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ASSET SALE AGREEMENT
THIS ASSET SALE AGREEMENT (hereinafter referred to as the "Agreement") is
made this 26th day of May, 1999 by and between Advanced Metabolic Systems, Inc.,
a Delaware corporation (hereinafter the "Seller"), and Advanced Metabolic
Technologies, Inc., a Nevada corporation (hereinafter the "Buyer").
W I T N E S S E T H:
WHEREAS, the Seller owns and operates a business (hereinafter the
"Business Operations") at a location or locations (hereinafter the "Business
Premises") and is engaged in the clinical training for treatment of diabetes and
other human metabolic disorders; and
WHEREAS, Seller desires to sell and Buyer desires to purchase certain of
the assets of the Business Operations as more particularly described in
Paragraph 1 herein, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions hereinafter set forth, and for other good and valuable
consideration, the parties hereto do hereby agree as follows:
1. SALE OF ASSETS
1.1 Subject to the terms and to the fulfillment of the conditions hereinafter
contained, Seller does hereby sell, convey and transfer to Buyer, and Buyer
hereby buys and accepts from Seller the following assets (hereinafter the "Sold
Assets"):
(a) The furniture, fixtures, equipment, supplies, devices, literature,
training materials, leases, leasehold improvements and customer accounts located
at the Business Premises, and all intellectual property including all patents,
copyrights and trademarks, foreign as well as domestic, whether owned outright
or under license, except for the cash on hand and the accounts receivable,
except those assets as more particularly described on Schedule "Excluded
Assets."
The Business Assets shall not include the cash on hand, and accounts receivable
to Buyer as of the date of hereof or as of the date of closing.
The Business Assets shall be conveyed free and clear of any and all liens,
claims, security interests or encumbrances of whatsoever nature (hereinafter
"Liens"), unless otherwise assumed by the Buyer in accordance with the terms and
conditions of this Agreement.
(b) All goodwill, contacts, research information, knowhow and client
lists.
1.2 The Sold Assets shall not include the assets set forth as "Excluded Assets"
attached hereto and made a part hereof, nor the cash on hand and accounts
receivable as of the date hereof or as of the date of closing.
1.3 The Buyer does hereby specifically acknowledge that it is fully and
completely familiar with the Business Operations of the Seller and the Sold
Assets and, except as otherwise specifically provided in this Agreement, it is
satisfied with the Business Operations and the condition of the Sold Assets and
does hereby accept the Business operations and acquire the Sold Assets "as is".
It is specifically understood and agreed that the Seller makes no warranty or
representation, of any nature or description, in relation to the Business
Operations or the Sold Assets, except as specifically provided in this
Agreement.
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2. PURCHASE PRICE
(a) The total purchase price (hereinafter referred to as the "Purchase Price")
for the Sold Assets shall be eight hundred and fifty thousand shares (850,000)
of the Buyer's common stock, said amount constituting all the issued and
outstanding shares of the Buyer's common stock.
(b) All applicable sales, transfer, documentary, use or filing taxes and/or
filing fees that result from the transaction contemplated by this Agreement and
the other related documents shall be borne by the Buyer.
3. PAYMENT/SECURITY
3.1 Payment shall be in the form of a single certificate in favor of Seller for
Buyer's common shares as specified in Paragraph 2(a) herein to be delivered at
the time of the Closing.
4. CLOSING AND ADJUSTMENTS
4.1 The closing (hereinafter the "Closing") of the sale and purchase
contemplated by this Agreement shall take place as soon as is reasonably
possible, and before June 15, 1999. In connection therewith, the Seller shall
effectuate the transfer of the Sold Assets by the delivery to Buyer of such
conveyances, bills of sale, assignments, consents and other documents
(hereinafter collectively referred to as the "Closing Documents") which are
required in order to transfer marketable title and all title, right and interest
of Seller in and to the Sold Assets to the Buyer. The Buyer does hereby
specifically acknowledge and agree that it and counsel thereof have reviewed
such Closing Documents, are satisfied with same and accept such Closing
Documents to complete such sale, transfer and conveyance.
4.2 At the Closing, the following adjustments will be made between the parties
effective as of the date first written herein:
(a) Rent and other accrued and/or prepaid expenses pursuant to the Lease,
including, without limitation, the security deposit, if any, in connection
therewith;
(b) Deposits, if any, to the extent the same are assigned to the Buyer, as more
particularly delineated on Schedule "Deposits" annexed hereto and made a part
hereof.
(c) Prepaid and/or accrued insurance premiums, if any, to the extent the same
are assigned to the Buyer;
(d) All other apportionable operating costs, charges and expenses, if any.
4.3 In the event that the Buyer shall fail to close or otherwise default in
relation to this Agreement, in addition to any other remedies available to the
Seller at law or in equity, the Seller may (a) deem the transaction to have been
closed and receive all proceeds actually paid by the Buyer, or (b) cancel this
Agreement.
4.4 At the Closing, the Seller shall make available to the Buyer copies of all
accounting ledgers maintained by the Seller, to the extent that same exist.
5. LEASE of EQUIPMENT AGREEMENTS
(a) The Seller shall cooperate in the assignment to the Buyer of all of the
right, title and interest of the Seller in and to Equipment Lease Agreements. A
copy of which along with any Amendments with
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respect to same is attached hereto as Schedule "Equipment Leases" and made a
part hereof, including the entire interest of Seller, if any, in and to the
Leasehold Improvements.
(b) The Buyer does hereby specifically acknowledge and agree that;
(i) The Buyer is fully and completely familiar with and has thoroughly
examined and inspected the Business Premises, all appliances, systems, equipment
and other personal property and fixtures included therein or utilized in
connection therewith, and is satisfied with the condition thereof and does
hereby accept same "as is".
(ii) The Buyer has thoroughly examined and reviewed any Equipment Leases,
and is familiar with the terms and conditions of each thereof and is satisfied
with same.
6. LIABILITIES
(a) It is understood and agreed that the Seller shall remain solely responsible
and liable for the payment of all liabilities (collectively hereinafter the
"Pre-Closing Debts") which are in existence on or before the date first written
herein and shall pay same. The Seller shall indemnify and hold harmless the
Buyer and all equity owners, officers, directors and other representatives
thereof in relation to the Pre-Closing Debts save and except for any future
royalties for the use of intellectual properties after the closing date.
(b) It is understood and agreed that any and all business debts, obligations or
other liabilities (collectively hereinafter the "Post-Closing Debts") incurred
in connection with the Business Operations and/or the Business Premises
subsequent to the close of business one month after the date first written
herein shall be the sole and absolute responsibility of the Buyer. The Buyer
shall indemnify and hold harmless the Seller and all equity owners, officers,
directors and other representatives thereof in relation to the Post-Closing
Debts. Immediately upon the Closing of the transactions contemplated by this
Agreement, the Buyer shall notify all of the known creditors of the Seller of
the change of ownership of the Business operations and that the Seller shall not
be responsible or liable in any manner for any Post-Closing Debts. The Buyer
shall take such other and further actions and make such other public notices
thereof as the Seller shall require and as shall be required by the laws of each
State where Seller operates Seller's business to notify potential creditors and
the general public that the Seller shall not be responsible for any such
Post-Closing Debts.
(c) Notwithstanding the preceding provisions of this Paragraph 6, it is
understood and agreed that the Seller shall remain liable for all litigation
claims which shall have arisen in connection with, or as a result of, the
execution of this Agreement prior to the date of the Closing (hereinafter the
"Closing Date").
(d) This Paragraph 6 shall survive the Closing.
7. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller warrants and represents that all of the foregoing representation
and warranties are true as of the date hereof:
7.1 The Seller is as of this date a corporation duly organized, existing and in
good standing under and by virtue of the laws of the state of Delaware.
7.2 The board of directors of the Seller has duly and validly approved this
Agreement and has authorized the performance by the Seller of all of the acts
and transactions contemplated hereby, and, to the best of the knowledge of the
Seller, no other approval or authorization of this Agreement or the acts or
transactions contemplated hereby is required to render this Agreement binding
upon the Seller save and except for the approval of the applicable shareholders,
who have verbally approved the terms of this
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agreement, and based upon such representation this agreement has been made. A
copy of the corporate resolution of the Seller which confirms same is annexed
hereto.
7.3 To the best of the knowledge of the Seller, neither the execution nor the
delivery of this Agreement, nor the consummation of the transactions
contemplated herein, will conflict with or result in a breach of any of the
terms, conditions or provisions of any law, regulation, order, writ, injunction
or decree of any court or governmental instrumentality which affects or is
applicable to the Seller, or of any agreement or other instrument to which the
Seller is bound.
7.4 To the best of the knowledge of the Seller, there are presently no liens,
claims, suits, actions, legal, administrative or arbitration proceedings, or
other proceedings or governmental investigations pending or threatened against
the Seller, other than those previously disclosed to Buyer, which would have an
adverse effect upon the Sold Assets.
8. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer warrants and represents that all of the following representations
and warranties are true as of the date hereof:
8.1 The Buyer is a corporation duly organized, existing and in good standing
under and by virtue of the laws of the State of Florida, and is authorized to do
business in the State of Nevada.
8.2 The board of directors of the Buyer has duly and validly approved this
Agreement, and, to the best of the knowledge of the Buyer, no other approval or
authorization is required by law or otherwise to make any or all of same binding
upon the Buyer. A copy of the corporate resolution of the Buyer which confirms
same is annexed hereto.
8.3 Neither the execution, delivery nor consummation of this Agreement or the
transactions contemplated hereby will conflict with or result in a breach of any
of the terms, conditions or provisions of any law, regulation, order, writ,
injunction or decree of any court or governmental instrumentality affecting or
applicable to the Buyer, or any agreement or other instrument to which Buyer is
bound, or constitute (with or without the giving of notice or the passage of
time or both) a default thereunder, or result in any lien or encumbrance on any
of the assets of Buyer (including the assets to be transferred to the Buyer
pursuant hereto).
8.4 This Agreement, and the obligations, responsibilities and liabilities of
Buyer hereunder, and the consummation or completion of any of the transactions
contemplated hereby, are legal, valid and binding obligations of the Buyer.
8.5 The Buyer has or will duly notify all state or local taxing persons,
entities, or authorities (hereinafter collectively referred to as the "Tax
Authorities") of the intended sale of the Sold Assets from the Seller to the
Buyer, if applicable law requires that such notice be given.
8.6 There are no claims, suits, proceedings or investigations pending or, to the
knowledge, information or belief of the Buyer, threatened against the Buyer, or
the businesses, properties and/or assets thereof, at law, in equity or
otherwise, which would have an adverse effect upon the Seller.
8.7 The Buyer has no claims, quits, proceedings or investigations pending or, to
the knowledge, information or belief of the Buyer, threatened against the
Seller, or the businesses, properties and/or assets thereof, at law, in equity
or otherwise, and shall execute and issue to the Seller at the Closing a General
Release with respect to any and all claims against the Seller.
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9. BROKERAGE COMMISSIONS
Each party represents and warrants that there are no valid claims for brokerage
commissions or finders, fees in connection with the transactions contemplated by
this Agreement resulting from any action taken by such party. Each of the
parties agrees to exonerate, indemnify and hold harmless the other party in
respect of any and all losses sustained by the other party, including reasonable
attorneys' fees, as a result of any liability to any broker or finder on the
basis of any agreement, arrangement or action made or taken, or alleged to have
been made or taken, by or on behalf of such party.
10. MODIFICATION
This Agreement cannot be amended, modified, changed, discharged, or
terminated, except by a writing duly signed by all of the parties hereto.
11. CONSTRUCTION
This Agreement is entered into and shall be construed in accordance with
the laws of the State of Nevada. Furthermore, it is specifically understood and
agreed that any and all disputes or conflicts, of any nature, in relation to
this Agreement and/or any of the other Related Documents, and/or any
transaction, of any manner or nature, between the Seller and the Buyer shall be
resolved in the Superior Court of the State of Nevada and the parties hereto do
each hereby subject themselves to the jurisdiction of said Court. No other Court
shall have jurisdiction over the parties to this Agreement without the written
consent of all of the parties hereto.
12. BENEFIT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
13. NOTICES
Any notice, request, instruction, or other document to be given or
provided hereunder shall be in writing and shall be mailed by certified or
registered mail, Postage prepaid, return receipt requested, to the party to whom
same is addressed, at the address set forth herein for such party, or to such
other address for such party as may be provided by a notice issued in accordance
with the provisions of this Paragraph, with a copy to:
If to Seller:
Advanced Metabolic Systems, Inc. Xxxxxxx X. Xxxxxxxx,
000 Xxxxxx Xxxxx Xx., Xxx Xxxxxx, XX, 00000
And copy to: Xxxxx XxXxxxx, Attorney at Law,
The Xxxxxxxxxxx Firm, Sacramento, CA.
Xxxxxxx Xxxxxxx, 0000 Xxxxxxx, Xxxxxxxxxx, XX 00000
If to Buyer: Advanced Metabolic Technologies, Inc.
000 Xxxxxxxxxx XxxxXxx Xxxxx, XX 00000
Xxxxx X. Xxxx, 000 Xxxx Xxxxxx Xx,
Xxxxxxx Xxxx, XX 00000
Xxxxxx X. Xxxxxxxxx, 0000 Xx. Xxxx Xxxxxx,
Xxxx Xxxx Xxxx, XX 00000
Xxxxxx Xxxxx, Esq. 0000 Xx. Xxxxx Xxxx Xxxxxx,
Xxxxxxx, XX 00000
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Any such notice, request, instruction, or other document issued in accordance
with the provisions of this Paragraph 13 shall be effective only upon the
receipt thereof by both the applicable party and its above noted counsel, if
any.
14. EXPENSES
Each party hereto shall be responsible for its own expenses, including,
without limitation, the fees and expenses of its counsel incurred in connection
with the preparation, negotiation, closing and enforcement of this Agreement and
transactions contemplated hereby. This Paragraph shall survive the Closing.
15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Except as specifically set forth herein to the contrary, it is
specifically understood and agreed that no warranties or representations made by
either of the parties hereto shall survive the Closing.
16. GENDER, NUMBER AND "PERSON"
Words used herein, regardless of the gender or number specifically used,
shall be deemed to include any other gender, masculine, feminine or neuter, and
any other number, singular or plural, as the context or situation at that time
may require. The term "person" shall be deemed to include a corporation,
partnership or unincorporated association, or any other entity, as well as a
natural person.
17. COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same grant, and shall become effective when one
or more counterparts have been signed by each of the parties and delivered to
the other party.
18. WAIVERS
The failure or waiver of either party hereto at any time or from time to
time to require performance by the other party of any of obligations of such
other party hereunder shall in no manner affect the rights of such party to
enforce such provision or any other provision hereunder at any subsequent time.
Each party hereto agrees that any waiver of its rights arising out of any breach
of this Agreement by the other party shall not be construed as a waiver of any
subsequent breach.
19. SEVERABILITY
In the event that any court of competent jurisdiction or other applicable
administrative body shall ultimately hold that any provision of this Agreement
is illegal, unethical, against public policy or otherwise unenforceable,. then
this Agreement shall remain in full force and effect with respect to the
remaining provisions thereof. This Paragraph shall survive the Closing.
20. ASSIGNMENT
This Agreement shall not be assignable by either party hereto without the
written consent of the other party.
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21. INCORPORATION OF SCHEDULES
All Schedules attached hereto are incorporated into and made a part of
this Agreement by reference.
22. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby.
23. FURTHER ASSURANCES
All parties agree that they will, at any time and from time to time, after
the date of Closing, upon the request of any other party, do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances as may reasonably be necessary or advisable in
order to accomplish the terms and conditions of this Agreement. This Paragraph
shall survive the Closing.
24. CAPTIONS
Any paragraph or subparagraph title or caption contained in this Agreement
is for convenience only and shall not, in any manner, be construed to define,
describe or limit the terms hereof.
IN WITNESS WHEREOF, the Seller and the Buyer have caused this Agreement to
be executed by their respective proper corporate officials effective as of the
day and year first above written.
for Advanced Metabolic Systems, Inc. For Advanced Metabolic Technologies, Inc.
(Seller): (Buyer):
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxx
------------------------------------ -----------------------------------------
/s/ Xxxxxxx X. Xxxxxxx
XXXXXXX X. XXXXXXX XXXXXXX X. XXXXXXX
------------------------------------ -----------------------------------------
Name (Please Print) Name (Please Print)
XXXXX XXXX ASS SEC
XXXXXX X. XXXX, PRES
CEO, Chairman
------------------------------------ -----------------------------------------
Title Title
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Estopple Certificate
The following is an undertaking and Estopple Certificate upon which the closing
of the Agreement and Plan of Reorganization shall take place by facsimile.
Please allow this certificate to confirm the following facts:
1. Share Certificates for AMTech have not been received, but will be sent by
federal express within five days of receipt of the share certificate book.
The share certificate book will also be sent at that time. A temporary
Stock Certificate is attached hereto as the certificate which will be
replaced by a more traditional form of certificate.
/s/ Xxxxxx X. Xxxx Xxxxxx X. Xxxx,
----------------------------------- Sole officer, AMTech.
2. Except as has been submitted by facsimile, consisting solely of the
original Articles of Incorporation, By-Laws, and the one Organizational
Meeting, there exists no other By-Laws, Amendments to Articles, Contracts,
or other acts of the company except those necessary to complete the
Exchange Agreement, including the attached Xxxx of Sale.
/s/ Xxxxxx X. Xxxx Xxxxxx X. Xxxx,
----------------------------------- Sole Officer, AMTech.
/s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
----------------------------------- Initial Board Member
3. Submitted in accordance with the agreement is the consulting agreement of
Aoki which provides for the continuation of the original license
agreement, as originally entered into by AMSys and modified, with
representation that no default exists, and consent to the limitation of
payment as contained in such agreement continues as of the date of
closing.
/s/ Xxxxxx X. Xxxx Xxxxxx X. Xxxx,
----------------------------------- Sole officer, AMTech
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/s/ Xxxxxx X. Xxxx Xxxxxx X. Xxxx, Director
----------------------------------- Aoki Diabetes Research
/s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx, Admin. Director
----------------------------------- Aoki Diabetes Research Institute
/s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx, CEO
----------------------------------- Advanced Metabolic Systems, Inc.
4. There are no taxes due, and the company is in good standing, having only
conducted the organizational meeting, the appointment of Xx. Xxxx as the
sole officer and director, and entering into the exchange agreement
whereby 850,000 shares of stock are exchanged for basically all the assets
of AMSys.
/s/ Xxxxxx X. Xxxx Xxxxxx X. Xxxx,
----------------------------------- Sole officer, AMTech
/s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx, CEO
----------------------------------- Advanced Metabolic Systems, Inc.
5. The Company is in good standing, having newly incorporated, and having
only conducted business in furtherance of the Agreement and Plan for
Reorganization. There are no other assets or liabilities of AMTech, other
than the payment of organizational costs, to incorporate, which must be
amortized, the Assets of AMSys as set forth in the Xxxx of Sale, the
rights and duties under the Reorganization, and the Consulting Agreement
of Xxxxxx X. Xxxx, with Diabetex and AMTech. Accordingly the Balance Sheet
prepared by the Company Accountants will reflect only this activity.
/s/ Xxxxxx X. Xxxx Xxxxxx X. Xxxx,
----------------------------------- Sole officer, AMTech
/s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx, CEO
----------------------------------- Advanced Metabolic Systems, Inc.
