AGREEMENT AND PLAN OF MERGER

Exhibit 2.5

AGREEMENT AND PLAN OF MERGER

Between

MAXCURE PHARMACEUTICAL, INC.,

and

APRO BIO PHARMACEUTICAL CORPORATION

Dated as of March 18, 2008

TABLE OF CONTENTS

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of  March 18, 2008 (the "Agreement"), between MaxCure Pharmaceutical, Inc., a Colorado corporation (the “Company”) and Apro Bio Pharmaceutical Corporation, a Utah corporation ("Apro").

W I T N E S S E T H:

WHEREAS, the Boards of Directors of Apro and the Company have each determined that it is in the best interests of their respective shareholders for the Company to acquire Apro through a reverse merger upon the terms and subject to the conditions set forth herein;

WHEREAS, in furtherance of such acquisition, the Boards of Directors of Apro and the Company have each approved the merger (the "Merger") of Apro with and into the Company upon the terms and subject to the conditions set forth herein;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Apro and the Company hereby agree as follows:

ARTICLE I                     DEFINITIONS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

"Action" means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

"Affiliate" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

"Agreement" or "this Agreement" means this Agreement and Plan of Merger, dated as of March 18, 2008, between Apro and the Company (including the Exhibits hereto and the Disclosure Schedule) and all amendments hereto made in accordance with the provisions of Section 11.09.

"Business" means the business of developing, marketing and supporting medical technology licenses and all other business which is conducted by Apro and the Subsidiaries or by MaxCure and the Subsidiaries, as applicable.

"Colorado Law" means the Colorado Business Corporations Code.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company" has the meaning specified in the recitals to this Agreement.

"Company Common Stock" means the common stock of the Company.

"Control" (including the terms "controlled by" and "under common control with"), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.

"Disclosure Schedule" means the Disclosure Schedule attached hereto, dated as of the date hereof, and forming a part of this Agreement.

"Effective Time" has the meaning specified in Section 2.02.

"Encumbrance" means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance, adverse claim, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.

"Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of non-compliance or violation, notice of liability or potential liability, investigations, proceedings, consent orders or consent agreements relating in any way to any Environmental Law, any Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the Environment, including, without limitation, (a) by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any Governmental Authority or any Person for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

"Environmental Laws" means any Law, now or hereafter in effect and as amended, and any judicial, administrative or otherwise binding interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, health, safety or Hazardous Materials, including, without limitation, the CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. SS6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. SS 6901 et seq.; the Clean Water Act,33 U.S.C. SS 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. SS 2601 et seq.; the Clean Air Act, 42 U.S.C. SS 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. SS 300f et seq.; the Atomic Energy Act, 42 U.S.C. SS 2011 et seq; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. SS 136 et seq.; and the Federal Food, Drug and Cosmetic Act, 21 U.S.C. SS 301 et seq.

"Environmental Permits" means all permits, approvals, identification numbers, licenses and other authorizations required under any applicable Environmental Law.

"Governmental Authority" means any United States federal, state or local or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

"Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

"Hazardous Materials" means (a) petroleum and petroleum products, radioactive materials, asbestos-containing materials, urea formaldehyde foam insulation, transformers or other equipment that contain polychlorinated biphenyls, and radon gas, and (b) any other chemicals, materials or substances defined or regulated as "hazardous" or "toxic" or words of similar import, under any applicable Environmental Law.

"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

"Indebtedness" means, without duplication with respect to any Person, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables created in the ordinary course of business), (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (d) all obligations of such Person as lessee under leases that have been or should be, in accordance with U.S. GAAP, recorded as capital leases, (e) all obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar facilities, (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any capital stock of such Person or any warrants, rights or options to acquire such capital stock, valued, in the case of redeemable preferred stock, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (g) all Indebtedness of others referred to in clauses (a) through (e) above guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (i) to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered), and (h) all Indebtedness referred to in clauses (a) through (e) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Encumbrance on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness.

"Intellectual Property" means all of the following:  (i) U.S. and foreign registered and unregistered trademarks, trade dress, service marks, logos, trade names, corporate names and all registrations and applications to register the same (the "Trademarks"); (ii) issued U.S. and foreign patents and pending patent applications, patent disclosures, and any and all divisions, continuations, continuations-in-part, reissues, reexaminations, and extension thereof, any counterparts claiming priority therefrom, utility models, patents of importation/confirmation, certificates of invention and like statutory rights (the "Patents"); (iii) U.S. and foreign registered and unregistered copyrights (including, but not limited to, those in computer software and databases) rights of publicity and all registrations and applications to register the same (the "Copyrights"); (iv) U.S. and foreign rights in any semiconductor chip product works or "mask works" as such term is defined in 17 U.S.C. 901, et seq. and any registrations or applications therefor ("Mask Works"); (v) all categories of trade secrets as defined in the Uniform Trade Secrets Act including, but not limited to, business information; (vi) all License and agreements pursuant to which the Company has acquired rights in or to any Trademarks, Patents, Copyrights or Mask Works, or Licenses and agreements pursuant to which the Company has Licensed or transferred the right to use any of the foregoing ("Licenses").

"IRS" means the Internal Revenue Service of the United States.

"Law" means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law.

"Liabilities" means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including, without limitation, those arising under any Law (including, without limitation, any Environmental Law), Action or Governmental Order and those arising under any contract, agreement, arrangement, commitment or undertaking.

"Material Adverse Effect" means any circumstance, change in, or effect on the Business of a Person that, individually or in the aggregate with any other circumstances, changes in, or effects on, such Business is, or could reasonably be expected to be, materially adverse to the business, operations, assets or Liabilities, results of operations or the financial condition of such Person, taken as a whole; provided, however, that a Material Adverse Effect will not exist as a result of circumstances that are demonstrated to have resulted directly from the public announcement of the Merger or the performance by a Person of its obligations hereunder.

"Material Contracts" has the meaning specified in Section 3.13(a).

"Merger Consideration" means one fully paid and non-assessable share of Company Common Stock for each outstanding share of Apro Common Stock at the Effective Time.

"Permits" has the meaning specified in Section 3.14(a).

"Permitted Encumbrances" means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced:  (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or for taxes, assessments and governmental charges or levies that are being contested in good faith; (b) Encumbrances imposed by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's liens and other similar liens arising in the ordinary course of business securing obligations that (i) are not overdue for a period of more than 30 days and (ii) are not in excess of $10,000 in the aggregate at any time; (c) pledges or deposits to secure obligations under workers' compensation laws or similar legislation or to secure public or statutory obligations; and (d) minor survey exceptions, reciprocal easement agreements and other customary encumbrances on and imperfections to title to real property and other Encumbrances that (i) do not render title to the property encumbered thereby uninsurable and (ii) do not, individually or in the aggregate, materially adversely affect the value or use of such property for its current purposes; and (e) Encumbrances related to Funded Debt and purchase money mortgages and conditional sales contracts entered into in the ordinary course of business.

"Person" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

"Receivables" means any and all accounts receivable, notes and other amounts receivable by the Company or any Subsidiary from third parties, including, without limitation, customers, arising before the Effective Time, whether or not in the ordinary course, together with all unpaid financing charges accrued thereon.

"Regulations" means the Treasury Regulations (including Temporary Regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal tax statutes.

"Release" means disposing, discharging, injecting, spilling, leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing and the like into or upon any land or water or air or otherwise entering into the Environment.

"Subsidiaries" means all corporations, partnerships, joint ventures, associations and other entities controlled by a Person directly or indirectly through one or more intermediaries.

"Tax" or "Taxes" means any and all taxes, levies, duties, tariffs, imposts, and other similar fees or charges of any kind, foreign or domestic, (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto), imposed by any government or taxing authority, including, without limitation:  taxes on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation, or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration and documentation fees; and customs duties and tariffs.

"U.S. GAAP" means United States generally accepted accounting principles and practices as in effect from time to time and applied consistently throughout the periods involved.

"Utah Law" means the Utah Revised Business Corporation Act.

ARTICLE II                   THE MERGER

SECTION 2.01.  The Merger.  At the Effective Time (as defined in Section 2.02) and subject to and upon the terms and conditions of this Agreement and Colorado Law and Utah Law, Apro will be merged with and into the Company, the separate corporate existence of Apro shall cease, and the Company shall continue as the surviving corporation.  The Company as the surviving corporation after the Merger is hereinafter sometimes referred to as the "Surviving Corporation". The Surviving Corporation shall be domiciled in Colorado.

SECTION 2.02.  Effective Time.  As promptly as practicable after the satisfaction or waiver of the conditions set forth in Article VIII, the parties hereto shall cause the Merger to be consummated by filing articles of merger (the "Articles of Merger") with the Secretaries of State of the States of  Colorado and Utah, in such form as required by, and executed in accordance with the relevant provisions of, Colorado and Utah Law (the time of such filing or such later mutually agreed upon time as may be set forth in the Articles of Merger being the "Effective Time").

SECTION 2.03.  Effect of the Merger.  At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of Colorado and Utah Law.  Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Apro shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Apro shall become the debts, liabilities and duties of the Surviving Corporation.

SECTION 2.04.  Articles of Incorporation; Bylaws.  (a)  Articles of Incorporation.  Unless otherwise determined by the Company prior to the Effective Time, at the Effective Time the Articles of Incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the Articles of Incorporation of the Surviving Corporation until thereafter amended as provided by law and such Articles of Incorporation; provided, however, that Article I of the Articles of Incorporation of the Surviving Corporation shall be amended to read as follows:  "The name of the corporation is Apro Bio Pharmaceutical Corporation."

(b)              Bylaws.  The Bylaws of the Company, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation until thereafter amended as provided by Colorado Law, the Articles of Incorporation of the Surviving Corporation and such Bylaws.

SECTION 2.05.  Directors and Officers.  The directors of the Surviving Corporation shall be David Olson, Al Kramer, Dr. Paul Dragul and Vicki D.E. Barone.  In addition, prior to the Effective Time, the parties shall select for appointment to the Board a qualified financial expert deemed to meet the requirements of an audit chairperson for SEC reporting purposes and two qualified Directors with significant prior biotech or pharmaceutical company experience.  In the event that any of the three non-designated directors have not been selected by the Effective Time, the existing Board of Directors will use its best efforts to determine and place those three directors within 30 days of the Effective Time.

 

.

SECTION 2.06.  Effect on Capital Stock.  At the Effective Time, by virtue of the Merger and without any action on the part of Apro and the Company or the holders of any of the following securities:

(a)              Conversion of Apro Common Stock.  Each share of Apro Common Stock issued and outstanding immediately prior to the Effective Time (other than any such shares constituting Dissenting Shares (as defined and to the extent provided in Section 2.07(a)) will be cancelled and extinguished and be converted automatically into the right to receive the Merger Consideration in the manner provided in Section 2.08, upon surrender of the certificate representing such share of Apro Common Stock.

(b)              Cancellation of Apro Notes and Warrants Held by the Company.  At the Effective Time, $750,000 in principal of promissory notes issued by Apro (the “Apro Notes”) to the Company and all accrued and unpaid interest thereon shall be cancelled.  In addition, warrants to purchase 600,000 shares of Apro Common Stock issued to the Company (the “Apro Warrants Issued to the Company”) shall be cancelled at the effective time.

(c)              Conversion of Outstanding Warrants.  All warrants to purchase Apro Common Stock other than the Apro Warrants Issued to the Company outstanding prior to the Effective Time shall be converted to warrants to purchase the common stock of the Surviving Corporation upon the same terms and conditions.

(d)              Adjustments to Merger Consideration.  The applicable Merger Consideration per share of Company Common Stock, shall be adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock or Company Preferred Stock), reorganization, recapitalization or other like change with respect to Company Common Stock or Company Preferred Stock occurring after the date hereof and prior to the Effective Time.

 

           (e)       Fractional Shares.  No fraction of a share of Company Common Stock will be issued and any fractional interests will be rounded to the nearest whole share.

SECTION 2.07.  Dissenting Shares.  (a) Notwithstanding any provision of this Agreement to the contrary, any shares of capital stock of Apro held by a holder who has exercised dissenters' rights for such shares in accordance with Utah Law and who, as of the Effective Time, has not effectively withdrawn or lost such dissenters' rights ("Dissenting Shares"), shall not be converted into or represent a right to receive Merger Consideration pursuant to Section 2.06, but the holder thereof shall only be entitled to such rights as are granted by Utah Law.

(b)              Notwithstanding the provisions of subsection (a), if any holder of Dissenting Shares shall effectively withdraw or lose (through failure to perfect or otherwise) his dissenters' rights, then, as of the later of Effective Time or the occurrence of such event, such holder's shares shall automatically be converted into and represent only the right to receive the applicable Merger Consideration, without interest thereon, upon surrender of the certificate or certificates representing such Dissenting Shares.

(c)              The Company shall give Apro (i) prompt notice of any written demands received by the Company to require the Company to purchase shares of capital stock of the Company, withdrawals of such demands, and any other instruments served pursuant to Colorado Law and received by the Company and (ii) the opportunity to participate in all negotiations and proceedings with respect to such demands.  The Company shall not, except with the prior written consent of Apro, voluntarily make any payment with respect to any such demands or offer to settle or settle any such demands.

SECTION 2.08.  Exchange of Certificates.  (a)  Exchange Agent.  The Company Company Stock shall be  supplied, to or for the account of a bank, trust company or registered transfer agent designated by Apro (the "Exchange Agent"), in trust for the benefit of the holders of Apro Common Stock (other than Dissenting Shares), for exchange in accordance with this Section 2.08, through the Exchange Agent, certificates evidencing the shares of Company Common Stock issuable pursuant to Section 2.06, in each case in exchange for outstanding shares of Apro Common Stock.

(b)              Company to Provide Company Common Stock.  At or prior to the Effective Time, Company shall make available to the Exchange Agent for exchange and payment in accordance with this Article II, through the procedures set forth in the Exchange Agent Agreement, the shares of Company Common Stock issuable pursuant to Section 2.06 and in accordance with the Exchange Agent Agreement.

(c)              Exchange Procedures.  The Surviving Corporation shall, in accordance with the Exchange Agent Agreement, cause to be delivered or mailed to each holder of record of a certificate or certificates (the "Certificates") which immediately prior to the Effective Time represented outstanding shares of Apro Common Stock or whose shares were converted into the right to receive Merger Consideration pursuant to Section 2.06, (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates or shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as the Company may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the certificates representing shares of Company Common Stock payable to such holder pursuant to Section 2.06. Upon surrender of a Certificate for cancellation to the Exchange Agent or to such other agent or agents as may be appointed by Company, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing the number of whole shares of Company Common Stock which such holder has the right to receive pursuant to Section 2.06, and the Certificate so surrendered shall forthwith be cancelled.  Until so surrendered, each outstanding Certificate that, prior to the Effective Time, represented shares of Apro Common Stock will be deemed from and after the Effective Time, for all corporate purposes, other than the payment of dividends, to evidence the ownership of the number of full shares of Company Common Stock, if any, into which such shares of Apro Common Stock shall have been so converted in accordance with Section 2.06(e).

(d)              Distributions With Respect to Unexchanged Shares.  No dividends or other distributions declared or made after the Effective Time with respect to Company Common Stock with a record date after the Effective Time will be paid to the holder of any unsurrendered Certificate with respect to the shares of Apro Common Stock represented thereby until the holder of record of such Certificate shall surrender such Certificate.  Subject to applicable law, following surrender of any such Certificate, there shall be paid to the record holder of the certificates representing whole shares of Company Common Stock issued in exchange therefor, without interest, (i) at the time of such surrender, the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Company Common Stock and (ii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to such surrender and a payment date subsequent to such surrender payable with respect to such shares of Company Common Stock.

 

(e)              Transfers of Ownership.  If any certificate for shares of Company Common Stock is to be issued in a name other than that in which the certificate surrendered in exchange therefor is registered, it will be a condition of the issuance thereof that the certificate so surrendered will be properly endorsed and otherwise in proper form for transfer and that the person requesting such exchange will have paid to Company or any agent designated by it any transfer or other taxes required by reason of the issuance of a certificate for shares of Company Common Stock in any name other than that of  the registered holder of the certificate surrendered, or established to the satisfaction of Company or any agent designated by it that such tax has been paid or is not payable.

(f)              No Liability.  Notwithstanding anything to the contrary in this Section 2.08, none of the Exchange Agent, the Surviving Corporation or any party hereto shall be liable to a holder of Apro Common Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

SECTION 2.09.  No Further Ownership Rights in Apro Common Stock. The Merger Consideration paid in accordance with the terms of this Article II exchanged for shares of Apro Common Stock shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares of Apro Common Stock in accordance with the terms hereof, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Apro Common Stock which were outstanding immediately prior to the Effective Time.  If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Article II.

SECTION 2.10.  Lost, Stolen or Destroyed Certificates.  In the event any certificates evidencing shares of Apro Common Stock shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed certificates, upon the making of an affidavit of that fact by the holder thereof, such shares of Company Common Stock, cash for fractional shares, if any, as may be required pursuant to Section 2.06(i) and the cash payable in the manner specified in Section 2.06 hereof; provided, however, that Company may, in its discretion and as a condition precedent to the issuance and payment thereof, require the owner of such lost, stolen or destroyed certificates to deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Company or the Exchange Agent with respect to the certificates alleged to have been lost, stolen or destroyed.

SECTION 2.11.  Taking of Necessary Action; Further Action.  If, at any time after the Effective Time, any such further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company and Apro, the officers and directors of the Company and Apro are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action.

ARTICLE III                  REPRESENTATIONS AND WARRANTIES OF APRO

As an inducement to Company to enter into this Agreement, Apro hereby represents and warrants to Company as follows:

SECTION 3.01.  Organization, Authority and Qualification of Apro.  Apro is a corporation duly organized, validly existing and in good standing under the laws of the State of Utah and has all necessary corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as it has been and is currently conducted.  Except as set forth in Section 3.01 of the Disclosure Schedule, Apro is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the failure to be licensed or qualified would have a Material Adverse Effect.  Apro has not taken any action that in any respect conflicts with, constitutes a default under or results in a violation of any provision of its Articles of Incorporation or Bylaws.  True and correct copies of the Articles of Incorporation and Bylaws of Apro, each as in effect on the date hereof, have been made available or delivered by Apro to the Company.  This Agreement has been duly executed and delivered by Apro, and (assuming due authorization, execution and delivery by the Company and Apro) this Agreement constitutes a legal, valid and binding obligation of Apro enforceable against Apro in accordance with its terms except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.

SECTION 3.02.  Capital Stock of Apro; Ownership of the Shares.  (a)  The authorized capital stock of Apro consists of 10,000,000 shares of Preferred Stock, par value $0.001, and 90,000,000 shares of Apro Common Stock, par value $0.001.  As of the date hereof, (i) there are no issued and outstanding shares of Apro Preferred Stock, (ii) 11,215,833 shares of Apro Common Stock are issued and outstanding, all of which are validly issued, fully paid and non-assessable, and (iii) 2,302,500 shares of Apro Common Stock are reserved for issuance pursuant to warrants to purchase shares of Apro Common Stock which are currently outstanding, including the Apro Warrants Issued to the Company.  None of the issued and outstanding shares of Apro Common Stock was issued in violation of any preemptive rights.  Except as set forth above or as disclosed in Section 3.02(a)(i) of the Disclosure Schedule, there are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of Apro to which Apro is a party or obligating Apro to issue or sell any shares of capital stock of, or any other interest in, Apro.  There are no outstanding contractual obligations of Apro to repurchase, redeem or otherwise acquire any shares of Apro Common Stock or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.  Except as disclosed in Section 3.02(a)(ii) of the Disclosure Schedule, there are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of Apro Common Stock.

(b)              Except as set forth in Section 3.02(b) of the Disclosure Schedule, the stock register of Apro accurately records:  (i) the name and last known address of each owner of record of shares of capital stock of Apro and (ii) the certificate number of each certificate evidencing shares of capital stock issued by Apro, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

SECTION 3.03.  Subsidiaries.  (a)  Section 3.03(a) of the Disclosure Schedule sets forth a true and complete list of all Subsidiaries, listing for each Subsidiary its name, type of entity, the jurisdiction and date of its incorporation or organization, its authorized capital stock, partnership capital or equivalent, the number and type of its issued and outstanding shares of capital stock, partnership interests or similar ownership interests and the current ownership of such shares, partnership interests or similar ownership interests by Apro and its Subsidiaries.

(b)              There are no other corporations, partnerships, joint ventures, associations or other similar entities in which Apro owns, of record or beneficially, any direct or indirect equity or other interest or any right (contingent or otherwise) to acquire the same.

 

(c)              Except as set forth in Section 3.03(c) of the Disclosure Schedule, each Subsidiary that is a corporation:  (i) is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, (ii) has all necessary corporate power and authority to own, operate or lease the properties and assets owned, operated or leased by such Subsidiary and to carry on its business as it has been and is currently conducted by such Subsidiary and (iii) is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except for, in each of clauses (i), (ii) and (iii), such failures which, when taken together with all other such failures, would not have a Material Adverse Effect.  Each Subsidiary that is not a corporation:  (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) has all necessary power and authority to own, operate or lease the material properties and material assets owned, operated or leased by such Subsidiary and to carry on its business as it has been and is currently conducted by such Subsidiary and (iii) is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except for, in each of clauses (i), (ii) and (iii), such failures which, when taken together with all other such failures, would not have a Material Adverse Effect.

(d)              Other than directors' qualifying shares in foreign jurisdictions, all the outstanding shares of capital stock of each Subsidiary that is a corporation are validly issued, fully paid, non-assessable and free of preemptive rights and are owned by Apro, whether directly or indirectly, free and clear of all Encumbrances.

(e)              There are no options, warrants, convertible securities, or other rights, agreements, arrangements or commitments of any character to which Apro or any Subsidiary is a party obligating Apro or any Subsidiary to issue or sell any shares of capital stock of, or any other interest in, any Subsidiary.

(f)              No Subsidiary has taken any action that in any respect conflicts with, constitutes a default under or results in a violation of any provision of its charter or by-laws (or similar organizational documents) except for such actions which, when taken together with all other such actions, would not have a Material Adverse Effect.  True and complete copies of the charter and by-laws (or similar organizational documents), in each case as in effect on the date hereof, of each Subsidiary have been made available or delivered by Apro to the Company.

(g)              There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any shares of capital stock of or any other interests in any Subsidiary.

(h)              The stock register of each Subsidiary that is a corporation accurately records:  (i) the record owners of capital stock of such Subsidiary and (ii) the certificate number of each certificate evidencing shares of capital stock issued by such Subsidiary, the number of shares evidenced each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

SECTION 3.04.  Corporate Books and Records.  Complete and accurate copies of all the minute books and of the stock register of Apro and each Subsidiary have been provided or made available by Apro to the Company.

SECTION 3.05.  No Conflict.  Subject to approval of the Merger and this Agreement by Apro’s Board of Directors and Apro's shareholders, assuming that all consents, approvals, authorizations and other actions described in Section 3.06 have been obtained and all filings and notifications listed in Section 3.06 of the Disclosure Schedule have been made, the execution, delivery and performance of this Agreement by Apro do not and will not (a) violate, conflict with or result in the breach of any provision of the charter or by-laws (or similar organizational documents) of Apro or any Subsidiary, (b) conflict with or violate any Law or Governmental Order applicable to Apro or any Subsidiary (other than conflicts and violations which could not reasonably be expected to have a Material Adverse Effect or as would occur solely as a result of the identity or the legal or regulatory status of Apro or any of its Affiliates), or (c) except as set forth in Section 3.05(c) of the Disclosure Schedule, conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance (other than a Permitted Encumbrance) on any of the assets or properties of Apro or any Subsidiary pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which Apro or any Subsidiary is a party or by which any of such assets or properties is bound or affected.

SECTION 3.06.  Governmental Consents and Approvals.  The execution, delivery and performance of this Agreement by Apro do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to any Governmental Authority, except (a) as described in Section 3.06 of the Disclosure Schedule, (b) the notification requirements of the HSR Act, (c) the filing of the Agreement of Merger and (d) such other consents, the absence of which could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07.  Brokers.  No broker, finder or investment banker is entitled to any brokerage, finders or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Apro.

SECTION 3.08.  Financial Information/Books and Records.  (a) True and complete copies of (i) the audited consolidated balance sheet of Apro for March 31, 2007 and the related audited consolidated statements of income, retained earnings, stockholders' equity and cash flows of Apro, together with all related notes and schedules thereto, accompanied by the reports thereon of Apro's Accountants (collectively referred to herein as the "Apro Financial Statements") and (ii) the unaudited consolidated balance sheet of Apro as of December 31, 2007 (the "Apro Interim Balance Sheet"), and the related consolidated statements of income, retained earnings, stockholders' equity and cash flows of Apro, together with all related notes and schedules thereto (collectively referred to herein as the "Apro Interim Financial Statement") have been made available or delivered by Apro to the Company.  The Apro Financial Statements and the Apro Interim Financial Statement (i) were prepared in accordance with the books of account and other financial records of Apro, (ii) present fairly the consolidated financial condition and results of operations of Apro and the Subsidiaries as of the dates thereof or for the periods covered thereby, (iii) have been prepared in accordance with U.S. GAAP applied on a basis consistent with the past practices of Apro and (iv) include all material adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the consolidated financial condition of Apro and the Subsidiaries and the results of the operations of Apro and the Subsidiaries as of the dates thereof or for the periods covered thereby, except that the unaudited Apro Interim Financial Statement was and is subject to normal and recurring year-end adjustments which were or were not expected to be material in amount.

(b)              The books of account and other financial records of Apro and the Subsidiaries:  (i) reflect all items of income and expense and all assets and Liabilities required to be reflected therein in accordance with U.S. GAAP applied on a basis consistent with the past practices of Apro and the Subsidiaries, respectively, (ii) are in all material respects complete and correct, and do not contain or reflect any material inaccuracies or discrepancies and (iii) have been maintained in accordance with good business and accounting practices.

SECTION 3.09.  No Undisclosed Liabilities.  There are no Liabilities of Apro or any Subsidiary required by U.S. GAAP to be recognized or disclosed on a consolidated balance sheet of Apro and the Subsidiaries in the notes thereto, other than Liabilities (i) reflected or reserved against on the Interim Balance Sheet, (ii) disclosed in Section 3.09 of the Disclosure Schedule or (iii) incurred since the date of the Interim Balance Sheet in the ordinary course of business, consistent with the past practice, of Apro and the Subsidiaries and which do not and could not reasonably be expected to have a Material Adverse Effect.  Reserves are reflected on the Interim Balance Sheet against all material Liabilities of Apro and the Subsidiaries in amounts that have been established on a basis consistent with the past practices of Apro and the Subsidiaries and in accordance with U.S. GAAP.

SECTION 3.10.  Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions.  Since the date of the Interim Balance Sheet, except as disclosed in Section 3.10 of the Disclosure Schedule, the business of Apro and the Subsidiaries has been conducted in the ordinary course and consistent with past practice.  As amplification and not limitation of the foregoing, except as disclosed in Section 3.10 of the Disclosure Schedule, since the date of the Interim Balance Sheet, neither Apro nor any Subsidiary has:

(i)  permitted or allowed any of the material assets or material properties (whether tangible or intangible) of Apro or any Subsidiary to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Effective Time;

(ii)  except in the ordinary course of business consistent with past practice, discharged or otherwise obtained the release of any Encumbrance or paid or otherwise discharged any Liability, other than current liabilities reflected on the Interim Balance Sheet and current liabilities incurred in the ordinary course of business consistent with past practice since the date of the Interim Balance Sheet;

(iii) except in the ordinary course of business consistent with past practice, made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of any Person;

(iv) redeemed any of the capital stock or declared, made or paid any dividends or distributions (whether in cash, securities or other property) to the holders of capital stock of Apro or any Subsidiary or otherwise, other than dividends, distributions and redemptions declared, made or paid by any Subsidiary solely to Apro;

(v)  made any material changes in the customary methods of operations of Apro or any Subsidiary, including, without limitation, practices and policies relating to manufacturing, purchasing, inventories, marketing, selling and pricing;

(vi) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person or acquired a substantial portion of the assets or business of any Person or any division or line of business thereof, or otherwise acquired any assets material to Apro and the Subsidiaries taken as a whole, other than in the ordinary course of business consistent with past practice;

(vii) made any capital expenditure or commitment for any capital expenditure in excess of $10,000 individually or $3,000,000 in the aggregate;

(viii) sold, transferred, leased, subleased, licensed or otherwise disposed of any material properties or material assets, real, personal or mixed material to Apro and the Subsidiaries taken as a whole but excluding the sale of inventories in the ordinary course of business consistent with past practice;

(ix) except for exercises and conversions of securities outstanding on the date of this Agreement and customary stock option grants (covering no greater than 300,000 shares of Apro Common Stock) for new hires and existing employees consistent with past practice, issued or sold any capital stock, notes, bonds or other securities, or any option, warrant or other right to acquire the same, of, or any other interest in, Apro or any Subsidiary;

(x)  entered into any material agreement, arrangement or transaction with any of its directors, officers, employees or shareholders (or with any relative, beneficiary, spouse or Affiliate of such Person);

(xi) (A) other than as contemplated by this Agreement, granted any material increase, or announced any material increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by Apro or any Subsidiary to any of its employees, including, without limitation, any increase or change pursuant to any Plan or (B) established or increased or promised to increase any benefits under any Plan, in either case except as required by Law or any existing agreement and/or involving ordinary increases consistent with the past practices of Apro or such Subsidiary;

(xii) materially written down or materially written up (or failed to write down or write up in accordance with U.S. GAAP consistent with past practice) the value of any inventories or Receivables or revalued any assets of Apro or any Subsidiary other than in the ordinary course of business consistent with past practice and in accordance with U.S. GAAP;

(xiii) amended, terminated, cancelled or compromised any material claims of Apro or any Subsidiary or waived any other rights of substantial value to Apro or any Subsidiary;

(xiv) made any change in any method of accounting or accounting practice or policy used by Apro or any Subsidiary, other than such changes required by U.S. GAAP;

(xv) allowed any Permit or Environmental Permit that was issued or relates to Apro or any Subsidiary or otherwise relates to any asset to lapse or terminate or failed to renew any such Permit or Environmental Permit or any insurance policy that is scheduled to terminate or expire within 45 calendar days of the Effective Time, except for such lapses, terminations or failures which could not reasonably be expected to have a Material Adverse Effect;

(xvi) materially amended, modified or consented to the termination of, any Material Contract or Apro's or any Subsidiary's rights thereunder;

(xvii) amended or restated the Articles of Incorporation or the Bylaws (or other organizational documents) of Apro or any Subsidiary;

(xviii) terminated, discontinued, closed or disposed of any plant, facility or other business operation, or laid off any employees (other than layoffs of less than ten (10) employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future;

(xix) made any express or deemed election (other than an election pursuant to Section 341(f) of the Code) or settled or compromised any liability, with respect to Taxes of Apro or any Subsidiary;

(xx) suffered any casualty loss or damage with respect to any asset which individually has a replacement cost of more than $100,000, whether or not such loss or damage shall have been covered by insurance;

(xxi) received notice of any claim of ownership by a third party of the Owned Intellectual Property or of infringement by Apro of any third party's Intellectual Property rights;

(xxii) materially changed the pricing or royalties set or charged by Apro to its customers or licensees or been the subject of a material change in pricing or royalties set or charged with regard to the Licensed Intellectual Property; or

(xxiii) agreed, whether in writing or otherwise, to take any of the actions specified in this Section 3.10 except as is expressly contemplated by this Agreement.

SECTION 3.11.  Litigation.  Except as set forth in Section 3.11 of the Disclosure Schedule (which, with respect to each Action disclosed therein, sets forth:  the parties, nature of the proceeding, date and method commenced, amount of damages or other relief sought and, if applicable, paid or granted), there are no Actions by or against Apro or any Subsidiary (or by or against Apro or any Affiliate thereof and relating to Apro or any Subsidiary), or affecting any of the Assets, pending before any Governmental Authority (or, to the knowledge of Apro, threatened to be brought by or before any Governmental Authority) that could reasonably be expected to have a Material Adverse Effect.  None of the matters disclosed in Section 3.11 of the Disclosure Schedule has or has had a Material Adverse Effect or could reasonably be expected to materially adversely affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby.  Except as set forth in Section 3.11 of the Disclosure Schedule, none of Apro, the Subsidiaries nor any of the Assets nor Apro is subject to any Governmental Order (nor, to the knowledge of Apro are there any such Governmental Orders threatened to be imposed by any Governmental Authority) which has or has had a Material Adverse Effect since the date of the Interim Balance Sheet.

SECTION 3.12.  Certain Interests.  (a) Except as disclosed in Section 3.12(a) of the Disclosure Schedule, no officer or director of Apro or any Subsidiary and no relative or spouse (or relative of such spouse) who resides with, any such officer or director:

(i)  has any material direct or indirect financial interest in any competitor, supplier or customer of Apro or any Subsidiary, provided, however, that the ownership of debt securities or the ownership of equity securities representing no more than ten percent of the outstanding voting power of any competitor, supplier or customer, shall not be deemed to be a "financial interest" so long as the Person owning such securities has no other material connection or relationship with such competitor, supplier or customer;

(ii) owns, directly or indirectly, in whole or in part, or has any other material interest in any material tangible or intangible property which Apro or any Subsidiary uses or has used in the conduct of its business or otherwise; or

(iii) has outstanding any material Indebtedness to Apro or any Subsidiary.

(b)              Except as disclosed in Section 3.12(b) of the Disclosure Schedule, neither Apro nor any Subsidiary has any material Liability or any other obligation of any nature whatsoever to any officer, director or shareholder of Apro or any Subsidiary or to any relative or spouse (or relative of such spouse) who resides with, or is a dependent of, any such officer, director or shareholder.

                            SECTION 3.13.  Material Contracts.  (a)  Section 3.13(a) of the Disclosure Schedule lists each of the following material contracts and material agreements (including, without limitation, oral and informal arrangements) of Apro and the Subsidiaries (such contracts and agreements, together with all material contracts, agreements, leases and subleases concerning the management or operation of any Real Property (including, without limitation, material brokerage contracts) listed or otherwise disclosed in Section 3.15(a) or 3.15(b) of the Disclosure Schedule to which Apro or any Subsidiary is a party and all material agreements relating to Intellectual Property set forth in Section 3.14(a) of the Disclosure Schedule, being "Material Contracts"):

(i)  each contract or agreement for the licensing of any medical technology, either from or to Apro;

(ii) each contract and agreement for the development or sale of any medical technology or for the furnishing of services by Apro or any Subsidiary;

(iii) all material broker, distributor, dealer, manufacturer's representative, franchise, agency, sales promotion, market research, marketing consulting and advertising contracts and agreements to which Apro or any Subsidiary is a party;

(iv) all management contracts and contracts with independent contractors or consultants (or similar arrangements) to which Apro or any Subsidiary is a party and which are not cancelable without penalty or further payment and without more than 30 days' notice;

(v)  all contracts and agreements relating to Indebtedness in excess of $20,000 of Apro or any Subsidiary;

(vi) all contracts and agreements with any Governmental Authority to which Apro or any Subsidiary is a party;

(vii) all contracts and agreements to which Apro or any Subsidiary is a party that limit or purport to limit the ability of Apro or any Subsidiary to compete in any line of business or with any Person or in any geographic area or during any period of time;

(viii) all contracts and agreements between or among Apro and any Affiliate of Apro that will survive (in whole or in part) the Effective Time;

(ix) all contracts and agreements providing for benefits under any Plan;

(x)  any distribution, joint marketing or development agreement;

(xi) all contracts and agreements under which Apro has obtained or will obtain Intellectual Property that is a component of any of Apro's products or services or that is necessary to develop, test, support, modify, maintain, reproduce, distribute, license or sell Apro’s products or provide Apro's services;

(xii) all contracts and agreements that in any way substantially limit or restrict or would substantially limit and restrict Apro's or, immediately after the Effective Time, Apro’s &nb