EXHIBIT 10.13
FINAL
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "AGREEMENT") is made as of February
10, 2005, by and among SYNOVA HEALTHCARE GROUP, INC., a Nevada corporation
(f/k/a Advanced Global Industries Corporation) (the "COMPANY"), SYNOVA
HEALTHCARE, INC., a Delaware corporation ("SYNOVA"), G.M. CAPITAL PARTNERS,
LTD., a B.V.I. company ("GM"), and OCEANA PARTNERS LLC ("Oceana" and, together
with GM, each, individually, an "INDEMNITOR," and collectively, the
"INDEMNITORS").
BACKGROUND
A. The Company and Synova are parties to an Agreement and Plan of
Merger (the "MERGER AGREEMENT") dated as of January 13, 2005, as amended,
pursuant to which Synova will merge (the "MERGER") with Synova AGBL Merger Sub,
Inc., a wholly owned subsidiary of the Company, with Synova being the surviving
corporation. The Indemnitors are significant stockholders of the Company and
will derive a significant benefit from the consummation of the Merger.
B. Immediately following the consummation of the Merger, the
Company will issue and sell equity securities in an amount not to exceed
$3,500,000, pursuant to a Securities Purchase Agreement among the Company and
the purchasers party thereto, and in substantially the form attached hereto as
Exhibit A (the "SECURITIES PURCHASE AGREEMENT").
C. The execution and delivery of this Agreement by the Indemnitors
are conditions to Synova's obligation to consummate the Merger.
NOW, THEREFORE, intending to be legally bound, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS. All defined terms used in this Agreement
that are not otherwise defined in this Agreement shall have the respective
meanings assigned to them in the Merger Agreement.
2. INDEMNIFICATION. As an inducement to Synova's
consummation of the Merger, the Indemnitors hereby agree to, jointly and
severally, indemnify, defend and hold harmless the Company, Synova and their
respective directors, officers, stockholders and affiliates (collectively, the
"INDEMNITEES") from and against any and all demands, proceedings, judgments,
obligations, settlements, charges, claims, losses of any kind, liabilities,
damages, actions, causes of action, deficiencies, costs and expenses including
but not limited to, costs of investigation, court costs, actual interests costs,
penalties and reasonable attorneys fees (collectively, "LOSSES") that the
Indemnitees may sustain, suffer or incur and that arise out of, are caused by,
relate to, or result or occur from or in connection with (i) any breach by any
of the AGBL Parties of any representation, warranty or covenant made by the AGBL
Parties in the Merger Agreement or (ii) any breach by the Company of any
representation, warranty or covenant contained in the Securities Purchase
Agreement (except to the extent such breach relates solely to representations,
warranties or covenants of Synova).
3. SECURITY; LIMITATIONS. As security for the
indemnification obligations of the Indemnitors hereunder, each Indemnitor does
hereby grant to the Indemnitees a security interest in, and does hereby assign,
pledge, hypothecate, deliver and set over to the Indemnitees, their successors
and assigns, 500,000 shares of Company common stock (350,000 shares in the name
of GM and 150,000 shares in the name of Oceana), together with any additions,
exchanges, replacements and substitutions therefor, dividends and distributions
with respect thereto, and the proceeds thereof (collectively, the "SHARES"). The
Indemnitees are hereby authorized to file financing statements naming the
Indemnitors as debtors (without Indemnitors' signatures) in accordance with the
Uniform Commercial Code as adopted in the State of Delaware. The Indemnitors
hereby authorize the Indemnitees to file all financing statements and amendments
to financing statements describing the Shares in any filing office as the
Indemnitees, in their sole discretion, may determine. Upon Indemnitors' failure
to perform their indemnification obligations hereunder, Indemitees shall have,
in addition to all rights given at law or in equity, the rights granted to a
secured party under the Uniform Commercial Code as adopted in the State of
Delaware. Concurrently with the execution of this Agreement, the Shares shall be
delivered to the Escrow Agent, to be held in escrow pursuant to that certain
Escrow Agreement between the parties hereto and Blank Rome LLP, such Escrow
Agreement to be in substantially the form attached hereto as Exhibit B. For
purposes of this Section, each share of Company Common Stock shall be deemed to
have a value equal to the Closing Price (as defined below) of such Company
common stock on the date the indemnification claim is paid. Notwithstanding
anything contained herein to the contrary, (i) the liability of the Indemnitors
hereunder shall not apply to any claims for indemnification that are not made by
the Indemnitees on or prior to the eighteen-month anniversary of the Closing
Date (as defined in the Securities Purchase Agreement) (the "ESCROW TERMINATION
DATE") and (ii) the indemnification obligations of the Indemnitors hereunder
shall be limited to the Shares. All Shares not forfeited, assigned and
transferred hereunder prior to the Escrow Termination Date will be promptly
returned to the Indemnitors; provided, however, that the Escrow Agent may
withhold any Shares it deems necessary to secure any indemnification claims made
hereunder prior to the Escrow Termination Date, but which, as of such date, have
not been resolved, and no such Shares withheld by the Escrow Agent pursuant to
such provision will be returned to the Indemnitors until such indemnification
claims are resolved and then only to the extent such Shares are not required to
be forfeited hereunder. For purposes of this Agreement, "CLOSING PRICE" means,
on any particular date (a) the last reported closing bid price per share of AGBL
Common Stock on such date on the applicable Trading Market (as defined in the
Securities Purchase Agreement), (b) if there is no such price on such date, then
the closing bid price on the applicable Trading Market on the date nearest
preceding such date, (c) if the AGBL Common Stock is not then listed or quoted
on a Trading Market and if prices for the AGBL Common Stock are then reported in
the "pink sheets" published by the Pink Sheets LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of the AGBL Common Stock so reported, or (d) if the shares of
AGBL Common Stock are not then publicly traded the fair market value of a share
of AGBL Common Stock as determined by a qualified independent appraiser selected
in good faith by the Company's board of directors.
4. NOTICES. If the Indemnitees intend to seek
indemnification under this Agreement, they shall promptly notify the Indemnitors
in writing of such claim; provided, however, that the failure to give such
notice shall not affect the rights of the Indemnitees hereunder unless given
after the Escrow Termination Date.
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5. MISCELLANEOUS.
5.1 This Agreement (together with the Merger
Agreement and the other Transaction Documents (as defined in the Securities
Purchase Agreement)) contains the entire agreement between the parties with
respect to the subject matter hereof, is not intended to confer upon any third
party any rights or remedies, and shall not be assignable by any party hereto
without the prior written consent of the other party.
5.2 This Agreement shall inure to the benefit of and
be binding upon the parties hereto, and their respective successors and
permitted assigns.
5.3 This Agreement shall be governed by the laws of
the State of Delaware applicable to contracts executed and to be performed
therein.
5.4 No failure of any party hereto to exercise,
delay in exercising, or single or partial exercise of any right, power or remedy
hereunder shall preclude any other or further exercise of the same or any other
right, power or remedy by any such party.
5.5 Paragraphs and headings as used in this
Agreement have been inserted for convenience of reference only and shall neither
constitute a part of this Agreement nor affect its meaning, construction or
effect.
5.6 If any portion of this Agreement is construed to
be invalid, illegal or unenforceable as against public policy or otherwise, the
remainder of this Agreement shall not be affected thereby, and shall remain in
full force and effect.
5.7 This Agreement may be executed in any number of
counterparts, and by any party on separate counterparts, each of which as so
executed and delivered shall be an original, and all of which together shall
constitute one and the same document. It shall not be necessary in making proof
of this Agreement as to any party hereto to produce or account for more than one
such counterpart executed by such party.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Indemnification
Agreement as of the date first above written.
SYNOVA HEALTHCARE GROUP, INC.
By: /s/ Xxxxxx Xxxxxxxxxx-Xxxxx
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Name: Xxxxxx Xxxxxxxxxx-Xxxxx
Title: President
SYNOVA HEALTHCARE, INC.
By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx,
Chief Executive Officer
G.M. CAPITAL PARTNERS, LTD.
By: /s/ X. X. Xxxxxx
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Name: X. X. Xxxxxx
Title: Managing Director
OCEANA PARTNERS LLC
By: /s/ Xxxxxxxxxx X. Xxxxxx
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Name: Xxxxxxxxxx X. Xxxxxx
Title: Senior Managing Director
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EXHIBIT A
SECURITIES PURCHASE AGREEMENT
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EXHIBIT B
ESCROW AGREEMENT
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