Stock Purchase Agreement

Section 3.24     Absence of Certain Changes. Since the date of the Financial Statements, the Company has not:

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Section 3.25     Disclosure. No representation or warranty of the Seller or the Company contained in this Agreement (including the exhibits hereto) contains any untrue statement or omits to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading.

Section 3.26     Brokerage Commission. No broker or finder has acted on behalf of Seller or the Company in connection with this Agreement or the transactions contemplated hereby, and no person is entitled to any brokerage or finder’s fee or compensation in respect thereof based in any way on agreements, arrangements or understandings made by or on behalf of Seller or the Company.

Brussels hereby represents and warrants to the Seller and the Company as follows:

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Section 4.1   Authorization. Brussels is a corporation duly organized in the state of Nevada and has full power, capacity, and authority to enter into this Agreement and perform the obligations contemplated hereby. All action on the part of Brussels necessary for the authorization, execution, delivery and performance of this Agreement by it has been taken and will be taken prior to Closing. This Agreement, when duly executed and delivered in accordance with its terms, will constitute legal, valid, and binding obligations of Brussels enforceable against Brussels in accordanc e with its terms, except as may be limited by bankruptcy, insolvency, and other similar laws affecting creditors' rights generally or by general equitable principles.

 

Section 4.2   Valid Issuance. The shares of Brussels Common Stock to be issued to the Seller pursuant to the terms of Section 1.2 above, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and non-assessable, and entitled to all of the benefits and rights stated in Brussels’ Articles of Incorporation and other charter documents.

 

Section 4.3   Restricted Stock. The shares of Brussels Common Stock to be issued to the Seller pursuant to the terms of Section 1.2 above are restricted securities and may only be sold, under current law, either by (a) the registration of the Shares under the Act and applicable state securities acts; (b) compliance with Rule 144 of the Act; or (c) the availability of an exemption from the registration requirements of the Act and applicable state securities acts. Brussels will use its best efforts to maintain current information by complying with its reporting requirements under The Securities Exchange Act of 1934, as amended.

Section 4.4   No Breaches or Defaults. The execution, delivery, and performance of this Agreement by Brussels does not: (i) conflict with, violate, or constitute a breach of or a default under or (ii) require any authorization, consent, approval, exemption, or other action by or filing with any third party or Governmental Authority under any provision of: (a) any applicable Legal Requirement, or (b) any credit or loan agreement, promissory note, or any other agreement or instrument to which Brussels is a party.

Section 4.5   Consents. No permit, consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority or any other person or entity is required on the part of Brussels in connection with the execution and delivery by Brussels of this Agreement or the consummation and performance of the transactions contemplated hereby other than as required under the federal securities laws.

Section 4.6   Disclosure. No representation or warranty of Brussels contained in this Agreement (including the exhibits hereto) contains any untrue statement or omits to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading.

Section 4.7   No Additional Representations. Seller and the Company acknowledge that the Purchaser has made no representations or warranties to Seller or the Company as to the financial condition or otherwise of the Purchaser other than as contained in the Form 10-KSB of the Purchaser for the fiscal year ended April 30, 2003 and the Form 10-QSB for the quarters ended July 31, 2003, October 31, 2003 and January 31, 2004.

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Section 4.8   Brokerage Commission. No broker or finder has acted on behalf of Brussels in connection with this Agreement or the transactions contemplated hereby, and no person is entitled to any brokerage or finder’s fee or compensation in respect thereof based in any way on agreements, arrangements or understandings made by or on behalf of Brussels.

ESCROW OF BRUSSELS COMMON STOCK AND CASH

Seller understands and acknowledges that the purchase of the Shares by Brussels is based, to a material degree, upon the representations and warranties made by Seller and the Company as set forth and contained herein regarding, among other things, the Minimum Revenue Guarantee, the collectibility of accounts receivable and the amount of certain liabilities. Therefore, as additional comfort and assurance to Brussels, Seller agrees to have shares representing the value of $650,000 of the Brussels Common Stock issued to the Seller by Brussels and $150,000 of the cash consideration provided for in Section 1.2.1 ("Escrow Cash") held by the Escrow Agent. The Escrow Agreement shall provide, among other things, that:

 

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Both Brussels and Debbas will use their best efforts to negotiate reductions in the amount due in connection with these liabilities. Such reductions, if any, shall reduce Brussel’s offset against Escrow Shares. In the event further increases in these liabilities are identified, such increases, if any, shall increase Brussel’s offset against Escrow Shares.

Additionally, in the event Brussels becomes obligated for any of Seller’s or the Company’s liabilities in addition to those discussed herein, then the Escrow Shares shall be used as an offset by Brussels for such liabilities. A determination will be made as to the amount owed by Seller or the Company for such liabilities and the number of shares of Brussels Common Stock to be forfeited and cancelled in satisfaction of any such liability shall be calculated using the average market closing price for shares of Brussels Common Stock for the five (5) consecutive business days preceding the date(s) at which such liability is paid by Purchaser. By way of illustration, if the amount of liabilites of Seller or the Company was $1,000 and the stock price of Brussels was $1.00, then the number of shares to be forfeited and cancelled would be reduced by 1,000 shares.

Each obligation of Seller and the Company to be performed on the Closing Date shall be subject to the satisfaction of each of the conditions stated in this Article VI, except to the extent that such satisfaction is waived by Seller and the Company in writing.

Section 6.1   Representations and Warranties Correct. The representations and warranties made by Brussels contained in this Agreement shall be true and correct as of the Closing Date.

Section 6.2   Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by Brussels on or prior to the Closing Date shall have been performed or complied with in all respects.

Section 6.3   Delivery of Certificate. Brussels shall provide to Seller and the Company Certificates, dated the Closing Date and signed by the President or Chief Financial Officer of Brussels to the effect set forth in Section 6.1 and 6.2 for the purpose of verifying the accuracy of such representations and warranties and the performance and satisfaction of such covenants and conditions.

Section 6.4   Consents. All necessary consents and approvals of governmental bodies, lenders, lessors and other third parties shall have been obtained.

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Section 6.5   Payment of Purchase Price. Brussels shall have tendered the Purchase Price for the Shares as referenced in Section 1.2 to the Seller concurrently with the Closing.

Section 6.6   Related Transactions. The Related Transactions as set forth in Section 2.3 shall be consummated concurrently with the Closing.

Section 6.7   Corporate Resolutions. Brussels shall provide corporate resolutions of the Board of Directors of Brussels which approve the transactions contemplated herein and authorize the execution, delivery and performance of this Agreement and the documents referred to herein to which it is or is to be a party dated as of the Closing Date.

Section 6.8   Absence of Proceedings. No action, suit or proceeding by or before any court or any governmental or regulatory authority shall have been commenced and no investigation by any governmental or regulatory authority shall have been commenced seeking to restrain, prevent or challenge the transactions contemplated hereby or seeking judgments against Brussels.

Each obligation of Brussels to be performed on the Closing Date shall be subject to the satisfaction of each of the conditions stated in this Article VII, except to the extent that such satisfaction is waived by Brussels in writing.

Section 7.1   Representations and Warranties Correct. The representations and warranties made by the Seller and the Company hereof shall be true and correct as of the Closing Date.

Section 7.2   Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Seller and the Company on or prior to the Closing Date shall have been performed or complied with in all respects.

Section 7.3   Delivery of Certificate. Seller and the Company shall provide to Brussels certificates, dated the Closing Date and signed by the Seller and by the President of the Company, respectively, to the effect set forth in Section 7.1 and 7.2 for the purpose of verifying the accuracy of such representations and warranties and the performance and satisfaction of such covenants and conditions.

Section 7.4   Delivery of Shares. Seller shall have delivered certificates evidencing the Shares of the Company, duly endorsed to Brussels or accompanied by duly executed stock powers in form and substance satisfactory to Brussels.

Section 7.5   Corporate Resolutions. The Company shall provide to Brussels a corporate resolution of the Board of Directors of the Company, which approves the transactions contemplated herein and authorizes the execution, delivery and performance of this Agreement and the documents referred to herein to which it is or is to be a party dated as of the Closing Date.

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Section 7.6   Consents; Transfer of Licenses. All necessary consents and approvals of governmental bodies, lenders, lessors and other third parties, and any transfer of licenses and leases required for the continued operation of the business of the Company.

Section 7.7   Related Transactions. The Related Transactions as set forth in Section 2.3 shall be consummated concurrently with the Closing, except for the transfer of the Building which shall occur as soon as possible after the Closing, and provided further that in the event that the Sellers fails to use their best efforts to consummate the transfer, then Brussels may sue Sellers for specific performance for the transfer of the Building.

Section 7.8     Resignation. The Officers and Directors of the Company shall have provided to Brussels their written resignations.

Section 7.9                  Ability to Audit. The Purchaser shall be satisfied that the Seller’s financial statements can be audited in compliance with Regulation S-B promulgated under the Securities Act of 1933, as amended.

Section 7.10       Absence of Proceedings. No action, suit or proceeding by or before any court or any governmental or regulatory authority shall have been commenced and no investigation by any governmental or regulatory authority shall have been commenced seeking to restrain, prevent or challenge the transactions contemplated hereby or seeking judgments against the Company or any of its assets.

Section 8.1   Indemnification from Seller and the Company. Seller and the Company, jointly and severally, hereby agree to and shall indemnify, defend (with legal counsel reasonably acceptable to Brussels), and hold Brussels, its officers, directors, employees, affiliates, assigns, agents and legal counsel (collectively, the "Brussels Group") harmless at all times after the date of this Agreement, from and against any and all actions, suits, claims, demands, debts, liabilities, obligations, losses, damages, costs, expenses, penalties or injury (including reasonable attorneys = fees and costs of any suit related thereto) suffered or incurred by any of the Brussels Group arising from: (a) any misrepresentation by, or breach of any covenant or warranty of the Seller or the Company contained in this Agreement, or any exhibit, certificate, or other instrument furnished or to be furnished by Seller or the Company hereunder; (b) any nonfulfillment of any agreement on the part of Seller or the Company under this Agreement; (c) from any material misrepresentation in or material omission from, any certificate or other instrument furnished or to be furnished to Brussels hereunder; or (d) any suit, action, proceeding, claim or investigation against Brussels which arises from or which is based upon or pertaining to Seller’s or the Company’s conduct or the operation or liabilities of the business of the Company prior to the Closing Date.

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Section 8.2   Indemnification from Brussels. Brussels agrees to and shall indemnify, defend (with legal counsel reasonably acceptable to the Seller) and hold Seller, the Company, its officers, directors, employees, agents, affiliates, legal counsel, successors and assigns (collectively, the "Seller’s Group") harmless at all times after the date of the Agreement from and against any and all actions, suits, claims, demands, debts, liabilities, obligations, losses, damages, costs, expenses, penalties or injury (including reasonably attorney’s fees and costs of any su it related thereto) suffered or incurred by any of the Seller’s Group, arising from (a) any misrepresentation by, or breach of any covenant or warranty of Brussels contained in this Agreement or any exhibit, certificate, or other agreement or instrument furnished or to be furnished by Brussels hereunder; (b) any nonfulfillment of any agreement on the part of Brussels under this Agreement; or (c) from any material misrepresentation in or material omission from, any exhibit, certificate or other agreement or instrument furnished or to be furnished to the Seller hereunder; or (d) any suit, action, proceeding, claim or investigation against Sellers which arises from or which is based upon or pertaining to Brussels conduct or the operation of the business of the Company subsequent to the Closing Date.

 

Section 8.3   Defense of Claims. If any lawsuit or enforcement action is filed against any party entitled to the benefit of indemnity hereunder, written notice thereof shall be given to the indemnifying party as promptly as practicable (and in any event not less than fifteen (15) days prior to any hearing date or other date by which action must be taken); provided that the failure of any indemnified party to give timely notice shall not affect rights to indemnification hereunder except to the extent that the indemnifying party demonstrates actual damage caused by such failu re. After such notice, the indemnifying party shall be entitled, if it so elects, to take control of the defense and investigation of such lawsuit or action and to employ and engage attorneys of its own choice to handle and defend the same, at the indemnifying party's cost, risk and expense; and such indemnified party shall cooperate in all reasonable respects, at its cost, risk and expense, with the indemnifying party and such attorneys in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom; provided, however, that the indemnified party may, at its own cost, participate in such investigation, trial and defense of such lawsuit or action and any appeal arising therefrom. The indemnifying party shall not, without the prior written consent of the indemnified party, effect any settlement of any proceeding in respect of which any indemnified party is a party and indemnity has been sought hereunder unless such settlement of a claim, investigation, suit, or other proceedi ng only involves a remedy for the payment of money by the indemnifying party and includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.

Section 8.4   Default of Indemnification Obligation. If an entity or individual having an indemnification, defense and hold harmless obligation, as above provided, shall fail to assume such obligation, then the party or entities or both, as the case may be, to whom such indemnification, defense and hold harmless obligation is due shall have the right, but not the obligation, to assume and maintain such defense (including reasonable counsel fees and costs of any suit related thereto) and to m ake any settlement or pay any judgment or verdict as the individual or entities deem necessary or appropriate in such individuals or entities absolute sole discretion and to charge the cost of any such settlement, payment, expense and costs, including reasonable attorneys= fees, to the entity or individual that had the obligation to provide such indemnification, defense and hold harmless obligation and same shall constitute an additional obligation of the entity or of the individual or both, as the case may be.

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Section 8.5   Right to Offset. In the event that the Brussels Group is entitled to indemnification in accordance with Section 8.1 hereof, then Brussels shall have the right to offset any such amount from any obligations that are then due and payable to the Seller or the Company, or, if the Escrow Agreement is still in place, Brussels shall have the right to reduce the number of shares of Brussels Common Stock then held in escrow in accordance with the terms and conditions of the Escrow Agreement.

Section 8.6   Termination. Indemnification obligations of the Company, Seller, and Brussels shall terminate two (2) years after the date of the signing of this Agreement.

This Agreement shall terminate upon the occurrence of any of the following events:

Section 10.1   Amendment; Waiver. Neither this Agreement nor any provision hereof may be amended, modified or supplemented unless in writing, executed by all the parties hereto. Except as otherwise expressly provided herein, no waiver with respect to this Agreement shall be enforceable unless in writing and signed by the party against whom enforcement is sought. Except as otherwise expressly provided herein, no failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by any party, and no course of dealing between or among any of the parties, shall constitute a waiver of, or shall preclude any other or further exercise of, any right, power or remedy.

Section 10.2   Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if in writing and delivered in Person, transmitted by facsimile transmission (fax) or sent by registered or certified mail (return receipt requested) or recognized overnight delivery service, postage pre-paid, addressed as follows, or to such other address has such party may notify to the other parties in writing:

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A notice or communication will be effective (i) if delivered in Person or by overnight courier, on the business day it is delivered, (ii) if transmitted by telecopier, on the business day of actual confirmed receipt by the addressee thereof, and (iii) if sent by registered or certified mail, three (3) business days after dispatch.

Section 10.3   Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

Section 10.4   Assignment; Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors and permitted assigns of the parties hereto. No party hereto may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other parties hereto, which consent will not be unreaso nably withheld.

Section 10.5   Survival of Representations, Warranties and Covenants. All representations and warranties made in, pursuant to or in connection with this Agreement shall survive the execution and delivery of this Agreement for the maximum period allowed by law.

Section 10.6   Public Announcements. The parties hereto agree that prior to making any public announcement or statement with respect to the transactions contemplated by this Agreement, the party desiring to make such public announcement or statement shall consult with the other parties hereto and exercise their best efforts to (i) agree upon the test of a joint public announcement or statement to be made by all of such parties or (ii) obtain approval of the other parties hereto to the text of a public announcement or statement to be made solely by the party desiring to make such public announcement; provided, however, that if any party hereto is required by law to make such public announcement or statement, then such announcement or statement may be made without the approval of the other parties.

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Section 10.7   Entire Agreement. This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof and supersede and cancel all prior representations, alleged warranties, statements, negotiations, undertakings, letters, acceptances, understandings, contracts and communications, whether verbal or written among the parties hereto and thereto or their respective agents with respect to or in connection with the subject matter hereof.

Section 10.8   Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, without regard to principles of conflict of laws. In any action between or among any of the parties, whether arising out of this Agreement or otherwise, each of the parties irrevocably consents to the exclusive jurisdiction and venue of the federal and state courts located in Harris County, Texas.

Section 10.9   Counterparts and Facsimiles. This Agreement may be executed in multiple counterparts and in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute and be deemed to be one and the same instrument and each of which shall be considered and deemed an original for all purposes. This Agreement shall be effective with the facsimile signature of any of the parties set forth below and the facsimile signature shall be deemed as an original signature for all purposes and the Agreement shall be deemed as an original for all purposes.

Section 10.10       Costs and Expenses. Each party shall pay their own respective fees, costs and disbursements incurred in connection with this Agreement.

Section 10.11             Section Headings. The section and subsection headings in this Agreement are used solely for convenience of reference, do not constitute a part of this Agreement, and shall not affect its  interpretation.

Section 10.12       No Third-Party Beneficiaries. Nothing in this Agreement will confer any third party beneficiary or other rights upon any person (specifically including any employees of The Company) or any entity that is not a party to this Agreement.

Section 10.13       Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect.

Section 10.14       Further Assurances. Each party covenants that at any time, and from time to time, after the Closing Date, it will execute such additional instruments and take such actions as may be reasonably be requested by the other parties to confirm or perfect or otherwise to carry out the intent and purposes of this Agreement.

Section 10.15       Exhibits Not Attached. Any exhibits not attached hereto on the date of execution of this Agreement shall be deemed to be and shall become a part of this Agreement as if executed on the date hereof upon each of the parties initialing and dating each such exhibit, upon their respective acceptance of its terms, conditions and/or form.

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IN WITNESS WHEREOF, the undersigned have executed this Stock Purchase Agreement to become effective as of the date first set forth above.

 

	HOUSE OF BRUSSELS CHOCOLATES INC.
	By:	/s/
		Robert Wesolek, Chief Financial Officer and Secretary Date: __________________________

	DEBAS CHOCOLATES, INC.
	By:	/s/
		By: Guy Debbas, President Date: __________________________

	GUY DEBBAS
	By:	/s/
		Guy Debbas, Individually Sole Shareholder of DeBas Chocolates, Inc. d/b/a DeBas Chocolatier

	WENDY DEBBAS
	By:	/s/
		Wendy Debbas, Individually

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Exhibit "A"	Escrow Agreement
Exhibit 2.3(i)	Employment Agreement
Exhibit 2.3(iv)	Minimum Revenue Guarantee Agreement
Exhibit 2.3(vi)	Agreement of Donald and Betty Warnes (Evidence of cancellation and forgiveness of related party debt)
Exhibit 3.8	Accounts Receivable of DeBas Chocolates, Inc. as of July 19, 2004
Exhibit 3.11	Taxes due and filings in arrears
Exhibit 3.13	Employee or labor contracts or disputes
Exhibit 3.15	Title to Properties; Encumbrances
Exhibit 3.18	Commercial Lease Agreement (Contracts, leases, powers of attorney or other obligations relating to assets)
Exhibit 3.22	Insurance Plans
Exhibit 3.23	Employee Benefit Plans

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