Exhibit 10.14
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT dated as of February 6, 2006 (the "Agreement") is
entered into by and between Shanghai Likang Disinfectant High-Tech Company,
Limited, a corporation formed under the laws of China ("Buyer"); Shanghai Likang
Pharmaceuticals Technology Company, a corporation formed under the laws of China
("Seller"); and Xxxxxxx Xxxx, an individual and principal control person of the
Seller ("Principal").
PREAMBLE
WHEREAS, Buyer is engaged in the manufacture and sale of disinfectant
health care products ("Business");
WHEREAS, Buyer, in connection with the operation of its Business, leases a
facility ("Building") (as more fully described below and referred to hereafter
as the "Asset") owned by the Seller;
WHEREAS, the Building is used by Buyer for manufacturing of certain of
Buyers products;
WHEREAS, Messrs. Xxxxxxx Xxxx and Xxx Xxxx, the Buyer's officers, directors
and principal shareholders, are the shareholders of Seller, owning 90% and 10%,
respectively, and are the principal persons in control of the Asset; and
WHEREAS, Seller desires to convey, sell and assign to Buyer all of Seller's
right, title and interest in and to the Asset, and Buyer desires to purchase the
Asset, upon the terms and conditions contained in this Agreement.
NOW THEREFORE, in consideration of the mutual promises and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1 Sale and Purchase of Asset.
1.1 Recitals. The parties agree that the recitals set forth above are true
and correct. This Agreement supercedes all prior understandings among the
parties, whether oral or written, concerning the subject matter contained
herein.
1.2 Sale and Purchase of Asset. Subject to the terms and conditions of this
Agreement, at the closing described in Section 5 (the "Closing"), Seller shall
sell to Buyer, and Buyer shall purchase from Seller, the Asset free and clear of
all liens, charges, encumbrances and security interests and identified more
particularly on Schedule 1.1 (the "Asset").
1.3 Liabilities Excluded. In connection with Buyer's purchase of the Asset,
Buyer shall not assume or become responsible for the payment of any liabilities,
obligations or expenses of Seller in connection with the Asset, Seller's
business or otherwise.
2 Purchase Price; Payment. The purchase price for the Asset (the "Purchase
Price") shall be the sum of $333,675.43 (the "Purchase Price") payable on the
Closing Date (as defined herein) in exchange for the Buyer satisfying and
canceling the unpaid amount Seller owes Buyer in the amount of $333,675.43,
3 Representations and Warranties of Seller. Except as otherwise set forth in a
disclosure schedule delivered by Seller at the time this Agreement is executed
and delivered (the "Seller Disclosure Schedule"), the Principal and Seller,
jointly and severally, hereby make the following representation and warranties
to Buyer as of the date hereof and as of the Closing Date.
3.1 Organization and Good Standing. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of formation, with full corporate power and authority to own, lease
and operate its business and properties and to carry on business in the places
and in the manner as presently conducted or proposed to be conducted. Seller is
in good standing as a foreign corporation in each jurisdiction in which the
properties owned, leased or operated, or the business conducted, by it requires
such qualification except where the failure to so qualify would not have a
material adverse effect on the Asset or consummation of the transactions
contemplated hereby (a "Seller Material Adverse Effect").
3.2 Authority and Enforcement. Seller has all requisite corporate power,
including any shareholder approval, if any, and authority to execute and deliver
this Agreement, and to consummate the transactions contemplated hereby. Seller
has taken all corporate action necessary for the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and this
Agreement constitutes the valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as may be affected by
bankruptcy, insolvency, moratoria or other similar laws affecting the
enforcement of creditors' rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought.
3.3 Actions Pending. There is no action, suit, claim, investigation or
proceeding pending or, to the knowledge of Seller or the Principal, threatened
against Seller or the Principal or the Asset, which questions the validity of
this Agreement or the transactions contemplated hereby or any action taken or to
be taken pursuant hereto or thereto. There is no action, suit, claim,
investigation or proceeding pending or, to the knowledge of Seller or the
Principal, threatened against or involving Seller or the Asset, other than
claims against Seller that are covered by insurance and that will not result in
a Seller Material Adverse Effect. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against Seller or affecting the Asset.
3.4 Title to Asset; Condition of Asset. Seller owns, or has either good and
marketable title to, or valid and enforceable leasehold interest in the Asset,
free and clear of all Liens, other than those disclosed in the Seller Financial
Statements (as hereafter defined). No person or entity has any right or option
to acquire the Asset. Seller has the right to use the Asset as presently being
used, and its use of the Asset does not violate the material provisions of (a)
any agreement to which Seller is a party, (b) the requirements of applicable
laws, rules or regulations, and/or (c) any order of any court or regulatory body
of competent jurisdiction that is binding on Seller, or the Asset. The Asset is
in good condition and repair, normal wear and tear excepted, and have been
maintained in accordance with all applicable ordinances, specifications,
environmental laws, and warranties and normal industry practice. The Asset meets
the good manufacturing practice ("GMP") standards established by the central
government of China for the production of medical and chemical products.
3.5 No Undisclosed Liabilities. Seller has and will have no liabilities,
obligations, claims or losses (whether liquidated or unliquidated, secured or
unsecured, absolute, accrued, contingent or otherwise) that would be required to
be disclosed on a balance sheet of Seller (including the notes thereto) in
conformity with generally accepted accounting principles ("GAAP") which are not
disclosed in the Seller Financial Statements, other than those incurred in the
ordinary course of Seller's business since the date of the Seller Financial
Statements, which, individually or in the aggregate, do not or would not result
in a Seller Material Adverse Effect in connection with the Asset.
3.6 Compliance with Laws.
(a) Seller is and at all times has been, in material compliance
with each law, rule and/or regulation ("Legal Requirement") that is or was
applicable to it or to the conduct or operation of its business or the ownership
or use of the Asset.
(b) No event has occurred or circumstance exists that (with or
without notice or lapse of time) (i) may constitute or result in a material
violation by Seller of, or a failure on the part of Seller to comply
with, any Legal Requirement in connection with the Asset, or (ii) may
give rise to any obligation on the part of Seller to undertake, or to bear all
or any portion of the cost of, any remedial action of any nature; and
(c) Seller has not received any notice or other communication
(whether oral or written) from any governmental or regulatory authority
("Authority") having or purporting to have jurisdiction over Seller or the
Asset regarding (i) any actual, alleged, possible, or potential violation of,
or failure to comply with, any Legal Requirement, or (ii) any actual, alleged,
possible, or potential obligation on the part of Seller to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature.
(d) Seller is, and at all times has been, in material compliance
with all of the terms and requirements of each license, permit and/or
authorization issued by any Authority ("Governmental Authorization") that is
held by Seller or that otherwise relates to the Asset.
(e) Each Governmental Authorization is valid and in full force
and effect.
(f) No event has occurred and no circumstance exists that may
(with or without notice or lapse of time) (i) constitute or result directly or
indirectly in a material violation of or a material failure to comply with any
term or requirement of any such Governmental Authorization, or (ii) result
directly or indirectly in the revocation, withdrawal, suspension, cancellation,
or termination of, or any modification to, any such Governmental Authorization.
(g) All Governmental Authorizations collectively constitute all
of the governmental Authorizations necessary to permit Seller to own and use the
Asset.
3.7 Tax Matters. Seller has filed or caused to be filed (on a timely basis
since inception) all federal, state and local tax returns or payments that are
or were required to be filed by or with respect to it or paid pursuant to
applicable Legal Requirements ("Tax Returns"). Seller has paid, made provision
for payment or has included on its most recent balance sheet included in the
Seller Financial Statements, all taxes as it relates to the Asset that have or
may have become due pursuant to those Tax Returns or otherwise, or pursuant to
any assessment received by Seller, except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided in
the Seller Financial Statements. All such tax returns are true, complete and
accurate.
3.8 Absence of Certain Developments. Since the date of the most recent
balance sheet included in the Seller Financial Statements, Seller has not
suffered a Seller Material Adverse Effect or entered into any agreement or
engaged in any conduct that could result in a Seller Material Adverse Effect.
3.9 Disclosure. The representations, warranties and acknowledgments of
Seller set forth herein are true, complete and accurate in all material
respects, do not omit to state any material fact, or omit any fact necessary to
make such representations, warranties and acknowledgments, in light of the
circumstances under which they are made, not misleading.
4 Representations and Warranties of Buyer and Seller. Except as otherwise set
forth in a disclosure schedule delivered by Buyer at the time this Agreement is
executed (the "Buyer Disclosure Schedule"), Buyer hereby makes the following
representations and warranties to Seller and the Principal, as of the date
hereof and as of the Closing Date.
4.1 Organization and Good Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of formation, with full corporate power and authority to own, lease
and operate its business and properties and to carry on its business in the
places and in the manner as presently conducted or proposed to be conducted.
Buyer is in good standing as a foreign corporation in each jurisdiction in which
the properties owned, leased or operated, or the business conducted, by it
requires such qualification, except where the failure to so qualify would not
have a material adverse effect on the business of Buyer, taken as a whole, or
consummation of the transactions contemplated hereby (a "Buyer Material Adverse
Effect").
4.2 Authority and Enforcement. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement, and to consummate the
transactions contemplated hereby. Buyer has each taken all corporate action
necessary for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, and this Agreement constitutes the
valid and binding obligation of Buyer, enforceable against each in accordance
with its terms, except as may be affected by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
4.3 Consents of Third Parties. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby by
Buyer does not require the consent of any person, or such consent has been or
will be obtained in writing prior to the Closing.
4.4 Actions Pending. There is no action, suit, claim, investigation or
proceeding pending or, to the knowledge of Buyer, threatened against Buyer which
questions the validity of this Agreement or the transactions contemplated hereby
or any action taken or to be taken pursuant hereto or thereto.
4.5 Disclosure. The representations, warranties and acknowledgments of
Buyer set forth herein are true, complete and accurate in all material respects
and do not omit any fact necessary to make such representations, warranties and
acknowledgments not misleading.
5 Conditions to Closing.
5.1 Conditions Precedent to Buyer's Obligation to Close. The obligation of
Buyer to consummate the transactions contemplated by this Agreement is subject
to satisfaction of the following conditions on or prior to the Closing Date:
(a) The representations and warranties of Seller and the
Principal set forth in Section 3 above shall be true and correct in all material
respects at and as of the Closing Date.
(b) Seller and the Principal shall have performed and complied
with all of their respective covenants hereunder in all material respects
through the Closing Date.
(c) No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would
(i) prevent or adversely affect Buyer's consummation of any of the transactions
contemplated by this Agreement or (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation; and no
such injunction, judgment, order, decree, ruling, or charge shall be in effect.
(d) No material adverse change shall have taken place with respect to
the Asset, and no event shall have occurred that could result in a Seller
Material Adverse Effect.
(e) Seller shall have delivered to Buyer the China Governmental
Authorization duly authorized and executed by the appropriate governmental
agency in China transferring the land use permit for the Asset to the Buyer;
(f) Buyer shall be reasonably satisfied with the results of its
due diligence review of the Asset;
(g) Buyer shall receive confirmation from their professional
financial advisers and accountants, in form and substance satisfactory to them
in their sole reasonable discretion, that the value of the Asset is not less
than $333,675.43
(h) All actions to be taken by Seller in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby, including under the laws of China, will be reasonably
satisfactory in form and substance to the Buyer; and
(i) Seller and Principal shall each have delivered to the Buyer
a certificate to the effect that each of the conditions specified above in
Sections 5.1(a) - (d) has been complied with in all respects;
5.2 Conditions Precedent to Seller's Obligation to Close. The obligation of
Seller to consummate the transactions contemplated hereby is subject to
satisfaction of the following conditions on or prior to the Closing Date:
(a) The representations and warranties of Buyer set forth in
Section 4 above shall be true and correct in all material respects at and as of
the Closing Date.
(b) Buyer shall have performed and complied with all of their
respective covenants hereunder in all material respects through the Closing
Date.
(c) No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would
(i) prevent or adversely affect Buyer's consummation of any of the transactions
contemplated by this Agreement or (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation; and no
such injunction, judgment, order, decree, ruling, or charge shall be in effect;
(d) No material adverse change shall have taken place with
respect to Buyer, and no event shall have occurred that results in a Buyer
Material Adverse Effect.
(e) Buyer shall have delivered to the Seller a certificate to
the effect that each of the conditions specified above in Sections 5.2(a)-(d)
has been complied with in all respects; and
(f) All actions to be taken by Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Seller and the Principal.
6 Closing; Closing Date. A closing of the transactions contemplated hereby the
"Closing") will take place at such time, not later than March 15, 2005, at the
offices of Buyer's counsel, that is agreed upon by Seller and Buyer. The date on
which the Closing is held is referred to in this Agreement as the "Closing
Date."
7 Documents to be Delivered at the Closing.
7.1 Documents to be Delivered by Seller. At the Closing, Seller, as the
case may be, shall deliver, or cause to be delivered, to Buyer the following:
(a) a duly executed xxxx of sale, dated the Closing Date,
transferring to Buyer all of Seller's right, title and interest in and to the
Asset together with possession of the Asset;
(b) the land use permit in the name of the Buyer executed by the
appropriate governmental agency in China transferring the land use permit for
the Asset to the Buyer;
(c) a copy of resolutions of the board of directors and
shareholders of Seller authorizing the execution, delivery and performance of
this Agreement by Seller; and
7.2 Documents to be Delivered by Buyer. At the Closing, Buyer shall deliver or
cause to be delivered to Seller and/or the Principal, as the case may be, the
following:
(a) a copy of resolutions of the board of directors of Buyer
authorizing the execution, delivery and performance of this Agreement by Buyer;
8 Additional Covenants.
8.1 Access to Books and Records. During the course of this transaction,
from the date hereof through Closing, each party agrees to make available for
inspection all corporate books, records and Asset, and otherwise afford to each
other and their respective representatives, reasonable access to all
documentation ad other information concerning the business, financial and legal
conditions of each other for the purpose of conducting a due diligence
investigation thereof. Such due diligence investigation shall be for the purpose
of satisfying each party as to the business, financial and legal condition of
each other for the purpose of determining the desirability of consummating the
proposed transaction. The parties further agree to keep confidential and not use
for their own benefit, except in accordance with this Agreement any information
or documentation obtained in connection with any such investigation.
8.2 Further Assurances. If, at any time after the Closing, the parties
shall consider or be advised that any further deeds, assignments or assurances
in law or that any other things are necessary, desirable or proper to complete
the transactions contemplated hereby in accordance with the terms of this
agreement or to vest, perfect or confirm, of record or otherwise, the title to
any property or rights of the parties hereto, the parties agree that their
proper officers and directors shall execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary, desirable or
proper to vest, perfect or confirm title to such property or rights and
otherwise to carry out the purpose of this Agreement, and that the proper
officers and directors the parties are fully authorized to take any and all such
action.
9 Miscellaneous.
9.1 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally
(including by confirmed legible telecopier transmission) or mailed by certified
mail, return receipt requested, or by overnight mail properly receipted to the
parties at the following addresses (or to such address as a party may have
specified by notice given to the other party pursuant to this provision):
If to Seller or the Principal:
Shanghai Likang Pharmaceuticals Technology Company
A103-A7
Xx 0000 Xxxxxxxxx Xxxx,
Xxxxxx Xxxxxxxx,
Xxxxxxxx, Xxxxx.
Attn: Xxxxxxx Xxxx
If to Buyer, to:
Linkwell Corporation
Xx. 000 Xxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxxxxx
Xxxxxxxx, Xxxxx 200436
Attn: Xxxxxxx Xxxx, President
IN WITNESS WHEREOF, we have executed this Agreement as of the day and
year first above written.
Linkwell Corporation
By: /s/ Xxxxxxx Xxxx
Xxxxxxx Xxxx, President
Shanghai Likang Pharmaceuticals Technology Company
By: /s/ Xxxxxxx Xxxx
Xxxxxxx Xxxx, President
SCHEDULE 1.1
ASSET
Shanghai Jiading district factory.
0000 Xxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxx, 000000
21,500 square feet
Shanghai Likang Pharmaceuticals Technology Company, Limited owns the
Shanghai Jiading district factory. The Shanghai Jiading district factory is
approximately 21,500 square feet, all of which is used for production. This
factory meets the good manufacturing practice ("GMP") standards established by
the central government for the production of medical and chemical products. The
main products produced here are liquid and index disinfectant devices. The
manufacturing facility has the capacity to produce approximately 9 million
liters of liquid disinfectant annually. The manufacturing cycle for the liquids,
from formulation to finish product, is one day.
