BY THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS
THEN IN FACT APPLICABLE TO SAID SHARES.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF B&D
REPRESENTATIONS AND WARRANTIES
3.1 B&D hereby represents and warrants in all material respects to BDFC and
the BDFC Shareholders, with the intent that BDFC and the BDFC Shareholders will
rely thereon in entering into this Agreement and in approving and completing the
transactions contemplated hereby, that:
B&D - CORPORATE STATUS AND CAPACITY
(a) Incorporation. B&D is a corporation duly incorporated and validly
subsisting under the laws of the State of Delaware, and is in good
standing with the office of the Secretary of State for the State of
Delaware;
(b) Carrying on Business. B&D conducts the business described in its
filings with the Securities and Exchange Commission and does not
conduct any other business. B&D is duly authorized and registered or
otherwise qualified to carry on such business as required by any
relevant jurisdiction;
(c) Corporate Capacity. B&D has the corporate power, capacity and
authority to own the B&D Assets and to enter into and complete this
Agreement;
(d) Reporting Status; Listing. B&D is required to file current reports
with the Securities and Exchange Commission pursuant to section
15(d) of the Securities Exchange Act of 1934, the B&D Common Shares
are quoted on the NASD "Bulletin Board", and all reports required to
be filed by B&D with the Securities and Exchange Commission or NASD
have been timely filed;
B&D - CAPITALIZATION
(e) Authorized Capital. The authorized capital of B&D consists of
400,000,000 B&D Common Shares, $0.001 par value and 10,000,000
shares of preferred stock. $0.001 par value, of which 4,655,312 B&D
Common Shares, and no shares of preferred stock are presently issued
and outstanding;
(f) No Option, Warrant or Other Right. No person, firm or corporation
has any agreement, option, warrant, preemptive right or any other
right capable of becoming an agreement, option, warrant or right for
the acquisition of B&D Common Shares or for the purchase,
subscription or issuance of any of the unissued shares in the
capital of B & D;
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B&D - RECORDS AND FINANCIAL STATEMENTS
(g) Charter Documents. The charter documents of B&D and its subsidiaries
have not been altered since the incorporation of each, respectively,
except as filed in the record books of B&D or its subsidiaries, as
the case may be;
(h) Corporate Minute Books. The corporate minute books of B&D and its
subsidiaries are complete and each of the minutes contained therein
accurately reflect the actions that were taken at a duly called and
held meeting or by consent without a meeting. All actions by B&D and
its subsidiaries which required director or shareholder approval are
reflected on the corporate minute books of B&D and its subsidiaries.
B&D and its subsidiaries are not in violation or breach of, or in
default with respect to, any term of their respective Certificates
of Incorporation (or other charter documents) or by-laws.
(i) B&D Financial Statements. The B&D Financial Statements present
fairly, in all material respects, the assets and liabilities
(whether accrued, absolute, contingent or otherwise) of B&D, on a
consolidated basis, as of the respective dates thereof, and the
sales and earnings of the B&D Business during the periods covered
thereby, in all material respects and have been prepared in
substantial accordance with generally accepted accounting principles
consistently applied;
(j) B&D Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of B&D or its subsidiaries
which are not disclosed in Schedule "B" hereto or reflected in the
B&D Financial Statements except those incurred in the ordinary
course of business since the date of the said schedule and the B&D
Financial Statements, and neither B&D nor its subsidiaries have
guaranteed or agreed to guarantee any debt, liability or other
obligation of any person, firm or corporation. Without limiting the
generality of the foregoing, all accounts payable and liabilities of
B&D as of March 31, 2005, are described in Schedule "B" hereto;
(k) B&D Accounts Receivable. All the B&D Accounts Receivable result from
bona fide business transactions and services actually rendered
without, to the knowledge and belief of B&D, any claim by the
obligor for set-off or counterclaim. Without limiting the generality
of the foregoing, all accounts receivable of B&D as of March 31,
2005, are described in Schedule "C" hereto;
(l) B&D Bank Accounts. All of the B&D Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule "D" hereto;
(m) No Debt to Related Parties. Except as disclosed in Schedule "E"
hereto, neither B&D nor any of its subsidiaries is, and on Closing
will not be, indebted to any affiliate, director or officer of B&D
except accounts payable on account of bona fide business
transactions of B&D incurred in normal course of the B&D Business,
including employment agreements, none of which are more than 30 days
in arrears;
(n) No Related Party Debt to B&D. No director or officer or affiliate of
B&D is now indebted to or under any financial obligation to B&D or
any subsidiary on any account whatsoever, except for advances on
account of travel and other expenses not exceeding $1,000 in total;
(o) No Dividends. No dividends or other distributions on any shares in
the capital of B&D have been made, declared or authorized since the
date of B&D Financial Statements;
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(p) No Payments. No payments of any kind have been made or authorized
since the date of the B&D Financial Statements to or on behalf of
officers, directors, shareholders or employees of B&D or its
subsidiaries or under any management agreements with B&D or its
subsidiaries, except payments made in the ordinary course of
business and at the regular rates of salary or other remuneration
payable to them;
(q) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting B & D;
(r) No Adverse Events. Since the date of the B&D Financial Statements
(i) there has not been any material adverse change in the
consolidated financial position or condition of B&D, its
subsidiaries, its liabilities or the B&D Assets or any damage,
loss or other change in circumstances materially affecting
B&D, the B&D Business or the B&D Assets or B&D' right to carry
on the B&D Business, other than changes in the ordinary course
of business,
(ii) there has not been any damage, destruction, loss or other
event (whether or not covered by insurance) materially and
adversely affecting B&D, its subsidiaries, the B&D Business or
the B&D Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by B&D to any of B&D' officers,
employees or agents or any bonus, payment or arrangement made
to or with any of them,
(iv) the B&D Business has been and continues to be carried on in
the ordinary course,
(v) B&D has not waived or surrendered any right of material value,
(vi) neither B&D nor its subsidiaries have discharged or satisfied
or paid any lien or encumbrance or obligation or liability
other than current liabilities in the ordinary course of
business, and
(vii) no capital expenditures in excess of $10,000 individually or
$30,000 in total have been authorized or made.
B&D - INCOME TAX MATTERS
(s) Tax Returns. All tax returns and reports of B&D and its subsidiaries
required by law to be filed have been filed and are true, complete
and correct, and any taxes payable in accordance with any return
filed by B&D and its subsidiaries or in accordance with any notice
of assessment or reassessment issued by any taxing authority have
been so paid;
(t) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by B&D or its subsidiaries. B&D is not aware of any
contingent tax liabilities or any grounds which would prompt a
reassessment including aggressive treatment of income and expenses
in filing earlier tax returns;
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B&D - APPLICABLE LAWS AND LEGAL MATTERS
(u) Licenses. B&D and its subsidiaries hold all licenses and permits as
may be requisite for carrying on the B&D Business in the manner in
which it has heretofore been carried on, which licenses and permits
have been maintained and continue to be in good standing except
where the failure to obtain or maintain such licenses or permits
would not have a material adverse effect on the B&D Business;
(v) Applicable Laws. Neither B&D nor its subsidiaries have been charged
with or received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which they are subject or
which apply to them the violation of which would have a material
adverse effect on the B&D Business, and to B&D' knowledge, neither
B&D nor its subsidiaries are in breach of any laws, ordinances,
statutes, regulations, bylaws, orders or decrees the contravention
of which would result in a material adverse impact on the B&D
Business;
(w) Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened
against or relating to B&D, its subsidiaries, the B&D Business, or
any of the B&D Assets nor does B&D have any knowledge of any
deliberate act or omission of B&D or its subsidiaries that would
form any material basis for any such action or proceeding;
(x) No Bankruptcy. Neither B&D nor its subsidiaries have made any
voluntary assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed
or presented against B&D or its subsidiaries and no order has been
made or a resolution passed for the winding-up, dissolution or
liquidation of B&D or its subsidiaries;
(y) Labor Matters. Neither B&D nor its subsidiaries are party to any
collective agreement relating to the B&D Business with any labor
union or other association of employees and no part of the B&D
Business has been certified as a unit appropriate for collective
bargaining or, to the knowledge of B&D, has made any attempt in that
regard;
(z) Finder's Fees. Neither B&D nor its subsidiaries are party to any
agreement which provides for the payment of finder's fees, brokerage
fees, commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated herein;
EXECUTION AND PERFORMANCE OF AGREEMENT
(aa) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated
hereby, have been duly and validly authorized by all necessary
corporate action on the part of B & D;
(bb) No Violation or Breach. The execution and performance of this
Agreement will not:
(i) violate the charter documents of B&D or result in any breach
of, or default under, any loan agreement, mortgage, deed of
trust, or any other agreement to which B&D or its subsidiaries
are party,
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(ii) give any person any right to terminate or cancel any agreement
including, without limitation, the B&D Material Contracts, or
any right or rights enjoyed by B&D or its subsidiaries,
(iii) result in any alteration of B&D' or its subsidiaries'
obligations under any agreement to which B&D or its
subsidiaries are party including, without limitation, the B&D
Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance
or restriction of any nature whatsoever in favor of a third
party upon or against the B&D Assets,
(v) result in the imposition of any tax liability to B&D or its
subsidiaries relating to the B&D Assets, or
(vi) violate any court order or decree to which either B&D or its
subsidiaries are subject;
THE B&D ASSETS - OWNERSHIP AND CONDITION
(cc) Business Assets. The B&D Assets comprise all of the property and
assets of the B&D Business, and no other person, firm or corporation
owns any assets used by B&D or its subsidiaries in operating the B&D
Business, whether under a lease, rental agreement or other
arrangement, other than as disclosed in Schedules "F" or "I" hereto;
(dd) Title. B&D or its subsidiaries are the legal and beneficial owner of
the B&D Assets, free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims
whatsoever, save and except as disclosed in Schedules "F" or "I"
hereto;
(ee) No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the purchase
of any of the B&D Assets;
(ff) B&D Insurance Policies. B&D and its subsidiaries maintain the public
liability insurance and insurance against loss or damage to the B&D
Assets and the B&D Business as described in Schedule "G" hereto;
(gg) B&D Material Contracts. The B&D Material Contracts listed in
Schedule "I" constitute all of the material contracts of B&D and its
subsidiaries;
(hh) No Default. There has not been any default in any material
obligation of B&D or any other party to be performed under any of
the B&D Material Contracts, each of which is in good standing and in
full force and effect and unamended (except as disclosed in Schedule
"I" hereto), and B&D is not aware of any default in the obligations
of any other party to any of the B&D Material Contracts;
(ii) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of B&D or its
subsidiaries. Neither B&D nor its subsidiaries are obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law;
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B&D ASSETS - B&D EQUIPMENT
(jj) B&D Equipment. The B&D Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such
equipment is in good working condition;
B&D ASSETS - B&D GOODWILL AND OTHER ASSETS
(kk) B&D Goodwill. B&D and its subsidiaries does not carry on the B&D
Business under any other business or trade names. B&D does not have
any knowledge of any infringement by B&D or its subsidiaries of any
patent, trademarks, copyright or trade secret;
THE B&D BUSINESS
(ll) Maintenance of Business. Since the date of the B&D Financial
Statements, B&D and its subsidiaries have not entered into any
material agreement or commitment except in the ordinary course and
except as disclosed herein;
(mm) Subsidiaries. Except for the Kama Sutra Media Ltd., B&D does not own
any subsidiaries and does not otherwise own, directly or indirectly,
any shares or interest in any other corporation, partnership, joint
venture or firm; and
B&D - ACQUISITION SHARES
(nn) Acquisition Shares. The Acquisition Shares when delivered to the
BDFC Shareholders pursuant to the Acquisition shall be validly
issued and outstanding as fully paid and non-assessable shares and
the Acquisition Shares shall be transferable upon the books of B&D,
in all cases subject to the provisions and restrictions of all
applicable securities laws.
NON-MERGER AND SURVIVAL
3.2 The representations and warranties of B&D contained herein will be true at
and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by BDFC or the BDFC Shareholders, the
representations and warranties of B&D shall survive the Closing.
INDEMNITY
3.3 B&D agrees to indemnify and save harmless BDFC and the BDFC Shareholders
from and against any and all claims, demands, actions, suits, proceedings,
assessments, judgments, damages, costs, losses and expenses, including any
payment made in good faith in settlement of any claim (subject to the right of
B&D to defend any such claim), resulting from the breach by it of any
representation or warranty made under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by B&D to BDFC or the BDFC Shareholders hereunder.
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ARTICLE 4
COVENANTS OF B&D
COVENANTS
4.1 B&D covenants and agrees with BDFC and the BDFC Shareholders that it will:
(a) Conduct of Business. Until the Closing, conduct the B&D Business
diligently and in the ordinary course consistent with the manner in
which the B&D Business generally has been operated up to the date of
execution of this Agreement;
(b) Preservation of Business. Until the Closing, use its best efforts to
preserve the B&D Business and the B&D Assets and, without
limitation, preserve for BDFC B&D's and its subsidiaries'
relationships with any third party having business relations with
them;
(c) Access. Until the Closing, give BDFC, the BDFC Shareholders, and
their representatives full access to all of the properties, books,
contracts, commitments and records of B&D, and furnish to BDFC, the
BDFC Shareholders and their representatives all such information as
they may reasonably request;
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the Acquisition and to preserve and
maintain the B&D Assets notwithstanding the change in control of
BDFC arising from the Acquisition;
AUTHORIZATION
4.2 B&D hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting B&D and its subsidiaries to release any and all
information in their possession respecting B&D and its subsidiaries to the BDFC
Shareholders. B&D shall promptly execute and deliver to the BDFC Shareholders
any and all consents to the release of information and specific authorizations
which the BDFC Shareholders reasonably requires to gain access to any and all
such information.
SURVIVAL
4.3 The covenants set forth in this Article shall survive the Closing for the
benefit of BDFC and the BDFC Shareholders.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
THE BDFC SHAREHOLDERS
REPRESENTATIONS AND WARRANTIES
5.1 The BDFC Shareholders hereby jointly and severaly represent and warrant in
all material respects to B&D, with the intent that it will rely thereon in
entering into this Agreement and in approving and completing the transactions
contemplated hereby, that:
BDFC - COMPANY STATUS AND CAPACITY
(a) Formation. BDFC is a company duly formed and validly subsisting
under the laws of Brazil;
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(b) Carrying on Business. BDFC carries on the BDFC Business primarily in
Brazil and does not carry on any material business activity in any
other jurisdiction. BDFC is duly authorized to carry on the BDFC
Business in Brazil. The nature of the BDFC Business does not require
BDFC to register or otherwise be qualified to carry on business in
any other jurisdiction;
(c) Legal Capacity. BDFC has the legal power, capacity and authority to
own BDFC Assets, to carry on the Business of BDFC and to enter into
and complete this Agreement;
BDFC - CAPITALIZATION
(d) Authorized Capital. The authorized capital of BDFC consists of 1,500
shares of capital stock;
(e) Ownership of BDFC Shares. The issued and outstanding share capital
of BDFC will on Closing consist of 4,242,908 common shares (being
the BDFC Shares), which shares on Closing shall be validly issued
and outstanding as fully paid and non-assessable shares. The BDFC
Shareholders will be at Closing the registered and beneficial owners
of the BDFC Shares. The BDFC Shares owned by the BDFC Shareholders
will on Closing be free and clear of any and all liens, charges,
pledges, encumbrances, restrictions on transfer and adverse claims
whatsoever;
(f) No Option, Warrant or Other Right. No person, firm or corporation
has any agreement, option, warrant, preemptive right or any other
right capable of becoming an agreement, option, warrant or right for
the acquisition of BDFC Shares held by the BDFC Shareholders or for
the purchase, subscription or issuance of any of the unissued shares
in the capital of BDFC;
(g) No Restrictions. There are no restrictions on the transfer, sale or
other disposition of BDFC Shares contained in the charter documents
of BDFC or under any agreement;
BDFC - RECORDS AND FINANCIAL STATEMENTS
(h) Charter Documents. The charter documents of BDFC have not been
altered since its formation date, except as filed in the record
books of BDFC;
(i) Minute Books. The minute books of BDFC are complete and each of the
minutes contained therein accurately reflect the actions that were
taken at a duly called and held meeting or by consent without a
meeting. All actions by BDFC which required director or shareholder
approval are reflected on the corporate minute books of BDFC. BDFC
is not in violation or breach of, or in default with respect to, any
term of its Certificate of Incorporation (or other charter
documents) or by-laws.
(j) BDFC Financial Statements. The BDFC Financial Statements present
fairly, in all material respects, the assets and liabilities
(whether accrued, absolute, contingent or otherwise) of BDFC as of
the date thereof, and the sales and earnings of the BDFC Business
during the periods covered thereby, in all material respects, and
have been prepared in substantial accordance with generally accepted
accounting principles consistently applied;
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(k) BDFC Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of BDFC which are not
disclosed in Schedule "K" hereto or reflected in the BDFC Financial
Statements except those incurred in the ordinary course of business
since the date of the said schedule and the BDFC Financial
Statements, and BDFC has not guaranteed or agreed to guarantee any
debt, liability or other obligation of any person, firm or
corporation. Without limiting the generality of the foregoing, all
accounts payable and liabilities of BDFC as of March 31, 2005 are
described in Schedule "K" hereto;
(l) BDFC Accounts Receivable. All the BDFC Accounts Receivable result
from bona fide business transactions and services actually rendered
without, to the knowledge and belief of the BDFC Shareholders, any
claim by the obligor for set-off or counterclaim. Without limiting
the generality of the foregoing, all accounts receivable of BDFC as
of March 31, 2005, are described in Schedule "L" hereto;
(m) BDFC Bank Accounts. All of the BDFC Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule "M" hereto;
(n) No Debt to Related Parties. Except as disclosed in Schedule "N"
hereto, BDFC is not and on Closing will not be, indebted to the BDFC
Shareholders nor to any family member thereof, nor to any affiliate,
director or officer of BDFC or the BDFC Shareholders except accounts
payable on account of bona fide business transactions of BDFC
incurred in normal course of BDFC Business, including employment
agreements with the BDFC Shareholders, none of which are more than
30 days in arrears;
(o) No Related Party Debt to BDFC. Except as set forth on Schedule "S"
hereto, no BDFC Shareholder nor any director, officer or affiliate
of BDFC is now indebted to or under any financial obligation to BDFC
on any account whatsoever, except for advances on account of travel
and other expenses not exceeding $5,000 in total;
(p) No Dividends. No dividends or other distributions on any shares in
the capital of BDFC have been made, declared or authorized since the
date of the BDFC Financial Statements;
(q) No Payments. No payments of any kind have been made or authorized
since the date of the BDFC Financial Statements to or on behalf of
the BDFC Shareholders or to or on behalf of officers, directors,
shareholders or employees of BDFC or under any management agreements
with BDFC, except payments made in the ordinary course of business
and at the regular rates of salary or other remuneration payable to
them;
(r) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting BDFC, except as set forth in the BDFC Financial
Statements;
(s) No Adverse Events. Since the date of the BDFC Financial Statements:
(i) there has not been any material adverse change in the
consolidated financial position or condition of BDFC, its
liabilities or the BDFC Assets or any damage, loss or other
change in circumstances materially affecting BDFC, the BDFC
Business or the BDFC Assets or BDFC's right to carry on the
BDFC Business, other than changes in the ordinary course of
business,
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(ii) there has not been any damage, destruction, loss or other
event (whether or not covered by insurance) materially and
adversely affecting BDFC, the BDFC Business or the BDFC
Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by BDFC to the BDFC Shareholders
or to any of BDFC's officers, employees or agents or any
bonus, payment or arrangement made to or with any of them,
(iv) the BDFC Business has been and continues to be carried on in
the ordinary course,
(v) BDFC has not waived or surrendered any right of material
value,
(vi) BDFC has not discharged or satisfied or paid any lien or
encumbrance or obligation or liability other than current
liabilities in the ordinary course of business, and
(vii) no capital expenditures in excess of $10,000 individually or
$30,000 in total have been authorized or made;
BDFC - INCOME TAX MATTERS
(t) Tax Returns. All tax returns and reports of BDFC required by law to
be filed have been filed and are true, complete and correct, and any
taxes payable in accordance with any return filed by BDFC or in
accordance with any notice of assessment or reassessment issued by
any taxing authority have been so paid;
(u) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by BDFC. BDFC is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment
including aggressive treatment of income and expenses in filing
earlier tax returns;
BDFC - APPLICABLE LAWS AND LEGAL MATTERS
(v) Licenses. BDFC holds all licenses and permits as may be requisite
for carrying on the BDFC Business in the manner in which it has
heretofore been carried on, which licenses and permits have been
maintained and continue to be in good standing except where the
failure to obtain or maintain such licenses or permits would not
have a material adverse effect on the BDFC Business;
(w) Applicable Laws. BDFC has not been charged with or received notice
of breach of any laws, ordinances, statutes, regulations, by-laws,
orders or decrees to which they are subject or which applies to them
the violation of which would have a material adverse effect on the
BDFC Business, and, to the knowledge of the BDFC Shareholders, BDFC
is not in breach of any laws, ordinances, statutes, regulations,
by-laws, orders or decrees the contravention of which would result
in a material adverse impact on the BDFC Business;
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(x) Pending or Threatened Litigation. Except as previously disclosed to
B&D, there is no material litigation or administrative or
governmental proceeding pending or threatened against or relating to
BDFC, the BDFC Business, or any of the BDFC Assets, nor do the BDFC
Shareholders have any knowledge of any deliberate act or omission of
BDFC that would form any material basis for any such action or
proceeding;
(y) No Bankruptcy. BDFC has not made any voluntary assignment or
proposal under applicable laws relating to insolvency and bankruptcy
and no bankruptcy petition has been filed or presented against BDFC
and no order has been made or a resolution passed for the
winding-up, dissolution or liquidation of BDFC;
(z) Labor Matters. Except as previously disclosed to B&D, BDFC is not
party to any collective agreement relating to the BDFC Business with
any labor union or other association of employees and no part of the
BDFC Business has been certified as a unit appropriate for
collective bargaining or, to the knowledge of the BDFC Shareholders,
has made any attempt in that regard;
(aa) Finder's Fees. BDFC is not a party to any agreement which provides
for the payment of finder's fees, brokerage fees, commissions or
other fees or amounts which are or may become payable to any third
party in connection with the execution and delivery of this
Agreement and the transactions contemplated herein;
EXECUTION AND PERFORMANCE OF AGREEMENT
(bb) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated
hereby, will be duly and validly authorized by all necessary
corporate action on the part of BDFC;
(cc) No Violation or Breach. The execution and performance of this
Agreement will not
(i) violate the charter documents of BDFC or result in any breach
of, or default under, any loan agreement, mortgage, deed of
trust, or any other agreement to which BDFC is a party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, BDFC Material Contracts, or any
right or rights enjoyed by BDFC,
(iii) result in any alteration of BDFC's obligations under any
agreement to which BDFC is a party including, without
limitation, the BDFC Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance
or restriction of any nature whatsoever in favor of a third
party upon or against the BDFC Assets,
(v) result in the imposition of any tax liability to BDFC relating
to BDFC Assets or the BDFC Shares, or
(vi) violate any court order or decree to which either BDFC is
subject;
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BDFC ASSETS - OWNERSHIP AND CONDITION
(dd) Business Assets. The BDFC Assets, comprise all of the property and
assets of the BDFC Business, and neither the BDFC Shareholders nor
any other person, firm or corporation owns any assets used by BDFC
in operating the BDFC Business, whether under a lease, rental
agreement or other arrangement, other than as disclosed in Schedules
"O" or "R" hereto;
(ee) Title. BDFC is the legal and beneficial owner of the BDFC Assets,
free and clear of all mortgages, liens, charges, pledges, security
interests, encumbrances or other claims whatsoever, save and except
as disclosed in Schedules "O" or "R" hereto;
(ff) No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the purchase
of any of the BDFC Assets;
(gg) BDFC Insurance Policies. BDFC maintains the public liability
insurance and insurance against loss or damage to the BDFC Assets
and the BDFC Business as described in Schedule "P" hereto;
(hh) BDFC Material Contracts. The BDFC Material Contracts listed in
Schedule "R" constitute all of the material contracts of BDFC;
(ii) No Default. There has not been any default in any material
obligation of BDFC or any other party to be performed under any of
BDFC Material Contracts, each of which is in good standing and in
full force and effect and unamended (except as disclosed in Schedule
"R"), and BDFC is not aware of any default in the obligations of any
other party to any of the BDFC Material Contracts;
(jj) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of BDFC. BDFC is not
obliged to pay benefits or share profits with any employee after
termination of employment except as required by law;
BDFC ASSETS - BDFC EQUIPMENT
(kk) BDFC Equipment. The BDFC Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such
equipment is in good working condition;
BDFC ASSETS - BDFC GOODWILL AND OTHER ASSETS
(ll) BDFC Goodwill. BDFC carries on the BDFC Business only under the name
" Tianjin BDFC Biology Development Co., Ltd." and variations thereof
and under no other business or trade names. The BDFC Shareholders do
not have any knowledge of any infringement by BDFC of any patent,
trademark, copyright or trade secret;
THE BUSINESS OF BDFC
(mm) Maintenance of Business. Since the date of the BDFC Financial
Statements, the BDFC Business has been carried on in the ordinary
course and BDFC has not entered into any material agreement or
commitment except in the ordinary course; and
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(nn) Subsidiaries. BDFC does not own any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest in any
other corporation, partnership, joint venture or firm and BDFC does
not own any subsidiary and does not otherwise own, directly or
indirectly, any shares or interest in any other corporation,
partnership, joint venture or firm.
NON-MERGER AND SURVIVAL
5.2 The representations and warranties of BDFC contained herein will be true
at and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by B&D, the representations and warranties
of BDFC shall survive the Closing.
INDEMNITY
5.3 The BDFC Shareholders agree to indemnify and save harmless B&D from and
against any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of the BDFC
Shareholders to defend any such claim), resulting from the breach by any of them
of any representation or warranty of such party made under this Agreement or
from any misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by BDFC or the BDFC Shareholders to B&D
hereunder.
ARTICLE 6
COVENANTS OF BDFC AND
THE BDFC SHAREHOLDERS
COVENANTS
6.1 BDFC and the BDFC Shareholders covenant and agree with B&D that they will:
(a) Conduct of Business. Until the Closing, conduct the BDFC Business
diligently and in the ordinary course consistent with the manner in
which the BDFC Business generally has been operated up to the date
of execution of this Agreement;
(b) Preservation of Business. Until the Closing, use their best efforts
to preserve the BDFC Business and the BDFC Assets and, without
limitation, preserve for B&D BDFC's relationships with their
suppliers, customers and others having business relations with them;
(c) Access. Until the Closing, give B&D and its representatives full
access to all of the properties, books, contracts, commitments and
records of BDFC relating to BDFC, the BDFC Business and the BDFC
Assets, and furnish to B&D and its representatives all such
information as they may reasonably request;
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the Acquisition and to preserve and
maintain the BDFC Assets, including the BDFC Material Contracts,
notwithstanding the change in control of BDFC arising from the
Acquisition;
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(e) Reporting and Internal Controls. From and after the Closing, the
BDFC Shareholders shall forthwith take all required actions to
implement internal controls on the business of BDFC to ensure that
BDFC and B&D comply with Section 13(b)(2) of the Securities and
Exchange Act of 1934;
(f) 1934 Act Reports. From and after the Closing Date, take all such
steps as are necessary to discharge all reporting obligations
imposed upon them by the Securities Exchange Act of 1934.
AUTHORIZATION
6.2 BDFC hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting BDFC to release any and all information in their
possession respecting BDFC to B&D. BDFC shall promptly execute and deliver to
B&D any and all consents to the release of information and specific
authorizations which B&D reasonably require to gain access to any and all such
information.
SURVIVAL
6.3 The covenants set forth in this Article shall survive the Closing for the
benefit of B&D.
ARTICLE 7
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT IN FAVOR OF B&D
7.1 B&D's obligations to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to B&D hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by BDFC or the BDFC Shareholders at or
prior to the Closing will have been complied with or performed;
(c) title to the BDFC Shares held by the BDFC Shareholders and to the
BDFC Assets will be free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims
whatsoever, save and except as disclosed herein, and the BDFC Shares
shall be duly transferred to B&D;
(d) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or
condition of BDFC, its liabilities or the BDFC Assets or any
damage, loss or other change in circumstances materially and
adversely affecting BDFC, the BDFC Business or the BDFC Assets
or BDFC's right to carry on the BDFC Business, other than
changes in the ordinary course of business, none of which has
been materially adverse, or
(ii) any damage, destruction, loss or other event, including
changes to any laws or statutes applicable to BDFC or the BDFC
Business (whether or not covered by insurance) materially and
adversely affecting BDFC, the BDFC Business or the BDFC
Assets; and
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(e) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any.
WAIVER BY B&D
7.2 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of B&D and any such condition may be waived in whole or in
part by B&D at or prior to the Closing by delivering to BDFC a written waiver to
that effect signed by B&D. In the event that the conditions precedent set out in
the preceding section are not satisfied on or before the Closing, B&D shall be
released from all obligations under this Agreement.
CONDITIONS PRECEDENT IN FAVOR OF BDFC AND THE BDFC SHAREHOLDERS
7.3 The obligations of BDFC and the BDFC Shareholders to carry out the
transactions contemplated hereby are subject to the fulfillment of each of the
following conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to BDFC hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by B&D at or prior to the Closing will
have been complied with or performed;
(c) B&D will have delivered the Acquisition Shares to be issued pursuant
to the terms of the Acquisition to BDFC at the Closing and the
Acquisition Shares will be registered on the books of B&D in the
name of the holder of BDFC Shares at the time of Closing;
(d) title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances
or other claims whatsoever;
(e) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or
condition of B&D, its subsidiaries, their liabilities or the
B&D Assets or any damage, loss or other change in
circumstances materially and adversely affecting B&D, the B&D
Business or the B&D Assets or B&D' right to carry on the B&D
Business, other than changes in the ordinary course of
business, none of which has been materially adverse, or
(ii) any damage, destruction, loss or other event, including
changes to any laws or statutes applicable to B&D or the B&D
Business (whether or not covered by insurance) materially and
adversely affecting B&D, its subsidiaries, the B&D Business or
the B&D Assets;
(f) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any; and
(g) the satisfaction of all liabilities of B&D on or prior to the
Closing Date, other than those liabilities to be transferred to ▇▇.
▇▇▇▇▇▇, save and except for liabilities incurred in connection with
the Acquisition.
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WAIVER BY BDFC AND THE BDFC SHAREHOLDERS
7.4 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of BDFC and the BDFC Shareholders and any such condition
may be waived in whole or in part by BDFC or the BDFC Shareholders at or prior
to the Closing by delivering to B&D a written waiver to that effect signed by
BDFC and the BDFC Shareholders. In the event that the conditions precedent set
out in the preceding section are not satisfied on or before the Closing, BDFC
and the BDFC Shareholders shall be released from all obligations under this
Agreement.
NATURE OF CONDITIONS PRECEDENT
7.5 The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favor of the other party or parties set forth in this
Article.
CONFIDENTIALITY
7.7 Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from BDFC and B&D and the
contents thereof confidential and not utilize nor reveal or release same,
provided, however, that B&D will be required to issue a news release regarding
the execution and consummation of this Agreement and file a Current Report on
Form 8-K with the Securities and Exchange Commission respecting the proposed
Acquisition contemplated hereby together with such other documents as are
required to maintain the currency of B&D's filings with the Securities and
Exchange Commission.
ARTICLE 8
RISK
MATERIAL CHANGE IN THE BUSINESS OF BDFC
8.1 If any material loss or damage to the BDFC Business occurs prior to
Closing and such loss or damage, in B&D' reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, B&D shall, within two
(2) days following any such loss or damage, by notice in writing to BDFC, at its
option, either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to B&D' obligations to carry out the
transactions contemplated hereby, be vested in BDFC or otherwise
adequately secured to the satisfaction of B&D on or before the
Closing Date.
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MATERIAL CHANGE IN THE B&D BUSINESS
8.2 If any material loss or damage to the B&D Business occurs prior to Closing
and such loss or damage, in BDFC's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, BDFC shall, within two (2) days
following any such loss or damage, by notice in writing to B&D, at its option,
either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to BDFC's obligations to carry out
the transactions contemplated hereby, be vested in B&D or otherwise
adequately secured to the satisfaction of BDFC on or before the
Closing Date.
ARTICLE 9
CLOSING
CLOSING
9.1 The Acquisition and the other transactions contemplated by this Agreement
will be closed at the Place of Closing in accordance with the closing procedure
set out in this Article.
DOCUMENTS TO BE DELIVERED BY BDFC
9.2 On or before the Closing, BDFC and the BDFC Shareholders will deliver or
cause to be delivered to B&D:
(a) the original or certified copies of the charter documents of BDFC
and all corporate records documents and instruments of BDFC, the
corporate seal of BDFC and all books and accounts of BDFC;
(b) all reasonable consents or approvals required to be obtained by BDFC
for the purposes of completing the Acquisition and preserving and
maintaining the interests of BDFC under any and all BDFC Material
Contracts and in relation to BDFC Assets;
(c) certified copies of such resolutions of the shareholders and
directors of BDFC as are required to be passed to authorize the
execution, delivery and implementation of this Agreement;
(d) an acknowledgement from BDFC and the BDFC Shareholders of the
satisfaction of the conditions precedent set forth in section 7.3
hereof;
(e) the certificates or other evidence of ownership of the BDFC Shares,
together with such other documents or instruments required to effect
transfer of ownership of the BDFC Shares to B & D; and
(f) such other documents as B&D may reasonably require to give effect to
the terms and intention of this Agreement.
DOCUMENTS TO BE DELIVERED BY B&D
9.3 On or before the Closing, B&D shall deliver or cause to be delivered to
BDFC and the BDFC Shareholders:
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(a) share certificates representing the Acquisition Shares duly
registered in the names of the holders of shares of BDFC Common
Stock;
(b) certified copies of such resolutions of the directors of B&D as are
required to be passed to authorize the execution, delivery and
implementation of this Agreement;
(c) a certified copy of a resolution of the directors of B&D dated as of
the Closing Date appointing the nominees of BDFC as officers of BDFC
and appointing the nominee of the BDFC Shareholders to the board of
directors of B & D;
(d) an acknowledgement from B&D of the satisfaction of the conditions
precedent set forth in section 7.1 hereof;
(e) such other documents as BDFC may reasonably require to give effect
to the terms and intention of this Agreement.
ARTICLE 10
POST-CLOSING MATTERS
Forthwith after the Closing, B&D, BDFC and the BDFC Shareholders, as the
case may be, agree to use all their best efforts to:
(a) issue a news release reporting the Closing;
(b) file a Form 8-K with the Securities and Exchange Commission
disclosing the terms of this Agreement within 15 days of the Closing
and, not more than 60 days following the filing of the Form 8-K,
file and amended Form 8-K which includes the audited financial
statements of BDFC as well as pro forma financial information of
BDFC and B&D as required by Item 310 of Regulation SB as promulgated
by the Securities and Exchange Commission;
(c) file reports on Forms 13D and 3 with the Securities and Exchange
Commission disclosing the acquisition of the Acquisition Shares by
the BDFC Shareholders;
ARTICLE 11
GENERAL PROVISIONS
ARBITRATION
11.1 The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by negotiation
in good faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in the City of New York, New York.
NOTICE
11.2 Any notice required or permitted to be given by any party will be deemed
to be given when in writing and delivered to the address for notice of the
intended recipient by personal delivery, prepaid single certified or registered
mail, or telecopier. Any notice delivered by mail shall be deemed to have been
received on the fourth business day after and excluding the date of mailing,
except in the event of a disruption in regular postal service in which event
such notice shall be deemed to be delivered on the actual date of receipt. Any
notice delivered personally or by telecopier shall be deemed to have been
received on the actual date of delivery.
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ADDRESSES FOR SERVICE
11.3 The address for service of notice of each of the parties hereto is as
follows:
(a) B&D:
B&D Holdings, Inc.
Rua ▇▇▇▇ ▇▇▇▇▇▇ 223,8th Floor, Conjunto 81
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Sao Paulo, S.P. - Brazil - CEP: 01309-901
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Phone: (55.11) 3214.5505
Telecopier: (55.11) 3151.6615
(b) BDFC or the BDFC Shareholders:
BDFC Brasil Alimentos Ltda.
Rua ▇▇▇▇ ▇▇▇▇▇▇ 223,8th Floor, Conjunto 81
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Sao Paulo, S.P. - Brazil - CEP:01309-901
With a copy to:
Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
CHANGE OF ADDRESS
11.4 Any party may, by notice to the other parties change its address for
notice to some other address in North America and will so change its address for
notice whenever the existing address or notice ceases to be adequate for
delivery by hand. A post office box may not be used as an address for service.
FURTHER ASSURANCES
11.5 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
TIME OF THE ESSENCE
11.6 Time is expressly declared to be the essence of this Agreement.
ENTIRE AGREEMENT
11.7 The provisions contained herein constitute the entire agreement among
BDFC, the BDFC Shareholders and B&D respecting the subject matter hereof and
supersede all previous communications, representations and agreements, whether
verbal or written, among BDFC, the BDFC Shareholders and B&D with respect to the
subject matter hereof.
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ENUREMENT
11.8 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
ASSIGNMENT
11.9 This Agreement is not assignable without the prior written consent of the
parties hereto.
COUNTERPARTS
11.10 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
APPLICABLE LAW
11.11 This Agreement is subject to the laws of the State of New York.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF the parties have executed this Agreement effective as
of the day and year first above written.
B&D FOOD CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
BDFC BRASIL ALIMENTOS LTDA.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, Director
SHAREHOLDERS
▇▇▇▇▇▇▇ ▇.▇.
By: /s/ ▇▇▇▇▇ Weiszman
--------------------------
Name: ▇▇▇▇▇ Weiszman
Title: President
BARDIMEL S.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Director
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
/s/ Daniela Ovale
--------------------------
Daniela Ovale
/s/ ▇▇▇▇▇▇▇ van Moergastel
--------------------------
▇▇▇▇▇▇▇ van Moergastel
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ Tr
--------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Tr
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ INVESTMENTS LTD
By: /s/ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇. ▇▇▇▇▇
Title: Director
LIVORNO INVESTMENTS S.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Pimto
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Pimto
ALTHSHULER SHACHAM LTD
By: /s/ Althshuler Gilad
-------------------------------
Name: Althshuler Gilad
Title: Chairman
▇▇▇▇@▇▇▇▇ CAPITAL
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
DAHAV FINANCIALS LTD
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
ZONBIT & CO
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title:
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ LTD
By: /s/ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇. ▇▇▇▇▇
Title: Director
"C" BE MALL LIMITED
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇▇▇
Title:
/s/ ▇▇▇▇ ▇▇▇▇
-----------------------------
▇▇▇▇ ▇▇▇▇
ASSET MANGERS INTERNATIONAL LTD
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Director
