MICROBIAL SOLUTIONS, INC.
A NEVADA CORPORATION
March 2, 1998
XX. XXXXX XXXXXXX
- AND TO -
MANLOE LABS, INC.
0000 X. Xxxxxxxx Xxxx, Xxxxx #00
Xxx Xxxxx Xxxxxx
00000
Dear Sirs:
Re: Agreement for the Acquisition by Microbial Solutions, Inc.
(the "Company") of Manloe Labs, Inc. ("Manloe") from Xxxxx
Xxxxxxx ("Hocking")
We write to confirm the Company's agreement to proceed with the
acquisition of a 100% equity interest in Manloe on the terms and
subject to the conditions as set forth in this letter. If you are
in agreement, we ask that each of Manloe and Hocking execute this
letter agreement where indicated below and return it to us. This
letter agreement will be a legally binding agreement of purchase
and sale upon execution.
The Company agrees to acquire all of the issued and outstanding
shares of Manloe (the "Shares") upon execution of this agreement by
Manloe and Hocking on the following basis:
1. Interest Acquired
The Company agrees to purchase and Hocking agrees to sell the
Shares on the terms and subject to the conditions of this letter
agreement.
2. Jazor Labs
In addition to the conditions precedent set forth in Section 7 of
this letter agreement, the agreement of the Company to purchase the
Shares is subject to Manloe having entered into a manufacturing and
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licensing agreement with Jazor Laboratory Group, Inc. of Pompona
Beach, Florida ("Jazor") upon the terms and conditions attached
hereto in Schedule A (the "Manufacturing and Marketing Agreement").
3. Closing Date
The closing date for the purchase and sale of the Shares will be
the 31st day of March, 1998.
4. Payment of the Purchase Price
The Company will deliver the following consideration for the Shares
on the Closing Date;
(a) payment of $200,000 by certified cheque, bank draft or
wire transfer (the "Cash Portion of the Purchase Price");
(b) the issue of 250,000 common shares of the Company (the
"Company Shares").
5. Representations and Warranties of Manloe and the Principal
Shareholders
The Company's agreement would be based on the joint and several
representations and warranties by Manloe and Hocking that:
(a) Manloe is a corporation duly organized, validly existing
and in good standing under the laws of the State of
Nevada;
(b) the authorized capital of Manloe consists of 25,000
common shares, all of which are issued and outstanding
shares are in the name of Hocking;
(c) Manloe is the owner of all assets required for the
conduct of Manloe's business (the "Business") as
disclosed in the financial statements of Manloe for the
period ending December 31, 1997 (the "Financial
Statements"), a copy of which are attached to this letter
as Schedule B - "Financial Statements". The liabilities
of Manloe do not and will not on the Closing Date exceed
$30,000;
(d) all assets of Manloe are owned by Manloe free and clear
of all liens, charges and other financial encumbrances;
(e) Hocking is the owner of all of the issued and outstanding
shares in the capital of Manloe, free and clear of all
liens, charges, encumbrances and security interests;
(f) Manloe has no liability or indebtedness to Hocking;
(g) neither Hocking nor any other person has any option,
warrant or other right to
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acquire any shares of Manloe;
(h) the books and records of Manloe fairly and correctly set
out and disclose in all material respects, in accordance
with generally accepted accounting principles, the
financial position of Manloe as at the date hereof, and
all material financial transactions of Manloe relating to
the Business have been accurately recorded in such books
and records;
(i) the Financial Statements present fairly and correctly the
assets, liabilities (whether accrued, absolute,
contingent or otherwise) and the financial condition of
Manloe as at the date thereof and there will not be,
prior to the Closing Date, any increase in such
liabilities other than in the ordinary course of
business;
(j) the Business has been carried on in the ordinary and
normal course by Manloe since the date of the Financial
Statements;
(k) Manloe does not have any outstanding material agreements
or contracts (including employment agreements) except
agreements, contracts and commitments in the ordinary
course of business.
(l) Manloe is not in material default or breach of any
contracts, agreements, written or oral, indentures or
other instruments to which it is a party and there exists
no state of facts which after notice or lapse of time or
both which would constitute such a default or breach;
(m) all contracts and agreements between Manloe and its
customers, suppliers and financers are in good standing
and Manloe is entitled to all benefits thereunder;
(n) there are no actions, suits or proceedings pending or
threatened against or affecting Manloe or Hocking or
affecting the Business, at law or in equity and neither
Manloe or Hocking are aware of any existing ground on
which any such action, suit or proceeding might be
commenced with any reasonable likelihood of success.
(o) Manloe has the right to use all of the registered trade
marks, trade names and patents, both domestic and
foreign, in relation to the Business and the conduct of
the Business does not infringe upon the patents, trade
marks, trade names or copyrights, domestic or foreign, of
any other person, firm or corporation;
(p) Manloe is the registered and beneficial owner of the
trademark "Manloe" and has not received notice from any
third party contesting the ownership by Manloe of this
trademark or claiming that the use of the trademark
"Manloe" in connection with the Business infringes on the
rights of the third party;
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6. Representations and Warranties of the Company
The Company represents and warrants to the Shareholders that:
(a) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State
of Nevada;
(b) this agreement has been duly authorized, validly executed
and delivered by the Company.
7. Obligations Pending Closing of each Subscription
Manloe and Hocking agree that the Business will be operated in the
ordinary course of business in accordance with past practices
pending the Closing Date.
8. Conditions Precedent to Closing
The Company's obligation to complete the purchase of the Shares
will be subject to each of the following conditions:
(a) all representations and warranties of Manloe and Hocking
will be true and correct in all material respects on the
Closing Date;
(b) there shall have been no material adverse change to the
Business between the date of this agreement and the
Closing Date;
(c) Manloe will have entered into the Manufacturing and
Marketing Agreement with Jazor prior to or on the Closing
Date; and
(d) Manloe will have delivered an opinion of its attorney as
to each of the following matters:
(i) Manloe has been duly incorporated and organized and
is validly subsisting under the laws of the State
of Nevada, it has the corporate power to own or
lease its properties and to carry on its business
that is now being conducted by it and is in good
standing with respect to all filings with the
appropriate corporate authorities;
(ii) the issued and authorized capital of Manloe is as
set out in this agreement and all issued shares
have been validly issued as fully paid and non-
assessable;
(iii) all necessary approvals and all necessary steps and
corporate proceedings have been obtained or taken
to permit the Shares to be duly and validly
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registered in the name of the Company;
(iv) the execution of this agreement, the transfer of the
Shares to Company and the appointment of the
Company's nominees to the board of directors, have
been duly and validly authorized by all required
corporate proceedings of Manloe and its
shareholders and directors.
(e) Hocking will have entered into a three year employment
agreement with Manloe in the form of employment agreement
attached hereto as Schedule C.
9. Closing Deliveries
On the Closing Date, Manloe and Hocking will deliver to the
Company:
(a) the Shares in the name of the Company;
(b) the legal opinion of Manloe's attorney, as contemplated
in Section 6.;
(c) the Employment Agreement, duly executed by Manloe and
Hocking;
(d) the Manufacturing and Marketing Agreement, duly executed
by Manloe and Jazor;
(e) evidence of all required director and shareholder
approvals, as contemplated in Section 8.;
(f) a certificate of Hocking, both in his individual capacity
and as an officer of Manloe, as to the truth and
correctness of the representations and warranties of
Manloe and Hocking as of the Closing Date;
(g) all other corporate resolutions, agreements, assignments,
consents and documentation as deemed necessary by the
Company's solicitors to give effect to the transactions
contemplated by this agreement in accordance with
accepted commercial practice.
(h) [DELETED]
(i) a copy of the escrow agreement executed between Jazor,
Manloe and Jazor's attorney pursuant to the Manufacturing
and Marketing Agreement;
(j) written confirmation from Xx. Xxxxx X. Xxxxxxx confirming
the delivery into escrow of the formulae for "JATEX"
under the escrow agreement;
On the Closing Date, the Company would deliver to Manloe the Cash
Portion of the Purchase Price
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and share certificates representing the Company Shares.
10. Directors
On the Closing Date, two of the Company's nominees will be
appointed to the board of directors of Manloe and the number of
directors of Manloe increased to three. Hocking will remain a
director of Manloe.
11. Confidentiality
We each agree to keep our discussions and this agreement
confidential and if for any reason the purchase and sale is not
completed, we each agree to keep confidential all information
furnished to each other or obtained from each other in connection
with this transaction, except where disclosure is required by law.
If you and Manloe are in agreement with the terms and conditions
set forth in this letter, please have two copies of this letter
signed and returned to the Company as early as possible.
Yours truly,
MICROBIAL SOLUTIONS, INC.
Per: /s/ Xxxxx Xxxxxxx
Authorized Signatory
Accepted and agreed to this __ day of March, 1998.
MANLOE LABS, INC.
by its authorized signatory:
Per: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx, President
/s/ Xxxxx Xxxxxxx
XXXXX XXXXXXX
in his personal capacity
