ASSET PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT (this “Agreement”),
is
made and entered into this 31st
day of
May, 2007, by and between Quest Group International, Inc., a Nevada corporation
(“Seller”),
and
Quest Group, LLC, a Utah limited liability company (“Buyer”).
WITNESSETH:
WHEREAS,
Seller is in the business of selling nutritional products to independent
distributors and customers (the “Nutritional
Business”)
and
until the acquisition of the New Business as defined below is engaged in other
business activities;
WHEREAS,
Seller desires to dispose of the Nutritional Business, and has acquired
effective May 16, 2007 a new business line as a pharmaceutical company with
a
focus on nuclear receptor target therapeutics (the “New
Business”);
WHEREAS,
the sole officer and director of Seller as of the date of this Agreement has
previously approved the transaction contemplated by this Agreement;
WHEREAS,
Xxxxxx Xxxxx has resigned as sole officer on May 31, 2007;
WHEREAS,
Xxxxxx Xxxxx has resigned as the sole director and new directors have been
appointed, effective upon the expiration of the 10-day waiting period (the
“Effective
Date”)
in
accordance with the Schedule 14F-1 filed by Seller on June 1, 2007;
WHEREAS,
Seller and Buyer believe that the terms of the transaction contemplated
hereunder are fair to the stockholders of Seller in view of the fact that the
management team related to the Nutritional Business has resigned;
and
WHEREAS,
Seller desires to sell to Buyer, and Buyer desires to buy from Seller, the
assets of Seller relating to the Nutritional Business.
NOW,
THEREFORE, in consideration of the mutual promises and agreements set forth
herein, the parties hereby agree as follows:
Section
1
PURCHASE
AND SALE OF ASSETS
1.1.
Purchase
and Sale of Assets.
Buyer
hereby purchases, accepts, and acquires from Seller, and Seller hereby sells,
transfers, assigns, conveys, and delivers to Buyer all right, title, and
interest of Seller in and to all of the rights and assets, real, personal,
and
mixed, tangible or intangible, owned or held by Seller that are used in the
Nutritional Business (the “Assets”).
The
Assets include, but are not limited to:
a.
Inventories.
All
inventories of (1) nutritional products; (2) distributor kits; and (3) packaging
materials used in the Nutritional Business.
b.
Technical
Documentation.
All
technical and descriptive materials relating to the Nutritional
Business.
c.
Computer
Equipment and Software.
All
equipment, devices (including data processing hardware and related
telecommunications equipment, media, and tools), customer lists (electronic
or
hard copy), and custom software used in the Nutritional Business, including
Seller's rights under all related warranties.
d.
Office
Furniture.
All
office furniture and fixtures of the Seller relating to the Nutritional
Business.
e.
Leases.
The
entire leasehold or rental interest arising under leases of real property,
equipment, and office furnishings and fixtures which are located in Orem,
Utah.
f.
Authorizations.
All
governmental approvals, authorizations, certifications, consents, variances,
permissions, licenses, and permits to or from, or filings, notices, or
recordings to or with, federal, state, and local governmental authorities that
relate to the Nutritional Business.
g.
Intellectual
Property.
All
patents, trademarks, service marks, trade names, and copyrights (including
registrations, licenses, and applications pertaining thereto), and all other
intellectual property rights, trade secrets, and other proprietary information,
processes, and formulae owed by Seller and that relate to the Nutritional
Business.
h.
Claims.
All
claims Seller may have against any person relating to or arising from the
Nutritional Business.
i.
Accounts
Receivable.
Accounts
receivable relating directly to the Nutritional Business.
The
Assets shall not include funds held in the Company’s bank account(s) and any
assets that do not directly relate to the Nutritional Business.
1.2
No
Warranty.
The
Assets are being sold hereunder “AS IS”, in their present condition as of the
date of this Agreement without any warranty of any kind by Seller. Buyer
acknowledges that it has inspected the Assets and is satisfied with their
present condition.
Section
2.
ASSUMPTION
OF LIABILITIES
2.1.
Enumeration
of Assumed Liabilities.
Buyer
shall assume and pay or perform all outstanding liabilities and obligations
of
Seller as of May 31, 2007 and all other liabilities and obligations that relate
directly to the Nutritional Business (the “Assumed
Liabilities”),
including, but not limited to, the following:
a.
The
accrued trade payables of Seller arising out of the Nutritional
Business.
2
b.
All
payment and performance obligations arising out of or relating to the
Nutritional Business.
c.
All
other
obligations and liabilities of the Seller relating to the Nutritional
Business.
d.
Any
liability or obligation for product liability or warranty claims or damage
claims arising out of defects in or failures of any product, program, or
material of Seller relating to the Nutritional Business.
2.2.
Payment
of Assumed Liabilities by Seller.
Subject
to the foregoing Section 2.1, Seller shall use its outstanding cash balance
as
of May 15, 2007 (“Cash
Balance”)
and
all proceeds related to the Nutritional Business received through May 31, 2007
(“NB
Proceeds”)
to pay
and reduce the Assumed Liabilities. It is understood and agreed that Xxxxx
Xxxxx
has been managing the Nutritional Business and that he will continue to manage
the Nutritional Business through May 31, 2007 and that he will be authorized
to
collect receivables and pay liabilities of the Nutritional Business in a manner
that is consistent with the terms of this Agreement.
Section
3.
PURCHASE
PRICE
3.1.
Purchase
Price. The
aggregate purchase price for the Assets (the “Purchase
Price”)
shall
be an amount of cash, or such other valuable consideration as agreed upon by
Buyer and Seller, equal to the net book value of the Assets as of the date
of
this Agreement. The Purchase Price shall be paid by Buyer to Seller on or before
Friday, June 29, 2007.
Section
4.
INDEMNITY
4.1.
Indemnification
by Seller.
Seller
shall indemnify, defend, and hold harmless Buyer and its respective successors
and assigns and the directors, officers, employees, and agents of each
(collectively, the “Buyer
Group”)
from
and against any and all demands, claims, actions, or causes of action,
assessments, losses, damages, liabilities, costs, and expenses, including
reasonable fees and expenses of counsel, other expenses of investigation,
handling, and litigation, and settlement amounts, together with interest and
penalties (collectively, a “Loss”
or
“Losses”),
asserted against, resulting to, imposed upon, or incurred by the Buyer Group,
directly or indirectly, by reason of, resulting from, or arising in connection
with any of the following:
a.
Breach
of Obligation.
Any
breach of any representation, warranty, or agreement of Seller contained in
or
made pursuant to this Agreement, including the agreements and other instruments
contemplated hereby.
b.
Excluded
Liabilities.
Any
liabilities or obligations of any kind or nature whatsoever, whether accrued,
absolute, contingent, or otherwise, known or unknown, arising out of or in
connection with the conduct of the Seller’s business, except for the Assumed
Liabilities.
3
c.
Incidental
Matters.
To the
extent not covered by the foregoing, any and all demands, claims, actions or
causes of action, assessments, losses, damages, liabilities, costs, and
expenses, including reasonable fees and expenses of counsel, other expenses
of
investigation, handling, and litigation, and settlement amounts, together with
interest and penalties, incident to the foregoing.
4.2.
Indemnification
by Buyer.
Buyer
shall indemnify, defend, and hold harmless Seller and its successors and assigns
and the officers, employees, and agents of Seller (collectively, the
“Seller
Group”)
from
and against any and all Losses asserted against, resulting to, imposed upon,
or
incurred by the Seller Group, to the extent arising from any of the
following:
a.
Breach
of Obligation.
Any
breach of any representation, warranty, or agreement of Buyer contained in
or
made pursuant to this Agreement, including the agreements and other instruments
contemplated hereby.
b.
Assumed
Liabilities.
Any of
the Assumed Liabilities.
c.
Incidental
Matters.
To the
extent not covered by the foregoing, any and all demands, claims, actions or
causes of action, assessments, losses, damages, liabilities, costs, and
expenses, including reasonable fees and expenses of counsel, other expenses
of
investigation, handling, and litigation, and settlement amounts, together with
interest and penalties, incident to the foregoing.
4.3.
Notice
of Claim.
The
party entitled to indemnification hereunder (the “Claimant”)
shall
promptly deliver to the party liable for such indemnification hereunder (the
“Obligor”)
notice
in writing (the “Required
Notice”)
of any
claim for recovery under Section 4.1 or Section 4.2, specifying in reasonable
detail the nature of the Loss, and, if known, the amount, or an estimate of
the
amount, of the liability arising therefrom (the “Claim”).
The
Claimant shall provide to the Obligor as promptly as practicable thereafter
information and documentation reasonably requested by the Obligor to support
and
verify the claim asserted, provided that, in so doing, it may restrict or
condition any disclosure in the interest of preserving privileges of importance
in any foreseeable litigation.
4.4.
Defense.
If the
facts pertaining to the Loss arise out of the claim of any third party (other
than a member of the Buyer Group or Seller Group, whichever is entitled to
indemnification for such matter) available by virtue of the circumstances of
the
Loss, the Obligor may assume the defense or the prosecution thereof, including
the employment of counsel or accountants, at its cost and expense. The Claimant
shall have the right to employ counsel separate from counsel employed by the
Obligor in any such action and to participate therein, but the fees and expenses
of such counsel employed by the Claimant shall be at its expense. The Claimant
shall have the right to determine and adopt (or, in the case of a proposal
by
Obligor, to approve) a settlement of such matter in its reasonable discretion,
except that Claimant need not consent to any settlement that (1) imposes any
nonmonetary obligation or (2) Obligor does not agree to pay in full. The Obligor
shall not be liable for any settlement of any such claim effected without its
prior written consent, which shall not be unreasonably withheld. Whether or
not
the Obligor chooses to so defend or prosecute such claim, all the parties hereto
shall cooperate in the defense or prosecution thereof and shall furnish such
records, information, and testimony, and attend such conferences, discovery
proceedings, hearings, trials, and appeals, as may be reasonably requested
in
connection therewith.
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Section
5.
MISCELLANEOUS
5.1.
Entire
Agreement.
This
Agreement and other instruments to be executed and delivered by the parties
in
connection with the transactions contemplated hereby; constitute the sole
understanding of the parties with respect to the subject matter hereof. No
amendment, modification, or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing and duly executed
by the parties hereto.
5.2.
Parties
Bound by Agreement; Successors and Assigns.
The
terms, conditions, and obligations of this Agreement shall inure to the benefit
of and be binding upon the parties hereto and the respective successors and
assigns thereof. Without the prior written consent of the other party hereto,
no
party may assign its rights hereunder.
5.3.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
for
all purposes be deemed to be an original and all of which shall constitute
the
same instrument.
5.4.
Headings.
The
headings of the Sections and paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or
to affect the construction hereof.
5.5.
Modification
and Waiver.
Any of
the terms or conditions of this Agreement may be waived in writing at any time
by the party that is entitled to the benefits thereof. No waiver of any of
the
provisions of this Agreement shall be deemed to or shall constitute a waiver
of
any other provision hereof (whether or not similar).
5.6.
Expenses.
Neither
party shall be obligated to reimburse the other for any costs or expenses
incurred by the other party in connection with this Agreement and/or the
transactions contemplated hereby, including fees and expenses of financial
consultants, accounts, and counsel.
5.7.
Notices.
Any
notice, request, instruction, or other document to be given hereunder by any
party hereto to any other party hereto shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, if to
Seller to:
| If to Buyer, to it at: |
Quest
Group, LLC
|
000
Xxxx
Xxxxxx
Xxxx,
Xxxx 00000
Fax:
(000) 000-0000
| If to Seller, to it at: |
Quest
Group International, Inc.
|
00000
Xxxx Xxxxxxx Xxxxxxxxx, Xx. 0000X
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Fax:
(000) 000-0000
5
or
at
such other address for a party as shall be specified by like notice. Any notice
that is delivered personally in the manner provided herein shall be deemed
to
have been duly given to the party to whom it is directed upon actual receipt
by
such party (or its agent for notices hereunder). Any notice that is addressed
and mailed in the manner herein provided shall be conclusively presumed to
have
been duly given to the party to which it is addressed at the close of business,
local time of the recipient, on the fourth business day after the day it is
so
placed in the mail.
5.8.
Governing
Law.
This
Agreement shall be construed in accordance with and governed by the laws of
the
State of Utah without giving effect to the principles of conflicts of law
thereof.
5.9.
“Including.”
Words of
inclusion shall not be construed as terms of limitation herein, so that
references to “included” matters shall be regarded as nonexclusive,
noncharacterizing illustrations.
5.10.
Survival
of Agreements.
All
covenants, agreements, representations, and warranties made herein shall survive
the execution and delivery of this Agreement.
5.11
Attorneys
Fees. If
either party brings an action or proceeding to enforce the terms of this
Agreement, the prevailing party in any such proceeding, action or appeal, shall
be entitled to the prevailing party’s reasonable and actual out-of-pocket
attorney’s fees and costs, whether awarded in the same suit or recovered in a
separate suit.
5.12
Further
Assurances. Each
party hereto agrees to perform such further acts, and to execute, acknowledge
and deliver such documents, as may be reasonably necessary, appropriate or
desirable to carry out the provisions and intent of this Agreement.
[Remainder
of Page Intentionally Blank - Signature Page Follows]
6
IN
WITNESS WHEREOF, each of the parties hereto has caused this Asset Purchase
Agreement to be executed on its behalf on the date indicated.
|
QUEST
GROUP INTERNATIONAL, INC.
By
/s/
Xxxxx Xxxxx-Xxxxxx
Its:
Chief Executive Officer
|
QUEST
GROUP, LLC
By
/s/
Xxxxx Xxxxx
Its:
President
|
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