Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is entered into as
of January 13, 2005, by and among SYNOVA HEALTHCARE GROUP, INC., a Nevada
corporation (f/k/a ADVANCED GLOBAL INDUSTRIES CORPORATION) ("AGBL"), SYNOVA AGBL
MERGER SUB, INC., a Delaware corporation, which is a wholly owned subsidiary of
AGBL ("MERGER SUB" and, together with AGBL, the "AGBL PARTIES"), and SYNOVA
HEALTHCARE, INC., a Delaware corporation ("SYNOVA"). Capitalized terms used
herein, but not defined have the meanings ascribed to them in ANNEX 1 hereto.
RECITALS
WHEREAS, the Board of Directors of each of AGBL, Merger Sub and Synova
have determined that it is in the best interests of their respective
stockholders for AGBL to acquire Synova upon the terms and subject to the
conditions set forth herein; and
WHEREAS, the AGBL Parties and Synova are desirous of effecting a merger,
all upon the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby represent, warrant, covenant, and agree as follows:
SECTION 1
THE MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement,
Merger Sub shall be merged with and into Synova in a transaction intended to
qualify as a tax-free reorganization pursuant to Section 368(a) of the Code.
SECTION 2
TERMS OF MERGER
2.1 Terms of Merger; Effective Time. The terms of merger (the
"MERGER") are as follows:
(a) Merger Sub shall be merged with and into Synova in
accordance with the statutory provisions of the Delaware General Corporation Law
("DGCL").
(b) Synova shall be the surviving corporation (the
"SURVIVING CORPORATION"), and the corporate identity, existence, purposes,
powers, franchises, rights, and immunities of Synova shall continue unaffected
and unimpaired by the Merger. The corporate identity, existence, purposes,
powers, franchises, rights, and immunities of Merger Sub shall be merged into
the Surviving Corporation, and the Surviving Corporation shall be fully vested
therewith.
(c) Immediately after the Closing, the Merger shall be
effected by filing with the Secretary of State of Delaware the Certificate of
Merger attached hereto as EXHIBIT A (the "CERTIFICATE OF MERGER"). The time at
which the Certificate of Merger is filed with the
Secretary of State of Delaware shall be the "EFFECTIVE TIME" of the Merger.
Concurrently with the Closing, the parties shall cause the Certificate of Merger
to be so filed and recorded.
(d) Except insofar as specifically otherwise provided by
law, Merger Sub shall cease to exist at the Effective Time, whereupon the
separate existence of Synova and Merger Sub shall become a single corporation.
(e) The certificate of incorporation and bylaws of Synova
prior to the Closing shall be the certificate of incorporation and bylaws of the
Surviving Corporation.
(f) At the Effective Time, without any action by the holder
thereof, (i) each issued and outstanding share of Synova common stock, par value
$0.00001 per share (collectively, "SYNOVA COMMON STOCK") and (ii) each
outstanding option or warrant to purchase a share of Synova Common Stock (the
"OPTIONS"), shall be deemed cancelled and converted into the right to receive
(A) with respect to the Synova Common Stock, 8.75 shares of common stock, $.001
par value of AGBL (the "AGBL COMMON STOCK"), and (B) with respect to the
Options, options (or warrants, as applicable) exercisable into 8.75 shares of
AGBL Common Stock upon substantially the same terms and conditions as in effect
prior to the Closing Date, but with appropriate adjustments to the exercise
prices of such Options. At the Effective Time, without any action by the holder
thereof, each outstanding share of the capital stock of Merger Sub shall be
deemed cancelled and converted into the right to receive one share of common
stock of the Surviving Corporation. The aggregate number of shares of AGBL
Common Stock issued to the Synova Stockholders pursuant to this Section 2.1(f)
shall equal, as of the Closing Date, seventy percent (70%) of the outstanding
AGBL Common Stock on a fully diluted basis.
(g) Fractional shares of AGBL Common Stock shall not be
issued and each holder of Synova Common Stock who would otherwise be entitled to
receive any such fractional shares shall forfeit the right thereto.
(h) At the Effective Time, AGBL shall issue certificates
evidencing the number of shares of AGBL Common Stock issuable to the holders of
Synova Common Stock in the Merger pursuant to Section 2.1(f) in return for the
applicable certificates of Synova Common Stock to be cancelled pursuant to
Section 2.1(f).
(i) If any certificate representing Synova Common Stock
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such certificate to be lost, stolen or
destroyed and an agreement by such person to indemnify AGBL and/or the Surviving
Corporation against any claim that may be made against it with respect to such
certificate, AGBL will issue, in exchange for such lost, stolen or destroyed
certificate, certificates representing the AGBL Common Stock to which such
Person is entitled under Section 2.1(f), and any dividends or other
distributions to which such Person is entitled pursuant to this Agreement.
(j) Notwithstanding anything in this Agreement to the
contrary, shares of Synova Common Stock, if any, issued and outstanding
immediately prior to the Effective Time and held by a Synova Stockholder who has
not voted in favor of the Merger and who has delivered a written demand for
appraisal of such shares in accordance with Section 262 of the
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DGCL (a "DISSENTING STOCKHOLDER") shall not be converted into the right to
receive the Merger Consideration, unless and until such holder fails to perfect
or effectively withdraws or otherwise loses such holder's right to appraisal
under the DGCL. A Dissenting Stockholder may receive payment of the fair value
of the shares of Synova Common Stock issued and outstanding immediately prior to
the Effective Time and held by such Dissenting Stockholder ("DISSENTING SHARES")
in accordance with the provisions of the DGCL, provided that such Dissenting
Stockholder complies with Section 262 of the DGCL. At the Effective Time, all
Dissenting Shares shall be cancelled and cease to exist and shall represent only
the right to receive the fair value thereof in accordance with the DGCL. If,
after the Effective Time, any Dissenting Stockholder fails to perfect or
effectively withdraws or otherwise loses such Dissenting Stockholder's right to
appraisal, such Dissenting Stockholder's Dissenting Shares shall thereupon be
treated as if they had been converted, as of the Effective Time, into the right
to receive the Merger Consideration.
2.2 Closing. The closing (the "CLOSING") of the transactions
contemplated by this Agreement shall take place at 10:00 a.m. EST on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the parties hereto to consummate the transactions contemplated by
this Agreement (the "CLOSING DATE"), at the offices of Blank Rome LLP, Xxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, unless another time, date or place is
agreed to in writing by the parties hereto.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF SYNOVA
Synova represents and warrants to the AGBL Parties, as of the date
hereof and as of the Closing Date (except for representations and warranties
that speak as of a specific date or time, in which case, such representations
and warranties shall be true and complete as of such date or time), as follows:
3.1 ORGANIZATION OF SYNOVA. Synova is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware.
Synova has the requisite corporate power and authority to own, lease, and
operate its properties, and to carry on its business where such properties are
now owned, leased, or operated and in the manner that such business is now
conducted. Synova is qualified to do business as a foreign corporation in all
jurisdictions in which the failure to so qualify would have a Material Adverse
Effect on Synova.
3.2 CAPITALIZATION; OWNERSHIP OF COMMON STOCK.
(a) The authorized capital stock of Synova consists of
1,250,000 shares of common stock, par value $0.00001 per share, of which 735,766
shares are issued and outstanding. There are options and warrants to purchase an
aggregate of 64,234 shares of Synova Common Stock outstanding.
(b) Except for the shares of Synova Common Stock and
options and warrants to purchase Synova Common Stock described in 3.2(a) above,
there are no other outstanding equity securities of Synova or any outstanding
securities of Synova convertible or exchangeable at any time into equity
securities of Synova. Synova does not have any Subsidiaries and does not
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own any interests in any corporation, association, partnership, joint venture,
trust, estate, limited liability company, limited liability partnership,
organization or any other entity. All of the Synova stockholders are "accredited
investors" as defined in Rule 501 promulgated under the Securities Act.
3.3 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Subject to the
approval of the Synova Stockholders, Synova has the requisite corporate power
and authority to execute and deliver this Agreement and all agreements and
documents contemplated hereby. Upon obtaining the approval of the Synova
Stockholders, the consummation by Synova of the transactions contemplated hereby
will have been duly authorized by all requisite corporate action required to
consummate the Merger. Upon obtaining the approval of the Synova Stockholders,
this Agreement will constitute, and all agreements and documents contemplated
hereby (when executed and duly delivered pursuant hereto) will constitute, the
valid and legally binding obligations of Synova, enforceable in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, moratorium
or other similar laws relating to creditors' rights and general principles of
equity.
3.4 BOOKS AND RECORDS. The minute books, stock record books, and
other records of Synova, all of which have been made available to the AGBL
Parties, are complete and correct in all material respects. The minute book of
Synova contains accurate and complete records in all material respects of all
meetings held of, and corporate action taken by, the stockholders, the Board of
Directors, and committees of the Board of Directors of Synova, and no meeting of
any such stockholders, Board of Directors, or committee has been held for which
minutes have not been prepared and are not contained in such minute books.
3.5 ABSENCE OF CONFLICTING AGREEMENTS. The execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement (with or without the giving of notice, the lapse of time, or both):
(a) other than the approval of the Synova Stockholders, does not require the
consent of any third party; (b) will not conflict with any provision of the
Certificate of Incorporation, Bylaws, or other organizational documents of
Synova; (c) will not conflict with, result in a breach of, or constitute a
default under, any applicable Order, Legal Requirement, or ruling of any court
or Governmental Body to which Synova is subject; (d) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to which
Synova is a party or by which Synova or its assets are bound; and (e) will not
create any Lien upon any of the assets of Synova or any of the Synova Common
Stock. Except for the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, and the filing of a Form D with the SEC, no
filing or consent with any Governmental Body or any other third party is
required of Synova to consummate this Agreement or the transactions contemplated
hereby.
3.6 GOVERNMENTAL AUTHORIZATIONS. SCHEDULE 3.6 contains a complete
and accurate list of each Governmental Authorization that is held by Synova or
that otherwise relates to the business of, or to any of the assets owned or used
by, Synova. Synova has made available to the AGBL Parties true and complete
copies of all such Governmental Authorizations. Each Governmental Authorization
listed or required to be listed on SCHEDULE 3.6 is valid and in full force and
effect.
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3.7 REAL PROPERTY. Synova does not own any real property or have any
Real Property Interests other than the lease described on SCHEDULE 3.7, which
lease of property is suitable for the conduct of Synova's business and
operations as now conducted. Synova is not and, to Synova's Knowledge, the
landlord of its leased premises is not, in default, violation, or breach under
said lease, and no event has occurred and is continuing that constitutes (with
notice or passage of time or both) a default, violation or breach thereunder by
Synova or, to Synova's Knowledge, the landlord. Synova has not received any
notice of a default under said lease. Synova has, to date, enjoyed quiet
enjoyment and practical access to the premises subject to the lease. The leased
premises (including the improvements thereon): (a) are in good condition and
repair consistent with its current use; and (b) are available for immediate use
in the conduct of Synova's business and operations.
3.8 TANGIBLE PERSONAL PROPERTY. Synova owns or leases all Tangible
Personal Property necessary to conduct Synova's business and operations as now
conducted. Without material exception, Synova owns and has good title to each
item of Tangible Personal Property owned by it, and none of such Tangible
Personal Property owned by Synova is subject to any Liens, except for Permitted
Encumbrances. With allowance for normal repairs, maintenance, wear, and
obsolescence, each material item of Tangible Personal Property owned by Synova
is in good operating condition and repair and is available for immediate use in
Synova's business and operations.
3.9 CONTRACTS. SCHEDULE 3.9 lists all written Contracts and true and
complete descriptions of all oral Contracts (including any amendments and other
modifications to such Contracts) that Synova is a party or otherwise bound. All
of such Contracts are in full force and effect and are valid, binding, and
enforceable against Synova and, to Synova's Knowledge, the other party(ies)
thereto in accordance with their terms, except as the enforceability of such
Contracts may be affected by bankruptcy, insolvency, or similar laws affecting
creditors' rights generally and by judicial discretion in the enforcement of
equitable remedies. Synova is not, and to Synova's Knowledge, no other party
thereto is, in material default, violation, or breach in any respect under any
such Contract and no event has occurred and is continuing that constitutes (with
notice or passage of time or both) a material default, violation, or breach in
any respect thereunder by Synova or, to Synova's Knowledge, the other party(ies)
thereto. No party to any Contract listed on SCHEDULE 3.9 has delivered notice of
any intention to terminate such Contract or amend the terms thereof.
3.10 INTANGIBLES. SCHEDULE 3.10 is a true and complete list of all
material Intangibles owned and used by Synova in its business and operations as
now conducted. Synova owns or has the right to use all material Intangibles
required for the conduct of Synova's business and operations as now conducted.
Except as set forth on SCHEDULE 3.10, (a) Synova has not received any notice or
demand alleging that it is infringing upon or otherwise acting adversely to any
trademarks, service marks, trade names, service names, copyrights, patents,
patent applications, know-how, methods, processes or other intellectual property
of any other Person, and there is no claim, proceeding or action pending or, to
Synova's Knowledge, threatened with respect thereto; (b) to Synova's Knowledge,
no Person is infringing upon Synova's rights or ownership interest in its
Intangibles; (c) to Synova's Knowledge, Synova is not improperly using any trade
secrets, or improperly using any confidential information of or about any of its
past or present
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employees; and (d) to Synova's Knowledge, the ownership and use of such
Intangibles does not, and will not, as a result of the continued operation of
the business as presently conducted, violate any legal requirement from or to
any jurisdiction, and none of the Intangibles are subject to any outstanding
order, decree, judgment, stipulation or any Lien. With respect to each
Intangible license, sublicense or agreement, (a) neither Synova nor, to Synova's
Knowledge, the other party(ies) to the license, sublicense, or agreement, is in
material breach or default, and no event has occurred which with notice or lapse
of time would constitute a material breach or default or permit termination,
modification, or acceleration thereunder, and (b) no party to the license,
sublicense or agreement has repudiated any provision thereof.
3.11 TITLE TO PROPERTIES. Except as disclosed on SCHEDULE 3.7, Synova
has good title to its assets and properties, free of Liens or rights of others
of any kind or nature, except for Permitted Encumbrances.
3.12 FINANCIAL STATEMENTS. Synova has delivered to AGBL unaudited
financial statements for the eleven-month period ended November 30, 2004
(collectively, the "FINANCIAL STATEMENTS"). Each of the foregoing Financial
Statements (including, in all cases, the notes thereto, if any) (i) was accurate
and complete in all material respects as of the date thereof, (ii) fairly
presented the financial condition and results of operations of Synova set forth
therein, and (iii) were prepared in accordance with GAAP applied on a consistent
basis throughout the period covered thereby. Except as set forth on
SCHEDULE 3.12, Synova has no liabilities or obligations of any nature (whether
known or unknown and whether absolute, accrued, contingent, or otherwise, except
for liabilities or obligations reflected or reserved against in the Financial
Statements and liabilities incurred in the Ordinary Course of Business since the
date thereof. No off-balance sheet transactions exist in which Synova is a
party.
3.13 TAX MATTERS.
(a) Synova has filed all Tax Returns required to be filed.
All such Tax Returns were correct and complete and have been prepared in
compliance in all material respects with all applicable Legal Requirements. All
Taxes owed by Synova (whether or not shown on any Tax Return) have been paid.
Synova currently is not the beneficiary of any extension of time within which to
file any Tax Return. No claim has ever been made by a Governmental Body in a
jurisdiction where Synova does not file Tax Returns that it may be subject to
taxation by that jurisdiction.
(b) Synova has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other Person for all periods
for which the statutory period of limitations for the assessment of such Tax has
not yet expired and all IRS Forms W-2 and 1099 required with respect thereto
have been properly completed and timely filed.
(c) No foreign, federal, state or local Tax audits or
administrative Tax proceedings are pending or being conducted with respect to
Synova. Neither Synova nor any director or officer of Synova has received from
any foreign, federal, state or local Taxing Authority (including jurisdictions
where Synova has not filed Tax Returns) any (i) notice indicating an intent to
open an audit or other review; (ii) request for information related to Tax
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matters; or (iii) notice of deficiency or proposed adjustment for any amount of
Tax proposed, asserted or assessed by any Taxing Authority against Synova.
Correct and complete copies of all material federal, state, local and foreign
income Tax Returns filed or issued since its inception have been provided or
made available to the AGBL Parties;
(d) Synova has not (i) waived any statute of limitations in
respect of any Tax which has continuing effect or (ii) agreed to any extension
of time with respect to a Tax assessment or deficiency which has not expired;
(e) Synova has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(f) There is no contract, agreement, plan or arrangement
covering any persons that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by reason of Section 280G of
the Code, or would constitute compensation in excess of the limitations set
forth in Section 162(m) of the Code.
(g) Synova has disclosed to the Internal Revenue Service on
the appropriate Tax Returns any Reportable Transaction in which it has
participated. Synova has retained all documents and other records pertaining to
any Reportable Transaction in which it has participated, including documents and
other records listed in Treasury Regulation Section 1.6011-4(g) and any other
documents or other records which are related to any Reportable Transaction in
which it has participated but not listed in Treasury Regulation
Section 1.6011-4(g).
3.14 INSURANCE. Synova maintains insurance coverage with reputable
insurers in such amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in businesses similar to that of
Synova (taking into account the cost and availability of such insurance).
SCHEDULE 3.14 sets forth a complete listing of all insurance maintained by
Synova (indicating form of coverage, name of carrier and broker, coverage limits
and premium, expiration dates and deductibles).
3.15 PERSONNEL AND EMPLOYEE BENEFITS.
(a) EMPLOYEES AND COMPENSATION. SCHEDULE 3.15 contains a
true and complete list of all employees employed by Synova as of the date
hereof. SCHEDULE 3.15 also contains a true and complete list of all employee
benefit plans or arrangements covering the officers and employees employed by
Synova, including, with respect to the employees any:
(i) "Employee welfare benefit plan," as defined in
Section 3(1) of ERISA (a "WELFARE PLAN");
(ii) "Multiemployer pension plan," as defined in
Section 3(37) of ERISA (a "MULTIEMPLOYER PLAN" and, together with the Welfare
Plans, the "BENEFIT PLANS");
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(iii) "Employee pension benefit plan," as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan) (a "PENSION PLAN");
(iv) Employee plan that is maintained in
connection with any trust described in Section 501(c)(9) of the Code; and
(v) Employment, severance, or other similar
contract, arrangement, or policy and each plan or arrangement (written or oral)
providing for insurance coverage (including any self-insured arrangements),
workers' compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, or retirement benefits or arrangement for deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation rights,
stock purchases, or other forms of incentive compensation or post-retirement
insurance, compensation, or benefits that is not a Welfare Plan, Pension Plan,
or Multiemployer Plan, (collectively, "BENEFIT ARRANGEMENTS").
(b) PENSION PLANS. Synova does not sponsor, maintain, or
contribute to any Pension Plan other than any Pension Plan listed on
SCHEDULE 3.15. Each Pension Plan complies currently and has been maintained in
substantial compliance with its terms and, both as to form and in operation,
with all requirements prescribed by any and all statutes, orders, rules and
regulations that are applicable to such plans, including ERISA and the Code.
(c) WELFARE PLANS. Each Welfare Plan complies currently and
has been maintained in compliance with its terms and, both as to form and in
operation, with all requirements prescribed by any and all statutes, orders,
rules and regulations that are applicable to such plans, including ERISA and the
Code. Synova does not sponsor, maintain, or contribute to any Welfare Plan that
provides health or death benefits to former employees of Synova other than as
required by Section 4980B of the Code or other applicable laws.
(d) BENEFIT ARRANGEMENTS. Each Benefit Arrangement has been
maintained in compliance with its terms and with the requirements prescribed by
all statutes, orders, rules and regulations that are applicable to such Benefit
Arrangement. Synova is not a party to any written contract prohibiting the
termination of any employee.
(e) MULTIEMPLOYER PLANS. Except as disclosed on
SCHEDULE 3.15, Synova has not at any time been a participant in any
Multiemployer Plan.
(f) DELIVERY OF COPIES OF RELEVANT DOCUMENTS AND OTHER
INFORMATION. Synova has delivered or made available to the AGBL Parties true and
complete copies of each of the following documents:
(i) Each Welfare Plan and Pension Plan (and, if
applicable, related trust agreements) and all amendments thereto, and written
descriptions thereof that have been distributed to employees, all annuity
contracts or other funding instruments; and
(ii) Each Benefit Arrangement and written
descriptions thereof that have been distributed to employees and complete
descriptions of any Benefit Arrangement that is not in writing.
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(g) LABOR RELATIONS. Except as set forth on
SCHEDULE 3.15(g), Synova is not a party to or subject to any collective
bargaining agreement or written or oral employment agreement with any employee.
Except as set forth on SCHEDULE 3.15(g), with respect to its employees, Synova
has complied in all material respects with all laws, rules and regulations
relating to the employment of labor, including those related to wages, hours,
collective bargaining, occupational safety, discrimination, and the payment of
social security and other payroll related taxes, and has not received any notice
alleging that Synova has failed to comply with any such laws, rules, or
regulations. No proceedings are pending or overtly threatened between Synova, on
the one hand, and any employee (singly or collectively), on the other hand. No
labor union or other collective bargaining unit represents or claims to
represent any of the employees.
3.16 LEGAL ACTIONS AND ORDERS.
(a) Except as disclosed on SCHEDULE 3.16(a), there is no
claim, legal action, counterclaim, suit, arbitration, or other legal or
administrative proceeding, or Tax Proceeding pending or overtly threatened
against Synova or relating to the assets used by Synova, or the business or
operations of Synova, nor does Synova have Knowledge of any basis for the same.
(b) There is no Order issued against Synova or the assets
owned or used by Synova, or to which Synova's business or operations are
subject.
(c) No officer or director or, to Synova's Knowledge, agent,
or employee of Synova is subject to any Order that prohibits such officer,
director, agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of Synova.
3.17 ENVIRONMENTAL COMPLIANCE. Except as disclosed on SCHEDULE 3.17:
(i) none of Synova's Tangible Personal Property, nor, to Synova's Knowledge, its
Leased Real Property contains (A) any asbestos, polychlorinated biphenyls or any
PCB contaminated oil, or (B) any Contaminants; and (ii) to Synova's knowledge,
all of Synova's Leased Real Property is in full compliance with all applicable
Environmental Laws.
3.18 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth on
SCHEDULE 3.18:
(a) Synova is, and at all times has been, in full compliance
with each material Legal Requirement that is or was applicable to it or to the
conduct or operation of its business or the ownership or use of any of its
assets;
(b) To Synova's knowledge, no event has occurred or
circumstance exists that (with or without notice or lapse of time) (i) may
constitute or result in a violation by Synova of, or a failure on the part of
Synova to comply with, any Legal Requirement, or (ii) may give rise under any
Legal Requirement to any obligation on the part of Synova to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature; and
(c) Synova has not received any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding any actual, alleged, possible, or potential violation of, or
failure to comply with, any Legal Requirement.
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3.19 CONDUCT OF BUSINESS IN ORDINARY COURSE. Except as set forth on
SCHEDULE 3.19, since November 30, 2004 and through the date hereof, there has
not been any Material Adverse Effect involving Synova. Without limiting the
generality of the foregoing, since that date, Synova has not:
(a) made any material sale, assignment, lease, or other
transfer of assets other than in the Ordinary Course of Business;
(b) canceled any debts owed to or claims held by Synova
outside the Ordinary Course of Business;
(c) made any material changes in its accounting practices;
(d) suffered any material write-down of the value of any
assets or any write-off as uncollectable of any of its accounts receivable;
(e) made any capital expenditures outside the Ordinary
Course of Business;
(f) made any capital investment in or any loan to any other
Person outside the Ordinary Course of Business;
(g) experienced any material damage, destruction, or loss
(whether or not covered by insurance) to its property; or
(h) committed to do any of the foregoing.
3.20 ACCOUNTS RECEIVABLE. The accounts receivable shown in the
Financial Statements arose in the ordinary course of business and represented,
as of the date of such Financial Statements, bona fide claims against debtors
for services, purchases, licenses and other charges. All accounts receivable of
Synova arising after the date of the Financial Statements through the date of
this Agreement arose in the ordinary course of business and, as of the date of
this Agreement, and except as set forth on SCHEDULE 3.20, are not subject to any
discount, contingency, claim of off-set or recoupment or counterclaim.
3.21 CUSTOMERS AND SUPPLIERS; LOSS OF BUSINESS. SCHEDULE 3.21 sets
forth a list of all customers of Synova that accounted for at least $10,000 of
net sales during the twelve-month period ended December 31, 2004. To Synova's
Knowledge, (a) all such customers will continue purchasing, without significant
reductions (in either quantity or price), products or services from Synova,
(b) all suppliers material to the Synova will continue to sell to Synova,
without significant increases in price, the products and services currently sold
by each of them to Synova and (c) all other parties that have material business
relations with Synova will continue such relations.
3.22 RELATIONSHIPS WITH RELATED PERSONS. No Related Person of Synova
has, or has had, any interest in any property (whether real, personal, or mixed
and whether tangible or intangible) used in or pertaining to Synova's business.
Except as set forth on SCHEDULE 3.22, no Related Person of Synova is, or has
owned (of record or as a beneficial owner) an equity interest
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or any other financial or profit interest in a Person that has (i) had business
dealings or a financial interest in any transaction with Synova other than
business dealings or transactions conducted in the Ordinary Course of Business
with Synova at substantially prevailing market prices and on substantially
prevailing market terms, or (ii) engaged in competition with Synova with respect
to any line of the products or services of Synova (a "COMPETING BUSINESS") in
any market presently served by Synova except for ownership of less than one
percent of the outstanding capital stock of any Competing Business that is
publicly traded on any recognized exchange or in the over-the-counter market.
3.23 BROKERS OR FINDERS. Except as set forth on SCHEDULE 3.23,
neither Synova nor, to Synova's Knowledge, any director, officer, agent or
employee of Synova, has employed any broker or finder or has incurred or will
incur any broker's, finder's or similar fees, commissions or expenses, in each
case in connection with the transactions contemplated by this Agreement.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE AGBL PARTIES
The AGBL Parties, jointly and severally, represent and warrant to Synova
(and the Synova Stockholders) as of the date hereof and as of the Closing Date
(except for representations and warranties that speak as of a specific date or
time, in which case, such representations and warranties shall be true and
complete as of such date or time) as follows:
4.1 ORGANIZATION OF AGBL AND MERGER SUB. AGBL is duly organized,
validly existing, and in good standing under the laws of the State of Nevada.
Merger Sub is duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each other direct or indirect subsidiary of AGBL
is duly organized, validly existing, and in good standing under the laws of the
state of its formation. AGBL and each of its Subsidiaries has the requisite
corporate power and authority to own, lease, and operate its properties, to
carry on its business where such properties are now owned, leased, or operated
and in the manner that such business is now conducted. AGBL and each of its
Subsidiaries is qualified to do business as a foreign corporation in all
jurisdictions in which the failure to so qualify would have a Material Adverse
Effect on AGBL. Neither AGBL nor any of its Subsidiaries is a participant in any
joint venture or partnership with any Person with respect to any part of its
operations or its business.
4.2 CAPITALIZATION; CORPORATE STATUS.
(a) The authorized capital stock of AGBL consists of
(i) 150,000,000 shares of common stock, par value $0.001 per share, of which
3,000,000 shares are issued and outstanding and (ii) 50,000,000 shares of
preferred stock, par value $0.001 per share, of which there are no shares
outstanding. All of the issued and outstanding shares of AGBL Common Stock have
been duly authorized, validly issued and are fully paid and nonassessable. All
of the issued and outstanding shares of AGBL Common Stock and their ownership
are as described on SCHEDULE 4.2. Except as described on SCHEDULE 4.2, (a) no
shares of AGBL Common Stock are held in treasury, (b) there are no outstanding
equity securities of AGBL or other securities of AGBL convertible or
exchangeable at any time into equity securities of AGBL, and (c) there are no
outstanding stock appreciation rights, phantom stock rights, profit
participation rights, or other similar rights with respect to any capital stock
of AGBL. SCHEDULE 4.2 also sets forth all
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commitments or obligations that would require the issuance or sale of additional
shares of capital stock of AGBL at any time under any options, subscriptions,
warrants, rights, or other obligations to purchase AGBL Common Stock. AGBL owns
the Subsidiaries set forth on SCHEDULE 4.2.
(b) AGBL and its Subsidiaries are now, and have always been,
inactive companies with no operations. AGBL and its Subsidiaries have no
material assets, no material liabilities, known or unknown, contingent or
otherwise and no commitments other than immaterial obligations with respect to
tax filings, corporate maintenance, and other similar ongoing expenses. At the
Effective Time, the business of the Surviving Corporation will be the only
operating business of AGBL.
4.3 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. AGBL and
Merger Sub have the requisite corporate power and authority to execute and
deliver this Agreement and all agreements and documents contemplated hereby. The
consummation by AGBL and Merger Sub of the transactions contemplated hereby has
been duly authorized by all requisite corporate action. This Agreement
constitutes, and all agreements and documents contemplated hereby (when executed
and duly delivered pursuant hereto) will constitute, the valid and legally
binding obligations of the AGBL Parties, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
4.4 BOOKS AND RECORDS. The minute books, stock record books, and
other records of AGBL and each of its Subsidiaries, all of which have been made
available to Synova, are complete and correct in all material respects. The
minute books of AGBL and its Subsidiaries contain accurate and complete records
in all material respects of all meetings held of, and corporate action taken by,
the respective stockholders, the respective Board of Directors, and committees
of the Board of Directors of AGBL and its Subsidiaries, and no meeting of any
such stockholders, Board of Directors, or committee has been held for which
minutes have not been prepared and are not contained in such minute books.
4.5 ABSENCE OF CONFLICTING AGREEMENTS. As to the AGBL Parties, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement (with or without the giving of
notice, the lapse of time, or both): (a) do not require the consent of any third
party; (b) will not conflict with any provision of the Certificate of
Incorporation, Bylaws, or other organizational documents of AGBL or any of its
Subsidiaries; (c) will not conflict with, result in a breach of, or constitute a
default under any applicable Order, Legal Requirement, or ruling of any court or
Governmental Body to which AGBL or any of its Subsidiaries is subject; (d) will
not conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any material agreement, instrument,
license, or permit to which AGBL or any of its Subsidiaries is a party or by
which AGBL or any of its Subsidiaries or their respective assets are bound; and
(e) will not create any Lien upon any of the assets of AGBL or any of its
Subsidiaries or any of the AGBL Common Stock. Except for the filing of the
Certificate of Merger and a Form D Filing pursuant to Regulation D of the
Securities Act, no filing with any Governmental Body or any other third party is
required to consummate this Agreement or the transactions contemplated hereby.
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4.6 SEC FILINGS; FINANCIAL STATEMENTS.
(a) AGBL has not made, and has not been obligated to make,
any filings under the Exchange Act. AGBL and its Subsidiaries have been in
continuous compliance with the Securities Act, the Exchange Act and all other
federal and state securities laws, rules or regulations that may now be, or have
ever been, applicable to AGBL or its Subsidiaries, including without limitation,
Section 5 of the Securities Act.
(b) AGBL has delivered to Synova unaudited financial
statements, including the balance sheet and statement of income for the fiscal
years ended December 31, 2003 and December 31, 2004 (collectively the "AGBL
FINANCIAL STATEMENTS"). Each of the AGBL Financial Statements (including, in all
cases, the notes thereto, if any) (i) was accurate and complete in all material
respects as of the date thereof, (ii) fairly presented the financial condition
and results of operations of AGBL set forth therein, and (iii) were prepared in
accordance with GAAP applied on a consistent basis throughout the period covered
thereby. Except as set forth on SCHEDULE 4.6, AGBL has no liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent, or otherwise, except for liabilities or obligations
reflected or reserved against in the AGBL Financial Statements and liabilities
incurred in the Ordinary Course of Business since the dates thereof. No
off-balance sheet transactions exist in which AGBL or any of its Subsidiaries is
a party.
4.7 LIABILITIES. As of the Closing Date, AGBL shall have no
liabilities, taxes or any other obligations, contractual, or otherwise, whether
or not contingent or known or unknown, other than those set forth in the AGBL
Financial Statements.
4.8 TAX MATTERS.
(a) AGBL and each of its Subsidiaries has timely filed all
Tax Returns required to be filed. All such Tax Returns were correct and complete
and have been prepared in compliance in all material respects with all
applicable laws and regulations. All Taxes owed by AGBL and each of its
Subsidiaries (whether or not shown on any Tax Return) have been paid. Neither
AGBL nor any of its Subsidiaries currently is the beneficiary of any extension
of time within which to file any Tax Return. No claim has ever been made by a
Governmental Body in a jurisdiction where either AGBL or any of its Subsidiaries
do not file Tax Returns that they may be subject to taxation by that
jurisdiction. There are no Liens on any of the assets of either AGBL or any of
its Subsidiaries that arose in connection with any failure (or alleged failure)
to pay any Tax.
(b) AGBL and each of its Subsidiaries has withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other Person for all periods for which the statutory period of limitations for
the assessment of such Tax has not yet expired and all IRS Forms W-2 and 1099
required with respect thereto have been properly completed and timely filed.
(c) No foreign, federal, state or local Tax audits or
administrative Tax proceedings are pending or being conducted with respect to
AGBL or any of its Subsidiaries.
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Neither AGBL nor any of its Subsidiaries nor any director or officer of AGBL or
any of its Subsidiaries has received from any foreign, federal, state or local
Taxing Authority (including jurisdictions where AGBL and its Subsidiaries have
not filed Tax Returns) any (i) notice indicating an intent to open an audit or
other review; (ii) request for information related to Tax matters; or (iii)
notice of deficiency or proposed adjustment for any amount of Tax proposed,
asserted or assessed by any Taxing Authority against AGBL or any of its
Subsidiaries.
(d) Correct and complete copies of all material federal,
state, local and foreign income Tax Returns, examination reports, and statements
of deficiencies assessed against, or agreed to by, AGBL or any of its
Subsidiaries filed or issued since December 31, 2000 have been provided to
Synova.
(e) Neither AGBL nor any of its Subsidiaries have (i) waived
any statute of limitations in respect of any Tax which has continuing effect or
(ii) agreed to any extension of time with respect to a Tax assessment or
deficiency which has not expired.
(f) The unpaid Taxes of AGBL and its Subsidiaries (i) did
not, as of December 31, 2004, exceed the reserve for Tax liability (rather than
any reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the AGBL Financial Statements as
of such date and (ii) do not exceed the reserve as adjusted for the passage of
time through the Closing Date in accordance with the past customs and practice
of AGBL and its Subsidiaries in filing their Tax Returns. Since December 31,
2003, neither AGBL nor any of its Subsidiaries have incurred any liability for
Taxes arising from extraordinary gains or losses, as the term is used in GAAP,
outside the ordinary course of business consistent with past custom and
practice.
(g) AGBL and each of its Subsidiaries have disclosed on
their federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the meaning of
Section 6662 of the Code.
(h) Neither AGBL nor any of its Subsidiaries (i) is or has
been a party to any Tax allocation or sharing agreement or (ii) has been a
member of an Affiliated Group (as defined in Section 1504(a) of the Code) filing
a consolidated federal income Tax Return (other than a group the common parent
of which is AGBL) or has a liability for Taxes of any person under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract or otherwise.
(i) Neither AGBL nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(j) There is no contract, agreement, plan or arrangement
covering any persons that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by reason of Section 280G of
the Code, or would constitute compensation in excess of the limitations set
forth in Section 162(m) of the Code.
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(k) Neither AGBL nor any of its Subsidiaries has been the
"distributing corporation" (within the meaning of Section 355(a)(1) of the Code)
nor the "controlled corporation" (within the meaning of Section 355(a)(1) of the
Code) within the two-year period ending as of the date of this Agreement.
(l) AGBL and each of its Subsidiaries has disclosed to the
Internal Revenue Service on the appropriate Tax Returns any Reportable
Transaction in which it has participated. AGBL and each of its Subsidiaries have
retained all documents and other records pertaining to any Reportable
Transaction in which it has participated, including documents and other records
listed in Treasury Regulation Section 1.6011-4(g) and any other documents or
other records which are related to any Reportable Transaction in which it has
participated but not listed in Treasury Regulation Section 1.6011-4(g).
(m) Except as provided for on SCHEDULE 4.8, neither AGBL nor
any of its Subsidiaries will be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any: (i) change in
accounting method for a taxable period ending on or prior to the Closing Date
under Section 481(a) of the Code (or any corresponding provision of state, local
or foreign income Tax law); (ii) "closing agreement" as described in Section
7121 of the Code (or any corresponding provision of state, local or foreign
income Tax law); (iii) installment sale or open transaction disposition made on
or prior to the Closing Date; or (iv) prepaid amount received on or prior to the
Closing Date.
4.9 INSURANCE. Neither AGBL nor any of its Subsidiaries maintains
insurance coverage (including without limitation, director and officer liability
insurance).
4.10 PERSONNEL AND EMPLOYEE BENEFITS.
(a) EMPLOYEES AND COMPENSATION. SCHEDULE 4.10 contains a
true and complete list of all individuals employed by AGBL or any of its
Subsidiaries as of the date hereof. SCHEDULE 4.10 also contains a true and
complete list of all employee benefit plans or arrangements covering the
officers and employees employed by AGBL or any of its Subsidiaries at any time,
including any:
(i) Welfare Plan;
(ii) Multiemployer Plans;
(iii) Pension Plan;
(iv) Employee plan that is maintained in
connection with any trust described in Section 501(c)(9) of the Code; and
(v) Benefit Arrangements.
(b) PENSION PLANS. Neither AGBL nor any of its Subsidiaries
sponsors, maintains, or contributes to any Pension Plan other than any Pension
Plan listed on SCHEDULE 4.10.
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Each Pension Plan complies currently and has been maintained in substantial
compliance with its terms and, both as to form and in operation, with all
requirements prescribed by any and all statutes, orders, rules and regulations
that are applicable to such plans, including ERISA and the Code.
(c) WELFARE PLANS. Each Welfare Plan provided or maintained
by AGBL or its Subsidiaries complies currently and has been maintained in
compliance with its terms and, both as to form and in operation, with all
requirements prescribed by any and all statutes, orders, rules and regulations
that are applicable to such plans, including ERISA and the Code. Neither AGBL
nor any of its Subsidiaries sponsors, maintains, or contributes to any Welfare
Plan that provides health or death benefits to former employees of AGBL or any
of its Subsidiaries other than as required by Section 4980B of the Code or other
applicable laws.
(d) BENEFIT ARRANGEMENTS. Each Benefit Arrangement has been
maintained in compliance with its terms and with the requirements prescribed by
all statutes, orders, rules and regulations that are applicable to such Benefit
Arrangement. Neither AGBL nor any of its Subsidiaries is a party to written
contract prohibiting the termination of any employee.
(e) MULTIEMPLOYER PLANS. Except as disclosed on
SCHEDULE 4.10, neither AGBL nor any of its Subsidiaries has at any time been a
participant in any Multiemployer Plan.
(f) DELIVERY OF COPIES OF RELEVANT DOCUMENTS AND OTHER
INFORMATION. The AGBL Parties have delivered or made available to Synova true
and complete copies of each of the following documents:
(i) Each Welfare Plan and Pension Plan provided or
maintained by AGBL or any of its Subsidiaries (and, if applicable, related trust
agreements) and all amendments thereto, and written descriptions thereof that
have been distributed to employees of AGBL or its Subsidiaries, all annuity
contracts or other funding instruments; and
(ii) Each Benefit Arrangement and written
descriptions thereof that have been distributed to employees of AGBL or its
Subsidiaries and complete descriptions of any Benefit Arrangement that is not in
writing.
(g) PRIOR EMPLOYEES. Neither AGBL, nor any of its
Subsidiaries, has any obligation to any present or former employee of AGBL or
any of its present or former Subsidiaries, under any Plan or Benefit Arrangement
described in Subsections 4.10(a), 4.10(b) or 4.10(c) or for indemnification for
any matter or in any other respect.
(h) LABOR RELATIONS. Neither AGBL nor any of its
Subsidiaries is a party to or subject to any collective bargaining agreement or
written or oral employment agreement with any employee. AGBL and each of its
Subsidiaries have complied in all material respects with all laws, rules and
regulations relating to the employment or labor, including those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of social security and other payroll related taxes, and have not
received any notice alleging that AGBL or any of its Subsidiaries has failed to
comply with any such laws, rules, or regulations. No proceedings are pending or
overtly threatened between AGBL or any of its Subsidiaries, on the
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one hand, and any employee (singly or collectively), on the other hand. No labor
union or other collective bargaining unit represents or claims to represent any
of the employees of AGBL or any of its Subsidiaries. There is no union campaign
being conducted to solicit cards from any employees to authorize a union to
represent any of the employees of AGBL or any of its Subsidiaries or to request
a National Labor Relations Board certification election with respect to any
employees.
4.11 LEGAL ACTIONS AND ORDERS.
(a) There is no claim, legal action, counterclaim, suit,
arbitration, or other legal or administrative proceeding, or Tax Proceeding
pending or overtly threatened, against AGBL or any of its Subsidiaries or
relating to the assets used by AGBL or any of its Subsidiaries, or the business
or operations of AGBL or any of its Subsidiaries, nor does AGBL or any of its
Subsidiaries have Knowledge of any basis for the same.
(b) There is no Order directed to AGBL or any of its
Subsidiaries or the assets owned or used by AGBL or any of its Subsidiaries, or
to which AGBL's or any of its Subsidiaries' business or operations, is subject.
4.12 ENVIRONMENTAL COMPLIANCE.
(a) Except as disclosed on SCHEDULE 4.12: (i) none of AGBL's
or its Subsidiaries' Tangible Personal Property, nor to AGBL's Knowledge, its
Leased Real Property Interests, contains (A) any asbestos, polychlorinated
biphenyls or any PCB contaminated oil, or (B) any Contaminants; and (ii) all of
such Leased Real Property Interests are in full compliance with all applicable
Environmental Laws.
(b) AGBL and each of its Subsidiaries have obtained all
Governmental Authorizations that are required under all Environmental Laws.
4.13 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth on
SCHEDULE 4.13:
(a) AGBL and each of its Subsidiaries are, and at all times
have been, in full compliance with each material Legal Requirement that is or
was applicable to them or to the conduct or operation of their business or the
ownership or use of any of their assets;
(b) No event has occurred or circumstance exists that (with
or without notice or lapse of time) (i) may constitute or result in a violation
by AGBL or any of its Subsidiaries of, or a failure on the part of AGBL or any
of its Subsidiaries to comply with, any Legal Requirement, or (ii) may give rise
under any Legal Requirement to any obligation on the part of AGBL or any of its
Subsidiaries to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature; and
(c) Neither AGBL nor any of its Subsidiaries has received
any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (i) any actual, alleged,
possible, or potential violation of, or failure to comply with, any Legal
Requirement, or (ii) any actual, alleged, possible, or potential obligation on
the part of
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AGBL or any of its Subsidiaries under any Legal Requirement to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature.
4.14 STOCK ISSUABLE IN MERGER. The Merger Consideration, when issued,
will be duly authorized and validly issued, fully paid and non-assessable, will
be delivered hereunder free and clear of any Liens, adverse claims, security
interests, pledges, mortgages, charges and encumbrances of any nature
whatsoever, except that the Merger Consideration shall not be registered under
the Securities Act or any state securities law and will be "restricted
securities," as such term is defined in the rules and regulations of the SEC
promulgated under the Securities Act, and will be subject to restrictions on
transfers pursuant to such rules and regulations. AGBL has reserved an adequate
number of shares of AGBL Common Stock to enable it to issue the Merger
Consideration. At the Effective Time, (i) the Synova Stockholders will own
seventy percent (70%) of the outstanding capital stock of AGBL on a fully
diluted basis (without giving effect to the contemplated equity financing by
AGBL of up to $3,500,000 to occur concurrently with the Closing, as referenced
in Section 6.2(i) and EXHIBIT C hereto) and (ii) AGBL will own one hundred
percent (100%) of the outstanding capital stock of the Surviving Corporation on
a fully diluted basis.
4.15 CONTRACTS. SCHEDULE 4.15 lists all written Contracts and true
and complete descriptions of all oral Contracts (including any amendments and
other modifications to such Contracts) that AGBL or Merger Sub is a party or
otherwise bound.
4.16 BROKERS OR FINDERS. Except as set forth on SCHEDULE 4.16,
neither AGBL nor any of its Subsidiaries, nor any director, officer, agent or
employee thereof, has employed any broker or finder or has incurred or will
incur any broker's, finder's or similar fees, commissions or expenses, in each
case in connection with the transactions contemplated by this Agreement.
SECTION 5
COVENANTS
5.1 PROCEDURE FOR EXCHANGE. At the Effective Time, AGBL shall make
appropriate provision for issuance of certificates representing the Merger
Consideration against surrender of the Synova Common Stock certificates.
5.2 CONDUCT OF SYNOVA'S BUSINESS PRIOR TO CLOSING. Except as
otherwise contemplated by this Agreement, from the date hereof through the
earlier of the termination of this Agreement or the Closing, Synova shall
conduct its business in the Ordinary Course of Business. Without limiting the
generality of the foregoing, except as contemplated by this Agreement or as
consented to by AGBL, during the period set forth in the preceding sentence,
Synova shall act as follows:
(a) Synova shall not adopt any change in any method of
accounting or accounting practice, except as contemplated or required by GAAP;
(b) Synova shall not amend its Certificate of Incorporation
or Bylaws;
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(c) subject to the fiduciary obligations of its board of
directors, Synova shall not merge or consolidate with, or agree to merge or
consolidate with, or purchase or sell, or agree to purchase or sell, all or
substantially all of its assets or the assets of any other Person;
(d) except for the dispositions in the Ordinary Course of
Business, Synova shall not sell, mortgage, pledge, or otherwise dispose of any
assets or properties owned, leased, or used in the operation of its business;
(e) Synova shall not authorize for issuance, issue, or sell
any additional shares of its capital stock or issue any securities or
obligations convertible or exchangeable into shares of its capital stock or
issue or grant any option, warrant, or other right to purchase any shares of its
capital stock; provided, however, that Synova may issue and sell debt or equity
securities in an aggregate amount not to exceed $1,000,000 when combined with
any indebtedness incurred under subsection 5.2(f) below;
(f) Synova shall not incur, or agree to incur, any
indebtedness for borrowed money; provided, however, that Synova may incur or
agree to incur indebtedness for borrowed money in an aggregate amount not to
exceed $1,000,000 when combined with any amounts raised in connection with the
issuance and sale of debt or equity securities under subsection 5.2(e) above;
(g) Synova shall not terminate the existing insurance
policies on the assets of its business; and
(h) Synova shall preserve its business and assets and use
reasonable commercial efforts to keep available its present employees and to
preserve present relationships with its customers, employees, and others having
business relations with it.
5.3 CONDUCT OF AGBL'S BUSINESS PRIOR TO CLOSING. Except as otherwise
contemplated by this Agreement, from the date hereof through the earlier of the
termination of this Agreement or the Effective Time, neither AGBL nor any of its
Subsidiaries shall conduct any business. In addition, without limiting the
generality of the foregoing, except as contemplated by this Agreement or as
consented to by Synova, during the period set forth in the preceding sentence,
AGBL and its Subsidiaries shall act as follows:
(a) neither AGBL nor any of its Subsidiaries shall adopt any
change in any method of accounting or accounting practice, except as
contemplated or required by GAAP;
(b) neither AGBL nor any of its Subsidiaries shall amend its
Certificate of Incorporation or Bylaws;
(c) subject to the fiduciary obligations of its board of
directors, neither AGBL nor any of its Subsidiaries shall merge or consolidate
with, or agree to merge or consolidate with, or purchase or agree to purchase
all or substantially all of the assets of, or otherwise acquire, any other
business entity;
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(d) other than as contemplated by Section 6.2(i), neither
AGBL nor any of its Subsidiaries shall authorize for issuance, issue, or sell
any additional shares of its capital stock or issue any securities or
obligations convertible or exchangeable into shares of its capital stock or
issue or grant any option, warrant, or other right to purchase any shares of its
capital stock;
(e) neither AGBL nor any of its Subsidiaries shall incur, or
agree to incur, any indebtedness for borrowed money;
(f) neither AGBL nor any of its Subsidiaries shall hire any
employees, consultants or independent contractors, or permit any increases in
the compensation of any of its employees except as required by law or existing
contract or agreement or enter into or amend any Welfare Plan, Pension Plan,
Benefit Plan or Benefit Arrangement;
(g) except as contemplated by this Agreement and in the
Ordinary Course of Business, neither AGBL nor any of its Subsidiaries shall
enter into, amend, renew, extend or terminate, or waive any Contract, or incur
any obligation that will be binding on AGBL or any such Subsidiary;
(h) except as contemplated by this Agreement, neither AGBL
nor any of its Subsidiaries shall enter into any transactions, including any
with an Affiliate that will be binding upon AGBL or any of its Subsidiaries
following the Closing Date; and
(i) AGBL and its Subsidiaries shall maintain their
respective assets and records in good condition.
5.4 ACCESS TO INFORMATION.
(a) From and after the date of this Agreement until the
earlier of the Closing Date or a termination of this Agreement pursuant to
Section 8, Synova shall, subject to any limitations imposed by any Governmental
Authorization, or Governmental Body, (i) give the AGBL Parties and the AGBL
Parties' employees, accountants and counsel (subject to agreements by such
persons to use and treat Confidential Information described in Subsection 5.4(c)
subject to the restrictions set forth in Subsection 5.4(c)), full and complete
access upon reasonable notice during normal business hours, to all officers,
employees, offices, properties, agreements, records and affairs of Synova to
perform its due diligence review of Synova; (ii) provide the AGBL Parties with
all financial information of Synova that is distributed to the officers and
directors of Synova; and (iii) provide copies of such other information
concerning Synova as the AGBL Parties may reasonably request.
(b) From and after the date of this Agreement until the
earlier of the Closing Date or a termination of this Agreement pursuant to
Section 8, the AGBL Parties shall (i) give Synova and its employees, accountants
and counsel full and complete access upon reasonable notice during normal
business hours, to all officers, employees, offices, properties, agreements,
records and affairs of AGBL and its Subsidiaries to perform its due diligence
review of AGBL and its Subsidiaries; (ii) provide Synova with all financial
information of AGBL and its Subsidiaries that is distributed to the officers and
directors of AGBL; and (iii) provide copies of
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such other information concerning AGBL and its Subsidiaries as Synova may
reasonably request.
(c) All confidential information of a party to which the
other party obtains pursuant to this Section 5.4 shall be deemed "Confidential
Information." As used in this Section 5.4, the term "CONFIDENTIAL INFORMATION"
shall mean any and all information (verbal and written) relating to the business
of Synova or AGBL, as the case may be, including, but not limited to,
information relating to: identity and description of goods and services used;
purchasing; costs; pricing; sources; machinery and equipment; technology;
research, test procedures and results; customers and prospects; marketing; and
selling and servicing. From and after the date hereof, the parties agree not to,
at any time, directly or indirectly, use, communicate, disclose or disseminate
any Confidential Information of the other parties in any manner whatsoever,
except in connection with the operation of the Surviving Corporation after the
Closing or as required by applicable law.
5.5 NAME CHANGE. If this Agreement is terminated pursuant to
Section 8 or the Merger is not consummated by February 15, 2005, the AGBL
Parties will take all actions necessary to change AGBL's name from "Synova
Healthcare Group, Inc." to a name not containing "Synova."
5.6 EMPLOYMENT AGREEMENTS. At the Closing, AGBL shall enter into an
employment agreement with each of Xxxxxxx Xxxx and Xxxxx Xxxxxxxx, which
employment agreements will be substantially in the form attached hereto as
EXHIBIT B.
5.7 RESIGNATION OF EMPLOYEES; APPOINTMENT OF DIRECTORS AND OFFICERS.
At the Closing, AGBL shall cause all of its officers and directors to resign,
and AGBL shall take such reasonable actions as are necessary to effectuate the
election of Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxx and
Xxxxxx Xxxxxxx, M.D. (collectively, the "NEW BOARD") to the board of directors
of AGBL, to hold office in accordance with applicable law, the Certificate of
Incorporation and Bylaws of AGBL until resignation, removal or replacement. At
the Effective Time, Xxxxxxx X. Xxxx shall be duly nominated and appointed as
AGBL's Chairman of the Board and Chief Executive Officer, and Xxxxx X. Xxxxxxxx
shall be duly nominated and appointed as AGBL's Chief Operating Officer and
Secretary, in each case to serve at the pleasure of the New Board in accordance
with applicable law, the Certificate of Incorporation and Bylaws of AGBL until
resignation, removal or replacement. On or prior to the Closing, AGBL shall
cause each resigning officer and director to execute a release of all claims and
future rights against AGBL, such release to be in form and substance reasonably
satisfactory to Synova.
5.8 CONSUMMATION OF TRANSACTION. Each of the parties hereto hereby
agrees to use its commercially reasonable efforts to cause all conditions
precedent to its obligations (and to the obligations of the other parties hereto
to consummate the transactions contemplated hereby) to be satisfied, including,
but not limited to, using all commercially reasonable efforts to obtain all
required (if so required by this Agreement) consents, waivers, amendments,
modifications, approvals, authorizations, novations and licenses; provided,
however, that nothing herein contained shall be deemed to modify any of the
absolute obligations imposed upon any of the parties hereto under this Agreement
or any agreement executed and delivered pursuant hereto.
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5.9 COOPERATION/FURTHER ASSURANCES.
(a) Each of the parties hereby agrees to fully cooperate
with the other parties hereto in preparing and filing any notices, applications,
reports and other instruments and documents which are required by, or which are
desirable in the reasonable opinion of any of the parties hereto, or their
respective legal counsel, in respect of, any Legal Requirement in connection
with the transactions contemplated by this Agreement.
(b) Each of the parties hereby further agrees to execute,
acknowledge, deliver, file and/or record, or cause such other parties to the
extent permitted by law to execute, acknowledge, deliver, file and/or record
such other documents as may be required by this Agreement or reasonably
requested by the other parties or their respective legal counsel in order to
document and carry out the transactions contemplated by this Agreement.
5.10 NOTICE OF DEVELOPMENTS. Each of the parties hereto shall give
prompt written notice to the other Parties of any material adverse development
causing a breach of any of its own representations and warranties in Section 3
or Section 4 above. No disclosure by any Party pursuant to this Section 5.10,
however, shall be deemed to amend or supplement the Disclosure Schedule or to
prevent or cure any misrepresentation, breach of warranty or breach of covenant.
SECTION 6
CONDITIONS TO OBLIGATIONS OF THE PARTIES
6.1 CONDITIONS TO OBLIGATIONS OF THE AGBL PARTIES. All obligations
of the AGBL Parties to consummate the Merger and the other transactions
contemplated by this Agreement are subject, at the AGBL Parties' option, to the
fulfillment or waiver prior to or at the Closing Date of each of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Synova contained in this Agreement shall be true and correct at
and as of the Closing Date as though made at and as of that time (except for
representations and warranties that speak as of a specific date or time, which
need only be true and complete as of such date or time).
(b) COVENANTS AND CONDITIONS. Synova shall have performed
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with prior to or on the Closing Date.
(c) NO LITIGATION. No action, suit or proceeding against
Synova relating to the consummation of any of the transactions contemplated by
this Agreement or any governmental action seeking to delay or enjoin any such
transactions shall be pending or threatened.
(d) CONSENTS AND APPROVALS. All required consents and
approvals required to be obtained by Synova hereunder shall have been received.
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6.2 CONDITIONS TO OBLIGATIONS OF SYNOVA. All obligations of Synova
to consummate the Merger and the other transactions contemplated by this
Agreement, are subject, at Synova's option, to the fulfillment or waiver prior
to or at the Closing Date of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the AGBL Parties contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date as though made at
and as of that time (except for representations and warranties that speak as of
a specific date or time, which need only be true and complete as of such date or
time).
(b) COVENANTS AND CONDITIONS; FINANCIAL STATEMENTS. The AGBL
Parties shall have performed and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by them prior to or on the Closing Date. Synova shall have
received consolidated audited financial statements of AGBL and its Subsidiaries
for the fiscal years ended December 31, 2003 and December 31, 2004.
(c) NO LITIGATION. No action, suit or proceeding against
Synova or any of the AGBL Parties relating to the consummation of any of the
transactions contemplated by this Agreement or any governmental action seeking
to delay or enjoin any such transactions shall be pending or threatened.
(d) CONSENTS AND APPROVALS. Any required consents and
approvals hereunder shall have been received, and this Agreement and the
transactions contemplated by this Agreement shall have been approved by the
Synova Stockholders in the manner required by applicable law, including without
limitation, the applicable provisions of the Delaware General Corporation Law.
(e) DUE DILIGENCE REVIEW. Synova shall be satisfied with its
due diligence review of the AGBL Parties as conducted in accordance with the
provisions of Section 5.4.
(f) EMPLOYMENT AGREEMENTS. All employment agreements to
which AGBL or any of its Subsidiaries is a party shall have been terminated, and
AGBL shall have entered into employment agreements with Xxxxxxx X. Xxxx and
Xxxxx X. Xxxxxxxx as required by Section 5.6 above.
(g) RESIGNATION OF EMPLOYEES. All current officers,
directors and employees of AGBL and its Subsidiaries, shall have resigned and
released AGBL from all claims and liabilities as required by Section 5.7.
(h) INDEMNIFICATION AGREEMENT. Synova shall have received an
indemnification agreement from G. M. Capital Partners, Ltd., a B.V.I. company
("GM"), in substantially the form attached hereto as EXHIBIT D, which
indemnification agreement will provide for G. M. to place 500,000 shares of AGBL
Common Stock into escrow as security for any breaches of the representations,
warranties and covenants of the AGBL Parties hereunder.
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(i) EQUITY FINANCING. Synova shall have received a written
certification from the Escrow Agent confirming that it has obtained commitments
(and the related funds) to purchase equity in AGBL immediately upon the
effectiveness of the Merger in an aggregate amount of at least $3,000,000 and on
terms and conditions substantially as set forth on EXHIBIT C hereto, which
commitments will become binding and effective immediately upon the Effective
Time. Notwithstanding the foregoing and anything contained herein to the
contrary, Synova may waive this condition if, and only if, the equity financing
commitments referenced above exceed a minimum of $2,000,000 in the aggregate,
and Synova has received a written certification from the Escrow Agent confirming
such fact.
(j) DELIVERIES. Synova shall have received complete copies
of all the documents required to be delivered under Section 7.2.
SECTION 7
CLOSING DELIVERIES
7.1 DELIVERIES BY SYNOVA. On the Closing Date, Synova shall deliver
to the AGBL Parties the following, in form and substance reasonably satisfactory
to the AGBL Parties and their counsel: (a) CERTIFICATE OF MERGER. The
Certificate of Merger in the form attached hereto as EXHIBIT A dated the Closing
Date and duly executed by the appropriate officers of Synova;
(b) CERTIFICATE. A certificate, dated as of the Closing
Date, executed by an appropriate officer of Synova, certifying to AGBL: (i) that
the representations and warranties of Synova contained in this Agreement are
true and correct in all material respects as of the Closing Date as though made
on and as of that date (except for representations and warranties that speak as
of a specific date or time, which need only be true and complete as of such date
or time) and (ii) that Synova has in all material respects performed and
complied with all of their respective obligations, covenants and agreements in
this Agreement to be performed and complied with on or prior to the Closing
Date;
(c) SECRETARY'S CERTIFICATE. A certificate, dated as of the
Closing Date, executed by Synova's Secretary (i) certifying that the
resolutions, as attached to such certificate, were duly adopted by each of
Synova's Board of Directors and stockholders, authorizing and approving the
execution of this Agreement and the consummation of the transactions
contemplated hereby and that such resolutions remain in full force and effect,
and (ii) providing, as attachments thereto, Synova's Certificate of
Incorporation and Bylaws, with all amendments;
(d) GOOD STANDING CERTIFICATES. Certificates as to the good
standing of Synova issued by the Delaware Secretary of State to be dated not
more than a reasonable number of days prior to the Closing Date;
(e) STOCKHOLDERS' CERTIFICATES. Certificates representing
all of the outstanding shares of Synova Common Stock held by the Synova
Stockholders as of the Closing Date, accompanied by all documents required to
effect the surrender of such certificates;
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(f) OTHER DOCUMENTS. Such other documents as are listed in
this Agreement or as are reasonably requested by the AGBL Parties or their
counsel for complete implementation of this Agreement and consummation of the
transactions contemplated hereby.
7.2 DELIVERIES BY THE AGBL PARTIES. Prior to or on the Closing Date,
the AGBL Parties shall deliver the following, in form and substance reasonably
satisfactory to Synova and its counsel:
(a) DELIVERY OF MERGER CONSIDERATION. Stock certificate(s)
representing the shares of AGBL Common Stock constituting Merger Consideration
in the amounts contemplated by this Agreement or an instruction letter from AGBL
to its transfer agent directing it to issue such certificate(s) to the Synova
Stockholders;
(b) CERTIFICATE OF MERGER. The Certificate of Merger duly
executed by the appropriate officers of Merger Sub;
(c) OFFICER'S CERTIFICATE. A certificate, dated as of the
Closing Date, executed on behalf of an officer of each of AGBL and Merger Sub
certifying (i) that the representations and warranties of each of the AGBL
Parties contained in this Agreement are true and correct in all material
respects as of the Closing Date as though made on and as of that date, and (ii)
that each of the AGBL Parties have in all material respects performed and
complied with all of its obligations, covenants and agreements in this Agreement
to be performed and complied with on or prior to the Closing Date;
(d) SECRETARY'S CERTIFICATE. A certificate, dated as of the
Closing Date, executed by each of AGBL's and Merger Sub's Secretary: (i)
certifying that the resolutions, as attached to such certificate, were duly
adopted by each of such party's Board of Directors, authorizing and approving
the execution of this Agreement and the consummation of the transaction
contemplated hereby and that such resolutions remain in full force and effect;
and (ii) providing, as an attachment thereto, each of such party's Certificate
of Incorporation and Bylaws;
(e) GOOD STANDING CERTIFICATES. Certificates as to the good
standing of AGBL and Merger Sub, issued by the Nevada Secretary of State in the
case of AGBL and the Delaware Secretary of State in the case of Merger Sub, each
such certificate to be dated a date not more than a reasonable number of days
prior to the Closing Date;
(f) OFFICER, DIRECTOR AND OTHER EMPLOYEE RESIGNATIONS.
Resignations of all AGBL employees, directors and officers prior to the Closing
as described in Section 5.7; and
(g) OTHER DOCUMENTS. Such other documents listed in this
Agreement or as are reasonably requested by Synova or its counsel for complete
implementation of this Agreement and consummation of the transactions
contemplated hereby.
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SECTION 8
TERMINATION
8.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated at any time prior to Closing by the mutual consent of the parties.
8.2 OTHER TERMINATION. This Agreement may be terminated by any party
hereto and the Merger abandoned if any other party hereto (the AGBL Parties, on
the one hand, and Synova, on the other hand) shall have failed to satisfy any of
its respective conditions precedent under Section 6 hereof (unless such failure
results primarily from the terminating party's breach of any representation,
warranty or covenant contained in this Agreement or under any other agreement
contemplated hereunder) or the Closing shall not have occurred on or before
January 31, 2005.
8.3 TERMINATION BY AGBL. The AGBL Parties may terminate this
Agreement by giving written notice to Synova at any time prior to the Closing in
the event Synova has breached any representation, warranty or covenant contained
in this Agreement in any material respect, the AGBL Parties have notified Synova
of the breach and the breach has continued without cure for a period of 10 days
after the notice of breach.
8.4 TERMINATION BY SYNOVA. Synova may terminate this Agreement by
giving written notice to AGBL at any time prior to the Closing in the event the
AGBL Parties have breached any representation, warranty or covenant contained in
this Agreement in any material respect, Synova has notified AGBL of the breach
and the breach has continued without cure for a period of 10 days after the
notice of breach.
8.5 SPECIFIC PERFORMANCE. The parties recognize that, if either
party hereto breaches this Agreement and refuses to perform under the provisions
of this Agreement, monetary damages alone would not be adequate to compensate
the other party for its injury. Such party shall therefore be entitled, in
addition to any other remedies that may be available, to obtain specific
performance of the terms of this Agreement. If any action is brought by such
party to enforce this Agreement, the breaching party shall waive the defense
that there is an adequate remedy at law.
8.6 PAYMENT OF FEES AND EXPENSES UPON BREACH. In addition to all
other rights and remedies that the AGBL Parties, on the one hand, and Synova, on
the other hand, may have, (i) if this Agreement is terminated by the AGBL
Parties pursuant to Section 8.3, Synova shall pay the AGBL Parties' expenses
incurred in connection with the authorization, preparation, execution and
performance of this Agreement, including all fees and expenses of counsel,
accountants, agents and representatives, and (ii) if this Agreement is
terminated by Synova pursuant to Section 8.4, AGBL shall pay Synova's expenses
incurred in connection with the authorization, preparation, execution and
performance of this Agreement, including all fees and expenses of counsel,
accountants, agents and representatives.
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SECTION 9
SURVIVAL
9.1 SURVIVAL. Each of the parties hereto hereby agrees that: (i) the
representations and warranties made by or on behalf of the AGBL Parties in this
Agreement or in any document or instrument delivered pursuant hereto shall
survive the Closing until April 30, 2006 and (ii) the representations and
warranties made by Synova in this Agreement or in any document or instrument
delivered pursuant hereto shall survive only until the Closing. All covenants
and agreements of the AGBL Parties contained in or made pursuant to this
Agreement or in any certificate furnished pursuant hereto shall survive the
Closing.
SECTION 10
MISCELLANEOUS
10.1 FEES AND EXPENSES. In the event the transactions contemplated by
this Agreement are consummated in accordance with the terms herein, AGBL shall
bear all costs and expenses of all of the parties hereto. Subject to Section
8.6, in the event such transaction is not consummated, AGBL, on the one hand,
and Synova, on the other hand, shall pay their own expenses incurred in
connection with the authorization, preparation, execution and performance of
this Agreement, including all fees and expenses of counsel, accountants, agents
and representatives, and each party shall be responsible for all fees or
commission payable to any finder, broker, advisor, or similar Person retained by
or on behalf of such party. The provisions of this Section 10.1 shall survive
the termination of this Agreement.
10.2 NOTICES. All notices, requests, consents, payments, demands, and
other communications required or contemplated under this Agreement shall be in
writing and (a) personally delivered or sent via telecopy (receipt confirmed and
followed promptly by delivery of the original), or (b) sent by Federal Express
or other reputable overnight delivery service (for next business day delivery),
shipping prepaid, as follows:
If to the AGBL Parties to:
Synova Healthcare Group, Inc. (f/k/a Advanced Global Industries
Corporation)
000 Xxxx Xxxxxxxx Xxxxxx, Xxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxx-Xxxxx
Telephone: 000 000-0000
Fax: 000 000-0000
With a copy to:
Rubin, Balin, Ortoli, Mayer & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx Xxxxxxx, Esquire
Telephone: (000) 000-0000
Fax: (000) 000-0000
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If to Synova:
Synova Healthcare, Inc.
Mr. Xxxxxxx Xxxx
Chief Executive Officer
0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxx, XX 00000
Telephone: (000) 000-0000, ext. 101
Fax: (000) 000-0000
With copies to:
Xxxx X. Xxxxxx, Esquire
Blank Rome LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Fax: (000) 000-0000
or to such other Persons or addresses as any Person may request by notice given
as aforesaid. Notices shall be deemed given and received at the time of personal
delivery or completed telecopying, or, if sent by Federal Express or such other
overnight delivery service one Business Day after such sending.
10.3 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
assigns, executors personal and legal representatives.
10.4 FURTHER ASSURANCES. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of the transactions contemplated by this
Agreement.
10.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).
10.6 ENTIRE AGREEMENT. Any confidentiality agreement entered into
between or among the parties, this Agreement and the Exhibits and the Schedules
hereto, each of which Exhibits and Schedules are hereby incorporated herein by
reference, and all documents, certificates and other documents to be delivered
by the parties pursuant hereto, collectively, represent the entire understanding
and agreement among the parties hereto with respect to the subject matter of
this Agreement, and supersede all prior negotiations between the parties, and
cannot be amended, supplemented, or changed except by an agreement in writing
duly executed by each of the parties thereto.
-28-
10.7 WAIVER OF COMPLIANCE; CONSENTS. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 10.7.
10.8 HEADINGS. The headings of the Sections and subsections contained
in this Agreement are inserted for convenience only and do not form a part or
affect the meaning, construction or scope thereof.
10.9 COUNTERPARTS. This Agreement may be signed in two or more
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.
10.10 COOPERATION. The parties hereto shall reasonably cooperate with
each other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and in connection with any litigation after the implementation and
consummation of this Agreement, and otherwise use their commercially reasonable
efforts to consummate the transaction contemplated hereby and to fulfill their
obligations under this Agreement.
10.11 EXCLUSIVITY. From the date hereof until January 31, 2005,
neither Synova (or any of its Affiliates) or AGBL (or any of its Affiliates)
shall, directly or indirectly, solicit offers from, negotiate with or in any
manner encourage or consider any proposal of any other Person relating to (i)
the acquisition of an ownership interest in Synova or AGBL or of all or
substantially all of the assets of such entities, through purchase, merger,
consolidation, share exchange or otherwise or (ii) any business combinations
involving such entities.
10.12 PUBLIC ANNOUNCEMENTS. The parties hereto shall consult with each
other before issuing any press releases or otherwise making any public
statements with respect to this Agreement or the transactions contemplated
herein and shall not issue any such press release or make any such public
statement without the prior written consent of the other party, which shall not
be unreasonably withheld; provided, however, that a party may, without the prior
written consent of the other party, issue such press release or make such public
statement as may be required by law if it has used all reasonable efforts to
consult with the other party and to obtain such party's consent but has been
unable to do so in a timely manner. The provisions of this Section 10.12 shall
survive the termination of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date first written above.
The AGBL Parties:
SYNOVA HEALTHCARE GROUP, INC. (f/k/a
ADVANCED GLOBAL INDUSTRIES
CORPORATION)
By: /s/ Xxxxxx Xxxxxxxxxx-Xxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxxx-Xxxxx
Title: President
SYNOVA AGBL MERGER SUB, INC.
By: /s/ Xxxxxx Xxxxxxxxxx-Xxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxxx-Xxxxx
Title: President
Synova:
SYNOVA HEALTHCARE, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: C.E.O.
-30-
ANNEX 1
CERTAIN DEFINITIONS
The following terms, as used in this Agreement, have the meanings set
forth in this ANNEX 1 (terms defined in the singular to have the correlative
meaning in the plural and vice versa):
"AFFILIATE" means, with respect to any Person, (a) any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such Person, or (b) an officer or
director of such Person or of an Affiliate of such Person within the meaning of
clause (a) of this definition. For purposes of clause (a) of this definition,
(i) a Person shall be deemed to control another Person if such Person (A) has
sufficient power to enable such Person to elect a majority of the board of
directors of such Person, or (B) owns a majority of the beneficial interests in
income and capital of such Person; and (ii) a Person shall be deemed to control
any partnership of which such Person is a general partner.
"CLOSING" means the closing of the transactions contemplated by this
Agreement on the Closing Date.
"CLOSING DATE" means the date on which the Closing occurs, as determined
pursuant to Section 2.2.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTAMINANT" shall mean and include any pollutant, contaminant,
hazardous material (as defined in any of the Environmental Laws), toxic
substances (as defined in any of the Environmental Laws), asbestos or
asbestos-containing material, urea formaldehyde, polychlorinated biphenyls,
regulated substances and wastes, radioactive materials, and petroleum or
petroleum by-products, including crude oil or any fraction thereof.
"CONTRACTS" means all contracts, consulting agreements, leases,
non-governmental licenses and other agreements (including leases for personal or
real property and employment agreements), written or oral (including any
amendments and other modifications thereto) that relate to or affect a party's
assets, properties, or its business or operations, the performance of which
involves annual consideration in excess of $10,000.
"ENVIRONMENTAL LAWS" shall mean and include, but not be limited to, any
applicable federal, state or local law, statute, charter, ordinance, rule or
regulation or any Governmental Body interpretation, policy or guidance,
including, without limitation, applicable safety/environmental/health laws, such
as, but not limited to, the Resource Conservation and Recovery Act of 1976,
Comprehensive Environmental Response Compensation and Liability Act, Federal
Emergency Planning and Community Right-to-Know Law, the Clean Air Act, the Clean
Water Act, and the Toxic Substance Control Act, as any of the foregoing have
been amended, and any Governmental Authorization or Order applicable to or
affecting any property (real or personal) used by or relating to a party or
issued pursuant to any Environmental Laws which pertains to, governs, or
controls the generation, storage, remediation or removal of
Contaminants or otherwise regulates the protection of health and the
environment, including, but not limited to, any of the following activities,
whether on site or off site if such could materially affect the site: (i) the
emission, discharge, release, spilling or dumping of any Contaminant into the
air, surface water, ground water, soil or substrata; or (ii) the use,
generation, processing, sale, recycling, treatment, handling, storage, disposal,
transportation, labeling or any other management of any Contaminant.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW AGENT" means Blank Rome LLP.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted United States accounting principles,
applied on a consistent basis.
"GOVERNMENTAL AUTHORIZATION" means any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"GOVERNMENTAL BODY" means any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal);
(d) multi-national organization or body;
(e) self-regulatory organization (including, with
limitation, NASD); or
(f) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"INTANGIBLES" means all copyrights, trademarks, trade names, service
marks, service names, domain names, licenses, patents, and any applications
therefore, permits, proprietary information, technical information and data,
databases, machinery and equipment, hardware, software and information systems,
warranties, and other intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by Synova
or under which Synova is licensed or franchised and that are used in its
business and operations.
"KNOWLEDGE" means, with respect to the Synova and AGBL Parties, the
actual knowledge of such party's officers and directors.
2
"LEASED REAL PROPERTY" means all real property and all buildings and
other improvements thereon and appurtenant thereto leased by either AGBL or
Synova, as the case may be.
"LEGAL REQUIREMENT" means any federal, state, local, municipal, foreign,
international, multinational, self regulatory organization or court or other
administrative order, constitution, law, ordinance, principle of common law,
rule, regulation, statute, treaty, by-law, or the like.
"LIEN" means any mortgage, pledge, security interests, encumbrance, lien
or charge of any kind.
"LOSSES" means any loss, liability, damage, cost, claim or expense,
including, without limitation, reasonable attorneys' fees and expenses.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
business, operations, properties, financial condition, assets, liabilities or
results of operations of the Person referred to, taken as a whole, or the
ability of such Person to consummate the transactions contemplated by this
Agreement.
"MERGER CONSIDERATION" means the shares of AGBL Common Stock and other
securities issued (or to be issued) to the Synova Stockholders in connection
with the Merger.
"ORDER" means any award, decision, injunction, judgment, decree, order,
ruling, writ, determination, subpoena, or verdict entered, issued, made, or
rendered by any court, administrative agency, or other Governmental Body or by
any arbitrator.
"ORDINARY COURSE OF BUSINESS" an action taken by a Person will be deemed
to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of
such Person and is taken in the ordinary course of the normal day-to-day
operations of such Person;
(b) such action is not required to be authorized by the
board of directors of such Person (or by any Person or group of Persons
exercising similar authority); and
(c) such action is similar in nature and magnitude to
actions customarily taken, without any authorization by the board of directors
(or by any Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.
"PERMITTED ENCUMBRANCES" means (a) encumbrances of a landlord, or other
statutory lien not yet due and payable, or landlord's liens arising in the
Ordinary Course of Business, (b) encumbrances arising in connection with
equipment or maintenance financing or leasing under the terms of the Contracts
set forth on the Schedules, (c) encumbrances for Taxes not yet delinquent or
which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on books of the contesting
party in accordance with generally accepted accounting principles, or
(d) encumbrances that do not materially detract
3
from the value of any of material assets of Synova or materially interfere with
the use thereof as currently used.
"PERSON" means an individual, corporation, association, partnership,
joint venture, trust, estate, limited liability company, limited liability
partnership, organization or other entity or Governmental Body.
"REAL PROPERTY INTERESTS" means all interests in Leased Real Property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon and appurtenant thereto, owned or held by Synova that
are used in the business or operations of Synova.
"RELATED PERSON" means with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is, directly or indirectly, controlled
by such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material Interest;
and
(d) any Person with respect to which such individual or one
or more members of such individual's Family serves as a director, officer,
partner, executor, or trustee (or in a similar capacity); and
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is,
directly or indirectly, controlled by, or is directly or indirectly under common
control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a
Material Interest; and
(e) any Related Person of any individual described in
clause (b) or (c).
For purposes of this definition, (a) the "FAMILY" of an individual includes
(i) the individual, (ii) the individual's spouse, (iii) any other natural person
who is related to the individual or the individual's spouse within the second
degree, and (iv) any other natural person who resides with such individual, and
(b) "MATERIAL INTEREST" means direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of voting securities or other
voting interests representing at least 5% of the outstanding voting power of a
Person or equity securities or other equity interests representing at least 5%
of the outstanding equity securities or equity interests in a Person.
4
"REPORTABLE TRANSACTION" shall mean any transaction listed in Treasury
Regulation Section 1.6011-4(b).
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSIDIARY" OR "SUBSIDIARIES" means, with respect to any Person, any
corporation, limited liability company, partnership, trust, limited partnership,
joint venture, or other business association or entity, twenty percent (20%) or
more of the voting securities or economic interests of which is or was directly
or indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries.
"SYNOVA STOCKHOLDERS" means the Persons owning beneficially the shares
of Synova Common Stock on the date hereof and immediately prior to the Closing.
"TANGIBLE PERSONAL PROPERTY" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts and other tangible personal property.
"TAX" or "TAXES" means any federal, state, local, or foreign income,
gross receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, capital, transfer, employment, withholding, or other
tax or similar governmental assessment, together with any interest, additions,
or penalties with respect thereto and any interest in respect of such additions
or penalties.
"TAX PROCEEDING" means any audit, examination, claim, or other
administrative or judicial proceeding involving Taxes.
"TAX RETURN" shall mean all returns and reports, amended returns,
information returns, statements, declarations, estimates, schedules, notices,
notifications, forms, elections, certificates or other documents required to be
filed or submitted to any Governmental Body with respect to the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of, or compliance with, any Tax.
"TAXING AUTHORITY" shall mean any Governmental Body exercising tax
regulatory authority.
5
EXHIBIT A
CERTIFICATE OF MERGER
OF
SYNOVA AGBL MERGER SUB, INC.
INTO
SYNOVA HEALTHCARE, INC.
PURSUANT TO SECTIONS 251(C) OF THE GENERAL CORPORATION LAW
Synova AGBL Merger Sub, Inc., a Delaware corporation, desiring to merge
with Synova Healthcare, Inc., a Delaware corporation, pursuant to the provisions
of Section 251(c) of the General Corporation Law of the State of Delaware, does
hereby certify as follows:
FIRST: The names and states of incorporation of each constituent
corporation are:
NAME STATE OF INCORPORATION
---------------------------- ----------------------
Synova AGBL Merger Sub, Inc. Delaware
Synova Healthcare, Inc. Delaware
SECOND: An Agreement and Plan of Merger has been approved, adopted,
certified, executed and acknowledged by each constituent corporation in
accordance with Sections 251(c) and 228(e) of the General Corporation Law of the
State of Delaware.
--------------------------------------------------------------------------------
THIRD: The name of the surviving corporation is Synova Healthcare,
Inc.
FOURTH: The Certificate of Incorporation of Synova Healthcare, Inc.
shall be the Certificate of Incorporation of the surviving corporation.
FIFTH: An executed copy of the Agreement and Plan of Merger is on file
at the principal place of business of the surviving corporation, c/o Synova
Healthcare, Inc., 0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 0000, Xxxxx, XX 00000, Attn:
Xxxxxxx Xxxx, and a copy of the Agreement and Plan of Merger will be furnished
by the surviving corporation, on request and without cost, to any stockholder of
any constituent corporation.
IN WITNESS WHEREOF, Synova Healthcare, Inc. has caused this Certificate
to be executed as of this 10th day of February 2005.
SYNOVA HEALTHCARE, INC.
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Executive Officer
SYNOVA AGBL MERGER SUB, INC.
By: /s/ Xxxxxx Xxxxxxxxxx-Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxxx-Xxxxx
Title: President
