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SHARE PURCHASE AGREEMENT

Purchase and Sale Agreement

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One Holdings, Corp | Trade Finance Solutions Inc

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Title: SHARE PURCHASE AGREEMENT
Governing Law: Florida     Date: 9/9/2009
Law Firm: Arnstein Lehr    

SHARE PURCHASE AGREEMENT, Parties: one holdings  corp , trade finance solutions inc
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Exhibit 10.1

 

SHARE PURCHASE AGREEMENT

 

THIS SHARE PURCHASE AGREEMENT (hereinafter referred to as the “Agreement” ), is entered into as of the 26th day of August, 2009, by and between One Holdings, Corp., a Florida corporation (sometimes hereinafter referred to as “ One Holdings ” and sometimes as the “ Buyer ”), Trade Finance Solutions Inc., an Ontario corporation (the “ Company ”) and the shareholders listed on the execution page of this Agreement (hereinafter sometimes collectively referred to as the “ Shareholders ” and sometimes individually as the “ Shareholder ”).

 

W I T N E S S E T H

 

WHEREAS, One Holdings desires to purchase from the Shareholders and the Shareholder desire to sell to One Holdings, Three Thousand Nine Hundred and Ninety (3990) common shares (the “ Shares ”) of common stock the Shareholders own in the Company, which represents all of the issued and outstanding shares of the Company’s common stock save for Ten (10) common shares, upon the terms and subject to the conditions of this Agreement;

 

 

NOW THEREFORE , in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

PURCHASE OF TFS STOCK

 

1.1            The Shareholders hereby agree to collectively sell to One Holdings and One Holdings hereby agrees to purchase from the Shareholders the Shares for a total purchase price consisting of cash and stock of One Holdings (the “ Purchase Price ”) which shall be determined and payable as follows:

(i) in each of months 7 to 18, both inclusive, following the Closing of the transactions contemplated by this Agreement (the “ Measuring Period ”) the Monthly EBIT of the Company, (earnings before interest and taxes) according to US GAAP, shall be measured;

(ii) when the aggregate Monthly EBIT of the Company achieved at any time during the Measuring Period is equal to or greater than $2,000,000.00 the Payout Term shall commence on the 1 st day of the month immediately next following;

 

(ii) failing the aggregate Monthly EBIT of the Company achieved at any time during the Measuring Period being equal to or greater than $2,000,000.00 the Payout Term shall commence on the 1 st day of the month immediately next following expiration of the Measuring Period;

 

(iii) if the aggregate Monthly EBIT of the Company achieved at any time during the Measuring Period is equal to or greater than $2,000,000.00 the total Purchase Price shall be $6,000,000.00;

 

 

 


 

 

(iv) failing the aggregate Monthly EBIT of the Company achieved at any time during the Measuring Period being equal to or greater than $2,000,000.00 the total Purchase Price shall be calculated as three (3) times the aggregate Monthly EBIT of the Company achieved during the Measuring Period; and

 

(iv) for the purposes of calculation of the Monthly EBIT of the Company pursuant to this Article 1.1, the calculation of the quarter-yearly installment payment pursuant to Article 1.1.2 (A) below and the calculation of EBIT pursuant to Article 1.1.3 below, any distributions by or payments from the Company or its subsidiary corporations to the Buyer, it’s associated or affiliated companies, directly or indirectly, for services, fees or otherwise, shall be excluded.

 

 

1.1.1

Payments of the Purchase Price shall initially be made in quarter-yearly installments from cash flow, the first of such quarter-yearly installments being due and payable on the 15th day of the 1st month of the Payout Term and continuing thereafter on the 15th day following expiration of each quarter year of the Payout Term.

 

 

1.1.2

Each quarter-yearly installment payment shall be equal to the amount determined by multiplying (A) Company’s EBITDA (earnings before interest, taxes, depreciation and amortization) according to US GAAP less interest, accrued taxes, and capital expenditures for the applicable quarter by (B) 70% (the “ Quarterly Installment Payment ”).  The Quarterly Installment Payments shall continue until the Purchase Price is paid in full; Provided further that upon that date which is 60 months following the Closing the Shareholders shall be paid 50% of any portion of the Purchase Price then unpaid and shall receive a promissory note (the “ Note ”) from the Company for the remaining 50% of any balance of the Purchase price then unpaid. The Note shall be for a term of 1 year, and be payable in 4 equal quarter-yearly installments, without interest.  Effective as of the Closing and continuing until the Purchase Price is paid in full, the Shareholders shall have security interests in the Company’s assets and in the assets of the Company’s subsidiary corporations, such security interests to be evidenced by General Security/U.C.C. Agreements in form and content satisfactory to Shareholder’s legal counsel and registered under the Ontario Personal Property Security Act and applicable U.S. registration, as security for payment of the unpaid balance of the Purchase Price, which security interests shall be subordinate and postponed only to the following:

 

 

 


 

 

 

(i)

to the presently held security interests of all existing lenders to the Company as at the date hereof; and,

 

(ii)

to any new financing placed on or after Closing where the proceeds of which are fully applied to the ordinary course business of the Company or its subsidiary corporations, as applicable.

 

 

1.1.3

In addition to the cash portion of the Purchase Price, the Shareholders shall receive 1 share of the Buyer’s common stock (the “ One Holdings Stock ”) (adjusted for forward or reverse splits following the Closing) for every $1.00 in EBIT achieved during the Measuring Period (“ Stock Compensation ”) subject to a maximum Stock Compensation of 6 million shares of the Buyer’s common stock.  The Stock Compensation shall be payable within 30 days following the end of the Measuring Period.  The Shareholder’s ability to sell the Stock Compensation shall be subject to lockup and leak-out as outlined in Section 1.2 below.

 

1.2     Subject to the Shareholder’s compliance with applicable securities laws, after the applicable holding period, the Shareholder shall be entitled to sell the shares of One Holdings Stock in the public market as set forth in this Section 1.2.  Except as otherwise expressly provided herein and subject to the resale requirements of Rule 144 promulgated under the Securities Act of 1933, as amended (the “1933 Act”), or any other rule or agreement that otherwise restricts the Shareholder from selling the One Holdings Stock, the Shareholder agrees that he/she may only sell the One Holdings Stock subject to the following conditions commencing from the date he/she receives the One Holdings Stock and until the expiration of 36 months after the Stock Compensation is paid as set forth in Section 1.1.3 hereof(the “ Lock Up/Leak Out Period ”) as follows:

 

(i)           if on any day the Shareholder desires to sell any of the One Holdings Stock, the Shareholder will not sell more than 10% of the average daily volume of trading in the One Holdings Stock for the ten (10) consecutive business days immediately preceding any such trading day. For the purposes of this subsection “average daily volume of trading” means the average of the number of shares traded on trading days in which an actual trade or trades occurs;

 

(ii)           The Shareholder will only sell the One Holdings Stock at the "offer" or "ask" price stated by the relevant market maker and the Shareholder agrees that he will not sell One Holdings Stock at the "bid" price.

 

(iii)           The Shareholder agrees that he will not engage in any short selling of the One Holdings Stock during the Lock-Up/Leak out Period.

 

 

 


 

 

(iv)           The Shareholder agrees that he will comply with all obligations and requirements under applicable “insider” trading rules;

 

(v)           Except as set forth in this Section 1.2, the Shareholder agrees that he will not transfer, pledge, or hypothecate the One Holdings Stock without the prior written consent of One Holdings;

 

Notwithstanding anything contained in this Agreement, the Shareholder may transfer any or all of his One Holdings Stock as bona fide gifts or transfers to any trust for the direct or indirect benefit of each person of the Shareholder’s immediate family; provided that it shall be a condition to any such gift or transfer that (i) the transferee/donee agrees, in writing, to be bound by the terms of this Agreement to the same extent as if the transferee/donee were a party hereto; and (ii) the Shareholder provides written notice to One Holdings prior to such gift or transfer.  “Immediate family” shall mean the Shareholder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, former spouses, siblings, nieces, nephews, mother-in-law, father-in-law, sons-in-law, daughters-in-law, brother-in-law, or sister-in-law, including adoptive relationships.

 

1.3            Legends .  The Shareholder understands that until such time as the resale of such shares have been registered under the 1933 Act the certificates representing the shares of One Holdings Stock shall bear any legend as required by the 1933 Act and the "blue sky" laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (i) IN THE ABSENCE OF (a) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (b) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (ii) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

1.4            No Dilution .  One Holdings shall neither effect, nor fix any record date with respect to, any stock split, stock dividend, reverse stock split, recapitalization, or similar change in One Holdings' Stock between the date of this Agreement and the Closing Date.

 

1.5            Closing . The consummation of the Transaction (the "Closing" ) shall take place at the offices of Arnstein & Lehr, LLP, on a date to be mutually agreed upon by the Parties, which shall be no later than September 2, 2009 (the “ Closing Date ”).  Not later than 5 days prior to the Closing Date the parties shall take the following actions:

 

 

(i)

the Shareholders shall deliver to Arnstein & Lehr, LLP as escrow agent (“ Escrow Agent ”) under this Agreement the certificate(s) evidencing the Shares together with a stock power executed by Shareholder in favor of One Holdings, with Medallion guarantee, dated as of the Closing Date.

 

 

 


 

 

 

(ii)

the Company shall deliver to the Escrow Agent the following:

 

 

a.

a certified copy of the Articles of Incorporation and bylaws of the Company;

 

 

b.

a Certificate of Status from the Ontario Ministry of Consumer and Business Services dated as of a date within ten days prior to the Closing Date certifying that the Company is in good standing as a corporation in the Province of Ontario;

 

 

c.

a copy of the consent resolution of the Company’s board of directors approving the Transactions.

 

(iii)            One Holdings shall deliver to the Escrow Agent the following:

 

 

a.

a certified copy of the Articles of Incorporation and bylaws of the One Holdings;

 

 

b.

a good standing certificate from the Secretary of State of Florida dated as of a date within ten days prior to the Closing Date certifying that the One Holdings is in good standing as a corporation in the State of Florida;

 

 

c.

a copy of the consent resolution of the One Holdings’ board of directors approving the Transactions.

 

Within sixty (60) days from the date of this Agreement, the Company shall deliver to One Holdings true and correct copies of the Company Financial Statements as defined and set forth in Section 2.10 hereof.  One Holdings shall have five (5) days from its receipt of the Company Financial Statements to approve the Company Financial Statements.  If One Holdings approves the Company Financial Statements, One Holdings shall notify the Escrow Agent in writing of such approval and the Escrow Agent shall release (i) to the respective party, signed copies of this Agreement, the good standing certificate and the Board consent resolutions to the other party hereto, and (ii) to One Holdings, the certificate(s) evidencing the Shares and the Stock Power executed by Shareholder (with Medallion guarantee) in favor of One Holdings and the Closing shall be effective as of the Closing Date.  If the Company fails to deliver the Company Financial Statements to One Holdings within said sixty (60) day period, notwithstanding any other rights One Holdings may have under this Agreement, One Holdings may waive such failure and close the Transactions effective as of the Closing Date and the Escrow Agent shall deliver to the respective party the documents, the stock certificate(s) evidencing the Shares and the stock powers as set forth in the previous sentence.  If (x) One Holdings does not accept the Company Financial Statements, or (y) if the Company fails to deliver the Company Financial Statements to One Holdings within the 60 day period and One Holdings does not waive such failure by the Company or (z) if One Holdings does not notify the Escrow Agent within said five (5) day period that it accepts the Company Financial Statements, this Agreement shall terminate.

 

 

 


 

 

           1.6                 Closing Events .  At the Closing, each of the Parties hereto shall execute, acknowledge, and deliver (or shall cause to be executed, acknowledged, and delivered) any and all stock certificates, officers’ certificates, agreements, resolutions, schedules, or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the other Parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated by this Agreement.  If agreed to by the Parties, the Closing may take place through the exchange of documents (other than the exchange of stock certificates) by efax, fax, email and/or express courier.


 

ARTICLE II

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE SHAREHOLDER AND ONE HOLDINGS

 

 

Each Shareholder, to the best of his knowledge, individually and jointly and severally with the other Shareholders, represents and warrants to, and covenants and agrees with, the Company as follows:

 

2.1            The Shareholder is acquiring the One Holdings Stock for its own account for investment only and not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.

 

2.2            The Shareholder is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules and Regulations under the Securities Act of 1933 Act, as amended (“ 1933 Act ”) , (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business and financial, to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment in the One Holdings Shares.

 

2.3            The Shareholder understands that its investment in the One Holdings Stock involves a high degree of risk.

 

2.4            The Shareholder understands that the One Holdings Stock is deemed to be “restricted stock” as defined under the 1933 Act.

 

2.5            The Shareholder has good and marketable title to all of the Shares, free and clear of any liens, claims, charges, options, rights of tenants or other encumbrances and shall not, until the transactions contemplated by this Agreement is closed, or this Agreement is terminated, sell, hypothecate, encumber, transfer or otherwise dispose of the Shares.  At the Closing, the Shareholder will convey to One Holdings all right, title, and interest in and to the Shares free and clear of all liens, claims, pledges, encumbrances, options, charges, restrictions, and adverse rights or interests whatsoever.  The Shareholder has the exclusive right to vote the Shares.

 

 

 


 

 

2.6            The entering into of this Agreement by the Shareholder, and the performance by the Shareholder of his obligations hereunder, will not conflict with or constitute a breach of or default under any agreement to which the Shareholder is a party or any order or decree of any court or regulatory body to which the Shareholder is subject.

 

The Company represents and warrants to, and covenants and agrees with, One Holdings as follows:

 

2.7            Organization .  The Company is a corporation duly organized, validly existing, and in good standing under the laws of the Province of Ontario.  A certified copy of the Articles of Incorporation and bylaws of the Company are attached hereto as Schedule 2.7.  The Company has the power and is duly authorized, qualified, franchised, and licensed under all applicable laws, regulations, ordinances, and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it is now being conducted, including qualification to do business as a foreign corporation in jurisdictions in which the character and location of the assets owned by it or the nature of the business transacted by it requires qualification.  The execution and delivery of this Agreement does not, and the consummation of the Transactions in accordance with the terms hereof will not, violate any provision of the Company’s organizational documents.  The Company has taken all action required by laws, its articles of incorporation, certificate of business registration, or otherwise to authorize the execution and delivery of this Agreement. The Company has full power, authority, and legal right and has taken or will take all action required by law, its Certificate of Incorporation, and otherwise to consummate the Transactions.

 

2.8            Capitalization .  The Company has a total of 4,000 issued and outstanding shares of common stock, each of which is legally issued, fully paid, and non-assessable.  All such shares of the Company’s Common Stock are held of record by the Shareholders, save for 10 common shares registered in the name of Jim Reddon.  The Company has no other capital stock, warrants, options, or other securities convertible into shares of the Company capital stock.

 

2.9            


 
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