AGREEMENT AND PLAN OF MERGER
Among
SILVER RIVER VENTURES, INC.,
SILVER RIVER ACQUISITIONS, INC.,
BIOFORCE NANOSCIENCES, INC.
AND
H. XXXXXXX XXXXXXXX AND XXXXXX X. XXXXX
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of this 30th day of November 2005 by and among SILVER RIVER VENTURES,
INC., a Nevada Corporation ("Silver River"), SILVER RIVER ACQUISITIONS, INC., a
Nevada corporation ("Merger Sub"), BIOFORCE NANOSCIENCES, INC., a Delaware
corporation ("BioForce") and H. Xxxxxxx Xxxxxxxx and Xxxxxx X. Xxxxx, principal
stockholders of Silver River who will make certain representations, warranties
and covenants herein ("Principal Stockholders") (the "SR Stockholders").
WHEREAS, Silver River desires to acquire BioForce as a wholly owned
subsidiary and to issue shares of Silver River common stock to the security
holders of BioForce upon the terms and conditions set forth herein. Merger Sub
is a newly-created, wholly-owned subsidiary corporation of Silver River that
will be merged with and into BioForce, whereupon BioForce will be the surviving
corporation and will become the wholly owned subsidiary of Silver River. Merger
Sub and BioForce are sometimes collectively hereinafter referred to herein as
the "Constituent Corporations");
WHEREAS, the boards of directors of Silver River, Merger Sub and
BioForce, respectively, deem it advisable and in the best interests of such
corporations and their respective stockholders that Merger Sub merges with and
into BioForce pursuant to this Agreement and the Certificate of Merger (in the
form attached hereto as Attachment "A") and pursuant to applicable provisions of
law (such transaction is hereafter referred to as the "Merger");
WHEREAS, the SR Stockholders own, beneficially and of record, 1,746,610
shares of common stock of Silver River, representing 87.3% of the issued and
outstanding common stock of Silver River; and
WHEREAS, each of the parties to this Agreement desires to make certain
representations, warranties and agreements in connection with the transactions
contemplated herein and also to prescribe various conditions thereto.
NOW THEREFORE, in consideration of the premises, mutual covenants set out
herein and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:
SECTION 1 Acquisition of BioForce Nanosciences, Inc. The parties to this
Agreement do hereby agree that Merger Sub will be merged with and into BioForce
upon the terms and conditions set forth herein and in accordance with the
provisions of the Nevada Revised Statutes ("NRS") and the Delaware General
Corporation Law (the "DGCL"). It is the intention of the parties hereto that
this transaction qualifies as a tax-free reorganization under Section
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended, and related
sections thereunder.
SECTION 2 Terms of Merger. In accordance with the provisions of this
Agreement and the requirements of applicable law, Merger Sub will be merged with
and into BioForce as of the Effective Time of the Merger (the terms "Closing"
and "Effective Time of the Merger" are defined in Section 6 hereof). BioForce
will be the surviving corporation (hereinafter sometimes referred to as the
-2-
"Surviving Corporation") and the separate existence of Merger Sub will cease at
the Effective Time of the Merger. BioForce, as the Surviving Corporation, will
succeed to and assume all the rights and obligations of Merger Sub in accordance
with the NRS and the DGCL, as described below. Consummation of the Merger will
be upon the following terms and subject to the conditions set forth herein:
(a) Corporate Existence. Commencing at the Effective Time of the Merger,
the separate corporate existence of Merger Sub will cease and the
Surviving Corporation will continue its corporate existence as a Delaware
corporation; and
(i) it will thereupon and thereafter possess all rights,
privileges, powers, franchises and property (real, personal
and mixed) of each of the Constituent Corporations;
(ii) all debts due to either of the Constituent Corporations, on
whatever account, all causes in action and all other things
belonging to either of the Constituent Corporations will,
except as otherwise set forth herein, be taken and deemed to
be transferred to and will be vested in the Surviving
Corporation by virtue of the Merger without further act or
deed; and
(iii) all rights of creditors and all liens, if any, upon any
property of any of the Constituent Corporations will be
preserved unimpaired, limited in lien to the property
affected by such liens immediately prior to the Effective
Time of the Merger, and all debts, liabilities and duties of
the Constituent Corporations will thenceforth attach to the
Surviving Corporation.
(b) Effective Time of the Merger. At the Effective Time of the Merger,
(i) the Certificate of Incorporation and the Bylaws of BioForce,
as existing and in effect immediately prior to the Effective
Time of the Merger, will be and remain the Certificate of
Incorporation and Bylaws of the Surviving Corporation;
(ii) the members of the Board of Directors of BioForce holding
office immediately prior to the Effective Time of the Merger
will remain as the members of the Board of Directors of the
Surviving Corporation until their respective successors are
elected or appointed and qualified (if on or after the
Effective Time of the Merger a vacancy exists on the Board of
Directors of the Surviving Corporation, such vacancy may
thereafter be filled in a manner provided by applicable law
and the Bylaws of the Surviving Corporation); and
(iii) until the Board of Directors of the Surviving Corporation
otherwise determines, all persons who hold offices of
BioForce at the Effective Time of the Merger will continue to
hold the same offices of the Surviving Corporation.
(c) Conversion of Securities. At the Effective Time of the Merger and
without any action on the part of Silver River, Merger Sub, BioForce or
the holders of any of the securities of any of these corporations, each
of the following will occur:
(i) The 13,397,425 shares of BioForce common stock issued and
outstanding immediately prior to the Effective Time of the
Merger, which amount includes shares to be issued by
BioForce prior to the Closing upon the conversion of certain
outstanding options and warrants to acquire shares of Bio
-3-
Force common stock, will be converted into the right to
receive an aggregate of 16,000,000 shares of Silver River
common stock, which shares will reflect the two (2) shares
for one (1) share forward stock split to be effected prior
to the Closing of the Merger and as depicted in Section 4(d)
below. Accordingly, each one (1) share of BioForce common
stock is to be converted into the right to receive 1.19426
shares of Silver River common stock (the "Conversion
Ratio"). No fraction of any share of Silver River common
stock will be issued to any former holder of BioForce common
stock; rather, the number of shares of Silver River common
stock otherwise issuable, if other than a whole number, will
be rounded to the nearest whole number. The holders of such
certificates previously evidencing shares of BioForce common
stock outstanding immediately prior to the Effective Time of
the Merger will cease to have any rights with respect to
such shares of BioForce's common stock except as otherwise
provided herein or by law. (ii) Any shares of BioForce
capital stock held in the treasury of BioForce immediately
prior to the Effective Time of the Merger will automatically
be canceled and extinguished without any conversion thereof
and no payment will be made with respect thereto. At the
Effective Time of the Merger, the stock transfer books of
BioForce will be closed and thereafter, there will be no
further registration of transfers on the stock transfer
books of the Surviving Corporation of any shares of BioForce
common stock which were outstanding immediately prior to the
Effective Time.
(iii) Each share of common stock of Merger Sub issued and
outstanding immediately prior to the Effective Time of the
Merger will remain in existence as one share of common stock
of the Surviving Corporation, which will be owned by Silver
River.
(v) The 1,999,975 shares of Silver River common stock issued and
outstanding prior to the Merger, which shares will be
increased to 3,999,950 shares as a result of the 2 shares
for 1 share Forward Stock Split described in Section 2(d)
below, will remain issued and outstanding after the
Effective Time of the Merger.
(d) Forward Stock Split. Prior to the Closing of the Merger, Silver River
will take all requisite and necessary action to effect a forward stock
split (the "Forward Stock Split") of its issued and outstanding shares of
common stock on a 2 shares for 1 share basis, the effect of which will
increase the number of issued and outstanding shares of Silver River
common stock to 3,999,950 shares. In connection with the Forward Stock
Split, no fraction of any share Silver River Shares will be issued;
rather, the number of shares otherwise issuable, if other than a whole
number, will be rounded up to the next whole number.
(e) Restricted Securities.
(i) None of the shares of Silver River common stock into which
the shares of BioForce common stock are to be converted
will, at the Effective Time of the Merger, be registered
under the Securities Act of 1933, as amended (the
"Securities Act") but, rather, will be deemed to have been
issued pursuant to an exemption or exemptions therefrom
(subject to the satisfaction of certain other terms and
-4-
conditions hereof) and will be considered "restricted
securities" within the meaning of Rule 144 promulgated under
the Securities Act. All shares of Silver River common stock
to be issued pursuant to this Agreement will be exempt from
registration under the Securities Act pursuant to Section
4(2) of that Act and Regulation D - Rule 506 and/or
Regulation S promulgated thereunder, and certificates
representing the shares will bear a restrictive legend
worded substantially as follows and as may otherwise be
required:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933 (the
"Act") and are "restricted securities" as that term is
defined in Rule 144 under the Act. The shares may not
be offered for sale, sold or otherwise transferred
except pursuant to an exemption from registration under
the Act, the availability of which is to be established
to the satisfaction of the corporation."
(ii) At the Closing, Silver River will direct its transfer agent
to record, as soon as practicable after the Closing, the
issuance of Silver River common stock to the holders of
BioForce's common stock pursuant to the provisions set forth
above. The transfer agent will annotate its records to
reflect the restrictions on transfer embodied in the legend
set forth above. There will be no requirement of Silver
River to register under the Securities Act any shares of
Silver River common stock in connection with the Merger.
(f) Other Matters.
(i) mmediately prior to the Effective Time of the Merger,
BioForce will have no more than 14,785,588 shares of
BioForce common stock issued and outstanding, which may
include the 13,397,425 shares of BioForce common stock
referenced in Section 2(c)(i) above and 1,388,163 shares of
BioForce common stock which may be issued upon exercise or
conversion of certain options and warrants outstanding on
the date hereof. Immediately prior to the Effective Time of
the Merger, Silver River will have no more than 3,999,950
shares of Silver River common stock and no other series of
common stock issued and outstanding.
(ii) From and after the Closing and with a view to making
available to holders of Silver River common stock issuable
hereunder the benefits of Rule 144 of the Securities Act, or
any other similar rule or regulation of the Securities and
Exchange Commission ("SEC"), Silver River will take all
action as may be required as a condition to the availability
of Rule 144 under the Securities Act (or any successor
exemptive rule hereinafter in effect) with respect to Silver
River common stock and furnish to any holder of Silver River
common stock forthwith, upon request, a written statement by
Silver River as to its compliance with the reporting
requirements of Rule 144, a copy of the most recent annual
or quarterly report of Silver River as filed with the SEC
and such other reports and documents as a holder may
reasonably request in availing itself of any rule or
regulation of the SEC allowing a holder to sell any such
Silver River common stock without registration, upon
satisfaction of all applicable provisions of Rule 144.
-5-
Silver River agrees to facilitate and expedite transfers of
the shares of Silver River common stock pursuant to Rule 144
under the Securities Act, which efforts will include timely
notice to its transfer agent to expedite such transfers of
such shares.
(iii) Immediately prior to the Closing, the Silver River Board of
Directors will nominate and elect to the Silver River Board,
Xxxx Xxxxxxxxx, Xxxx-Xxxxxxx Xxxxxx and Xxxxx Xxxx,
effective immediately upon the Closing, and Silver River
will cause all of the persons then serving as directors and
officers of Silver River immediately prior to the Closing to
tender their resignations as directors and executive
officers of Silver River, effective immediately upon the
Closing. Following the Closing, the Silver River Board will
be granted the right to appoint up to three additional
Directors to the Silver River Board of Directors. All such
directors shall serve in such capacities until the next
meeting of stockholders of Silver River at which directors
are elected.
(iv) The parties hereto acknowledge and agree that, subject to
Section 2(g), at the Closing of this Agreement, Xxxxxxxx
Investment Company, a private company having its principal
offices in Salt Lake City, Utah will have earned and be
entitled to a one-time fee of $250,000 in consideration for
certain services rendered in connection with the
consummation of this Agreement and other services. Silver
River and BioForce agree that the $250,000 fee is to be paid
as set forth below in Section 2(g) below.
(v) Following the Closing of this Agreement, as defined in
Section 2(g) below, current holders of BioForce stock
options and warrants will have their options and warrants
converted into new options and warrants, exercisable to
purchase shares of Silver River common stock, on terms and
conditions equivalent to the existing terms and conditions
of the respective BioForce options and/or warrants. The
parties hereto acknowledge and agree that the maximum number
of shares of Silver River common stock to be available for
the conversion of existing BioForce stock options and
warrants following the Closing will be 1,657,828 shares.
This number has been determined by taking the maximum number
of BioForce shares (1,388,163) into which the existing
BioForce stock options and warrants may be converted and
multiplying by 1.19426 (Conversion Ratio). Also, each new
option or warrant will be exercisable or convertible into a
number of Silver River shares equal to the number of
BioForce shares subject to the existing option or warrant,
multiplied by the Conversion Ratio. Further, the exercise
price per shares for each new option or warrant to purchase
Silver River shares will equal the conversion price per
share of the existing BioForce options or warrants, divided
by the Conversion Ratio. -
(vi) If, at any time after the Closing, any further action is
necessary or desirable to carry out the purposes of this
Agreement, the officers and directors of Silver River are
hereby fully authorized to take, and will use their
reasonable efforts to take, all such lawful and necessary
action.
-6-
(g) Financing.
(i) Following the execution of this Agreement, the parties
hereto agree that Silver River will use its best efforts to
arrange for financing in the form of a private placement of
its securities for a minimum of $2.5 million and a maximum
of $6.0 million for the benefit of BioForce and Silver River
(the "Private Placement"). The parties hereto further agree
that Xxxxxxxx Investment Company will assist in arranging
for this financing. Xxxxxxxx Investment Company will
participate only as a finder in any prospective financing
and will not negotiate for or participate in the actual sale
of any securities.
(ii) The Private Placement will be made pursuant to an
equity-based security in the form of a "Unit," each Unit
consisting of one share of Silver River common stock
(post-split) and one stock purchase warrant to purchase one
additional share of Silver River common stock (post-split).
Each Unit will be offered at a price of $1.50 per Unit. Each
common stock purchase warrant included in the Unit will
entitle the holder to purchase one additional share of
Silver River common stock at the price of $1.75 per share
for a 45-day period beginning on the effective date of the
registration statement described in Section 2(g)(vi) below,
and each common stock purchase warrant will expire if
unexercised at the end of such 45-day period. All other
terms of the Private Placement and the warrants shall be
approved by BioForce in its reasonable discretion.
(iii) In connection with the Private Placement, BioForce agrees to
assist Silver River in the preparation of a confidential
private placement memorandum (the "PPM") to be used in
connection with the offering of Units and to provide Silver
River with all information, documents and financial
statements with respect to BioForce required and necessary
to be included in the PPM.
(iv) All funds realized from the Private Placement financing will
be placed into a special escrow account with an escrow agent
reasonably acceptable to both Silver River and BioForce
until both (A) the minimum of $2,500,000 in gross proceeds
has been realized pursuant to the Private Placement and (B)
the Merger has been completed and the Closing of this
Agreement has occurred. Upon the satisfaction of the above
criteria, the funds will be released to BioForce and Silver
River.
(v) Upon realizing the minimum $2,500,000 in gross proceeds from
the Private Placement and effecting the Closing of this
Agreement, the $250,000 one-time fee described in Section
2(f)(iv) above will be payable to Xxxxxxxx Investment
Company and the parties hereto agree that the fee will be
paid immediately upon the escrowed funds being released from
the special escrow account.
(vi) Following completion of the Private Placement and the
Closing of this Agreement, the parties hereto agree to use
their best effort to cause Silver River to prepare and file
with the SEC a registration statement on Form SB-2, or other
equivalent and appropriate form, relating to certain issued
-7-
and outstanding shares of Silver River common stock. Those
shares of Silver River common stock that may be included in
the registration statement will be (x) shares of Silver
River common stock included within the Units sold pursuant
to the Private Placement, including those shares of common
stock underlying the stock purchase warrants; (y) shares of
certain current BioForce stockholders that have existing
registration rights relating to their BioForce shares and
who will receive Silver River shares pursuant to the Merger;
and (z) such other shares as may be determined by the Silver
River Board of Directors following the Closing.
SECTION 3 Delivery of Shares. On or as soon as practicable after the
Effective Time of the Merger, BioForce will use reasonable efforts to cause all
holders of BioForce's common stock (the "BioForce Stockholders") to surrender to
Silver River's transfer agent for cancellation certificates representing their
shares of BioForce's common stock, against delivery of certificates representing
the shares of Silver River common stock for which BioForce's common stock is to
be converted in the Merger pursuant to Section 2 hereof. Each of the BioForce
Stockholders will be required, prior to or upon surrender of their BioForce
common stock, to deliver to Silver River an "investment letter" or other written
instrument acceptable to the parties hereto, providing, among other things,
whether or not the investor is an "accredited investor" as defined under
Regulation D of the Securities Act, and whether or not the investor is a "U.S.
Person" as defined by Regulation S of the Securities Act. Until surrendered and
exchanged as herein provided, each outstanding certificate which, prior to the
Effective Time of the Merger, represented BioForce common stock, will be deemed
for all corporate purposes to evidence ownership of the same number of shares of
Silver River common stock into which the shares of BioForce common stock
represented by such BioForce certificate will have been so converted.
SECTION 4 Representations of BioForce. BioForce hereby makes as of the
date hereof and as of the Effective Time of the Merger, the following
representations and warranties:
(a) As of the date hereof and for the purpose of this Agreement, the
total number of shares of BioForce common stock issued and outstanding is
13,397,425 shares, which amount includes shares to be issued by BioForce
prior to the Closing upon the conversion of certain outstanding options
and warrants to acquire shares of Bio Force common stock.
(b) BioForce common stock constitutes duly authorized and validly issued
shares of common stock of BioForce. All shares are fully paid and
nonassessable.
(c) The audited financial statements of BioForce as of and for the year
ended December 31, 2004 and unaudited interim financial statements of
BioForce for the period ended October 31, 2005, which have been delivered
to Silver River, or will be delivered prior to the Closing (hereinafter
referred to as the "BioForce Financial Statements"), fairly present the
financial condition of BioForce as of the dates thereof and the results
of its operations for the periods covered thereby. Other than as set
forth in any schedule or exhibit attached hereto, and except as may
otherwise be set forth or referenced herein, there are no material
liabilities or obligations, either fixed or contingent, not disclosed or
referenced in BioForce Financial Statements or in any exhibit or notes
thereto other than contracts or obligations occurring in the ordinary
course of business since October 31, 2005; and no such contracts or
obligations occurring in the ordinary course of business constitute liens
or other liabilities which materially alter the financial condition of
BioForce as reflected in BioForce Financial Statements. BioForce has, or
will have at the Closing, good title to all assets, properties or
contracts shown on BioForce Financial Statements subject only to
dispositions and other transactions in the ordinary course of business,
the disclosures set forth therein and liens and encumbrances of record.
-8-
(d) Except as disclosed in writing to Silver River, since October 31,
2005, there has not been any material adverse changes in the financial
position of BioForce except changes arising in the ordinary course of
business, which changes will not materially and adversely affect the
financial position of BioForce.
(e) Except as and to the extent set forth in Attachment 4(e), BioForce is
not a party to any material pending litigation or, to the knowledge of
its executive officers (herein, the "BioForce's Knowledge"), any
governmental investigation or proceeding, not reflected in BioForce
Financial Statements, and, to BioForce's Knowledge, no material
litigation, claims, assessments or any governmental proceedings are
threatened in writing against BioForce.
(f) Neither BioForce nor any of its officers, employees or agents, nor
any other person acting on behalf of BioForce, has directly or
indirectly, within the past five years, given or agreed to give any gift
or similar benefit to any person who is or may be in a position to help
or hinder BioForce's business, or assist it in connection with any actual
or proposed transaction, which (i) might be reasonably expected to
subject it to any material damage or penalty in any action or to have a
material adverse effect on BioForce or its business, assets, properties,
financial condition or results of operations (a "Material Adverse
Effect"), (ii) if not given in the past, might have reasonably been
expected to have had a Material Adverse Effect, or (iii) if not continued
in the future, might be reasonably expected to have a Material Adverse
Effect or to subject BioForce to material suit or penalty in any action.
(g) BioForce is in good standing in its state of incorporation, and is in
good standing and duly qualified to do business in each state where
required to be so qualified, except where the failure to so qualify would
have no Material Adverse Effect.
(h) BioForce has, or by the Effective Time of the Merger will have, filed
all material tax, governmental and/or related forms and reports (or
extensions thereof) due or required to be filed in the ordinary course of
business and has (or will have) paid or made adequate provisions for all
taxes or assessments which have become due as of the Effective Time of
the Merger.
(i) BioForce has not materially breached any material agreement to which
it is a party. BioForce has previously given Silver River copies of or
access to all material contracts, commitments and/or agreements to which
BioForce is a party.
(j) BioForce has the requisite corporate power and authority to enter
into this Agreement together with such other agreements and documents
requisite to this Agreement (the "Transaction Documents") to which it is
a party and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and other Transaction Documents
to which it is a party and the consummation of the transactions
contemplated hereby and thereby have been, or will prior to the Closing
and the Effective Time of the Merger be, duly authorized by BioForce's
Board of Directors and by BioForce's stockholders (if necessary). The
execution of this Agreement and other Transaction Documents does not
materially violate or breach any material agreement or contract to which
BioForce is a party, and BioForce, to the extent required, has, or will
have by Closing, obtained all necessary approvals or consents required by
any agreement to which BioForce is a party. The execution and performance
of this Agreement and other Transaction Documents will not violate or
conflict with any provision of BioForce's Certificate of Incorporation in
effect as of the date hereof, or Bylaws of BioForce.
-9-
(k) Information regarding BioForce which has been delivered by BioForce
to Silver River for use in connection with the Merger, including the
preparation of the Information Statement and the PPM, was, at the time
provided, to BioForce's Knowledge, true and accurate in all material
respects.
(l) To BioForce's Knowledge, BioForce has and at the Closing will have,
disclosed in writing to Silver River all events, conditions and facts
materially affecting the business, financial conditions (including any
liabilities, contingent or otherwise) or results of operations of
BioForce.
(m) To BioForce's Knowledge BioForce is, and has been in material
compliance with, and BioForce has conducted any business previously owned
or operated by it in material compliance with, all applicable laws,
orders, rules and regulations of all governmental bodies and agencies,
including applicable securities laws and regulations and environmental
laws and regulations, except where such noncompliance in the aggregate
has not had, and would not be reasonably expected to have, a Material
Adverse Effect. BioForce has not received notice of any noncompliance
with the foregoing, nor is it aware of any claims or claims threatened in
writing in connection therewith.
(n) To BioForce's Knowledge without limiting the foregoing, (i) BioForce
and any other person or entity for whose conduct BioForce is legally held
responsible are and have been in material compliance with all applicable
federal, state, regional, local laws, statutes, ordinances, judgments,
rulings and regulations relating to any matters of pollution, protection
of the environment, health or safety, or environmental regulation or
control, and (ii) neither BioForce nor any other person for whose conduct
BioForce is legally held responsible has manufactured, generated,
treated, stored, handled, processed, released, transported or disposed of
any hazardous substance on, under, from or at any of BioForce's
properties or in connection with BioForce's operations.
(o) Except as, and to the extent specifically disclosed in this Agreement
and as may be specifically disclosed or reserved against it as to amount
in the latest balance sheet contained in BioForce Financial Statements,
there is no basis for any assertion against BioForce of any material
liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due, including,
without limitation, any liability for taxes (including e-commerce sales
or other taxes), interest, penalties and other charges payable with
respect thereto. Neither the execution and delivery of this Agreement or
other Transaction Documents to which it is a party, nor the consummation
of the transactions contemplated hereby or thereby will
(i) result in any payment (whether severance pay, unemployment
compensation or otherwise) becoming due from BioForce to any
person or entity, including without limitation any employee,
director, officer or affiliate or former employee, director,
officer or affiliate of BioForce;
(ii) increase any benefits otherwise payable to any person or
entity, including without limitation any employee, director,
officer or affiliate or former employee, director, officer
or affiliate of BioForce; or
(iii) result in the acceleration of the time of payment or vesting
of any such benefits.
-10-
(p) Except as disclosed to Silver River in writing and annexed hereto as
Attachment 4(p), to BioForce's Knowledge BioForce has no material
contracts, commitments, arrangements, or understandings relating to its
business, operations, financial condition, prospects, or otherwise. For
purposes of this Section 4(p), "material" means payment or performance of
a contract, commitment, arrangement or understanding in the ordinary
course of business, which is expected to involve payments from BioForce
to any third party in excess of $100,000.
(q) To BioForce's Knowledge, no representation or warranty by BioForce
contained in this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein not misleading. Except as specifically indicated
elsewhere in this Agreement, all documents delivered by BioForce in
connection herewith have been and will be complete originals, or exact
copies thereof.
SECTION 5 Representations of Silver River, Merger Sub and the SR
Stockholders. Silver River, Merger Sub and the SR Stockholders hereby make
jointly and severally, as of the date hereof and as of the Effective Time of the
Merger, the following representations and warranties:
(a) As of the date hereof and the Effective Time of the Merger, the
shares of Silver River common stock to be issued and delivered to the
security holders of BioForce hereunder and in connection herewith will,
when so issued and delivered, constitute duly authorized, validly and
legally issued, fully-paid, nonassessable shares of Silver River common
stock, free of all liens and encumbrances.
(b) Each of Silver River and Merger Sub has the requisite corporate power
to enter into this Agreement and to perform its respective obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (i) have been or
will prior to the Closing and the Effective Time of the Merger be duly
authorized by the respective Boards of Directors of Silver River and
Merger Sub and by Silver River as the sole stockholder of Merger Sub, and
(ii) except as set forth in Section 7(e) hereof, do not have to be
approved or authorized by the stockholders of Silver River. The execution
and performance of this Agreement will not constitute a material breach
of any agreement, indenture, mortgage, license or other instrument or
document to which Silver River, Merger Sub or the SR Stockholders is a
party or to which it is otherwise subject and will not violate any
judgment, decree, order, writ, law, rule, statute, or regulation
applicable to Silver River, Merger Sub or their properties. The execution
and performance of this Agreement will not violate or conflict with any
provision of the respective Certificates of Incorporation or Bylaws of
either Silver River or Merger Sub. Each of the SR Stockholders is an
individual and each has the authority and capacity to enter into and
execute this Agreement and to be obligated to the terms and conditions
set forth herein.
(c) Silver River has delivered to BioForce a true and complete copy of
its audited financial statements for the fiscal years ended December 31,
2004, and 2003, and unaudited financial statements for the nine-month
period ended September 30, 2005 (the "Silver River Financial
Statements"). The Silver River Financial Statements are complete,
accurate and fairly present the financial condition of Silver River as of
the dates thereof and the results of its operations for the periods then
ended. There are no material liabilities or obligations either fixed or
contingent not reflected therein. The Silver River Financial Statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis (except as may be
-11-
indicated therein or in the notes thereto) and fairly present the
financial position of Silver River as of the dates thereof and the
results of its operations and changes in financial position for the
periods then ended. Silver River agrees to provide updated quarterly
financial statements as required by the SEC. Merger Sub has no financial
statements because it was recently formed solely for the purpose of
effectuating the Merger and it has been, is and will remain inactive
except for purposes of the Merger and it has no assets, liabilities,
contracts or obligations of any kind other than as incurred in the
ordinary course in connection with its incorporation in Nevada. Silver
River has no subsidiaries or affiliates except for Merger Sub and Merger
Sub has no subsidiaries or affiliates.
(d) Since September 30, 2005, there have not been any material adverse
changes in the business, financial condition or results of operation of
Silver River. At the Closing, neither Silver River nor Merger Sub will
have any material assets and neither such corporation now has, nor will
it have, any liabilities of any kind other than those reflected in the
most recent balance sheet set forth in the Silver River Financial
Statements and any costs or liabilities incurred in connection with the
Merger (which costs and liabilities, including those liabilities
reflected in the most recent balance sheet set forth in the Silver River
Financial Statements, collectively will be paid in full by Silver River
prior to the Closing so that at Closing, Silver River has no outstanding
liabilities).
(e) Neither Silver River nor Merger Sub is a party to, or the subject of,
any material pending litigation, claims, or governmental investigation or
proceeding not reflected in the Silver River Financial Statements, and to
the knowledge of the executive officers of Silver River and of the SR
Stockholders (herein "Silver River's Knowledge"), there are no material
lawsuits, claims, assessments, investigations, or similar matters,
threatened in writing against Merger Sub, Silver River, or the management
or properties of Silver River or Merger Sub.
(f) Silver River and Merger Sub are each duly organized, validly existing
and in good standing under the laws of the jurisdiction of their
respective incorporation; each has the corporate power to own its
property and to carry on its business as now being conducted and is duly
qualified to do business in any jurisdiction where so required except
where the failure to so qualify would have no material negative impact.
Neither corporation is required to be qualified to do business in any
state other than the State of Nevada.
(g) To Silver River's Knowledge, Silver River and Merger Sub have filed
all federal, state, county and local income, excise, property and other
tax, governmental and/or other returns, forms, filings, or reports, which
are due or required to be filed by it prior to the date hereof and have
paid or made adequate provision in the Silver River Financial Statements
for the payment of all taxes, fees, or assessments which have or may
become due pursuant to such returns, filings or reports or pursuant to
any assessments received. Neither Silver River nor Merger Sub is
delinquent or obligated for any tax, penalty, interest, delinquency or
charge and there are no tax liens or encumbrances applicable to either
corporation. Neither Silver River nor Merger Sub is deemed to be an "S
Corporation" as defined by Internal Revenue Code of 1986, as amended.
(h) As of the date of this Agreement, Silver River's authorized capital
stock consists solely of 100,000,000 shares of common stock, $0.001 par
value, of which 1,999,975 shares are presently issued and outstanding.
Prior to the Closing, Silver River will have outstanding 1,999,975 shares
of common stock (prior to the Forward Stock Split) and no other capital
-12-
stock. Prior to the Closing, Silver River will amend its Certificate of
Incorporation to increase its authorized capitalization to include
10,000,000 shares of "blank check" preferred stock, and to reflect the 2
shares for 1 share forward stock split to be effected prior to the
Closing. Merger Sub's capitalization consists solely of 1,000 authorized
shares of $0.001 par value common stock ("Merger Sub's Common Stock"), of
which 1,000 shares are outstanding, all of which are owned by Silver
River, free and clear of all liens, claims and encumbrances. All
outstanding shares of common stock of Silver River and Merger Sub are,
and will be at the Closing, duly authorized, validly issued, fully paid
and nonassessable. There are no existing options, calls, claims,
warrants, preemptive rights, registration rights or commitments of any
character relating to the issued or unissued capital stock or other
securities of either Silver River or Merger Sub.
(i) The financial records, minute books, and other documents and records
of Silver River and Merger Sub have been made available to BioForce prior
to the Closing The records and documents of Silver River and Merger Sub
that have been delivered to BioForce constitute all of the material
records and documents of Silver River and Merger Sub that they are aware
of or that are in their possession or in the possession of Silver River
or Merger Sub.
(j) Neither Silver River nor Merger Sub has materially breached any
material agreement to which it is or has been a party. Prior to the
execution of the Agreement, Silver River has given to BioForce copies or
access to all material contracts, commitments and/or agreements to which
Silver River is a party. There are no currently existing agreements with
any affiliates, related or controlling persons or entities. Silver River
has no leasehold interest or other ownership interest, and no obligations
under any real estate or any mining claims.
(k) Silver River has complied with all provisions relating to the
issuance of shares and for the registration thereof under the Securities
Act and all applicable state securities laws, or appropriate exemption
from registration therefrom. To the best of Silver River's Knowledge,
there are no outstanding, pending or threatened stop orders or other
actions or investigations relating thereto involving federal and state
securities laws.
(l) Silver River currently has no, and for the past five years has not
had, any employees, consultants or independent contractors other than its
attorneys, accountants and transfer agent. Xxxxx Xxxxxxxx, Xxxxx Xx Xxxxx
and Xxxxx Xxxxx are, and will be at the Closing, the sole directors and
sole executive officers of Silver River, and Xxxxx Xxxxxxxx and Xxxxx Xx
Xxxxx will be at the Closing the sole directors and sole executive
officers of Merger Sub.
(m) Silver River and Merger Sub have, and at the Closing will have,
disclosed in writing to BioForce all events, conditions and facts
materially affecting the business, financial conditions, including any
liabilities, contingent or otherwise, or results of operations of either
Silver River or Merger Sub, since September 30, 2005.
(n) To Silver River's Knowledge, Silver River was originally organized
for the purposes of, and with a specific plan for the ownership and
operations of mining claims. Subsequently, Silver River revised its
business to seeking potential operating businesses and business
opportunities with the intent to acquire or merge with such businesses.
(o) To Silver River's knowledge, all information regarding Silver River
-13-
which has been provided to BioForce by Silver River, or set forth in any
document or other communication, disseminated to any former, existing or
potential stockholders of Silver River, to the public or filed with the
SEC or any state securities regulators or authorities, is true, complete,
accurate in all material respects, not misleading, and was and is in full
compliance with all securities laws and regulations. Without limiting the
generality of the foregoing, Silver River has filed all required reports,
schedules, forms, statements and other documents with the SEC since the
filing of its registration statement on Form 10-SB on December 14, 2004,
including all filed reports, schedules, forms, statements and other
documents whether or not required (the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents. Except to the extent that information contained in any SEC
Document has been revised or superseded by a later filed SEC Document,
none of the SEC Documents contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Silver River included in the SEC Documents are true and
complete and comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
SEC with respect thereto.
(p) To Silver River's Knowledge, Silver River is and has been in
compliance with, and Silver River has conducted any business owned or
operated by it in compliance with, all applicable laws, orders, rules and
regulations of all governmental bodies and agencies, including applicable
securities laws and regulations, including, but not limited to, the
Xxxxxxxx-Xxxxx Act of 2002, and environmental laws and regulations,
except where such noncompliance has and will have, in the aggregate, no
material adverse effect. Silver River has not received notice of any
noncompliance with the foregoing, nor is it aware of any claims or
threatened claims in connection therewith. To its Knowledge, Silver River
has never conducted any operations or engaged in any business
transactions of a material nature other than as set forth in the reports
Silver River has previously filed with the SEC.
(q) The certificates of the Chief Executive Officer and Principal
Accounting Officer of Silver River required by Rules 13a-14 and 15d-14 of
the Exchange Act or Section 906 of the Xxxxxxxx-Xxxxx Act of 2002 with
respect to the SEC Documents, as applicable, are true and correct as of
the date of this Agreement as they relate to a particular SEC Document,
as though made as of the date of this Agreement. Silver River has
established and maintains disclosure controls and procedures, has
conducted the procedures in accordance with their terms and has otherwise
operated in compliance with the requirements under Rules 13a-15 and
15d-15 of the Exchange Act.
(r) Except as and to the extent specifically disclosed in this Agreement
and as may be specifically disclosed or reserved against as to amount in
the latest balance sheet contained in the Silver River Financial
Statements, there is no basis for any assertion against Silver River of
any material liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise and whether due or to become due,
including, without limitation, any liability for taxes, including
e-commerce sales or other taxes, interest, penalties and other charges
payable with respect thereto. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will
-14-
(i) result in any payment, whether severance pay, unemployment
compensation or otherwise, becoming due from Silver River to
any person or entity, including without limitation any
employee, director, officer;
(ii) increase any benefits otherwise payable to any person or
entity, including without limitation any employee, director,
officer or affiliate; or
(iii) result in the acceleration of the time of payment or vesting
of any such benefits.
(s) To Silver River's Knowledge, no aspect of Silver River's business,
operations or assets is of such a character as would restrict or
otherwise hinder or impair Silver River from carrying on the business of
Silver River as it is presently being conducted and as anticipated
following consummation of the Merger.
(t) To Silver River's Knowledge, other than retention of accountants,
attorney, and transfer agent, Silver River has no other contracts,
commitments, arrangements, or understandings relating to its business,
operations, financial condition, prospects or otherwise.
(u) None of Silver River, Merger Sub or any other affiliate thereof has
or maintains any employee benefit, bonus, incentive compensation,
profit-sharing, equity, stock bonus, stock option, stock appreciation
rights, restricted stock, other stock-based incentive, executive
compensation agreement, employment agreement, deferred compensation,
pension, stock purchase, employee stock ownership, savings, pension,
retirement, supplemental retirement, employment related
change-in-control, severance, salary continuation, layoff, welfare
(including, without limitation, health, medical, prescription, dental,
disability, salary continuation, life, accidental death, travel accident,
and other insurance), vacation, holiday, sick leave, fringe benefit, or
other benefit plan, program, or policy, whether qualified or nonqualified
and any trust, escrow, or other agreement related thereto, covering any
present or former employees, directors, or their respective dependents.
(v) There are no actions, proceedings or investigations pending or, to
Silver River's Knowledge after making appropriate investigation,
threatened before any federal or state environmental regulatory body, or
before any federal or state court, alleging noncompliance by Silver River
or any predecessor in interest with the Comprehensive Environmental
Response, Compensation and Liability Act of 1990 ("CERCLA") or any other
Environmental Laws. To Silver River's Knowledge after due investigation;
(i) there is no reasonable basis for the institution of any
action, proceeding or investigation against Silver River
under any Environmental Law;
(ii) Silver River is not responsible under any Environmental Law
for any release by any person at or in the vicinity of real
property of any hazardous substance (as defined by CERCLA),
caused by the spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching,
dumping or disposing of any such hazardous substance into
the environment;
(iii) Silver River is not responsible for any costs of any
remedial action required by virtue of any release of any
toxic or hazardous substance, pollutant or contaminant into
the environment including, without limitation, costs arising
from security fencing, alternative water supplies, temporary
evacuation and housing and other emergency assistance
undertaken by any environmental regulatory body;
-15-
(iv) Silver River is in material compliance with all applicable
Environmental Laws; and
(v) no real property, now or in the past, used, owned, managed
or controlled by Silver River contains any toxic or
hazardous substance including, without limitation, any
asbestos, PCBs or petroleum products or byproducts in any
form, the presence, location or condition of which (x)
violates any Environmental Law, or (y) cannot be cleaned by
ordinary reclamation procedures customary in the oil and gas
industry.
For purposes of this Agreement, "Environmental Laws" will mean any
federal, state, local or municipal statute, ordinance or regulation, or
order, ruling or other decision of any court, administrative agency or
other governmental authority pertaining to the release of hazardous
substances (as defined in CERCLA) into the environment.
(w) To Silver River's Knowledge, no representation or warranty by Silver
River or Merger Sub contained in this Agreement and no statement
contained in any certificate, schedule or other communication furnished
pursuant to or in connection with the provisions hereof, contains or will
contain any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein not
misleading. Except as specifically indicated elsewhere in this Agreement,
all documents delivered by Silver River in connection herewith have been
and will be complete originals, or exact copies thereof.
SECTION 6 Closing. The Closing of the transactions contemplated herein
will take place on such date (the "Closing") as mutually determined by the
parties hereto, but no later than five (5) days after all conditions precedent
have been satisfied or waived and all required documents have been delivered.
The parties will use their reasonable commercial efforts to cause the Closing to
occur on or before February 15, 2006. The "Effective Time of the Merger" will be
that date and time specified in the Certificate of Merger as the date on which
the Merger will become effective.
SECTION 7 Actions Prior to Closing.
(a) Prior to the Closing, BioForce on the one hand, and Silver River and
Merger Sub on the other hand, will be entitled to make such
investigations of the assets, properties, business and operations of the
other party and to examine the books, records, tax returns, financial
statements and other materials of the other party as such investigating
party deems necessary in connection with this Agreement and the
transactions contemplated hereby. Any such investigation and examination
will be conducted at reasonable times and under reasonable circumstances,
and the parties hereto will cooperate fully therein. The representations
and warranties contained in this Agreement will not be affected or deemed
waived by reason of the fact that either party hereto discovered or
should have discovered any representation or warranty is or might be
inaccurate in any respect. Until the Closing, the parties hereto and
their respective affiliates will keep confidential and will not use in
any manner inconsistent with the transactions contemplated by this
Agreement any information or documents obtained from the other concerning
its assets, properties, business or operations. If the Closing will not
occur for any reason (including, without limitation, pursuant to a
termination of this Agreement), the parties hereto and their respective
affiliates will not disclose, nor use for their own benefit, any such
information or documents obtained from the other, in either case, unless
and to the extent
-16-
(i) readily ascertainable from public or published information,
or trade sources;
(ii) received from a third party not under an obligation to such
BioForce or Silver River, as the case may be, to keep such
information confidential; or
(iii) required by any applicable law, rule, regulation or court
order.
If the Closing does not occur for any reason, each of the parties and
their respective affiliates will promptly return or destroy all such
confidential information and compilations thereof as is practicable, and
will certify such destruction or return to the other party.
(b) Prior to the Closing, any written news releases or public disclosure
by either party pertaining to this Agreement will be submitted to the
other party for its review and approval prior to such release or
disclosure, provided, however, that
(i) such approval will not be unreasonably withheld, and
(ii) such review and approval will not be required of disclosures
required to comply, in the judgment of counsel, with federal
or state securities or corporate laws or policies.
(c) Prior to the Effective Time of the Merger, Silver River will amend
its Certificate of Incorporation in the form attached hereto as
Attachment "A" to (i) increase its authorized capitalization to include
10,000,000 shares of "blank check" preferred stock, and (ii) change
Silver River's corporate name to BioForce Nanosciences Holdings, Inc.
(d) Except as contemplated by this Agreement, there will be no stock
dividend, stock split, recapitalization, or exchange of shares with
respect to or rights issued in respect of Silver River common stock after
the date hereof and there will be no dividends or other distributions
paid on Silver River's common stock after the date hereof, in each case
through and including the Effective Time of the Merger. Silver River and
Merger Sub will conduct no business activities prior to the Closing other
than in the ordinary course of business or as may be necessary in order
to consummate the transactions contemplated hereby.
(e) Silver River, acting through its Board of Directors, will authorize
the effectuation of the 2 shares for 1 share Forward Stock Split and take
all requisite and necessary action to finalize the stock split and, in
accordance with applicable law, give notice of and submit for action by
written consent of its stockholders;
(i) an amendment to its Certificate of Incorporation to increase
the authorized capitalization of Silver River to include
10,000,000 shares of "blank check" preferred stock;
(ii) a proposal to prepare and approve an employee / directors
incentive compensation plan and allocate 5,000,000 shares of
Silver River common stock to the plan (the "BioForce
Nanosciences Incentive Compensation Plan"); and
(iii) an amendment to its Certificate of Incorporation to change
Silver River's corporate name to BioForce Nanosciences
Holdings, Inc.
(f) Silver River will take the requisite and necessary actions to obtain
the written consent for those actions discussed in Section 7(e) above as
soon as practicable after the execution of this Agreement and, as
promptly as practicable thereafter will:
-17-
(i) prepare and file with the SEC a preliminary Information
Statement to be disseminated by Silver River to its
stockholders (the "Information Statement") relating to the
matters stated above;
(ii) take the appropriate action to obtain and furnish the
information required by the SEC to be included in the
definitive Information Statement; and
(iii) after consultation with counsel to BioForce, respond
promptly to any comments made by the SEC with respect to the
preliminary Information Statement and cause the definitive
Information Statement to be mailed to its stockholders as
promptly as practicable following clearance from the SEC.
(g) BioForce will provide to Silver River any information for inclusion
in the Information Statement which may be required under applicable law
and which is reasonably requested by Silver River. Each of BioForce,
Silver River and Merger Sub, respectively, agree promptly to correct any
information provided by any of them for use in the Information Statement
if, and to the extent that, such information will have become false or
misleading in any material respect and Silver River further agrees to
take all necessary steps to cause the Information Statement as so
corrected to be filed with the SEC and to be disseminated to its
stockholders to the extent required by applicable federal securities
laws.
(h) Silver River hereby represents and warrants that the information
supplied or to be supplied by Silver River for inclusion or incorporation
by reference in (i) the Information Statement or (ii) the Other Filings
(as defined below) will, at the respective times filed with the SEC and,
in addition, in the case of the Information Statement, as of the date it
or any amendment or supplement thereto is mailed to stockholders, not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
are made, not misleading. The Information Statement will comply as to
form in all material respects with the requirements of the Exchange Act
and the rules and regulations promulgated thereunder. BioForce hereby
represents and warrants that the information supplied or to be supplied
by BioForce for inclusion or incorporation by reference in the
Information Statement or Other Filings will, at the respective times
filed with the SEC and, in addition, in the case of the Information
Statement, as of the date it or any amendment or supplement thereto is
mailed to stockholders, not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(i) As soon as practicable following the date hereof and following the
Effective Time of the Merger, each of Silver River and BioForce will
properly prepare and file any other filings required under the Exchange
Act or any other federal, state or foreign law relating to the Merger
(collectively, the "Other Filings").
(j) Except as required by law, Silver River and Merger Sub will not
voluntarily take any action that would, or that is reasonably likely to,
result in any of the conditions to the Merger not being satisfied.
Without limiting the generality of the foregoing Silver River and Merger
Sub will not take any action that would result in
-18-
(i) any of its representations and warranties set forth in this
Agreement that are qualified as to materiality becoming
untrue, or
(ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect.
(k) Silver River common stock will continue to be approved for quotation
on the OTC Bulletin Board and Silver River will have continued to satisfy
throughout the period from the date hereof through the Closing Date (i)
its filing requirements under Section 13 of the Exchange Act and (ii) the
requirements of Rule 15c2-11 as promulgated by the SEC under the Exchange
Act.
SECTION 8 Conditions Precedent to the Obligations of BioForce. All
obligations of BioForce under this Agreement to effect the Merger and the other
transactions contemplated hereby are subject to the fulfillment, prior to or as
of the Closing and/or the Effective Time of the Merger, as indicated below, of
each of the following conditions:
(a) The representations and warranties by or on behalf of Silver River
and Merger Sub contained in this Agreement, or in any certificate or
document delivered pursuant to the provisions hereof or in connection
herewith, will be true at and as of the Closing and Effective Time of the
Merger as though such representations and warranties were made at and as
of such time.
(b) Silver River and Merger Sub will have performed and complied with, in
all material respects, all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by them prior to or at
the Closing. No preliminary or permanent injunction or other order,
decree or ruling issued by a court or other governmental authority of
competent jurisdiction nor any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority of competent
jurisdiction will be in effect which would have the effect of (i) making
the consummation of the Merger illegal, or (ii) otherwise prohibiting the
consummation of the Merger.
(c) On or before the Closing, the directors of Silver River and Merger
Sub, and Silver River as sole stockholder of Merger Sub, will have
approved in accordance with applicable provisions of the NRS the
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein, and will have approved the amendment to
its Certificate of Incorporation and the BioForce Nanosciences Incentive
Compensation Plan and submitted the same for approval by the stockholders
of Silver River, as required.
(d) On or before the Closing, Silver River and Merger Sub will have
delivered certified copies of resolutions of the sole stockholder and
directors of Merger Sub and of the directors and stockholders of Silver
River approving and authorizing:
(i) the execution, delivery and performance of this Agreement
and all necessary and proper actions to enable Silver River
and Merger Sub to comply with the terms of this Agreement;
(ii) the election of BioForce's nominees to the Board of
Directors of Silver River and all matters outlined or
contemplated herein;
-19-
(iii) the Forward Stock Split; and
(iv) the submission of the amendment to the Certificate of
Incorporation and the BioForce Nanosciences Incentive
Compensation Plan to the stockholders of Silver River and
the filing of the amendment to the Certificate of
Incorporation upon approval thereof.
(e) Prior to the Closing, either (x) Silver River must receive from each
of the BioForce Stockholders an "investment letter" or other equivalent
document providing whether or not the investor is an "accredited
investor," as defined under Regulation D of the Securities Act, and
whether or not the investor is a "U.S. Person," as defined under
Regulation S of the Securities Act, and evidencing that no more than 35
BioForce Stockholders are U.S. Persons, but not accredited investors; or
(y) in the alternative, if not all BioForce Stockholders deliver an
investment letter or equivalent document, then the total number of
BioForce Stockholders not delivering a letter plus the total number of
BioForce Stockholders delivering a letter indicating that they are a U.S.
Person, but not an accredited investor, may not exceed 35 persons.
Each of the BioForce Stockholders delivering an investment letter must
also agree that the shares of Silver River common stock to be issued in
the Merger are, among other things
(i) being acquired for investment purposes and not with a view
to public resale;
(ii) being acquired for the investor's own account; and
(iii) restricted and may not be resold, except in reliance of an
exemption under the Act.
(f) The Merger will be permitted by applicable state law and Silver River
will have sufficient shares of its common stock authorized to complete
the Merger at the Effective Time and the transactions contemplated
hereby.
(g) Prior to the Closing, Silver River will have sold a minimum of $2.5
million in the Private Placement and gross proceeds of at least $2.5
million will be held in the special escrow account as per the terms and
conditions set forth in the PPM.
(h) The amendment to the Certificate of Incorporation and BioForce
Nanosciences Incentive Compensation Plan will have been approved by the
requisite vote of the stockholders of Silver River, acting by written
consent in lieu of a special meeting thereof, and the amendment to the
Certificate of Incorporation will have been filed in accordance with the
applicable requirements of the NRS.
(i) At Closing, all of the directors and officers of Silver River and
Merger Sub will have resigned in writing from their positions as
directors and executive officers of Silver River and Merger Sub,
respectively, effective upon the election and appointment of BioForce
nominees, and the directors of Silver River will have taken such action
as may be deemed necessary or desirable by BioForce regarding such
election and appointment of the BioForce nominees.
(j) At the Closing, all instruments and documents delivered by Silver
River or Merger Sub, including to BioForce Stockholders pursuant to the
provisions hereof, will be reasonably satisfactory to legal counsel for
BioForce.
-20-
(k) The capitalization of Silver River and Merger Sub will be the same as
described in Section 5(h) above and will reflect the effectiveness of the
amendment to the Certificate of Incorporation increasing Silver River's
authorized capitalization.
(l) The shares of Silver River common stock to be issued to BioForce
Stockholders at Closing will be validly issued, nonassessable and fully
paid under the applicable provisions of the NRS and will be issued in a
nonpublic offering in compliance with all federal, state and applicable
securities laws.
(m) BioForce will have received all necessary and required approvals and
consents from required parties and from its stockholders.
(n) At the Closing, Silver River and Merger Sub will have delivered to
BioForce an opinion of Silver River's legal counsel dated as of the
Closing to the effect that:
(i) Each of Silver River and Merger Sub is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation;
(ii) Silver River and Merger Sub each has the corporate power to
execute, deliver and perform its respective obligations
under this Agreement;
(iii) This Agreement has been duly authorized, executed and
delivered by Silver River and Merger Sub and is a valid and
binding obligation of Silver River and Merger Sub
enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general
principles of equity;
(iv) Silver River and Merger Sub each through its Board of
Directors and/or stockholders, as required, have taken all
corporate action necessary for performance under this
Agreement;
(v) The documents executed by Silver River and delivered to
BioForce and BioForce Stockholders hereunder are valid and
binding in accordance with their terms and vest in BioForce
Stockholders all right, title and interest in and to the
shares of Silver River's common stock to be issued pursuant
to Section 2 hereof, and the shares of Silver River common
stock when issued will be duly and validly issued, fully
paid and nonassessable;
(vi) The shares of Silver River common stock issued pursuant to
this Agreement will be deemed "restricted securities" and
may be sold or otherwise transferred upon the satisfaction
of the provisions of Rule 144, or pursuant to any other
appropriate exemption or registration under the Securities
Act;
(vii) Silver River has satisfied its reporting requirements
pursuant to the Exchange Act and has fulfilled all
disclosure obligations under such Act and applicable
securities laws; and
(viii) Current stockholders of Silver River common stock will have
no appraisal or similar rights as a result of consummation
of this Agreement and the transactions contemplated hereby.
-21-
(o) BioForce will have completed its financial and legal due diligence
investigation of Silver River with results thereof satisfactory to
BioForce in its sole discretion.
Section 9 Conditions Precedent to the Obligations of Silver River and
Merger Sub. All obligations of Silver River and Merger Sub under this Agreement
are subject to the fulfillment, prior to or at the Closing and/or the Effective
Time of the Merger, of each of the following conditions:
(a) The representations and warranties by BioForce contained in this
Agreement or in any certificate or document delivered pursuant to the
provisions hereof or in connection herewith, will be true at and as of
the Closing and the Effective Time of the Merger as though such
representations and warranties were made at and as of such times.
(b) BioForce will have performed and complied with, in all material
respects, all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it prior to or at the
Closing.
(c) On or before the Closing, the directors of BioForce will have
approved in accordance with applicable state corporation law the
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein and will have submitted the same to the
stockholders of BioForce.
(d) On or before the Closing Date, BioForce will have delivered certified
copies of resolutions of the stockholders and directors of BioForce
approving and authorizing the execution, delivery and performance of this
Agreement and the other Transaction Documents and authorizing all of the
necessary and proper action to enable BioForce to comply with the terms
of this Agreement.
(e) The Merger will be permitted by applicable state law.
(f) Prior to the Closing, either (x) Silver River must receive from each
of the BioForce Stockholders an "investment letter" or other equivalent
document providing whether or not the investor is an "accredited
investor," as defined under Regulation D of the Securities Act, and
whether or not the investor is a "U.S. Person," as defined under
Regulation S of the Securities Act, and evidencing that no more than 35
BioForce Stockholders are U.S. Persons, but not accredited investors; or
(y) in the alternative, if not all BioForce Stockholders deliver an
investment letter or equivalent document, then the total number of
BioForce Stockholders not delivering a letter plus the total number of
BioForce Stockholders delivering a letter indicating that they are a U.S.
Person, but not an accredited investor, may not exceed 35 persons.
Each of the BioForce Stockholders delivering an investment letter must
also agree that the shares of Silver River common stock to be issued in
the Merger are, among other things
(i) being acquired for investment purposes and not with a view
to public resale;
(ii) being acquired for the investor's own account; and
(iii) restricted and may not be resold, except in reliance of an
exemption under the Act.
-22-
(g) At the Closing, all instruments and documents delivered by BioForce
pursuant to the provisions hereof will be reasonably satisfactory to
legal counsel for Silver River. (h) The capitalization of BioForce will
be the same as described in Section 4(a) hereof, subject to exercise or
conversion of currently outstanding exercisable or convertible
securities.
(i) Silver River will have received all necessary and requisite approvals
and consents from required parties and from its stockholders, and this
Agreement and the Merger will have been adopted and approved by the
requisite vote of BioForce Stockholders.
(j) At the Closing, BioForce will have delivered to Silver River an
opinion of BioForce's legal counsel dated as of the Closing to the effect
that:
(i) BioForce is a corporation validly existing and in good
standing under the laws of the jurisdiction of its
incorporation;
(ii) This Agreement has been duly authorized, executed and
delivered by BioForce and is a valid and binding obligation
of BioForce enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general
principles of equity;
(iii) BioForce, through its Board of Directors and stockholders
has taken all corporate action necessary for performance of
its obligations under this Agreement; and
(iv) BioForce has the corporate power to execute, deliver and
perform its obligations under this Agreement.
(k) Silver River will have an exemption from registration under the
Securities Act and the securities laws of the State of Delaware and the
various states of residence of BioForce Stockholders for issuance of the
shares of Silver River common stock to be issued to BioForce Stockholders
in the Merger.
SECTION 10 Survival; Indemnification.
(a) From and after the Closing, and subject to the limitations set forth
in this Section 10, the SR Stockholders shall indemnify Silver River
against and from all liabilities, demands, claims, actions or causes or
action, losses, damages, costs and expenses which arise out of (i) any
breach of any representation and warranty contained in Section 5 hereof;
or (ii) any breach by the SR Stockholders or, prior to the Closing,
Silver River or Merger Sub, of any of its covenants or obligations
contained in this Agreement.
(b) Silver River shall not be entitled to recover under Section 10(a)
until, and then only to the extent that, the total amount which Silver
River would recover under Section 10(a), but for this Section 10(b),
exceeds $250,000 in the aggregate.
(c) Silver River shall not be entitled to recover under Section 10(a)
unless a claim has been asserted by written notice, setting forth the
basis for such claim, delivered to the SR Stockholders on or prior to the
date which is two years after the Effective Time of the Merger.
-23-
(d) The SR Stockholders may satisfy any obligation under this Section 10,
or any portion thereof, by delivery to Silver River of certificates
representing shares in Silver River, which shall then be cancelled. In
any such event, such shares shall be valued at the average of the closing
prices of Silver River common stock on the primary exchange or market on
which it is then listed or traded during the ten (10) trading days
immediately preceding the date on which such certificates are so
delivered.
SECTION 11 Nature of Representations. All of the parties hereto are
executing and carrying out the provisions of this Agreement in reliance solely
on the representations, warranties, covenants and agreements contained in this
Agreement and the other documents delivered at the Closing and not upon any
representation, warranty, agreement, promise or information, written or oral,
made by the other party or any other person other than as specifically set forth
herein.
SECTION 12 Documents at Closing. At the Closing, the following documents
will be delivered:
(a) BioForce will deliver, or will cause to be delivered, to Silver River
the following:
(i) a certificate executed by the President of BioForce to the
effect that all representations and warranties made by
BioForce under this Agreement are true and correct as of the
Closing and as of the Effective Time of the Merger, the same
as though originally given to Silver River or Merger Sub on
said date and that BioForce has performed or complied in all
material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it on
or prior to the Effective Time of the Merger;
(ii) a certificate from the state of BioForce's incorporation
dated within five business days of the Closing to the effect
that BioForce is in good standing under the laws of said
state;
(iii) such other instruments, documents and certificates, if any,
as are required to be delivered pursuant to the provisions
of this Agreement and the other Transaction Documents;
(iv) executed copy of the Certificate of Merger for filing in
Delaware;
(v) certified copies of resolutions adopted by BioForce
Stockholders and the directors of BioForce approving the
Merger Agreement and other Transaction Documents and
authorizing the Merger;
(vi) the opinion of BioForce's counsel as described in Section
9(i) above; and
(vii) all other items, the delivery of which is a condition
precedent to the obligations of Silver River and Merger Sub,
as set forth herein.
(b) Silver River and Merger Sub will deliver or cause to be delivered to
BioForce:
(i) stock certificates representing those securities of Silver
River to be issued as a part of the Merger as described in
Section 2 hereof;
-24-
(ii) a certificate of the President of Silver River and Merger
Sub, respectively, to the effect that all representations
and warranties of Silver River and Merger Sub made under
this Agreement are true and correct as of the Closing, the
same as though originally given to BioForce on said date;
and that each of Silver River and Merger Sub has performed
or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time of the
Merger;
(iii) certified copies of resolutions adopted by Silver River's
and Merger Sub's Board of Directors and Merger Sub's sole
stockholder approving the Merger Agreement and authorizing
the Merger and all related matters; and certified copies of
resolutions adopted by the stockholders of Silver River
approving the matters described in Section 7(e) above;
(iv) certificates from the jurisdiction of incorporation of
Silver River and Merger Sub dated within five business days
of the Closing Date that each of said corporations is in
good standing under the laws of said state;
(v) executed copy of the Certificate of Merger for filing in
Nevada;
(vi) opinion of Silver River's counsel as described in Section
8(m) above;
(vii) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement;
(viii) written resignation of all of the officers and directors of
Silver River and Merger Sub; and
(ix) all other items, the delivery of which is a condition
precedent to the obligations of BioForce, as set forth in
Section 8 hereof.
SECTION 13 Finder's Fees. Silver River and Merger Sub, jointly and
severally, represent and warrant to BioForce, and BioForce represents and
warrants to Silver River and Merger Sub, that none of them, or any party acting
on their behalf, has incurred any liabilities, either express or implied, to any
"broker" or "finder" or similar person in connection with this Agreement or any
of the transactions contemplated hereby.
SECTION 14 Additional Covenants. Between the date hereof and the Closing,
except with prior written consent of the other party:
(a) Silver River, Merger Sub and BioForce will conduct their business
only in the usual and ordinary course and the character of such business
will not be changed nor will any different business be undertaken;
(b) No change will be made in the Certificate of Incorporation or Bylaws
of Silver River, Merger Sub or BioForce except as described herein;
(c) No change will be made in the authorized or issued shares of Silver
River except as set forth herein;
(d) Neither Silver River nor BioForce will discharge or satisfy any lien
or encumbrance or obligation or liability, other than current liabilities
shown on the financial statements heretofore delivered and current
liabilities incurred since that date in the ordinary course of business;
and
-25-
(e) Silver River will not make any payment or distribution to its
stockholders or purchase or redeem any shares or common stock except as
set forth herein.
SECTION 15 Post-Closing Covenants. After the Closing and within four days
thereof, BioForce will cause Silver River to timely file with the SEC a current
report on Form 8-K to report the Merger Closing. BioForce will also cause Silver
River to timely file, in connection with the Private Placement, a Form D with
the SEC and such other reports or fillings that may be required by the SEC
and/or state regulatory agency. In addition, for a period of 12 months following
the Closing, BioForce will cause Silver River to use its commercially reasonable
efforts to timely file all reports and other documents required to be filed by
Silver River under the Exchange Act.
SECTION 16 Termination. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, by action taken or authorized by the
Board of Directors of the terminating party or parties and, except as provided
below, whether before or after approval of the matters presented in connection
with the Merger by the stockholders of Silver River or BioForce:
(a) By mutual written consent of Silver River and BioForce;
(b) By either Silver River or BioForce, if the Effective Time of the
Merger will not have occurred on or before February 15, 2006 (the
"Termination Date"); provided, however, that the right to terminate this
Agreement under this Section 16(b) will not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
cause of or resulted in, the failure of the Effective Time of the Merger
to occur on or before the Termination Date;
(c) By either Silver River or BioForce if any governmental entity
(i) will have issued an order, decree or ruling or taken any
other action (which the parties will use their reasonable
best efforts to resist, resolve or lift, as applicable)
permanently restraining, enjoining or otherwise prohibiting
the transaction contemplated by this Agreement and such
order, decree, ruling or other action will have become final
and nonappealable; or
(ii) will have failed to issue an order, decree or ruling or to
take any other action and such denial of a request to issue
such order, decree, ruling or take such other action will
have become final and nonappealable (which order, decree,
ruling or other action the parties will have used their
reasonable best efforts to obtain); if such action under (i)
and/or (ii) is necessary to fulfill the conditions set forth
in Sections 8 and 9, as applicable;
(d) By either Silver River or BioForce, if the approvals of the
respective stockholders of either Silver River or BioForce contemplated
by this Agreement will not have been obtained by reason of the failure to
obtain the required vote of stockholders or consent to the respective
matters as to which such approval was sought;
(e) By Silver River, if BioForce will have breached or failed to perform
any of its representations, warranties, covenants or other agreements
contained in this Agreement, such that the conditions set forth in
Section 9 are not capable of being satisfied on or before the Termination
Date; or
-26-
(f) By BioForce, if Silver River will have breached or failed to perform
any of its representations, warranties, covenants or other agreements
contained in this Agreement, such that the conditions set forth in
Section 8 are not capable of being satisfied on or before the Termination
Date.
SECTION 17 Effect of Termination. In the event of termination of this
Agreement by either Silver River or BioForce as provided in Section 16 (other
than Sections 16(e) or (f)), this Agreement will forthwith become void and there
will be no liability or obligation on the part of any of the parties or their
respective officers or directors.
SECTION 18 Miscellaneous.
(a) Further Assurances. At any time and from time to time after the
Effective Time of the Merger, each party will execute such additional
instruments and take such action as may be reasonably requested by the
other party to confirm or perfect title to any property transferred
hereunder or otherwise to carry out the intent and purposes of this
Agreement. (b) Waiver. Any failure on the part of any party hereto to
comply with any of its obligations, agreements or conditions hereunder
may be waived in writing by the party (in its sole discretion) to whom
such compliance is owed.
(c) Amendment. This Agreement may be amended only in writing as agreed to
by all parties hereto.
(d) Notices. All notices and other communications hereunder will be in
writing and will be deemed to have been given if delivered in person or
sent by prepaid first class registered or certified mail, return receipt
requested to the last known address of the noticed party.
(e) Headings. The section and subsection headings in this Agreement are
inserted for convenience only and will not affect in any way the meaning
or interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
(g) Binding Effect. This Agreement will be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
(h) Entire Agreement. This Agreement and the attached Exhibits, including
the Certificate of Merger, is the entire agreement of the parties
covering everything agreed upon or understood in the transaction. There
are no oral promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution hereof.
(i) Severability. If any part of this Agreement is deemed to be
unenforceable, the balance of the Agreement will remain in full force and
effect.
(j) Responsibility and Costs. Whether the Merger is consummated or not
and except as otherwise set forth below, all fees, expenses and
out-of-pocket costs including, but not limited to, fees and disbursements
of counsel, financial advisors and accountants and expenses associated
with fulfillment of the obligations set forth herein, that are incurred
-27-
by the parties hereto will be borne solely and entirely by the party that
has incurred such costs and expenses, unless the failure to consummate
the Merger constitutes a breach of the terms hereof, in which event the
breaching party will be responsible for all costs of all parties hereto.
Notwithstanding the above, the parties agree that BioForce will pay to
Xxxxxxx X. Xxxxxxx, Attorney at Law, all reasonable legal fees, expenses
and costs associated with the preparation and execution of this Agreement
and all transactions, agreements and documents associated thereto and
contemplated hereby, including preparation of the PPM and all requisite
filings and reports required pursuant to the Private Placement depicted
in Section 2(g)(i) above, or other financing that may be secured by
BioForce and/or Silver River prior to the Closing, which amount for such
legal fees and expenses will not exceed $50,000. All printing expenses
and Xxxxx filing expenses, will be paid by BioForce, and any and all
filing fees, finders' fees, commissions, sales costs and other reasonable
expenses associated with the Private Placement will be paid by BioForce
from proceeds from the Private Placement. No other pre-Merger fees,
expenses or other costs incurred by Silver River prior to the Effective
Time of the Merger will be the obligation of Silver River at or following
the Effective Time of the Merger.
(k) Governing Law. This Agreement will be governed and construed in
accordance with the laws of the State of Delaware without regard to
principles of conflicts of law.
[Signatures on Following Page]
-28-
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
BioForce Nanosciences, Inc.
By: /s/ Xxxx Xxxxxxxxx, Ph.D.
---------------------------------------
Xxxx Xxxxxxxxx, Ph.D.
Its: Chief Executive Officer
Silver River Ventures, Inc.
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxx
Its: President
Silver River Acquisitions, Inc.
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxx
Its: President
SR Stockholders
/s/ H. Xxxxxxx Xxxxxxxx
-------------------------------------------
H. Xxxxxxx Xxxxxxxx
/s/ Xxxxxx X. Xxxxx
-------------------------------------------
Xxxxxx X. Xxxxx
-29-
