Assets Purchase Agreement Sheng Yuan Nutritional Food Co., Ltd. Beijing Huilian Food Co., Ltd.
EXHIBIT
2.1
Xxxxx
Xxxx Nutritional Food Co., Ltd.
Beijing
Huilian Food Co., Ltd.
July
14, 2008
Tongzhou
District, Beijing
1
Assets
Purchaser: Xxxxx
Xxxx Nutritional Food Co., Ltd. (“Party A”)
Business
License No.: 370284400001270
Legal
Representative: Xxxx Xxxxxxx
Registered
Address: Jiaonan
Coastal Industry Park, Qingdao
Assets
Transferor: Beijing
Huilian Food Co., Ltd. (“Party
B”)
Business
License No.: QDJZZ No.012637
Legal
Representative: Lei Xinjin
Registered
Address: B Area, Tianzhukonggang Industry Park, Shunyi District, Beijing
Party
A and Party B hereby enter into this agreement (“Agreement”) concerning Party
A’s proposal on purchasing the assets held by Party B by way of assets transfer,
through friendly negotiation and on the principle of equality, voluntariness,
and bona fide.
2
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1.
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Offer
and Acceptance
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Party
A
is willing to offer RMB45,000,000 (Renminbi forty five million yuan) (“Total
Price”) to purchase Party B’s assets, specification and evaluation of which are
described below; Party B agrees to transfer the following assets (“Transferred
Assets”) to Party A according to the conditions provided herein.
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1.1
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Land
and Property (evaluation of about
RMB25,000,000)
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1.1.1
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Party
B’s plant area at Xx.00 Xxxxx Xxxxxx, Xxxxxx Xxxxxxxx, Xxxxxxx, a parcel
of 10796 m2
industrial land (see Attachment 1: Photocopy of JSGY(ISSUED IN 2000)ZI
No.0120 Use Certificate of State-owned
Land).
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1.1.2
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All
existing structures and buildings within Party B’s plant area (for the
title certificates thereof, see Attachment 2: Photocopy of JFQZSSWZI
No.00013 Title Certificate of
Property).
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1.2
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Other
tangible assets (evaluation of about
RMB10,000,000)
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1.2.1
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Existing
equipment in Party B’s plant (see Attachment 3: Statement of Equipment and
Facilities and Pictures thereof), including the entire (A) production
line, (B) water purification system and electrical equipment, (C)
laboratory apparatus, (D) waste water processing equipment, (E)
refrigerator and (F) reception, cafeteria and dormitory facilities.
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1.2.2
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Party
B’s three vehicles (see Attachment 4: Photocopies of Vehicle Statement
and
Permits.)
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1.2.3
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Office
equipment (see Attachment 5: Statement of Office
Equipment).
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1.3
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Other
intangible assets (evaluation of about
RMB10,000,000).
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3
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1.3.1
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All
registered trademarks of “Xxx Xx Duo” Series (see Attachment 6:
Photocopies of Statement of Registered Trademarks, Existing Registration
Certificates of Trademarks and Certificates of Approval of Registered
Trademarks Transfer).
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1.3.2
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Baby
food formulas held by Party B (See Attachment 7: Statement of Baby
Food
Formulas).
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1.3.3
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Documents
on production flow and procedures (see Attachment 8: Statement of
Production Quality Management and Procedure Documents).
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1.3.4
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Documents
of quality standard and quality management (see Attachment 9: Statement
of
Quality and Technique Standards).
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1.3.5
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Party
B’s existing construction approval documents and design drawings (see
Attachment 10: Statement of Building
Documents).
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2
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Transaction
Conditions and Transaction Payment
Schedule
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2.1 Party
A shall pay RMB4,500,000 (Renminbi four million five hundred thousand Yuan),
accounting for 10% of the Total Price (“First Installment of Transaction
Amount”), to the account designated by Party B within five (5) business days
upon execution hereof. Party A shall fax a payment notice to Party B upon
payment of the First Installment of Transaction Amount. Upon Party B’s receipt
of the First Installment of Transaction Amount, this Agreement shall become
effective and Party B shall issue a receipt notice thereof to Party A.
2.2 Within
forty five (45) business days after this Agreement becomes effective, the
parties shall complete the following work separately or jointly:
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2.2.1
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Party
A shall establish a company (“New Company”) to accept all Transferred
Assets purchased according to this Agreement. Party A shall issue
an
entrustment letter to the New Company concerning acceptance of the
Transferred Assets and bear joint liability for the New Company’s
accepting the Transferred Assets.
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4
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2.2.2
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Party
A shall have already gone through inner decision making procedures
(including having formed legal and effective resolution of board
of
directors) to purchase the Transferred Assets and entrust the New
Company
to accept all Transferred Assets purchased according to this Agreement.
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2.2.3
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Party
A shall have established the New Company, obtained the business license
and has already gone through inner decision making procedures (including
having formed legal and effective resolution of board of directors)
to
purchase the Transferred Assets.
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2.2.4
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Party
A shall have completed the investigation on and verification of the
Use
Certificate of State-owned Land referred to in Article 1.1.1, the
Title
Certificate of Property in Article 1.1.2, and the Registration
Certificates of Trademarks and the Certificates of Approval of Registered
Trademarks Transfer in Article 1.3.1.
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2.2.5
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Party
B shall have gone through inner decision making procedures (including
having formed legal and effective resolution of board of directors)
to
sell all Transferred Assets.
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2.2.6
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Party
B shall have delivered to Party A the Use Certificate of State-owned
Land
referred to in Article 1.1.1, the Title Certificate of Property in
Article
1.1.2, and the Registration Certificates of Trademarks and the
Certificates of Approval of Registered Trademarks Transfer in Article
1.3.1. Party A shall issue a receipt to Party B upon receiving such
documents.
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2.2.7
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According
to the requirements on change of title of property and title to land,
transfer of exclusive use right to trademark stipulated by competent
administrative authorities in Beijing, Party B shall provide necessary
documents for the transfer
procedures.
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5
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2.2.8
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Party
B shall enter into a Sale Contract on Second-hand Property in Beijing
Municipal with the New Company entrusted by Party A according to
the
requirement of Party A.
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2.2.9
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According
to the requirements on change of title of property and title to land,
transfer of exclusive use right to trademark stipulated by competent
administrative authorities in Beijing, Party A and Party B shall
verify
the application documents for the transfer
procedures.
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2.2.10
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Party
B shall pay the stamp duty and value-added tax on transfer of property;
Party A shall pay the deed tax and trademark transfer fees. Upon
clearance
of taxes, both parties shall us their best efforts to start the transfer
procedures, submit to the relevant government authorities transfer
applications with respect to the land, buildings and trademarks and
obtain
receipts from such government authorities with respect to such
applications, which receipts shall be retained by Party
A.
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On
the day when both parties complete the work as mentioned in Article 2.2.10,
Party A shall pay RMB31,500,000 (Renminbi thirty five million five hundred
thousand Yuan), amounting to 70% of the Total Price to the account designated
by
Party B (“Second Installment of Transaction Amount”). Party A shall fax a
payment notice to Party B upon payment thereof, and Party B shall issue a
receipt notice to Party A upon receipt of the payment.
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2.3
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On
the 8th
business day after Party A pays the Second Installment of Transaction
Amount according to Article 2.2 (or the next business day if it falls
into
a holiday), Party A (including the lawyer, financial consultant,
appraiser, equipment consultant and other experts retained by Party
A)
shall enter the plant to verify the Other Tangible Assets specified
in
Article 1.2 and the Other Intangible
Assets specified in Article 1.3, count the assets according to the
above
mentioned Statements attached hereto and immediately attach and accept
the
Assets. The Transferred Assets shall be delivered to Party A on an
“as is”
basis. Party B warrants that the Assets are materially consistent
with the
pictures thereof provided upon execution of this Agreement. Party
B shall
cooperate with Party A in delivering the Assets and completing necessary
registrations for the vehicles and equipment. The authorized agents
of
both parties shall enter into a delivery memorandum which shall mainly
include the assets delivered, delivery process and settlement of
any
outstanding issues. Both parties agree to complete the delivery in
the
plant within five (5) business
days.
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6
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2.4
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Within
five (5) business days of the completion of the work as mentioned
in
Article 2.3 and the satisfaction of the requirements stipulated in
Article
2.4.1-2.4.5, Party A shall pay the balance of the Total Price
(RMB9,000,000) to Party B (“Last Installment of Transaction Amount”).
Party A shall fax a payment notice to Party B upon payment thereof,
and
Party B shall issue a receipt notice to Party A on the day receiving
such
amount.
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2.4.1
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The
New Company shall obtain the Title Certificate of Property and Certificate
of Use Right to State-owned Land under its name.
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2.4.2
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The
New Company shall obtain Notice of Accepting and Handling Transfer
Application as to the transfer of the Registered Certificates of
Trademarks and Certificates of Approval of Registered Trademarks
Transfer
issued by competent trademark registration authorities of the
State.
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2.4.3
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The
New Company shall obtain all rights to the vehicles and equipment
of which
the transfer has been registered.
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2.4.4
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Party
B shall provide Party A with list of its employees, salaries and
benefits
thereof, and profiles of key employees.
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2.4.5
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The
facilities and equipment transferred function normally and are capable
of
producing qualified products.
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7
3.
Warranties and Undertakings
3.1
Both parties warrant the authenticity of all documents provided to each other.
The party providing documents with error or falsity shall be liable for all
economic losses caused thereby to the other party.
3.2
Party A undertakes that this Agreement is executed upon due inner decision
making procedure, and has obtained, is about to obtain or there is no obstacle
in obtaining approvals of competent authorities.
3.3
Party
A undertakes that it is inner arrangement to establish the New Company to accept
all Transferred Assets under this Agreement and Party A shall assume full
liability for making an offer and purchasing the Transferred
Assets.
3.4
Party B undertakes that transferring the Assets has been decided by due inner
decision making procedure, and has obtained, is to obtain or there is no
obstacle in obtaining approvals of competent authorities.
3.5
Party
B undertakes that there are no encumbrances such as pledge and mortgage, no
administrative or judiciary limitations such as attachment, injunction or
prohibition on transfer and no third party rights such as lease, permit or
permit of use, free use, transfer, donation and right of first refusal on the
Transferred Assets.
3.6
Party B warrants that all equipment and facilities function normally and those
for production are capable of producing qualified products.
4.
Other Rights and Obligations
4.1
Party
B shall not be liable for management of the Transferred Assets after such Assets
are registered, transferred and delivered.
4.2
Personal belongs of the staff, archives, data, human resources, administration,
office facilities of the financial department of Party B are not within the
scope of transfer and shall be removed from the plant when the Transferred
Assets are officially delivered to Party A.
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4.3
Party
B agrees to provide Party A with invoices (separately issued when the transfer
of title of property, land use right, exclusive use right of trademark,
vehicles, equipment and machineries are registered; invoices with respect to
the
the Last Installment of Transaction Amount shall be provided upon the payment
thereof).
4.4
Within forty five (45) days upon delivery in accordance with Article 2.4, Party
B shall amend its business license by changing its registered address therein
from the address of the plant to a different address.
4.5
Upon
completion of performance hereof, Party B shall never produce or sell similar
baby food, or use “Xxx Xx Duo” as the trademark of other products within China
(including Hong Kong and Macau).
5.
Tax
The
parties hereto shall separately bear taxes incurred from assets transfer
hereunder according to relevant laws and regulations; where there is no statute
provision by laws and regulations or no stipulations herein, each party shall
bear 50%.
6.
Liability for Breach of Contract
6.1
If
any Transferred Asset is inconsistent with the status under Party B’s
description or the status of such Asset contradicts Party B’s representation and
warranties hereunder, Party A may rescind this Agreement. In such case, Party
B
shall refund Total Price paid by Party A and the interests thereof based on
applicable bank loan interest rate to the account designated by Party A; in
addition, Party B shall indemnify Party A for all economic losses thereof
(including due diligence expenses and attorney’s fees, etc.); Party A may also
choose not to rescind this Agreement based on the resolution it has reached
with
Party B through consultation, and in such case, the relevant provisions
hereunder shall be amended.
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6.2
In
case that the Transferred Assets are frozen or the application to transfer
the
Transferred Assets are denied or challenged by government authorities due to
the
occurrence of potential lawsuits or disputes arising out of Party B’s act or
omission, Party B shall be liable for the settlement and all the expenses
thereof. if any of the conditions enumerated in the preceding sentence is not
resolved within thirty (30) days after its occurrence, Party A is entitled
to
rescind this agreement and in such case, Party B shall refund Total Price paid
by Party A and the interests thereof based on current bank loan interest rate
to
the account designated by Party A; in addition, Party B shall indemnify Party
A
for all the economic losses thereof (including due diligence expenses, etc.)
Party A may also choose not to rescind this Agreement based on the resolution
it
has reached with Party B through consultation, and in such case, the relevant
provisions hereunder shall be amended.
6.3
If
Party A rescinds this Agreement in accordance with the provisions in Articles
6.1 or 6.2, it will constitute the rescission of the Sale
Contract on Second-hand Property in Beijing Municipal
and the
Supplementary Agreement thereto, the Registered Trademark Transfer Contract
and
the Supplementary Agreement thereto and other contracts as well as documents
with binding effects which have been executed and come into force for the
purpose of this Agreement. Part A shall immediately return to Party B the
Transferred Assets.
6.4
In
the event that Party A fails to reach the internal resolution on the
registration of the New Company as stipulated in Article 2.2.1 and 2.2.3 within
forty five (45) business days as of the effective date of this Agreement as
proved in Article 2.2, Party B has the right to rescind this Agreement; in
such
case, Party B will not refund the amount paid by Party A; Party A shall also
indemnify Party B for all economic losses thereof. Party
B
may
also
choose not to rescind this Agreement based on the resolution it has reached
with
Party B through consultation, and in such case, the relevant provisions
hereunder shall be amended.
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6.5
In
case any part of this Agreement may not be performed due to Party A’s act or
omission, including Party A’s failure to pay the Second Installment of
Transaction Amount specified in Article 2.2 and the Final Installment of
Transaction Amount specified in Article2.4 into the account designated by Party
B within the term hereof, Party B is entitled to rescind this Agreement and
retain the amount paid by Party A; Party A shall indemnify Party B for all
economic losses arising out of the transaction hereunder. The Sale
Contract on Second-hand Property in Beijing Municipal
and the
Supplementary Agreement thereto, the Registered Trademark Transfer Contract
and
the Supplementary Agreement thereto and other contracts as well as all other
documents with binding effects which have been executed and come into force
in
connection this Agreement shall be rescinded. Party A shall immediately return
the Transferred Assets to Party B.
6.6
Where
Party A fails to follow the provisions set forth in Article 2.1, 2.2 and 2.4
to
the extent that the Transaction Amount is overdue and Party B has not rescinded
this Agreement, Party A shall pay Party B liquidated damages equal to 3‰ of the
transaction installment for each day the Transaction Amount is
overdue.
6.7
Where
Party B fails to change its registered address with the industrial and
commercial authority from the plant as set forth in Article 4.4, Party B shall
pay Party A RMB10,000 Yuan for each day after the Party B is obligated to change
the address until the change is made.
6.8
If
either Party hereto breaches any other obligations hereunder and causes economic
losses to the other party, the breaching party shall be liable to the other
party for such losses.
7.
Confidentiality
Both
parties hereto warrant that they are obligated to keep confidential any business
information and materials (whether in writing or other forms) of the other
party
obtained in connection with the execution and performance of this Agreement
and
they shall not disclose such information and materials in writing, orally or
by
any other means, to any third party; provided that such information and
materials may be provided to the professional consultant of either party and
the
disclosure of such information and materials as required by law or by competent
authorities shall not be subject to this confidentiality provision.
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8.
Miscellaneous
8.1
All
attachments hereto shall be integral parts of this Agreement.
8.2
Both
parties may negotiate to execute other supplementary agreement hereto through
consultation to settle any issues uncovered herein, and such supplementary
agreement shall have the same legal effect as this Agreement.
8.3
This
agreement is executed six counterparts, with each party holding 3 of them all
of
which have the equal legal effect.
8.4
Any
dispute arising out of the performance of this Agreement shall be submitted
to
the Beijing Arbitration Commission for arbitration.
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Party
A: Xxxxx
Xxxx Nutritional Food Co., Ltd.
Authorized
Representative:
/s/
Xxxxx Xxxxx
Party
B: Beijing Huilian Food Co., Ltd.
Authorized
Representative: /s/ Kongbiao Li
July
14, 2008
Tongzhou
District, Beijing
13
