ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
effective as of July 1, 2000 by and between Hechi Industrial Co., Ltd., a
company organized and existing under the laws of the People's Republic of China
("Hechi") and Biogan International, Inc., a Delaware corporation ("Biogan").
RECITALS
A. Hechi is engaged in the business of mining, refining and marketing
base metal products in the People's Republic of China (the "Business").
B. Hechi desires to sell, transfer and assign to Biogan, and Biogan
desires to purchase, acquire and assume from Hechi, certain of the assets and
liabilities of Hechi relating to the operation of the Business in exchange for
the issuance of shares of Biogan's Common Stock and Series A Convertible
Preferred Stock pursuant to the terms and conditions of this Agreement.
C. On March 15, 2000, the parties hereto entered into a Share
Acquisition Agreement (the "Share Acquisition Agreement") pursuant to which
Biogan was to issue shares of its Series A Convertible Preferred Stock to
certain of the shareholders of Hechi.
D. The parties hereto desire to terminate the Share Acquisition
Agreement inasmuch as the Share Acquisition Agreement does not properly reflect
the intent of the parties.
E. On January 27, 2000, the parties hereto entered into a Cooperative
Joint Venture Contract (the "Cooperative Joint Venture Contract") in the form of
Exhibit A attached hereto in connection with the formation of Guangxi Guange
Metals Co. Ltd. (the "Joint Venture").
F. It is the intent of the parties hereto that Biogan contribute to the
Joint Venture the assets and liabilities purchased under this Agreement in
exchange for an interest in the Joint Venture.
AGREEMENT
In consideration of the foregoing recitals and the respective covenants,
agreements, representations and warranties contained herein, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale of Assets. Subject to the terms and conditions of
this Agreement, Hechi agrees to sell, transfer, assign and deliver to Biogan,
and Biogan agrees to purchase from Hechi, all of Hechi's right, title and
interest in and to the assets, properties and business of Hechi related to or
used directly or indirectly in the operation of the Business as set forth on
Exhibit B attached hereto and incorporated herein by reference (collectively,
the "Purchased Assets").
1.2 Purchased Assets Free of Liens. Except as otherwise specifically
provided in this Agreement, all of the Purchased Assets shall be transferred by
Hechi to Biogan free and clear of all liens, claims, encumbrances, restrictions
or rights of others of every kind and description.
1.3 Liabilities Assumed. On and as of the Payment Date (as defined in
Section 1.5), Biogan shall assume and agree to pay, honor or otherwise discharge
when due only those liabilities of Hechi specifically set forth on Exhibit C
attached hereto and incorporated herein by reference (the "Assumed
Liabilities"), which liabilities shall relate to the Purchased Assets and shall
be necessary to maintain the ongoing operations of the Business. Except for the
Assumed Liabilities specifically listed on Exhibit C, Biogan shall not assume
any liabilities or obligations of Hechi and such liabilities and obligations
(the "Excluded Liabilities") shall remain the liabilities and obligations of
Hechi.
1.4 Purchase Price. On the Payment Date (as defined in Section 1.5),
Biogan shall deliver to Hechi certificates representing an aggregate of 31,300
shares of Biogan's Series A Convertible Preferred Stock and 16,800,000 shares of
Biogan's Common Stock (collectively, the "Shares"), which Shares shall be issued
to the shareholders of Hechi (the "Hechi Shareholders") in the names and amounts
set forth on Exhibit D attached hereto and incorporated herein by reference. The
shares of Series A Convertible Preferred Stock shall have the rights,
privileges, preferences and restrictions set forth in the form of Certificate of
Designation of Series A Convertible Preferred Stock attached hereto as Exhibit E
and incorporated herein by reference.
1.5 Payment of Purchase Price. Subject to the terms hereof, the Shares
shall be delivered to Hechi on or before September 15, 2000 (the "Payment
Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HECHI
Hechi hereby represents and warrants to Biogan, and Biogan, in agreeing
to consummate the transactions contemplated by this Agreement, has relied upon
such representations and warranties with respect to the operations, Business and
assets (including the Purchased Assets) of Hechi, the following:
2.1 Organization and Existence. Hechi is a corporation duly organized,
duly incorporated and validly existing under the laws of the People's Republic
of China. Hechi has all requisite power and authority to conduct the Business as
now conducted and to own, use and lease the Purchased Assets. Hechi is qualified
to do business in each jurisdiction in which the conduct of its business or the
ownership or leasing of properties makes such qualification necessary.
2.2 Authorization of Transaction. Hechi has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and
the transactions contemplated hereby, including, without limitation, to sell and
transfer the Purchased Assets hereunder. The execution and delivery of this
Agreement and the Cooperative Joint Venture Agreement (including all agreements
related thereto) by Hechi and the performance by Hechi of the obligations
hereunder and thereunder have been duly and validly authorized by the board of
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directors and the shareholders of Hechi, with no other corporate action on the
part of Hechi or its shareholders being necessary. This Agreement constitutes
the valid and legally binding obligation of Hechi, enforceable in accordance
with its terms, except as enforceability hereof may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights
generally and by the exercise of judicial discretion in accordance with
equitable principles. The persons who have executed this Agreement on behalf of
Hechi have been duly authorized to do so.
2.3 Financial Statements and Other Information; Financial Condition.
Hechi has previously furnished to Biogan copies of the audited balance sheets of
Hechi at December 31, 1998 and 1999, and the related statements of income and
cash flow for the periods then ended, together with the related notes thereto
and the auditors' report thereon of Lam, Kwok, ▇▇▇▇ & ▇▇▇▇▇, C.P.A. Limited,
independent certified public accountants. All financial statements referred to
in this Section 2.3 (collectively, the "Financial Statements") are complete and
correct, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the respective periods, and
fairly present the financial condition of Hechi as of the respective dates
thereof and the results of operations of Hechi for the respective periods
covered by the statements of income contained therein. Hechi does not have any
material obligations or liabilities, contingent or otherwise, not fully
disclosed by the Financial Statements.
2.4 Title to Purchased Assets. Hechi either owns or holds under leases
all of the properties used by it in the Business. Hechi has good and marketable
title to all of the Purchased Assets, and to its leased interests in all leased
assets used by it, free and clear of all mortgages, security interests, liens,
encumbrances, restrictions, claims and other burdens. Title to the Purchased
Assets shall be transferred by Hechi to Biogan free and clear of all mortgages,
security interests, liens, encumbrances, restrictions, claims and other burdens.
The machinery, equipment and motor vehicles are in good operating condition and
repair and are adequate and sufficient for all operations conducted by Hechi.
Hechi enjoys peaceful and undisturbed possession of all of the Purchased Assets,
including those assets used by it pursuant to leases.
2.5 Certain Real Property Matters. Hechi has not received, nor is aware
of, any notifications, restrictions or stipulations from any governmental
authority requiring any work to be done on any real property owned by Hechi or
used by Hechi in the operation of the Business and transferred and sold
hereunder as a Purchased Asset (hereinafter, the "Acquired Property"), or
threatening the use of any such Acquired Property. There are no pending or
threatened proceedings affecting any portion of the Acquired Property. Hechi
possesses title to all the Acquired Property, subject to no liens, encumbrances,
patents, covenants, leases and other matters affecting title. There are no
leases, agreements, understandings, options, contracts or rights of first
refusal affecting or relating to the Acquired Property in any way, except as
previously disclosed to Biogan.
2.6 Leases. All leases under which Hechi leases from others any real or
personal property are in good standing, valid and effective and there is not
under any of such leases any existing default by Hechi or event or condition
which after notice or lapse of time or both would constitute a default.
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2.7 Inventories. The inventories of Hechi shown on the Financial
Statements or thereafter acquired by Hechi consist of items of a quality and
quantity usable and saleable in the normal course of the Business. The value at
which such inventories are carried on the Financial Statements reflect the
inventory valuation policy of Hechi, all in accordance with generally accepted
accounting principles consistently applied.
2.8 Regulatory and Other Approvals. Hechi has obtained all
registrations, consents, permits, licenses and approvals of, has made all
filings with, and has given all required notices to all governmental or
regulatory authorities in the People's Republic of China and all other persons
as is necessary or required to consummate the transactions contemplated hereby
and by the Cooperative Joint Venture Contract.
2.9 Violation of Applicable Law. Hechi is not in violation of any
applicable law, ordinance, rule or regulation relating to the operation of the
Business or affecting any of the Purchased Assets. Hechi has not received any
notice from any governmental authority or other person claiming any violation of
any law, ordinance, rule or regulation, or requiring or calling attention to the
need for any work, repairs, construction, alteration or installation related to
the Business. All reports and filings required to be made by Hechi with respect
to the Business under domestic and foreign statutes, laws, regulations, rules
and ordinances have been filed in a timely manner and no such report or filings
are currently required that have not been made.
2.10 No Materially Adverse Change. Since December 31, 1999, there have
been no changes in the condition, financial or otherwise, of the Business, or in
its prospects, earnings or properties, whether or not arising from transactions
in the ordinary course of business, that, individually or in the aggregate, have
been materially adverse to the prospects, earnings, properties or condition,
financial or otherwise, of Hechi.
2.11 Licenses and Permits. Hechi holds free from burdensome restrictions
all permits, licenses, rights-of-way, governmental and other consents, and other
rights from governmental, regulatory or administrative agencies that are
sufficient for the lawful and efficient operation of the Business as presently
conducted and as presently proposed to be conducted.
2.12 Intellectual Property. Hechi owns or has the right to use pursuant
to license, sublicense, agreement or permission all intellectual property,
including without limitation, all patent rights, trade names, service marks,
service names, brand names, copyrights, trade secrets, inventions, processes,
formulae, trade dress, methodologies, technical information, and manufacturing,
engineering and technical drawings (the "Intellectual Property"), necessary for
the operation of the Business as presently conducted and as presently proposed
to be conducted, without any conflict with the rights of others. Each item of
Intellectual Property owned or used by Hechi immediately prior to the Closing
will be owned or available for use by Biogan on substantially the same terms and
conditions immediately subsequent to the Closing. There are no claims, disputes,
actions or proceedings pending by or against Hechi with respect to any
Intellectual Property of Hechi, and none is threatened against Hechi. Hechi has
not interfered with, infringed upon, misappropriated or otherwise come into
conflict with the intellectual property rights of third parties.
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2.13 No Materially Adverse Contracts, etc. Hechi is not a party to and
none of its properties is bound or affected by, any agreement or instrument, or
is subject to any order, injunction, judgment, rule, regulation, or other action
of any court or other governmental or public authority or agency, or the award
of any arbitrator or any contractual restriction, that materially adversely
affects, or in the future may materially adversely affect, the prospects,
earnings, properties or condition, financial or otherwise, of the Business.
2.14 Environmental Matters. None of the Purchased Assets, including the
Acquired Property, is in violation of any applicable environmental law,
regulation, ordinance or order of any governmental entity relating to
contamination of or adverse effects on the environment, and neither the Acquired
Property nor any underlying soil or groundwater contains any concentrations of
regulated substances, hazardous substances, hazardous materials, toxic
substances, or similar substances, residues and wastes; neither Hechi nor any of
its employees, agents or representatives has taken, or refrained from taking,
any action that has caused or may cause any such violation. Hechi has obtained,
and is in compliance with all terms and conditions of, all required permits,
licenses and other authorizations which are required under applicable laws
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic materials or wastes into ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or hazardous or toxic materials or wastes.
There are no past or present events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or prevent
continued compliance, or which may give rise to any common law or legal
liability of Hechi, or otherwise form the basis of any claim, action, suit,
proceeding, hearing or investigation, against or involving Hechi based on or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant, or
hazardous or toxic material or waste.
2.15 Pending Litigation. There is no pending or threatened action at
law, proceeding or investigation, at law or in equity or otherwise, in, for or
by any court or governmental board, commission, agency, department or office
arising from, relating to or affecting any of its properties, including the
Purchased Assets (whether or not purportedly on behalf of Hechi) or to the past,
present or proposed operations of the Business. Hechi is not subject to, nor
does any basis exist for, any order, judgment, decree or governmental
restriction that does or could adversely affect the prospects, earnings,
properties or condition, financial or otherwise, of the Business.
2.16 Leases. Hechi has previously disclosed to Biogan all real property
leased by, or on behalf of, Hechi and has delivered true and complete copies of
all such agreements to Biogan. All lease agreements to which Hechi is a party
are in full force and effect and there is no existing default and there is no
event that, with the passage of time, would constitute an event of default under
any of such lease agreements on the part of the lessor or lessee thereunder.
2.17 Accounts Receivable. Except to the extent collected since December
31, 1999, all Accounts Receivable are reflected on the Financial Statements and
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all Accounts Receivable of Hechi accruing or created between the December 31,
1999 and the effective date of this Agreement are (a) valid bona fide claims
against debtors for sales or other charges, and (b) subject to no defenses,
set-offs, or counterclaims. No loss reserves are required with respect to such
notes and accounts receivable. Hechi has no reason to believe that the Accounts
Receivable are not collectible in accordance with their terms.
2.18 Books, Records and Financial Controls. The books and records of
account of Hechi are complete and correct in all respects and reflect a true
record of Hechi's financial condition and the Business through the effective
date of this Agreement.
2.19 Warranties. Hechi has not given or made any express warranties to
third parties with respect to any properties or goods sold or services performed
by Hechi. Hechi has no knowledge of any state of facts or the occurrence of any
event forming the basis of any present claim against Hechi for liability due to
any express or implied warranty.
2.20 Labor Matters. Hechi is in compliance with all applicable laws
respecting employment and employment practices, terms and conditions of
employment, and wages and hours, and is not engaged in any unfair labor
practices.
2.21 Insurance. Hechi has provided Biogan with copies of all relevant
insurance policies respecting Hechi's assets, properties and Business.
2.22 No Conflict. The execution and delivery of this Agreement by Hechi,
and the performance of its obligations hereunder, (a) are not in violation or
breach of, and will not conflict with or constitute a default under any of the
terms of the charter documents or bylaws of Hechi or any note, debt instruments,
security agreement or other contract, agreement or commitment binding upon Hechi
or any of its respective assets or properties; (b) will not result in the
imposition of any lien, encumbrance or restriction in favor of any third party
upon any of the assets of Hechi; and (c) will not conflict with or violate any
applicable law, regulation, judgment or decree of any government, governmental
instrumentality or court having jurisdiction over Hechi or any of its assets or
properties.
2.23 Taxes. All taxes, including without limitation, income, excise,
property, sales, transfer, use and any other taxes imposed or assessed by any
and all local, provincial, national or foreign regulatory authorities, or by any
other taxing authority, which are due or payable by Hechi with respect to the
Business, and all interest and penalties thereon, whether disputed or not, have
been paid in full. No issues have been raised (or are currently pending) by any
taxing authority in connection with any of the returns and reports referred to
in this Section 2.23. The provisions for taxes in the Financial Statements are
sufficient for the payment of all accrued and unpaid taxes of the Business.
2.24 Full Disclosure. All material facts relating to the Business and
the Purchased Assets have been disclosed to Biogan in or in connection with this
Agreement. No representation, warranty or other statement or information of or
from Hechi contained in this Agreement or in the Exhibits or any other document
furnished or to be furnished to Biogan in connection with the transactions
contemplated by this Agreement contains or will contain any untrue statement of
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a material fact or omits or will omit to state a material fact required to be
stated herein or therein necessary to make the statements and facts contained
herein or therein, in light of the circumstances in which they are made, not
false or misleading. Copies of all documents heretofore or hereafter delivered
or made available to Biogan pursuant to this Agreement were or will be complete
and accurate records of such documents. There is no fact known to Hechi which
has or could have a material adverse effect on the prospects, earnings,
properties or condition, financial or otherwise, of the Business that has not
been disclosed herein or in such other documents, certificates and statements
furnished to Biogan for use in connection with the transactions contemplated
hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BIOGAN
Biogan hereby represents and warrants to Hechi as follows:
3.1 Organization and Capitalization of Biogan. Biogan is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware. As of the effective date of this Agreement, the authorized
capital stock of Biogan consists of (a) 300,000,000 shares of common stock,
$.001 par value per share (the "Common Stock"), of which 85,386,710 shares are
validly issued and outstanding, and (b) 10,000,000 shares of preferred stock,
$.001 par value, of which no shares are issued and outstanding. Of the
10,000,000 shares of preferred stock authorized, 31,300 shares have been
designated Series A Convertible Preferred Stock.
3.2 Authorization of Transaction. Biogan has all requisite corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of Biogan, enforceable in accordance with its terms, except as
enforceability hereof may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally and by the
exercise of judicial discretion in accordance with equitable principles. The
persons who have executed this Agreement on behalf of Biogan have been duly
authorized to do so.
3.3 OTC Electronic Bulletin Board. The Common Stock of Biogan is quoted
for trading on the National Association of Securities Dealers ("NASD") OTC
Electronic Bulletin Board (the "OTC Bulletin Board") and (a) Biogan and the
Common Stock meet the criteria for continued trading on the OTC Bulletin Board,
(b) Biogan has not been notified by the NASD of any failure or potential failure
to meet the criteria for continued trading on the OTC Bulletin Board, and (c) no
suspension of trading in the Common Stock is in effect.
3.4 Compliance with Laws. Biogan has operated in compliance with all
federal, state and local laws, regulations and orders, the violation of which
would have a material adverse effect upon its business. Since January 1, 1999,
Biogan has filed with the Securities and Exchange Commission (the "SEC") all
reports and other information required to be filed under Sections 13(a), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act").
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3.5 Pending Litigation. There is no action, suit, proceeding, demand or
claim pending or, to the best knowledge of Biogan, threatened against Biogan in
connection with or relating to the transactions contemplated by this Agreement
or of any action taken or to be taken in connection by Biogan with this
Agreement.
3.6 Miscellaneous. Biogan, up to the Payment Date, is free of debt
(except those listed in Exhibit H), no pending claims, law suits, tax liability,
etc. The Board of Biogan further indemnify and protect Hechi Shareholders,
directors, officers and agents harmless against any and all lawsuits (past or
future lawsuits hat have arisen or may arise from their actions prior to the
Payment Date).
ARTICLE IV
THE CLOSING
4.1 Closing. The closing (the "Closing") of the sale and purchase of the
Purchased Assets shall take place on August 1, 2000 in Hong Kong, or at such
other place and date as may be mutually agreed to by the parties.
4.2 Hechi's Obligations. At the Closing, Hechi shall deliver to Biogan
the following:
(a) ▇▇▇▇ of Sale for the Purchased Assets in the form of
Exhibit F attached hereto and incorporated herein by reference and such
other instruments of transfer which may be reasonably necessary to
transfer to Biogan all of Hechi's rights, title and interest in and to
the Purchased Assets, all in form and substance satisfactory to Biogan;
(b) All original registrations and other government and/or
regulatory approvals required in connection with the execution of this
Agreement and the transactions contemplated hereby
(c) All books, records and other data relating to the Business
(other than its corporate records);
(d) For all real property and interest in real property,
warranty deeds, properly executed and acknowledged, conforming to and
conveying the agreed state of the title;
(e) Assignments of all leaseholds, properly executed and
acknowledged by Hechi, and accompanied by all consents of lessors
required by this Agreement and the leases being assigned;
(f) Instruments of assignment and transfer of all Purchased
Assets of every kind and description and wherever situated; and
(g) Resolutions of the board of directors and, if necessary,
the shareholders of Hechi approving the transactions contemplated by
this Agreement.
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Hechi, at any time before or after the Closing, will execute,
acknowledge and deliver any further deeds, assignments, conveyances and other
assurances, documents and instruments of transfer, reasonably requested by
Biogan, and will take any other action consistent with the terms of this
Agreement that may reasonably be requested by Biogan, for the purpose of
assigning, transferring, granting, conveying and confirming to Biogan, or
reducing to possession, any or all property to be conveyed and transferred by
this Agreement.
4.3 Biogan's Obligations. At the Closing, Biogan shall deliver to Hechi
the following:
(a) Assumption of Assumed Liabilities in the form of Exhibit H
attached hereto and incorporated herein by reference; and
(b) Resolutions of the board of directors of Biogan approving
the transactions contemplated hereby.
ARTICLE V
POST CLOSING COVENANTS AND ADDITIONAL AGREEMENTS
In addition to the foregoing, the parties hereto agree as follows:
5.1 Board of Directors of Biogan. Following the Closing, it is the
intent of the parties hereto that following the Closing the Board of Directors
of Biogan shall be comprised of seven members, three of whom shall be proposed
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President of Biogan and four of whom shall be proposed by
Hechi. The Chairman of the new Board of HMZ will be nominated by Hechi
Shareholders. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ will be the President and the Chief Executive
Officer of the first term (3 years). Hechi Shareholders and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
shall pool their votes to elect the Board for a period of three years. Each of
Hechi, the Hechi Shareholders, Biogan and ▇▇. ▇▇▇▇▇▇▇▇▇▇ shall use reasonable
best efforts to ensure that the directors of Biogan be elected as contemplated
by this Section 5.1.
5.2 Name Change. Following the Closing, Biogan shall change its name to
"HMZ Metals, Inc." and shall change its trading symbol.
5.3 Reverse Stock Split. Following the Closing, Biogan shall, subject to
the approval of the stockholders of Biogan, effect a 1-for-12 reverse split of
shares of its Common Stock.
5.4 Stockholder Approval. Prior to the Payment Date, Biogan shall use
its good faith best efforts to obtain the approval of its stockholders to the
transactions contemplated by this Agreement.
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5.5 Cooperative Joint Venture Contract. The parties acknowledge and
agree that it is the intent of the parties that the assets purchased and
liabilities assumed pursuant to this Agreement be contributed to the joint
venture (the "Joint Venture") created by the Cooperative Joint Venture Contract
in exchange for the economic interests described therein. In addition, the
parties acknowledge and agree that, from the $9.2 million dollars that Biogan
must contribute to the Joint Venture, $2.0 million dollars will be distributed
by the Joint Venture to the shareholders of Hechi for the purpose of satisfying
certain payment obligations of such shareholders in connection with the original
acquisition of the Business by such shareholders from the local government and
the subsequent formation of Hechi.
5.6 Termination of Share Acquisition Agreement. The parties hereby
terminate the Share Acquisition Agreement effective March 15, 2000.
5.7 Delivery of Shares. On the Payment Date, Hechi shall duly deliver
the Shares payable by Biogan to Hechi hereunder to the Hechi Shareholders in the
names and amounts as set forth on Exhibit D.
5.8 Consents. Prior to the Payment Date, Hechi shall obtain and will
provide Biogan with copies of all necessary consents, waivers and approvals of
third parties required to be obtained or required by Hechi in connection with
the execution and delivery of this Agreement by Hechi and the performance of its
obligations hereunder.
5.9 Survival of Representations and Warranties. Regardless of any
investigation at any time made by or on behalf of any party, or of any
information any party may have in respect thereof, all covenants, agreements,
representations and warranties made hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive the Closing.
5.10 Expenses. Hechi and Biogan each represents and warrants that it has
not taken and will not take any action that would cause the other party to have
any obligation or liability to any person for a finder's or broker's fee. Each
of the parties hereto shall pay all costs and expenses incurred by it or on its
behalf in connection with this Agreement and the transactions contemplated
hereby, including, without limiting the generality of the foregoing, fees and
expenses of its own financial consultants, accountants and counsel.
5.11 Indemnification.
(a) Each party hereto shall indemnify and hold harmless (the
"Indemnitor") the other party (the "Indemnitee") in respect of any and
all claims, losses, damages, liabilities and expenses (including,
without limitation, settlement costs and any legal, accounting and other
expenses for investigating or defending any actions or threatened
actions) reasonably incurred by the Indemnitee, in connection with each
and all of the following:
(i) Any breach of any representation or warranty made
by Indemnitor in this Agreement;
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(ii) The breach of any covenant, agreement or
obligation of Indemnitor contained in this Agreement or any
other instrument contemplated by this Agreement;
(iii) Any misrepresentation contained in any statement
or certificate furnished by Indemnitor pursuant to this
Agreement or in connection with the transactions contemplated
by this Agreement;
(iv) Any claims against, or liabilities or obligations
of Indemnitor not specifically assumed by Indemnitee pursuant
to this Agreement; and
(v) Any claims, liabilities or obligations resulting
from a failure to make or obtain or deficiency in making or
obtaining any necessary registrations and other governmental
and regulatory approvals or authorizations required for the
transactions contemplated by this Agreement.
(b) Whenever any claim arises for indemnification hereunder,
the Indemnitee shall promptly notify the Indemnitor of the claim and,
when known, the facts constituting the basis for such claim. The
Indemnitee shall not settle or compromise any claim by a third party for
which it is entitled to indemnification hereunder, without the prior
written consent of the Indemnitor (which shall not be unreasonably
withheld) unless suit shall have been instituted against it and the
Indemnitor shall not have taken control of such suit after notification
thereof as provided in this Section 5.11(b).
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Entire Agreement. This Agreement and the Exhibits to this Agreement,
supercede all prior discussions and agreements between the parties with respect
to the subject matter hereof and contain the sole and entire agreement between
the parties hereto with respect to the subject matter hereof and thereof.
6.2 Assignment. Neither this Agreement nor any interest herein is
assignable by any party hereto without the prior written consent of the other
party and any attempt at such an assignment without such consent shall be void.
Each of the terms, provisions and obligations of this Agreement shall be binding
upon, shall inure to the benefit of, and shall be enforceable by the parties and
their respective legal representatives, successors and assigns.
6.3 Waiver and Amendment. This Agreement may be amended, supplemented,
modified and/or rescinded only by a written instrument duly executed by each of
the parties hereto, which consent shall not be unreasonably withheld, and which
shall be signed by any necessary governmental or regulatory authorities, if
applicable.
6.4 Severability. Each provision of this Agreement is intended to be
severable. If any covenant, condition or other provision contained in this
Agreement is held to be invalid, void or illegal by any court of competent
jurisdiction, such provision shall be deemed severable from the remainder of
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this Agreement and shall in no way affect, impair or invalidate any other
covenant, condition or other provision contained in this Agreement. If such
condition, covenant or other provision shall be deemed invalid due to its scope
or breadth, such covenant, condition or other provision shall be deemed valid to
the extent of the scope or breadth permitted by law.
6.5 Governing Law and Choice of Forum. This Agreement shall be deemed to
be made under, shall be construed in accordance with and shall be governed by
the laws of the State of California, without reference to the choice of law
principles thereof. The parties hereby agree, in good faith, to attempt to
settle any dispute arising out of or relating to this Agreement by a meeting of
a designated representative of each party ten days after a request is made by
any party to the other party asking for the same. If such dispute cannot be
settled at this meeting, it shall be finally settled under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce (the
"Rules") by three arbitrators appointed in accordance with the Rules. Such
arbitration shall be conducted in Los Angeles, California, U.S.A. Except as
otherwise specifically provided for herein, each party shall bear its own costs
and attorneys' fees incurred in connection with any such arbitration. The
procedures specified herein shall be the sole and exclusive procedures for the
resolution of any disputes between the parties arising out of or relating to
this Agreement.
6.6 Notices. All notices, demands or other communications which are
required or are permitted to be given hereunder shall be in writing and shall be
deemed to have been sufficiently given upon personal delivery, facsimile
transmission or on the fifth business day following due deposit with an
international express courier service correctly addressed to the addresses of
the parties as set forth on the signature page hereof. Any party may give
written notice of a change of address sent via facsimile, and after confirmation
of notice of such change has been received, any notice shall be given to such
party in the manner above described at such new address.
6.7 Further Assurances. In addition to the documents and instruments to
be delivered as provided in this Agreement, each of the parties shall, from time
to time at the request of another party, execute and deliver to another party
such other documents and shall take such other action as may be necessary or
proper to more effectively carry out the terms of this Agreement.
6.8 Attorneys' Fees. In any action, litigation or proceeding (including
arbitration) between the parties arising out of or in relation to this
Agreement, the prevailing party in such action shall be awarded, in addition to
any damages or other relief, and without regard to whether or not such matter be
prosecuted to final judgment, such party's costs and expenses, including but not
limited to taxable costs and reasonable attorneys', accountants' and experts'
fees incurred in bringing such action, litigation or proceeding and/or enforcing
any judgment or order granted therein, all of which shall be deemed to have
accrued upon the commencement of such action, litigation or proceeding.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement this
1st day of August 2000.
HECHI INDUSTRIAL CO., LTD.,
a company organized under the laws of the
People's Republic of China
By: /s/ ▇▇▇▇▇ YIHUAI
------------------------------------------
▇▇▇▇▇ Yihuai,
Chairman of the Board
Business Address:
▇▇. ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ Zhuang Autonomous Region
People's Republic of China
Attn: _________________________________
Telephone: ▇▇-▇▇▇-▇▇▇▇▇▇▇
Facsimile: ▇▇-▇▇▇-▇▇▇▇▇▇▇
BIOGAN INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Chairman of the Board
Business Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Attn: Chairman
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT LIST
Exhibit A - Cooperative Joint Venture Contract
Exhibit B - List of Purchased Assets
Exhibit C - List of Assumed Liabilities
Exhibit D - List of Hechi Shareholders and Amount of Consideration to be Issued
to Each Shareholder
Exhibit E - Amended Certificate of Designations of Series A Convertible
Preferred Stock
Exhibit F - Warranty
Exhibit G - None
Exhibit H - List of Debt of Biogan as of the Payment Date
Exhibit H(sic) - Assumption of Assumed Liabilities
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