AGREEMENT OF MERGER AND PLAN OF REORGANIZATION among AGRONIX, INC., AGRONIX ACQUISITION CORP. and WARNER NUTRACEUTICAL INTERNATIONAL, INC. May 10, 2006
PLAN
OF REORGANIZATION
among
AGRONIX,
INC.,
AGRONIX
ACQUISITION CORP. and
WARNER
NUTRACEUTICAL INTERNATIONAL, INC.
May
10, 2006
TABLE
OF CONTENTS
Page
|
1. The
Merger.
|
1
|
|
|
1.1
|
Merger
|
1
|
|
1.2
|
Effective
Time
|
2
|
|
1.3
|
Certificate
of Incorporation, Bylaws, Directors and Officers.
|
2
|
|
1.4
|
Assets
and Liabilities
|
2
|
|
1.5
|
Conversion
of Securities.
|
2
|
|
1.6
|
Surrender
and Exchange of Certificates
|
3
|
|
1.7
|
Intentionally
Omitted.
|
3
|
|
1.8
|
Parent
Common Stock and Parent Class A Preferred Stock
|
3
|
|
1.9
|
Operation
of Surviving Corporation.
|
4
|
|
1.10
|
Further
Assurances
|
4
|
|
2. Representations
and Warranties of the Company
|
4
|
|
|
2.1
|
Organization,
Standing, Subsidiaries, Etc.
|
4
|
|
2.2
|
Qualification
|
4
|
|
2.3
|
Capitalization
of the Company
|
5
|
|
2.4
|
Indebtedness
|
5
|
|
2.5
|
Company
Stockholders
|
5
|
|
2.6
|
Corporate
Acts and Proceedings
|
5
|
|
2.7
|
Compliance
with Laws and Instruments
|
5
|
|
2.8
|
Binding
Obligations
|
5
|
|
2.9
|
Broker’s
and Finder’s Fees
|
6
|
|
2.10
|
Financial
Statements
|
6
|
|
2.11
|
Absence
of Undisclosed Liabilities
|
6
|
|
2.12
|
Changes
|
6
|
|
2.13
|
Intentionally
Omitted.
|
7
|
|
2.14
|
Employees
|
7
|
|
2.15
|
Tax
Returns and Audits
|
7
|
|
2.17
|
Employee
Benefit Plans; ERISA
|
|
|
2.18
|
Title
to Property and Encumbrances
|
8
|
|
2.19
|
Condition
of Properties
|
8
|
|
2.20
|
Insurance
Coverage
|
8
|
|
2.21
|
Litigation
|
8
|
|
2.22
|
Licenses
|
8
|
|
2.23
|
Interested
Party Transactions
|
8
|
|
2.24
|
Environmental
Matters
|
9
|
|
2.25
|
Receivables
|
9
|
|
2.26
|
Inventories
|
10
|
|
2.27
|
Customers,
Suppliers and Independent Contractors
|
10
|
|
2.28
|
Duty
to Make Inquiry.
|
10
|
|
2.29
|
Disclosure.
|
10
|
i
|
2.30
|
Questionable
Payments
|
10
|
|
2.31
|
Obligations
to or by Stockholders
|
11
|
|
3. Representations
and Warranties of Parent and Acquisition Corp.
|
11
|
|
|
3.1
|
Organization
and Standing
|
11
|
|
3.2
|
Corporate
Authority
|
11
|
|
3.3
|
Broker’s
and Finder’s Fees
|
12
|
|
3.4
|
Capitalization
of Parent
|
12
|
|
3.5
|
Acquisition
Corp.
|
12
|
|
3.6
|
Validity
of Shares
|
12
|
|
3.7
|
SEC
Reporting and Compliance
|
12
|
|
3.8
|
Financial
Statements
|
12
|
|
3.9
|
Governmental
Consents
|
13
|
|
3.10
|
Compliance
with Laws and Other Instruments
|
14
|
|
3.11
|
No
General Solicitation
|
14
|
|
3.12
|
Binding
Obligations
|
14
|
|
3.13
|
Absence
of Undisclosed Liabilities
|
15
|
|
3.14
|
Changes
|
15
|
|
3.15
|
Tax
Returns and Audits
|
15
|
|
3.16
|
Employee
Benefit Plans; ERISA
|
16
|
|
3.17
|
Litigation
|
16
|
|
3.18
|
Interested
Party Transactions
|
17
|
|
3.19
|
Questionable
Payments
|
17
|
|
3.20
|
Obligations
to or by Stockholders
|
17
|
|
3.21
|
Schedule
of Assets and Contracts
|
17
|
|
3.22
|
Employees
|
18
|
|
3.23
|
Disclosure
|
18
|
|
3.24
|
Patents
and Other Intangible Assets
|
19
|
|
4. Intentionally
Omitted.
|
19
|
|
|
5. Conduct
of Businesses Pending the Merger.
|
19
|
|
|
5.1
|
Conduct
of Business by the Company Pending the Merger
|
20
|
|
5.2
|
Conduct
of Business by Parent and Acquisition Corp. Pending the
Merger
|
21
|
|
6. Additional
Agreements.
|
21
|
|
|
6.1
|
Access
and Information
|
22
|
|
6.2
|
Additional
Agreements
|
22
|
|
6.3
|
Publicity
|
22
|
|
6.4
|
Appointment
of Directors
|
22
|
|
6.5
|
Filing
of 10-QSB.
|
22
|
|
6.6
|
Satisfaction
of, Release of and Indemnification from Liabilities; Escrow
Agreement
|
22
|
ii
|
6.7
|
Subsidiary
Purchase Agreement
|
23
|
|
7. Conditions
of Parties’ Obligations
|
23
|
|
|
7.1
|
Parent
and Acquisition Corp. Obligations
|
23
|
|
7.2
|
Company
Obligations
|
25
|
|
8. Non-Survival
of Representations and Warranties
|
27
|
|
|
9. Amendment
of Agreement
|
27
|
|
|
10. Definitions
|
27
|
|
|
11.
Closing
|
31
|
|
|
12.
Termination
Prior to Closing
|
32
|
|
|
12.1
|
Termination
of Agreement
|
32
|
|
12.2
|
Termination
of Obligations
|
32
|
|
13.
Miscellaneous.
|
32
|
|
|
13.1
|
Notices
|
32
|
|
13.2
|
Entire
Agreement
|
33
|
|
13.3
|
Expenses
|
33
|
|
13.4
|
Time
|
33
|
|
13.5
|
Severability
|
33
|
|
13.6
|
Successors
and Assigns
|
34
|
|
13.7
|
No
Third Parties Benefited
|
34
|
|
13.8
|
Counterparts
|
34
|
|
13.9
|
Recitals,
Schedules and Exhibits
|
34
|
|
13.10
|
Section
Headings and Gender
|
34
|
|
13.11
|
Governing
Law
|
|
iii
LIST
OF EXHIBITS AND SCHEDULES
|
Exhibits
|
|
|
A
|
Articles
of Merger and Certificate of Merger
|
|
B
|
Certificate
of Incorporation of the Company
|
|
C
|
Bylaws
of the Company
|
|
D
|
Directors
and Officers of the Surviving Corporation and Parent
|
|
E
|
Letter
of Transmittal
|
|
F
|
Intentionally
Omitted
|
|
G
|
Form
of Opinion of Company’s Counsel
|
|
H
|
Form
of Opinion of Parent’s Counsel
|
|
I
|
Intentionally
Omitted
|
|
J
|
Intentionally
Omitted
|
|
K
|
Intentionally
Omitted
|
|
L
|
Subsidiary
Purchase Agreement
|
|
Company
Disclosure Schedules
|
|
|
2.5
|
Company
Stockholders
|
|
2.9
|
Company
Broker’s and Finder’s Fees
|
|
2.10
|
Financial
Statements
|
|
2.21
|
Litigation
|
|
2.23
|
Interested
Party Transactions
|
|
2.31
|
Obligations
to or by Stockholders
|
|
Parent
Disclosure Schedules
|
|
|
3.3
|
Parent
Broker’s and Finder’s Fees
|
|
3.4
|
Outstanding
Options and Other Convertible Securities
|
|
3.7
|
SEC
Reporting
|
|
3.10
|
Compliance
with Laws
|
|
0.1
|
Absence
of Undisclosed Liabilities
|
|
0.2
|
Changes/Indebtedness
|
|
3.15
|
Schedule
of Parent Bank Accounts
|
|
6.6
|
Executed
Releases from Creditors
|
iv
AGREEMENT
OF MERGER AND PLAN OF REORGANIZATION
THIS
AGREEMENT OF MERGER AND PLAN OF REORGANIZATION is made and entered into on
May
5, 2006, by and among AGRONIX, INC., a Florida Corporation (“Parent”),
AGRONIX ACQUISITION CORP., a Florida corporation (“Acquisition
Corp.”),
which
is a wholly-owned subsidiary of Parent, and WARNER NUTRACEUTICAL INTERNATIONAL,
INC., a Delaware corporation (the “Company”).
WITNESSETH:
A.
The
Board of Directors of each of Acquisition Corp., Parent and the Company have
each determined that it is fair to and in the best interests of their respective
corporations and stockholders for Acquisition Corp. to be merged with and into
the Company (the “Merger”)
upon
the terms and subject to the conditions set forth herein;
B.
The
Board of Directors of Acquisition Corp. and the Board of Directors of the
Company have approved the Merger in accordance with the Florida Business
Corporation Act (the “FBCA”)
and
Delaware General Corporation Law (the “DGCL”),
and
upon the terms and subject to the conditions set forth herein and in the
Articles of Merger and Certificate of Merger (including the Plan of Merger
attached thereto as Exhibit A, the “Articles
of Merger”)
attached as Exhibit
A
hereto;
and the Board of Directors of Parent also has approved this Agreement and the
Articles of Merger and Certificate of Merger;
C.
The
requisite Stockholders (as such term is defined in Section
10
hereof)
of the Company have approved by written consent pursuant to Section 228 of
the
DGCL this Agreement and the Certificate of Merger and the transactions
contemplated and described hereby and thereby, including without limitation
the
Merger, and Parent, as the sole stockholder of Acquisition Corp., has approved
this Agreement, the Articles of Merger and the transactions contemplated and
described hereby and thereby, including without limitation the Merger;
and
D.
The
parties intend the Merger to qualify as a reorganization under the provisions
of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
“Code”), by reason of Section 368(a)(2)(E) of the Code.
NOW,
THEREFORE, in consideration of the mutual agreements and covenants hereinafter
set forth, the parties
hereto agree as follows:
1 1. The
Merger.
1.1 Merger.
Subject
to the terms and conditions of this Agreement and the Articles of Merger and
Certificate of Merger, Acquisition Corp. shall be merged with and into the
Company in accordance with Section 607.1101 of the FBCA and Section 221 of
the
DGCL. At the Effective Time (as hereinafter defined), the separate legal
existence of Acquisition Corp. shall cease, the Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the
“Surviving
Corporation”)
and
shall be a wholly-owned subsidiary of the Parent and shall continue its
corporate existence under the laws of the State of Delaware under the name
WARNER NUTRACEUTICAL INTERNATIONAL, INC.
1
1.2 Effective
Time.
The
Merger shall become effective on the date and at the time the Articles of Merger
is filed with the Florida Secretary of State in accordance with Section 607.1101
of the FBCA, and the Certificate of Merger is filed with the Delaware Secretary
of State in accordance with Section 251 of the DGCL. The time at which the
Merger shall become effective as aforesaid is referred to hereinafter as the
“Effective Time.”
1.3 Certificate
of Incorporation, Bylaws, Directors and Officers.
(a) The
Certificate of Incorporation of Company in effect immediately prior to the
Effective Time, attached as Exhibit
B,
shall
be the Certificate of Incorporation of the Surviving Corporation from and after
the Effective Time until further amended in accordance with applicable
law.
(b) The
Bylaws of Company in effect immediately prior to the Effective Time, attached
as
Exhibit
C,
shall
be the Bylaws of the Surviving Corporation from and after the Effective Time
until amended in accordance with applicable law, the Certificate of
Incorporation and such Bylaws.
(c) The
directors, officers and key employees listed in Exhibit
D
shall be
the directors, officers and key employees of the Surviving Corporation, and
each
shall hold his respective office or offices from and after the Effective Time
until his successor shall have been elected and shall have qualified in
accordance with applicable law, or as otherwise provided in the Certificate
of
Incorporation or Bylaws of the Surviving Corporation.
1.4 Assets
and Liabilities.
At the
Effective Time, the Surviving Corporation shall possess all the rights,
privileges, powers and franchises of a public as well as of a private nature,
and be subject to all the restrictions, disabilities and duties of each of
Acquisition Corp. and the Company (collectively, the “Constituent
Corporations”); and all the rights, privileges, powers and franchises of each of
the Constituent Corporations, and all property, real, personal and mixed, and
all debts due to any of the constituent corporations on whatever account, as
well for stock subscriptions as all other things in action or belonging to
each
of the Constituent Corporations, shall be vested in the Surviving Corporation;
and all property, rights, privileges, powers and franchises, and all and every
other interest shall be thereafter as effectively the property of the Surviving
Corporation as they were of the several and respective constituent corporations,
and the title to any real estate vested by deed or otherwise in either of the
such Constituent Corporations shall not revert or be in any way impaired by
the
Merger; but all rights of creditors and all liens upon any property of any
of
the Constituent Corporations shall be preserved unimpaired, and all debts,
liabilities and duties of the Constituent Corporations shall thenceforth attach
to the Surviving Corporation, and may be enforced against it to the same extent
as if said debts, liabilities and duties had been incurred or contracted by
it.
1.5 Conversion
of Securities.
(a) At
the Effective Time:
(i) Each
share of Acquisition Corp. common stock, par value $.001 per share, issued
and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into the right to receive one (1) share of common stock, par value $.001 per
share, of the Surviving Corporation, so that at the Effective Time, Parent
shall
be the holder of all of the issued and outstanding shares of the Surviving
Corporation;
2
(ii) Each
share of Company Common Stock, $.0001 par value per share, (the “Company
Common Stock”),
shall, by virtue of the Merger and without any action on the part of the holders
thereof, in consideration for a cash payment of $289,000, be converted into
(a)
5,481.1475 newly issued shares of Parent Common Stock, par value $.001 per
share, for a total issuance by Parent of 54,811,475 shares of Parent Common
Stock, so that the Surviving Corporation’s Stockholders hold 54.8% of the issued
and outstanding shares of Parent, and (b)
147.3649074 newly issued shares of Parent Class A Preferred Stock, par value
$.001 per share, for a total issuance by Parent of 1,473,649.074 shares of
Parent Class A Preferred Stock, of which each share is convertible into five
hundred (500) shares of Parent Common Stock; and
(iii) Each
share of Company Common Stock held in the treasury of the Company immediately
prior to the Effective Time shall be cancelled in the Merger and cease to
exist.
(b) After
the
Effective Time, there shall be no further registration of transfers on the
stock
transfer books of the Surviving Corporation of the shares of Company Common
Stock that were outstanding immediately prior to the Effective
Time.
1.6 Surrender
and Exchange of Certificates.
Promptly
after the Effective Time and upon (i) surrender of a certificate or certificates
representing shares of Company Common Stock that were outstanding immediately
prior to the Effective Time or an affidavit and indemnification in form
reasonably acceptable to counsel for the Parent stating that such Stockholder
has lost their certificate or certificates or that such have been destroyed
and
(ii) delivery of a Letter of Transmittal (as described in Section
4
hereof),
Parent shall issue to each record holder of Company Common Stock surrendering
such certificate or certificates and Letter of Transmittal, a certificate or
certificates registered in the name of such Stockholder representing the number
of shares of Parent Common Stock and Parent Class A Preferred Stock that such
Stockholder shall be entitled to receive as set forth in Section
1.5(a)(ii)
hereof.
Until the certificate, certificates or affidavit is or are surrendered together
with the Letter of Transmittal as contemplated by this Section
1.6
and
Section
4
hereof,
each certificate or affidavit that immediately prior to the Effective Time
represented any outstanding shares of Company Common Stock shall be deemed
at
and after the Effective Time to represent only the right to receive upon
surrender as aforesaid the Parent Common Stock and Parent Class A Preferred
Stock specified in Schedule
1.5
hereof
for the holder thereof or to perfect any rights of appraisal which such holder
may have pursuant to the applicable provisions of the FBCA and
DGCL.
1.7 Intentionally
Omitted.
1.8 Parent
Common Stock and Parent Class A Preferred Stock.
Parent
agrees that it will cause the Parent Common Stock and Parent Class A Preferred
Stock to be issued to the Company at the Effective Time pursuant to Section
1.5(a)(ii)
to be
available for such purpose. Parent further covenants that immediately prior
to
the Effective Time there will be no more than 45,188,525 shares of Parent Common
Stock and no shares of Parent Preferred Stock issued and outstanding, and that
no other common or preferred stock or equity securities or any options,
warrants, rights or other agreements or instruments convertible, exchangeable
or
exercisable into common or preferred stock or other equity securities shall
be
issued or outstanding,
except as described herein.
3
1.9 Operation
of Surviving Corporation.
The
Company acknowledges that upon the effectiveness of the Merger, and the
compliance by the Parent and Acquisition Corp. of its duties and obligations
hereunder, Parent shall have the absolute and unqualified right to deal with
the
assets and business of the Surviving Corporation as its own property without
limitation on the disposition or use of such assets or the conduct of such
business.
1.10 Further
Assurances.
From
time to time, from and after the Effective Time, as and when reasonably
requested by Parent, the proper officers and directors of the Company as of
the
Effective Time shall, for and on behalf and in the name of the Company or
otherwise, execute and deliver all such deeds, bills of sale, assignments and
other instruments and shall take or cause to be taken such further actions
as
Parent, Acquisition Corp. or their respective successors or assigns reasonably
may deem necessary or desirable in order to confirm or record or otherwise
transfer to the Surviving Corporation title to and possession of all of the
properties, rights, privileges, powers, franchises and immunities of the Company
or otherwise to carry out fully the provisions and purposes of this Agreement
and the Certificate of Merger.
2 2. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to Parent and Acquisition Corp. as
follows:
2.1 Organization,
Standing, Subsidiaries, Etc.
(a) The
Company is a corporation duly organized and existing in good standing under
the
laws of the State of Delaware, and has all requisite power and authority
(corporate and other) to carry on its business, to own or lease its properties
and assets, to enter into this Agreement and the Articles of Merger and to
carry
out the terms hereof and thereof. Copies of the Certificate of Incorporation
and
Bylaws of the Company that have been delivered to Parent and Acquisition Corp.
prior to the execution of this Agreement are true and complete and have not
since been amended or repealed.
(b) Other
than Company’s wholly-owned subsidiary, Xxxxxx Xxxxxxx Industrial Group Co. Ltd,
a corporation duly organized and existing in good standing under the laws of
the
Republic of China (the “Subsidiary”),
Company has no other subsidiaries or direct or indirect interest (by way of
stock ownership or otherwise) in any firm, corporation, limited liability
company, partnership, association or business. Company owns all of the issued
and outstanding capital stock of Subsidiary free and clear of all Liens, and
Subsidiary has no outstanding options, warrants or rights to purchase capital
stock or other equity securities of Subsidiary, other than the capital stock
owned by Company. Unless the content otherwise requires, all references in
this
Section 2 to the “Company” shall be treated as being a reference to the Company
and Subsidiary taken together as one enterprise.
2.2 Qualification.
The
Company is duly qualified to conduct business as a foreign corporation and
is in
good standing in each jurisdiction wherein the nature of its activities or
its
properties owned or leased makes such qualification necessary, except where
the
failure to be so qualified would not have a material adverse effect on the
condition (financial or otherwise), properties, assets, liabilities, business
operations, results of operations or prospects of the Company taken as a whole
(the “Condition
of the Company”).
4
2.3 Capitalization
of the Company.
The
authorized capital stock of the Company consists of 60,000,000 shares of Company
Common Stock, par value $.0001 per share, no shares of Preferred Stock, and
the
Company has no authority to issue any other capital stock. There are 10,000
shares of Company Common Stock issued and outstanding, and such issued shares
are duly authorized, validly issued, fully paid and nonassessable, and none
of
such shares have been issued in violation of the preemptive rights of any
person. Except as disclosed in Schedule
2.5,
the
Company has no outstanding options, rights or commitments to issue Company
Common Stock or other Equity Securities of the Company, and there are no
outstanding securities convertible or exercisable into or exchangeable for
Company Common Stock or other Equity Securities of the Company.
2.4 Indebtedness.
The
Company has no Indebtedness for Borrowed Money, except as disclosed on the
Balance Sheet and Schedule
2.4.
2.5 Company
Stockholders. Schedule
2.5
hereto
contains a true and complete list of the record owner of all of the outstanding
shares of Company Common Stock together with the number of securities held.
To
the knowledge of the Company, except as described in Schedule
2.5,
there
is no voting trust, agreement or arrangement among any of the beneficial holders
of Common Stock affecting the nomination or election of directors or the
exercise of the voting rights of Company Stock.
2.6 Corporate
Acts and Proceedings.
The
execution, delivery and performance of this Agreement and the Certificate of
Merger (together, the “Merger
Documents”)
have
been duly authorized by the Board of Directors of the Company and have been
approved by the requisite vote of the Stockholders, and all of the corporate
acts and other proceedings required for the due and valid authorization,
execution, delivery and performance of the Merger Documents
and the
consummation of the Merger have been validly and appropriately taken, except
for
the filing referred to in Section
1.2.
2.7 Compliance
with Laws and Instruments.
The
execution, delivery and performance by the Company of the Merger Documents
and
the consummation by the Company of the transactions contemplated by this
Agreement will not cause the Company to violate or contravene (i) any provision
of law, (ii) any rule or regulation of any agency or government (iii) any order,
judgment or decree of any court, or (v) any provision of their respective
certificates of incorporation or by-laws as amended and in effect on and as
of
the Closing Date and will not violate or be in conflict with, result in a breach
of or constitute (with or without notice or lapse of time, or both) a default
under any material indenture, loan or credit agreement, deed of trust, mortgage,
security agreement or other agreement or contract to which the Company is a
party or by which Company or any of its respective properties is
bound.
2.8 Binding
Obligations. The
Merger Documents constitute the legal, valid and binding obligations of the
Company and are enforceable against the Company in accordance with their
respective terms, except as such enforcement is limited by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity.
5
2.9 Broker’s
and Finder’s Fees.
No
Person has, or as a result of the transactions contemplated or described herein
will have, any right or valid claim against the Company, Parent, Acquisition
Corp. or any Stockholder for any commission, fee or other compensation as a
finder or broker, or in any similar capacity, except as disclosed in
Schedule
2.9
hereto.
Parent
and Acquisition on the one hand and the Company on the other, hereby indemnify
and hold each other harmless from and against any and all claims, losses or
liabilities for any such commission, fee or other compensation as a result
of
the claim by any other Person that the indemnifying party or parties introduced
or assisted them in connection with the transactions contemplated or described
here.
2.10 Financial
Statements.
Attached
hereto as Schedule
2.10
are the
Company’s audited balance sheets (the “Balance
Sheet”)
for
the year ended December 31, 2005
(the
“Balance
Sheet Date”).
Such
financial statements (i) are in accordance with the books and records of the
Company, (ii) present fairly in all material respects the financial condition
of
the Company at the dates therein specified and the results of its operations
and
changes in financial position for the periods therein specified and (iii) have
been prepared in accordance with generally accepted accounting principles
(“GAAP”)
applied on a basis consistent with prior accounting periods.
2.11 Absence
of Undisclosed Liabilities. The
Company has no material obligation or liability (whether accrued, absolute,
contingent, liquidated or otherwise, whether due or to become due), arising
out
of any transaction entered into at or prior to the Closing, (b) to the extent
set forth on or reserved against in the Balance Sheet or the Notes to the
Financial Statements, (c) current liabilities incurred and obligations under
agreements entered into in the usual and ordinary course of business since
the
Balance Sheet Date, none of which (individually or in the aggregate) has had
or
will have a material adverse effect on the Condition of the Company, and (d)
by
the specific terms of any written agreement, document or arrangement identified
in the Schedules.
2.12 Changes.
Since
the Balance Sheet Date, the Company has not (a) incurred any debts, obligations
or liabilities, absolute, accrued, contingent or otherwise, whether due or
to
become due, except for fees, expenses and current liabilities incurred in the
usual and ordinary course of business, (b) discharged or satisfied any Liens
other than those securing, or paid any obligation or liability other than,
current liabilities shown on the Balance Sheet and current liabilities incurred
since the Balance Sheet Date, in each case in the usual and ordinary course
of
business, (c) mortgaged, pledged or subjected to Lien any of its assets,
tangible or intangible other than in the usual and ordinary course of business,
(d) sold, transferred or leased any of its assets, except in the usual and
ordinary course of business, (e) cancelled or compromised any debt or claim,
or
waived or released any right, of material value, (f) suffered any physical
damage, destruction or loss (whether or not covered by insurance) materially
and
adversely affecting the Condition of the Company, (g) entered into any
transaction other than in the usual and ordinary course of business, (h)
encountered any labor union difficulties, (i) declared or paid any dividends
on
or made any other distributions with respect to, or purchased or redeemed,
any
of its outstanding capital stock, (j) suffered or experienced any change in,
or
condition affecting, the Condition of the Company other than changes, events
or
conditions in the usual and ordinary course of its business, none of which
(either by itself or in conjunction with all such other changes,
events and conditions) has been materially adverse, (k) made any change in
the
accounting principles, methods or practices followed by it or depreciation
or
amortization policies or rates theretofore adopted, (l) made or permitted any
amendment or termination of any material contract, agreement or license to
which
it is a party, (m) suffered any material loss not
reflected in the Balance Sheet or its statement of income for the year ended
on
the Balance Sheet Date, or (n) entered into any agreement, or otherwise
obligated itself, to do any of the foregoing.
6
2.13 Intentionally
Omitted.
2.14 Employees.
The
Company has complied in all material respects with all laws relating to the
employment of labor, and the Company has encountered no material labor union
difficulties. Other than pursuant to ordinary arrangements of employment
compensation, the Company is not under any obligation or liability to any
officer, director or employee of the Company.
2.15 Tax
Returns and Audits.
All
required federal, state and local Tax Returns of the Company have been
accurately prepared and duly and timely filed or extensions with respect thereto
have been granted, and all federal, state and local Taxes required to be paid
with respect to the periods covered by such returns have been paid. The Company
is not and has not been delinquent in the payment of any Tax. The Company has
not had a Tax deficiency proposed or assessed against it and has not executed
a
waiver of any statute of limitations on the assessment or collection of any
Tax.
None of the Company’s federal income tax returns nor any state or local income
or franchise tax returns has been audited by governmental authorities. The
reserves for Taxes reflected on the Balance Sheet are and will be sufficient
for
the payment of all unpaid Taxes payable by the Company as of the Balance Sheet
Date. Since the Balance Sheet Date, the Company has made adequate provisions
on
its books of account for all Taxes with respect to its business, properties
and
operations for such period. The Company has withheld or collected from each
payment made to each of its employees the amount of all taxes (including, but
not limited to, federal, state and local income taxes, Federal Insurance
Contribution Act taxes and Federal Unemployment Tax Act taxes) required to
be
withheld or collected therefrom, and has paid the same to the proper Tax
receiving officers or authorized depositaries. There are no federal, state,
local or foreign audits, actions, suits, proceedings, investigations, claims
or
administrative proceedings relating to Taxes or any Tax Returns of the Company
now pending, and the Company has not received any notice of any proposed audits,
investigations, claims or administrative proceedings relating to Taxes or any
Tax Returns. The
Company is not obligated to make a payment, or is a party to an agreement that
under certain circumstances could obligate it to make a payment, that would
not
be deductible under Section 280G of the Code. The
Company has not agreed nor is required to make any adjustments under Section
481(a) of the Code (or any similar provision of state, local and foreign law)
by
reason of a change in accounting method or otherwise for any Tax period for
which the applicable statute of limitations has not yet expired. The Company
(i)
is not a party to, is bound by or has any obligation
under, any Tax sharing agreement, Tax indemnification agreement or similar
contract or arrangement, whether written or unwritten (collectively,
“Tax
Sharing Agreements”),
or (ii)
does not have any potential liability or obligation to any person as a result
of, or pursuant to, any such Tax Sharing Agreements.
2.16
[Intentionally Omitted]
7
2.17 Employee
Benefit Plans; ERISA.
(a)
The
Company has no “employee benefit plans” (within the meaning of Section 3(3) of
the ERISA) nor any other employee benefit or fringe benefit arrangements,
practices, contracts, policies or programs of any type other than programs
merely involving the regular payment of wages, commissions, or bonuses
established, maintained or contributed to by the Company, whether written or
unwritten and whether or not funded.
2.18 Title
to Property and Encumbrances. The
Company has good, valid and indefeasible marketable title to all properties
and
assets used in the conduct of its business (except for property held under
valid
and subsisting leases which are in full force and effect and which are not
in
default) free of all Liens and other encumbrances, except Permitted Liens and
such ordinary and customary imperfections of title, restrictions and
encumbrances as do not, individually or in the aggregate, materially detract
from the value of the property or assets or materially impair the use made
thereof by the Company in its business. Without limiting the generality of
the
foregoing, the Company has good and indefeasible title to all of its properties
and assets reflected in the Balance Sheet, except for property disposed of
in
the usual and ordinary course of business since the Balance Sheet Date and
for
property held under valid and subsisting leases which are in full force and
effect and which are not in default.
2.19 Condition
of Properties.
All
facilities, machinery, equipment, fixtures and other properties owned, leased
or
used by the Company are in operating condition and repair, subject to ordinary
wear and tear, and are adequate and sufficient for the Company’s
business.
2.20 Insurance
Coverage.
There is
in full force and effect one or more policies of insurance issued by insurers
of
recognized responsibility, insuring the Company and its properties, products
and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in the same or similar business and similarly situated.
2.21 Litigation.
Except
as disclosed in Schedule
2.21
hereto,
there is no legal action, suit, arbitration or other legal, administrative
or
other governmental proceeding pending or, to the best knowledge of the Company,
threatened against or affecting the Company or its properties, assets or
business, and after reasonable investigation, the Company is not aware of any
incident, transaction, occurrence or circumstance that might reasonably be
expected to result in or form the basis for any such action, suit, arbitration
or other proceeding. The Company is not in default with respect to any order,
writ, judgment, injunction, decree, determination or award of any court or
any
governmental agency or instrumentality or arbitration authority.
2.22 Licenses.
The
Company possesses from all appropriate governmental authorities all licenses,
permits, authorizations, approvals, franchises and rights necessary for the
Company to engage in the business currently conducted by it, all of which are
in
full force and effect.
2.23 Interested
Party Transactions.
Except
as disclosed in Schedule
2.23
hereto,
no officer, director or stockholder of the Company or any Affiliate or
“associate” (as such term is defined in Rule 405 under the Securities Act)
of any
such
Person or the Company has or has had, either directly or indirectly, (a) an
interest in any Person that (i) furnishes or sells services or products that
are
furnished or sold or are proposed to be furnished or sold by the Company or
(ii)
purchases from or sells or furnishes to the Company any goods or services,
or
(b) a beneficial interest in any contract or agreement to which the Company
is a
party or by which it may be bound or affected.
8
2.24 Environmental
Matters
(a) To
the
knowledge of the Company, the Company has never generated, used, handled,
treated, released, stored or disposed of any Hazardous Materials on any real
property on which it now has or previously had any leasehold or ownership
interest, except in compliance with all applicable Environmental
Laws.
(b) To
the
knowledge of the Company, the historical and present operations of the business
of the Company are in compliance with all applicable Environmental Laws, except
where any non-compliance has not had and would not reasonably be expected to
have a material adverse effect on the Condition of the Company.
(c) There
are
no material pending or, to the knowledge of the Company, threatened, demands,
claims, information requests or notices of noncompliance or violation against
or
to the Company relating to any Environmental Law; and, to the knowledge of
the
Company, there are no conditions or occurrences on any of the real property
used
by the Company in connection with its business that would reasonably be expected
to lead to any such demands, claims or notices against or to the Company, except
such as have not had, and would not reasonably be expected to have, a material
adverse effect on the Condition of the Company.
(d) To
the
knowledge of the Company, (i) the Company has not, sent or disposed of,
otherwise had taken or transported, arranged for the taking or disposal of
(on
behalf of itself, a customer or any other party) or in any other manner
participated or been involved in the taking of or disposal or release of a
Hazardous Material to or at a site that is contaminated by any Hazardous
Material or that, pursuant to any Environmental Law, (A) has been placed on
the
“National Priorities List”, the “CERCLA” list, or any similar state or federal
list, or (B) is subject to or the source of a claim, an administrative order
or
other request to take “removal”, “remedial”, “corrective” or any other
“response” action, as defined in any Environmental Law, or to pay for the costs
of any such action at the site; (ii) the Company is not involved in (and has
no
basis to reasonably expect to be involved in) any suit or proceeding and has
not
received (and has no basis to reasonably expect to receive) any notice, request
for information or other communication from any governmental authority or other
third party with respect to a release or threatened release of any Hazardous
Material or a violation or alleged violation of any Environmental Law, and
has
not received (and has no basis to reasonably expect to receive) notice of any
claims from any Person relating to property damage, natural resource damage
or
to personal injuries from exposure to any Hazardous Material; and (iii) the
Company has timely filed every report required to be filed, acquired all
necessary certificates, approvals and permits, and generated and maintained
all
required data, documentation and records under all Environmental Laws, in all
such instances except where the failure to do so would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect
on
the Condition of the Company.
2.25 Receivables.
The
accounts receivable shown on the Balance Sheet (net of the allowance for
doubtful accounts in the amount appearing thereon) have been collected or are,
to the knowledge of the Company, collectible in the usual and ordinary course
of
the Company’s business in the amounts thereof shown on the Balance Sheet. The
accounts receivable of the Company acquired after the Balance Sheet Date and
prior to the Closing Date will be reflected on the books of account of the
Company at 100% of the amount thereof and have been collected, or are, to the
knowledge of the Company, collectible in the usual and ordinary course of the
Company’s business, in the full amounts thereof (less normal allowances for
doubtful accounts). All of the accounts receivable reflected on the Balance
Sheet and all accounts receivable which have arisen since the Balance Sheet
Date
are valid and enforceable claims, and the goods and services sold and delivered
which gave rise to such accounts receivable were sold and delivered in
conformity with all applicable express and implied warranties, purchase orders,
agreements and specifications, and, to knowledge of the Company, are not subject
to any valid defense or offset.
9
2.26 Inventories.
The
inventories of the Company which are reflected in the Balance Sheet and all
inventory items which have been acquired since the Balance Sheet Date consist
of
raw materials, supplies, work-in-process and finished goods of such quality
and
in such quantities as are being used and will be usable or are being sold and
will be saleable in the ordinary course of its business with full xxxx-up at
prevailing market prices, except to the extent of reserves for obsolete and
slow-moving inventories reflected in the Balance Sheet. Such inventories are
valued at the lower of cost or fair market value and were determined in
accordance with generally accepted accounting principles consistently applied.
The Company has not experienced, nor has any reason to believe that it will
experience in the foreseeable future, any material difficulty in obtaining,
in
the desired quantity and quality and upon reasonable terms and conditions,
the
raw materials, supplies or component products required for the manufacture,
assembly or production of its products.
2.27 Customers,
Suppliers and Independent Contractors.
Since
the Balance Sheet Date, the Company has not been advised that any customer,
supplier or independent contractor of the Company intends to terminate or
materially curtail its business relationship with the Company.
2.28 Duty
to Make Inquiry.
To the
extent that any of the representations or warranties in this Section 2 are
qualified by “knowledge” or “belief,” the Company represents and warrants that
it has made due and reasonable inquiry and investigation concerning the matters
to which such representations and warranties relate, including, but not limited
to, diligent inquiry of its directors, officers and key personnel.
2.29 Disclosure.
There is
no fact relating to the Company that the Company has not disclosed to Parent
and
Acquisition Corp. in writing which has had or is currently having a material
and
adverse effect nor, insofar as the Company can now foresee, will materially
and
adversely affect, the Condition of the Company. No representation or warranty
by
the Company herein and no information disclosed in the schedules or exhibits
hereto by the Company contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements contained herein
or
therein not misleading.
2.30 Questionable
Payments. Neither
the Company nor any director, officer or, to the best knowledge of the Company,
agent, employee or other Person associated with or acting on behalf of the
Company, has used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; made
any direct or indirect unlawful payments to government officials or employees
from corporate funds; established or maintained any unlawful or unrecorded
fund
of corporate monies or other assets; made any false or fictitious entries on
the
books of record of any such corporations; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
10
2.31 Obligations
to or by Stockholders.
Except
as disclosed in Schedule
2.31,
other
than for accrued salary of employees of the Company who are also Stockholders
and legal fees owed to the Law Firm of Xxxxxx & Jaclin, LLP, the Company has
no liability or obligation or commitment to any Stockholder or any Affiliate
or
“associate” (as such term is defined in Rule 405 under the Securities Act) of
any Stockholder, nor does any Stockholder or any such Affiliate or associate
have any liability, obligation or commitment to the Company.
3 3. Representations
and Warranties of Parent and Acquisition Corp.
Parent
and Acquisition Corp. represent and warrant to the Company as
follows:
3.1 Organization
and Standing.
(a) Parent
is
a corporation duly organized and existing in good standing under the laws of
the
State of Florida. Acquisition Corp. is a corporation duly organized and existing
in good standing under the laws of the State of Florida. Parent and Acquisition
Corp. have heretofore delivered to the Company complete and correct copies
of
their respective Certificates of Incorporation and Bylaws as now in effect.
Parent and Acquisition Corp. have full corporate power and authority to carry
on
their respective businesses as they are now being conducted and as now proposed
to be conducted and to own or lease their respective properties and assets.
(b)Except
for Parent’s wholly-owned subsidiary, American Waste Recovery, Inc., neither
Parent nor Acquisition Corp. has any other subsidiaries (except Parent’s
ownership of American Waste Recovery, Inc. and Acquisition Corp.) or direct
or
indirect interest (by way of stock ownership or otherwise) in any firm,
corporation, limited liability company, partnership, association or business.
Parent owns all of the issued and outstanding capital stock of American Waste
Recovery, Inc. and Acquisition Corp. free and clear of all Liens, and American
Waste Recovery, Inc. and Acquisition Corp. have no outstanding options, warrants
or rights to purchase capital stock or other equity securities of American
Waste
Recovery, Inc. or Acquisition Corp., other than the capital stock owned by
Parent. Unless the content otherwise requires, all references in this Section
3
to the “Parent” shall be treated as being a reference to the Parent, American
Waste Recovery, Inc., and Acquisition Corp. taken together as one
enterprise.
3.2 Corporate
Authority.
Each of
Parent and/or Acquisition Corp. (as the case may be) has full corporate power
and authority to enter into the Merger Documents and the other agreements to
be
made pursuant to the Merger Documents, and to carry out the transactions
contemplated hereby and thereby. All corporate acts and proceedings required
for
the authorization, execution, delivery and performance of the Merger Documents
and such other agreements and documents by Parent and/or Acquisition Corp.
(as
the case may be) have been duly and validly taken or will have been so taken
prior to the Closing. Each of the Merger Documents constitutes a legal, valid
and binding obligation of Parent and/or Acquisition Corp. (as the case may
be),
each enforceable against them in accordance with their respective terms, except
as such enforcement may be limited by bankruptcy, insolvency, reorganization
or
other similar laws affecting creditors’ rights generally and by general
principles of equity.
11
3.3 Broker’s
and Finder’s Fees.
No
person, firm, corporation or other entity is entitled by reason of any act
or
omission of Parent or Acquisition Corp. to any broker’s or finder’s fees,
commission or other similar compensation with respect to the execution and
delivery of this Agreement or the Certificate of Merger, or with respect to
the
consummation of the transactions contemplated hereby or thereby, except as
disclosed in Schedule
3.3
hereto.
Parent
and Acquisition Corp. jointly and severally indemnify and hold Company harmless
from and against any and all loss, claim or liability arising out of any such
claim from any other Person who claim they introduced Parent or Acquisition
Corp. to, or assisted them with the transactions contemplated by or described
herein.
3.4 Capitalization
of Parent. The
authorized capital stock of Parent consists of (a) 100,000,000 shares of common
stock, par value $0.001 per share (the “Parent
Common Stock”),
of
which not more than 45,188,525 shares will be, prior to the Effective Time,
issued and outstanding, and (b) 10,000,000 shares of preferred stock, par value
$.001 per share, of which 1,473,650
are
designated as Class A Preferred Stock, and no shares are issued and outstanding
on the date hereof. Except
as
disclosed in Schedule
3.4,
Parent
has no outstanding options, rights or commitments to issue shares of Parent
Common Stock or any other Equity Security of Parent or Acquisition Corp., and
there are no outstanding securities convertible or exercisable into or
exchangeable for shares of Parent Common Stock or any other Equity Security
of
Parent or Acquisition Corp. There is no voting trust, agreement or arrangement
among any of the beneficial holders of Parent Common Stock affecting the
nomination or election of directors or the exercise of the voting rights of
Parent Common Stock. All outstanding shares of the capital stock of Parent
are
validly issued and outstanding, fully paid and nonassessable, and none of such
shares have been issued in violation of the preemptive rights of any
person.
3.5 Acquisition
Corp.
Acquisition
Corp. is a wholly-owned subsidiary of Parent that was formed specifically for
the purpose of the Merger and that has not conducted any business or acquired
any property, and will not conduct any business or acquire any property prior
to
the Closing Date, except in preparation for and otherwise in connection with
the
transactions contemplated by this Agreement, the Certificate of Merger and
the
other agreements to be made pursuant to or in connection with this Agreement
and
the Certificate of Merger.
3.6 Validity
of Shares.
The
shares of Parent Common Stock and Parent Class A Preferred Stock to be issued
at
the Closing pursuant to Section
1.5(a)(ii)
hereof,
when issued and delivered in accordance with the terms hereof and of the
Certificate of Merger, shall be duly and validly issued, fully paid and
nonassessable. The issuance of the Parent Common Stock and Parent Class A
Preferred Stock upon the Merger pursuant to Section
1.5(a)(ii)
will be
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 4(2) and from the qualification or registration
requirements of any applicable state blue sky or securities laws.
3.7 SEC
Reporting and Compliance.
12
(a) Parent
filed a registration statement on Form 10-SB under the Securities Act which
became effective on July 16, 2000. Since that date, Parent has filed with the
Commission all registration statements, proxy statements, information statements
and reports required to be filed pursuant to the Exchange Act. Parent
has not filed with the Commission a certificate on Form 15 pursuant to Rule
12h-3 of the Exchange Act.
(b) Parent
has delivered to the Company true and complete copies of the registration
statements, information statements and other reports (collectively, the
“Parent
SEC Documents”)
filed
by the Parent with the Commission. None of the Parent SEC Documents, as of
their
respective dates, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements contained
therein not misleading.
(c) Except
as
set forth on Schedule
3.7,
Parent
has not filed, and nothing has occurred with respect to which Parent would
be
required to file, any report on Form 8-K since February 22, 2006 and Form 10-KSB
or 10-QSB since April 14, 2006. Prior to and until the Closing, Parent will
provide to the Company copies of any and all amendments or supplements to the
Parent SEC Documents filed with the Commission since April 14, 2006 and all
subsequent registration statements and reports filed by Parent subsequent to
the
filing of the Parent SEC Documents with the Commission and any and all
subsequent information statements, proxy statements, reports or notices filed
by
the Parent with the Commission or delivered to the stockholders of
Parent.
(d) Parent
is
not an investment company within the meaning of Section 3 of the Investment
Company Act.
(e) The
shares of Parent Common Stock are quoted on the Over-the-Counter (OTC) Bulletin
Board under the symbol “AGNI,” and Parent is in compliance in all material
respects with all rules and regulations of the OTC Bulletin Board applicable
to
it and the Parent Stock.
(f) Between
the date hereof and the Closing Date, Parent shall continue to timely satisfy
the filing requirements of the Exchange Act and all other requirements of
applicable securities laws and the OTC Bulletin Board including, but not limited
to the timely filing of notices required by Rule 10b-17 under the Securities
Act.
(g) To
the
best knowledge of the Parent, the Parent has otherwise complied with the
Securities Act, Exchange Act and all other applicable federal and state
securities laws.
(h) Parent
is
not a “blank check company” subject to the requirements of Rule 419 of the
Securities Act.
3.8 Financial
Statements.
The
balance sheets, and statements of income, changes in financial position and
stockholders’ equity contained in the Parent SEC Documents (the “Parent
Financial Statements”)
(i)
have been prepared in accordance with GAAP applied on a basis consistent with
prior periods (and, in the case of unaudited financial information, on a basis
consistent with year-end audits), (ii) are in accordance with the books and
records of the Parent, and (iii) present fairly in all material respects the
financial condition of the Parent at the dates therein specified and the results
of its operations and changes in financial position for the periods therein
specified. The financial statements included in the Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2005, are as audited by, and include
the
related opinions of Lancaster & Xxxxx, Chartered Accountants, Parent’s
independent certified public accountants. The financial information included
in
the Quarterly Reports on Form 10-QSB for the quarters ended June 30, 2005 and
March 31, 2005 are unaudited, but reflect all adjustments (including normally
recurring accounts) that Parent considers necessary for a fair presentation
of
such information and have been prepared in accordance with generally accepted
accounting principles, consistently applied.
13
3.9 Governmental
Consents.
All
material consents, approvals, orders, or authorizations of, or registrations,
qualifications, designations, declarations, or filings with any federal or
state
governmental authority on the part of Parent or Acquisition Corp. required
in
connection with the consummation of the Merger shall have been obtained prior
to, and be effective as of, the Closing.
3.10 Compliance
with Laws and Other Instruments.
The
business, products and operations of Parent and/or Acquisition Corp. have been
and are being conducted in compliance in all material respects with all
applicable laws, rules and regulations, except for such violations thereof
for
which the penalties, in the aggregate, would not have a material adverse effect
on the Condition of t Parent and/or Acquisition Corp. The execution, delivery
and performance by Parent and/or Acquisition Corp. of this Agreement, the
Certificate of Merger and the other agreements to be made by Parent or
Acquisition Corp. pursuant to or in connection with this Agreement or the
Articles of Merger and the consummation by Parent and/or Acquisition Corp.
of
the transactions contemplated by the Merger Documents (a) will not require
any
authorization, consent or approval of, or filing or registration with, any
court
or governmental agency or instrumentality, except such as shall have been
obtained prior to the Closing or as set forth in Schedule
3.10,
(b)
will not cause the Parent and/or Acquisition Corp. to violate or contravene
(i)
any provision of law, (ii) any rule or regulation of any agency or government,
(iii) any order, judgment or decree of any court, or (iv) any provision of
the
Certificate of Incorporation or Bylaws of the Parent and/or Acquisition Corp.,
(c) will not violate or be in conflict with, result in a breach of or constitute
(with or without notice or lapse of time, or both) a default under, any
indenture, loan or credit agreement, deed of trust, mortgage, security agreement
or other contract, agreement or instrument to which the Parent and/or
Acquisition Corp. is a party or by which Parent and/or Acquisition Corp. or
any
of its properties is bound or affected, except as would not have a material
adverse effect on the Condition of Parent and/or Acquisition Corp. and (d)
will
not result in the creation or imposition of any Lien upon any property or asset
of Parent and/or Acquisition Corp. Parent and/or Acquisition Corp. are not
in
violation of, or (with or without notice or lapse of time, or both) in default
under, any term or provision of their Certificate of Incorporation or Bylaws
or
of any indenture, loan or credit agreement, deed of trust, mortgage, security
agreement or, except as would not materially and adversely affect the Condition
of Parent and/or Acquisition Corp. or any other material agreement or instrument
to which Parent and/or Acquisition Corp. is a party or by which Parent and/or
Acquisition Corp. or any of its properties is bound or affected.
3.11 No
General Solicitation.
In
issuing Parent Common Stock in the Merger hereunder, neither Parent nor anyone
acting on its behalf has offered to sell the Parent Common Stock by any form
of
general solicitation or advertising.
14
3.12 Binding
Obligations.
The
Merger Documents constitute the legal, valid and binding obligations of the
Parent and Acquisition Corp., and are enforceable against the Parent and
Acquisition Corp., in accordance with their respective terms, except as such
enforcement is limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity.
3.13 Absence
of Undisclosed Liabilities.
Neither
Parent nor Acquisition Corp. has any material obligation or liability (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become
due), arising out of any transaction entered into at or prior to the Closing,
except (a) as disclosed in the Parent SEC Documents, (b) to the extent set
forth
on or reserved against in the balance sheet of Parent as of December 31, 2005
(the “Parent
Balance Sheet”)
or the
Notes to the Parent Financial Statements, (c) current liabilities incurred
and
obligations under agreements entered into in the usual and ordinary course
of
business since December 31, 2005 (the “Parent
Balance Sheet Date”),
none
of which (individually or in the aggregate) materially and adversely affects
the
condition (financial or otherwise), properties, assets, liabilities, business
operations, results of operations or prospects of the Parent or Acquisition
Corp., taken as a whole (the “Condition
of the Parent”),
(d)
by the specific terms of any written agreement, document or arrangement attached
as an exhibit to the Parent SEC Documents, and (e) as disclosed in Schedule
3.13 hereto.
3.14 Changes.
Since
the Parent Balance Sheet Date, except as disclosed in Schedule
3.14
hereto
and in the Parent SEC Documents, the Parent has not (a) incurred any debts,
obligations or liabilities, absolute, accrued or, to the Parent’s knowledge,
contingent, whether due or to become due, except for current liabilities
incurred in the usual and ordinary course of business, (b) discharged or
satisfied any Liens other than those securing, or paid any obligation or
liability other than, current liabilities shown on the Parent Balance Sheet
and
current liabilities incurred since the Parent Balance Sheet Date, in each case
in the usual and ordinary course of business, (c) mortgaged, pledged or
subjected to Lien any of its assets, tangible or intangible, other than in
the
usual and ordinary course of business, (d) sold, transferred or leased any
of
its assets, except in the usual and ordinary course of business, (e) cancelled
or compromised any debt or claim, or waived or released any right of material
value, (f) suffered any physical damage, destruction or loss (whether or not
covered by insurance) which could reasonably be expected to have a material
adverse effect on the Condition of the Parent, (g) entered into any transaction
other than in the usual and ordinary course of business, (h) encountered any
labor union difficulties, (i) made or granted any wage or salary increase or
made any increase in the amounts payable under any profit sharing, bonus,
deferred compensation, severance pay, insurance, pension, retirement or other
employee benefit plan, agreement or arrangement, other than in the ordinary
course of business consistent with past practice, or entered into any employment
agreement, (j) issued or sold any shares of capital stock, bonds, notes,
debentures or other securities or granted any options (including employee stock
options), warrants or other rights with respect thereto, (k) declared or paid
any dividends on or made any other distributions with respect to, or purchased
or redeemed, any of its outstanding capital stock, (l) suffered or experienced
any change in, or condition affecting, the financial condition of the Parent
other than changes, events or conditions in the usual and ordinary course of
its
business, none of which (either by itself or in conjunction with all such other
changes, events and conditions) could reasonably be expected to have a material
adverse effect on the Condition of the Parent, (m) made any change in the
accounting principles, methods or practices followed by it or depreciation
or
amortization policies or rates theretofore adopted, (n) made or permitted any
amendment or termination of any material contract, agreement or license to
which
it is a party, (o) suffered any material loss not reflected in the Parent
Balance Sheet or its statement of income for the year ended on the Parent
Balance Sheet Date, (p) paid, or made any accrual or arrangement for payment
of,
bonuses or special compensation of any kind or any severance or termination
pay
to any present or former officer, director, employee, stockholder or consultant,
(q) made or agreed to make any charitable contributions or incurred any
non-business expenses in excess of $5,000 in the aggregate, or (r) entered
into
any agreement, or otherwise obligated itself, to do any of the
foregoing.
15
3.15 Tax
Returns and Audits.
All
required federal, state and local Tax Returns of the Parent have been accurately
prepared in all material respects and duly and timely filed, and all federal,
state and local Taxes required to be paid with respect to the periods covered
by
such returns have been paid to the extent that the same are material and have
become due, except where the failure so to file or pay could not reasonably
be
expected to have a material adverse effect upon the Condition of the Parent.
The
Parent is not and has not been delinquent in the payment of any Tax. The Parent
has not had a Tax deficiency assessed against it. None of the Parent’s federal
income tax returns nor any state or local income or franchise tax returns has
been audited by governmental authorities. The reserves for Taxes reflected
on
the Parent Balance Sheet are sufficient for the payment of all unpaid Taxes
payable by the Parent with respect to the period ended on the Parent Balance
Sheet Date. There are no federal, state, local or foreign audits, actions,
suits, proceedings, investigations, claims or administrative proceedings
relating to Taxes or any Tax Returns of the Parent now pending, and the Parent
has not received any notice of any proposed audits, investigations, claims
or
administrative proceedings relating to Taxes or any Tax Returns.
3.16 Employee
Benefit Plans; ERISA. (a)
Except
as disclosed in the Parent SEC Documents, there are no “employee benefit plans”
(within the meaning of Section 3(3) of ERISA) nor any other employee benefit
or
fringe benefit arrangements, practices, contracts, policies or programs other
than programs merely involving the regular payment of wages, commissions, or
bonuses established, maintained or contributed to by the Parent. Any plans
listed in the Parent SEC Documents are hereinafter referred to as the
“Parent
Employee Benefit Plans”.
(b) Any
current and prior material documents, including all amendments thereto, with
respect to each Parent Employee Benefit Plan have been given to the Company
or
its advisors.
(c) All
Parent Employee Benefit Plans are in material compliance with the applicable
requirements of ERISA, the Code and any other applicable state, federal or
foreign law.
(d) There
are
no pending, or to the knowledge of the Parent, threatened, claims or lawsuits
which have been asserted or instituted against any Parent Employee Benefit
Plan,
the assets of any of the trusts or funds under the Parent Employee Benefit
Plans, the plan sponsor or the plan administrator of any of the Parent Employee
Benefit Plans or against any fiduciary of a Parent Employee Benefit Plan with
respect to the operation of such plan.
16
(e) There
is
no pending, or to the knowledge of the Parent, threatened, investigation or
pending or possible enforcement action by the Pension Benefit Guaranty
Corporation, the Department of Labor, the Internal Revenue Service or any other
government agency with respect to any Parent Employee Benefit Plan.
(f) No
actual
or, to the knowledge of Parent, contingent liability exists with respect to
the
funding of any Parent Employee Benefit Plan or for any other expense or
obligation of any Parent Employee Benefit Plan, except as disclosed on the
financial statements of the Parent or the Parent SEC Documents, and to the
knowledge of the Parent, no contingent liability exists under ERISA with respect
to any “multi-employer plan,” as defined in Section 3(37) or Section 4001(a)(3)
of ERISA.
3.17 Litigation.
Except
as disclosed in the Parent SEC Documents, there is no legal action, suit,
arbitration or other legal, administrative or other governmental proceeding
pending or, to the knowledge of the Parent, threatened against or affecting
the
Parent or Acquisition Corp. or their properties, assets or business. To the
knowledge of the Parent, neither Parent nor Acquisition Corp. is in default
with
respect to any order, writ, judgment, injunction, decree, determination or
award
of any court or any governmental agency or instrumentality or arbitration
authority.
3.18 Interested
Party Transactions.
Except
as disclosed in the Parent SEC Documents, no officer, director or stockholder
of
the Parent or any Affiliate or “associate” (as such term is defined in Rule 405
under the Securities Act) of any such Person or the Parent has or has had,
either directly or indirectly, (a) an interest in any Person that (i) furnishes
or sells services or products that are furnished or sold or are proposed to
be
furnished or sold by the Parent or (ii) purchases from or sells or furnishes
to
the Parent any goods or services, or (b) a beneficial interest in any contract
or agreement to which the Parent is a party or by which it may be bound or
affected.
3.19 Questionable
Payments.
Neither
the Parent, Acquisition Corp. nor to the knowledge of the Parent, any director,
officer, agent, employee or other Person associated with or acting on behalf
of
the Parent or Acquisition Corp., has used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payments to government
officials or employees from corporate funds; established or maintained any
unlawful or unrecorded fund of corporate monies or other assets; made any false
or fictitious entries on the books of record of any such corporations; or made
any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
3.20 Obligations
to or by Stockholders.
Except
as disclosed in the Parent SEC Documents, the Parent has no liability or
obligation or commitment to any stockholder of Parent or any Affiliate or
“associate” (as such term is defined in Rule 405 under the Securities Act) of
any stockholder of Parent, nor does any stockholder of Parent or any such
Affiliate or associate have any liability, obligation or commitment to the
Parent.
3.21 Schedule
of Assets and Contracts.
Except
as expressly set forth in this Agreement, the Parent Balance Sheet or the notes
thereto, the Parent is not a party to any written or oral agreement not made
in
the ordinary course of business that is material to the Parent. Parent does
not
own any real property. Parent is not a party to or otherwise barred by any
written or oral (a) agreement with any labor union, (b) agreement for the
purchase of fixed assets or for the purchase of materials, supplies or equipment
in excess of normal operating requirements, (c) agreement for the employment
of
any officer, individual employee or other Person on a full-time basis or any
agreement with any Person for consulting services, (d) bonus, pension, profit
sharing, retirement, stock purchase, stock option, deferred compensation,
medical, hospitalization or life insurance or similar plan, contract or
understanding with respect to any or all of the employees of Parent or any
other
Person, (e) indenture, loan or credit agreement, note agreement, deed of trust,
mortgage, security agreement, promissory note or other agreement or instrument
relating to or evidencing Indebtedness for Borrowed Money or subjecting any
asset or property of Parent to any Lien or evidencing any Indebtedness, (f)
guaranty of any Indebtedness, (g) lease or agreement under which Parent is
lessee of or holds or operates any property, real or personal, owned by any
other Person, (h) lease or agreement under which Parent is lessor or permits
any
Person to hold or operate any property, real or personal, owned or controlled
by
Parent, (i) agreement granting any preemptive right, right of first refusal
or
similar right to any Person, (j) agreement or arrangement with any Affiliate
or
any “associate” (as such term is defined in Rule 405 under the Securities Act)
of Parent or any present or former officer, director or stockholder of Parent,
(k) agreement obligating Parent to pay any royalty or similar charge for the
use
or exploitation of any tangible or intangible property, (1) covenant not to
compete or other restriction on its ability to conduct a business or engage
in
any other activity, (m) distributor, dealer, manufacturer’s representative,
sales agency, franchise or advertising contract or commitment, (n) agreement
to
register securities under the Securities Act, (o) collective bargaining
agreement, or (p) agreement or other commitment or arrangement with any Person
continuing for a period of more than three months from the Closing Date that
involves an expenditure or receipt by Parent in excess of $1,000. The Parent
maintains no insurance policies and insurance coverage of any kind with respect
to Parent, its business, premises, properties, assets, employees and agents.
Schedule
3.15
contains
a true and complete list and description of each bank account, savings account,
other deposit relationship and safety deposit box of Parent, including the
name
of the bank or other depository, the account number and the names of the
individuals having signature or other withdrawal authority with respect thereto.
Except as disclosed on Schedule
3.15,
no
consent of any bank or other depository is required to maintain any bank
account, other deposit relationship or safety deposit box of Parent in effect
following the consummation of the Merger and the transactions contemplated
hereby. Parent has furnished to the Company true and complete copies of all
agreements and other documents disclosed or referred to in Schedule
3.15,
as well
as any additional agreements or documents, requested by the
Company.
17
3.22 Employees.
Other
than pursuant to ordinary arrangements of employment compensation, Parent is
not
under any obligation or liability to any officer, director, employee or
Affiliate of Parent.
3.23 Disclosure.
There is
no fact relating to Parent that Parent has not disclosed to the Company in
writing that materially and adversely affects nor, insofar as Parent can now
foresee, will materially and adversely affect, the condition (financial or
otherwise), properties, assets, liabilities, business operations, results of
operations or prospects of Parent. No representation or warranty by Parent
herein and no information disclosed in the schedules or exhibits hereto by
Parent contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein
misleading.
3.24 Patents
and Other Intangible Assets.
(a) Except
as set forth in Schedule
2.16
or as
disclosed in the Memorandum, the Company (i) owns or has the right to use,
free
and clear of all Liens, claims and restrictions, all patents, trademarks,
service marks, trade names, copyrights, licenses and rights with respect to
the
foregoing used in or necessary for the conduct of its business as now conducted
or proposed to be conducted without infringing upon or otherwise acting
adversely to the right or claimed right of any Person under or with respect
to
any of the foregoing and (ii) is not obligated or under any liability to make
any payments by way of royalties, fees or otherwise to any owner or licensor
of,
or other claimant to, any patent, trademark, service xxxx, trade name, copyright
or other intangible asset, with respect to the use thereof or in connection
with
the conduct of its business or otherwise.
(b)To
the
best knowledge of the Company, the Company owns and has the unrestricted right
to use all trade secrets, if any, including know-how, negative know-how,
formulas, patterns, programs, devices, methods, techniques, inventions, designs,
processes, computer programs and technical data and all information that derives
independent economic value, actual or potential, from not being generally known
or known by competitors (collectively, “intellectual
property”)
required for or incident to the development, operation and sale of all products
and services sold by the Company, free and clear of any right, Lien or claim
of
others; provided,
however,
the
possibility exists that other Persons, completely independent of the Company
or
its employees or agents, could have developed intellectual property similar
or
identical to that of the Company. Except as set forth in Schedule
2.16 (b)
hereof
or as disclosed in the Memorandum, the Company is not aware of any such
development of substantially identical trade secrets or technical information
by
others.
4. Intentionally
Omitted.
18
5 5. Conduct
of Businesses Pending the Merger.
5.1 Conduct
of Business by the Company Pending the Merger.
Prior to
the Effective Time, unless Parent or Acquisition Corp. shall otherwise agree
in
writing or as otherwise contemplated by this Agreement:
(i) the
business of the Company shall be conducted only in the ordinary
course;
(ii) the
Company shall not (A) directly or indirectly redeem, purchase or otherwise
acquire or agree to redeem, purchase or otherwise acquire any shares of its
capital stock; (B) amend its Certificate of Incorporation or Bylaws; or (C)
split, combine or reclassify the outstanding Company Stock or declare, set
aside
or pay any dividend payable in cash, stock or property or make any distribution
with respect to any such stock.
(iii) the
Company shall not (A) issue or agree to issue any additional shares of, or
options, warrants or rights of any kind to acquire any shares of, Company Stock,
except to issue shares of Company Common Stock in connection with the exercise
of stock options outstanding on the date hereof; (B) acquire or dispose of
any
fixed assets or acquire or dispose of any other substantial assets other than
in
the ordinary course of business; (C) incur additional Indebtedness or any other
liabilities or enter into any other transaction other than in the ordinary
course of business; (D) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing; or (E) except as contemplated
by this Agreement, enter into any contract, agreement, commitment or arrangement
to dissolve, merge, consolidate or enter into any other material business
combination;
19
(iv) the
Company shall use its best efforts to preserve intact the business organization
of the Company, to keep available the service of its present officers and key
employees, and to preserve the good will of those having business relationships
with it; and
(v) the
Company will not, nor will it authorize any director or authorize or permit
any
officer or employee or any attorney, accountant or other representative retained
by it to, make, solicit, encourage any inquiries with respect to, or engage
in
any negotiations concerning, any Acquisition Proposal (as defined below). The
Company will promptly advise Parent orally and in writing of any such inquiries
or proposals (or requests for information) and the substance thereof. As used
in
this paragraph, “Acquisition
Proposal”
shall
mean any proposal for a merger or other business combination involving the
Company or for the acquisition of a substantial equity interest in it or any
material assets of it other than as contemplated by this Agreement. The Company
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any person conducted heretofore with respect
to
any of the foregoing.
5.2 Conduct
of Business by Parent and Acquisition Corp. Pending the
Merger.
Prior to
the Effective Time, unless the Company shall otherwise agree in writing or
as
otherwise contemplated by this Agreement:
(i) the
business of Parent and Acquisition Corp. shall be conducted only in the ordinary
course; provided,
however,
that
Parent shall take the steps necessary to have discontinued its existing business
without liability to Parent or Acquisition Corp. as of the Closing
Date;
(ii) neither
Parent nor Acquisition Corp. shall (A) directly or indirectly redeem, purchase
or otherwise acquire or agree to redeem, purchase or otherwise acquire any
shares of its capital stock; (B) amend its certificate of incorporation or
bylaws other than as reasonably requested by the Company; or (C) split, combine
or reclassify its capital stock or declare, set aside or pay any dividend
payable in cash, stock or property or make any distribution with respect to
such
stock; and
(iii) neither
Parent nor Acquisition Corp. shall (A) issue or agree to issue any additional
shares of, or options, warrants or rights of any kind to acquire shares of,
its
capital stock; (B) acquire or dispose of any assets other than in the ordinary
course of business (except for dispositions in connection with Section 5.2(i)
hereof); (C) incur additional Indebtedness or any other liabilities or enter
into any other transaction except in the ordinary course of business; (D) enter
into any contract, agreement, commitment or arrangement with respect to any
of
the foregoing, or (E) except as contemplated by this Agreement, enter into
any
contract, agreement, commitment or arrangement to dissolve, merge; consolidate
or enter into any other material business contract or enter into any
negotiations in connection therewith.
20
(iv) neither
the Parent nor Acquisition will,
nor
will they authorize any director or authorize or permit any officer or employee
or any attorney, accountant or other representative retained by them to, make,
solicit, encourage any inquiries with respect to, or engage in any negotiations
concerning, any Acquisition Proposal (as defined below for purposes of this
paragraph). Parent will promptly advise the Company orally and in writing of
any
such inquiries or proposals (or requests for information) and the substance
thereof. As used in this paragraph, “Acquisition
Proposal”
shall
mean any proposal for a merger or other business combination involving the
Parent or Acquisition Corp or for the acquisition of a substantial equity
interest in either of them or any material assets of either of them other than
as contemplated by this Agreement. The Parent will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with
any
person conducted heretofore with respect to any of the foregoing;
and
(v)
neither
the Parent nor Acquisition will enter into any new employment agreements with
any of their officers or employees or grant any increases in the compensation
or
benefits of their officers and employees.
6 6. Additional
Agreements.
6.1 Access
and Information.
The
Company, Parent and Acquisition Corp. shall each afford to the other and to
the
other’s accountants, counsel and other representatives full access during normal
business hours throughout the period prior to the Effective Time of all of
its
properties, books, contracts, commitments and records (including but not limited
to tax returns) and during such period, each shall furnish promptly to the
other
all information concerning its business, properties and personnel as such other
party may reasonably request, provided
that no
investigation pursuant to this Section 6.1 shall affect any representations
or
warranties made herein. Each party shall hold, and shall cause its employees
and
agents to hold, in confidence all such information (other than such information
which (i) is already in such party’s possession or (ii) becomes generally
available to the public other than as a result of a disclosure by such party
or
its directors, officers, managers, employees, agents or advisors, or (iii)
becomes available to such party on a non-confidential basis from a source other
than a party hereto or its advisors, provided that such source is not known
by
such party to be bound by a confidentiality agreement with or other obligation
of secrecy to a party hereto or another party until such time as such
information is otherwise publicly available; provided,
however,
that
(A) any such information may be disclosed to such party’s directors, officers,
employees and representatives of such party’s advisors who need to know such
information for the purpose of evaluating the transactions contemplated hereby
(it being understood that such directors, officers, employees and
representatives shall be informed by such party of the confidential nature
of
such information), (B) any disclosure of such information may be made as to
which the party hereto furnishing such information has consented in writing,
and
(C) any such information may be disclosed pursuant to a judicial, administrative
or governmental order or request; provided,
however,
that
the requested party will promptly so notify the other party so that the other
party may seek a protective order or appropriate remedy and/or waive compliance
with this Agreement and if such protective order or other remedy is not obtained
or the other party waives compliance with this provision, the requested party
will furnish only that portion of such information which is legally required
and
will exercise its best efforts to obtain a protective order or other reliable
assurance that confidential treatment will be accorded the information
furnished). If this Agreement is terminated, each party will deliver to the
other all documents and other materials (including copies) obtained by such
party or on its behalf from the other party as a result of this Agreement or
in
connection herewith, whether so obtained before or after the execution
hereof.
21
6.2 Additional
Agreements.
Subject
to the terms and conditions herein provided, each of the parties hereto agrees
to use its commercially reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using its commercially
reasonable efforts to satisfy the conditions precedent to the obligations of
any
of the parties hereto to obtain all necessary waivers, and to lift any
injunction or other legal bar to the Merger (and, in such case, to proceed
with
the Merger as expeditiously as possible). In order to obtain any necessary
governmental or regulatory action or non-action, waiver, consent, extension
or
approval, each of Parent, Acquisition Corp. and the Company agrees to take
all
reasonable actions and to enter into all reasonable agreements as may be
necessary to obtain timely governmental or regulatory approvals and to take
such
further action in connection therewith as may be necessary. In case at any
time
after the Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and/or directors of
Parent, Acquisition Corp. and the Company shall take all such necessary
action.
6.3 Publicity.
No party
shall issue any press release or public announcement pertaining to the Merger
that has not been agreed upon in advance by Parent and the Company, except
as
Parent reasonably determines to be necessary in order to comply with the rules
of the Commission or of the principal trading exchange or market for Parent
Common Stock, provided that in such case Parent will use its best efforts to
allow Company to review and reasonably approve any same prior to its
release.
6.4 Appointment
of Directors.
Immediately upon the Effective Time, Parent shall accept the resignations of
the
current officers and directors of Parent as provided by Section
7.2(f)(7)
hereof,
and shall cause the persons listed as directors in Exhibit
D
hereto
to be elected to the Board of Directors of Parent. At the first annual meeting
of Parent stockholders and thereafter, the election of members of Parent’s Board
of Directors shall be accomplished in accordance with the bylaws of
Parent.
6.5 Filing
of 10-QSB.
Parent
shall, not later than May 15, 2006, file with the SEC its Quarterly Report
on
Form 10-QSB for the quarter ended March 31, 2006.
22
6.6 Satisfaction
of, Release of and Indemnification from Liabilities; Escrow
Agreement.
Prior to
or at the time of the Closing Date, Parent shall satisfy all outstanding
liabilities, debts, expenses and unpaid taxes from the cash proceeds of the
closing, including payment of (i) $100,000 CAD to Carleton University, and
(ii)
$100,000 CAD to Xxxxx Xxxxxxx, for which wire instructions are attached as
Schedule
6.6.
Parent
has also received executed releases from creditors, which are attached to
Schedule
6.6,
releasing certain liabilities, debts and expenses. The Company is aware, and
Parent acknowledges that it has not paid any taxes from its inception. All
parties agree to close the Merger and resolve the unpaid taxes issue
post-merger. Parent agrees that Surviving Corporation will hold in escrow for
ninety (90) days or until such time as any unpaid taxes and/or penalties from
Parent’s inception through the Closing Date are paid, whichever is longer, the
remainder of the cash purchase price of $107,000 less any fees paid to
reconcile liabilities within 90 days of closing of the Merger to satisfy
the remainder of Parent’s unsatisfied debts or liabilities. If no debts or
liabilities are discovered within the ninety (90) day period after Closing
or
the question of the existence of such liabilities is satisfactorily resolved,
the full purchase price will then be released.
6.7 Subsidiary
Purchase Agreement .
AGNI
entered into a Subsidiary Purchase Agreement, which is attached as Exhibit
L,
with
the Principal Shareholder. The Agreement provides that at any time during the
period commencing 90 days after closing of the merger and ending 180 days after
closing of the merger, AGNI may require the Principal Shareholder to purchase,
or the Principal Shareholder may require AGNI to sell, all of American Waste
Recovery that is, at present, the subsidiary of AGNI. The purchase price, if
either option is exercised, will be $107,000 less any fees paid to
reconcile liabilities within 90 days of closing of the Merger. In addition,
the
Principal Shareholder will be required to indemnify AGNI against any liabilities
that existed on the date of the merger closing or that arose in connection
with
the operations of the subsidiaries.
7. Conditions
of Parties’ Obligations.
7.1 Parent
and Acquisition Corp. Obligations.
The
obligations of Parent and Acquisition Corp. under this Agreement and the
Certificate of Merger are subject to the fulfillment at or prior to the Closing
of the following conditions, any of which may be waived in whole or in part
by
Parent.
(a) No
Errors, etc.
The
representations and warranties of the Parent and Acquisition Corp. under this
Agreement shall be deemed to have been made again on the Closing Date and shall
then be true and correct in all material respects.
(b) Compliance
with Agreement.
The
Parent and Acquisition Corp. shall have performed and complied in all material
respects with all agreements and conditions required by this Agreement to be
performed or complied with by them on or before the Closing Date.
(c) No
Default or Adverse Change.
There
shall not exist on the Closing Date any Default or Event of Default or any
event
or condition that, with the giving of notice or lapse of time, or both, would
constitute a Default or Event of Default, and since the Balance Sheet Date,
there shall have been no material adverse change in the Condition of the Parent
and Acquisition Corp.
(d) Certificate
of Officers.
The
Parent and Acquisition Corp. shall have delivered to the Company a certificate
dated the Closing Date, executed on its behalf by the Chief Executive Officer
and Chief Financial Officer of Parent and Acquisition Corp., certifying the
satisfaction of the conditions specified in paragraphs (a), (b) and (c) of
this
Section 7.1.
23
(e) No
Restraining Action.
No
action or proceeding before any court, governmental body or agency shall have
been threatened, asserted or instituted to restrain or prohibit, or to obtain
substantial damages in respect of, this Agreement or the Certificate of Merger
or the carrying out of the transactions contemplated by the Merger
Documents.
(f) Supporting
Documents.
Parent
and Acquisition Corp. shall have received the following:
(1) Copies
of
resolutions of the Board of Directors and the stockholders of the Company,
certified by the Secretary of the Company, authorizing and approving the
execution, delivery and performance of the Merger Documents and all other
documents and instruments to be delivered pursuant hereto and
thereto.
(2) A
certificate of incumbency executed by the Secretary of the Company certifying
the names, titles and signatures of the officers authorized to execute any
documents referred to in this Agreement and further certifying that the
Certificate of Incorporation and Bylaws of the Company delivered to Parent
and
Acquisition Corp. at the time of the execution of this Agreement have been
validly adopted and have not been amended or modified.
(3) A
certificate, dated the Closing Date, executed by the Company’s Secretary,
certifying that, except for the filing of the Certificate of Merger: (i) all
consents, authorizations, orders and approvals of, and filings and registrations
with, any court, governmental body or instrumentality that are required for
the
execution and delivery of this Agreement and the Certificate of Merger and
the
consummation of the Merger shall have been duly made or obtained, and all
material consents by third parties that are required for the Merger have been
obtained; and (ii) no action or proceeding before any court, governmental body
or agency has been threatened, asserted or instituted to restrain or prohibit,
or to obtain substantial damages in respect of, this Agreement or the
Certificate of Merger or the carrying out of the transactions contemplated
by
the Merger Documents.
(4) Evidence
as of a recent date of the good standing and corporate existence of the Company
issued by the Secretary of State of the State of Delaware and evidence that
the
Company is qualified to transact business as a foreign corporation and is in
good standing in each state of the United States and in each other jurisdiction
where the character of the property owned or leased by it or the nature of
its
activities makes such qualification necessary.
(5) Such
additional supporting documentation and other information with respect to the
transactions contemplated hereby as Parent and Acquisition Corp. may reasonably
request.
(g) Consents.
The
Parent and Acquisition Corp. shall have obtained and delivered to the Company
written consents, reasonably satisfactory in form and substance to Parent,
from
each party to the leases, contracts, instruments and other documents consenting
to the assignment to the Surviving Corporation upon the effectiveness of the
Merger, of all of the rights and interests of Parent and Acquisition Corp.
in
and to such leases, contracts, instruments and documents, except to the extent
(i) waived by Parent and/or Acquisition Corp. in its sole discretion, or (ii)
such lease, contract, instrument or other document does not require the consent
of such party to such assignment.
24
(h) Proceedings
and Documents.
All
corporate and other proceedings and actions taken in connection with the
transactions contemplated hereby and all certificates, opinions, agreements,
instruments and documents mentioned herein or incident to any such transactions
shall be reasonably satisfactory in form and substance to the Company. Parent
and Acquisition Corp. shall furnish to the Company such supporting documentation
and evidence of the satisfaction of any or all of the conditions precedent
specified in this Section 7.1 as Parent or its counsel may reasonably
request.
7.2 Company
Obligations.
The
obligations of the Company under this Agreement and the Certificate of Merger
are subject to the fulfillment at or prior to the Closing of the conditions
precedent specified in paragraphs (f), (g) and (h) of Section 7.1 hereof and
the
following additional conditions:
(a) No
Errors, etc.
The
representations and warranties of the Company under this Agreement shall be
deemed to have been made again on the Closing Date and shall then be true and
correct in all material respects.
(b) Compliance
with Agreement.
The
Company shall have performed and complied in all material respects with all
agreements and conditions required by this Agreement and the Certificate of
Merger to be performed or complied with by them on or before the Closing
Date.
(c) No
Default or Adverse Change.
There
shall not exist on the Closing Date any Default or Event of Default or any
event
or condition, that with the giving of notice or lapse of time, or both, would
constitute a Default of Event of Default, and since the Company Balance Sheet
Date, there shall have been no material adverse change in the Condition of
the
Company.
(d) Certificate
of Officers.
The
Company shall have delivered to Parent and Acquisition Corp. a certificate
dated
the Closing Date, executed on its behalf by its respective President or other
duly authorized officer, certifying the satisfaction of the conditions specified
in paragraphs (a), (b), and (c) of this Section 7.2.
(e) Opinion
of Parent’s Counsel.
The
Company shall have received from counsel for Parent, a favorable opinion dated
the Closing Date to the effect set forth in Exhibit
H
hereto.
(f) Supporting
Documents.
The
Company shall have received the following:
(1) Copies
of
resolutions of Parent’s and Acquisition Corp.’s respective board of directors
and the sole stockholder of Acquisition Corp., certified by their respective
Secretaries, authorizing and approving, to the extent applicable, the execution,
delivery and performance of this Agreement, the Certificate of Merger and all
other documents and instruments to be delivered by them pursuant hereto and
thereto.
25
(2) A
certificate of incumbency executed by the respective Secretaries of Parent
and
Acquisition Corp. certifying the names, titles and signatures of the officers
authorized to execute the documents referred to in paragraph (i) above and
further certifying that the certificates of incorporation and Bylaws of Parent
and Acquisition Corp. appended thereto have not been amended or
modified.
(3) A
certificate, dated the Closing Date, executed by the Secretary of each of the
Parent and Acquisition Corp., certifying that, except for the filing of the
Certificate of Merger: (i) all consents, authorizations, orders and approvals
of, and filings and registrations with, any court, governmental body or
instrumentality that are required for the execution and delivery of this
Agreement and the Certificate of Merger and the consummation of the Merger
shall
have been duly made or obtained, and all material consents by third parties
required for the Merger have been obtained; and (ii) no action or proceeding
before any court, governmental body or agency has been threatened, asserted
or
instituted to restrain or prohibit, or to obtain substantial damages in respect
of, this Agreement or the Certificate of Merger or the carrying out of the
transactions contemplated by any of the Merger Documents.
(4) A
certified list from Manhattan Transfer Registrar Co., Parent’s transfer agent
and registrar, of the names and addresses of the record owners of all of the
outstanding shares of Parent Common Stock and Parent Preferred Stock, together
with the number of shares of Parent Common Stock and Parent Preferred Stock
held
by each record owner.
(5) An
opinion letter from Frascona, Joiner, Xxxxxxx and Xxxxxxxxxx, P.C., Parent’s
counsel setting forth that the number of shares of Parent Common Stock that
are
issued and outstanding as of the Closing Date is no more than 45,188,525 shares
of Parent Common Stock, that no shares of Parent Preferred Stock are issued
and
outstanding, and that 1,473,650 shares of Parent Preferred Stock are designated
as Parent Class A Preferred Stock, for which each share is convertible into
500
shares of Parent Common Stock.
(6) An
agreement in writing from Lancaster & Xxxxx, Chartered Accountants, in form
and substance reasonably satisfactory to the Company, to deliver copies of
the
audit opinions with respect to any and all financial statements of Parent that
had been audited by such firm.
(7)
The
executed resignations of Xxxxx Xxxxx, Xxxxx X. Xxxxxxx and Xxxxxxx Xxxxx, as
directors and officers of Parent, with the director resignations to take effect
at the Effective Time.
(8) Evidence
as of a recent date of the good standing and corporate existence of each of
the
Parent and Acquisition Corp. issued by the Secretary of State of their
respective states of incorporation and evidence that the Parent and Acquisition
Corp. are qualified to transact business as foreign corporations and are in
good
standing in each state of the United States and in each other jurisdiction
where
the character of the property owned or leased by them or the nature of their
activities makes such qualification necessary.
26
(9) Evidence
that Parent has all tax returns required to be filed in the states of Florida
and Delaware and in Vancouver, B.C. and that Parent has no liabilities for
taxes
or penalties for failure to timely file tax returns.
(10) Evidence
that Parent has satisfied all outstanding liabilities prior to the Closing
Date.
(11) Such
additional supporting documentation and other information with respect to the
transactions contemplated hereby as the Company may reasonably
request.
(g) Proceedings
and Documents.
All
corporate and other proceedings and actions taken in connection with the
transactions contemplated hereby and all certificates, opinions, agreements,
instruments and documents mentioned herein or incident to any such transactions
shall be mutually satisfactory in form and substance to the Company, Parent
and
Acquisition Corp. Parent and Acquisition Corp. shall furnish to the Company
such
supporting documentation and evidence of satisfaction of any or all of the
conditions specified in this Section 7.2 as the Company may reasonably
request.
The
Company and Parent may waive compliance with any of the conditions precedent
specified in this Sections 7.1 and 7.2.
.
The
representations and warranties of the parties made in Sections 2 and 3 of this
Agreement (including the Schedules to the Agreement which are hereby
incorporated by reference) shall not survive beyond the Effective Time. This
Section 8 shall not limit any claim for fraud or any covenant or agreement
of
the parties which by its terms contemplates performance after the Effective
Time.
9 9. Amendment
of Agreement.
This
Agreement and the Certificate of Merger may be amended or modified at any time
in all respects by an instrument in writing executed (i) in the case of this
Agreement by the parties hereto and (ii) in the case of the Certificate of
Merger by the parties thereto.
10 10. Definitions.
Unless
the context otherwise requires, the terms defined in this Section 10 shall
have
the meanings herein specified for all purposes of this Agreement, applicable
to
both the singular and plural forms of any of the terms herein
defined.
“Acquisition
Corp.”
means
Agronix Acquisition Corp., a Florida corporation.
“Affiliate”
shall
mean any Person that directly or indirectly controls, is controlled by, or
is
under common control with, the indicated Person.
“Agreement”
shall
mean this Agreement.
“Articles
of Merger”
shall
have the meaning assigned to it in the second recital of this
Agreement.
“Balance
Sheet”
and
“Balance
Sheet Date”
shall
have the meanings assigned to such terms in Section 2.10 hereof.
27
“Closing”
and
“Closing
Date”
shall
have the meanings assigned to such terms in Section 11 hereof.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Commission”
shall
mean the U.S. Securities and Exchange Commission.
“Company”
shall
mean Agronix, Inc., a Florida corporation.
“Company
Common Stock”
shall
mean the Common Stock of the Company.
“Condition
of the Company”
shall
have the meaning assigned to it in Section 2.2 hereof.
“Condition
of the Parent”
shall
have the meaning assigned to it in Section 3.13 hereof.
“Default”
shall
mean a default or failure in the due observance or performance of any covenant,
condition or agreement on the part of the Company to be observed or performed
under the terms of this Agreement or the Certificate of Merger, if such default
or failure in performance shall remain unremedied for five (5)
days.
“Effective
Time”
shall
have the meaning assigned to it in Section 1.2 hereof.
“Employee
Benefit Plans”
shall
have the meaning assigned to it in Section 2.17 hereof.
“Environmental
Laws”
means
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. §§ 9601, et seq.; the Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. §§ 11001, et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. §§ 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. §§
2601 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
§§ 136, et seq. and comparable state statutes dealing with the registration,
labeling and use of pesticides and herbicides; the Clean Air Act, 42 U.S.C.
§§
7401 et seq.; the Clean Water Act (Federal Water Pollution Control Act), 33
U.S.C. §§ 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f, et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801, et seq.; as any
of the above statutes have been amended as of the date hereof, all rules,
regulations and policies promulgated pursuant to any of the above statutes,
and
any other foreign, federal, state or local law, statute, ordinance, rule,
regulation or policy governing environmental matters, as the same have been
amended as of the date hereof.
“Equity
Security”
shall
mean any stock or similar security of an issuer or any security (whether stock
or Indebtedness for Borrowed Money) convertible, with or without consideration,
into any stock or similar equity security, or any security (whether stock or
Indebtedness for Borrowed Money) carrying any warrant or right to subscribe
to
or purchase any stock or similar security, or any such warrant or
right.
“ERISA”
shall
mean the Employee Retirement Income Securities Act of 1974, as
amended.
28
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
“Event
of Default”
shall
mean (a) the failure of the Company to pay any Indebtedness for Borrowed Money,
or any interest or premium thereon, within five (5) days after the same shall
become due, whether such Indebtedness shall become due by scheduled maturity,
by
required prepayment, by acceleration, by demand or otherwise, (b) an event
of
default under any agreement or instrument evidencing or securing or relating
to
any such Indebtedness, or (c) the failure of the Company to perform or observe
any material term, covenant, agreement or condition on its part to be performed
or observed under any agreement or instrument evidencing or securing or relating
to any such Indebtedness when such term, covenant or agreement is required
to be
performed or observed.
“FBCA”
means
the Florida Business Corporation Act, as amended.
“GAAP”
shall
mean generally accepted accounting principles in the United States, as in effect
from time to time.
“Hazardous
Material”
means
any substance or material meeting any one or more of the following criteria:
(a)
it is or contains a substance designated as or meeting the characteristics
of a
hazardous waste, hazardous substance, hazardous material, pollutant, contaminant
or toxic substance under any Environmental Law; (b) its presence at some
quantity requires investigation, notification or remediation under any
Environmental Law; or (c) it contains, without limiting the foregoing, asbestos,
polychlorinated biphenyls, petroleum hydrocarbons, petroleum derived substances
or waste, pesticides, herbicides, crude oil or any fraction thereof, nuclear
fuel, natural gas or synthetic gas.
“Indebtedness”
shall
mean any obligation of the Company which under generally accepted accounting
principles is required to be shown on the balance sheet of the Company as a
liability. Any obligation secured by a Lien on, or payable out of the proceeds
of production from, property of the Company shall be deemed to be Indebtedness
even though such obligation is not assumed by the Company.
“Indebtedness
for Borrowed Money”
shall
mean (a) all Indebtedness in respect of money borrowed including, without
limitation, Indebtedness which represents the unpaid amount of the purchase
price of any property and is incurred in lieu of borrowing money or using
available funds to pay such amounts and not constituting an account payable
or
expense accrual incurred or assumed in the ordinary course of business of the
Company, (b) all Indebtedness evidenced by a promissory note, bond or similar
written obligation to pay money, or (c) all such Indebtedness guaranteed by
the
Company or for which the Company is otherwise contingently liable.
“Investment
Company Act”
shall
mean the Investment Company Act of 1940, as amended.
“knowledge”
and
“know”
means,
when referring to any person or entity, the actual knowledge of such person
or
entity of a particular matter or fact, and what that person or entity would
have
reasonably known after due inquiry. An entity will be deemed to have "knowledge"
of a particular fact or other matter if any individual who is serving, or who
has served, as an executive officer of such entity has actual "knowledge" of
such fact or other matter, or had actual "knowledge" during the time of such
service of such fact or other matter, or would have had "knowledge" of such
particular fact or matter after due inquiry.
29
“Letter
of Transmittal”
shall
have the meaning assigned to it in Section 4 hereof.
“Lien”
shall
mean any mortgage, pledge, security interest, encumbrance, lien or charge of
any
kind, including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code
of
any jurisdiction and including any lien or charge arising by statute or other
law.
“Memorandum”
shall
have the meaning assigned to it in the fourth recital hereof.
“Merger”
shall
have the meaning assigned to it in Section 1.1 hereof.
“Merger
Documents”
shall
have the meaning assigned to it in Section 2.6 hereof.
“Parent”
shall
mean Warner Nutraceutical, Inc., a Delaware corporation.
“Parent
Balance Sheet Date”
shall
have the meaning assigned to it in Section 3.14 hereof.
“Parent
Class A Preferred Stock”
shall
mean the designated Class A preferred stock, par value [$.001] per share, of
Parent.
“Parent
Common Stock”
shall
mean the common stock, par value [$.001] per share, of Parent.
“Parent
Employee Benefit Plans”
shall
have the meaning assigned to it in Section 3.16 hereof.
“Parent
Financial Statements”
shall
have the meaning assigned to it in Section 3.8 hereof.
“Parent
Preferred Stock”
shall
mean the preferred stock, par value [$.001] per share, of Parent.
“Parent
SEC Documents”
shall
have the meaning assigned to it in Section 3.7 hereof.
“Permitted
Liens”
shall
mean (a) Liens for taxes and assessments or governmental charges or levies
not
at the time due or in respect of which the validity thereof shall currently
be
contested in good faith by appropriate proceedings; (b) Liens in respect of
pledges or deposits under workmen’s compensation laws or similar legislation,
carriers’, warehousemen’s, mechanics’, laborers’ and materialmens’ and similar
Liens, if the obligations secured by such Liens are not then delinquent or
are
being contested in good faith by appropriate proceedings; and (c) Liens
incidental to the conduct of the business of the Company that were not incurred
in connection with the borrowing of money or the obtaining of advances or
credits and which do not in the aggregate materially detract from the value
of
its property or materially impair the use made thereof by the Company in its
business.
30
“Person”
shall
include all natural persons, corporations, business trusts, associations,
limited liability companies, partnerships, joint ventures and other entities
and
governments and agencies and political subdivisions.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended.
“Stockholders”
shall
mean all of the stockholders of the Company.
“Subsidiary”
shall
mean Xxxxxx Xxxxxxx Industrial Group Co. Ltd., a corporation of the Republic
of
China, and the Company’s wholly-owned subsidiary.
“Surviving
Corporation”
shall
have the meaning assigned to it in Section 1.1 hereof.
“Tax”
or
“Taxes”
shall
mean (a) any and all taxes, assessments, customs, duties, levies, fees, tariffs,
imposts, deficiencies and other governmental charges of any kind whatsoever
(including, but not limited to, taxes on or with respect to net or gross income,
franchise, profits, gross receipts, capital, sales, use, ad valorem, value
added, transfer, real property transfer, transfer gains, transfer taxes,
inventory, capital stock, license, payroll, employment, social security,
unemployment, severance, occupation, real or personal property, estimated taxes,
rent, excise, occupancy, recordation, bulk transfer, intangibles, alternative
minimum, doing business, withholding and stamp), together with any interest
thereon, penalties, fines, damages costs, fees, additions to tax or additional
amounts with respect thereto, imposed by the United States (federal, state
or
local) or other applicable jurisdiction; (b) any liability for the payment
of
any amounts described in clause (a) as a result of being a member of an
affiliated, consolidated, combined, unitary or similar group or as a result
of
transferor or successor liability, including, without limitation, by reason
of
Regulation section 1.1502-6; and (c) any liability for the payments of any
amounts as a result of being a party to any Tax Sharing Agreement or as a result
of any express or implied obligation to indemnify any other Person with respect
to the payment of any amounts of the type described in clause (a) or
(b).
“Tax
Return”
shall
include all returns and reports (including elections, declarations, disclosures,
schedules, estimates and information returns (including Form 1099 and
partnership returns filed on Form 1065) required to be supplied to a Tax
authority relating to Taxes.
11. Closing.
The
closing of the Merger (the “Closing”)
shall
occur concurrently with the Effective Time (the “Closing
Date”).
The
Closing shall occur at the offices of Xxxxxx & Xxxxxx, LLP, 000 Xxxxx 0
Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000. At the Closing, Parent shall present
for
delivery to each Stockholder the certificate representing the Parent Class
A
Preferred Stock and Parent Common Stock to be issued pursuant to Section
1.5(a)(ii)
hereof
to them pursuant to Sections
1.6 and 4
hereof.
Such presentment for delivery shall be against delivery to Parent and
Acquisition Corp. of the certificates, opinions, agreements and other
instruments referred to in Section
7.1 hereof,
and the certificates representing all of the Common Stock issued and outstanding
immediately prior to the Effective Time. Parent will deliver at such Closing
to
the Company the officers’ certificate and opinion referred to in Section
7.2
hereof.
All of the other documents and certificates and agreements referenced in
Section
7
will
also be executed as described therein. At the Effective Time, all actions to
be
taken at the Closing shall be deemed to be taken simultaneously.
31
12. Termination
Prior to Closing.
12.1 Termination
of Agreement.
This
Agreement may be terminated at any time prior to the Closing:
(a) By
the
mutual written consent of the Company, Acquisition Corp. and
Parent;
(b) By
the
Company, if Parent or Acquisition Corp. (i) fails to perform in any material
respect any of its agreements contained herein required to be performed by
it on
or prior to the Closing Date, (ii) materially breaches any of its
representations, warranties or covenants contained herein, which failure or
breach is not cured within thirty (30) days after the Company has notified
Parent and Acquisition Corp. of its intent to terminate this Agreement pursuant
to this paragraph (b);
(c) By
Parent
and Acquisition Corp., if the Company (i) fails to perform in any material
respect any of its agreements contained herein required to be performed by
it on
or prior to the Closing Date, (ii) materially breach any of its representations,
warranties or covenants contained herein, which failure or breach is not cured
within thirty (30) days after Parent or Acquisition Corp. has notified the
Company of its intent to terminate this Agreement pursuant to this paragraph
(c);
(d) By
either
the Company, on the one hand, or Parent and Acquisition Corp., on the other
hand, if there shall be any order, writ, injunction or decree of any court
or
governmental or regulatory agency binding on Parent, Acquisition Corp. or the
Company, which prohibits or materially restrains any of them from consummating
the transactions contemplated hereby, provided
that the
parties hereto shall have used their best efforts to have any such order, writ,
injunction or decree lifted and the same shall not have been lifted within
ninety (90) days after entry, by any such court or governmental or regulatory
agency; or
12.2 Termination
of Obligations.
Termination of this Agreement pursuant to this Section 12 shall terminate all
obligations of the parties hereunder, except for the obligations under
Sections
6.1, 13.3 and 13.11;
provided,
however,
that
termination pursuant to paragraphs (b) or (c) of Section 12.1 shall not relieve
the defaulting or breaching party or parties from any liability to the other
parties hereto.
13 13. Miscellaneous.
13.1 Notices.
Any
notice, request or other communication hereunder shall be given in writing
and
shall be served either personally by overnight delivery or delivered by mail,
certified return receipt and addressed to the following addresses:
32
|
If
to Parent
|
|
|
or
Acquisition Corp.:
|
Agronix,
Inc.
|
|
#0000
- 000 Xxxx Xxxxxxxx Xxxxxx
|
|
|
Xxxxxxxxx,
X.X., Xxxxxx X0X 0X0
|
|
|
Attention:
Xxxxx Xxxx, President
|
|
|
With
a copy to:
|
Frascona,
Joiner, Xxxxxxx and Xxxxxxxxxx, P.C.
|
|
00
Xxxxx Xxx.
|
|
|
Xxxxx
Xxxx Xxxxx
|
|
|
Xxxxxxx,
XX 00000
|
|
|
Fax:
(000) 000-0000
|
|
| Attention: Xxxx Xxxxxx, Esq. | |
|
If
to Company:
|
|
|
c/o
American Union Securities
|
|
|
000
Xxxx Xxxxxx
|
|
|
|
Warner
Nutraceutical International, Inc.
|
|
|
00xx
Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
Attention:
Xx. Xxxxxxx Xxxx
|
|
|
With
a copy to:
|
Xxxxxx
& Jaclin, LLP
|
|
000
Xxxxx 0 Xxxxx, Xxxxx 000
|
|
|
Xxxxxxxxx,
XX 00000
|
|
|
Fax:
(000) 000-0000
|
|
|
Attention:
Xxxxxxx X. Xxxxxx, Esq.
|
|
Notices
shall be deemed received at the earlier of actual receipt or three (3) business
days following mailing. Counsel for each party (or any authorized
representative) shall have authority to accept delivery of any notice on behalf
of such party.
13.2 Entire
Agreement.
This
Agreement, including the schedules and exhibits attached hereto and other
documents referred to herein, contains the entire understanding of the parties
hereto with respect to the subject matter hereof. This Agreement supersedes
all
prior agreements and undertakings between the parties with respect to such
subject matter.
13.3 Expenses.
In
addition to the provisions in Section 12.3 hereof, each party shall bear and
pay
all of the legal, accounting and other expenses incurred by it in connection
with the transactions contemplated by this Agreement.
Expenses
of Parent prior to the effective time shall be satisfied by Parent immediately
prior to the effective time and Parent shall not be liable for such expenses
after the effective date.
13.4 Time.
Time is
of the essence in the performance of the parties’ respective obligations herein
contained.
13.5 Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
33
13.6 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns and heirs; provided,
however,
that
neither party shall directly or indirectly transfer or assign any of its rights
hereunder in whole or in part without the written consent of the others, which
may be withheld in its sole discretion, and any such transfer or assignment
without said consent shall be void.
13.7 No
Third Parties Benefited.
This
Agreement is made and entered into for the sole protection and benefit of the
parties hereto, their successors, assigns and heirs, and no other Person shall
have any right or action under this Agreement.
13.8 Counterparts.
This
Agreement may be executed in one or more counterparts, with the same effect
as
if all parties had signed the same document. Each such counterpart shall be
an
original, but all such counterparts together shall constitute a single
agreement.
13.9 Recitals,
Schedules and Exhibits.
The
Recitals, Schedules and Exhibits to this Agreement are incorporated herein
and,
by this reference, made a part hereof as if fully set forth herein.
13.10 Section
Headings and Gender.
The
Section headings used herein are inserted for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement. All
personal pronouns used in this Agreement shall include the other genders,
whether used in the masculine, feminine or neuter gender, and the singular
shall
include the plural, and vice versa, whenever and as often as may be
appropriate.
13.11 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Florida.
This
Agreement and the transactions contemplated hereby shall be subject to the
exclusive jurisdiction of the courts of Palm Beach County, Florida. The parties
to this Agreement agree that any breach of any term or condition of this
Agreement or the transactions contemplated hereby shall be deemed to be a breach
occurring in the State of Florida by virtue of a failure to perform an act
required to be performed in the State of Florida. The parties to this Agreement
irrevocably and expressly agree to submit to the jurisdiction of the courts
of
the State of Florida for the purpose of resolving any disputes among the parties
relating to this Agreement or the transactions contemplated hereby. The parties
irrevocably waive, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement and the transactions
contemplated hereby, or any judgment entered by any court in prospect hereof
brought in Palm Beach County, Florida, and further irrevocably waive any claim
that any suit, action or proceeding brought in Palm Beach County, Florida has
been brought in an inconvenient forum. With respect to any action before the
above courts, the parties hereto agree to service of process by certified or
registered United States mail, postage prepaid, addressed to the party in
question.
[Remainder
of Page Intentionally Left Blank]
[Signature
Page to Follow]
34
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement to be binding
and effective as of the day and year first above written.
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PARENT:
AGRONIX,
INC.
By: /s/Xxxxx
Xxxxx
Xxxxx
Xxxxx, CEO
|
|
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ACQUISITION
CORP.:
AGRONIX
ACQUISITION CORP.
By: /s/Xxxxx
Xxxxx
Xxxxx Xxxxx, CEO |
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THE
COMPANY:
WARNER
NUTRACEUTICAL INTERNATIONAL, INC.
By: /s/Xx.
Xxxxxxx Xxxx
Name:
Xx. Xxxxxxx Xxxx
Title:
President
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35
