EXHIBIT 1
ASSET SALE AGREEMENT
THIS AGREEMENT dated for reference March 18th, 2003.
BETWEEN:
RED DOT CAPITAL INC., a company incorporated pursuant to
the laws of the State of Delaware with an office located at 200 - 675 West
Hastings Street, Vancouver, British Columbia, V6B1N2;
("Red Dot")
OF THE FIRST PART
AND:
PAN ASIA COMMUNICATIONS CORP., a body corporate, duly incorporated under the
laws of the State of Nevada and having an office at #1001-1166 Alberni Street,
Vancouver, Canada. V6E 3Z3
("Pan Asia")
OF TI SECOND PART
WHEREAS:
A. Pursuant to a joint venture agreement (the "Joint Venture Agreement") dated
December 23, 2002 with Hubei Zenith Airbeck Pharmaceutical Co, Ltd. ("Airbeck"),
a translated copy of which is attached hereto as Schedule "A", Red Dot has the
right to acquire on certain terms and conditions a 57.1% joint venture interest
(the "Interest") in Hubei Pharmaceutical Co., Ltd. ("Hubei"), a private Chinese
company to be involved in the research, development, production and sale of
certain pharmaceutical products that Airbeck will contribute to Hubei;
B. Pan Asia wishes to acquire and Red Dot wishes to sell the Interest upon the
terms and conditions contained herein;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants and provisos herein contained, THE PARTIES HERETO AGREE AS
FOLLOWS:
RED DOT'S REPRESENTATIONS
1.1 Red Dot hereby makes the following representations and warranties to Pan
Asia, each of which will be true and correct at Closing:
(a) Red Dot owns a 100% right, interest and title to the Interest, free and
clear of all liens, charges and encumbrances;
(b) The Joint Venture Agreement is in good standing and in full force as of the
date of this Agreement, and to the best of Red Dot's knowledge and belief, after
due inquity, there are no other outstanding agreements or options to acquire or
purchase an interest in Hubei;
(c) To the best of Red Dot's knowledge and belief, after due inquiry, Airbeck is
the registered and beneficial owner of a 100% interest in the pharmaceutical
assets described in the Joint Venture Agreement. Red Dot knows of no
circumstance that would prevent Airbeck from complying with the terms of the
Joint Venture Agreement.
(d) Red Dot has the right, subject to the notice requirements contained in the
Joint Venture Agreement, to assign the Interest to Pan Asia;
(e) Hubei is a body corporate, duly incorporated under the laws of China with
full power and absolute capacity to conduct business as contemplated in the
Joint Venture Agreement;
(0 Red Dot has the full right, authority and capacity to enter into this
Agreement without first obtaining the consent of any other person or body
corporate and the consummation of the transaction herein contemplated will not
conflict with or result in any breach of any covenants or agreements contained
in, or constitute a default under, or result in the creation of any encumbrance
under the provisions of any indenture, agreement or other instrument whatsoever
to which Red Dot is a party or by which it is bound; and
(g) Red Dot is a body corporate, duly incorporated under the laws of Delaware
with full power and absolute capacity to enter into this Agreement and that the
terms of this Agreement have been authorized by all necessary corporate acts and
deeds in order to give effect to the terms hereof.
1.2 The representations and warranties of Red Dot set out in paragraph 1.1 above
form a part of this Agreement and are conditions upon which Pan Asia has relied
upon in entering into this Agreement and shall survive Closing.
2. REPRESENTATION OF PAN ASIA
2.1 Pan Asia hereby makes the following representations and warranties to Red
Dot, each of which will be true and correct at Closing:
(a) Pan Asia is a corporation duly incorporated, validly existing and in good
standing under the laws of Nevada;
(b) Pan Asia is in good standing with the U.S. Securities & Exchange Commission
(the "SEC"). All Pan Asia filings submitted to the SEC contain full, plain and
true disclosure of all material events in Pan Asia's affairs. The Company has
complied in all material respects with the corporate laws of the State of
Nevada;
(c) As of the date of this closing approximately 19,828,762 shares of common
stock with nominal par value will have been issued as fully paid and
non-assessable in the capital of the Company;
(d) Pan Asia has good and sufficient right and authority to enter into this
Agreement on the terms and conditions herein set forth and to issue shares of
common stock to Red Dot as contemplated in this Agreement;
(e) The Articles and Bylaws of Pan Asia permit it to carry on its present
business;
(f) To the best of knowledge of the current board of Directors and management of
the Company, the corporate records and minute books of Pan Asia contain complete
and accurate minutes of all meetings of the directors and shareholders held
since incorporation;
(h) Pan Asia has no knowledge of any:
(i) actions, suits, investigations or proceedings against Pan Asia which are in
progress, pending or threatened.
(ii) outstanding judgments of any kind against Pan Asia other than a judgment in
favor of Lawyer Steve O'Neill ; or
(iii) occurrences or events which have, or might reasonably be expected to have,
a material adverse effect on Pan Asia intended business.
(i) Pan Asia's financial statements, as filed with the SEC (the "Financial
Statements"), have been prepared in accordance with generally accepted
accounting principles and fairly represent Pan Asia's financial position at that
date. Since the date to which the most recent Financial Statements were
prepared:
(i) There has not been any material change in the financial position other than
debts incurred in the normal course of business including Office Administration
fees, Directors fees and shares issued to consultants under Reg S8 or condition
of Pan Asia or its right or capacity to carry on business;
(ii) Pan Asia has not waived or surrendered any right of material value; (iii)
The business of Pan Asia has been conducted in the ordinary course;
(iv) Pan Asia has not guaranteed, or agreed to guarantee, any debt, liability or
other obligation of any person, firm or corporation;
(v) Pan Asia has authorized shares for debt exchange for management fees and
certain debts outstanding on the books of the Company.
Pan Asia does not have any contracts, agreements, pension plans, profit sharing
plans, bonus plans, undertakings, or arrangements whether oral, written or
implied with employees, licensees, managers, accountants, suppliers, agents,
distributors, officers, directors, lawyers or others which cannot be terminated
on not more than one month's notice; and
(Ic) Pan Asia has initiated, and will complete prior to Closing or as soon as
practically possible after closing, a reverse split of its shares of common
stock whereby every ten pre-consolidation shares shall be converted into one
post-consolidation share.
2.2 The representations and warranties of Pan Asia set out in paragraph 2.1
above form a part of this Agreement and are conditions upon which Red Dot has
relied in entering into this Agreement and shall survive Closing.
PURCHASE AND SALE OF INTEREST
3.1 At Closing, upon the terms and conditions herein set forth, Red Dot agrees
to sell and assign a 100% undivided right, title and interest in and to the
Interest, in consideration of Pan Asia;
(a) issuing 22,000,000 post-consolidation, restricted shares of common stock in
its capital (the "Shares") to Red Dot, or Red Dot's nominees appointed in
writing; to be issued on the following terms and conditions
i) 3,000,000 on closing
ii) 19,000,000 at the time the Airbeck assets are vended into the Joint Venture
(b) issuing 2,000,000 post-consolidation, restricted shares of common stock in
its capital (the "Shares") to _____________________________ as a finders fee due
and payable at such time as Airbeck assets are vended in to the Joint Venture as
referred to above.
(c) assuming all of Red Dot's obligations pursuant to the Joint Venture
Agreement subject to 3.1(a) (ii) above.
3.2 In thither consideration of Red Dot's assignment of the Interest in Pan
Asia, Pan Asia agrees to issue the following number of post-consolidation,
restricted shares of common stock in its capital to Red Dot, or Red Dot's
nominees appointed in writing, upon Hubei attaining the following cumulative,
gross sales revenue levels:
Gross Sales Amount Additional Shares To Be Issued
US$5,000,000 5,000,000
US$7,500,000 2,500,000
US$10,000,000 2,500,000
US$12,500,000 2,500,000
US$15,000,000 2,500,000
3.4 Pan Asia shall be obligated to issue shares pursuant to paragraph 3.2 based
on
Hubei gross sales revenue figures reported in Pan Asia's audited annual
financial statements. Pan Asia shall issue such shares within 10 days of the
date that Pan Asia files with the SEC via EDGAR its annual financial statements
that evidence the sales amounts necessary to trigger an issuance or issuances
described in paragraph 3.3
CLOSING
The sale and purchase of the Assets shall be closed at the office Pan Asia, at
#1001- Albemi Street, Vancouver, British Columbia at 10:00 A.M. (Vancouver time)
on March ____ 2003, or on such other date or at such other place as may be
agreed upon by the parties (the "Closing").
ACTIONS BY THE PARTIES PENDING CLOSING
From and after the date hereof and until Closing, Red Dot and Pan Asia covenant
and agree that:
I
(a) Red Dot and Pan Asia, and their authorized representatives, shall have fill!
access during normal business hours to each others records relevant to the
representations and warrants made in this Agreement. Furthermore, each party
shall furnish to the other party, or its authorized representatives, with all
information with respect to its affairs and business as the other party may
reasonably request;
(b) Pan Asia shall conduct its business diligently and substantially in the
manner previously conducted and shall not make or institute any unusual or novel
methods of purchase, sale, management, accounting or operation, except with the
prior written consent of Red Dot;
(c) Pan Asia shall not enter into any contract or commitment to purchase or sell
any assets or engage in any transaction not in the usual and ordinary course of
business without the prior written consent of Red Dot except
i) for the understanding that Pan Asia has agreed to pay EuroCapital Holdings
AVV. the sum of $50,000 as compensation for the cancellation of the 4,000,000
shares issued to EuroCapital for conversion and settlement of debt.
ii) For the issuance of 1,500,000 restricted pre-consolidation shares to 618335
BC Ltd for Office Administration Services for the period December, 1, 2002 until
March, 31, 2003.
iii) For the issuance of 1 million restricted pre-consolidation shares to Mark
Glusing, President of Pan Asia as a sign on bonus.
(d) Pan Asia shall not act or omit to do any act, or permit any act or omission
to act, which will cause a breach of any contract, commitment or obligation; and
(e) Pan Asia will not declare or pay any dividend or make any distribution,
directly or indirectly, in respect of its capital, nor will it directly or
indirectly redeem, purchase, sell or otherwise acquire or dispose of shares in
its capital.
(f) Red Dot will furnish to Pan Asia, before closing, all documentation relating
to the Joint Venture Agreement including, without limitation, articles of
incorporation, certificate of good standing, Directors resolutions, copies of
minutes of meetings, agreements, detail of Assets and government licenses all of
which shall be acceptable to Pan Asia.
CONDITIONS PRECEDENT TO PAN ASIA'S OBLIGATIONS
Each and every obligation of Pan Asia to be performed at Closing shall be
subject to Red Dot's satisfaction by Closing of the following conditions, unless
waived in writing by Pan
Asia:
(a) The representations and warranties made by Red Dot in this Agreement shall
be true and correct as at Closing with the same effect as though such
representations and warranties had been made or given at Closing; and
(b) Red Dot shall deliver to Pan Asia:
(i) a certified true copy of resolutions of Red Dot's Board of Directors
authorizing the assignment and sale of the Interest to Pan Asia and the
execution of this Agreement;
(ii) the form of Red Dot's intended notice to Airbeck pursuant to Article 56 of
the Joint Venture Agreement; and
(iii) a Bill of Sale and Assignment addressed to Pan Asia and executed by Red
Dot with respect to the Interest.
(iv) all documentation relating to the Joint Venture Agreement including,
without limitation, articles of incorporation, certificate of good standing,
Directors resolutions, copies of minutes of meetings, agreements, detail of
Assets, government licenses.
CONDITIONS PRECEDENT TO RED DOT'S OBLIGATIONS
Each and every obligation of Red Dot to be performed at Closing shall be subject
to Pan Asia's satisfaction by Closing of the following conditions, unless waived
in writing by Red
Dot:
(a) The representations and warranties made by Pan Asia in this Agreement shall
be true and correct at Closing with the same effect as though such
representations and warranties had been made or given at Closing;
(b) Pan Asia's commencement of the necessary regulatory and administrative tasks
of the reverse split described in subparagraph 2.1(k); subject to Pan Asia'
shareholder and board approval and
(c) Pan Asia shall deliver to Red Dot or their Solicitor Yanke:
(i) share certificates representing the Shares issued in accordance with Red
Dot's instructions; and
(ii) a certified true copy of resolutions of Pan Asia's Board of Directors
authorizing the purchase of the Interest from Red Dot, the execution of this
Agreement and the issuance of the Shares;
(d) Subject to Board and Shareholder approval
FURTHER ASSURANCES
The parties hereto covenant and agree to do such further acts and execute and
deliver all such further deeds and documents as shall be reasonably required in
order to filly perform and carry out the terms and intent of this Agreement.
ENTIRE AGREEMENT
This Agreement constitutes the entire agreement to date between the parties
hereto and supersedes every previous agreement, communication, expectation,
negotiation, representation or understanding, whether oral or written, express
or implied, statutory or otherwise, between the parties with respect to the
subject of this Agreement.
NOTICE
10.1 Any notice required to be given under this Agreement shall be deemed to be
well
and sufficiently given if delivered by hand or transmitted by facsimile
addressed as follows:
In the case of Red Dot:
Red Dot Capital Inc.
200 - 675 West Hastings Street
Vancouver, British Columbia
V6B 1N2
Fax number: (604) 681-7622
and in the case of Pan Asia addressed as follows:
Pan Asia Communications Corp.
#1001-1166 Alberni Street, Vancouver. Canada. V6B 3Z3
Fax number: (604) 648-2091
and any notice given as aforesaid shall be deemed to have been given, if
delivered, when delivered, or if sent by facsimile, on the first business day
after the date of transmission.
Either party may time to time by notice in writing change its address for the
purpose of this section.
TIME OF ESSENCE
Time shall be of the essence of this Agreement.
The titles to the respective sections hereof shall not be deemed a part of this
Agreement but shall be regarded as having been used for convenience only.
SEVERABILITY
If any one or more of the provisions contained herein should be invalid, illegal
or unenforceable in any respect in any jurisdictions, the validity, legality and
enforceability of such provisions shall not in any way be affected or impaired
thereby in any other jurisdiction and the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
APPLICABLE LAW
The situs of the Agreement is Las Vegas, Nevada, and for all .purposes this
Agreement will be governed exclusively by and construed and enforced in
accordance with laws prevailing in the State of Nevada. The parties agree to
attorn to the jurisdiction of the Courts of the State of Nevada.
ENUREMENT
This Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and theft respective successors and permitted assigns.
IN WITNESS WHEREOF Red Dot and Pan Asia have duly executed this Agreement
effective as of the date and year above written.
RED DOT CAPITAL INC. PAN ASIA COMMUNICATIONS CORP.