Exhibit 99.01
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into as of
February 2002 by and between D'Angelo Brands Inc., a Nevada corporation (the
"Company") and Shayne Paul Holdings, Inc. (the "Investor").
WHEREAS, the Investor desires to make an equity investment in the Company; and
WHEREAS, the Company desires to issue to the Investor, and the Investor desires
to purchase from the Company, shares of the Company's $.01 par value per share
common stock (the "Common Stock"), pursuant to Rule 506, promulgated under the
Securities Act of 1933, as amended (the "1933 Act"), on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL THE COMMON STOCK.
The Company agrees to issue to the Investor, and the Investor agrees to
purchase from the Company 500,000 common shares at a price of cdn $0.10
per unit, for a total purchase price of Seventy Five Thousand Dollars
(cdn $75,000.00) (the "Purchase Price") pursuant to Rule 506
promulgated under the 1933 Act.
2. CLOSING.
The purchase and sale of the Common Stock will take place at 10:00 a.m
Toronto time, on February 16th,2002, or at such other time and place
as the Company and the Investor mutually agree upon (which time and
place are referred to in this Agreement as the "Closing"). Within 10
Business days of Closing, the Company will deliver to the Investor the
original stock certificates in Investor's name and in such
denominations as Investor may specify against delivery to the Company
by the Investor of the Purchase Price, paid by wire transfer or
certified cheque pay able to the account designated by the Company in
writing prior to the Closing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Investor as follows:
3.1 Organization, Good Standing and Qualification.
The Company has been duly incorporated and organized, and is
validly existing and in good standing, under the laws of the
State of Nevada. The Company has the corporate power and
authority to enter into and perform this Agreement, to own and
operate its properties and assets and to carry on its proposed
business as currently conducted.
3.2 Due Authorization.
All corporate action on the part of the Company's directors and
shareholders necessary for the authorization, execution,
delivery of, and the performance of all obligations of the
Company under this Agreement, has been taken or will be taken
prior to the Closing, and this Agreement constitutes the valid
and legally binding obligations of the Company, enforceable in
accordance with its terms.
3.3 Valid Issuance of Stock.
The Common Stock, when issued and paid for as provided in this
Agreement, will be duly authorized, validly issued, fully paid
and nonassessable.
3.4 Governmental Consents.
To the best of the Company's knowledge, no consent, approval,
order or authorization of, or registration, qualification,
designation, declaration or filing with any court, governmental
agency, regulatory authority or political subdivision thereof,
or any other entity, is required in connection with the
execution, delivery and performance by the Company of this
Agreement.
3.5 Litigation.
There is no action, suit, proceeding, claim, arbitration or
investigation pending (or, to the best knowledge of the
Company, currently threatened) against the Company or any
company deemed in control of the Company, their respective
activities, properties or assets or, to the best of the
Company's knowledge, against any officer, director or key
employee of the Company or any Company deemed in control of the
Company in connection with such officer's, director's or key
employee's relationship with, or actions taken on behalf of,
the Company or any Company deemed in control of the Company.
The Company has no knowledge or belief that there is pending or
threatened any claim or litigation against the Company
contesting its right to produce, manufacture, sell, use or
offer any product, process, method, substance, part or other
material or service presently produced, manufactured, sold,
used or offered or planned to be produced, manufacture, sold,
used or offered by the Company. The Company has no knowledge
or belief that there exists, or there is pending or planned,
any patent, invention, device, application or principle, which
would materially adversely affect the condition, financial or
otherwise, or the operations of the Company.
3.6 Permits.
To the best of the Company's knowledge, the Company has, or is
in the process of obtaining, all franchises, permits, licenses
and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which could
materially and adversely affect its business, properties or
financial condition and believes it can obtain, without undue
burden or expense, any similar authority for the conduct of its
business as planned to be conducted. The Company is not in
default in any material respect under any of such franchises,
permits, licenses or other similar authority.
3.7 Registration Rights and Other Shareholder Rights.
Except as provided in the Investor Rights Agreements, other
investor rights agreements with prior purchasers of the
Company's stock and debt with options to purchase Company
stock, the Company is not under any obligation to register
under the 1933 Act, any of its currently outstanding securities
or any securities issuable upon exercise or conversion of its
currently outstanding options or warrants nor is the Company
obligated to register or qualify any such securities under the
securities laws of any state of the United States or to list
any of its shares in any other jurisdiction. To the best of
the Company's knowledge, no voting or similar agreements exist
related to the Company's securities which are presently
outstanding or that may hereafter be issued.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF INVESTOR.
The Investor hereby represents and warrants to, and agrees with, the
Company that:
4.1 Authorization.
This Agreement constitutes its valid and legally binding
obligation, enforceable in accordance with its terms. The
Investor represents that he has full power and authority to
enter into this Agreement and any other agreements to which it
is a party.
4.2 Purchase for Own Account.
The Common Stock to be purchased by such Investor hereunder
will be acquired for investment for such Investor's own
account, not as a nominee or agent, and not with a view to the
public resale or distribution thereof, and such Investor has no
present intention of selling, granting any participation in, or
otherwise distributing the same. Investor is not registered as
an issuer under the 1933 Act and is not required to be
registered with the U.S. Securities and Exchange Commission
under the Investment Company Act of 1940, as amended.
4.3 No Directed Selling Efforts.
Neither Investor, nor any of its affiliates, nor any person
acting on its behalf or on behalf of any such affiliate, has
engaged or will engage in any activity undertaken for the
purpose of, or that reasonably could be expected to have the
effect of, conditioning the markets in the United States for
the Common Stock, including but not limited to effecting any
sale or short sale of the Company's securities through Investor
or any of its affiliates prior to the expiration of any
restricted period (any such activity being defined herein as a
"Directed Selling Effort"). To the best knowledge of the
undersigned, this Agreement and the transactions contemplated
herein are not part of a plan or scheme to evade the
registration provisions of the 1933 Act, and the Common Stock
is being purchased for investment purposes by Investor.
Investor agrees that all offers and sales of the Common Stock
from the date hereof and through the expiration of the any
restricted period set forth in Rule 903 of Regulation S (as the
same may be amended from time to time hereafter) shall not be
made to U.S. Persons or for the account or benefit of U.S.
Persons and shall otherwise be made in compliance with the
provisions of Regulation S and any other applicable provisions
of the 1933 Act. Investor and its representatives have not
conducted any Directed Selling Effort as that term is used and
defined in Rule 902 of Regulation S and will not engage in any
such Directed Selling Effort within the United States through
the expiration of any restricted period set forth in Rule 903
of Regulation S.
4.4 Disclosure of Information.
The Investor believes he has received or has had full access to
all the information he considers necessary or appropriate to
make an informed investment decision with respect to the Common
Stock to be purchased by the Investor under this Agreement.
The Investor further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and
conditions of the offering of the Common Stock and to obtain
additional information (to the extent the Company possessed
such information or could acquire it without unreasonable
effort or expense) necessary to verify any information
furnished to such Investor or to which the Investor had access.
The foregoing, however, does not in any way limit or modify the
representations and warranties made by the Company in Section
3. The Investor has not relied on any oral representation made
by the Company or any officer, director or employee of the
Company.
4.3 Investment Experience.
The Investor understands that the purchase of the Common Stock
involves substantial risk. The Investor (a)has experience as
an investor in securities of companies in the development stage
and acknowledges that the Investor can bear the economic risk
of the Investor's investment in the Common Stock and has such
knowledge and experience in financial or business matters that
the Investor is capable of evaluating the merits and risks of
this investment in the Common Stock and protecting his own
interests in connection with this investment and/or (b)has a
preexisting business relationship with the Company and certain
of its officers, directors or controlling persons of a nature
and duration that enables the Investor to be aware of the
character, business acumen and financial circumstances of such
persons.
4.4 Accredited Investor Status.
The Investor is an "accredited investor" within the meaning of
Regulation D promulgated under the 1933 Act.
4.5 Restricted Securities.
The Investor understands that the Common Stock is characterized
as "restricted securities" under the 1933 Act inasmuch as they
are being acquired from the Company in a transaction not
involving a public offering and that under the 1933 Act and
applicable regulations thereunder such securities may be resold
without registration under the 1933 Act only in certain limited
circumstances. In this connection, such Investor represents
that the Investor is familiar with Rule 144 and Regulation S of
the 1933 Act, and understands the resale limitations imposed
thereby and by the 1933 Act. The Investor understands that the
Company is under no obligation to register any of the
securities sold hereunder except as provided in the Investor
Rights Agreement.
4.6 Further Limitations on Disposition.
Without in any way limiting the representations set forth
above, the Investor further agrees not to make any disposition
of all or any portion of the Common Stock except:
(a) pursuant to a registration statement under the 1933 Act
covering such disposition; or
(b) pursuant to an exemption from registration under the
1933 Act, including, without limitation, Rule 144, Rule
144A or Regulation S thereunder.
4.7 No General Solicitation.
Investor has not received any general solicitation or
advertising regarding the offering of the Common Stock or this
Agreement.
4.9 Investor acknowledges that if any transfer of the Common Stock
is proposed to be made in reliance upon an exemption under the
1933 Act, the Company may require an opinion of counsel
satisfactory to the Company that such transfer may be made
pursuant to an applicable exemption under the 1933 Act.
Investor acknowledges that, so long as appropriate, a legend
similar to the following may appear on the certificates
representing the Common Stock:
THESE SHARES HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
PURSUANT TO REGULATION S THEREUNDER. THE SHARES EVIDENCED BY
THIS CERTIFICATE CANNOT BE TRANSFERRED, OFFERED, OR SOLD IN THE
UNITED STATES OR TO U.S. PERSONS (AS THAT TERM IS DEFINED IN
REGULATION S) UNTIL ONE YEAR AFTER COMPLETION OF THE OFFERING.
5. CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING.
The obligations of the Investor under Section 2 of this Agreement are
subject to the fulfillment or waiver, on or before the Closing, of each
of the following conditions:
5.1 RepresentationsandWarrantiesTrue. Each of the representations
and warranties of the Company contained in Section 3 shall be
true and complete on and as of the Closing with the same effect
as though such representations and warranties had been made on
and as of the date of the Closing.
5.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied
with by it on or before the Closing and shall have obtained all
approvals, consents and qualifications necessary to complete
the purchase and sale described herein.
5.3 SecuritiesExemptions. The offer and sale of the Common Stock
to the Investor pursuant to this Agreement shall be exempt from
the registration requirements of the 1933 Act.
5.4 Completion of Due Diligence. The Investor shall have completed
his legal and financial due diligence, the results of which
shall be reasonably satisfactory to the Investor, and the
Company shall have reasonably cooperated with the Investor in
connection therewith.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING.
The obligations of the Company to the Investor under this Agreement are
subject to the fulfillment or waiver on or before the Closing of each
of the following conditions by the Investor:
6.1 Representations and Warranties.
The representations and warranties of the Investor contained in
Section 4 shall be true and complete on the date of the Closing
with the same effect as though such representations and
warranties had been made on and as of theClosing.
6.2 Payment of Purchase Price.
The Investor shall have delivered to the Company the Purchase
Price in accordance with the provisions of Section 2.
6.3 Securities Exemptions.
The offer and sale of the Common Stock to the Investor pursuant
to this Agreement shall be exempt from the registration
requirements of the 1933 Act, and that prior to closing the
Investor will deliver to the Company an executed Investment
Letter in the form attached hereto as Exhibit B.
7. POST-CLOSING COVENANTS.
7.1 Confidentiality.
(a) The Investor acknowledges that the Company could be
irreparably damaged if confidential information
concerning the business and affairs of the Company were
disclosed to or utilized on behalf of any person. The
Investor covenants and agrees to and with the Company
that, except as otherwise provided in this Agreement,
it will not, at any time, directly or indirectly,
without the prior written consent of the Company,
divulge, or permit any of its partners, shareholders,
directors, officers, employees or agents to divulge to
any person any non-public information concerning the
business or financial or other affairs, or any of the
methods of doing business used by the Company or any of
its subsidiaries, nor release any information provided
pursuant to or concerning this Agreement or any
ancillary agreement or the transactions contemplated by
this Agreement or any Ancillary Agreement if such
release is intended for, or may result in, its public
dissemination. The foregoing requirements of
confidentiality shall not apply to information: (i)
that is now or in the future becomes freely available
to the public through no fault of or action by the
using or disclosing party; (ii)that is in the
possession of the using or disclosing party prior to
the time such information was obtained from the Company
or that is independently acquired by the using or
disclosing party without the aid, application or use of
such other information; (iii)that is obtained by the
using or disclosing party in good faith without
knowledge of any breach of a secrecy arrangement from a
third party; (iv) that is required to be disclosed by
applicable law or order of government agency or self-
regulatory body; or (v) that is disclosed in connection
with any bona-fide offer to purchase any shares in the
Company; provided that the proposed transferor obtains
an undertaking from the proposed transferee to keep
such information confidential in accordance with the
provision of this Section7.1 prior to such disclosure.
(b) The Investor and the Company agree to consult with each
other (and to take into consideration any comments
reasonably raised by any such party) prior to the
dissemination of any press release or public
communication concerning this Agreement or any
ancillary agreement or the transactions contemplated by
this Agreement or any ancillary agreement. Any such
press release or public communication shall be subject
to the approval of both the Company and the Investor.
(c) This Section 7.1 will survive termination of this
Agreement.
7.2 Registration Rights. The Company agrees that the Common Stock
purchased by Investor pursuant to this Purchase Agreement shall
be included with any securities registered under the Investor
Rights Agreements, subject to all terms and conditions set
forth therein.
8. GENERAL PROVISIONS.
8.1 Survival of Warranties; Investigation.
The representations, warranties and covenants of the Company
and the Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this
Agreement and the Closing. It shall be no defense to an action
for breach of this Agreement that the Investor or its agents
have (or have not) made investigations into the affairs of the
Company or that the Company could not have known of the
misrepresentation or breach of warranty. Damages for breach of
a representation or warranty or other provision of this
Agreement shall not be diminished by alleged tax savings
resulting to the complaining party as a result of the loss
complained of.
8.2 Successors and Assigns.
The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and
assigns of theparties, except that the Company may not assign
or transfer any of its rights or obligations under this
Agreement.
8.3 GoverningLaw; Jurisdiction.
Any dispute, disagreement, conflict of interpretation or claim
arising out of or relating to this Agreement, or its
enforcement, shall be governed by the laws of the Province of
Ontario.
8.4 Counterparts.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
8.5 Headings.
The headings and captions used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement
to sections, paragraphs, exhibits and schedules shall, unless
otherwise provided, refer to sections and paragraphs hereof and
exhibits and schedules attached hereto, all of which exhibits
and schedules are incorporated herein by this reference.
8.6 Notices.
Any and all notices required or permitted to be given to a
party pursuant to the provisions of this Agreement will be in
writing and will be effective and deemed to provide such party
sufficient notice under this Agreement on the earliest of the
following: (i)at the time of personal delivery, if delivery is
in person; (ii) at the time of transmission by facsimile,
addressed to the other party at its facsimile number specified
herein (or hereafter modified by subsequent notice to the
parties hereto), with confirmation of receipt made by both
telephone and printed confirmation sheet verifying successful
transmission of the facsimile; (iii) one (1) business day after
deposit with an express overnight courier for deliveries within
a country, or three (3) business days after such deposit for
international deliveries or (iv) three (3) business days after
deposit in mail by certified mail (return receipt requested) or
equivalent for deliveries within a country.
All notices for international delivery will be sent by
facsimile or by express courier. All notices not delivered
personally or by facsimile will be sent with postage and/or
other charges prepaid and properly addressed to the party to be
notified at the address or facsimile number indicated for such
party, in the case of the Company, c/o D'Angelo Brands Inc, 14
Brewster Road Brampton, Attention: Frank or, in the case of the
Investor, (_________________) or at such other address or
facsimile number as such other party may designate by giving
ten (10) days advance written notice by one of the indicated
means of notice herein to the other parties hereto. Notices by
facsimile shall be machine verified as received.
Any party hereto (and such party's permitted assigns) may by
notice so given change its address for future notices
hereunder. Notice shall conclusively be deemed to have been
given in the manner set forth above.
8.7 Costs, Expenses.
Each party hereto shall bear its own costs in connection with
the preparation, execution and delivery of this Agreement.
8.8 Amendments and Waivers.
Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or
prospectively), only with the written consent of the Company
and the Investor. No delay or omission to exercise any right,
power, or remedy accruing to the Investor, upon any breach,
default or noncompliance of the Company under this Agreement
shall impair any such right, power, or remedy, nor shall it be
construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. All
remedies, either under this Agreement, by law, or otherwise
afforded to the Investor, shall be cumulative and not
alternative.
8.9 Severability.
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement
shall be interpreted as if such provision(s) were so excluded
and shall be enforceable in accordance with its terms.
8.10 Entire Agreement.
This Agreement, together with all exhibits and schedules
hereto, constitutes the entire agreement and understanding of
the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence,
agreements, understandings duties or obligations between the
parties with respect to the subject matter hereof.
8.11 Further Assurances.
From and after the date of this Agreement, upon the request of
the Investor or the Company, the Company and the Investor shall
execute and deliver such instruments, documents or other
writings as may be reasonably necessary or desirable to confirm
and carry out and to effectuate fully the intent and purposes
of this Agreement.
In Witness Whereof, the parties hereto have executed this Agreement as of the
date first written above.
THE COMPANY:
D'ANGELO BRANDS INC.
By: __/s/_____________________
Name: Frank D'Angelo
Title: President
By: __/s/_____________________
Name: Shayne Paul
Title: President,
Shayne Paul Holdings, Inc.