LETTER OF INTENT
This Agreement made this 15th day of May, 1996 by and between Natural Way
Technologies, Inc. (hereinafter "Natural Way") and Simple Win Investment Ltd.
(hereinafter "Simple"), hereinafter collectively the "Parties".
RECITALS
WHEREAS, Natural Way is desirous of acquiring all of the equity in Asia First
Pharmaceutical Investment Ltd. (hereinafter "Asia"), a company wholly-owned by
Simple, and;
WHEREAS, Simple is desirous of selling all of its equity interest in Asia to
Natural Way upon the terms and conditions hereinafter set out;
NOW THEREFORE, in consideration of the mutual promises herein contained, the
adequacy of which is hereby acknowledged, the Parties hereto covenant and agree
as follows:
1. Natural Way agrees to acquire and Simple agrees to sell One Hundred
Percent (100%) of the equity of Asia now owned by Simple at a price
equal to the fair value of Asia's assets, but in no event more than
US$5,000,000 and subject to completion of reasonable due diligence.
2. Simple hereby represents and warrants that it is the sole legal owner
and has the legal right to sell and convey one hundred percent (100%)
of the equity interest of Asia and its subsidiary companies including
its 90% equity interest in Jilin Huajia Pharmaceutical Company
Limited, a joint venture operated in Meihekou City, Jilin Province PRC
to Natural Way.
3. As consideration for the afore referenced acquisition, Natural Way
agrees to deposit with Simple Renminbi in an amount equal to not less
than US$2,000,000 nor more than US$3,000,000 before 15 June 1996. In
the event that the estimated fair value of the assets of Asia are
determined to be less than the deposited amount, Simple shall refund
any excess within ten (10) days after the valuation to Natural Way. In
the event that the estimated fair value of the assets is greater than
the deposit, Natural Way agrees to deposit an amount equal to the
difference within ten (10) days after the valuation with Simple. Upon
signing this letter of intent, Simple agrees that Natural Way shall
have the right, which is transferable to any of Natural Way's
subsidiary companies, to operate and manage Huajia until the
acquisition is completed. In the event the parties are unable to
successfully conclude the acquisition, the deposit shall be refunded
without interest and all profits accrued during the operations of
Huajia by Natural Way shall be refunded to Simple.
4. The terms and conditions for the acquisition shall be more
specifically set out in an acquisition agreement to be negotiated in
good faith by and between the parties hereto.
5. The requisite due diligence to be conducted as part of the overall
evaluation by
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Xxxxxxx Xxx shall be concluded not later than June 30, 1997. Simple
agrees to make all the books and records of Huajia available to
Natural Way in order to facilitate the due diligence process.
6. The closing date for the afore referenced acquisition shall be no
later than June 30, 1997.
7. Each party shall bear their own costs and expenses in concluding this
transaction and each shall be responsible for its own legal and
accounting expenses incident hereto.
8. Each party hereto represents that they have not been represented by
any broker or other person to whom a commission is due or other
compensation is payable and if such a claim is made, the party which
incurred such liability shall hold the other party harmless.
9. Notwithstanding the place where the parties executed this Agreement,
the internal laws of Hong Kong shall govern the construction of the
terms and application of the provisions of this Agreement.
10. This Agreement binds and inures to the benefit of the parties and
their respective successors, legal representatives and permitted
assigns.
11. This Agreement constitutes the entire agreement for the parties with
regard to the subject matter of this Agreement and replaces and
supersedes all other written and oral agreements and statements of the
parties relating to the subject matter of this Agreement.
12. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same agreement.
NATURAL WAY SIMPLE INVESTMENT LTD.
TECHNOLOGIES, INC.
By: /s/ illegible By: /s/ illegible
---------------------------- --------------------------------
Title: Chairman Title: President
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