AGREEMENT AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER (the “
Agreement ”)
is entered into as of June 5, 2008, by and among
Neuro-Hitech, Inc., a
Delaware corporation (“
Buyer ”),
GKI Acquisition Sub, Inc., a Delaware corporation (“
Buyer Sub ”),
a wholly-owned subsidiary of Buyer, GKI Acquisition Corporation, a
Delaware corporation (“
GKI ”)
and Timothy J. Ryan, Matthew Colpoys and Phillip J. Young, the
stockholders of GKI (the “
Stockholders ”).
RECITALS
WHEREAS,
David Ambrose owns all of the outstanding capital stock of MCR
American Pharmaceuticals, Inc., a Florida corporation
(“
MCR ”),
and AMBI Pharmaceuticals, Inc., a Florida corporation
(“
AMBI ”
and together with MCR, the “
Companies ”);
WHEREAS,
GKI and David Ambrose (“
Ambrose ”)
previously entered into a Stock Purchase Agreement, dated June 5,
2007 (the “
Original Agreement ”),
between GKI and Ambrose, pursuant to which GKI would acquire the
stock of the Companies;
WHEREAS,
GKI was formed expressly for the purpose of acquiring the
Companies and has engaged in no business since its formation
other than negotiating the acquisition of the
Companies;
WHEREAS,
Buyer desires to acquire the Companies and is negotiating the
amendment of the Original Agreement to enable the Buyer to
purchase the Companies (the “
Companies’ Acquisition ”);
WHEREAS,
in order to effect the Companies’ Acquisition by Buyer,
prior to the closing of the Companies’ Acquisition,
Buyer Sub will merge (the “
Merger ”)
with and into GKI and following the Merger, GKI shall be the
surviving corporation in the Merger; and
WHEREAS,
the parties desire to make certain representations, warranties
and agreements in connection with the Merger and to prescribe
certain conditions to the Merger.
NOW,
THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set
forth in this Agreement, the parties agree as
follows:
1.1
The Merger .
At
the Effective Time (as defined below), and subject to and upon the
terms and conditions of this Agreement and the applicable
provisions of the Delaware
General Corporation Law (“
Delaware Law ”)
,
Buyer Sub shall be merged with and into GKI
,
the separate corporate existence of Buyer Sub shall cease,
and GKI
shall
continue as the surviving corporation. GKI
as
the surviving corporation after the Merger is hereinafter sometimes
referred to as the “ Surviving
Corporation ”
and will be governed by the laws of the State of
Delaware.
1.2
Effective Time; Closing .
Subject to the provisions of this Agreement, the parties hereto
shall cause the Merger to be consummated by filing a Certificate of
Merger (“
Certificate of Merger ”)
with the Secretary of State of Delaware in accordance with the
relevant provisions of Delaware Law (the time of such filing with
the Secretary of State of Delaware or such later time as may be
agreed in writing by GKI and Buyer and specified in Certificate of
Merger, the “
Effective Time ”)
as soon as practicable on or after the date hereof.
1.3
Charter Documents .
1.3.1
Certificates of Incorporation and Formation .
At the Effective Time, the certificate of incorporation of GKI, as
in effect immediately prior to the Effective Time,
shall
be the certificate of incorporation of the Surviving
Corporation .
1.3.2
Bylaws .
At the Effective Time, the bylaws of GKI, as in effect immediately
prior to the Effective Time, shall be the bylaws of the Surviving
Corporation.
1.4
Board of Directors and Officers .
The directors and corporate officers of Buyer Sub immediately prior
to the Effective Time, shall be the directors and corporate
officers of the Surviving Corporation.
1.5
Conversion of Capital Stock .
At the Effective Time, by virtue of the Merger, and without any
action on the part of Buyer, Buyer Sub or GKI:
1.5.1 The
GKI capital stock validly issued and outstanding prior to the
Effective Time shall be changed and converted into the number of
shares of Buyer’s common stock (“
Buyer Common Stock ”)
set forth on
Exhibit A .
(The total number of shares of Buyer Common Stock issued pursuant
to this Section 1.5.1 shall
be referred to herein as the “
Merger Consideration ”).
1.5.2 At
the Effective Time, any shares of GKI capital stock held in the
treasury of GKI immediately prior to the Effective Time shall, by
virtue of the Merger, be canceled and retired and cease to exist as
of the Effective Time and no consideration shall be paid with
respect thereto.
1.5.3 At
the Effective Time, each share of Buyer Sub capital stock
outstanding immediately prior to the Effective Time will be changed
and converted into an identical outstanding share of the Surviving
Corporation.
1.6
Exchange of Certificates .
1.6.1 Concurrent
with the execution of this Agreement, the Stockholders will
surrender stock certificate(s) representing shares of GKI capital
stock to Buyer. Until so surrendered, such certificates will
represent solely the right to receive the Merger
Consideration.
1.6.2 At
the Effective Time, the stock transfer books of GKI will be closed
and there will not be any further registration of transfers of any
shares of GKI’s capital stock. If, at or after the Effective
Time, certificates are presented to the Surviving Corporation for
transfer, they will be canceled and exchanged for Merger
Consideration.
1.6.3 In
the event GKI capital stock shall have been lost, stolen or
destroyed, the Buyer shall issue in exchange for such lost, stolen
or destroyed GKI capital stock, upon the making of an affidavit of
that fact by the holder thereof, the amount of Merger Consideration
set forth opposite such Stockholder’s name on
Exhibit A .
1.7
Further Assurances .
GKI agrees that if, at any time before or after the Effective Time,
Buyer considers or is advised that any further deeds, assignments
or assurances are reasonably necessary or desirable to vest,
perfect or confirm in Buyer title to any property or rights of GKI,
Buyer and its proper officers and directors may execute and deliver
all such proper deeds, assignments and assurances and do all other
things necessary or desirable to vest, perfect or confirm title to
such property or rights in Buyer and otherwise to carry out the
purpose of this Agreement, in the name of GKI or
otherwise.
1.8
Securities Law Issues.
1.8.1 Based
in part on the representations of the Stockholders made in Section
2.11, the Buyer Common Stock to be issued in the Merger will be
issued pursuant to an exemption from registration under Section
4(2) of the Securities Act of 1933, as amended (the “
Securities Act ”)
and/or Rule 506 under Regulation D promulgated under the Securities
Act and applicable state securities laws.
1.8.2 The
shares of Buyer Common Stock will not have been registered and will
be deemed to be “restricted securities” under federal
securities laws and may not be resold without registration under or
exemption from the Securities Act. Each certificate evidencing
shares of Buyer Common Stock will bear the following
legend:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION WITHOUT EXEMPTION UNDER THE SECURITIES
ACT OR AN OPINION OF LEGAL COUNSEL REASONABLY ACCEPTABLE TO
NEURO-HITECH, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
2.
REPRESENTATIONS AND WARRANTIES OF
GKI AND THE STOCKHOLDERS
Except
as set forth on the GKI Disclosure Letter (the “
GKI Disclosure Schedule ”)
delivered to Buyer and Buyer Sub herewith, GKI and the Stockholders
hereby represent and warrant to Buyer and Buyer Sub as set forth in
this Section 2.
2.1
Organization and Good Standing .
GKI is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, has the
corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. Other than as set forth
in Section 2.1 of the GKI Disclosure Schedule, GKI does not own or
lease any real property and has no employees.
2.2
Power, Authorization and Validity
.
2.2.1
Power and Capacity .
GKI and the Stockholders have the right, power, legal capacity and
authority to enter into and perform their obligations under this
Agreement, and all agreements to which GKI or the Stockholders are
or will be a party that are required to be executed pursuant to
this Agreement (the “
GKI Ancillary Agreements ”).
The execution, delivery and performance of this Agreement and the
GKI Ancillary Agreements have been duly and validly approved and
authorized by GKI’s board of directors and the Stockholders
as required by applicable law and GKI’s certificate of
incorporation and bylaws.
2.2.2
No Filings .
No filing, authorization or approval, governmental or otherwise, is
necessary to enable GKI to enter into, and to perform its
obligations under, this Agreement and the GKI Ancillary Agreements,
except for (a) the filing of the Certificate of Merger and (b) such
filings as may be required to comply with federal and state
securities laws.
2.2.3
Binding Obligation .
This Agreement and the GKI Ancillary Agreements are, or when
executed by GKI will be, valid and binding obligations of GKI and
the Stockholders enforceable in accordance with their respective
terms; provided, however, that the Certificate of Merger will not
be effective until filed with the Delaware Secretary of
State.
2.3
Capitalization .
2.3.1 The
authorized capital stock of GKI consists of 1,000 shares of common
stock, $1.00 par value per share, of which 1,000 shares are issued
and outstanding and no shares of preferred stock are issued or
outstanding. The Stockholders hold all of the issued and
outstanding GKI capital stock, and each of the Stockholders holds
good and marketable title to his GKI shares, free and clear of all
liens, agreements, voting trusts, proxies and other arrangements or
restrictions of any kind whatsoever (other
than normal restrictions on transfer under applicable federal and
state securities laws) .
All issued and outstanding shares of GKI capital stock have been
duly authorized and were validly issued, are fully paid and
nonassessable, are not subject to any right of rescission, are not
subject to preemptive rights by statute, the certificate of
incorporation or bylaws of GKI, or any agreement or document to
which GKI is a party or by which it is bound and have been offered,
issued, sold and delivered by GKI in compliance with all
registration or qualification requirements (or applicable
exemptions therefrom) of applicable federal and state securities
laws.
2.3.2 There
are no existing (i) options, warrants, calls, preemptive
rights, subscriptions or other rights, convertible securities,
agreements or commitments of any character obligating GKI to issue,
transfer or sell any shares of capital stock or other equity
interest in, GKI or securities convertible into or exchangeable for
such shares or equity interests, (ii) contractual obligations
of GKI to repurchase, redeem or otherwise acquire any capital stock
of GKI or (iii) voting trusts or similar agreements to which
GKI or a Stockholder is a party with respect to the voting of the
capital stock of GKI.
2.4
Securityholder Lists and Agreements
.
2.4.1 Set
forth on Section 2.4.1 of
the GKI Disclosure Schedule is a true, complete and correct list of
all of the Stockholders, showing the shares of GKI capital stock
held by each such Stockholder as of the date of this
Agreement.
2.4.2 There
are no agreements, written or oral, between GKI and any holder of
its securities or among any holders of GKI’s securities
relating to the acquisition (including rights of first refusal,
anti-dilution or pre-emptive rights), disposition, registration
under the Securities Act or voting of the capital stock of
GKI .
2.5
Subsidiaries .
GKI does not have any subsidiaries or any interest, direct or
indirect, in any corporation, partnership, joint venture or other
business entity.
2.6
No Violation of Existing Agreements
.
Neither the execution and delivery of this Agreement nor any GKI
Ancillary Agreement, nor the consummation of the transactions
contemplated hereby, will conflict with, or (with or without notice
or lapse of time, or both) result in a termination, breach,
impairment or violation of (a) any provision of the
certificate of incorporation or bylaws of GKI, as currently in
effect, (b) in any material respect, any material instrument
or contract to which GKI is a party or by which GKI is bound, or
(c) any federal, state, local or foreign judgment, writ,
decree, order, statute, rule or regulation applicable to GKI or its
assets or properties. The
consummation of the Merger and the transfer to Buyer of all
material rights, licenses, franchises, leases and agreements of GKI
will not require the consent of any third party.
2.7
Litigation .
There is no action, proceeding, claim or investigation pending
against GKI. There is no reasonable basis for any security holder
or former security holder of GKI, or any other person, firm,
corporation, or entity, to assert a claim against GKI.
2.8
Contracts and Commitments .
Set forth on Section 2.8 of the GKI Disclosure Schedule is a list
of all of the agreements, oral or written, to which GKI is a party.
A copy of each agreement or document listed on S
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