EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "AGREEMENT") is made and
entered into as of May 3, 2000, by and between Biopool International, Inc., a
Delaware corporation ("BIOPOOL") and Xtrana, Inc. ("XTRANA"), a Delaware
corporation. The capitalized terms in this Agreement not elsewhere defined have
the meanings given them in Article X.
RECITALS
A. The Boards of Directors of Biopool and Xtrana have determined that the
merger of Xtrana with and into Biopool on the terms set forth herein (the
"MERGER"), with Biopool to be the surviving corporation, is advisable and in the
best interests of their respective corporations and stockholders and have
approved this Agreement.
B. The parties hereto desire to adopt a plan of reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"CODE").
C. The parties desire to sign this Agreement for the purpose of setting
forth certain representations, warranties and agreements in connection with the
Merger.
AGREEMENT
ARTICLE I
THE MERGER AND REORGANIZATION
1.1 CLOSING. The closing under this Agreement shall take place at the
offices of Troop Steuber Pasich Reddick & Tobey, LLP, 2029 Century Park East,
24th Floor, Los Angeles, CA 90067, within one (1) business day after the
satisfaction (or waiver by the party entitled to waive) of all conditions stated
in Sections 5 and 6, or at such other place and date as the parties may agree
upon in writing (the "CLOSING").
1.2 THE MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time and in accordance with the DGCL, Xtrana
shall be merged with and into Biopool in accordance with this Agreement (the
"MERGER") and the separate existence of Xtrana shall cease. Biopool shall be the
surviving corporation in the Merger (hereinafter sometimes referred to as the
"SURVIVING CORPORATION").
1.3 FILINGS; EFFECTIVE TIME OF THE MERGER. On the Closing Date, Biopool and
Xtrana shall cause the Merger to be consummated by executing, delivering and
filing a certificate of merger with the Secretary of State of the State of
Delaware (the "DELAWARE SECRETARY OF STATE") in accordance with Section 251 of
the DGCL. The parties shall on the Closing Date file such other documents with
the Delaware Secretary of State as may be required by the provisions of the DGCL
and as are necessary to cause the Merger to become effective. The Merger shall
become effective when the certificate of merger, the agreement of merger and
such other necessary documents are so filed with the Delaware Secretary of
State, as applicable, or at such other time thereafter as provided
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in the certificate of merger and the agreement of merger. The time at which the
Merger becomes effective is herein referred to as the "EFFECTIVE TIME."
1.5 EFFECTS OF THE MERGER. The Merger shall have the effects set forth in
the DGCL. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time, all of the properties, rights, privileges, powers and
franchises of Xtrana shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Xtrana shall become the debts, liabilities and duties
of the Surviving Corporation. At the Effective Time of the Merger:
(a) the Certificate of Incorporation of the Surviving Corporation
shall be Biopool's Amended Certificate of Incorporation, a form of which is
attached hereto as EXHIBIT "A".
(b) the Bylaws of the Surviving Corporation shall be Biopool's Bylaws,
a form of which is attached hereto as EXHIBIT "B"; (c) the Board of Directors of
the Surviving Corporation shall consist of the following 7 members at the
Effective Time, in each case until their successors shall have been elected and
qualified or until otherwise provided by law:
Michael Bick, Ph.D.
Douglas Ayer
Price Paschall
John C. Gerdes
Stephen Schultheis
John H. Wheeler
James Chamberlain
(d) the Officers of the Surviving Corporation shall be as follows:
John H. Wheeler Chief Executive Officer
John C. Gerdes Vice President, Research and Development
and such additional officers as the Board of Directors of the Surviving
Corporation shall appoint. All such officers shall serve at the pleasure of the
Board of Directors of the Surviving Corporation and may be removed from such
office by the Board at any time in its sole and absolute discretion. Nothing
contained herein is intended, however, to modify or amend any employment
agreement that may exist between the corporation and any such officer, and the
rights and remedies available to either party in the event of any material
breach of the terms of any such employment agreement by the other party shall
not be affected by this Agreement.
(e) the Merger shall, from and after the Effective Time, have all the
effects provided by applicable law.
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1.6 EFFECT OF THE MERGER ON BIOPOOL'S CAPITAL STOCK AND OPTIONS.
(a) BIOPOOL COMMON STOCK. At the Effective Time, each outstanding
share of Biopool Common Stock shall be an outstanding share of Common Stock in
the Surviving Corporation.
(b) BIOPOOL OPTIONS. At the Effective Time, each outstanding Biopool
Option shall remain in effect and without modification, except as called for by
the terms and conditions of the Biopool Stock Option Plan attached as EXHIBIT C,
and shall continue to vest according to the vesting schedule set forth in the
option grant for each Biopool Option.
(c) BIOPOOL WARRANTS. At the Effective Time, each outstanding Biopool
Warrant shall remain in effect and without modification, except as called for by
the terms and conditions of such warrant, and shall be exercisable for shares of
Common Stock of the Surviving Corporation.
1.7 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF XTRANA.
(a) AGGREGATE CONSIDERATION TO BE RECEIVED AND ESCROW. The aggregate
merger consideration (the "MERGER CONSIDERATION") issued at the Effective Time
to existing Xtrana stockholders and all other parties will be 9,369,461 fully
paid, nonassessable shares of the Surviving Corporation's Common Stock (or with
respect to Claremont, the Claremont Warrant) which number includes (in addition
to the Claremont Shares) the Escrow Shares (as defined below) and the Holdback
Shares (as defined below). Under no circumstances will the aggregate Merger
Consideration exceed 9,369,461 shares of the Surviving Corporation's Common
Stock, excluding the Xtrana Indemnification Shares, if any, and the Additional
Shares, if any. Notwithstanding anything in this Section 1.7(a) to the contrary,
the Merger Consideration shall not be reduced by any cash fee paid by Xtrana to
its financial advisers to the extent that such fee is negotiated and paid on an
arm's length basis and does not exceed the cash proceeds received by Xtrana from
the sale of its Series D Preferred Stock. From the Merger Consideration, 936,946
shares shall be deposited in escrow (the "ESCROW SHARES") for purposes of
satisfying Xtrana's indemnification obligations set forth in ARTICLE VII hereof
and an additional 936,946 shares shall be deposited in escrow (the "HOLDBACK
SHARES") to be released or cancelled pursuant to the provisions of SECTION 1.12
hereof. The Escrow Shares and the Holdback Shares shall be deposited in escrow
pursuant to an escrow agreement generally in the form attached hereto as EXHIBIT
D, including such changes as may be requested by the escrow agent (the "ESCROW
AGREEMENT"), which agreement shall treat each such deposit as a separate and
distinct escrow for purposes of this Agreement. As a result of the Merger and
without any action on the part of the holders thereof, at the Effective Time,
all shares of Xtrana Common Stock and Xtrana Preferred Stock shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of shares of Xtrana Common Stock and Xtrana Preferred
Stock shall thereafter cease to have any rights with respect to such shares of
Xtrana Common Stock and Xtrana Preferred Stock, except the right to receive,
without interest, the Merger Consideration upon the surrender of a certificate
that, immediately prior to the Effective Time, represented an outstanding share
or shares of Xtrana Common Stock or Xtrana Preferred Stock (in each such case, a
"CERTIFICATE").
(b) XTRANA PREFERRED. Each share of Xtrana Series A, Series B, Series
C and Series D Preferred Stock outstanding immediately prior to the Effective
Time (other than shares
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held by stockholders who properly exercise any dissenters' rights available
under applicable law), shall be converted into the right to receive
approximately 3.15 fully paid, nonassessable shares of Biopool Common Stock,
subject to the Escrow Agreement, and subject further to the number of shares of
Series D Preferred stock issued by Xtrana prior to the Effective Time; PROVIDED,
HOWEVER, that in no case shall such adjustment require the issuance of a number
of Merger Shares in excess of the Merger Consideration.
(c) XTRANA COMMON. Each share of Xtrana Common Stock outstanding
immediately prior to the Effective Time (other than shares held by shareholders
who properly exercise any dissenters' rights available under applicable law)
shall be converted at the Effective Time into the right to receive approximately
3.15 shares of Biopool Common Stock, subject to the Escrow Agreement, and
subject further to the number of shares of Series D Preferred stock issued by
Xtrana prior to the Effective Time; PROVIDED, HOWEVER, that in no case shall
such adjustment require the issuance of a number of Merger Shares in excess of
the Merger Consideration.. No fractional shares of Biopool Common Stock will be
issued in the Merger. Fractional share amounts of .5 or higher will be rounded
up to a full share of Biopool Common Stock, and fractional share amounts of less
than .5 will be rounded down to the next whole share.
(d) CONVERTIBLE NOTES AND WARRANTS. Prior to the Effective Time, each
outstanding Xtrana convertible note listed on SCHEDULE 2.1 (the "CONVERTIBLE
SECURITIES") shall either be repaid in full or converted to shares of Xtrana
Common Stock or Preferred Stock, according to its terms. No Merger Consideration
will be paid with respect to any unconverted Convertible Security. Xtrana has no
warrants outstanding, other than the Xtrana Warrant and the Gould Warrant.
(i) Immediately prior to the Effective Time, Xtrana will issue a
warrant to Arthur P. Gould & Co., substantially in the form attached hereto as
EXHIBIT E (the "GOULD WARRANT"), exercisable for such number of shares of Xtrana
Common Stock that would immediately prior to the Effective Time be exchangeable
for 180,000 shares (the "GOULD SHARES") of the Surviving Corporation's Common
Stock, subject to adjustment as set forth in Sections 1.1 and 2 of the Gould
Warrant. The Gould Shares are not included within the Merger Consideration
described in SECTION 1.7(A) hereof. Notwithstanding anything herein or in the
Escrow Agreement to the contrary, in the event that for any reason the Gould
Warrant becomes exercisable for a number of shares of Xtrana Common Stock
immediately prior to the Effective Time that would entitle the holder to receive
more than 180,000 shares of the Surviving Corporation's Common Stock, then the
Escrow Shares shall be permanently reduced by such additional number of shares
of the Surviving Corporation's Common Stock (the "ADDITIONAL WARRANT SHARES"),
up to a maximum of 10,000 Additional Warrant Shares, and such shares shall be
treated for all purposes as if they had been cancelled and removed from escrow
pursuant to SECTION 7.2 hereof; PROVIDED, HOWEVER, that if the number of
Additional Warrant Shares exceeds 10,000, the Merger Consideration shall be
reduced share for share by such excess. In the event that the Gould Warrant
expires without the issuance in full of the Additional Warrant Shares, the
Surviving Corporation shall use its reasonable efforts to distribute on a pro
rata basis any unissued Additional Warrant Shares to its stockholders that were
pre-Merger Xtrana stockholders.
(ii) Immediately prior to the Effective Time, the Surviving
Corporation will issue a warrant to Claremont, substantially in the form
attached hereto as EXHIBIT F (the "CLAREMONT WARRANT"), exercisable for 540,000
shares (the "CLAREMONT SHARES") of the Surviving
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Corporation's Common Stock, subject to adjustment as set forth in Section 2 of
the Claremont Warrant.
(e) TREASURY SHARES. Notwithstanding anything contained in this
SECTION 1.7 to the contrary, each share of Xtrana Stock issued and held in
Xtrana's treasury immediately prior to the Effective Time shall, by virtue of
the Merger, cease to be outstanding and shall be cancelled and retired and shall
cease to exist without payment of any consideration therefore.
1.8 DELIVERY OF CONSIDERATION.
(a) As soon as reasonably practicable after the Effective Time, the
Surviving Corporation shall mail to each holder of record of Xtrana Stock
immediately prior to the Effective Time (i) a letter of transmittal (the "LETTER
OF TRANSMITTAL") (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Surviving Corporation and shall be in such form and have
such other customary provisions as the Surviving Corporation may reasonably
specify), and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration with respect to the shares
of Xtrana Stock formerly represented thereby.
(b) Upon surrender of a Certificate for cancellation to the Surviving
Corporation or to any agent or agents as may be appointed by the Surviving
Corporation, together with a Letter of Transmittal, duly completed and executed,
and such other documents as the Surviving Corporation or any such agent may
reasonably request, the holder of such Certificate shall be entitled to receive
in exchange therefore, a certificate representing the number of Merger Shares
which such holder has the right to receive pursuant to the provisions of SECTION
1.7 (the "MERGER SHARE CERTIFICATES") and the Certificate so surrendered shall
forthwith be cancelled. Until surrendered as contemplated by this SECTION
1.8(B), each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration with respect to the
shares of Xtrana Stock formerly represented thereby.
1.9 CLOSING OF TRANSFER BOOKS. At and after the Effective Time, transfers
of the shares of Xtrana Stock outstanding immediately prior to the Effective
Time shall not be made on the stock transfer books of Xtrana.
1.10 LOST CERTIFICATES. Notwithstanding the provisions of SECTION 1.8, in
the event any Certificate representing Xtrana Stock has been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and an agreement to indemnify
the Surviving Corporation against any claim that may be made against it with
respect to such Certificate, the Surviving Corporation will issue in exchange
for such lost, stolen or destroyed Certificate the Merger Consideration into
which such Xtrana Stock would have been converted.
1.11 FEDERAL INCOME TAX CONSEQUENCES. The parties intend that, for federal
income tax purposes, the Merger shall constitute a reorganization within the
meaning of Section 368 of the Code.
1.12 XTRANA EARNOUT. The parties have agreed that the consideration to be
received by the Xtrana stockholders with respect to the Merger will be subject
to upward or downward adjustment as set forth in this SECTION 1.12, based on
Xtrana's actual Gross Revenues for the one
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year period commencing on October 1, 2000 and ending on September 30, 2001 (the
"EARNOUT PERIOD") relative to the projected Gross Revenues of $7,300,000 for
this same period (the "EARNOUT TARGET"). If Gross Revenues received by the
Surviving Corporation during the Earnout Period equal at least eighty five
percent (85%) of the Earnout Target (the "THRESHOLD Target") but less than one
hundred and fifteen percent (115%) of the Earnout Target (the "MAXIMUM TARGET"),
then the Holdback Shares shall be released promptly from escrow for distribution
to the pre-merger Xtrana stockholders on the same basis as the Merger
Consideration. In the event that Gross Revenues during the Earnout Period equal
or exceed the Maximum Target, the pre-Merger Xtrana stockholders shall receive,
in addition to the Holdback Shares, 1,030,641 shares of the Surviving
Corporation's Common Stock (the "ADDITIONAL SHARES," and together with the
Holdback Shares, the "EARNOUT SHARES"), to be distributed on the same basis as
the Merger Consideration. In the event that Gross Revenues during the Earnout
Period are less than the Threshold Target, the Earnout Period shall be extended
to include an additional 12-month period (such 24-month period, the "EXTENDED
EARNOUT PERIOD"). If Gross Revenues during the Extended Earnout Period equal at
least eighty five percent (85%) of $29,300,000 (the "EXTENDED THRESHOLD TARGET")
but less than one hundred and fifteen percent (115%) of the Extended Earnout
Target (the "EXTENDED MAXIMUM TARGET"), then the Holdback Shares shall be
released promptly from escrow for distribution to the pre-merger Xtrana
stockholders, on the same basis as the Merger Consideration. If Gross Revenues
during the Extended Earnout Period are less than the Extended Threshold Target,
then the Holdback Shares shall be permanently cancelled and removed from escrow.
In the event that Gross Revenues during the Extended Earnout Period equal or
exceed the Extended Maximum Target, the pre-Merger Xtrana stockholders shall
receive the Earnout Shares, to be distributed on the same basis as the Merger
Consideration. The number of Holdback Shares and Additional Shares shall be
equitably adjusted into a different number of shares in order to maintain the
Xtrana stockholders rights hereunder in the event of any stock splits, dividends
or reclassifications of the shares of the Surviving Corporation. Notwithstanding
anything in this Agreement to the contary, no adjustment to the number of shares
to be issued upon the exercise of the Gould Warrant or the Claremont Warrant
will be made as a result of Xtrana's performance under this Section 1.12.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF XTRANA
Except as disclosed in the Xtrana Disclosure Schedule attached as EXHIBIT
G, Xtrana represents and warrants to Biopool as set forth below:
2.1 CAPITAL STOCK.
(a) CAPITALIZATION. The authorized capital stock of Xtrana consists of
4,000,000 shares of Common Stock and 1,250,000 shares of preferred stock, par
value $0.01 per share ("XTRANA PREFERRED STOCK") of which 400,000 shares have
been designated Series A Preferred Stock, 460,000 shares have been designated
Series B Preferred Stock, which 60,000 shares have been designated Series C
Preferred Stock, and 300,000 shares have been designated Series D Preferred
Stock. As of the date hereof, (i) 1,710,000 shares of Common Stock were
outstanding, all of which were validly issued, fully paid and nonassessable and
not subject to preemptive rights; (ii) 400,000, 262,880 and 40,000 shares of
Series A, Series B and Series C shares, respectively, of Xtrana Preferred Stock
were issued and outstanding; (iii) no shares of Common Stock and no shares of
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Xtrana Preferred Stock were held in the treasury of Xtrana; (iv) no shares of
Common Stock were reserved for issuance upon the exercise of outstanding stock
options granted pursuant to any Xtrana stock option plan; and (v) there were no
securities of any subsidiary of Xtrana or any other Person outstanding which are
convertible into or exercisable or exchangeable for capital stock of Xtrana.
Except as set forth above, no shares of capital stock or other voting securities
of Xtrana have been issued, are reserved for issuance or are outstanding.
(b) OTHER SECURITIES. Except for the Xtrana Warrant and the Gould
Warrant or as otherwise disclosed in SCHEDULE 2.1 of Disclosure Schedule, there
are no existing rights, options, warrants, calls, subscriptions, convertible
securities or other securities, agreements, commitments, or obligations which
would require Xtrana to issue or sell shares of Common Stock, Preferred Stock or
any other equity securities, or securities convertible into or exchangeable or
exercisable for shares of Common Stock, Preferred Stock or any other equity or
debt securities of Xtrana, other than Xtrana's commitment to issue the Series D
Preferred Stock. Except as disclosed in SCHEDULE 2.1 of the Disclosure Schedule,
Xtrana has no commitments or obligations to purchase or redeem any shares of
Common Stock. Except for the Xtrana Warrant and the Gould Warrant, SCHEDULE 2.1
of the Disclosure Schedule contains a complete and accurate list of all
outstanding Options and warrants and the exercise price thereof.
(c) DIVIDENDS. Xtrana has not declared or paid any dividend or made
any distribution in respect of any of its capital stock, or directly or
indirectly redeemed, purchased or otherwise acquired any capital stock issued by
it, and no Person has any right to require Xtrana to redeem, purchase or
otherwise reacquire any capital stock issued by Xtrana.
(d) VALIDITY OF SHARES. All of the issued and outstanding capital
stock of Xtrana has been duly and validly authorized and issued (including,
without limitation, issued in compliance with applicable federal and state
securities laws) and is fully paid and nonassessable and free and clear of all
Liens imposed by or through Xtrana.
2.2 CORPORATE ORGANIZATION. Xtrana is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business and is in good standing in all jurisdictions in which
such qualification is required and where the failure to be so qualified would
have a Material Adverse Effect. Xtrana has all requisite power and authority to
own and operate its Property and to carry on its business as now conducted or as
presently proposed to be conducted.
2.3 AUTHORITY; ENFORCEABILITY. Xtrana has all requisite power and authority
under applicable corporate law to execute and deliver this Agreement and to
perform the transactions contemplated hereby and, upon approval of the execution
and delivery of this Agreement and consummation of the Merger by the Board of
Directors and the stockholders of Xtrana as contemplated by SECTION 4.1 (the
"XTRANA STOCKHOLDER APPROVAL"), the transactions contemplated hereby will have
been duly authorized by all requisite corporate action on the part of Xtrana and
its stockholders and will constitute a legal, valid and binding obligation of
Xtrana, enforceable against Xtrana in accordance with its terms, subject to
general limitations on the availability of equitable remedies and the effect of
bankruptcy, insolvency, reorganization and other laws of general application
affecting the enforcement of creditors' rights.
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2.4 NO VIOLATION AND NO CONSENTS REQUIRED.
(a) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby do not and will not violate or conflict
with the Xtrana Certificate of Incorporation or the bylaws of Xtrana, or, to the
best of Xtrana's knowledge, violate any Legal Requirement or Order applicable to
Xtrana. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not and will not: (i) except as disclosed in
SCHEDULE 2.4, require any Third-Party Action with respect to Xtrana; or (ii)
conflict with or constitute a default under, or result in the acceleration or
right of acceleration of any obligations, or any termination or right of
termination under any Contract where such failure to secure Third-Party Action,
conflict, default, acceleration or termination would have a Material Adverse
Effect; or (iii) result in the creation or imposition of any material Lien,
claim, charge, restriction, equity or encumbrance of any kind upon, or give any
Person any interest or right in or with respect to, any of the Properties,
assets, business or Contracts of Xtrana.
(b) There are no approvals, authorizations, consents, orders or other
actions of, or filings or registrations with, any Person that are required to be
obtained or made by Xtrana in connection with the execution of, and the
consummation of the transactions contemplated under, this Agreement, other than
the Xtrana Stockholder Approval and the filings with the Delaware Secretary of
State as set forth in SECTION 1.3, or as set forth in Schedule 2.4. Xtrana
currently has contracts with or is performing work under grants from only those
Governmental Agencies, and to the best of its knowledge its genetic and
biomedical research and product development activities are only regulated by
those Governmental Agencies, listed on Schedule 2.4 hereof.
2.5 SUBSIDIARIES, OTHER INTERESTS. Xtrana owns no equity or beneficial
interest (except as a creditor in the ordinary course of business), directly or
indirectly, in any Person.
2.6 FINANCIAL INFORMATION.
(a) FINANCIAL STATEMENTS. Xtrana has provided Biopool with its
statement of financial position, statement of operations and statement of cash
flows as of and for the years ended December 31, 1998 and December 31, 1999,
(the "XTRANA ANNUAL STATEMENTS") and with its statement of financial position
and statement of operations as of and for the monthly periods ending on January
31, 2000, February 29, 2000 and March 31, 2000 (collectively, the "XTRANA
INTERIM STATEMENT" and, together with Xtrana Annual Statements, the "XTRANA
FINANCIAL STATEMENTS"). Xtrana Financial Statements have been derived from
Xtrana's books and records maintained in the ordinary course of business, and
fairly present in all material respects the financial position of Xtrana as of
the date thereof and for the period then ended, in accordance with GAAP
consistently applied (except as may be stated therein), and with Xtrana's
internal accounting policies and, in the case of Xtrana Interim Statement,
normal year-end adjustments.
(b) ABSENCE OF CERTAIN LIABILITIES. Xtrana has no Liabilities required
to be disclosed or accrued in financial statements prepared in accordance with
GAAP, other than those: (i) accrued or disclosed in Xtrana Financial Statements;
(ii) incurred in the ordinary course of business after the date of the Xtrana
Interim Statement; (iii) for legal and accounting fees and expenses incurred by
Xtrana in connection with the transactions contemplated hereby; (iv) expressly
set forth in this Agreement (including without limitation disclosures in
Schedules hereto) or (v) which are, in the aggregate, not material to the
financial condition of Xtrana. To Xtrana's knowledge, the Liabilities of Xtrana
that are not required to be disclosed or accrued in financial statements
prepared in accordance with GAAP, and that are not disclosed in Xtrana
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Financial Statements or in this Agreement, are not likely to have, individually
or in the aggregate, a Material Adverse Effect on Xtrana.
(c) ABSENCE OF CERTAIN CHANGES. Other than as set forth in Schedule
2.6, Since the date of Xtrana Interim Statement:
(i) Xtrana has operated its business in the ordinary course;
(ii) there has been no change or changes which, individually or
in the aggregate, has or have had or is or are reasonably likely to have a
Material Adverse Effect on Xtrana;
(iii) there has not been any damage, destruction or condemnation
known to Xtrana with respect to Property having an aggregate net book value on
Xtrana Financial Statements in excess of $50,000 net of any insurance
recoveries;
(iv) there has not been any material change in the accounting
methods, practices or principles of Xtrana;
(v) Except for the shares of its Series D Preferred Stock issued
upon conversion of the Convertible Notes, Xtrana has not sold, transferred or
otherwise disposed of (or agreed or committed to sell, transfer or otherwise
dispose of) any Property other than the sale of inventory in the ordinary
course, or canceled, compromised, released or assigned any note or claim in its
favor, where the aggregate amount of such sales, transfers, dispositions,
cancellations, compromises, releases or assignments exceeds $50,000;
(vi) Xtrana has not instituted, settled or agreed to settle any
litigation, action or proceeding before any Governmental Agency;
(vii) Xtrana has not assumed, guaranteed, endorsed or otherwise
become responsible (or otherwise agreed to become responsible) for the
obligations of any other Person, except for the endorsement of negotiable
instruments in the ordinary course of business;
(viii) Xtrana has not granted (or agreed or committed to grant)
any increase in compensation or fringe benefits of its employees and consultants
other than normal salary increases consistent with prior periods; and
(ix) Xtrana has not entered into any license or other Contract
with regard to the acquisition or disposition of any material Intellectual
Property other than non-exclusive licenses granted in the ordinary course of
business consistent with past practice.
2.7 TAXES.
(a) Xtrana has filed all Tax Returns that it has been required to
file. All such Tax Returns were correct and complete in all material respects.
All Taxes owed by Xtrana (whether or not shown on any Tax Return) have been
paid. For any Taxes that have not been paid, Xtrana has established reserves on
its books that equal or exceed those required by GAAP. No claim has ever been
made by a Governmental Agency in a jurisdiction where Xtrana does not file Tax
Returns
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that it is or may be subject to taxation by that jurisdiction. There are
no Liens on any of the assets of Xtrana that arose in connection with any
failure (or alleged failure) to pay any Tax.
(b) Xtrana has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other Person, except for
amounts not due as of the Closing for which Xtrana has withheld but not yet
paid.
(c) To the best of Xtrana's knowledge, no Governmental Agency is
expected to assess any additional Taxes for any period for which Tax Returns
have been filed. There is no pending or, to the best of Xtrana's knowledge,
threatened dispute or claim of any Governmental Agency relating to any Tax
liability of Xtrana.
(d) No consent has been filed under Section 341(f) of the Code with
respect to Xtrana.
(e) There is no Contract covering any Person that, individually or
collectively, as a consequence of the Merger could give rise to the payment of
any amount that would not be deductible by Xtrana by reason of Section 280G of
the Code.
2.8 TITLE TO PROPERTIES.
(a) SCHEDULE 2.8(A) contains a true and complete listing of all real
property and material interests in real property owned by Xtrana.
(b) SCHEDULE 2.8(B) contains a true and complete listing based on the
books and records of Xtrana of all other items of personal property owned by
Xtrana with a net book value at the date of Xtrana Interim Statement in excess
of $50,000 per item.
(c) Xtrana has good and marketable title to all of its Properties, and
has good title to all its leasehold interests, in each case subject to no Lien.
With respect to the Property and assets it leases, Xtrana is in compliance with
such leases and holds valid leasehold interests free of all Liens.
2.9 ACCOUNTS RECEIVABLE. The accounts receivable of Xtrana: (a) are bona
fide and arose from valid sales in the ordinary course of business; and (b) to
Xtrana's knowledge, are not subject to any material offsets or counterclaims
(other than routine billing inquiries of customers), and do not represent
guaranteed sale, sell-or-return transactions or any other similar understanding.
No accounts receivable have been pledged as collateral to any other Person. The
carrying amount for accounts receivable in Xtrana Interim Statement reflects
adjustments in accordance with GAAP consistently applied as an allowance for
doubtful accounts receivable.
2.10 LEASES. SCHEDULE 2.10 lists or incorporates by reference to SCHEDULE
2.14 all leases, rental agreements, conditional sales contracts and other
similar Contracts with rental payments exceeding $50,000 per year ("XTRANA
DISCLOSABLE LEASES") under which Xtrana holds any real or personal Property or
leases any of the same to others. All Xtrana Disclosable Leases are, in all
material respects, valid, in good standing and enforceable by Xtrana in
accordance with their terms except: (i) as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
enforcement of creditors' rights generally; and (ii) as the
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remedy of specific performance and other forms of injunctive relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. To Xtrana's knowledge, neither Xtrana
nor any other party to any Xtrana Disclosable Lease is in material breach
thereof.
2.11 INSURANCE. SCHEDULE 2.11 lists and describes briefly all binders and
policies of liability, theft, fire and other forms of property/casualty
insurance and surety bonds, insuring Xtrana or its Properties, assets and
business as of the date hereof. All policies and binders listed in SCHEDULE 2.11
are valid and in good standing and in full force and effect and the premiums
have been paid. With the exception of those claims listed in SCHEDULE 2.11(B),
there are no outstanding claims under such policies or binders and Xtrana has
not received any notice of cancellation, general disclaimer of liability or
non-renewal of any such policy or binder.
2.12 FACILITIES, EQUIPMENT. Xtrana owns or leases all material land,
buildings, equipment or other Properties used in the operation of its business.
Xtrana has not received any notice of any material violation of any Legal
Requirement or Order by Xtrana's facilities which has not been corrected, and,
to Xtrana's knowledge, no facilities of Xtrana are in material violation of any
Legal Requirement or Order.
2.13 EMPLOYMENT AND BENEFIT MATTERS; CONTRACTORS.
(a) SCHEDULE 2.13(A) lists all of Xtrana's employment contracts,
arrangements, plans with any agent, employee, officer, director or shareholder,
and contracts or arrangements providing for bonuses, profit sharing payments,
deferred compensation, stock options, stock purchase rights, retainer,
consulting, incentive, severance pay or retirement benefits, life, medical or
other insurance or any other employee benefits or any other payments, "fringe
benefits" or perquisites which are not terminable at will without liability to
Xtrana.
(b) Xtrana has not entered into any union contracts, collective
bargaining agreements or similar agreements with employee organizations or
groups, nor, to Xtrana's knowledge, has Xtrana ever participated in or
contributed to any single employer defined benefit plan or multi-employer plan
within the meaning of ERISA Section 3(37), nor is Xtrana currently engaged in
any labor negotiations, excepting minor grievances, nor is Xtrana the subject of
any union organization effort. There is no labor dispute, strike, or work
stoppage pending against Xtrana business. Xtrana has no ERISA Affiliates.
(c) True and correct copies of each plan listed in Schedule 2.13(c)
that is subject to ERISA (an "XTRANA ERISA PLAN") and related trust agreements,
insurance contracts, summary descriptions, and Xtrana Option Plan have been
delivered or made available to Biopool by Xtrana. To Xtrana's knowledge, nothing
has occurred prior to or since the issuance of such letters to cause the loss of
qualification under the Code of any of such plans.
(d) To Xtrana's knowledge, none of the Xtrana ERISA Plans has
participated in, engaged in or been a party to any prohibited transaction as
defined in ERISA or the Code, and there are no material claims, pending (with
service or other notice) or overtly threatened, involving any plan listed in
Schedule 2.13(d). To Xtrana's knowledge, there have been no violations of any
reporting or disclosure requirements with respect to any Xtrana ERISA Plan that
would have a Material Adverse Effect on Xtrana.
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(e) Xtrana has no material liability for any excise tax imposed by
Sections 4971, 4972, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980 or
4980B of the Code.
(f) Other than as disclosed in SCHEDULE 2.13(C), Xtrana does not
maintain any plans providing benefits within the meaning of Section 3(1) of
ERISA (other than group health plan continuation coverage under 601 of ERISA and
4980B(f) of the Code) to former employees or retirees.
2.14 CONTRACTS. SCHEDULE 2.14 lists all Contracts that affect Xtrana,
its business, Properties, assets, operations or financial condition, other than
Contracts entered into in the ordinary course of Xtrana's business and no one of
which contemplates performance by Xtrana during a period of more than one year
or involves commitments for sale or purchase in excess of $50,000 and except for
Contracts fully performed or terminable at will without liability to Xtrana. To
Xtrana's knowledge, each Contract disclosable on SCHEDULE 2.14 ("XTRANA
DISCLOSABLE CONTRACT") is, in all material respects, valid and enforceable by
Xtrana in accordance with its terms, except (i) as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting the enforcement of creditors' rights generally, and (ii) as the remedy
of specific performance and other forms of injunctive relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. To Xtrana's knowledge, neither Xtrana nor
any other party to any Xtrana Disclosable Contract, is in breach of any Xtrana
Disclosable Contract, except for such breaches as, taken in the aggregate, would
not have a Material Adverse Effect on Xtrana.
2.15 OFFICERS AND DIRECTORS; BANK ACCOUNTS. SCHEDULE 2.15 is a true and
complete list of:
(a) the names and addresses of Xtrana's officers and directors;
(b) the name of each bank or other financial institution in which
Xtrana has an account, deposit or safe deposit box and the names of all Persons
authorized to draw thereon or to have access thereto; and
(c) the name of each bank or other financial institution in which
Xtrana has a line of credit or other loan facility.
2.16 CORPORATE DOCUMENTS. Xtrana has furnished or made available to
Biopool or its representatives true, correct and complete copies of: (a) the
Xtrana Certificate of Incorporation and Bylaws of Xtrana in effect as of the
date hereof; (b) the minute books of Xtrana containing all records required to
be set forth of all proceedings, consents, actions and meetings of the
shareholders and board of directors of Xtrana; (c) all material Permits and
Orders with respect to Xtrana; and (d) the stock ledger of Xtrana setting forth
all issuances and transfers of any capital stock of Xtrana.
2.17 LEGAL PROCEEDINGS.
(a) Except as disclosed in SCHEDULE 2.17, to the best of Xtrana's
knowledge there is no action, suit, proceeding or investigation pending in any
court or before any arbitrator or before or by any Governmental Agency against
Xtrana or any of its Properties or business and, to the best of Xtrana's
knowledge, there is no such action, suit, proceeding or investigation
threatened.
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(b) Xtrana has never been notified in writing that it has been subject
to an audit, compliance review, investigation or like contract review by the
U.S. General Services Administration or any other Governmental Agency in
connection with any government contract (a "GOVERNMENT AUDIT"), other than
routine and recurring audits to which government contractors are generally
subject. To Xtrana's knowledge, no Government Audit is threatened and no basis
exists for a finding of noncompliance with any material provision of any
government contract or for a material refund of any amounts paid or owed to
Xtrana by any Governmental Agency pursuant to such government contract.
2.18 COMPLIANCE WITH INSTRUMENTS, ORDERS AND LEGAL REQUIREMENTS. To the
best of Xtrana's knowledge, Xtrana is not in material violation of, or in
default in any material respect with respect to, any term or provision of the
Xtrana Certificate of Incorporation or Bylaws, or any Order or any Legal
Requirement known by Xtrana to be applicable to it. No investigation by any
Governmental Agency of any alleged violation or noncompliance with any Legal
Requirement is pending, or, to the best of Xtrana's knowledge, threatened.
2.19 PERMITS. Xtrana holds all Permits material to the conduct of its
business as and where now conducted. To the best of Xtrana's knowledge, each of
such Permits is in full force and effect. No violation of any of such Permits
has occurred, and to the best of Xtrana's knowledge, no proceedings to
terminate, revoke, limit or impair any material Permit are pending or
threatened.
2.20 CUSTOMERS AND SUPPLIERS. SCHEDULE 2.20 sets forth the: (a) top ten
customers of Xtrana, based on net sales for the year ended December 31, 1999;
and (b) top five suppliers of Xtrana, based on dollar volume of purchases for
the year ended December 31, 1999.
2.21 INTELLECTUAL PROPERTY.
(a) Except for Third-Party Intellectual Property licensed to Xtrana
pursuant to an agreement listed in SCHEDULE 2.21(C)(II) and Xtrana Intellectual
Property licensed to Third Parties, as disclosed in SCHEDULE 2.21(C)(I), Xtrana
owns, solely and exclusively, and free and clear of any Third-Party Right, all
title to and rights in all Xtrana Intellectual Property that is used in the
business of Xtrana as currently conducted.
(b) SCHEDULE 2.21(B) lists all patents, patent applications,
trademarks, trade names, service marks and copyrights included in Xtrana
Intellectual Property which have been registered, issued or applied for and the
jurisdictions in which such Xtrana Intellectual Property right has been issued,
registered or applied for.
(c) SCHEDULE 2.21(C)(I) lists all licenses, sublicenses and other
agreements, written or unwritten, to which Xtrana is a party and pursuant to
which any Person is authorized to use, resell, sublicense, or market or
distribute any product currently marketed or presently planned to be marketed by
Xtrana or any component or predecessor of any such product. SCHEDULE 2.21(C)(II)
lists all Third-Party Intellectual Property which is incorporated in or is a
part of any products which Xtrana has sold, resold, licensed or sublicensed, or
which is material to the current operations of Xtrana, other than (in the case
of Third-Party Intellectual Property used internally only) readily obtainable,
standard products with wide retail distribution. Xtrana has, and at the relevant
times in the past had, all necessary rights to resell or distribute any
hardware, software or products produced by a third party which it resells or
distributes or has resold or distributed. Xtrana is not in material
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violation of any license, sublicense or agreement described in SCHEDULE
2.21(C)(I) OR (II). To the best of Xtrana's knowledge, neither Xtrana nor any of
its products or operations is in material violation of or materially infringes
any Third-Party Intellectual Property. Xtrana has not received any claim that it
has lost or will lose any rights of Xtrana under any licenses to Third-Party
Intellectual Property to which Xtrana is a party. The execution and delivery of
this Agreement by Xtrana and the consummation of the transactions contemplated
hereby will not cause Xtrana to be in violation or default under any such
license, sublicense or agreement nor entitle any other party to any such
license, sublicense or agreement to terminate or modify such license, sublicense
or agreement. Xtrana has not assigned or licensed to any third party any right,
title or interest in Xtrana Intellectual Property. Xtrana is not contractually
obligated to pay any compensation to any third party for the use of Xtrana
Intellectual Property or the Third-Party Intellectual Property.
(d) To Xtrana's knowledge, there is no material unauthorized use,
disclosure, infringement or misappropriation of any Xtrana Intellectual Property
or any Third-Party Intellectual Property licensed by or through Xtrana by any
third party, including without limitation any employee or former employee of
Xtrana. Xtrana has not entered into any agreement to indemnify any other person
against any charge of infringement of any Third-Party Intellectual Property,
other than indemnification provisions contained in purchase orders arising in
the ordinary course of business.
(e) To Xtrana's knowledge, all patents, registered trademarks,
registered service marks and registered copyrights held by Xtrana are valid and
subsisting. To Xtrana's knowledge, there is no assertion or claim (or basis
therefor) challenging the validity of any Xtrana Intellectual Property. Xtrana
has not been sued in any suit, action or proceeding, or otherwise notified of
any claim, which involves a claim of infringement of any patent, trademark,
service mark, copyright or violation of any trade secret or other proprietary
right of any third party. Neither the conduct of the business of Xtrana as
currently conducted nor the manufacture, sale, licensing or use of any of the
products of Xtrana as now manufactured, sold or licensed or used, infringes on
or conflicts with, in any way, any trademark, trademark right, trade name, trade
name right, service mark or copyright, or, to Xtrana's knowledge, any patent,
patent right, industrial model or invention, of any third party that
individually or in the aggregate has or is reasonably likely to have a Material
Adverse Effect. To Xtrana's knowledge and except as set forth on SCHEDULE
2.21(E), no third party is challenging the ownership by Xtrana, or the validity
or effectiveness of, any of Xtrana Intellectual Property. Xtrana has not brought
any action, suit or proceeding for infringement of Xtrana Intellectual Property
or breach of any license or agreement involving Xtrana Intellectual Property
against any third party. There are no pending, or to Xtrana's knowledge,
threatened interference, re-examinations, oppositions or nullities involving any
patents, patent rights or applications therefor of Xtrana. To Xtrana's
knowledge, there is no breach or violation by a third party of, or actual or
threatened, loss of rights under, any licenses to which Xtrana is a party.
(f) Xtrana has secured written assignments from all current and former
consultants and employees who contributed to the creation or development of
Xtrana Intellectual Property currently being provided or marketed to customers
or currently being used by Xtrana of the rights to such contributions that
Xtrana does not already own by operation of law, recognizing Xtrana's ownership
of all such Xtrana Intellectual Property and agreeing to hold such of it as is
not protected by patents, patent applications or copyright (the "XTRANA
CONFIDENTIAL INFORMATION") in confidence and not to use any such Confidential
Information except in connection with such consultant's or employee's work for
Xtrana.
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(g) Xtrana has taken all commercially reasonable steps to protect and
preserve the confidentiality of all Xtrana Confidential Information. All use,
disclosure or appropriation of Xtrana Confidential Information by or to a third
party has been pursuant to the terms of a written confidentiality or
nondisclosure agreement between Xtrana and such third party.
2.23 ENVIRONMENTAL MATTERS. There are no Hazardous Materials used or
present at any location used by Xtrana in the conduct of its business, except
for (i) any Hazardous Materials constituting normal office supplies and (ii)
those Hazardous Materials listed on SCHEDULE 2.23 (the "PERMITTED HAZARDOUS
MATERIALS"). To the best of Xtrana's knowledge, no location currently or
previously used by Xtrana is contaminated by any Hazardous Material, other than,
with respect to Xtrana's current facilities, the presence of the Permitted
Hazardous Materials; PROVIDED, HOWEVER, that all Permitted Hazardous Materials
are used, stored and maintained in compliance with all governmental safety
standards and usual and customary standards applied in the biotechnology
industry. There are no environmental materials or conditions, including on-site
or off-site disposal or releases of Hazardous Materials that could reasonably be
expected to have a Material Adverse Effect. To the best of Xtrana's knowledge,
no event has occurred and no activity has been or is being conducted by Xtrana
or any other Person which has resulted or could reasonably result in
contamination of any location currently or previously used by Xtrana by any
Hazardous Material, other than, with respect to Xtrana's current facilities, the
presence of the Permitted Hazardous Materials; PROVIDED, HOWEVER, that all
Permitted Hazardous Materials are used, stored and maintained in compliance with
all governmental safety standards and usual and customary standards applied in
the biotechnology industry. Xtrana has not received any written communication
from any Governmental Agency alleging that Xtrana or any premises currently or
previously occupied by Xtrana is contaminated by any Hazardous Materials or in
violation of any Environmental Requirement. To the best of Xtrana's knowledge,
no Government Agency has commenced any investigation or proceeding with respect
to the contamination of any location currently or previously used by Xtrana by
any Hazardous Material.
2.24 ILLEGAL PAYMENTS. To the best of Xtrana's knowledge, none of Xtrana or
any director, officer, employee, or agent of Xtrana has, directly or indirectly,
paid or delivered any fee, commission, or other sum of money or item of property
however characterized to any broker, finder, agent, government official, or
other person, in the United States or any other country, in any manner related
to the business or operations of Xtrana, which Xtrana or any such director,
officer, employee, or agent knows or has reason to believe to have been illegal
under any law.
2.25 BOARD OF DIRECTORS APPROVAL. The Board of Directors of Xtrana has
unanimously approved this Agreement and the Merger and unanimously recommended
this Agreement and the Merger to Xtrana's stockholders. Such approval and
recommendation have not been modified or withdrawn and are in full force and
effect on the date hereof.
2.26 REPRESENTATIONS. No representation or warranty by Xtrana in this
Agreement (including without limitation the Schedules and Exhibits attached
hereto), or in any document furnished by Xtrana at the Closing pursuant hereto
contains any untrue statement of a material fact or omits to state a fact
necessary to make the statements contained in such representation or warranty
not misleading.
2.27 BROKERS. Except with respect to its retention of Arthur P. Gould & Co.
and Claremont York Capital ("CLAREMONT"), Xtrana has not retained or otherwise
engaged or employed
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any broker, finder or any other Person, or paid or agreed to pay any fee or
commission to any agent, broker, finder or other Person, for or on account of
acting as a finder or broker in connection with this Agreement or the
transactions contemplated hereby.
2.28 PROXY STATEMENT. None of the information supplied by Xtrana or its
attorneys specifically for inclusion in the Proxy Statement (the "XTRANA PROXY
INFORMATION") shall, as of the date such information is supplied, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, and, to
the extent that any Xtrana Proxy Information becomes false or misleading due to
the passage of time, Xtrana shall timely supplement such information so as to
correct any material false or misleading statements contained therein.
2.29 KNOWLEDGE OF XTRANA. For the purposes of this Agreement, references to
"THE BEST OF XTRANA'S KNOWLEDGE" shall mean the actual knowledge of those
individuals set forth in SCHEDULE 2.29 (the "XTRANA PRINCIPALS"), or knowledge
that a person in the Principal's position would be reasonably expected to know,
after appropriate consultation with the employees, directors and stockholders of
Xtrana most likely to have knowledge of the subject matter of such
representation and warranty; provided, however, if in the course of such
consultation, a Xtrana Principal becomes aware of an omission or fact that in
his or her reasonable judgment warrants further investigation, that such Xtrana
Principal shall perform whatever further investigation he or she deems
appropriate and the information obtained in such investigation becomes actual
knowledge of such Principal.
ARTICLE III
BIOPOOL REPRESENTATIONS AND WARRANTIES
Except as disclosed in Biopool Disclosure Schedule attached as EXHIBIT F,
Biopool represents and warrants to Xtrana as set forth below:
3.1 CAPITAL STOCK.
(a) CAPITALIZATION. The authorized capital stock of Biopool consists
of 50,000,000 shares of Common Stock. As of the date hereof, (i) 8,319,951
shares of Biopool Common Stock were outstanding, all of which were validly
issued, fully paid and nonassessable and not subject to preemptive rights; (ii)
no shares of Common Stock and no shares of Preferred Stock were held in the
treasury of the Biopool; (iii) 1,088,333 shares of Common Stock were reserved
for issuance upon the exercise of outstanding stock options granted pursuant to
the Biopool Stock Option Plan; (iv) 335,000 shares of Common Stock were reserved
for issuance upon the exercise of outstanding warrants (other than the Biopool
Warrant); (v) no Biopool Subsidiary owned any shares of Biopool's capital stock;
and (vi) there were no securities of any subsidiary of Biopool or any other
Person outstanding which are convertible into or exercisable or exchangeable for
capital stock of Biopool. Except as set forth above, no shares of capital stock
or other voting securities of Biopool have been issued, are reserved for
issuance or are outstanding.
(b) OTHER SECURITIES. Except for the Biopool Warrant and the Claremont
Warrant, and as otherwise disclosed in SCHEDULE 3.1(B) of the Biopool Disclosure
Schedule, there are no existing rights, options, warrants, calls, subscriptions,
convertible securities or other securities,
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agreements, commitments, or obligations which would require Biopool or any of
its subsidiaries to issue or sell shares of Common Stock, Preferred Stock or any
other equity securities, or securities convertible into or exchangeable or
exercisable for shares of Common Stock, Preferred Stock or any other equity or
debt securities of Biopool or any of its subsidiaries. Except as disclosed in
SCHEDULE 3.1(B), Biopool has no commitments or obligations to purchase or redeem
any shares of Common Stock. SCHEDULE 3.1(B) of the Biopool Disclosure Schedule
contains a complete and accurate list of all outstanding Options and warrants
and the exercise price thereof.
(c) DIVIDENDS. Biopool has not declared or paid any dividend or made
any distribution in respect of any of its capital stock, or directly or
indirectly redeemed, purchased or otherwise acquired any capital stock issued by
it, and no Person has any right to require Biopool to redeem, purchase or
otherwise reacquire any capital stock issued by Biopool.
(d) VALIDITY OF SHARES. All of the issued and outstanding capital
stock of Biopool has been duly and validly authorized, validly issued
(including, without limitation, issued in compliance with applicable federal and
state securities laws), and is fully paid and nonassessable and free and clear
of all Liens imposed by or through Biopool.
3.2 CORPORATE ORGANIZATION. Biopool is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and is qualified to do business and is in good standing in all jurisdictions in
which such qualification is required and where the failure to be so qualified
would have a Material Adverse Effect. Biopool has all requisite power and
authority to own and operate its Property and to carry on its business as now
conducted or as presently proposed to be conducted.
3.3 AUTHORITY; ENFORCEABILITY. Biopool has all requisite power and
authority under applicable corporate law to execute and deliver this Agreement
and to perform the transactions contemplated hereby and, subject to approval of
the Merger by the shareholders of Biopool as contemplated by Section 4.1 (the
"BIOPOOL STOCKHOLDER APPROVAL"), to consummate the Merger. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of Biopool (subject to the Biopool Shareholder Approval), and no other approval
on the part of Biopool is necessary under applicable corporate law for the
execution, delivery and performance of this Agreement. This Agreement
constitutes a legal, valid and binding obligation of Biopool, enforceable
against Biopool in accordance with its terms, subject to general limitations on
the availability of equitable remedies and the effect of bankruptcy, insolvency,
reorganization and other laws of general application affecting the enforcement
of creditors' rights.
3.4 INTELLECTUAL PROPERTY.
(a) Except for Third-Party Intellectual Property licensed to Biopool
pursuant to an agreement listed in SCHEDULE 3.4(C)(II) and Biopool Intellectual
Property licensed to Third Parties, as disclosed in SCHEDULE 3.4(C)(I), Biopool
owns, solely and exclusively, and free and clear of any Third-Party Right, all
title to and rights in all Biopool Intellectual Property that is used in the
business of Biopool as currently conducted.
(b) SCHEDULE 3.4(B) lists all patents, patent applications,
trademarks, trade names, service marks and copyrights included in Biopool
Intellectual Property which have been registered,
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issued or applied for and the jurisdictions in which such Biopool Intellectual
Property right has been issued, registered or applied for.
(c) SCHEDULE 3.4(C)(I) lists all licenses, sublicenses and other
agreements, written or unwritten, to which Biopool is a party and pursuant to
which any Person is authorized to use, resell, sublicense, or market or
distribute any product currently marketed or presently planned to be marketed by
Biopool or any component or predecessor of any such product. SCHEDULE 3.4(C)(II)
lists all Third-Party Intellectual Property which is incorporated in or is a
part of any products which Biopool has sold, resold, licensed or sublicensed, or
which is material to the current operations of Biopool, other than (in the case
of Third-Party Intellectual Property used internally only) readily obtainable,
standard products with wide retail distribution. Biopool has, and at the
relevant times in the past had, all necessary rights to resell or distribute any
hardware, software or products produced by a third party which it resells or
distributes or has resold or distributed. Biopool is not in material violation
of any license, sublicense or agreement described in SCHEDULE 3.4(C)(I) OR (II).
To the best of Biopool's knowledge, neither Biopool nor any of its products or
operations is in material violation of or materially infringes any Third-Party
Intellectual Property. Other than the Agen Patent Claim, Biopool has not
received any claim that it has lost or will lose any rights of Biopool under any
licenses to Third-Party Intellectual Property to which Biopool is a party. The
execution and delivery of this Agreement by Biopool and the consummation of the
transactions contemplated hereby will not cause Biopool to be in violation or
default under any such license, sublicense or agreement nor entitle any other
party to any such license, sublicense or agreement to terminate or modify such
license, sublicense or agreement. Biopool has not assigned or licensed to any
third party any right, title or interest in Biopool Intellectual Property.
Biopool is not contractually obligated to pay any compensation to any third
party for the use of Biopool Intellectual Property or the Third-Party
Intellectual Property.
(d) To Biopool's knowledge, there is no material unauthorized use,
disclosure, infringement or misappropriation of any Biopool Intellectual
Property or any Third-Party Intellectual Property licensed by or through Biopool
by any third party, including without limitation any employee or former employee
of Biopool. Biopool has not entered into any agreement to indemnify any other
person against any charge of infringement of any Third-Party Intellectual
Property, other than indemnification provisions contained in purchase orders
arising in the ordinary course of business.
(e) To Biopool's knowledge, all patents, registered trademarks,
registered service marks and registered copyrights held by Biopool are valid and
subsisting. To Biopool's knowledge, there is no assertion or claim (or basis
therefore) challenging the validity of any Biopool Intellectual Property. Other
than the Agen Patent Claim, Biopool has not been sued in any suit, action or
proceeding, or otherwise notified of any claim, which involves a claim of
infringement of any patent, trademark, service mark, copyright or violation of
any trade secret or other proprietary right of any third party. Neither the
conduct of the business of Biopool as currently conducted nor the manufacture,
sale, licensing or use of any of the products of Biopool as now manufactured,
sold or licensed or used, infringes on or conflicts with, in any way, any
trademark, trademark right, trade name, trade name right, service mark or
copyright, or, to Biopool's knowledge, any patent, patent right, industrial
model or invention, of any third party that individually or in the aggregate has
or is reasonably likely to have a Material Adverse Effect. To Biopool's
knowledge and except as set forth on SCHEDULE 3.4(E), no third party is
challenging the ownership by Biopool, or the validity or effectiveness of, any
of Biopool Intellectual Property. Biopool has not brought any action, suit or
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proceeding for infringement of Biopool Intellectual Property or breach of any
license or agreement involving Biopool Intellectual Property against any third
party. There are no pending, or to Biopool's knowledge, threatened interference,
re-examinations, oppositions or nullities involving any patents, patent rights
or applications therefore of Biopool. To Biopool's knowledge, there is no breach
or violation by a third party of, or actual or threatened, loss of rights under,
any licenses to which Biopool is a party.
(f) Biopool has secured written assignments from all current and
former consultants and employees who contributed to the creation or development
of Biopool Intellectual Property currently being provided or marketed to
customers or currently being used by Biopool of the rights to such contributions
that Biopool does not already own by operation of law, recognizing Biopool's
ownership of all such Biopool Intellectual Property and agreeing to hold such of
it as is not protected by patents, patent applications or copyright (the
"BIOPOOL CONFIDENTIAL INFORMATION") in confidence and not to use any such
Confidential Information except in connection with such consultant's or
employee's work for Biopool.
(g) Biopool has taken all commercially reasonable steps to protect and
preserve the confidentiality of all Biopool Confidential Information. All use,
disclosure or appropriation of Biopool Confidential Information by or to a third
party has been pursuant to the terms of a written confidentiality or
nondisclosure agreement between Biopool and such third party.
3.5 NO CONSENTS REQUIRED. Other than the Biopool Stockholder Approval,
there are no approvals, authorizations, consents, orders or other actions of, or
filings with, any Person that are required to be obtained or made by Biopool in
connection with the execution of, and the consummation of the transactions
contemplated under, this Agreement.
3.6 VALIDITY OF MERGER SHARES. Upon delivery of the certificates for the
Merger Shares pursuant to the terms of this Agreement, due countersignature of
the certificates by Biopool's transfer agent and delivery to Xtrana Shareholders
receiving Merger Shares pursuant to this Agreement, the Merger Shares to be
issued by Biopool represented thereby will be duly authorized and validly
issued, fully paid and nonassessable.
3.7 SEC REPORTS. Since the date Biopool became subject to the reporting
requirements of the Exchange Act, Biopool has filed all required forms, reports
and documents with the Securities and Exchange Commission (the "SEC") required
to be filed by it pursuant to the federal securities laws and the SEC rules and
regulations thereunder (collectively, the "SEC REPORTS"), all of which have
complied as of their respective filing dates in all material respects with all
applicable requirements of the Securities Act of 1933 (the "SECURITIES ACT") and
the Securities Exchange Act of 1934 (the "EXCHANGE ACT"), and the rules
promulgated thereunder. None of the SEC Reports at the time filed contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
3.8 FINANCIAL STATEMENTS. The financial statements of Biopool included in
SEC Reports (including the notes thereto) (the "BIOPOOL FINANCIAL STATEMENTS")
at the time filed complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with GAAP (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC)
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applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material respects the
consolidated financial position of Biopool and its consolidated subsidiaries as
of the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (and include, in the case of any unaudited
interim financial statements, reasonable accruals for normal year-end
adjustments). No subsidiaries of Biopool are required to file periodic reports
with the SEC under the Exchange Act. Except as disclosed in the SEC Reports,
since December 31, 1999, there has not occurred any change or event which has
resulted in a Material Adverse Effect on the business condition of Biopool.
3.9 ABSENCE OF CERTAIN CHANGES. Except as disclosed in SCHEDULE 3.9 of the
Disclosure Schedule, since December 31, 1999 Biopool has no Liabilities required
to be disclosed or accrued in financial statements prepared in accordance with
GAAP, other than those: (i) accrued or disclosed in the Biopool Financial
Statements; (ii) incurred in the ordinary course of business after December 31,
1999, (iii) for legal and accounting fees and expenses incurred by Biopool in
connection with the transactions contemplated hereby, (iv) expressly set forth
in this Agreement (including without limitation disclosures in Schedules hereto)
or (v) which are, in the aggregate, not material to the financial condition of
Biopool. To Biopool's knowledge, the Liabilities of Biopool that are not
required to be disclosed or accrued in financial statements prepared in
accordance with GAAP, and that are not disclosed in Biopool Financial Statements
or in this Agreement, are not likely to have, individually or in the aggregate,
a Material Adverse Effect on Biopool.
3.10 LEGAL PROCEEDINGS.
(a) Except for the Agen Patent Claim and as disclosed in the SEC
Reports filed prior to the date hereof, to the best of Biopool's knowledge there
is no action, suit, proceeding or investigation pending in any court or before
any arbitrator or before or by any Governmental Agency against Biopool or any of
its Properties or business and, to the best of Biopool's knowledge there is no
such action, suit, proceeding or investigation threatened.
(b) Biopool has never been notified in writing that it has been
subject to an audit, compliance review, investigation or like contract review by
the U.S. General Services Administration or any other Governmental Agency in
connection with any government contract (a "GOVERNMENT AUDIT"). To Biopool's
knowledge, no Government Audit is threatened and no basis exists for a finding
of noncompliance with any material provision of any government contract or for a
material refund of any amounts paid or owed to Biopool by any Governmental
Agency pursuant to such government contract.
3.11 INSURANCE. SCHEDULE 3.11 lists and describes briefly all binders and
policies of liability, theft, fire and other forms of property/casualty
insurance and surety bonds, insuring Biopool or its Properties, assets and
business as of the date hereof. All policies and binders listed in SCHEDULE 3.11
are valid and in good standing and in full force and effect and the premiums
have been paid. With the exception of those claims listed in SCHEDULE 3.11(B),
there are no outstanding claims under such policies or binders and Biopool has
not received any notice of cancellation, general disclaimer of liability or
non-renewal of any such policy or binder.
3.12 COMPLIANCE WITH INSTRUMENTS, ORDERS AND LEGAL REQUIREMENTS. To the
best of Biopool's knowledge, Biopool is not in material violation of, or in
default in any material respect with respect to, any term or provision of its
Certificate of Incorporation or Bylaws, or any Order
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or any Legal Requirement known by Biopool to be applicable to it. No
investigation by any Governmental Agency of any alleged violation or
noncompliance with any Law is pending, or, to the best of Biopool's knowledge,
threatened.
3.13 REPRESENTATIONS. No representation or warranty by Biopool in this
Agreement (including without limitation the Schedules and Exhibits attached
hereto), or in any document furnished by Biopool at the Closing pursuant hereto
contains any untrue statement of a material fact or omits to state a fact
necessary to make the statements contained in such representation or warranty
not misleading.
3.14 EMPLOYMENT AND BENEFIT MATTERS; CONTRACTORS.
(a) SCHEDULE 3.14(A) lists all of Biopool's employment contracts,
arrangements, plans with any agent, employee, officer, director or shareholder,
and contracts or arrangements providing for bonuses, profit sharing payments,
deferred compensation, stock options, stock purchase rights, retainer,
consulting, incentive, severance pay or retirement benefits, life, medical or
other insurance or any other employee benefits or any other payments, "fringe
benefits" or perquisites which are not terminable at will without liability to
Biopool or which are subject to ERISA.
(b) Biopool has not entered into any union contracts, collective
bargaining agreements or similar agreements with employee organizations or
groups, nor, to Biopool's knowledge, has Biopool ever participated in or
contributed to any single employer defined benefit plan or multi-employer plan
within the meaning of ERISA Section 3(37), nor is Biopool currently engaged in
any labor negotiations, excepting minor grievances, nor is Biopool the subject
of any union organization effort. There is no labor dispute, strike, or work
stoppage pending against Biopool business. Biopool has no ERISA Affiliates.
(c) True and correct copies of each plan listed in SCHEDULE 3.14(c)
that is subject to ERISA (a "BIOPOOL ERISA PLAN") and related trust agreements,
insurance contracts, summary descriptions, and Biopool Option Plan have been
delivered or made available to Xtrana by Biopool. Biopool has also delivered or
made available to Xtrana a copy of, in the case of each Biopool ERISA Plan
intended to qualify under Section 401(a) of the Code, the most recent Internal
Revenue Service letter as to its qualification under Section 401(a) of the Code.
To Biopool's knowledge, nothing has occurred prior to or since the issuance of
such letters to cause the loss of qualification under the Code of any of such
plans.
(d) To Biopool's knowledge, none of the Biopool ERISA Plans has
participated in, engaged in or been a party to any prohibited transaction as
defined in ERISA or the Code, and there are no material claims, pending (with
service or other notice) or overtly threatened, involving any plan listed in
Schedule 3.14(c). To Biopool's knowledge, there have been no violations of any
reporting or disclosure requirements with respect to any Biopool ERISA Plan that
would have a Material Adverse Effect on Biopool.
(e) Biopool has no material liability for any excise tax imposed by
Sections 4971, 4972, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980 or
4980B of the Code.
(f) Other than as disclosed in SCHEDULE 3.14, Biopool does not
maintain any plans providing benefits within the meaning of Section 3(1) of
ERISA (other than group health
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plan continuation coverage under 601 of ERISA and 4980B(f) of the Code) to
former employees or retirees.
3.15 BOARD OF DIRECTORS APPROVAL. The Board of Directors of Biopool has
unanimously approved this Agreement and the Merger and will recommended this
Agreement and the Merger to Biopool's stockholders. Such approval has not been
modified or withdrawn and is in full force and effect on the date hereof.
3.16 BROKERS. Other than as disclosed in SCHEDULE 3.16, Biopool has not
retained or otherwise engaged or employed any broker, finder or any other
Person, or paid or agreed to pay any fee or commission to any agent, broker,
finder or other Person, for or on account of acting as a finder or broker in
connection with this Agreement or the transactions contemplated hereby.
3.17 CONTRACTS. Except to the extent disclosed in the SEC Reports, SCHEDULE
3.17 lists all Contracts that affect Biopool, its business, Properties, assets,
operations or financial condition, other than Contracts entered into in the
ordinary course of Biopool's business and no one of which contemplates
performance by Biopool during a period of more than one year or involves
commitments for sale or purchase in excess of $50,000 and except for Contracts
fully performed or terminable at will without liability to Biopool. To Biopool's
knowledge, each Contract disclosable on SCHEDULE 3.17 or disclosed in the SEC
Reports (a "BIOPOOL DISCLOSABLE CONTRACT") is, in all material respects, valid
and enforceable by Biopool in accordance with its terms, except (i) as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the enforcement of creditors' rights
generally, and (ii) as the remedy of specific performance and other forms of
injunctive relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefore may be brought. To Biopool's
knowledge, neither Biopool nor any other party to any Biopool Disclosable
Contract, is in breach of any Biopool Disclosable Contract, except for such
breaches as, taken in the aggregate, would not have a Material Adverse Effect on
Biopool.
3.18 CORPORATE DOCUMENTS. Biopool has furnished or made available to Xtrana
or its representatives true, correct and complete copies of: (a) the Certificate
of Incorporation and Bylaws of Biopool in effect as of the date hereof; (b) the
minute books of Biopool containing all records required to be set forth of all
proceedings, consents, actions and meetings of the shareholders and board of
directors of Biopool from January 1, 1997 through the present; (c) all material
Permits and Orders with respect to Biopool; and (d) the stock ledger of Biopool
setting forth all issuances and transfers of any capital stock of Biopool.
3.19 PROXY STATEMENT. The Proxy Statement will comply in all material
respects with the Exchange Act, except that no representation or warranty is
made by Biopool with respect to information supplied by or on behalf of Xtrana,
or any affiliate of Xtrana, specifically for inclusion in the Proxy Statement.
None of the information supplied by Biopool or its attorneys specifically for
inclusion in the Proxy Statement (the "BIOPOOL PROXY INFORMATION") shall, as of
the date such information is supplied, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and, to the extent
that any Biopool Proxy Information becomes false or misleading due to the
passage of time, Biopool shall timely supplement such information so as to
correct any material false or misleading statements contained therein. The
letter to stockholders, notice of meeting, proxy statement and form of
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proxy to be distributed to stockholders in connection with the Merger, and any
schedule required to be filed with the SEC in connection therewith, together
with any amendments or supplements thereto, are collectively referred to herein
as the "PROXY STATEMENT."
3.20 TAXES.
(a) Biopool has filed all Tax Returns that it has been required to
file. All such Tax Returns were correct and complete in all material respects.
All Taxes owed by Biopool (whether or not shown on any Tax Return) have been
paid. For any Taxes that have not been paid, Biopool has established reserves on
its books that equal or exceed those required by GAAP. No claim has ever been
made by a Governmental Agency in a jurisdiction where Biopool does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. There are
no Liens on any of the assets of Biopool that arose in connection with any
failure (or alleged failure) to pay any Tax.
(b) Biopool has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other Person, except for
amounts not due as of the Closing for which Biopool has withheld but not yet
paid.
(c) To the best of Biopool's knowledge, no Governmental Agency is
expected to assess any additional Taxes for any period for which Tax Returns
have been filed. There is no pending or, to the best of Biopool's knowledge,
threatened dispute or claim of any Governmental Agency relating to any Tax
Liability of Biopool.
(d) No consent has been filed under Section 341(f) of the Code with
respect to Biopool.
(e) There is no Contract covering any Person that, individually or
collectively, as a consequence of the Merger could give rise to the payment of
any amount that would not be deductible by Biopool by reason of Section 280G of
the Code.
3.21 KNOWLEDGE OF BIOPOOL. For the purposes of this Agreement, references
to "THE BEST OF BIOPOOL'S KNOWLEDGE" shall mean the actual knowledge of those
individuals set forth in SCHEDULE 3.21 (the "BIOPOOL PRINCIPALS"), or knowledge
that a person in the Principal's position would be reasonably expected to know,
after appropriate consultation with the employees, directors and stockholders of
Biopool most likely to have knowledge of the subject matter of such
representation and warranty; provided, however, if in the course of such
consultation, a Biopool a Principal becomes aware of an omission or fact that in
his or her reasonable judgment warrants further investigation, that such Biopool
Principal shall perform whatever further investigation he or she deems
appropriate and the information obtained in such investigation becomes actual
knowledge of such Principal.
ARTICLE IV
COVENANTS
4.1 SPECIAL MEETING. Each of Biopool and Xtrana shall (a) call and hold, in
accordance with the DGCL, a special meeting of stockholders (or, if appropriate,
an annual meeting of
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stockholders); or (b) in the case of Xtrana, solicit written consents of each of
its respective stockholders, for the purpose of considering and voting upon the
adoption of this Agreement and the approval of the Merger in accordance with the
DGCL.
4.2 REASONABLE BEST EFFORTS, NO INCONSISTENT ACTION. Each party will use
its reasonable best efforts to cause the conditions over which it has control to
be satisfied on or before the Closing. No party will take any action which will
foreseeably result in the nonsatisfaction of any conditions stated in SECTION 5
or SECTION 6 on or before the Closing. The parties hereto will use their
respective reasonable best efforts to (a) obtain all material consents,
authorizations, orders and approvals of or from private parties or Governmental
Agencies, required, proper or advisable in connection with this Agreement and
the Merger; and (b) resolve any action, suit, proceeding or investigation which
shall have been instituted or which a Governmental Agency shall have indicated
its intention to institute which jeopardizes the Merger.
4.3 ACCESS. Subject to the terms of that certain Non-Disclosure Agreement
between the parties, dated March 2, 2000, between the date of this Agreement and
the Closing or any earlier termination of this Agreement in accordance with its
terms, each of Biopool and Xtrana will (a) give the other and its authorized
representatives access to its books, records, Properties, officers, attorneys
and accountants and permit the other to make inspections and copies of such
books and records; and (b) furnish the other with such financial information and
operating data and other information with respect to its business and
Properties, and to discuss with the other and its authorized representative its
affairs, all as the other may from time to time reasonably request for the
purposes of this Agreement, during normal office hours. Any on-site visit shall
be subject to reasonable advance notice and to being accompanied by an officer
or designated employee of the party receiving the on-site visit. No information
furnished pursuant to this SECTION 4.3 or otherwise known shall affect any
representation, warranty or condition in this Agreement.
4.4 NO SOLICITATION OR NEGOTIATION. Until the earlier of the termination of
this Agreement pursuant to its terms or the Effective Time, neither party nor
any of its officers, employees, agents, and representatives (including, without
limitation, any investment banker, attorney or accountant) shall, directly or
indirectly, take any action to (a) encourage, solicit, entertain, initiate or
accept the submission of any Acquisition Proposal or any inquiries with respect
thereto; (b) enter into any agreement for or relating to a Third-Party
Transaction; or (c) participate in any way in discussions or negotiations with,
or furnish any non-public information to, any Person in connection with any
Acquisition Proposal. Each of Biopool and Xtrana are obligated to (a) inform the
other immediately upon receipt of any third party solicitation, proposal or bona
fide inquiry that either party or any of their respective representatives may
receive regarding an Acquisition Proposal; or of any request for such
information, including in each case a copy thereof and all other particulars
thereof, (b) keep the other fully apprised of all developments therein on a
current basis; and (c) immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Person conducted heretofore
with respect to any Acquisition Proposal.
4.6 INTERIM FINANCIAL INFORMATION. Each of Biopool and Xtrana will supply
to the other unaudited consolidated monthly financial statements within 30
business days of the end of each month ending between the date of the respective
party's interim statements and the Closing or any earlier termination of this
Agreement in accordance with its terms, prepared on a basis consistent with the
unaudited consolidated financial statements for the preceding months. For
purposes of these
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statements, employee bonuses and similar expenses may be accrued based on actual
results for the year to date and budgeted results for the balance of the year.
4.7 INTERIM CONDUCT OF BUSINESS. Concurrently with the execution of this
Agreement, Biopool will enter into a Management Services Agreement with Xtrana,
pursuant to which John H. Wheeler will act as Biopool's chief operating officer
until the Effective Time, in the form attached hereto as EXHIBIT I. Except as
set forth immediately above or disclosed in SCHEDULE 2.6, from the date of this
Agreement until the Closing or any earlier termination of this Agreement in
accordance with its terms, unless approved by the other party in writing, each
of Biopool and Xtrana will operate its business consistently with past practice
and in the ordinary course of business, and will not:
(a) merge or consolidate with or agree to merge or consolidate with,
or sell or agree to sell all or substantially all of its Property to, or
purchase or agree to purchase all or substantially all of the Property of, or
otherwise acquire, any other Person or a division thereof, except as provided in
this Agreement;
(b) amend its certificate of incorporation or by-laws;
(c) make any changes in its accounting methods, principles or
practices, except as required by GAAP;
(d) sell, consume or otherwise dispose of any Property, except in the
ordinary course of business consistent with past practice;
(e) authorize for issuance, issue, sell or deliver any additional
shares of its capital stock of any class or any securities or obligations
convertible into shares of its capital stock or issue or grant any option,
warrant or other right to purchase any shares of its capital stock of any class,
other than, in each case, the issuance of common stock pursuant to the exercise
of the options and warrants disclosed in such party's Schedules to this
Agreement;
(f) declare any dividend on, make any distribution with respect to, or
redeem or repurchase, its capital stock except under existing repurchase
agreements or obligations disclosed in such party's Schedules to this Agreement;
(g) pay, discharge, settle or satisfy any claims, Liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction in the
ordinary course of business consistent with past practice or in accordance with
their terms, of claims, liabilities or obligations reflected or reserved against
on the latest Financial Statement and other than the payment of expenses
incurred in connection with the transactions contemplated hereby, or waive any
material benefits of, or agree to modify in any materially adverse respect, any
confidentiality, standstill or similar agreements;
(h) form any subsidiary;
(i) except as otherwise contemplated by this Agreement or as required
to comply with Legal Requirements or Contracts existing on the date hereof, (i)
terminate, adopt, enter into or amend any collective bargaining agreement or
Benefit Plan; (ii) increase in any manner the compensation or fringe benefits
of, or pay any bonus to, any director, officer or employee (except in the case
of employees who are not directors or officers for normal increases of cash
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compensation or cash bonuses in the ordinary course of business consistent with
past practice); (iii) pay any benefit not provided for under any Benefit Plan;
(iv) increase in any manner the severance or termination pay of any director,
officer or employee, (v) enter into (1) any employment, severance, termination
or indemnification agreement; or consulting agreement with any current or former
director, officer, employee or consultant or (2) any agreements with any current
or former director, officer, employee or consultant the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of
a transaction of the nature contemplated by this Agreement; (vi) grant any
awards under any Benefit Plan (including the grant of options, stock
appreciation rights, stock based or stock related awards, performance units or
restricted stock or the removal of existing restrictions in any Benefit Plans or
agreements or awards made thereunder); (vii) take any action to fund or in any
other way secure the payment of compensation or benefits under any employee
plan, contract, agreement or arrangement or Benefit Plan; or (viii) except to
the extent required under any Benefit Plan on the date hereof, take any action
to accelerate the vesting of payment of any compensation or benefit under any
Benefit Plan;
(j) cancel or allow to expire or be cancelled any insurance policy or
binder listed in SCHEDULE 2.11 or SCHEDULE 3.11, as applicable, unless such
policy or binder is replaced with a policy or binder providing comparable
coverage;
(k) enter into any exclusive license agreement or other license
agreement having material terms not usually agreed to by such party in the
ordinary course of its business.
(l) authorize or enter into an agreement to do any of the foregoing.
The transactions contemplated as part of the closing conditions, as
set forth in Articles V and VI, shall not be deemed to be a violation of this
SECTION 4.7.
4.8 EXPENSES. Each party to this Agreement will each pay all of its own
costs and expenses incurred in connection with the transactions contemplated
hereby including, without limitation, all fees and expenses of attorneys,
accountants and financial advisors.
4.9 EXCHANGE ACT REPORTING. Biopool will use its best efforts to remain a
"reporting person" for purposes of the Exchange Act.
4.10 STRUCTURE OF MERGER. In the event that after the Effective Time
Biopool reasonably determines that in order to eliminate the need to obtain
Third Party Action or for other proper reasons it would be desirable to
effectuate the transactions described herein by means of a "reverse triangular
merger" in which a subsidiary of Biopool is merged with and into Xtrana, with
Xtrana to be the surviving corporation in such merger, and provided that such a
structure will not materially prejudice Xtrana or its stockholders, then this
Agreement will be revised accordingly and the parties will take such actions as
are necessary to accomplish this alternative structure.
4.11 PROXY STATEMENT. Biopool will prepare the Proxy Statement with such
assistance from Xtrana as may be required.
4.12 INFORMATION SUPPLIED. Each party to this Agreement will promptly
inform the other of the occurrence of any event which should be included in an
amendment or supplement to the Proxy Statement or any other such filing,
agreement or document and of any discovery that any
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information supplied as described in this SECTION 4.12 no longer conforms with
the requirements of this SECTION 4.12.
4.13 PRESS RELEASES. Promptly after the Effective Time, Biopool and Xtrana
will issue a mutually agreeable press release concerning the transactions
contemplated hereby. The parties hereto will consult and cooperate with each
other and agree upon the terms and substance of all press releases,
announcements and public statements with respect to this Agreement and the
Merger, PROVIDED, HOWEVER, that such consultation and cooperation shall not
interfere with any obligation of either party hereto to disclose any information
as required by applicable law.
4.14 LOAN TO XTRANA. Following the execution of this Agreement, Biopool
will, if requested by Xtrana, promptly make the $1 million principal amount loan
to Xtrana described in that certain letter agreement between such parties, dated
March 10, 2000, on the terms and conditions set forth in such letter agreement.
4.15 RULE 145 AFFILIATES. Prior to the Effective Time, Xtrana shall deliver
to Biopool a letter identifying all persons who were, in Xtrana's reasonable
judgment, at the record date for its stockholders meeting (or the record date
for receipt of a written consent) to approve this Agreement and the Merger,
"affiliates" of Xtrana for purposes of Rule 145 under the Securities Act ("RULE
145 AFFILIATES"). Each of such Rule 145 Affiliates will deliver to Biopool on or
prior to the Effective Time a written agreement (the "AFFILIATE LETTER") in a
usual and customary form for transactions of this type to the effect that such
person will not offer to sell, sell or otherwise dispose of any Merger Shares
except pursuant to an effective registration statement or in compliance with
Rule 145, as amended from time to time, or in a transaction which, in the
opinion of legal counsel reasonably satisfactory to Biopool, is exempt from the
registration requirements of the Securities Act. Biopool shall be entitled to
place legends as specified in such Affiliate Letters on the certificate
evidencing any Merger Shares to be received by such Rule 145 Affiliates pursuant
to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for Biopool Common Stock, consistent with the
terms of such Affiliate Letters.
4.16 REORGANIZATION. From and after the date hereof and until the Effective
Time, none of Biopool, Xtrana or any of their respective Subsidiaries or other
Affiliates shall knowingly take any action, or knowingly fail to take any
action, that would jeopardize qualification of the Merger as a reorganization
with the meaning of Section 368(a) of the Code. Following the Closing, the
Surviving Corporation shall not take any action which would cause the Merger to
fail to qualify as a "reorganization" within the meaning of Section 368 of the
Code. Each of Biopool and Xtrana shall reflect the Merger on their respective
federal income tax returns as a Section 368(a)(1)(A) reorganization.
4.17 MERGER TAX MATTERS. The parties hereto agree that neither of them, nor
any of their respective Affiliates, nor their officers, directors, agents, or
representatives have made any representation or warranty with respect to the tax
consequences of the Merger for the shareholders of the other party.
ARTICLE V
CONDITIONS TO BIOPOOL'S OBLIGATIONS
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The obligations of Biopool hereunder are subject to the satisfaction at or
prior to the Closing of each of the following conditions, except as Biopool may
have waived the same in writing in accordance with SECTION 9.1.
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in Section 2 shall have been true in all material respects on the date
of this Agreement and shall be true in all material respects at and as of
immediately prior to the Closing with the same effect as though made at and as
of immediately prior to the Closing. The updating of Schedules to disclose any
changes in the underlying matters disclosed therein occurring from the date
hereof to the Effective Time, which changes do not involve a reasonable
possibility of a material loss to or restriction on Xtrana taken as a whole or a
Material Adverse Effect, shall not constitute a failure of the condition set
forth in this SECTION 5.
5.2 PERFORMANCE. Xtrana shall have performed and complied in all material
respects with all covenants required under this Agreement to be performed or
complied with by it on or before the Closing.
5.3 CLOSING CERTIFICATE. Xtrana shall have delivered to Biopool a
certificate dated as of the date of the Closing and signed by an officer of
Xtrana representing and warranting that the conditions specified in SECTION 5.1
and SECTION 5.2 above are satisfied. Such certificate shall be deemed a
representation and warranty of Xtrana under SECTION 2 for all purposes of this
Agreement.
5.4 THIRD-PARTY ACTION. All Third-Party Action (including, without
limitation, the Hart-Scott Rodino waiting period, if any) required to be
obtained by Xtrana in order to consummate the transactions contemplated hereby,
other than any the absence of which, singularly or in the aggregate, would not
have a material effect on the transactions contemplated hereby or a Material
Adverse Effect on Biopool or Xtrana, shall have been taken.
5.5 TRANSACTIONAL LITIGATION. No action, suit or proceeding before any
Governmental Agency shall have been commenced and not dismissed, and no
investigation by any Governmental Agency shall have been commenced or overtly
threatened, against the parties hereto or any of their officers, directors or
stockholders seeking to restrain, prevent or change the transactions
contemplated hereby or questioning the validity or legality of any of such
transactions or seeking damages in connection with any of such transactions.
5.6 CORPORATE OR OTHER PROCEEDINGS. All corporate and other proceedings on
the part of Xtrana in connection with the transactions to be consummated at the
Closing, and all documents and instruments incident to such transactions, shall
have been taken.
5.7 OPINION OF COUNSEL. Biopool shall have received an opinion of Hogan &
Hartson LLP, counsel to Xtrana, dated as of the Effective Time, substantially in
the form attached hereto as EXHIBIT K.
5.8 STOCKHOLDER APPROVAL. The Biopool Stockholder Approval and the Xtrana
Stockholder Approval shall have been obtained in accordance with SECTION 4.1.
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5.9 GOOD STANDING. Biopool shall have received a good standing certificate
for Xtrana from the Secretary of State of Delaware dated as of a date not
earlier than ten (10) days prior to the Closing and an oral "bring down" from
Secretary of State of Delaware on the date of the Closing.
5.10 WHEELER EMPLOYMENT AGREEMENT. Biopool and John H. Wheeler shall have
entered into an Employment Agreement, substantially in the form attached hereto
as EXHIBIT L, pursuant to which Mr. Wheeler shall serve as the Surviving
Corporation's chief executive officer immediately following the Effective Time.
ARTICLE VI
CONDITIONS TO XTRANA'S OBLIGATIONS
The obligations of Xtrana hereunder are subject to the satisfaction at or
prior to the Closing of each of the following conditions, except as Xtrana may
have waived the same in writing in accordance with Section 9.1.
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in Section 3 shall have been true in all material respects on the date
of this Agreement and shall be true in all material respects at and as of
immediately prior to the Closing with the same effect as though made at and as
of immediately prior to the Closing. The updating of Schedules to disclose any
changes in the underlying matters disclosed therein occurring from the date
hereof to the Effective Time, which changes do not involve a reasonable
possibility of a material loss to or restriction on Biopool taken as a whole or
a Material Adverse Effect, shall not constitute a failure of the condition set
forth in this Section 6.
6.2 PERFORMANCE. Biopool shall have performed and complied in all material
respects with all covenants required under this Agreement to be performed or
complied with by it on or before the Closing.
6.3 CLOSING CERTIFICATE. Biopool shall have delivered to Xtrana a
certificate dated as of the date of the Closing and signed by officers of
Biopool representing and warranting that the conditions specified in SECTION 6.1
and SECTION 6.2 above are satisfied. Such certificate shall be deemed a
representation and warranty of Biopool under SECTION 3 for all purposes of this
Agreement.
6.4 THIRD-PARTY ACTION. All Third-Party Action (including, without
limitation, the Hart-Scott Rodino waiting period, if any) required to be
obtained by Biopool in order to consummate the transactions contemplated hereby,
other than any the absence of which, singularly or in the aggregate, would not
have a material effect on the transactions contemplated hereby or a Material
Adverse Effect on Biopool or Xtrana, shall have been taken.
6.5 TRANSACTIONAL LITIGATION. No action, suit or proceeding before any
Governmental Agency shall have been commenced and not dismissed, and no
investigation by any Governmental Agency shall have been commenced or overtly
threatened, against the parties or any of their officers, directors or
shareholders seeking to restrain, prevent or change the transactions
contemplated hereby or questioning the validity or legality of any of such
transactions or seeking damages in connection with any of such transactions.
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6.6 CORPORATE OR OTHER PROCEEDINGS. All corporate and other proceedings on
the part of Biopool in connection with the transactions to be consummated at the
Closing, and all documents and instruments incident to such transactions, shall
have been taken.
6.7 OPINION OF COUNSEL. Xtrana shall have received an opinion of Troop
Steuber Pasich Reddick & Tobey, LLP, counsel to Biopool, dated as of the
Closing, substantially in the form attached hereto as EXHIBIT M.
6.8 SHAREHOLDER APPROVAL. The Biopool Stockholder Approval shall have been
obtained in accordance with SECTION 4.1.
6.9 GOOD STANDING. Xtrana shall have received a good standing certificate
for Biopool from the Secretary of State of Delaware dated as of a date not
earlier than ten (10) days prior to the Closing, and an oral "bring down" from
the Secretary of State of Delaware on the date of the Closing.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION WITH RESPECT TO REPRESENTATIONS AND WARRANTIES. After
the Effective Time, all rights, obligations and claims with respect to the
representations and warranties made in or pursuant to this Agreement shall be
determined exclusively in accordance with this ARTICLE VII. Such representations
and warranties shall survive the Effective Time and any investigation made by
the other party with respect thereto for a period of twelve months, in
accordance with this SECTION 7.1. After the Effective Time, Arthur Harrison or
such other individual as may be selected by the former Xtrana stockholders
("XTRANA'S POST-MERGER REPRESENTATIVE") shall act as the agent of Xtrana's
pre-Merger stockholders for purposes of representing and protecting their
interests under this ARTICLE VII. After the Effective Time, a committee
consisting of the Biopool Continuing Directors ("BIOPOOL'S POST-MERGER
REPRESENTATIVE") shall act as the agent of Biopool for purposes of representing
and protecting its interests under this SECTION 7.1. The Surviving Corporation
shall cooperate with Xtrana's Post-Merger Representative and Biopool's
Post-Merger Representative in connection with their reasonable performance of
their responsibilities hereunder, including by providing them with access to
information about the Surviving Corporation that is reasonably necessary for
them to determine whether a claim for indemnification hereunder should be made.
(a) Subject to SECTION 7.1(C), the Surviving Corporation will
indemnify the Xtrana Indemnitee Parties (as defined below) and hold them
harmless against and in respect of any and all Losses, which arise out of,
result from or relate to:
(i) the operation of the Surviving Corporation of the business
of Xtrana, or the use or disposition by the Surviving Corporation of all or any
part of the assets of Xtrana, after the Effective Time, assuming no material
breach by Xtrana of any representations and/or warranties and no breach by
Xtrana at or prior to the Effective Time of any of its covenants contained in
this Agreement,
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(ii) any breach of or inaccuracy in any of the representations
and warranties or covenants made by Biopool to Xtrana in this Agreement or in
any certificate delivered by Biopool pursuant to this Agreement. As used herein,
the "XTRANA INDEMNITEE PARTIES" means Xtrana's stockholders, Affiliates,
officers, directors, employees and their respective successors, assigns, heirs
and personal representatives.
(b) Subject to SECTION 7.1(C), Xtrana will indemnify Biopool and hold
it harmless against and in respect of any and all Losses, which arise out of,
result from or relate to any breach of or inaccuracy in any of the
representations and warranties or covenants made by Xtrana to Biopool in this
Agreement or in any certificate delivered by Xtrana pursuant to this Agreement.
(c) LIMITATIONS ON CLAIMS. No claim shall be payable under this
SECTION 7.1 with respect to any representation or warranty unless and until the
aggregate Losses owing under this SECTION 7.1 in respect of an Indemnitee (as
defined below) and all claims against Biopool or the Xtrana Indemnitee Parties,
as applicable (an "INDEMNITOR") exceed $50,000, in which case the Indemnitee
shall be entitled to indemnification from the Indemnitor for all Losses without
regard to such threshold. As used herein, an "INDEMNITEE" means either Biopool
or one or more of the Xtrana Indemnitee Parties to the extent that such parties
seek indemnification from the other pursuant to this SECTION 7.1.
Notwithstanding the foregoing, Biopool's sole and exclusive remedy for
indemnification claims against Xtrana under this Agreement shall consist of its
right to set off any Losses against the Escrow Shares, and the Xtrana Indemnitee
Parties' sole and exclusive remedy for indemnification claims against Biopool
under this Agreement shall consist of their right to receive additional shares
of the Surviving Corporation's Common Stock, PROVIDED, HOWEVER, in no event
shall the aggregate number of such shares exceed 1,030,641 (the "XTRANA
INDEMNIFICATION SHARES"), in either case pursuant to the procedure described in
SECTION 7.2 hereof. No claim shall be payable with respect to any representation
or warranty unless such claim is asserted within twelve months after the
Effective Time (the "INDEMNIFICATION TERMINATION PERIOD"). For the purposes of
this SECTION 7.1(C), a month shall be deemed to elapse at 5:00 p.m. California
time on the day of the month on which the Effective Time occurred. (For example,
if the Effective Time occurs on June 26, 2000, the sixth month would be deemed
to elapse at 5:00 p.m. California time on December 26, 2000.) All Escrow Shares
not then subject to indemnification claims under SECTION 7.1 hereof shall be
released to the Xtrana's pre-Merger stockholders upon the expiration of the
Indemnification Termination Period.
7.2 COMPENSATION FOR INDEMNIFIED LOSSES.
(a) Losses for which Indemnitees are entitled to indemnification under
SECTION 7.1 shall, after the Merger, be reimbursed as determined pursuant to
this SECTION 7.2. To initiate a claim, the Indemnitee shall deliver a notice of
claim to the Xtrana Post-Merger Representative or Biopool Post-Merger
Representative, as applicable. The notice shall include a description in
reasonable detail of the amount and nature of any Losses that the Indemnitee
claims have been suffered and the amount thereof sought to be indemnified. If
the Indemnitor decides to dispute the claim, it shall, within 30 days after
receipt of the notice or claim, give counter-notice to the Indemnitee setting
forth in reasonable detail the basis for disputing the claim. If, within 30 days
after the giving of a counter-notice by Indemnitor, the parties have not reached
agreement as to the indemnification claim in question, then the claim for
indemnification shall be submitted to and be settled by arbitration as provided
below. If the Xtrana Post-Merger Representative submitted the claim, and no
counter-notice is given, the Xtrana Indemnitee Party shall receive such number
of
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Xtrana Indemnification Shares that when multiplied by the Market Price (as of
the date the counter-notice was due, or if the parties subsequently settle their
dispute, as of the date of such settlement) is equal to the amount of the award,
up to a maximum of the number of Xtrana Indemnification Shares not previously
issued pursuant to this ARTICLE VII (for purposes of this SECTION 7.2, the
"MARKET PRICE" shall mean the average of the closing bid and asked prices for
the Surviving Corporation's Common Stock, as reported by Nasdaq for the over the
counter market, for the ten trading day period ending on the day such
determination is made). If Biopool's Post-Merger Representative submitted the
claim, and no counter-notice is given, the number of Escrow Shares shall be
permanently reduced by that number of shares, that when multiplied by the Market
Price (as of the date the counter-notice was due, or if the parties subsequently
settle their dispute, as of the date of such settlement) is equal to the amount
of the award, up to a maximum of the number of Escrow Shares not previously
cancelled and removed from escrow as a result of indemnification awards pursuant
to SECTION 7.1 hereof.
(b) Any dispute arising out of ARTICLE VII shall be settled by binding
arbitration conducted in accordance with the commercial arbitration rules of the
American Arbitration Association then in effect, and the exclusive venue for
such arbitration shall be Denver, Colorado. Upon resolution of the dispute, if
an Xtrana Indemnitee Party is determined to be entitled to an indemnification
award, such party shall receive such number of Indemnification Shares that when
multiplied by the Market Price (as of such date) is equal to the amount of the
award, up to a maximum of the number of Xtrana Indemnification Shares not
previously issued pursuant to this ARTICLE VII. If Biopool is determined by the
arbitrator to be entitled to an indemnification award, it shall permanently
reduce the number of Escrow Shares by that number of Escrow Shares, that when
multiplied by the Market Price (as of such date) is equal to the amount of the
award, up to a maximum of the number of Escrow Shares not previously cancelled
and removed from escrow as a result of indemnification awards pursuant to
SECTION 7.1 hereof.
7.3 INDEMNIFICATION OF POST-MERGER REPRESENTATIVES. Each of the
Xtrana Post-Merger Representative and the Biopool Post-Merger Representative
shall be indemnified and held harmless by the Surviving Corporation for all
actions taken in connection with this ARTICLE VII to the fullest extent
permitted by Delaware law. Prior to the Effective Time, the Surviving
Corporation shall enter into an indemnification agreement with each such
Representative, to become effective as of the Effective Time, effectuating this
indemnification obligation.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing:
(a) by written mutual agreement of the parties upon the authorization
of their respective Boards of Directors, notwithstanding approval of this
Agreement by their shareholders or stockholders, as the case may be;
(b) by either party if there shall have been a material breach of any
representation, warranty, covenant, condition or agreement set forth in this
Agreement on the part of the other, which breach shall not have been cured
within ten (10) days following receipt by the breaching party of notice of such
breach
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(c) by either party if any permanent injunction or other Order of a
court of other competent authority preventing the consummation of the Merger
shall have become final and nonappealable;
(d) by either party if the parties fail to obtain all material
governmental, authorizations, consents and approvals necessary for the valid
consummation of the Merger; despite the exercise of their reasonable best
efforts to do so, or
(e) by either party if the Merger shall not have been consummated on
or before November 30, 2000, PROVIDED that the initiating party is not in
material default of its obligations under this Agreement.
In the event of a termination of this Agreement by either party as
provided in subsections (a)-(e) above, this Agreement shall forthwith become
void and there shall be no liability or obligation on the part of the parties or
their respective officers or directors, except with respect to willful material
breach of any provision of this Agreement prior to such termination and except
that SECTION 4.2 (Non-Disclosure) and SECTION 4.8 (Expenses) hereof shall
continue in effect.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 COMPLETE AGREEMENT; WAIVER AND MODIFICATION; NO THIRD PARTY
BENEFICIARIES. This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties other than the
Biopool Warrant, the Xtrana Warrant and the Letter Agreement dated March 10,
2000 between Biopool and Xtrana, which Letter Agreement shall continue in effect
until the Closing, and will thereafter be superseded. There are no
representations or warranties by any party except those expressly stated or
provided for herein, any implied warranties being hereby expressly disclaimed.
There are no covenants or conditions except those expressly stated herein. No
amendment, supplement or termination of or to this Agreement, and no waiver of
any of the provisions hereof, shall be binding on a party unless made in a
writing signed by such party. This Agreement may be modified by mutual agreement
of the parties as authorized by their respective boards of directors,
notwithstanding approval hereof and thereof by the stockholders of the parties.
Nothing in this Agreement shall be construed to give any Person other than the
express parties hereto any rights or remedies.
9.2 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be given by delivery (by
mail or otherwise) or transmitted to the address or facsimile number listed
below, and will be effective (in all cases) upon receipt. Without limiting the
generality of the foregoing, a mail, express, messenger or other receipt signed
by any Person at such address shall conclusively evidence delivery to and
receipt at such address, and any printout showing successful facsimile
transmission of the correct total pages to the correct facsimile number shall
conclusively evidence transmission to and receipt at such facsimile number.
(a) If to Xtrana:
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XTRANA, INC.
717 Yosemite Circle
Denver, CO 80230
Attention: John H. Wheeler
Facsimile:
with a copy to:
Hogan & Hartson, LLP
1800 Broadway, Suite 200
Boulder, Colorado 80302
Attention: William Roberts
Facsimile: (720) 406-5301
(b) If to Biopool:
BIOPOOL INTERNATIONAL, INC.
6025 Nicolle Street
Ventura, CA 93003
Attention: Michael Bick, Ph.D.
Facsimile:
with a copy to:
TROOP STEUBER PASICH REDDICK & TOBEY, LLP
2029 Century Park East, 24th Floor
Los Angeles, CA 90067
Attention: Scott Alderton
Facsimile: (310) 728-2222
Any party may change its address or facsimile number for purposes of
this Section 9.2 by giving the other party written notice of the new address or
facsimile number in accordance with this Section 9.2, PROVIDED it is a normal
street address, or normal operating facsimile number, in the continental United
States.
9.3 LAW GOVERNING. This Agreement shall be interpreted in accordance with
and governed by the laws of the State of Delaware, without regard to principles
of conflicts of laws. The exclusive venue for all disputes arising hereunder
shall be in Denver, Colorado.
9.4 HEADINGS; REFERENCES; "HEREOF;" INTERPRETATION. The Article and Section
headings in this Agreement are provided for convenience only, and shall not be
considered in the interpretation hereof. References herein to Articles,
Sections, Exhibits or Schedules refer, unless otherwise specified, to the
designated Article, Section of or Exhibit or Schedule to this Agreement. Terms
such as "HEREIN," "HERETO" and "HEREOF" refer to this Agreement as a whole. This
Agreement has been negotiated at arm's length between parties sophisticated and
knowledgeable in the matters addressed in this Agreement. Each of the parties
has been represented by experienced and knowledgeable legal counsel.
Accordingly, any rule of law or legal decision that would require interpretation
of any ambiguities in this Agreement against the party that has drafted it is
not
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applicable and is waived. The provisions of this Agreement shall be interpreted
in a reasonable manner to effect the purpose of the parties and this Agreement.
9.5 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the heirs, executors, administrators and successors of the
parties hereto, but no right or liability or obligation arising hereunder may be
assigned by any party hereto.
9.6 COUNTERPARTS, SEPARATE SIGNATURE PAGES. This Agreement may be executed
in any number of counterparts, or using separate signature pages. Each such
executed counterpart and each counterpart to which such signature pages are
attached shall be deemed to be an original instrument, but all such counterparts
together shall constitute one and the same instrument.
9.7 SEVERABILITY. In the event any of the provisions of this Agreement
shall be declared by a court or arbitrator to be void or unenforceable, then
such provision shall be severed from this Agreement without affecting the
validity and enforceability of any of the other provisions hereof, and the
parties shall negotiate in good faith to replace such unenforceable or void
provisions with a similar clause to achieve, to the extent permitted under law,
the purpose and intent of the provisions declared void and unenforceable.
9.8 [INTENTIONALLY OMITTED]
9.9 FURTHER ASSURANCES. From time to time following the Closing, the
parties will execute and deliver such instruments and take such other actions
(each at the requesting party's expense, limited to the reasonable out of pocket
costs of the performing party) as may be reasonably required to (i) carry out
the intent of this Agreement and the Merger, and (ii) confirm the consummation
of the transactions contemplated hereby.
ARTICLE X
GLOSSARY
ACQUISITION PROPOSAL - any proposed Acquisition Transaction.
ACQUISITION TRANSACTION - any merger, acquisition, sale, consolidation or
similar transaction involving all or any significant portion of the assets or
ownership of the designated party or a transaction in which any Person shall
acquire Beneficial Ownership or the right to acquire Beneficial Ownership, or
any Group shall have been formed which has Beneficial Ownership or has the right
to acquire Beneficial Ownership, of more than 50 percent of the outstanding
shares of common stock of the designated party.
ADDITIONAL SHARES - 1.7(a) hereof.
ADDITIONAL WARRANT SHARES - 1.7(d) hereof.
AFFILIATE LETTER - 4.15 hereof.
AFFILIATES - a person or entity within the meaning of Rule 144 under the
1933 Act.
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AGEN PATENT CLAIM - the claims and causes of action set forth in the
Complaint styled "Agen Biomedical Ltd v. Biopool International, Inc.", filed on
or about March 10, 2000, in the United States District Court for the Northern
District of California, docket no. C 00 0852 PJH.
BENEFICIAL OWNERSHIP - the meanings stated in Regulation 13D-G under the
Securities Exchange Act of 1934, as amended.
BENEFIT PLAN - contracts or arrangements providing for bonuses, profit
sharing payments, deferred compensation, stock options, stock purchase rights,
retainer, consulting, incentive, severance pay or retirement benefits, life,
medical or other insurance or any other employee benefits or any other payments,
"fringe benefits" or perquisites which are not terminable at will without
liability.
BIOPOOL COMMON STOCK - the common stock, par value $0.01 per share, of
Biopool.
BIOPOOL CONFIDENTIAL INFORMATION - 3.4(f) hereof.
BIOPOOL CONTINUING DIRECTORS - Michael Bick, Ph.D., Douglass Ayer and Price
Paschall.
BIOPOOL DISCLOSABLE CONTRACT - has the meaning given in Section 3.17.
BIOPOOL ERISA PLAN - 3.14(c) hereof.
BIOPOOL FINANCIAL STATEMENTS - 3.8 hereof.
BIOPOOL INTELLECTUAL PROPERTY - Intellectual Property used in the business
of Biopool as currently conducted and presently planned to be conducted, other
than Third-Party Intellectual Property.
BIOPOOL OPTIONS - options to purchase Biopool Common Stock issued pursuant
to the Biopool Stock Option Plan or any predecessor plan.
BIOPOOL POST-MERGER REPRESENTATIVE - 7.2 hereof.
BIOPOOL PRINCIPALS - 3.21 hereof.
BIOPOOL PROXY INFORMATION - 3.19 hereof.
BIOPOOL STOCKHOLDER APPROVAL - 3.3 hereof.
BIOPOOL STOCK OPTION PLAN - the 1993 Stock Option Plan of Biopool.
BIOPOOL WARRANT - a warrant to purchase 1,658,588 shares of Biopool Common
Stock, dated March 30, 2000, granted to Xtrana.
CERTIFICATE - 1.7(a) hereof.
CLAREMONT - 2.27 hereof
CLAREMONT SHARES - 1.7(d) hereof.
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CLAREMONT WARRANT - 1.7(d) hereof.
CLOSING - 1.1 hereof.
CLOSING DATE - the date on which the Closing occurs.
CONTRACT - any agreement, contract, lease, license, promissory note,
conditional sales contract, indenture, mortgage, deed of trust, stipulation,
consent decree, consent order, settlement, accord, commitment, undertaking,
instrument or arrangement of any kind, whether or not in writing, and whether
with a private party or a Governmental Agency.
CONVERTIBLE SECURITIES - 1.7(d) hereof.
DELAWARE SECRETARY OF STATE - 1.3 hereof.
DGCL - General Corporation Law of the State of Delaware.
EARNOUT PERIOD - 1.12 hereof.
EARNOUT SHARES - 1.12 hereof.
EARNOUT TARGET - 1.12 hereof.
EFFECTIVE TIME - 1.3 hereof.
ENVIRONMENTAL REQUIREMENT - any Legal Requirement relating to pollution,
waste, disposal, industrial hygiene, land use or the protection of human health,
safety or welfare, plant life or animal life, natural resources, wetlands,
endangered or threatened species or habitat, the environment or property,
including without limitation those pertaining to reporting, licensing,
permitting, controlling, investigating or remediating emissions, discharges,
releases or threatened releases of Hazardous Materials, chemical substances,
pollutants, contaminants or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature, into the air, surface water, groundwater or
land, or relating to the manufacture, generation, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Material,
chemical substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature.
ERISA - the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.
ERISA AFFILIATE - any company which, as of the relevant measuring date
under ERISA, is or was a member of a controlled group of corporations or trades
or businesses (as defined in Sections 414(b), (c), (m) or (o) of the Code) of
which the designated party either is or was a member.
ESCROW AGREEMENT - 1.7(a) hereof.
ESCROW SHARES - 1.7(a) hereof.
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EXCHANGE ACT - 3.7 hereof.
EXTENDED EARNOUT PERIOD - 1.12 hereof.
EXTENDED EARNOUT TARGET - 1.12 hereof. EXTENDED MAXIMUM TARGET - 1.12
hereof.
GAAP - generally accepted accounting principles applied on a consistent
basis, as set forth in authoritative pronouncements which are applicable to the
circumstances as of the date in question. The requirement that such principles
be applied on a "CONSISTENT BASIS" means that accounting principles observed in
the period in question are comparable in all material respects to those applied
in the preceding periods, except as change is permitted or required under or
pursuant to such accounting principles.
GOULD SHARES - 1.7(d) hereof.
GOULD WARRANT - 1.7(d) hereof.
GOVERNMENTAL AGENCY - any agency, department, board, commission, district
or other public organ, whether federal, state, local or foreign.
GOVERNMENT AUDIT - 2.17(b) hereof.
GROSS REVENUES - (i) all revenues received by the Surviving Corporation
from grants and contracts between it and any Person, other than grants or
contracts in existence at the Effective Time between Biopool and any Person or
grants or contracts that Biopool was negotiating or had applied for as of the
Effective Time and (ii) all revenues from the sales of products not currently
offered or under development by Biopool as of the date hereof, less shipping
costs, charge-backs, customs duties, taxes (other than income taxes), third
party license fees and other similar items that do not actually represent
revenue to the Surviving Corporation.
HAZARDOUS MATERIAL - all or any of the following: (i) any substance the
presence of which requires investigation or remediation under any applicable law
or regulation; (ii) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable laws or regulations as "HAZARDOUS
SUBSTANCES," "HAZARDOUS MATERIALS," "HAZARDOUS WASTES," "TOXIC SUBSTANCES," or
any other formulation intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity or "EP toxicity;" (iii) any petroleum
products, explosives or radioactive materials; and (iv) asbestos in any form or
electrical equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per million.
HOLDBACK SHARES - 1.7(a) hereof
INDEMNIFICATION TERMINATION PERIOD - 7.1(c) hereof.
INDEMNITEE - 7.1(c) hereof.
INDEMNITOR - 7.1(c) hereof.
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INTELLECTUAL PROPERTY - any or all of the following and all rights
associated therewith: (i) all domestic and foreign patents and applications
therefore and all reissues, divisions, renewals, extensions, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
proprietary rights and processes, know how, technology rights and licenses,
research and development in progress, technical data and customer lists, and all
documentation relating to any of the foregoing; (iii) all copyrights, copyrights
registration and applications therefore, and all other rights corresponding
thereto throughout the world; (iv) all mask works, mask work registrations and
applications therefore; (v) all industrial designs and any registrations and
applications therefore; (vi) all trade names, logos, common law trademarks and
service marks; trademark and service mark registrations and applications
therefore and all goodwill associated therewith; and (vii) all computer software
including all source code, object code, firmware, development tools, files,
records and data, all media on which any of the foregoing is recorded, all
documentation related to any of the foregoing.
LEGAL REQUIREMENT - a statute, regulation, ordinance or similar legal
requirement, whether federal, state, local or foreign, or any requirement of a
permit or other authorization issued by a Governmental Agency.
LETTER OF TRANSMITTAL - 1.8(a) hereof.
LIABILITIES - all liabilities, including without limitation any direct or
indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or unknown,
fixed or contingent, asserted or unasserted, liquidated or unliquidated, secured
or unsecured.
LIEN - any lien, security interest, mortgage, deed of trust, pledge,
hypothecation, capitalized lease or interest or right for security purposes.
LOSSES - all losses, costs, claims, demands, actions, suits, proceedings,
assessments, expenses, liabilities, damages and judgments (including interest,
penalties and reasonable attorneys' fees and reasonable out-of-pocket costs and
the reasonable fees and out-of-pocket costs of other professional advisors).
MAXIMUM TARGET - 1.12 hereof.
MARKET PRICE - 7.2(a) hereof.
MATERIAL ADVERSE EFFECT - a material adverse effect on the business,
assets, Properties, Liabilities, financial condition, results of operations or
business of the designated party.
MERGER - Recitals.
MERGER CONSIDERATION - 1.7(a) hereof.
MERGER SHARE CERTIFICATES - the stock certificates to be issued to the
former Xtrana stockholders evidencing the Merger Shares.
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MERGER SHARES - the shares of Common Stock of the Surviving Corporation to
be received as the Merger Consideration, including the Xtrana Indemnification
Shares, if any, and the Additional Shares, if any.
ORDER - any judgment, injunction, order or similar mandatory direction of,
or stipulation or agreement filed with, a Governmental Agency, court, judicial
body, arbitrator or arbitrage body.
PERMIT - a permit, license, franchise, certificate of authority or similar
instrument issued by a Governmental Agency.
PERMITTED HAZARDOUS MATERIALS - 2.23 hereof.
PERSON - a natural individual, corporation, partnership, limited liability
company, trust, business trust, association or entity of any kind, including
without limitation a Governmental Agency.
PROPERTY - any interest in real, personal or mixed property, whether
tangible or intangible, including without limitation cash.
PROXY STATEMENT - the proxy statement the be prepared by Xtrana and Biopool
relating to the solicitation of votes of the shareholders of Biopool approving
this Agreement, the Merger and the transactions contemplated by this Agreement.
RULE 145 AFFILIATES - 4.15 hereof.
SEC - 3.7 hereof.
SEC REPORTS - 3.7 hereof.
SECURITIES ACT - 3.7 hereof.
SURVIVING CORPORATION - 1.2 hereof.
TAX - any federal, state, local or foreign tax, assessment, duty, fee and
other governmental charge or imposition of any kind, whether measured by
properties, assets, wages, payroll, purchases, value added, payments, sales,
use, business, capital stock, surplus or income, and any addition, interest,
penalty, deficiency imposed with respect to any Tax.
TAX RETURNS - all returns, reports, estimates, information returns and
statements required to be filed in respect of any Taxes.
THIRD-PARTY ACTION - any consent, waiver, approval, license or other
authorization of, or notice to, or filing with, any other Person, whether or not
a Governmental Agency, and the expiration of any associated mandatory waiting
period.
THIRD-PARTY INTELLECTUAL PROPERTY - all written, and all material
unwritten, licenses, sublicenses and other agreements pursuant to which the
designated party is authorized to use, resell
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or distribute any third-party Intellectual Property, including without
limitation software, open-source, freeware, shareware and hardware.
THIRD-PARTY RIGHT - any Lien on any Property of the Person in question, or
any right (other than the rights of the designated party hereunder) (i) to
acquire, lease, use, dispose of, vote or exercise any right or power conferred
by any Property of such Person, or (ii) restricting the Person's right to lease,
use, dispose of, vote or exercise any right or power conferred by any Property
of such Person.
THIRD-PARTY TRANSACTION - an Acquisition Transaction with a Person
unrelated to this Agreement and the transactions contemplated hereunder.
THRESHOLD TARGET - 1.12 hereof.
XTRANA ANNUAL STATEMENTS - 2.6(a) hereof.
XTRANA CERTIFICATE OF INCORPORATION - that certain Certificate of
Incorporation of Molecular Innovations, Inc. filed with the Delaware Secretary
of State on October 7, 1997 and that certain Certificate of Amendment To The
Certificate of Incorporation of Molecular Innovations, Inc., filed with the
Delaware Secretary of State on January 31, 2000.
XTRANA COMMON STOCK - the common stock, par value $0.01 per share, of
Xtrana.
XTRANA CONFIDENTIAL INFORMATION - 2.21(f) hereof.
XTRANA DISCLOSABLE CONTRACTS - 2.14 hereof.
XTRANA DISCLOSABLE LEASES - 2.10 hereof.
XTRANA ERISA PLAN - 2.13(c) hereof.
XTRANA FINANCIAL STATEMENTS - 2.6(a) hereof.
XTRANA INDEMNIFICATION SHARES - 7.1(c) hereof.
XTRANA INDEMNITEE PARTIES - 7.1(a)(ii) hereof.
XTRANA INTELLECTUAL PROPERTY - Intellectual Property used in the business
of Xtrana as currently conducted and presently planned to be conducted, other
than Third-Party Intellectual Property.
XTRANA INTERIM STATEMENT - 2.6(a) hereof.
XTRANA PREFERRED STOCK- Section 2.1.
XTRANA'S POST-MERGER REPRESENTATIVE - 7.2 hereof.
XTRANA PRINCIPALS - 2.29 hereof.
XTRANA'S PROXY INFORMATION - 2.28 hereof.
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XTRANA STOCKHOLDER APPROVAL - 2.3 hereof.
XTRANA WARRANT - that certain warrant to purchase 25,278 shares of Xtrana
Common Stock, dated March 30, 2000, granted to Biopool.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement and Plan of
Reorganization as of the date first written above.
BIOPOOL INTERNATIONAL, INC. XTRANA, INC.
/S/ MICHAEL D. BICK, PH.D. /S/ JOHN H. WHEELER
------------------------------- ------------------------------
Name: Michael D. Bick, Ph.D. Name: John H. Wheeler
Title: Chief Executive Officer Title: Chief Executive Officer
