Manufacturing Plant Purchase Agreement
THIS Manufacturing Plant Purchase Agreement (The Agreement), is made and entered
into as of the 6th day of July 1998, by and between Pentagenic Pharmaceuticals,
Inc., a corporation organized and existing under the laws of the State of Nevada
(Buyer), and Fuzhou 851 Marketing Company, Inc., a corporation organized and
existing under the laws of People's Republic of China (Seller).
PREAMBLE
Buyer desires to purchase from Seller, and Seller desires to sell and transfer
to Buyer a Manufacturing Plant located at Ruoxing Road, Mawei, Fujian China (the
Plant), and certain assets of Seller used in connection with the operation of
the Plant, upon the terms and subject to the conditions set forth herein.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
Sale and Purchase
Section 1.1 Sale and Transfer of Assets. Seller hereby agrees to sell,
convey, transfer, assign and deliver to Buyer at closing, as hereinafter
defined, and Buyer hereby agrees to purchase as herein provided, all the assets,
property, rights, and interests in connection with the operation of the Plant,
tangible of intangible and regardless of whether of hot carried or reflected in
the books and records of Seller, used in the operation if the Plant. The assets
and property to be purchases and sold hereunder (collectively, the Purchased
Assets) include the following:
(a)All machinery, equipment (including office equipment), tools, furniture,
leasehold improvements and all other personal property in the Plant, and used in
connection with the Plant, including, but not limited to, those items listed or
referenced in Exhibit A attached hereto and incorporated herein (collectively,
the Fixed Assets), together with any expressed or implied warranties by the
manufactures or sellers of any item or component part thereof and all
maintenance records, brochures, catalogues and other documents relating thereto
or to the installation or functioning thereof which are now in or may hereafter
come onto the possession of Seller;
(b)All the existing inventory in the factory and US$133,287 worth of inventory
located in 00000 Xxxxxx Xxxx. Xxxxx X, Xxxxxxxxx, XX 00000, XXX, and;
(c)All computer software used in the operation of the Plant.
Section 1.3 Purchase Price. The purchase price payable to the Seller by the
Buyer in consideration for the Purchased Assets shall be 1.1 million shares of
the Buyer's common stocks.
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Section 1.4 Assumption of Certain Liabilities. As further consideration
for the Purchased Assets, at the Closing, Buyer shall assume and agree to pay,
perform and discharge, when due, the executory liabilities and commitments
included in or pertaining to the Purchases Assets, but only to the extent that
the same were incurred by Seller in the ordinary course of business (the Assumed
liabilities), and Excluding:
(a) Consequential damages arising out or any breach by Seller, at any
time, of any such contract, agreement, lease, license or commitment; and
(b) Noncontractual liabilities, claims or obligations arising out of or
related to Sellers operation of the Plant prior to the Closing Date;
(c) Any liability of Seller for Federal, State of local income and
franchise taxes applicable to operations prior to the Closing Date, and for
sales tax , and any penalties, interest, fines or assessments in connection
therewith;
(d) Any liability for commitments relating to the employment, relocation
or termination of any employees of Seller;
(e) Any matter required to be disclosed in response to Sellers
representations and warranties set forth in Article 2, but not so disclosed;
(f) Liabilities or obligations in respect of previous sales of the assets
of Seller outside of the ordinary course of business;
(g) Obligations or expenses of Seller in connection with the transactions
contemplated hereby, including, without limitations, legal and accounting fees
and expenses and brokerage finders fees due; and
(h) Liabilities imposed upon Seller as a result of litigation pending
against Seller as of Closing Date.
ARTICLE 2
Representations and Warranties of Seller and Buyer
Section 2.1 Representations and Warranties of Seller. Seller hereby
represents and warrants to Buyer as follows:
(a) Due Incorporation and Organization. Seller is a corporation duly
organized, validly existing and in good standing under the laws of People's
Republic of China, with all requisite corporate power and authority to own,
operate, lease and utilize the assets, properties of the Plant.
(b) Authority. Seller has the legal power and authority to enter into and
perform this
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Agreement and the transactions contemplated by this Agreement. The execution,
delivery and performance of this Agreement by Seller and the transactions
contemplated by this Agreement have been duly and validly approved and
authorized by all necessary corporate and shareholder action of Seller.
(c) Title to Plant. Seller has good and marketable title to all of the
Fixed Assets and other property conveyed and all such property is held by
Seller free of all liens, encumbrances, security interests and charges.
(d) Compliance with Applicable Laws. The Seller has complied with all
laws, regulations and orders applicable to the Plant. The Plant is not in
default with respect to any order, writ, injunction or decree of any court or
any court or Federal, State, Municipal or other Governmental authority or
agency. The Plant as now operated does not violate any zoning ordinance,
restrictive covenant, administrative regulation, environmental law or
regulation, or any other provision of law.
(e) Actions Pending. There are no actions, suits or proceedings pending
or, to the knowledge of Seller, threatened against or affecting the Plant at
law or in equity, or before any governmental or public office, agency or
authority which involves the possibility of any liability or which may result
in any adverse change in the operation or ownership of the Plant or the
Purchased Assets.
(f) Condition of Fixed Assets. All Fixed Assets conveyed hereunder are
in good and operable condition, normal wear and tear excepted.
(g) Absence of Conflicts and Consent Requirements. Sellers execution
and delivery of this Agreement and performance of its obligations hereunder,
including the sale of the Plant and the Purchased Assets hereunder, do not
(i) conflict with or violate Sellers Articles of Incorporation or Bylaws,
(ii) violate or, alone or with notice or the passage of time, result in the
material breach or termination of, or otherwise give any contracting party
the tight to terminate or declare a default under, the terms of any written
agreement to which Seller is a party or by which its properties or assets may
be bound; or (iii) violate any judgment, order, decree, or to the knowledge
of Seller, any law, statute, regulation or other judicial or governmental
restriction to which Seller is subject.
(h) Licenses, Permits and Compliance with Law. Seller holds all
licenses, certificates, permits, franchises and rights from all appropriate
Federal, State or other public authorities necessary for the use of the
Purchased Assets in the operation of the Plant, and all such material
licenses, certificates, permits, franchises and rights are set forth in
Exhibit D attached hereto and incorporated herein. Seller is presently
conducting the Plant so as to comply with all applicable statutes,
ordinances, rules, regulations and orders of any governmental authority.
Further, to its knowledge, Seller is not presently charged with and Seller is
not under governmental investigation with respect to any actual or alleged
violation of any statute, ordinance, rule or regulation affection the
Purchases Assets or the Plant.
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Section 2.2 Representations and Warranties of Buyer. Buyer hereby
represents and warrants to Seller as follows:
(a) Due Organization. Buyer is a corporation duly organized, existing
and in good standing under the laws of the Stare of Nevada.
(b) Authority. Buyer has the legal power and authority to enter into and
perform this Agreement and the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by Buyer and the
transactions contemplated by this Agreement have been duly and validly approved
and authorized by all necessary corporate action of Buyer. Neither the execution
and delivery by the Buyer of this Agreement, nor the consummation of the
transactions contemplated hereby, not compliance by Buyer with any of the
provisions hereof will:
ARTICLE 3
Closing
Section 3.1 Closing Date. The closing for the consummation of the
transactions contemplated by this Agreement (the Closing) shall be on July 6,
1998 (Closing Date).
Section 3.2 Obligations of Seller. At the closing, Seller shall deliver
to Buyer, as appropriate:
Such warranty deeds, leases, bills of sale, endorsements, assignments, and
other good and sufficient instruments of conveyance and transfer, and such
further assurances and evidences of conveyances as may be reasonably
requested by Buyer in form satisfactory to Buyer and its counsel, as shall be
effective to vest, in accordance with the terms of this Agreement, all
rights, title and interest in and to the Purchased Assets and other rights
contemplated by this Agreement;
Section 3.3 Obligations of Buyer. At the closing, buyer shall execute
and/or deliver to Seller payment of the purchase price.
ARTICLE 4
Covenants of Seller
Seller agrees and covenants with Buyer as follows:
Section 4.1 Conduct of the Plant. Except as otherwise agreed to in
writing by Buyer, Seller shall conduct the Plant only in the ordinary course
and shall take no action which should interfere with or prevent performance
of this Agreement. Seller agrees that, unless Buyer agrees in writing, until
the Closing Date:
(a) Preservation of the Plant. Without purporting to make any commitment
on behalf of Buyer, Seller shall exercise all reasonable efforts to: (i)
preserve intact the present business organization and personnel of Seller; (ii)
preserve the present relationship of
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Seller with all persons having business dealings with Seller; (iii) preserve
and maintain in force all licenses, permits, registrations, franchises, and
other similar rights applicable to the Plant; and
(b) Maintenance of the Purchased Assets. The Purchased Assets shall be
maintained in good repair, order and condition, reasonable wear and tear
excepted.
(c) Employment Agreement. Seller shall not enter into any employment or
consulting agreements or terminate any employee of the Plant without prior
notice to the Buyer.
(d) Insurance. The Seller shall maintain in full force insurance
covering loss or damage to the property conveyed hereunder and general
liability coverage for operation of the Plant, and shall take all actions
necessary to preserve all rights under such insurance.
(e) Books and Records. Seller shall maintain complete and accurate
books, accounts and records for the Plant in the usual, regular and ordinary
manner, and on a basis consistent with prior years.
(f) Compensation. Seller shall not: (i) increase the compensation
payable to any personnel of Seller except in the ordinary course of business
and in accordance with usual and customary compensation practices; or (ii)
introduce any pension of profit-sharing plan, or any other employee benefit
arrangement affecting the Plant.
(g) Actions Affecting Accuracy of Representations and Warranties.
Seller shall not take any action which would render any representation or
warranty made herein by Seller untrue in any material respect as of the
Closing Date.
Section 4.2 Notice of Breach or Failure of Condition. Seller will give
notice promptly to Buyer of the occurrence of any event or the failure of any
event to occur that would preclude the satisfaction of any condition
contained herein.
Section 4.3 Further Assurances. Seller shall promptly execute and
deliver such instruments and take such actions as Buyer reasonably may
request in order to effect the transactions contemplated by this Agreement
and to satisfy each of the conditions set forth in Article 6 of this
Agreement.
Section 4.4 Best Efforts of Seller to Obtain Consents. Seller shall use
its best efforts to obtain promptly all consents and authorizations of third
parties, to make all filings, and to give all notices to third parties which
may be necessary and reasonably required in order to effect, or in connection
with, the transactions contemplated by this Agreement.
Section 4.5 Non-Competition and Consulting Agreement. Seller and all
shareholders of Seller shall enter into an agreement with the Buyer at
closing, which agreement shall be substantially in the form of Exhibit E
attached hereto and incorporated herein.
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ARTICLE 5
Covenants of Buyer and Seller
Section 5.1 Best Efforts. Buyer and Seller will use their best efforts
to perform or cause to be satisfied each covenant or condition to be
performed or satisfied by them.
Section 5.2 Governmental and other Filings. Seller and Buyer agree to
cooperate with each other in filing any necessary applications, reports or
other documents with any Federal; or State authorities having jurisdiction
with respect to the transactions contemplated by this Agreement and in
seeking necessary consultation with and favorable action by any such
agencies, authorities or bodies.
Section 5.3 Cooperation After Closing. After the Closing Date, Buyer
and Seller shall whenever and as often as shall be reasonably required by the
other, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any and all further instruments as may be
necessary or expedient to consummate the transactions provided for in this
Agreement.
ARTICLE
Conditions to Sale
Section 6.1 Conditions Precedent to Obligations of Buyer. All
obligations of Buyer under this Agreement are, at the option of Buyer,
subject to and shall be conditioned upon the satisfaction on or prior to the
Closing Date, of each of the following additional conditions:
(a) Representations, Warranties and Agreements of Seller. Except for
changes contemplated by this Agreement and changes occurring in the ordinary
course of business, the representations, warranties and agreements made by
Seller herein shall be true in all material respects on an as of the Closing
Date with the same effect as though such representations and warranties had
been made or given on and as of the Closing Date. Seller and all shareholders
of Seller shall have performed in all material respects the obligations,
agreements and covenants undertaken by them herein to be performed at or
prior to the Closing Date.
(b) Consents to Assignments. Buyer shall have received evidence,
satisfactory to buyer and its counsel, that any necessary consents to the
assignments of the contracts agreements, leases, licenses and commitments
contemplated hereunder have been obtained.
(c) Necessary Approvals: Regulatory Authorizations. All authorizations
and approvals of any third parties, including Federal or State regulatory
bodies and officials, necessary, in the reasonable opinion of Buyer, for the
consummation of the transactions contemplated by this Agreement, and the
continuation in all material respects of the business without interruption
after the Closing Date in substantially the manner in which such business is
now conducted, shall have been received and shall be in full force and
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effect.
(d) Corporate Authorization. All resolutions and actions necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby by Seller shall have
been duly and validly made and taken, and Seller shall have full power and
right to consummate the transactions contemplated hereby.
(e) Status and Condition of the Plant. The Plant shall not have
suffered, prior to the closing, any loss or damage on account of fire, flood,
accident or any other calamity to an extent that would materially interfere
with the conduct of the Plant or materially impair its value as a going
concern, regardless of whether any such loss or losses have been insured
against.
(f) Payment of Transfer Taxes. The Seller shall have paid or made
provision for payment of all transfer taxes sales taxes or other similar
taxes, which become due by reason of the transactions herein provided, if any.
Section 6.2 Conditions Precedent to Obligations of Seller. All
obligations of Seller under this Agreement are subject to and shall be
conditioned upon the satisfaction prior to the Closing Date, of each of the
following conditions:
(a) Representations, Warranties and Agreements of Buyer. The
representations, warranties and agreements made by Buyer herein shall be true
in all material respects on and as of the Closing Date with the same effect
as though such representations and warranties had been made or given on and
as of the Closing Date with the same effect as though such representations
and warranties had been made or given on and as of the Closing Date, except
as affected by transactions contemplated hereby. Buyer shall have performed
in all material respects the obligations, agreements and covenants undertaken
herein to be performed at or prior to the Closing Date.
(b) Corporate Authorization. All resolutions and actions necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby by Buyer shall have been
duly and validly made and taken, and Buyer shall have full power and right to
consummate the transactions contemplated hereby.
ARTICLE 8
Termination
Section 8.1 Termination by Mutual Consent. At any time on or prior to
the Closing Date, this Agreement may be terminated by the mutual consent of
Buyer and Seller without liability on the part of any party. In the event of
the termination of this Agreement by mutual consent, this Agreement shall
become void and have no effect, without any liability on the part of any
party or its directors, officers or shareholders.
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Section 8.2 Termination Upon Breach or Default. At any time on or prior
to the Closing Date, if a material default shall be made by a party in the
observance or in the due and timely performance of the covenants herein
contained, or if there shall have been a material breach by a party of any of
the representations and warranties set forty in this Agreement, Buyer or
Seller, as the case may be, any terminate this Agreement without prejudice to
its other rights and remedies, including such partys right to recover its
expenses, costs, and other damages.
Section 8.3 Termination Based Upon Conditions. If the conditions of
this Agreement to be complied with or performed by a party on or before the
Closing Date shall not have been complied with and such noncompliance or
nonperformance shall not have been waived, the party to whom the benefit of
such condition runs may terminate this Agreement without prejudice to its
other rights and remedies, including such partys right to recover its
expenses, costs and other damages.
ARTICLE 9
Miscellaneous
Section 9.1 Amendment. This agreement may be amended, modified or
supplemented in whole or in part only by an instrument in writing executed by
both Buyer and Seller.
Section 9.2 Assignment. The parties agree that neither this Agreement
nor any rights created hereby shall be assignable by any party.
Section 9.3 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be considered to be an original
instrument.
Section 9.4 Expenses. Seller and Buyer shall each bear the respective
expenses incurred by them in connection with the negotiation, execution and
delivery of this Agreement and the consummation of he transactions
contemplated hereby.
Section 9.5 Entire Agreement. This Agreement contains the entire
agreement between Buyer and Seller with respect to the sale of the Purchased
Assets and related transactions and supersedes all prior arrangements or
understandings with respect thereto.
Section 9.6 Descriptive Headings. The description headings are for
convenience of reference only and shall not control or affect the meaning or
construction of any provision of this Agreement.
Section 9.7 Notices. All notices or other communications that are
required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by registered or certified mail, postage
prepaid, addressed as follows:
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IF TO BUYER: 00000 Xxxxxx Xxxx. Xxxxx #X
Xxxxxxxxx, XX 00000, XXX
IF TO SELLER: 00 Xxxxxxxxx Xxxxxx Xxxx,
Xxxxxx, Xxxxxx, Xxxxx
Section 9.8 Specific Performance. Seller acknowledges that the
Purchased Assets are unique and that if Seller fails to consummate the
transactions contemplated by this Agreement, such failure will cause
irreparable harm to Buyer for which there will be no adequate remedy at law.
Buyer shall be entitled, in addition to its other remedies at law, to
specific performance of this Agreement of Seller, without just cause, refuses
to consummate the transactions contemplated by this Agreement.
Section 9.9 Survival of Covenants, Representations, Warranties and
Indemnifications.
All covenants, representations and warranties made by any party to this
Agreement shall be deemed made for the purpose of inducing the other parties
to enter into this Agreement. The representations, warranties and covenants
contained in this Agreement shall, except as otherwise provided in this
Agreement, survive the Closing indefinitely. The provisions of Article 7 of
this Agreement shall survive the Closing indefinitely. The covenants,
presentations and warranties of both Seller and Buyer are made only to and
for the benefit of the other party to this Agreement and shall not create or
vest rights in other persons.
Section 9.10 Controlling Law. This Agreement shall be governed by and
construed pursuant to the laws of Nevada.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their authorized officers on the date stated above.
BUYER: Pentagenic Pharmaceuticals, Inc.
BY:
---------------------------
Name: Xxxxxx Xxx
Title: Vice President
SELLER: Fuzhou 851 Marketing Company, Inc.
BY:
---------------------------
Name: Xxxx Xxxx
Title: President
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