THIS SHARE EXCHANGE AGREEMENT made as of the 15th day of March, 2021.
THE PERSONS listed in Schedule "A" attached hereto.
(hereinafter collectively called the "Vendors")
OF THE FIRST PART
ENTHEOS CAPITAL CORP., a company incorporated pursuant to the laws of the Province of British Columbia and having an office located Suite 1500-409 Granville Street, Vancouver, British Columbia, V6C 1T2
(hereinafter called "Purchaser")
OF THE SECOND PART
THE BC BUD CORPORATION., a company incorporated pursuant to the federal laws of Canada and having an office located at 151 West 2nd Avenue, Vancouver BC, V5Y 1B8
(hereinafter called the "Target")
OF THE THIRD PART
The Vendors are or are entitled to be the registered, legal and beneficial owners of all of the issued and outstanding Target Shares (as defined herein).
The Purchaser has made an offer to the Vendors to acquire all of the Target Shares as at the Closing in exchange for the issuance of the Payment Shares (as defined herein); and
NOW THEREFORE in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed by and between the parties hereto as follows:
ARTICLE 1 - INTERPRETATION
In this Agreement, the following capitalized terms and phrases shall have the following meanings:
"Affiliate" shall have the meaning ascribed thereto in the Business Corporations Act.
"Applicable Laws" with respect to any Person, any domestic (whether federal, state, territorial, state, provincial, municipal or local) or foreign statutes, laws, ordinances, rules, administrative interpretations, regulations, orders, writs, injunctions, directives, judgments, decrees or other requirements of any Governmental Entity applicable to such Person or any of its Affiliates or any of their respective properties, assets, Employees, consultants or agents (in connection with such Employee's, consultant's or agent's activities on behalf of such Person or any of its Affiliates), including Applicable Securities Laws.
"Applicable Securities Laws" means all applicable securities legislation in all jurisdictions relevant to sale of the Target Securities to the Purchaser or the issuance of the Payment Shares to the Vendors, as well as the rules and policies of the CSE.
"Authorization" means, with respect to any Person, any order, permit, approval, consent, waiver, licence or similar authorization of any Governmental Entity having jurisdiction over the Person, including any municipal or other approvals required to be granted before a Governmental Entity provides an authorization
"Books and Records" means all books of account, tax records, sales and purchase records, customer and supplier lists, computer software, formulae, business reports, plans and projections and all other documents, files, correspondence and other information of the Purchaser or the Target, as applicable, (whether in written, printed, electronic or computer printout form
"Business" means the business actively presently and previously carried on by the Target, consisting of the development of a portfolio of cannabis brands for licensing and sale and includes other inactive business activities in the Target.
"Business Corporations Act" means the Business Corporations Act (British Columbia) and regulations pursuant thereto, as amended from time to time.
"Business Day" means a day other than a Saturday, Sunday or statutory holiday in the
Province of British Columbia.
"CBCA" means the Business Corporations Act (Canada) and regulations pursuant thereto, as amended from time to time.
"Change of Control" means the acquisition, directly or indirectly, of beneficial ownership of voting shares that results in a holding of more than 20% of the issued and outstanding
voting shares of the Purchaser or the Target, as the case may be, by a third party.
"Closing" means the completion of the Transaction pursuant to and in accordance with all of the terms and conditions of this Agreement.
"Closing Date" means the date which is five Business Days following the satisfaction or waiver of all of the conditions precedent set forth in this Agreement, or such other date as may be agreed to in writing by the Parties.
"Closing Time" means the time on the Closing Date specified in Section 8.1 hereof.
"Constating Documents" means the certificate and articles of incorporation (as amended), statute, constitution, joint venture or partnership agreement, articles, notice of articles, bylaws or other constituting document of any Person other than an individual, each as from time to time amended or modified.
"Contaminants" means any pollutant, contaminant or waste of any nature or any other substance or material regulated by or pursuant to any Environmental Laws, including, without limitation, any hazardous waste, hazardous substance, hazardous material, toxic substance, dangerous substance, dangerous good, or deleterious substance, as defined, judicially interpreted or identified in or for the purposes of any Environmental Laws.
"Contract" means any contract, agreement, option, lease, license, sale and purchase order, commitment, understanding or other right or obligation of any kind, whether written or oral, to which any Party, or any Affiliate thereof, is a party, or is bound or affected, or to which any of its respective properties or assets is subject.
"Corporate Records" means the corporate records of either the Purchaser or the Target, as applicable, including (i) all Constating Documents, (ii) all minutes of meetings and resolutions of shareholders and directors (and any committees), and (iii) the share certificate books, securities register, register of transfers and register of directors.
"CSE" means the Canadian Securities Exchange.
"Disclosing Party" shall have the meaning set forth in Section 9.1 of this Agreement.
"Distribution" means (a) the declaration or payment of any dividend in cash, securities or property on or in respect of any class of shares of a Person or its subsidiaries; (b) the purchase, redemption or other retirement of any shares of a Person or its subsidiaries, directly or indirectly; or (c) any other distribution on or in respect of any class of shares of a Person or its subsidiaries;
"Employee" means with respect to any Person, any current or former or retired employee, officer, manager, consultant or director of such Person.
"Employee Contract" means any employment, severance, consulting or similar Contract between an Employee and any Person.
"Employee Plan" means any plan, program, policy, practice, Contract or other arrangement providing for bonuses, severance, termination pay, performance awards, share or share-related compensation, fringe benefits, health or welfare benefits, supplemental unemployment benefits, pensions, profit sharing, deferred compensation, incentive compensation, retirement benefits, salary continuation, medical or dental insurance, disability benefits or other employee benefits of any kind, whether formal or informal, funded or unfunded, and whether or not legally binding, pursuant to which any Person has or may have any material liability, contingent or otherwise.
"Encumbrance" means any encumbrance, lien, charge, hypothecation, pledge, mortgage, security interest of any nature (registered or unregistered), claim, exception, reservation, restrictions, right or pre-emption, option, privilege or any agreement to create any of the foregoing, and includes a royalty, profit interest, security interest under applicable legislation, trust or deemed trust (whether contractual, statutory or otherwise) and any voting trust or pooling agreement or shareholder agreement with respect to securities.
"Environmental Approvals" means all permits, certificates, licences, authorizations, consents, instructions, registrations, directions or approvals and the like issued or required by any applicable regulatory body pursuant to any Environmental Laws.
"Environmental Laws" means, with respect to any Person or its business, activities, property, assets or undertaking, all applicable laws, including agreements with Governmental Entities, relating to pollution or employee and public health and safety, the environment (including air, surface water, ground water, land surface or otherwise) or wildlife, including laws relating to the release or threatened release of any Contaminants or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Contaminants.
"Financing" means the financing completed by the Purchaser connection with the Transaction raising gross proceeds of $1,000,000 through the sale of subscription receipts exchangeable into Units, at a price of $0.25 per subscription receipt, with such subscription receipts exchanging into Units upon the completion of the Transaction.
"Founders" means collectively, the directors of the Target, being Brayden Sutton and
Thomas Joshua Taylor;
"Governmental Entity" means (i) any international, multinational, national, federal, provincial, state, municipal, local or other governmental or public department, tribunal, central bank, court, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) any subdivision or authority of any of the above, (iii) any securities commission or stock exchange, and (iv) any arbitrator, arbitration tribunal or other tribunal or quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above.
"IFRS" means the International Financial Reporting Standards as adopted by the Canadian Accounting Standards Board, applied on a consistent basis with prior periods.
"Information" has the meaning set out in Section 9.1.
"Intellectual Property" means all intellectual property and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, pursuant to the Applicable Laws of any jurisdiction throughout the world, whether registered or unregistered, including any and all: (a) trademarks, service marks, trade names, brand names, logos, slogans, trade dress, design rights and other similar designations of source, sponsorship, association or origin, together with the goodwill connected with the use of, and symbolized by, and all registrations, applications and renewals for, any of the foregoing, (b) internet domain names, whether or not trademarks, web addresses, web pages, websites and related content, URLs and accounts with Twitter, Facebook, Instagram and other social media companies, and the content found thereon and related thereto, (c) works of authorship, expressions, designs and design registrations, whether or not copyrightable, including copyrights, author, performer, moral and neighboring rights, and all registrations, applications for registration and renewals of such copyrights,
inventions, discoveries, trade secrets, software source code, business and technical information and know-how, databases, data collections and other confidential and proprietary information and all rights therein, (e) patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part,re-examinations, renewals, substitutions and extensions thereof), patent applications, and other patent rights and any other Governmental Entity-issued indicia of invention ownership
(including inventor's certificates, petty patents and patent utility models), (f) all licenses for listed intellectual property granted to third parties, (g) all future income and proceeds from any of the listed intellectual property and from the licenses listed in (f) above, and
all rights to damages, royalties and profits by reason of the past, present or future infringement or other misuse of any of the listed intellectual property.
"Listing Statement" means the listing statement and/or information circular to be filed by the Purchaser with the CSE and applicable regulatory authorities under Applicable Securities Laws for approval in connection with the Transaction.
"Losses" means all losses, damages, liabilities, deficiencies, costs and expenses (including, without limitation, all reasonable legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) arising out of or relating to any Claim but specifically excluding all loss of profits, punitive damages and consequential damages of all types and any amounts which would result in the duplication of indemnification for any Claim.
"Material Adverse Effect" or "Material Adverse Change" means any change, effect, event, occurrence, condition or development that when considered either individually or in the aggregate is material and adverse to the business, operations, results of operations, capitalization assets, liabilities or financial condition of the Purchaser or the Target taken as a whole or their assets; except to the extent that the material adverse effect results from or is caused by (i) worldwide, national or local conditions or circumstances whether they are economic, political, regulatory or otherwise, including war, armed hostilities, acts of terrorism, emergencies, crises and natural disasters, (ii) changes in legal or regulatory conditions generally affecting the Business, except that any such change, effect, event or occurrence will be considered in determining whether there has been, or will be, a
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