EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XTRANA, INC.,
AIC MERGER CORPORATION
AND
ALPHA INNOTECH CORPORATION
DATED AS OF DECEMBER 14, 2004
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER ("AGREEMENT") made this 14th day of
December, 2004 is entered into by and among Xtrana, Inc., a Delaware corporation
("XTRANA"), AIC Merger Corporation, a California corporation and wholly-owned
subsidiary of Xtrana ("MERGERCO"), and Alpha Innotech Corporation, a California
corporation ("AIC"). Xtrana, MergerCo and AIC are sometimes referred to herein
individually as a "PARTY" and collectively as the "PARTIES."
RECITALS:
A. The Parties intend to effect the acquisition of AIC by Xtrana
through the statutory merger of MergerCo with and into AIC in accordance with
this Agreement and the CGCL, upon the consummation of which MergerCo will cease
to exist as a separate entity and AIC will survive as a wholly-owned subsidiary
of Xtrana.
B. The respective Boards of Directors of each of the Parties have (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger (as defined below), are advisable and in the best interests
of their respective stockholders and (ii) adopted this Agreement and the
transactions contemplated hereby.
C. In connection with the execution and delivery of this Agreement,
Xtrana has agreed to make a loan to AIC in the amount of $500,000 pursuant to
the terms of the Promissory Note (as defined below), upon completion of the Note
Conversion.
D. It its contemplated that prior to the Effective Time Xtrana will
effect a one-for-ten reverse split of its Common Stock.
E. The Parties desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
AGREEMENT:
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficient of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
1.1 CERTAIN DEFINITIONS. The following terms used herein, as used
in this Agreement, shall have the following meanings:
"AFFILIATE" of any specified Person means any other Person
directly or indirectly Controlling or Controlled by or under direct or indirect
common Control with such specified Person.
"AIC COMMON EXCHANGE RATIO" means 0.1136072, as adjusted to
reflect appropriately the effect of any stock split, reverse stock split, stock
dividend (including any
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dividend or distribution of securities convertible into Xtrana Common Stock),
reorganization, recapitalization, reclassification or other like change with
respect to Xtrana Common Stock occurring on or after the date hereof and prior
to the Effective Time, other than the Reverse Stock Split.
"AIC COMMON STOCK" means the Common Stock of AIC.
"AIC INDEMNIFICATION SHARES" means 500,000 additional shares
of Xtrana Common Stock (as adjusted to reflect appropriately the effect of any
stock split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into Xtrana Common Stock),
reorganization, recapitalization, reclassification or other like change with
respect to Xtrana Common Stock occurring on or after the date hereof and prior
to the Effective Time except for the Reverse Stock Split), which shares shall be
deposited at Closing in escrow, to be held pursuant to the terms and conditions
of this Agreement and the Escrow Agreement for the purpose of satisfying
Xtrana's indemnification obligations, if any, set forth in SECTION 9 of this
Agreement. For avoidance of doubt, the foregoing number has been adjusted to
reflect to the anticipated Reverse Stock Split.
"AIC INDEMNIFIED PARTIES" means AIC and its Affiliates, and
each of their respective officers, directors, agents and representatives and
each of the heirs, executors, successors and assigns of any of the foregoing.
"AIC POST-MERGER REPRESENTATIVE" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or such
other individual as may be selected by the AIC Shareholders immediately prior to
the Effective Time, and who shall act as the agent of the AIC Indemnified
Parties for purposes of representing and protecting their interests under this
SECTION 9.
"AIC SERIES A PREFERRED EXCHANGE RATIO" means 0.2868318, as
adjusted to reflect appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Xtrana Common Stock), reorganization, recapitalization,
reclassification or other like change with respect to Xtrana Common Stock
occurring on or after the date hereof and prior to the Effective Time, other
than the Reverse Stock Split.
"AIC SERIES A-1 PREFERRED EXCHANGE RATIO" means 0.2868318, as
adjusted to reflect appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Xtrana Common Stock), reorganization, recapitalization,
reclassification or other like change with respect to Xtrana Common Stock
occurring on or after the date hereof and prior to the Effective Time, other
than the Reverse Stock Split.
"AIC SERIES A PREFERRED STOCK" means the Series A Preferred
Stock of AIC.
"AIC SERIES A-1 PREFERRED STOCK" means the Series A-1
Preferred Stock of AIC.
"AIC SHARES" means, collectively, the AIC Common Stock, AIC
Series A Preferred Stock and AIC Series A-1 Preferred Stock.
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"AIC SHAREHOLDERS" means, collectively, the holders of the AIC
Common Stock, AIC Series A Preferred Stock and AIC Series A-1 Preferred Stock.
"BENEFIT PLAN" means any collective bargaining agreement or
any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other plan, arrangement or understanding (whether or not legally binding) under
which a Party to this Agreement currently has an obligation to provide benefits
to any current or former employee, officer or director of such Party.
"CGCL" means the California General Corporation Law.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTROL," when used with respect to any specified Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise.
"EFFECTIVE TIME" means the date and time the Merger becomes
effective as specified in the Certificate of Merger or as otherwise provided in
accordance with the CGCL.
"ENVIRONMENTAL LAWS" means all applicable laws, statutes,
by-laws and regulations of any Governmental Entity relating to protection of the
environment, pollution control, product registration and Hazardous Materials.
"ESCROW AGREEMENT" means the Escrow Agreement to be entered
into by and among Xtrana, the AIC Post-Merger Representative, the Xtrana
Post-Merger Representative and a mutually acceptable escrow agent, substantially
in the form attached hereto as EXHIBIT B.
"ESCROW SHARES" means, collectively, the Holdback Shares and
the AIC Indemnification Shares.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles as
applied in the United States of America.
"GOVERNMENTAL ENTITY" means any national, state, municipal, or
other government or any court, administrative or regulatory agency or commission
or other governmental authority or agency, domestic or foreign.
"HAZARDOUS MATERIALS" means any waste, pollutant, contaminant,
hazardous substance, toxic, ignitable, reactive or corrosive substance,
hazardous waste, special waste, industrial substance, by-product, process
intermediate product or waste, petroleum or petroleum-derived substance or
waste, chemical liquids or solids, liquid or gaseous products, or any
constituent of any such substance or waste, the use, handling or disposal of
which by the Company is in any way governed by or subject to any applicable
Environmental Law.
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"HOLDBACK SHARES" means, out of Xtrana Common Stock
constituting the Merger Consideration, 500,000 shares of Xtrana Common Stock (as
adjusted to reflect appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Xtrana Common Stock), reorganization, recapitalization,
reclassification or other like change with respect to Xtrana Common Stock
occurring on or after the date hereof and prior to the Effective Time except for
the Reverse Stock Split), which shares shall be deposited at Closing in escrow,
to be held pursuant to the terms and conditions of this Agreement and the Escrow
Agreement for the purpose of satisfying AIC's indemnification obligations, if
any, set forth in SECTION 9 of this Agreement. For avoidance of doubt, the
foregoing number has been adjusted to reflect to the anticipated Reverse Stock
Split.
"INTELLECTUAL PROPERTY" means any and all United States and
foreign: (i) patent registrations and patent applications (including all
reissues, divisions, continuations, continuations-in-part, extensions and
reexaminations) and all rights therein and all improvements to the inventions
disclosed in each such registration or application, (ii) trademarks, service
marks, trade dress, trade names and corporate names, whether or not registered,
including but not limited to all common law rights, and registrations and
applications for registration thereof, (iii) copyrights (including but not
limited to copyrights on designs) (registered or otherwise) and registrations
and applications for registration thereof, (iv) computer software, including,
without limitation, source code, operating systems and specifications, data,
data bases, files, documentation and other materials related thereto, data and
documentation, (v) trade secrets and confidential technical and business
information (including but not limited to formulas, compositions, and inventions
reduced to practice, whether or not patentable), (vi) confidential technology
(including know-how and show-how), manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works, financial,
marketing and business data, pricing and cost information, business and
marketing plans and customer and supplier lists and information, (vii) any right
arising under any law providing protection to industrial or other designs,
(viii) all rights to obtain and rights to apply for patents, and to register
trademarks and copyrights, and (ix) all rights to ▇▇▇ or recover and retain
damages and costs and attorneys fees for present and past infringement of any of
the foregoing.
"LICENSES" means all notifications, licenses, permits
(including, without limitation, environmental, construction and operation
permits), franchises, certificates, approvals, exemptions, classifications,
registrations and other similar documents and authorizations issued by a
Governmental Entity, and applications therefor.
"LIENS" mean all mortgages, liens, pledges, security
interests, charges, claims, restrictions and encumbrances of any nature
whatsoever, other than Permitted Liens.
"MARKET PRICE" means the average of the closing bid and asked
prices for the Xtrana Common Stock, as reported on the Over-the-Counter Bulletin
Board, for the ten (10) trading day period commencing on the Closing Date and as
adjusted for the Reverse Stock Split.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means,
when used in connection with AIC or Xtrana, any change or effect that either
individually or in the aggregate with all other such changes or effects is
materially adverse to the business, assets, properties,
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condition (financial or otherwise) or results of operations of such Party and
its Subsidiaries taken as a whole.
"MERGER" means the merger of MergerCo with and into AIC
pursuant to this Agreement and the CGCL.
"MERGERCO COMMON STOCK" means the Common Stock of MergerCo.
"MERGER CONSIDERATION" means that number of shares of Xtrana
Common Stock computed using the following formula:
MC = (OS/0.17) - OS
WHERE: MC = the number of shares of Xtrana Common Stock
constituting the Merger Consideration.
OS = the number of shares of Xtrana Common Stock
issued and outstanding immediately prior to
the Effective Time.
"MINIMUM CLOSING DATE CASH" means an amount equal to
$2,950,000 LESS (i) the Audit Fees, and (ii) all other out-of-pocket costs and
expenses incurred by Xtrana on or after January 1, 2005 and through the Closing
Date which would not have otherwise been incurred by Xtrana but for delay in
consummation of the Merger resulting from the necessity of such audit of the AIC
financial statements, including, but not limited to, the consulting fees of
$5,000 per month payable to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ for serving as interim Chief
Executive Officer and interim Chief Financial Officer of Xtrana, the director
fees incurred by Xtrana (consistent with past practice and policy), consulting
fees for the services of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and similar direct costs incurred
after January 1, 2005 and through the Closing Date, but not exceeding in the
aggregate $15,000 per month, unless otherwise agreed in writing between AIC and
Xtrana.
"PERMITTED LIENS" means (i) liens for taxes, assessments,
governmental charges, or claims that are being contested in good faith by
appropriate proceedings and only to the extent that a reserve or other
appropriate provision, if any, has been made on the face of the AIC Financial
Statements in an amount equal to the liability for which the lien is asserted,
(ii) statutory liens of landlords and warehousemen's, carriers', mechanics',
suppliers', materialmen's, repairmen's, or other like liens (including
contractual landlords' liens) arising in the ordinary course of business and
with respect to amounts not yet delinquent or being contested in good faith by
appropriate proceedings, only to the extent that a reserve or other appropriate
provision, if any, has been made on the face of the AIC Financial Statements in
an amount equal to the liability for which the lien is asserted; and (iii) liens
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other similar types of social
security.
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"PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization,
government or any agency or political subdivision thereof or other entity.
"POST-MERGER REPRESENTATIVES" means the AIC Post-Merger
Representative and the Xtrana Post-Merger Representative.
"PROMISSORY NOTE" means that certain Secured Promissory Note
in the principal amount of $500,000 to be made by AIC in favor of Xtrana, in the
form attached hereto as EXHIBIT A.
"SEC" means the United States Securities and Exchange
Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSIDIARY" of any Person means another Person, an amount of
the voting securities, other voting ownership or voting partnership interests of
another Person, which are sufficient to elect at least a majority of such other
Person's board of directors or other governing body (or, if there are no such
voting interests, fifty percent (50%) or more of such other Person's equity
interests).
"TAXES" means all taxes, assessments, charges, duties, fees,
levies or other governmental charges (including interest, penalties or additions
associated therewith), including income, franchise, capital stock, real
property, personal property, tangible, withholding, employment, payroll, social
security, social contribution, unemployment compensation, disability, transfer,
sales, use, excise, gross receipts, value-added and all other taxes of any kind
for which a Person may have any liability imposed by any Governmental Entity,
whether disputed or not, and any charges, interest or penalties imposed by any
Governmental Entity.
"TAX RETURN" means any report, return, declaration or other
information required to be supplied to a Governmental Entity in connection with
Taxes, including estimated returns and reports of every kind with respect to
Taxes.
"XTRANA COMMON STOCK" means the Common Stock, par value $0.01
per share, of Xtrana.
"XTRANA INDEMNIFIED PARTIES" means Xtrana and its Affiliates,
and each of their respective officers, directors, agents and representatives and
each of the heirs, executors, successors and assigns of any of the foregoing.
"XTRANA POST-MERGER REPRESENTATIVE" means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
or such other individual as may be selected by the holders of Xtrana Common
Stock immediately prior to the Effective Time, and who shall act as the agent of
the Xtrana Indemnified Parties for purposes of representing and protecting their
interests under this SECTION 9.
1.2 OTHER DEFINITIONS. The following terms are defined in the
following sections of this Agreement:
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DEFINED TERM SECTION
------------ -------
ABI....................................................... 4.17
ABI Agreements............................................ 4.17
AIC....................................................... Preamble
AIC Audited Financial Statements.......................... 6.2
AIC Contracts............................................. 3.17
AIC Disclosure Schedule................................... 3
AIC Financial Statements.................................. 3.6
AIC Intellectual Property................................. 3.21
AIC Shareholders' Approval................................ 3.33
AIC Subsidiaries.......................................... 3.2
Agreement................................................. Preamble
Assumed Options and Warrants.............................. 2.9.8
Audit Fees................................................ 6.2
Certificate of Merger..................................... 2.3
Certificates.............................................. 2.10.1
Claims Deadline........................................... 9.2
Closing................................................... 2.2
Closing Date.............................................. 2.2
Damages................................................... 9.3.1
Deferred Compensation..................................... 6.11
Hearing Notice............................................ 6.3
Hearing Request........................................... 6.3
Indemnification Termination Period........................ 9.4
Indemnitee................................................ 9.4
Independent Accountants................................... 6.2
Letter of Transmittal..................................... 2.10.1
MergerCo.................................................. Preamble
Merger Share Certificate.................................. 2.10.2
NIST Agreement............................................ 4.17
Note Conversion........................................... 3.3
Notice Materials.......................................... 6.3
Party(ies)................................................ Preamble
Permit.................................................... 6.3
Proxy Statement........................................... 4.8
Reverse Stock Split....................................... 6.4.2
Secretary of State........................................ 2.3
Surviving Corporation..................................... 2.1
Terminated Xtrana Contracts............................... 4.18
Notice Materials.......................................... 6.3
US Army Agreement......................................... 4.17
Xtrana Contracts.......................................... 4.18
Xtrana Disclosure Schedule................................ 4
Xtrana SEC Documents...................................... 4.6.1
Xtrana Stockholders' Approval............................. 4.15
Xtrana Stockholders' Meeting.............................. 6.4.2
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2. THE MERGER.
2.1 THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the CGCL, MergerCo shall be
merged with and into AIC at the Effective Time. At the Effective Time, the
separate existence of MergerCo shall cease, and AIC shall continue as the
surviving corporation following the Merger (the "SURVIVING CORPORATION"). The
corporate existence of AIC, with all its purposes, rights, privileges,
franchises, powers and objects, shall continue unaffected and unimpaired by the
Merger and, as the Surviving Corporation, it shall be governed by the laws of
the State of California. As a result of the Merger, the outstanding shares of
capital stock of AIC and MergerCo shall be converted or cancelled in the manner
provided in SECTION 2.9.
2.2 CLOSING. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been abandoned pursuant to
SECTION 8.1 and subject to the satisfaction or waiver (where applicable) of the
conditions set forth in SECTION 7, the closing of the Merger (the "CLOSING")
will take place at 10:00 a.m. on the first business day after satisfaction of
the conditions set forth in SECTION 7 (or as soon as practicable thereafter
following satisfaction or waiver of the conditions set forth in SECTION 7) (the
"CLOSING DATE"), at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Markiles, LLP, unless
another date, time or place is agreed to in writing by the parties hereto.
2.3 ACTIONS AND DELIVERIES AT CLOSING. An agreement of merger in
the form attached hereto as EXHIBIT C (the "CERTIFICATE OF MERGER") shall be
duly prepared and executed, and shall be filed with the Secretary of State of
the State of California (the "SECRETARY OF STATE") in accordance with the CGCL
on the Closing Date. The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State, or at such other time as is
permissible in accordance with the CGCL and as Xtrana and AIC shall agree should
be specified in the Certificate of Merger. In addition, at the Closing,
2.3.1 AIC will deliver to Xtrana:
(a) An officers' certificate, substantially in
the form of EXHIBIT D, duly executed on AIC's behalf, as to whether each
condition specified in SECTIONS 7.2.1 through 7.2.7 has been satisfied in all
respects.
(b) A Secretary's certificate, substantially in
the form of EXHIBIT E, duly executed on AIC's behalf.
(c) The Escrow Agreement, duly executed by the
AIC Post-Merger Representative.
(d) A legal opinion of counsel to AIC,
substantially in the form of EXHIBIT F hereto.
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2.3.2 Xtrana will deliver to AIC:
(a) An officers' certificate, substantially in
the form of EXHIBIT G, duly executed on Xtrana and MergerCo's behalf, as to
whether each condition specified in SECTIONS 7.3.1 through 7.3.5 has been
satisfied in all respects.
(b) A Secretary's certificate, substantially in
the form of EXHIBIT H, duly executed on each of Xtrana's and MergerCo's behalf.
(c) The Escrow Agreement, duly executed by
Xtrana and the Xtrana Post-Merger Representative.
(d) A legal opinion of counsel to Xtrana,
substantially in the form of EXHIBIT I hereto.
2.3.3 Xtrana will deliver the Escrow Shares to the escrow
agent pursuant to the Escrow Agreement.
2.4 EFFECTS OF THE MERGER. Subject to the foregoing, the effects
of the Merger shall be as provided in the applicable provisions of the CGCL. At
the Effective Time all MergerCo's property, rights, privileges, powers, and
franchises will vest in the Surviving Corporation, and all debts, liabilities,
and duties of MergerCo will become the Surviving Corporation's debts,
liabilities, and duties.
2.5 GOVERNING DOCUMENTS OF THE SURVIVING CORPORATION. As of the
Effective Time, by virtue of the Merger and without any action on the part of
Parties:
2.5.1 ARTICLES OF INCORPORATION. The Articles of
Incorporation of the Surviving Corporation shall be amended and restated in its
entirety to read as set forth on EXHIBIT J hereto; and
2.5.2 BYLAWS. The Bylaws of AIC, as in effect immediately
prior to the Effective Time, will be the Surviving Corporation's Bylaws until
thereafter amended.
2.6 DIRECTORS OF THE SURVIVING CORPORATION. At the Effective Time,
the Board of Directors of the Surviving Corporation shall consist of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇, who shall serve as the directors of the Surviving
Corporation, each of such directors to hold office, subject to the applicable
provisions of the Articles of Incorporation and Bylaws of the Surviving
Corporation, in each case, until their respective successors shall have been
elected and qualified or until otherwise provided by law. All other directors of
MergerCo immediately prior to the Effective Time shall resign, effective as of
the Effective Time.
2.7 OFFICERS OF THE SURVIVING CORPORATION. At the Effective Time
the officers of MergerCo immediately prior to the Effective Time shall resign,
effective as of the Effective Time, and shall be replaced by the following
individuals:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇........ President and Chief Executive Officer
▇▇▇▇▇▇ ▇▇▇, Ph.D....... Chief Financial Officer and Secretary
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who shall serve as officers of the Surviving Corporation subject to the
applicable provisions of the Articles of Incorporation and Bylaws of the
Surviving Corporation, in each case, until their respective successors shall
have been duly appointed or until otherwise provided by law.
2.8 EFFECT ON CAPITAL STOCK OF MERGERCO. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof,
each share of MergerCo Common Stock issued and outstanding immediately prior to
the Effective Time shall automatically be converted into and become one validly
issued, fully paid and nonassessable share of Common Stock of the Surviving
Corporation.
2.9 EFFECT ON CAPITAL STOCK OF AIC. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof:
2.9.1 AGGREGATE CONSIDERATION TO BE RECEIVED BY AIC
SHAREHOLDERS AND ESCROW. The aggregate merger consideration issued at the
Effective Time to AIC Shareholders will be that number of fully paid,
nonassessable shares of Xtrana Common Stock constituting the Merger
Consideration, which number includes the Holdback Shares). To the extent
necessary, the Parties shall make appropriate adjustment to the AIC Common
Exchange Ratios, AIC Series A Preferred Exchange Ratio and AIC Series A-1
Preferred Ratio, as applicable, to ensure that the shares issued at the
Effective Time to the AIC Shareholders (including the Holdback Shares) shall not
exceed the Merger Consideration. Of the total Merger Consideration, that number
of shares of Xtrana Common Stock constituting the Holdback Shares shall be
deposited at Closing in escrow, along with the AIC Indemnification Shares which
shall be deposited in escrow at Closing by Xtrana, to be held pursuant to the
terms and conditions of this Agreement and the Escrow Agreement until released
for distribution to the AIC Shareholders or for cancellation.
2.9.2 CONVERSION OF AIC COMMON STOCK. Each issued and
outstanding share of AIC Common Stock (other than shares of AIC Common Stock, if
any, that are held by Xtrana or MergerCo) shall be converted into the right to
receive that number of fully paid and nonassessable shares of Xtrana Common
Stock equal to the AIC Common Exchange Ratio, subject in all respects to SECTION
2.9.1 and the Escrow Agreement.
2.9.3 CONVERSION OF AIC SERIES A PREFERRED STOCK. Each
issued and outstanding share of AIC Series A Preferred Stock (other than shares
of AIC Series A Preferred Stock, if any, that are held by Xtrana or MergerCo)
shall be converted into the right to receive that number of fully paid and
nonassessable shares of Xtrana Common Stock equal to the AIC Series A Preferred
Exchange Ratio, subject in all respects to SECTION 2.9.1 and the Escrow
Agreement.
2.9.4 CONVERSION OF AIC SERIES A-1 PREFERRED STOCK. Each
issued and outstanding share of AIC Series A-1 Preferred Stock (other than
shares of AIC Series A-1 Preferred Stock, if any, that are held by Xtrana or
MergerCo) shall be converted into the right to receive that number of fully paid
and nonassessable shares of Xtrana Common Stock equal to the AIC Series A-1
Preferred Exchange Ratio, subject in all respects to SECTION 2.9.1 and the
Escrow Agreement.
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2.9.5 CANCELLATION OF TREASURY SHARES AND SHARES HELD BY
XTRANA. Any and all AIC Shares owned by Xtrana or MergerCo or held in the
treasury of AIC shall be cancelled and cease to exist at the Effective Time, and
no consideration shall be paid with respect thereto.
2.9.6 NO FRACTIONAL SHARES. No fractional shares of Xtrana
Common Stock shall be issued in the Merger. If the number of shares a holder of
AIC Shares holds immediately prior to the Closing multiplied by the applicable
exchange ratio would result in the issuance of a fractional share of Xtrana
Common Stock, that product will be rounded down to the nearest whole number of
shares of Xtrana Common Stock if it is less than the fraction of one-half (.5)
of one share of Xtrana Common Stock or round up to the nearest whole number of
shares of Xtrana Common Stock if the said product is equal to or greater than
the fraction of one-half (.5) of one share of Xtrana Common Stock.
2.9.7 CANCELLATION AND RETIREMENT OF AIC SHARES. As of the
Effective Time, all AIC Shares issued and outstanding immediately prior to the
Effective Time shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a certificate
representing any such AIC Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration per share upon the
surrender of such certificate in accordance with SECTION 2.10, without any
interest thereon, subject to any applicable withholding tax.
2.9.8 STOCK OPTIONS AND WARRANTS. At the Effective Time,
all options to purchase shares of AIC Common Stock then outstanding and all
warrants to purchase shares of AIC Common Stock or AIC Preferred Stock then
outstanding, in each case whether vested or unvested, shall be assumed by Xtrana
or replaced with Xtrana options and warrants on substantially identical terms
(the "ASSUMED OPTIONS AND WARRANTS") in accordance with this SECTION 2.9.8,
provided that warrants to purchase shares of AIC Preferred Stock will be
exercisable into shares of Xtrana Common Stock based on the relevant Exchange
Ratio. Each Assumed Option and Warrant will continue to have, and be subject to,
the same terms and conditions of such options immediately prior to the Effective
Time (including, without limitation, any repurchase rights or vesting provisions
and provisions regarding the acceleration of vesting on certain transactions),
except that (i) each Assumed Option and Warrant will be exercisable (or will
become exercisable in accordance with its terms) for that number of whole shares
of Xtrana Common Stock equal to the product of the number of shares of AIC
Common Stock that were issuable upon exercise of such AIC option or warrant
immediately prior to the Effective Time multiplied by the AIC Common Exchange
Ratio, and (ii) the per share exercise price for the shares of Xtrana Common
Stock issuable upon exercise of each Assumed Option and Warrant will be equal to
the quotient determined by dividing the exercise price per share of AIC Common
Stock at which such AIC option or warrant was exercisable immediately prior to
the Effective Time by the AIC Common Exchange Ratio.
2.10 EXCHANGE OF CERTIFICATES.
2.10.1 EXCHANGE PROCEDURES. As soon as reasonably
practicable after the Effective Time, Xtrana shall deliver to each holder of
record of a certificate or certificates which, immediately prior to the
Effective Time represented outstanding shares of AIC Shares (the
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"CERTIFICATES") whose shares are converted pursuant to SECTION 2.9 into the
right to receive Merger Consideration: (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 Xtrana or its designated agent and shall be in such form and
have such other customary provisions as Xtrana may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificate in exchange
for the Merger Consideration allocable to the AIC Shares formerly represented
thereby.
2.10.2 MERGER SHARE CERTIFICATES. Upon surrender of a
Certificate for cancellation to Xtrana, or to any agent or agents as may be
appointed by Xtrana, together with the Letter of Transmittal, duly completed and
executed in accordance with its terms and such other documents as Xtrana or its
agent or agents, the holder of such Certificate shall be entitled to receive in
exchange therefore, a certificate ("MERGER SHARE CERTIFICATE") representing the
number of shares of Xtrana Common Stock which such holder has the right to
receive pursuant to the provisions of SECTION 2.9 less such holder's pro rata
portion of the Holdback Shares (calculated as that percentage of the total
number of shares issuable as Merger Consideration that such holder has the right
to receive pursuant to SECTION 2.9) and the Certificate so surrendered shall
forthwith be cancelled. If any certificate for such Xtrana Common Stock is to be
issued in a name other than that in which the certificate for AIC Shares
surrendered for exchange is registered, it shall be a condition of such exchange
that the certificate so surrendered shall be properly endorsed, with signature
guaranteed, or otherwise in proper form for transfer and that the Person
requesting such exchange shall pay to Xtrana or its transfer agent any transfer
or other taxes or other costs required by reason of the issuance of certificates
for such Xtrana Common Stock in a name other than that of the registered holder
of the certificate surrendered, or establish to the satisfaction of Xtrana or
its transfer agent that all taxes have been paid. Until surrendered as
contemplated by this SECTION 2.10.2, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration as contemplated by SECTION 2.9.
2.10.3 LOST CERTIFICATES. If any Certificate 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, if required by
Xtrana, the posting by such Person of a bond in such reasonable amount as Xtrana
may direct as indemnity against any claim that may be made against it with
respect to such Certificate, Xtrana shall issue in exchange for such lost,
stolen or destroyed Certificate, the Merger Consideration due to such Person a
provided in SECTION 2.9.
2.10.4 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to Xtrana Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered certificate for AIC Shares with respect to the shares of Xtrana
Common Stock, the right to receive which is represented thereby, until the
surrender of such certificate in accordance with this SECTION 2.10.
2.10.5 NO FURTHER OWNERSHIP RIGHTS IN AIC SHARES. All shares
of Xtrana Common Stock issued upon the surrender of the Certificates in
accordance with the terms of this SECTION 2 and placed in escrow pursuant to
SECTION 2.9.1, shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to AIC Shares theretofore represented by
such certificates.
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2.10.6 NO LIABILITY. None of the Parties shall be liable to
any Person in respect of any shares of Xtrana Common Stock (or dividends or
distributions with respect thereto) delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If any certificates
representing AIC Shares shall not have been surrendered prior to the first (1st)
anniversary of the Closing, any such shares, dividends or distributions in
respect of such certificate shall, to the extent permitted by applicable law,
become the property of Xtrana, free and clear of all claims or interests of any
Person previously entitled thereto.
3. REPRESENTATIONS AND WARRANTIES OF AIC.
Except as set forth in the disclosure schedule delivered by AIC to
Xtrana at the time of execution of this Agreement and attached hereto (the "AIC
DISCLOSURE SCHEDULE") and arranged in section corresponding to the numbered
subsections contained in this SECTION 3, AIC represents and warrants to Xtrana
as follows:
3.1 ORGANIZATION, STANDING AND CORPORATE POWER. AIC is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California and has the requisite corporate power and authority
to carry on its business as now being conducted and currently contemplated to be
conducted. AIC is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) would not have a Material Adverse
Effect on AIC.
3.2 SUBSIDIARIES. The only direct or indirect Subsidiaries of AIC
are listed in the AIC Disclosure Schedule (the "AIC SUBSIDIARIES"). All the
outstanding shares of capital stock of each AIC Subsidiary which is a
corporation have been validly issued and are fully paid and nonassessable and,
except as set forth in the AIC Disclosure Schedule, are owned (of record and
beneficially) by AIC, free and clear of all Liens. Except for the capital stock
of the AIC Subsidiaries, which are corporations, AIC does not own, directly or
indirectly, any capital stock or other ownership interest in any corporation,
partnership, business association, joint venture or other entity.
3.3 CAPITAL STRUCTURE. The authorized capital stock of AIC
consists of 70,000,000 shares of AIC Common Stock, 14,000,000 shares of AIC
Series A Preferred Stock and 10,000,000 shares of AIC Series A-1 Preferred
Stock, of which 23,177,526 shares of AIC Common Stock, 10,533,334 shares of AIC
Series A Preferred Stock and no shares of AIC Series A-1 Preferred Stock are
issued and outstanding. In addition, the AIC Board of Directors has approved the
issuance of approximately 7,343,418 shares of AIC Series A-1 Preferred Stock in
exchange for the conversion of all outstanding principal, accrued interest or
other obligations under all convertible notes or other convertible debt
obligations of AIC outstanding as of the date hereof (the "NOTE CONVERSION").
Except as set forth above, no shares or other equity securities of AIC are
issued, reserved for issuance or outstanding. All outstanding shares of AIC are
duly authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of AIC having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any matters
on which shareholders of AIC may vote. The AIC Disclosure Schedule
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sets forth the outstanding capitalization of AIC, including a list of all
holders of AIC Shares and their respective holdings. Except as set forth on the
AIC Disclosure Schedule, there are no outstanding securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of any kind
to which AIC is a party or by which it is bound obligating AIC to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares or other
equity or voting securities of AIC or obligating AIC to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There are no outstanding contractual
obligations, commitments, understandings or arrangements of AIC or any AIC
Subsidiaries to repurchase, redeem or otherwise acquire or make any payment in
respect of any securities of AIC. There are no agreements or arrangements
pursuant to which AIC is or could be required to register AIC Common Stock or
other securities under the Securities Act, or other agreements or arrangements
with or among any security holders of AIC with respect to securities of AIC.
3.4 AUTHORITY. AIC has the requisite corporate and other power and
authority to enter into this Agreement and, subject to obtaining the AIC
Shareholders' Approval (as defined in SECTION 3.33), to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by AIC and the consummation by AIC of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of AIC; the Board of Directors has recommended adoption of this
Agreement by the shareholders of AIC; and no other corporate proceedings on the
part of AIC or its shareholders are necessary to authorize the execution,
delivery and performance of this Agreement by AIC and the consummation by AIC of
the transaction contemplated hereby, other than obtaining the AIC Shareholders'
Approval. This Agreement has been duly executed and delivered by AIC and
constitutes a valid and binding obligation of AIC, enforceable against AIC in
accordance with its terms, subject to applicable bankruptcy, insolvency and
other similar laws affecting the enforceability of creditors' rights generally,
general equitable principles and the discretion of courts in granting equitable
remedies.
3.5 NON-CONTRAVENTION. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated by this
Agreement and compliance with the provisions hereof will not, conflict with, or
result in any breach or violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of or "put" right with respect to any obligation or
to loss of a material benefit under, or result in the creation of any Lien upon
any of the properties or assets of AIC under, (i) the Articles of Incorporation
or Bylaws of AIC, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to AIC, its properties or assets, or (iii) subject to the
governmental filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule, regulation or
arbitration award applicable to AIC, its properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, breaches, violations,
defaults, rights, losses or Liens that individually or in the aggregate would
not have either a Material Adverse Effect on AIC or would not prevent, hinder or
delay the ability of AIC to consummate the transactions contemplated by this
Agreement. No consent, approval, order or authorization of, or registration,
declaration or filing with, or notice to, any Governmental Entity is required by
or with respect to AIC in connection with the execution and delivery of this
Agreement by AIC or the consummation by AIC of the transactions contemplated
hereby,
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except, with respect to this Agreement, for the filing of the Certificate of
Merger and other appropriate merger documents required by the CGCL with the
Secretary of State and appropriate documents with the relevant authorities of
other states in which AIC is qualified to do business.
3.6 FINANCIALS STATEMENTS. Set forth on the AIC Disclosure
Schedule are the following financial statements (collectively the "AIC FINANCIAL
STATEMENTS"): (a) unaudited consolidated balance sheets and statements of
income, changes in shareholders' equity, and cash flow as of and for the fiscal
years ended December 31, 2002 and 2003 for AIC and (b) unaudited consolidated
balance sheets and statements of income, changes in shareholders' equity, and
cash flow as of and for the ten months ended October 31, 2004 for AIC. The AIC
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, present fairly the
financial condition of AIC as of such dates and the results of operations of AIC
for such periods, are correct and complete, and are consistent with the books
and records of AIC; PROVIDED, HOWEVER, that the unaudited interim financial
statements are subject to normal year-end adjustments (which will not be
material individually or in the aggregate) and lack footnotes and other
presentation items. Since September 30, 2004, AIC has not effected any change in
any method of accounting or accounting practice, except for any such change
required because of a concurrent change in GAAP.
3.7 NO UNDISCLOSED LIABILITIES. AIC does not have any liabilities
or obligations (whether absolute, contingent or otherwise), which are not
adequately reflected or provided for in the AIC Financial Statements, except for
liabilities and obligations (i) that have been incurred since the date of the
most recent balance sheet included in the AIC Financial Statements in the
ordinary course of business and are not (singly or in the aggregate) material to
AIC's business, and (ii) not due and payable or to be performed or satisfied
after the date hereof under AIC Contracts in accordance with their terms, in
each case which are not (singly or in the aggregate) material to AIC's business.
3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since October 31, 2004,
AIC has conducted its business only in the ordinary course consistent with past
practice, and there is not and has not been: (i) any Material Adverse Change
with respect to AIC; (ii) any condition, event or occurrence which individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect or give rise to a Material Adverse Change with respect to AIC; (iii) any
event which, if it had taken place following the execution of this Agreement,
would not have been permitted by SECTION 5.1 without prior consent of Xtrana; or
(iv) any condition, event or occurrence which could reasonably be expected to
prevent, hinder or materially delay the ability of AIC to consummate the
transactions contemplated by this Agreement.
3.9 LEGAL PROCEEDINGS. There is no suit, action, claim,
arbitration, proceeding or investigation pending or, to the knowledge of AIC,
threatened against, relating to or involving AIC, or real or personal property
of AIC, before any Governmental Entity or other third party. To the knowledge of
AIC, there is no basis for any such suit, action, proceeding or investigation.
3.10 COMPLIANCE WITH LAW. AIC is compliance in all material
respects with all applicable laws (including, without limitation, applicable
laws relating to zoning, environmental matters and the safety and health of
employees), ordinances, regulations and orders of all
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Governmental Entities. AIC has not been charged with and, to the knowledge of
AIC, is not now under investigation with respect to, a violation of any
applicable law, regulation, ordinance, order or other requirement of a
Governmental Entity. AIC is not a party to or bound by any order, judgment,
decree or injunction of any Governmental Entity. AIC has filed all reports and
has all Licenses required to be filed with any Governmental Entity on or before
the date hereof the failure to file or to obtain would result in a Material
Adverse Effect on AIC.
3.11 OFFICERS AND EMPLOYEES. AIC has made available to Xtrana a
schedule containing a true and complete list of all of the employees (whether
full-time, part-time or otherwise) and independent contractors of AIC as of the
date hereof, specifying with respect to each such individual his or her
position, status, annual salary and hourly wages, including consulting or other
independent contractor fees. AIC is not a party to or bound by any employment
agreement. AIC has not made any verbal commitments to any such officers,
employees or former employees, consultants or independent contractors with
respect to compensation, promotion, retention, termination, severance or similar
matters in connection with the transactions contemplated by this Agreement or
otherwise.
3.12 EMPLOYEE RELATIONS. To the knowledge of AIC, no executive, key
employee, or group of employees has any plans to terminate employment with AIC.
AIC is not a party to or bound by any collective bargaining agreement, nor has
AIC experienced any strikes, grievances, claims of unfair labor practices or
other collective bargaining disputes. AIC has not committed any unfair labor
practice (as determined under any applicable law). There is no organizational
effort currently being made or threatened by or on behalf of any labor union
with respect to any of AIC's employees.
3.13 BENEFIT PLANS. The AIC Disclosure Schedule contains a true and
complete list of each Benefit Plan currently sponsored, maintained or
contributed to by AIC. Any special tax status enjoyed by such plan is noted on
such schedule. With respect to each Benefit Plan identified the AIC Disclosure
Schedule, AIC has heretofore delivered or made available to Xtrana true and
complete copies of the plan documents and any amendments thereto (or, if the
plan is not written, a written description thereof). AIC's records accurately
reflect its employees' employment histories, including their hours of service,
and all such data is maintained in a usable form.
3.14 CERTAIN EMPLOYEE PAYMENTS. AIC is not a party to any
employment agreement which could result in the payment to any current, former or
future director or employee of AIC of any money or other property or rights or
accelerate or provide any other rights or benefits to any such employee or
director as a result of the transactions contemplated by this Agreement, whether
or not (i) such payment, acceleration or provision would constitute a "parachute
payment" (within the meaning of Section 280G of the Code), or (ii) some other
subsequent action or event would be required to cause such payment, acceleration
or provision to be triggered.
3.15 TAX RETURNS AND TAX PAYMENTS. AIC is not subject to any
liabilities or claims for Taxes, including Taxes relating to prior periods,
other than those set forth or adequately reserved against in the AIC Financial
Statements or those incurred since the date of the most recent balance sheet
included in the AIC Financial Statements in the ordinary course of
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business. AIC has duly filed when due all Tax Returns in connection with and in
respect of its business, assets and employees, and has timely paid and
discharged all amounts shown as due thereon. AIC has made available to Xtrana
accurate and complete copies of all of its Tax Returns for all periods, except
those periods for which returns are not yet due. AIC has not received any notice
of any Tax deficiency outstanding, proposed or assessed against or allocable to
it, and has not executed any waiver of any statute of limitations on the
assessment or collection of any Tax or executed or filed with any Governmental
Entity any contract or other agreement now in effect extending the period for
assessment or collection of any Taxes against it. There are no Liens for Taxes
upon, pending against or threatened against, any asset of AIC. AIC is not
subject to any Tax allocation or sharing agreement.
3.16 ENVIRONMENTAL MATTERS. Except as set forth on the AIC
Disclosure Schedule, (i) AIC is in compliance with all Environmental Laws in
connection with owning, using, maintaining or operating its business or assets;
(ii) each location at which AIC operates, or has operated, its business is in
compliance with all Environmental Laws; and (iii) there are no pending or, to
AIC's knowledge, threatened allegations by any Person that AIC's properties or
assets is not, or that its businesses has not been conducted, in compliance with
all Environmental Laws. No material expenditures are or will be required in
order for AIC to comply with any applicable Environmental Law. AIC has not
received any written or oral notice, report or other information regarding any
actual or alleged violation of Environmental Laws or any liabilities, including
any investigatory, remedial or corrective liabilities, relating to AIC, or its
facilities arising under Environmental Laws. Neither AIC nor any of its
predecessors or Affiliates has, either expressly or by operation of law, assumed
or undertaken any liability, including any obligation for corrective or remedial
action, of any other Person relating to Environmental Laws.
3.17 CONTRACTS AND COMMITMENTS. The AIC Disclosure Schedule
contains a true, complete and accurate list of each of the following written,
and to AIC's knowledge, oral, contracts, agreements, understandings or other
obligations to which AIC is a party or by which any of its assets or properties
are bound (together the "AIC CONTRACTS"):
3.17.1 all bonds, debentures, notes, loans, credit or loan
agreements or loan commitments, mortgages, indentures, guarantees or other
contracts relating to the borrowing of money or binding upon any properties or
assets (real, personal or mixed, tangible or intangible) of AIC;
3.17.2 all rental or use agreements, contracts, covenants or
obligations which may involve the payment by or to AIC of more than $25,000;
3.17.3 any contract, agreement, commitment or obligation to
make any capital expenditures in excess of $25,000;
3.17.4 contracts, agreements, commitments or other
obligations with any Person containing any provision or covenant limiting the
ability of AIC to engage in any line of business or to compete with or to obtain
products or services from any Person or limiting the ability of any Person to
compete with or to provide products or services to, or obtain products or
services from, AIC, or covering indemnification of another Person other than in
the ordinary course of business;
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3.17.5 any profit-sharing or similar contract, agreement,
understanding or obligation with any Person;
3.17.6 contracts, agreements, commitments or other
obligations with respect to the purchase or sale by or to AIC of any product,
equipment, facility, or similar item that by their respective terms do not
expire or terminate or are not terminable by AIC, without penalty, premium or
other liability within 30 days or may involve the payment by or to AIC of more
than $25,000;
3.17.7 contracts, agreements, commitments or other
obligations to provide services or facilities by or to AIC or to or by another
Person which is not terminable by AIC within 30 days without penalty, premium or
other liability or involving payment by AIC or the other Person of more than
$25,000;
3.17.8 any contract that provides for an increased payment
or benefit, or accelerated vesting, upon the execution of this Agreement or in
connection with the transactions contemplated hereby;
3.17.9 any contract or agreement granting any Person a Lien
on all or any part of any asset of AIC;
3.17.10 any contract providing for the indemnification or
holding harmless by AIC of any of its shareholders, officers, directors,
employees or representatives;
3.17.11 all other contracts, agreements, commitments or other
obligations whether or not made in the ordinary course of business which may
involve the expenditure by AIC of funds in excess of $25,000 per commitment (or
under a group of similar commitments), or are otherwise material to AIC; or
3.17.12 all other contracts, agreements, commitments, or
other obligations of any kind that involve or relate to any AIC Shareholder,
officer, director, employee or consultant of AIC or any Affiliate or relative
thereof.
True, correct and complete copies of all AIC Contracts have been made available
to Xtrana. To the knowledge of AIC, the AIC Contracts are legal, valid, binding
and enforceable in accordance with their respective terms with respect to AIC
and each other party to such AIC Contracts. There are no existing defaults or
breaches of AIC under any AIC Contract (or events or conditions which, with
notice or lapse of time or both would constitute a default or breach) and, to
the knowledge of AIC, there are no such defaults (or events or conditions which,
with notice or lapse of time or both, would constitute a default or breach) with
respect to any third party to any AIC Contract. Except as set forth on the AIC
Disclosure Schedule, AIC is not participating in any discussions or negotiations
regarding modification of or amendment to any AIC Contract or entry in any new
material contract applicable to AIC or the real or personal property of AIC. The
AIC Disclosure Schedule specifically identifies each AIC Contract set forth
therein that requires the consent of or notice to the other party thereto to
avoid any breach, default or violation of such contract, agreement or other
instrument in connection with the transactions contemplated by this Agreement.
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3.18 RECEIVABLES. All of the receivables of AIC are enforceable,
represent BONA FIDE transactions, and arose in the ordinary course of business
of AIC, and are reflected properly in its books and records. All of AIC's
receivables are reasonably believed by AIC to be collectible in accordance with
past practice and the terms of such receivables, without set off or
counterclaims except to the extent of reserves therefor set forth in the most
recent balance sheet included in the AIC Financial Statements or, for
receivables arising subsequent to September 30, 2004, as reflected on the books
and records of AIC. No customer or supplier of AIC has any reasonable basis to
believe that it has or would be entitled to any payment terms other than terms
in the ordinary course of business, including any prior course of conduct.
3.19 PERSONAL PROPERTY. AIC has good, clear and marketable title to
all the tangible properties and tangible assets reflected in AIC's latest
balance sheet as being owned by AIC or acquired after the date thereof which
are, individually or in the aggregate, material to AIC's business (except
properties sold or otherwise disposed of since the date thereof in the ordinary
course of business), free and clear of all Liens. All equipment and other items
of tangible personal property and assets of AIC (a) are in good operating
condition and in a state of good maintenance and repair, ordinary wear and tear
excepted, and (b) are usable in the regular and ordinary course of AIC's
business.
3.20 REAL PROPERTY. AIC does not own any real property. The AIC
Disclosure Schedule sets forth all real property leases to which AIC is a party.
AIC has a valid leasehold interest in such leased real property, and such leases
are in full force and effect. The improvements and fixtures on such real
property leased by AIC are in good operating condition and in a state of good
maintenance and repair, ordinary wear and tear excepted.
3.21 INTELLECTUAL PROPERTY RIGHTS. AIC owns, or is licensed or
otherwise has the valid rights to use, all Intellectual Property used in the
conduct of its business (the "AIC INTELLECTUAL PROPERTY"). The AIC Disclosure
Schedule contains an accurate and complete list of all: (a) Intellectual
Property owned by AIC, (b) Intellectual Property licensed to AIC, including a
list of all agreements related thereto, and (c) licenses granted by AIC to
others to use AIC's Intellectual Property, including a list of all agreements
related thereto (in each case excluding licenses available in consumer retail
stores or subject to "shrink-wrap" license agreements), in each case that is the
subject of an application, certificate, filing or registration with a
Governmental Entity. AIC owns all right, title and interest in and to the
Intellectual Property owned by it, free and clear of any Liens. AIC has the sole
and exclusive right to use AIC Intellectual Property licensed to it, and the
consummation of the transaction contemplated hereby will not alter or impair any
such rights. No claims have been asserted by any Person challenging or
questioning the validity or effectiveness of any licenses or agreements related
to the Intellectual Property licensed by, or licensed to, AIC, and to the
knowledge of AIC, there is no valid basis for any such claim. To the knowledge
of AIC, the use by AIC of any Intellectual Property owned or licensed to it does
not violate or infringe the rights of any Person. To the knowledge of AIC,
neither AIC nor any other Person is in default under any license or other
agreement relating to any AIC Intellectual Property, and all such licenses and
agreements are valid, in full force and effect and enforceable. AIC has taken
reasonable steps to safeguard and maintain the secrecy and confidentiality of,
and its proprietary rights in, AIC Intellectual Property. No present or former
employee or consultant of AIC owns or has any proprietary,
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financial or other interest, direct or indirect (other than through ownership of
AIC Common Stock), in whole or in part, in any AIC Intellectual Property.
3.22 TRANSACTIONS WITH RELATED PARTIES. AIC is not a party to any
contract, lease, license, commitment or arrangement, written or oral, which,
were AIC a "registrant" under the Exchange Act, would be required to be
disclosed pursuant to Item 404(a) or (c) of Regulation S-B as promulgated by the
SEC, and there are no loans outstanding to or from any Person specified in Item
404(a) of Regulation S-B from or to AIC.
3.23 NO GUARANTIES. None of the obligations or liabilities of AIC
incurred in connection with the operation of its business is guaranteed by or
subject to a similar contingent obligation of any other Person. AIC has not
guaranteed or become subject to a similar contingent obligation in respect of
the obligations or liabilities of any other Person. There are no outstanding
letters of credit, surety bonds or similar instruments of AIC or any of its
Affiliates.
3.24 INSURANCE. The AIC Disclosure Schedule contains a complete and
correct list of all insurance policies carried by or for the benefit of AIC. AIC
delivered to Xtrana schedules specifying the insurer, amount of and nature of
coverage, the risk insured against, the deductible amount (if any) and the date
through which coverage will continue by virtue of premiums already paid of each
such insurance policies. AIC is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which AIC is engaged. AIC does not have any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.
3.25 CUSTOMER RELATIONS. The AIC Disclosure Schedule contains a
complete and accurate list of the names and addresses of each customer that
generated more than $40,000 in revenue for AIC during since January 1, 2003.
Except as set forth in the AIC Disclosure Schedule no such customer (or former
customer) during the last twelve (12) months has canceled, terminated or, to the
knowledge of AIC, made any threat to cancel or otherwise terminate its contract
or to decrease its usage of AIC's services or products. AIC has not received any
notice or has any knowledge to the effect that any current customer or supplier
may terminate or materially alter its business relations with AIC, either as a
result of the transactions contemplated by this Agreement or otherwise.
3.26 PRODUCT OR SERVICE DEFECTS; LIABILITY. AIC is not aware of any
material defects in any of its products or the design thereof, nor in any of the
services it provides. AIC has not received any customer complaints or third
party reports concerning alleged defects in its products, the design thereof or
its services that, if true, could have a Material Adverse Effect on AIC, nor has
AIC had any of its products returned by a purchaser thereof other than for
minor, nonrecurring warranty problems. AIC has no liabilities (and, to the
knowledge of AIC, there is no basis for any present or future action against AIC
giving rise to any liability) arising out of any injury to individuals or
property as a result of ownership, possession or use of any product designed,
manufactured, sold, leased or delivered by AIC.
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3.27 PRODUCT WARRANTY. Each product manufactured, sold, leased or
delivered by AIC has been manufactured, sold, leased or delivered, as the case
may be, in conformity in all material respects with all applicable law, all
contracts to which AIC is a party, and all express and implied warranties, and
AIC does not have any liability (and, to the knowledge of AIC, there is no basis
for any present or future actions against AIC giving rise to any such liability)
for replacement or repair thereof or other damages in connection therewith,
subject only to the reserve for product warranty claims set forth on the face of
the Financial Statements (rather than in any notes thereto) as adjusted for the
passage of time through the Effective Time in accordance AIC's ordinary course
of business, consistent with GAAP. No product designed, manufactured, sold,
leased or delivered by AIC is subject to any guaranty, warranty or other
indemnity or similar liability beyond the applicable standard terms and
conditions of sale or lease.
3.28 LICENSES. AIC owns or possesses all of the material Licenses
which are necessary to enable it to carry on its business as presently
conducted. All such Licenses are valid, binding, and in full force and effect.
The execution, delivery, and performance of this Agreement and the consummation
of the transactions contemplated hereby will not adversely affect any such
License.
3.29 RECORDS. The books of account, corporate records and minute
books of AIC are complete and correct in all material respects. Complete and
accurate copies of all such books of account, corporate records and minute books
and of the stock register of AIC have been provided to Xtrana.
3.30 NO BROKERS OR FINDERS. AIC has not, and its Affiliates,
officers, directors or employees have not, employed any broker or finder or
incurred any liability for any brokerage or finder's fee or commissions or
similar payment in connection with any of the transactions contemplated hereby.
3.31 BOARD RECOMMENDATION. The Board of Directors of AIC has
unanimously determined that the terms of the Merger are fair to and in the best
interests of the AIC Shareholders and recommended that the AIC Shareholders
approve the Merger.
3.32 DISCLOSURE. AIC has disclosed to Xtrana all facts material to
AIC's business, operations, assets, liabilities, prospects, properties,
condition (financial or otherwise) and results of operations. Neither this
Agreement, nor any Schedule or Exhibit to this Agreement, nor any other
statements, documents or certificates made or delivered in connection herewith
or therewith contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained herein and therein
not misleading in light of the circumstances under which such statements were
made. None of the information supplied by AIC in connection with the
solicitation by Xtrana of the Xtrana Stockholders' Approval contained any untrue
statement of a material fact or omitted 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 are made, not misleading.
3.33 REQUIRED AIC VOTE. The affirmative votes of (a) the holders of
a majority of the shares of AIC Shares voting together as one class on an
as-converted basis and (b) the
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holders of AIC Series A Preferred Stock and AIC Series A-1 Preferred Stock,
voting together as one class, are the only votes of the holders of any class or
series of AIC's securities necessary to approve the Merger (the "AIC
SHAREHOLDERS' APPROVAL").
4. REPRESENTATIONS AND WARRANTIES OF XTRANA AND MERGERCO.
Except as set forth in the disclosure schedule delivered by Xtrana to
AIC at the time of execution of this Agreement and attached hereto (the "XTRANA
DISCLOSURE SCHEDULE"), Xtrana and MergerCo, jointly and severally, represent and
warrant to AIC as follows:
4.1 ORGANIZATION, STANDING AND CORPORATE POWER. Xtrana is duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and authority to carry on its
business as now being conducted. MergerCo is duly organized, validly existing
and in good standing under the laws of the State of California, and has the
requisite corporate power and authority to carry on its business as now being
conducted.
4.2 NO SUBSIDIARIES. Other than MergerCo, Xtrana does not
currently own, directly or indirectly, any capital stock or other equities,
securities or interests in any other corporation or in any limited liability
company, partnership, joint venture or other association.
4.3 CAPITAL STRUCTURE.
4.3.1 The authorized capital stock of Xtrana consists of
50,000,000 shares of Xtrana Common Stock, $0.01 par value, of which 16,533,269
shares of Xtrana Common Stock are issued and outstanding as of the date of this
Agreement. All outstanding shares of capital stock of Xtrana are, and all shares
which may be issued pursuant to this Agreement will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and, not subject to
preemptive rights, and issued in compliance with all applicable state and
federal laws concerning the issuance of securities. There are no outstanding
bonds, debentures, notes or other indebtedness or other securities of Xtrana
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which holders of Xtrana Common Stock
may vote. Except as set forth on the Xtrana Disclosure Schedule, there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Xtrana is a party
or by which any of them is bound obligating Xtrana to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other equity securities of Xtrana or obligating Xtrana to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other equity securities of Xtrana or obligating Xtrana to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations, commitments, understandings or arrangements of Xtrana
to repurchase, redeem or otherwise acquire or make any payment in respect of any
shares of capital stock of Xtrana. There are no agreements or arrangements
pursuant to which Xtrana is or could be required to register shares of Xtrana
Common Stock or other securities under the Securities Act or other agreements or
arrangements with or among any holder of Xtrana securities with respect to
securities of Xtrana.
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4.3.2 The authorized capital stock of MergerCo consists of
1,000 shares of Common Stock, all of which are issued and outstanding as of the
date of this Agreement and held by Xtrana. All outstanding shares of capital
stock of MergerCo are duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of MergerCo having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of MergerCo Common Stock may vote. Other than as
provided in this Agreement, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which MergerCo is a party or by which any of them is bound
obligating MergerCo to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other equity securities of
MergerCo or obligating MergerCo to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
securities of MergerCo or obligating MergerCo to issue, grant, extend or enter
into any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking.
4.4 AUTHORITY. Each of Xtrana and MergerCo has the requisite
corporate and other power and authority to enter into this Agreement and,
subject to obtaining the Xtrana Stockholders' Approval (as defined in SECTION
4.15), to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by each Xtrana
and MergerCo and the consummation by Xtrana and MergerCo of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Xtrana; the Board of Directors has recommended adoption of this Agreement by the
stockholders of Xtrana; and no other corporate proceedings on the part of Xtrana
or its stockholders are necessary to authorize the execution, deliver and
performance of this Agreement by Xtrana and the consummation by Xtrana of the
transaction contemplated hereby, other than obtaining the Xtrana Stockholders'
Approval. This Agreement has been duly executed and delivered by each of Xtrana
and MergerCo and constitutes a valid and binding obligation of each of Xtrana
and MergerCo, enforceable against such Party in accordance with its terms,
subject to applicable bankruptcy, insolvency and other similar laws affecting
the enforceability of creditors' rights generally, general equitable principles
and the discretion of courts in granting equitable remedies.
4.5 NON-CONTRAVENTION. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated by this
Agreement and compliance with the provisions hereof will not, conflict with, or
result in any breach or violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of or "put" right with respect to any obligation or
to loss of a material benefit under, or result in the creation of any Lien upon
any of the properties or assets of either Xtrana or MergerCo under, (i) the
Certificate or Articles of Incorporation or Bylaws of Xtrana or MergerCo, (ii)
any loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable to
Xtrana or MergerCo, their respective properties or assets, or (iii) subject to
the governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation
or arbitration award applicable to Xtrana or MergerCo, their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, breaches, violations, defaults, rights, losses or Liens that
individually or in the aggregate could not have either a Material Adverse Effect
on Xtrana or MergerCo or could not prevent, hinder or
24
delay the ability of Xtrana or MergerCo to consummate the transactions
contemplated by this Agreement. No consent, approval, order or authorization of,
or registration, declaration or filing with, or notice to, any Governmental
Entity is required by or with respect to Xtrana or MergerCo in connection with
the execution and delivery of this Agreement by Xtrana or MergerCo or the
consummation by Xtrana and MergerCo of the transactions contemplated hereby,
except, with respect to this Agreement, for the filing of the Certificate of
Merger and other appropriate merger documents required by the CGCL with the
Secretary of State and appropriate documents with the relevant authorities of
other states in which Xtrana is qualified to do business.
4.6 SEC DOCUMENTS; UNDISCLOSED LIABILITIES.
4.6.1 For all periods subsequent to January 1, 2000, Xtrana
has filed all reports, schedules, forms, statements and other documents as
required by the SEC in a timely basis (or has received a valid extension of such
time of filing and has filed any such reports or other documents prior to the
expiration of any such extension), and Xtrana has delivered or made available to
AIC all reports, schedules, forms, statements and other documents filed with the
SEC during such period (collectively, and in each case including all exhibits
and schedules thereto and documents incorporated by reference therein, the
"XTRANA SEC DOCUMENTS"). As of their respective dates (or, if amended,
supplemented or superseded by a filing prior to the date hereof, then as of the
date of such amendment, supplement or superseding filing) the Xtrana SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Xtrana SEC
Documents, and none of the Xtrana SEC Documents (including any and all
consolidated financial statements included therein) as of such date 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. The consolidated financial statements of Xtrana included in such
Xtrana SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the case
of unaudited consolidated quarterly statements, as permitted by Form 10-QSB of
the SEC) applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly and accurately present the
consolidated financial position of Xtrana as of the dates thereof and the
consolidated results of operations and changes in cash flows for the periods
covered thereby (subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments as determined by Xtrana's independent
accountants). Except as set forth in the Xtrana SEC Documents, at the date of
the most recent financial statements of Xtrana included in the Xtrana SEC
Documents, Xtrana did not have, and since such date Xtrana has not incurred, any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) except for liabilities and obligations that have been incurred
since the date of the most recent balance sheet included in the Xtrana Financial
Statements in the ordinary course of business and are not (singly or in the
aggregate) material to Xtrana's business.
4.6.2 The Xtrana SEC Documents include all certifications
and statements required of it, if any, by (i) Rule 13a-14 or 15d-14 under the
Exchange Act, and (ii) 18 U.S.C. Section 1350 (Section 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002), and each of such certifications and statements contain no
qualifications or exceptions to the matters certified
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therein other than a knowledge qualification, permitted under such provision,
and have not been modified or withdrawn and neither Xtrana nor any of its
officers has received any notice from the SEC or any other Governmental Entity
questioning or challenging the accuracy, completeness, form or manner of filing
or submission of such certifications or statements.
4.6.3 Xtrana is in compliance in all material respects with
all of the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, and the provisions of
the Exchange Act and the Securities Act relating thereto which under the terms
of such provisions (including the dates by which such compliance is required)
have become applicable to Xtrana.
4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Xtrana SEC Documents, since the date of the most recent financial statements
included in the Xtrana SEC Documents, Xtrana has conducted its business only in
the ordinary course consistent with past practice in light of its current
business circumstances, and there is not and has not been: (i) any Material
Adverse Change with respect to Xtrana; (ii) any condition, event or occurrence
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or give rise to a Material Adverse Change with respect
to Xtrana; (iii) any event which, if it had taken place following the execution
of this Agreement, would not have been permitted by SECTION 5.1 without the
prior consent of AIC; or (iv) any condition, event or occurrence which could
reasonably be expected to prevent, hinder or materially delay the ability of
Xtrana to consummate the transactions contemplated by this Agreement.
4.8 INFORMATION SUPPLIED. None of the information included or
incorporated by reference in the proxy statement relating to the Xtrana
Stockholders' Meeting (as defined in SECTION 6.4.2), as amended or supplemented
from time to time (as so amended and supplemented, the "PROXY STATEMENT"), and
any other documents to be filed by Xtrana with the SEC or any other Governmental
Entity in connection with the Merger and the other transactions contemplated
hereby will, on the date of its filing or, in the case of the Proxy Statement,
at the date it is mailed to stockholders of Xtrana and at the time of the Xtrana
Stockholders' Meeting, 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
are made, not misleading or necessary to correct any statement in any earlier
communication with respect to any solicitation of proxies for the Xtrana
Stockholders' Meeting which shall have become false or misleading, except that
no representation is made by Xtrana with respect to information supplied in
writing by or on behalf of AIC for inclusion therein. The Proxy Statement filed
by Xtrana with the SEC under the Exchange Act relating to the Xtrana
Stockholders' Meeting, and any other documents to be filed with the SEC in
connection with the Merger, will comply as to form in all material respects with
the Exchange Act.
4.9 CERTAIN EMPLOYEE PAYMENTS. Xtrana is not a party to any
employment agreement which could result in the payment to any current, former or
future director or employee of Xtrana of any money or other property or rights
or accelerate or provide any other rights or benefits to any such employee or
director as a result of the transactions contemplated by this Agreement, whether
or not (i) such payment, acceleration or provision would constitute a "parachute
payment" (within the meaning of Section 280G of the Code), or (ii) some other
subsequent action or event would be required to cause such payment, acceleration
or provision to be triggered.
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4.10 TAX RETURNS AND TAX PAYMENTS. Xtrana is not subject to any
liabilities or claims for Taxes, including Taxes relating to prior periods,
other than those set forth or adequately reserved against in the financial
statements included in the Xtrana SEC Documents or those incurred since the date
of the most recent balance sheet included in the Xtrana SEC Documents in the
ordinary course of business. Xtrana has duly filed when due all Tax Returns in
connection with and in respect of its business, assets and employees, and has
timely paid and discharged all amounts shown as due thereon. Xtrana has made
available to AIC accurate and complete copies of all of its Tax Returns for all
periods, except those periods for which returns are not yet due. Xtrana has not
received any notice of any Tax deficiency outstanding, proposed or assessed
against or allocable to it, and has not executed any waiver of any statute of
limitations on the assessment or collection of any Tax or executed or filed with
any Governmental Entity any contract or other agreement now in effect extending
the period for assessment or collection of any Taxes against it. There are no
Liens for Taxes upon, pending against or threatened against, any asset of
Xtrana. Xtrana is not subject to any Tax allocation or sharing agreement.
4.11 RECORDS. The books of accounts, corporate records and minute
books of Xtrana and MergerCo are complete and correct in all material respects.
Complete and accurate copies of all such books of account, corporate records and
minute books of Xtrana and MergerCo have been provided to AIC.
4.12 MERGERCO. MergerCo has been formed for the sole purpose of
effecting the Merger and, except as contemplated by this Agreement, MergerCo has
not conducted any business activities and does not have any material
liabilities.
4.13 NO BROKERS OR FINDERS. Neither Xtrana, MergerCo, nor their
respective Affiliates, officers, directors or employees have, employed any
broker or finder or incurred any liability for any brokerage or finder's fee or
commissions or similar payment in connection with any of the transactions
contemplated hereby.
4.14 BOARD RECOMMENDATION. The Board of Directors of Xtrana has
unanimously determined that the terms of the Merger are fair to and in the best
interests of the Stockholders of Xtrana and recommended that the holders of
Xtrana Common Stock approve the Merger.
4.15 REQUIRED XTRANA VOTE. The affirmative vote of the holders of a
majority of shares of Xtrana Common Stock is the only vote of the holders of any
class or series of Xtrana's securities necessary to approve the Merger (the
"XTRANA STOCKHOLDERS' APPROVAL").
4.16 LEGAL PROCEEDINGS. There is no suit, action, claim,
arbitration, proceeding or investigation pending or, to the knowledge of Xtrana,
threatened against, relating to or involving Xtrana, or real or personal
property of Xtrana, before any Governmental Entity or other third party. To the
knowledge of Xtrana, there is no basis for any such suit, action, proceeding or
investigation.
4.17 TRANSACTIONS WITH APPLERA CORPORATION. Xtrana provided to AIC
true and complete copies of all agreements, instruments, certificates and other
documents entered or
27
delivered in connection with the Assignment Agreement dated as of January 26,
2004 by and between Xtrana and Applera Corporation, through its Applied
Biosystems Group ("ABI"), as amended by the First Amendment to Assignment
Agreement dated as of March 31, 2004, between Xtrana and ABI (as amended, the
"ASSIGNMENT AGREEMENT"), including all amendments, supplements, exhibits and
ancillary agreements related thereto (collectively, the "ABI AGREEMENTS"). Other
than breaches or potential breaches that have been waived, all representations
warranties made by Xtrana in the Assignment Agreement were true and correct on
the date of the Assignment Agreement and on the closing of the transactions
under the Assignment Agreement. Xtrana is in compliance in all material respects
with and has not breached, violated or defaulted under in any material respect,
or received notice that it has breached, violated or defaulted under, any of the
terms or conditions of the ABI Agreements, nor has there occurred any event or
condition that could reasonably constitute such a breach, violation or default
with the lapse of time, giving of notice or both, and Xtrana is not aware of any
legitimate basis for any indemnification claim against Xtrana under the ABI
Agreements. The ABI Agreements and the consummation of the transactions
contemplated thereby did not breach or caused a default under the Cooperation
Agreement No. 70NANB5H1109 between Xtrana and the National Institutes of
Standards and Technology (the "NIST AGREEMENT") or under Contract DAMB
17-00-C-001 between Xtrana and the U.S. Army (the "US ARMY AGREEMENT"). Xtrana
has at all times complied with all terms and conditions of the NIST Agreement
and the US Army Agreement, and except pursuant to the Confirmatory Licenses
dated February 18, 2004 and February 20, 2004, true and complete copies of which
were delivered to AIC, Xtrana has no obligations under the NIST Agreement or the
US Army Agreement required to be performed after the date of this Agreement.
4.18 CONTRACTS AND COMMITMENTS. The Xtrana Disclosure Schedule
contains a true, complete and accurate list of each of the following written,
and to Xtrana's knowledge, oral, contracts, agreements, understandings or other
obligations to which Xtrana is a party or by which any of its assets or
properties are bound (together the "XTRANA CONTRACTS"):
4.18.1 all bonds, debentures, notes, loans, credit or loan
agreements or loan commitments, mortgages, indentures, guarantees or other
contracts relating to the borrowing of money or binding upon any properties or
assets (real, personal or mixed, tangible or intangible) of Xtrana;
4.18.2 all rental or use agreements, contracts, covenants or
obligations which may involve the payment by or to Xtrana of more than $25,000;
4.18.3 any contract, agreement, commitment or obligation to
make any capital expenditures in excess of $25,000;
4.18.4 contracts, agreements, commitments or other
obligations with any Person containing any provision or covenant limiting the
ability of Xtrana to engage in any line of business or to compete with or to
obtain products or services from any Person or limiting the ability of any
Person to compete with or to provide products or services to, or obtain products
or services from, Xtrana, or covering indemnification of another Person other
than in the ordinary course of business;
28
4.18.5 any profit-sharing or similar contract, agreement,
understanding or obligation with any Person;
4.18.6 contracts, agreements, commitments or other
obligations with respect to the purchase or sale by or to Xtrana of any product,
equipment, facility, or similar item that by their respective terms do not
expire or terminate or are not terminable by Xtrana, without penalty, premium or
other liability within 30 days or may involve the payment by or to Xtrana of
more than $25,000;
4.18.7 contracts, agreements, commitments or other
obligations to provide services or facilities by or to Xtrana or to or by
another Person which is not terminable by Xtrana within 30 days without penalty,
premium or other liability or involving payment by Xtrana or the other Person of
more than $25,000;
4.18.8 any contract that provides for an increased payment
or benefit, or accelerated vesting, upon the execution of this Agreement or in
connection with the transactions contemplated hereby;
4.18.9 any contract or agreement granting any Person a Lien
on all or any part of any asset of Xtrana;
4.18.10 any contract providing for the indemnification or
holding harmless by Xtrana of any of its shareholders, officers, directors,
employees or representatives;
4.18.11 all other contracts, agreements, commitments or other
obligations whether or not made in the ordinary course of business which may
involve the expenditure by Xtrana of funds in excess of $25,000 per commitment
(or under a group of similar commitments), or are otherwise material to Xtrana;
or
4.18.12 all other contracts, agreements, commitments, or
other obligations of any kind that involve or relate to any holder of Xtrana
Common Stock, officer, director, employee or consultant of Xtrana or any
Affiliate or relative thereof.
True, correct and complete copies of all Xtrana Contracts have been made
available to AIC. To the knowledge of Xtrana, the Xtrana Contracts are legal,
valid, binding and enforceable in accordance with their respective terms with
respect to Xtrana and each other party to such Xtrana Contracts. There are no
existing defaults or breaches of Xtrana under any Xtrana Contract (or events or
conditions which, with notice or lapse of time or both would constitute a
default or breach) and, to the knowledge of Xtrana, there are no such defaults
(or events or conditions which, with notice or lapse of time or both, would
constitute a default or breach) with respect to any third party to any Xtrana
Contract. Except as set forth on the Xtrana Disclosure Schedule, Xtrana is not
participating in any discussions or negotiations regarding modification of or
amendment to any Xtrana Contract or entry in any new material contract
applicable to Xtrana or the real or personal property of Xtrana. The Xtrana
Disclosure Schedule specifically identifies each Xtrana Contract set forth
therein that requires the consent of or notice to the other party thereto to
avoid any breach, default or violation of such contract, agreement or other
instrument in connection with the transactions contemplated by this Agreement.
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The Xtrana Disclosure Schedule contains a true, complete and accurate
list of each written contract, agreement, understanding or other obligation to
which Xtrana was a party or by which any of its assets or properties was bound
that was terminated by Xtrana since May 14, 2004 (together the "TERMINATED
XTRANA Contracts"). True, correct and complete copies of all Terminated Xtrana
Contracts have been made available to AIC. Each of the Terminated Xtrana
Contracts was terminated in full compliance with its terms or with the written
consent of the other party to such Terminated Xtrana Contract, in each case
without any liability to Xtrana.
4.19 INSURANCE. The Xtrana Disclosure Schedule contains a complete
and correct list of all insurance policies carried by or for the benefit of
Xtrana, specifying the insurer, amount of and nature of coverage, the risk
insured against, the deductible amount (if any) and the date through which
coverage will continue by virtue of premiums already paid.
4.20 PRODUCT OR SERVICE DEFECTS; LIABILITY. Xtrana is not aware of
any material defects in any of its products (including products developed and
sold prior to completion of the transactions under the ABI Agreements) or the
design thereof, nor in any of the services it provides. Xtrana has not received
any customer complaints or third party reports concerning alleged defects in its
products, the design thereof or its services that, if true, could have a
Material Adverse Effect on Xtrana, nor has Xtrana had any of its products
returned by a purchaser thereof other than for minor, nonrecurring warranty
problems. Xtrana has no liabilities (and, to the knowledge of Xtrana, there is
no basis for any present or future action against Xtrana giving rise to any
liability) arising out of any injury to individuals or property as a result of
ownership, possession or use of any product designed, manufactured, sold, leased
or delivered by Xtrana.
4.21 PRODUCT WARRANTY. Each product manufactured, sold, leased or
delivered by Xtrana has been manufactured, sold, leased or delivered, as the
case may be, in conformity in all material respects with all applicable law, all
contracts to which Xtrana is a party, and all express and implied warranties,
and Xtrana does not have any liability (and, to the knowledge of Xtrana, there
is no basis for any present or future actions against Xtrana giving rise to any
such liability) for replacement or repair thereof or other damages in connection
therewith, subject only to the reserve for product warranty claims set forth on
the face of the financial statements included in the Xtrana SEC Documents
(rather than in any notes thereto) as adjusted for the passage of time through
the Effective Time in accordance Xtrana's ordinary course of business,
consistent with GAAP. No product designed, manufactured, sold, leased or
delivered by Xtrana is subject to any guaranty, warranty or other indemnity or
similar liability beyond the applicable standard terms and conditions of sale or
lease.
4.22 BENEFIT PLANS. The Xtrana Disclosure Schedule contains a true
and complete list of each Benefit Plan currently sponsored, maintained or
contributed to by Xtrana as well as any "employee benefit plan" as defined in
Section 3(3) of ERISA of Xtrana. Any special tax status enjoyed by such plan is
noted on such schedule. With respect to each Benefit Plan and "employee benefit
plan" identified on the Xtrana Disclosure Schedule, Xtrana has heretofore
delivered or made available to AIC true and complete copies of the plan
documents and any amendments thereto (or, if the plan is not written, a written
description thereof). Xtrana has performed in all material respects all
obligations required to be performed by it under each Benefit Plan and "employee
benefit plan" identified on the Xtrana Disclosure Schedule, and each
30
such Benefit Plan has been established and maintained in all material respects
in accordance with its terms and in compliance with all applicable laws,
statutes, orders, rules and regulations, including but not limited to ERISA or
the Code. Xtrana's records accurately reflect its employees' employment
histories, including their hours of service, and all such data is maintained in
a usable form. Xtrana has taken all actions required to terminate the Xtrana,
Inc. 401(k) Plan.
4.23 DISCLOSURE. None of the information supplied by Xtrana in
connection with the solicitation by AIC of the AIC Shareholders' Approval
contained any untrue statement of a material fact or omitted 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 are made, not
misleading.
5. COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER.
5.1 CONDUCT OF AIC, XTRANA AND MERGERCO. Except as expressly
permitted by this Agreement, between the date of this Agreement and the
Effective Time, each of Xtrana and AIC shall conduct its business only in the
ordinary course in substantially the same manner as heretofore conducted, and
use all its reasonable efforts to preserve intact its present business
organization and employees and to preserve the goodwill of Persons with which it
has business relations. Without limiting the generality of the foregoing, except
as otherwise expressly provided in this Agreement, between the date of this
Agreement and the Effective Time, (i) each of Xtrana and AIC shall pay accounts
payable and pay and perform other obligations of its business when they become
due and payable in the ordinary course of business consistent with past
practice, or when required to be performed, as the case may be, and (ii) each of
Xtrana, MergerCo and AIC shall (unless otherwise mutually agreed to in writing):
5.1.1 not amend or alter its certificate or articles of
incorporation, bylaws, or similar charter documents (except as required to
effect the Reverse Stock Split (as defined in SECTION 6.4.2 below) and the Note
Conversion);
5.1.2 not engage in any transaction, except in the normal
and ordinary course of business, or create or suffer to exist any Lien or other
encumbrance upon any of its assets or which will not be discharged in full prior
to the Effective Time;
5.1.3 not sell, exchange, lease, assign or otherwise
transfer any of its assets, or cancel or compromise any debts or claims relating
to their assets, other than for fair value, in the ordinary course of business,
and consistent with past practice;
5.1.4 not, other than in connection with the Reverse Stock
Split, with respect to Xtrana, and the Note Conversion, with respect to AIC, (i)
declare, set aside or pay any dividends on or make other distributions in
respect of any of its capital shares, (ii) split, combine, reclassify or take
similar action with respect to any of its capital shares or issue or authorize
or propose the issuance of any other securities in respect of, in lieu of or in
substitution for its capital shares (other than the Reverse Stock Split), (iii)
adopt a plan of complete or partial liquidation or resolutions providing for or
authorizing such liquidation or a dissolution, merger,
31
consolidation, restructuring, recapitalization or other reorganization, or (iv)
directly or indirectly redeem, repurchase or otherwise acquire any capital
shares or any option with respect thereto, except for repurchases in connection
with an existing option plan that result from a participant's use of such
Party's Common Stock to exercise options or pay withholding taxes in connection
with such exercise;
5.1.5 not sell, issue, grant or authorize the issuance or
grant of any capital stock, other security (including the sale, transfer or
grant of any treasury shares) or any obligation convertible or exchangeable for
capital stock or any other security, except that (i) AIC may issue up to
7,343,418 shares of AIC Series A-1 Preferred Stock pursuant to the Note
Conversion, (ii) AIC may issue AIC Common Stock upon the valid exercise of stock
options and warrants outstanding as of the date of this Agreement and (iii) AIC
may grant options to purchase shares of AIC Common Stock at fair market value in
the ordinary course of business consistent with past practice to its employees,
officers, directors and consultants;
5.1.6 not fail to use reasonable efforts to preserve intact
its present business organizations, keep available the services of its employees
(except as expressly provided herein) and preserve its material relationships
with customers, suppliers, licensors, licensees, distributors and others, to the
end that its good will and on-going business not be impaired prior to the
Effective Time;
5.1.7 not organize any subsidiary or acquire any capital
stock or other equity securities of any Person or any equity or ownership
interest in any business;
5.1.8 not enter into any instrument which would constitute
an AIC Contract, as applicable, or enter into any material amendment, supplement
or waiver in respect of any AIC Contract, in each case except in the ordinary
course of business consistent with past practice;
5.1.9 not incur any severance pay obligation by reason of
this Agreement or the transactions contemplated hereby;
5.1.10 not grant or extend any power of attorney other than
in the ordinary course of business which does not affect a material part of its
business;
5.1.11 keep in full force and effect insurance comparable in
amount and scope of coverage to insurance now carried by it;
5.1.12 not make any material change with respect to their
business in accounting or bookkeeping methods, principles or practices, except
as required by GAAP;
5.1.13 promptly advise the other Party in writing of any
Material Adverse Effect with respect to it;
5.1.14 not agree or otherwise commit, whether in writing or
otherwise, to do, or take any action or omit to take any action that would
result in, any of the foregoing;
32
5.1.15 not acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion of the
assets of, by licensing or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof, or
otherwise acquire or agree to acquire any assets of any other Person, except for
the purchase of assets from suppliers or vendors in the ordinary course of
business; or
5.1.16 not make any expenditure or enter into any commitment
or transaction exceeding $30,000 other than purchases in the ordinary course of
business consistent with past practices.
5.2 ADVICE OF CHANGES. Each Party shall promptly advise the other
Party in writing of (a) any event occurring subsequent to the date of this
Agreement that would render any representation or warranty of AIC contained in
SECTION 3 or Xtrana contained in SECTION 4 untrue or inaccurate such that the
condition set forth in SECTIONS 7.2 or 7.3 would not be satisfied, (b) any
breach of any covenant or obligation of AIC or Xtrana pursuant to this Agreement
such that the condition set forth in SECTIONS 7.2 and 7.3 would not be
satisfied, (c) any Material Adverse Change or Effect in AIC or Xtrana, or (d)
any change, event, circumstance, condition or effect that would reasonably be
expected to result in a Material Adverse Change or Effect on AIC or Xtrana or
cause any of the conditions set forth in SECTIONS 7.2 or 7.3 not to be
satisfied, including any communication related to the ABI Agreements; PROVIDED,
HOWEVER, that the delivery of any notice pursuant to this SECTION 5.2 shall not
be deemed to amend or supplement the AIC or Xtrana Disclosure Schedule.
5.3 SEC REPORTS. Xtrana shall use commercially reasonable efforts
to (a) cause the forms, reports, schedules, statements and other documents
required to be filed with the SEC by Xtrana between the date of this Agreement
and the Effective Time to be filed in a timely manner and (b) remain a
"reporting person" for purposes of the Exchange Act.
6. ADDITIONAL AGREEMENTS.
6.1 PROMISSORY NOTE. As soon as reasonably practicable, but in any
event within two (2) business days, following the completion by AIC of the Note
Conversion and delivery of evidence satisfactory to Xtrana and its counsel that
all obligations under all convertible promissory notes of AIC outstanding as of
the date hereof have been satisfied in full, Xtrana shall make a loan to AIC in
the amount of $500,000, in exchange for execution and delivery of the Promissory
Note and the Security Agreement (as defined in the Promissory Note) by AIC to
Xtrana. The issuance of the Promissory Note, the borrowing of the amounts
thereunder and the grant of the liens contemplated by the Promissory Note and
the Security Agreement by AIC are expressly consented to by the Parties an shall
not constitute a breach of SECTION 5.1 of this Agreement.
6.2 AIC AUDIT. As soon as practicable following the execution and
delivery of this Agreement but in no event later March 31, 2005, AIC shall cause
its consolidated financial statements for the fiscal years ended December 31,
2004 and 2003 to be audited (the "AIC AUDITED FINANCIAL STATEMENTS") by a firm
of independent certified public accountants (the "INDEPENDENT ACCOUNTANTS") and
the Independent Accountants shall have consented to the inclusion of the AIC
Audited Financial Statements, including the Independent Accountants'
33
report thereon, in the Proxy Statement to be filed by Xtrana with the SEC and
delivered to the Xtrana stockholders. The AIC Audited Financial Statements shall
comply with all applicable requirements of the Exchange Act and the rules and
regulations of the SEC so that they may be included by Xtrana in the Proxy
Statement and any other filings required to be made by Xtrana with the SEC.
Xtrana will pay the fees and expenses of the Independent Accountants for the
audit of the AIC Audited Financial Statements and providing their consent for
inclusion of the AIC Audited Financial Statements in the Proxy Statement (the
"AUDIT FEES") upon submission of invoices by AIC.
6.3 FAIRNESS HEARING. Promptly after execution of this Agreement,
the Parties will use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things, including
preparation and filing with the California Commissioner of Corporations of the
documents required by the California Corporations Code, including but not
limited to any required Permit Application, request for a hearing ("HEARING
REQUEST") or notice of a hearing ("HEARING NOTICE") pursuant to Sections 25121
and 25142 of the California Corporations Code (collectively the "NOTICE
MATERIALS"), in connection with the Merger and the issuance of the Merger
Consideration and the assumption or replacement of the Assumed Options and
Warrants, in order to perfect the exemption from registration provided by
Section 3(a)(10) of the Securities Act. Each Party will use commercially
reasonable efforts to have the Permit Application, Hearing Request and Hearing
Notice declared effective and to obtain the permit of the California
Commissioner of Corporation under the California Corporations Code (the
"PERMIT") as promptly as practicable after such filing. Each of the Parties will
promptly provide all information relating to their respective business and
operations necessary for inclusion in the Notice Materials to satisfy all
requirements of applicable state and federal securities laws. Each of the
Parties will be solely responsible for any statement, information or omission in
the Notice Materials relating to it or its Affiliates upon the written
information furnished by it or its representatives.
6.4 STOCKHOLDER APPROVALS.
6.4.1 AIC SHAREHOLDERS' APPROVAL. AIC shall, as promptly as
practicable following obtaining the Permit, duly submit this Agreement and the
transactions contemplated by this Agreement to the AIC Shareholders for approval
and adoption. In connection with the Merger, this Agreement and the other
transactions contemplated hereby, the Board of Directors of AIC shall (i)
recommend to the AIC Shareholders that they consent to, and use all commercially
reasonable efforts to obtain the approvals by the AIC Shareholders, of the
Merger, this Agreement and the other transactions contemplated hereby, and (ii)
otherwise comply with all requirements of applicable law and AIC's Articles of
Incorporation and Bylaws in connection with obtaining the AIC Shareholders'
Approval. AIC shall prepare and distribute to the AIC Shareholders a consent
solicitation disclosure statement in connection with the solicitation of
consents to obtain the AIC Shareholders' Approval, and shall provide Xtrana a
reasonable period of time to review the disclosure statement prepared in
connection with such consent solicitation prior to the delivery of such
disclosure statement to the AIC Shareholders.
6.4.2 XTRANA STOCKHOLDERS' MEETING. Xtrana shall, as
promptly as practicable following the delivery of the AIC Audited Financial
Statements, duly call, give notice of, convene and hold a meeting of its
stockholders (the "XTRANA STOCKHOLDERS' MEETING")
34
for the purpose of approving (a) the Merger pursuant to this Agreement and the
other transactions contemplated by this Agreement, (b) the change of its
corporate name to Alpha Innotech Corp., and (c) the authorization of a
one-for-ten reverse split of the Xtrana Common Stock to effected immediately
prior the Effective Time (the "REVERSE STOCK SPLIT"). In connection with the
Merger, this Agreement and the other transactions contemplated hereby, the Board
of Directors of Xtrana shall (i) recommend to the stockholders of Xtrana that
they consent to, and use all commercially reasonable efforts to obtain the
approvals by the stockholders of Xtrana, of the Merger, this Agreement and the
other transactions contemplated hereby, and (ii) otherwise comply with all
requirements of applicable law and Xtrana's Certificate of Incorporation and
Bylaws in connection with obtaining the Xtrana Shareholders' Approval.
6.5 BOARD OF DIRECTORS AND OFFICERS FOLLOWING CLOSING.
6.5.1 BOARD OF DIRECTORS. Xtrana covenants and agrees to
take all actions necessary such that, immediately following the Closing, the
Board of Directors of Xtrana shall consist of the following individuals:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
▇▇▇▇▇▇ ▇▇▇, Ph.D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
who shall serve as the directors of Xtrana, each of such directors to hold
office, subject to the applicable provisions of the Certificate of Incorporation
and Bylaws of Xtrana, in each case, until their respective successors shall have
been elected and qualified or until otherwise provided by law. All other
directors of Xtrana immediately prior to the Effective Time shall resign,
effective as of the Effective Time.
6.5.2 OFFICERS. Each of the Parties covenants and agrees to
take all actions necessary such that, immediately following the Closing, the
officers of Xtrana immediately prior to the Effective Time shall resign and
shall be replaced by the following individuals:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.................. Chief Executive Officer
▇▇▇▇▇▇ ▇▇▇, Ph.D................. President, Chief Financing
Officer and Chief Operating
Officer
who shall serve as officers of Xtrana subject to the applicable provisions of
the Certificate of Incorporation and Bylaws of Xtrana, in each case, until their
respective successors shall have been duly appointed or until otherwise provided
by law.
6.6 ACCESS TO INFORMATION; CONFIDENTIALITY.
6.6.1 ACCESS. Each of Xtrana and AIC shall, and shall (a)
cause its officers, employees, counsel, financial advisors and other
representatives to, afford to the other Party and its representatives reasonable
access during normal business hours during the period prior to the Effective
Time to its properties, books, contracts, commitments, personnel and records and
(b) during such period, cause its officers, employees and representatives to,
furnish
35
promptly to the other Party all information concerning its business, properties,
financial condition, operations and personnel as such other Party may from time
to time reasonably request. Except as required by law, each of AIC and Xtrana
will hold, and will cause its respective directors, officers, employees,
accountants, counsel, financial advisors and other representatives and
Affiliates to hold, any nonpublic information in strict confidence and in
accordance with the provisions of the Nondisclosure Agreement dated August 30,
2004 between AIC and Xtrana.
6.6.2 LIMITATIONS. No investigation pursuant to this
SECTION 6.6 shall affect any representations or warranties of the parties herein
or the conditions to the obligations of the parties hereto.
6.7 COMMERCIALLY REASONABLE EFFORTS. Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
its commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the Merger and the
other transactions contemplated by this Agreement. Xtrana and AIC will use their
commercially reasonable efforts and cooperate with one another (i) in promptly
determining whether any filings are required to be made or consents, approvals,
waivers, permits or authorizations are required to be obtained (or, which if not
obtained, would result in an event of default, termination or acceleration of
any agreement or any put right under any agreement) under any applicable law or
regulation or from any Governmental Entities or third parties, including parties
to loan agreements or other debt instruments and including such consents,
approvals, waivers, permits or authorizations as may be required to transfer the
assets and related liabilities of AIC to the Surviving Corporation in the
Merger, in connection with the transactions contemplated by this Agreement, and
(ii) in promptly making any such filings, in furnishing information required in
connection therewith and in timely seeking to obtain any such consents,
approvals, permits or authorizations.
6.8 PUBLIC ANNOUNCEMENTS. No party will issue any press release or
other statements to any third party (other than to their respective agents) with
respect to the transactions contemplated by this Agreement without the express
written consent of the other parties, except as may be advised by counsel is
necessary under applicable securities laws.
6.9 PREPARATION OF PROXY STATEMENT. Xtrana shall prepare and file
with the SEC promptly after receiving the AIC Audited Financial Statement, the
Proxy Statement with such assistance from AIC as may be required. If at any time
prior to the Effective Time of the Merger any event shall occur that should be
set forth in an amendment or a supplement to the Proxy Statement, Xtrana shall
prepare and file with the SEC such amendment or supplement as soon thereafter as
is reasonably practicable. Xtrana and AIC shall cooperate with each other in the
preparation of the Proxy Statement, and Xtrana shall notify AIC of the receipt
of any comments of the SEC with respect to the Proxy Statement and of any
requests by the SEC for any amendment or supplement thereto or for additional
information, and shall provide to AIC promptly copies of all correspondence
between the Xtrana or any representative of Xtrana and the SEC with respect to
the Proxy Statement. Xtrana shall give AIC and its counsel reasonable
opportunity to review the Proxy Statement and all responses to requests for
additional
36
information by and replies to comments of the SEC before their being filed with,
or sent to, the SEC. Each of Xtrana and AIC agrees to use commercially
reasonable efforts, after consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC and to cause the Proxy
Statement to be mailed to the holders of Xtrana Common Stock entitled to vote at
the Xtrana Stockholders' Meeting at the earliest practicable time.
6.10 AMENDING SCHEDULES. From time to time prior to the Closing,
the Parties shall promptly supplement or amend AIC Disclosure Schedules or
Xtrana Disclosure Schedules, as applicable, hereto with respect to any matter
arising after the date of this Agreement which, if existing or occurring at the
date of this Agreement, would have been required to have been set forth in AIC
Disclosure Schedules or Xtrana Disclosure Schedules, as applicable. Such
supplement or amendment shall have the effect of curing any related
misrepresentation or breach of warranty made in connection with the transactions
contemplated by this Agreement; PROVIDED, HOWEVER, each Party shall have a five
(5) business days following receipt of any supplemented or amended AIC
Disclosure Schedules or Xtrana Disclosure Schedules, as applicable, which
supplement or amend the AIC Disclosure Schedules or Xtrana Disclosure Schedules,
as applicable, in a material respect to elect (a) to terminate this Agreement
without any further liability to any other Party hereunder, or (b) in such
non-amending Party's sole discretion, to elect to waive such breach and
consummate the transactions contemplated by this Agreement.
6.11 DEFERRED COMPENSATION. At the Closing, AIC's aggregate
obligations for all deferred compensation shall be not more than $550,000 (the
"DEFERRED COMPENSATION"). A schedule of the Deferred Compensation will be
delivered by AIC to Xtrana prior the Closing and will be attached to this
Agreement as SCHEDULE 6.11. At or promptly following the Closing, the Surviving
Corporation or Xtrana may pay up to a total of $100,000 of the Deferred
Compensation. Following the Closing, the Surviving Corporation and Xtrana shall
be permitted to pay up to a total $30,000 of the Deferred Compensation per
month; PROVIDED, HOWEVER, that no payment of any Deferred Compensation shall be
permitted to the extent such payment would result in Xtrana having less than
$1.7 million in cash following the payment. Notwithstanding the foregoing, all
remaining Deferred Compensation may be paid by the Surviving Corporation or
Xtrana at any time after June 30, 2006.
6.12 EXPENSES. Except as expressly provided in this Agreement, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Party incurring such
expenses.
6.13 NO SOLICITATION. Except as previously agreed to in writing by
the other Party, neither AIC nor Xtrana nor any of their respective officers,
directors, agents, representatives, or advisors shall solicit, initiate or
encourage or take any action to facilitate the submission of inquiries,
proposals or offers from any Person relating to any matter concerning any
merger, consolidation, business combination, acquisition of all or any material
part of the assets, business or stock, recapitalization or similar transaction
involving AIC or Xtrana, respectively, other than the transaction contemplated
by this Agreement or any other transaction the consummation of which would or
could reasonably be expected to impede, interfere with, prevent or delay the
Merger or which would or could be expected to dilute the benefits to AIC of the
transactions contemplated hereby. AIC or Xtrana will immediately cease and cause
to be
37
terminated any existing activities, discussions and negotiations with any
parties conducted heretofore with respect to any of the foregoing.
6.14 DILUTIVE FINANCINGS. From the Effective Date and for a period
of twelve (12) months thereafter, Xtrana shall not, directly or indirectly,
without the unanimous approval of the Xtrana Board of Directors, offer or sell
any shares of Xtrana Common Stock, securities convertible, exercisable or
exchangeable for Xtrana Common Stock or other equity securities of Xtrana at a
price per share of Xtrana Common Stock issued (or issuable upon exercise,
conversion or exchange of such other securities) less than one hundred ten
percent (110%) of the Market Price; PROVIDED, HOWEVER, that the foregoing
restriction shall not apply to shares of Xtrana Common Stock (or options to
purchase such shares of Xtrana Common Stock) issued or issuable at not less than
fair market value to officers, employees, or directors of, or consultants to,
Xtrana pursuant to any stock purchase or option plan or other employee stock
bonus arrangement or other similar agreement as approved by Xtrana Board of
Directors or upon exercise or conversion of any securities convertible,
exercisable or exchangeable for Xtrana Common Stock outstanding on the Closing
Date.
6.15 TAX REPORTING. Consistent with the intent of the parties
hereto, each of AIC and Xtrana shall treat, and cause its Affiliates to so
treat, the Merger as a reorganization under Section 368(a) with respect to all
Tax Returns, to the extent consistent with law.
6.16 FURTHER ASSURANCES. Each of Xtrana and AIC shall, and shall
cause its Subsidiaries to, execute such further actions as may reasonably be
requested by the other in order to consummate the Merger and other transaction
contemplated by this Agreement and to use commercially reasonable efforts to
take or cause to be taken all actions, and to do or cause to be done all things,
necessary, proper or advisable under applicable laws and regulations to
consummated and make effective the Merger and the other transactions
contemplated hereby, including fully cooperating with the other in obtaining
required statutory approvals and authorization of any Governmental Entities
necessary or advisable to consummate the transactions contemplated hereby.
7. CONDITIONS PRECEDENT.
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each Party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
7.1.1 STOCKHOLDER APPROVAL. The Xtrana Stockholders'
Approval shall have been obtained.
7.1.2 FAIRNESS HEARING. Xtrana shall have been issued a
permit from the California Department of Corporations with respect to the
issuance of Xtrana Common Stock pursuant to this Agreement, and such permit
shall be in full force and effect.
7.1.3 NO INJUNCTIONS OR RESTRAINTS. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect.
38
7.1.4 REVERSE STOCK SPLIT. Xtrana shall have effected the
Reverse Stock Split.
7.2 CONDITIONS TO OBLIGATIONS OF XTRANA. The obligations of Xtrana
to effect the Merger are further subject to the following conditions:
7.2.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of AIC set forth in this Agreement shall be true and correct in
all material respects, in each case as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date, unless made as of
another date, in which case they shall be true and correct in all material
respects as of such date.
7.2.2 PERFORMANCE OF OBLIGATIONS OF AIC. AIC shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.
7.2.3 NO MATERIAL ADVERSE CHANGE. Since the date hereof
there must have been no event, series of events or the lack of occurrence
thereof which, singularly or in the aggregate, could reasonably be expected to
have a Material Adverse Effect on AIC.
7.2.4 CONSENTS, ETC. Xtrana shall have received evidence,
in form and substance reasonably satisfactory to it, that such licenses,
permits, consents, approvals, authorizations, qualifications and orders of
Governmental Entities and other third parties as necessary in connection with
the transactions contemplated hereby have been obtained.
7.2.5 SHAREHOLDER APPROVAL. The AIC Shareholders' Approval
shall have been obtained by a vote of holders at least 90% of the issued and
outstanding AIC Shares.
7.2.6 NO DISSENTERS. No AIC Shareholders shall have
dissented to the Merger or be entitled to exercise dissenters' rights in
connection with the Merger.
7.2.7 NO LITIGATION. There shall not be pending or
threatened by any Governmental Entity any suit, action or proceeding (or by any
other Person any suit, action or proceeding which has a reasonable likelihood of
success) challenging or seeking to restrain or prohibit the consummation of the
Merger.
7.2.8 CONVERSION OF CONVERTIBLE NOTES. All convertible
notes or other convertible debt obligations of AIC shall have been converted
into equity securities of AIC prior the Closing.
7.2.9 DEFERRED COMPENSATION. AIC's aggregate obligations
for all deferred compensation shall be not more than $550,000.
7.2.10 LEGAL OPINION. Xtrana shall have received the legal
opinion of counsel to AIC, in substantially the form of EXHIBIT F hereto.
7.2.11 OFFICER'S CERTIFICATE. Xtrana shall have received an
officer's certificate, substantially in the form of EXHIBIT D, duly executed on
AIC's behalf.
39
7.2.12 SECRETARY'S CERTIFICATE. Xtrana shall have received a
Secretary's certificate, substantially in the form of EXHIBIT E, duly executed
on AIC's behalf.
7.2.13 TERMINATION OF AIC SHAREHOLDER AGREEMENTS. Each of
(a) that certain Alpha Innotech Corporation Amended and Restated Information and
Registration Rights Agreement among AIC and the persons listed on Exhibit A
thereto and (b) that certain Alpha Innotech Corporation Amended and Restated
Voting Agreement among AIC and the AIC Shareholders (in each case, as such
agreements may be amended in connection with the Note Conversion or otherwise),
shall have been terminated or shall automatically terminate at the Effective
Time.
7.3 CONDITIONS TO OBLIGATION OF AIC. The obligation of AIC to
effect the Merger is further subject to the following conditions:
7.3.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Xtrana set forth in this Agreement shall be true and correct
in all material respects, in each case as of the date of this Agreement and as
of the Closing Date as though made on and as of the Closing Date, unless made as
of another date, in which case they shall be true and correct in all material
respects as of such date.
7.3.2 PERFORMANCE OF OBLIGATIONS OF XTRANA. Xtrana shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date.
7.3.3 NO MATERIAL ADVERSE CHANGE. Since the date hereof
there must have been no event, series of events or the lack of occurrence
thereof which, singularly or in the aggregate, could reasonably be expected to
have a Material Adverse Effect on Xtrana.
7.3.4 CONSENTS, ETC. AIC shall have received evidence, in
form and substance reasonably satisfactory to it, that such licenses, permits,
consents, approvals, authorizations, qualifications and orders of Governmental
Entities and other third parties as necessary in connection with the
transactions contemplated hereby have been obtained.
7.3.5 NO LITIGATION. There shall not be pending or
threatened by any Governmental Entity any suit, action or proceeding (or by any
other Person any suit, action or proceeding which has a reasonable likelihood of
success) challenging or seeking to restrain or prohibit the consummation of the
Merger.
7.3.6 RESIGNATIONS. Xtrana shall deliver to AIC written
resignations of the members of the Xtrana Board of Directors not continuing as
directors following the Effective Time and of all of the officers of Xtrana, as
required by SECTION 6.5.
7.3.7 NAME CHANGE. Xtrana shall have changed its corporate
name, as of the Closing, to "Alpha Innotech Corp.".
7.3.8 LEGAL OPINION. AIC shall have received the legal
opinion of counsel to Xtrana, in substantially the form of EXHIBIT I hereto.
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7.3.9 OFFICER'S CERTIFICATE. AIC shall have received an
officer's certificate, substantially in the form of EXHIBIT G, duly executed on
Xtrana's behalf.
7.3.10 SECRETARY'S CERTIFICATE. AIC shall have received a
Secretary's certificate, substantially in the form of EXHIBIT H, duly executed
on Xtrana's behalf.
7.3.11 CASH AND CASH EQUIVALENTS. The cash and cash
equivalents less current liabilities of Xtrana on the Closing Date shall be not
less than the Minimum Closing Date Cash and AIC shall have received a
certificate from Xtrana to such effect signed by a duly authorized officer.
8. TERMINATION.
8.1 TERMINATION. This Agreement may be terminated and abandoned at
any time prior to the Effective Time:
8.1.1 by mutual written consent of Xtrana and AIC;
8.1.2 by either Xtrana or AIC if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and nonappealable;
8.1.3 by either Xtrana or AIC if the Merger shall not have
been consummated on or before July 31, 2005 (other than as a result of the
failure of the Party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Effective Time);
8.1.4 by Xtrana, if a Material Adverse Change shall have
occurred relative to AIC;
8.1.5 by Xtrana, if AIC materially breaches any of its
representations and warranties contained in this Agreement or willfully fails to
perform in any material respect any of its material obligations under this
Agreement, which failure or breach is not cured within ten (10) days after
Xtrana has notified AIC of its or their intent to terminate this Agreement
pursuant to this SECTION 8.1.5;
8.1.6 by Xtrana, if the AIC Shareholders do not approve and
adopt the Merger and the transactions contemplated by this Agreement under the
CGCL;
8.1.7 by AIC, if a Material Adverse Change shall have
occurred relative to Xtrana;
8.1.8 by AIC, if Xtrana materially breaches any of its
representations and warranties contained in this Agreement willfully fails to
perform in any material respect any of its material obligations under this
Agreement, in each case, which failure or breach is not cured within ten (10)
days after AIC has notified Xtrana of its or their intent to terminate this
Agreement pursuant to this SECTION 8.1.7; and
41
8.1.9 by AIC, if the stockholders of Xtrana vote to reject
the approval and adoption of the Merger and the transactions contemplated by
this Agreement under the CGCL and the Delaware General Corporation Code.
8.2 TERMINATION FEE.
8.2.1 If this Agreement is terminated by: (i) AIC pursuant
to SECTIONS 8.1.3, 8.1.7, 8.1.8 or 8.1.9 or (ii) Xtrana pursuant to SECTION
8.1.3, then Xtrana shall pay $100,000 to AIC by offset against the obligations
of AIC to Xtrana pursuant to the Promissory Note, in each case to compensate AIC
for, among other things, its expenses and management time in pursuing the
transactions contemplated by this Agreement and for lost opportunity costs.
8.2.2 If this Agreement is terminated for any reason, then
the Promissory Note shall become due and payable on the date that is six months
from the date of such termination and in accordance with its terms.
8.3 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either AIC or Xtrana as provided in SECTION 8.1, this Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of Xtrana or AIC, other than the provisions of the last
sentence of SECTION 6.6.1, SECTION 8.2, SECTION 8.4, SECTION 10 and this SECTION
8.3. Nothing contained in this Section shall relieve any Party for any breach of
the representations, warranties, covenants or agreements set forth in this
Agreement.
8.4 RETURN OF DOCUMENTS. In the event of termination of this
Agreement for any reason, Xtrana and AIC will return to the other Party all of
the other Party's documents, work papers, and other materials (including copies)
relating to the transactions contemplated in this Agreement, whether obtained
before or after execution of this Agreement. Xtrana and AIC will not use any
information so obtained from the other Party for any purpose and will take all
reasonable steps to have such other Party's information kept confidential.
9. INDEMNIFICATION AND RELATED MATTERS.
9.1 SURVIVAL. All representations, warranties, covenants and
agreements of contained in this Agreement or in any certificate delivered
pursuant to this Agreement shall survive the Closing for a period ending on
March 31, 2006.
9.2 TIME LIMITATIONS. Neither Xtrana nor AIC shall have any
liability (for indemnification or otherwise) with respect to any representation
or warranty, or agreement to be performed and complied with prior to the
Effective Time, unless on or before March 31, 2006 (the "CLAIMS DEADLINE"), the
indemnifying party is given written notice of a claim with respect thereto, in
accordance with SECTION 9.5, specifying the factual basis therefor in reasonable
detail to the extent then known by the party claiming indemnification hereunder.
9.3 INDEMNIFICATION.
9.3.1 BY XTRANA. Subject to SECTION 9.4, Xtrana shall
indemnify and hold harmless the AIC Indemnified Parties, and shall reimburse the
AIC Indemnified Parties for, any loss, liability, claim, damage, expense
(including, but not limited to, costs of investigation
42
and defense and reasonable attorneys' fees) or diminution of value
(collectively, "DAMAGES") arising from or in connection with (a) any inaccuracy,
in any material respect, in any of the representations and warranties of Xtrana
in this Agreement or in any certificate delivered by Xtrana to AIC pursuant to
this Agreement, (b) any failure by Xtrana to perform or comply in any material
respect with any agreement in this Agreement, (c) any claim by any Person for
brokerage for finder's fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by any such Person with
Xtrana (or any Person acting on their behalf) in connection with any of the
transactions contemplated by this Agreement, or (d) any litigation, action,
claim, proceeding or investigation by any third party relating to or arising out
of the business or operations of Xtrana, or the actions of Xtrana, its officers
or directors or any holder of Xtrana capital stock prior to the Effective Time,
including any Damages relating to or arising out of a claim by ABI, against
Xtrana for indemnification pursuant to the Assignment Agreement to the extent is
relates to a breach occurring prior to the Effective Time; PROVIDED, HOWEVER,
AIC shall not be entitled to indemnification from Xtrana hereunder for any
Damages arising from or in connection with a claim by ABI against Xtrana for
indemnification under the Assignment Agreement for a breach of any covenant
contained in the Assignment Agreement occurring after the Effective Time or for
recovery of any costs incurred by ABI as a result of a any such breach. After
the Effective Time the Xtrana Post-Merger Representative shall act as the agent
of the Xtrana Indemnified Parties for purposes of representing and protecting
their interests under this SECTION 9. The Parties shall cooperate with Xtrana's
Post-Merger Representative in connection with the reasonable performance of its
responsibilities hereunder, including by providing it with access to information
about Xtrana and the Surviving Corporation that is reasonably necessary for it
to determine whether a claims for indemnification hereunder should be made.
9.3.2 BY AIC. Subject to SECTION 9.4, AIC shall indemnify
and hold harmless the Xtrana Indemnified Parties, and shall reimburse the Xtrana
Indemnified Parties for, any Damages arising from or in connection with (a) any
inaccuracy, in any material respect, in any of the representations and
warranties of AIC in this Agreement or in any certificate delivered by AIC to
Xtrana pursuant to this Agreement, (b) any failure by AIC to perform or comply
in any material respect with any agreement in this Agreement, (c) any claim by
any Person for brokerage for finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by any such
Person with AIC (or any Person acting on their behalf) in connection with any of
the transactions contemplated by this Agreement, or (d) any litigation, action,
claim, proceeding or investigation by any third party relating to or arising out
of the business or operations of AIC, or the actions of AIC its officers or
directors or any holder of AIC capital stock prior to the Effective Time,
including without limitation any Damages relating to or arising out of any claim
for patent infringement by or on behalf of Oxford Gene Technology (relating to
U.S. Patents Nos. 5,436,327, 6,054,270, 5,700,637 and 6,307,039), ▇▇▇▇▇▇-▇▇▇▇▇
Life Science (relating to U.S. Patent No. 4,874,492), or Clare Chemical
Research, Inc. (relating to U.S. Patents No. 6,512,236 and 6,198,107). After the
Effective Time the AIC Post-Merger Representative shall act as the agent of the
AIC Indemnified Parties for purposes of representing and protecting their
interests under this SECTION 9. The Parties shall cooperate with AIC's
Post-Merger Representative in connection with the reasonable performance of its
responsibilities hereunder, including by providing it with access to information
about Xtrana or the Surviving Corporation that is reasonably necessary for it to
determine whether a claims for indemnification hereunder should be made.
43
9.4 LIMITATION ON CLAIMS. No claims shall be payable under this
SECTION 9 with respect to any Damages unless and until the aggregate Damages
owing under this SECTION 9 in respect of any Indemnitee (as defined below)
exceed $100,000, in which case the Indemnitee shall be entitled to
indemnification from the indemnifying party for all Damages without regard to
such threshold. As used herein, an "INDEMNITEE" means one or more of the AIC
Indemnified Parties or the Xtrana Indemnified Parties to the extent that such
parties seek indemnification from the other pursuant to this SECTION 9. The
Xtrana Indemnified Parties' sole and exclusive remedy for indemnification claims
against AIC under this Agreement shall consist of its right to set off any
Damages against the Holdback Shares and the AIC Indemnified Parties' sole and
exclusive remedy for indemnification claims against Xtrana under this Agreement
shall consist of their right to receive additional shares of Xtrana Common Stock
out of the AIC Indemnification Shares, in either case pursuant to the procedure
described in SECTION 9.5 hereof. No claims shall be payable with respect to any
representation or warranty unless such claim is asserted in writing within
twelve (12) months after the Closing Date (the "INDEMNIFICATION TERMINATION
PERIOD"). For the purposes of this SECTION 9.4 a month shall be deemed to elapse
at 5:00 p.m. California time on the day of the month on which the Closing Date
occurred. (For example, if the Effective Time occurs on March 15, 2005, the
sixth month would be deemed to elapse at 5:00 p.m. California time on September
15, 2005.) All Holdback Shares not then subject to indemnification claims under
SECTION 9.3.2 hereof shall be released to the AIC's pre-Merger shareholders
pursuant to the terms of the Escrow Agreement upon the expiration of the
Indemnification Termination Period. All AIC Indemnification Shares not then
subject to indemnification claims under SECTION 9.3.1 hereof shall be released
from escrow and permanently cancelled pursuant to the Escrow Agreement upon the
expiration of the Indemnification Termination Period.
9.5 COMPENSATION FOR INDEMNIFIED LOSSES.
9.5.1 NOTICE OF CLAIM. Losses for which Indemnitees are
entitled to indemnification under this SECTION 9 shall, after the Merger, be
reimbursed as determined pursuant to this SECTION 9.5. To initiate a claim, the
Indemnitee shall deliver a notice of claim to the Xtrana Post-Merger
Representative or the AIC Post-Merger Representative, as applicable. The notice
shall include a description in reasonable detail of the amount and nature of any
Damages that the Indemnitee claims have been suffered and the amount thereof
sought to be indemnified. If the party from which indemnification is sought
decides to dispute the claim, it shall, within thirty (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 thirty (30) days
after the giving of a counter-notice by party form which indemnification is
sought, 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 AIC Post-Merger Representative
submitted the claim, and no counter-notice is given, the AIC Indemnified Party
shall receive such number of AIC Indemnification Shares that when multiplied by
the Market Price is equal to the amount of the award, up to a maximum of the
number of AIC Indemnification Shares not previously issued pursuant to this
SECTION 9.5. If Xtrana's Post-Merger Representative submitted the claim, and no
counter-notice is given, the number of Holdback Shares shall be permanently
reduced by that number of shares, that when multiplied by the Market Price is
equal to the amount of the award, up to a maximum of the
44
number of Holdback Shares not previously cancelled and removed from escrow as a
result of indemnification awards pursuant to this SECTION 9.
9.5.2 INDEMNIFICATION AWARDS. If an AIC Indemnified Party
is entitled to an indemnification award, such party shall receive such number of
AIC Indemnification Shares that when multiplied by the Market Price is equal to
the amount of the award, up to a maximum of the number of AIC Indemnification
Shares not previously issued pursuant to this SECTION 9. If an Xtrana
Indemnified Party is entitled to an indemnification award, it shall permanently
reduce the number of Holdback Shares by that number of Holdback Shares, that
when multiplied by the Market Price is equal to the amount of the award, up to a
maximum of the number of Holdback Shares not previously cancelled and removed
from escrow as a result of indemnification awards pursuant to this SECTION 9.
9.6 SOLE REMEDY. Other than claims based on fraud or for specific
performance, injunctive or other equitable relief, the indemnity provided in
this SECTION 9 shall be the sole and exclusive remedy of the parties hereto at
law or equity for any matter covered by SECTION 9.3.
9.7 INDEMNIFICATION OF POST-MERGER REPRESENTATIVES. Each of the
Post-Merger Representatives shall be indemnified and held harmless by Xtrana and
the Surviving Corporation for all actions taken in connection with this SECTION
9 to the fullest extent permitted by applicable law.
10. GENERAL PROVISIONS.
10.1 POST-MERGER REPRESENTATIVES.
10.1.1 AIC POST-MERGER REPRESENTATIVE. By approval of this
Agreement, each of the AIC Shareholders appoints the AIC Post-Merger
Representative as the true and lawful agent and attorney-in-fact of such Person
with full powers of substitution to act in the name, place and stead of such
Person with respect to the performance on behalf of such Person under terms and
provisions of this Agreement and the Escrow Agreement, as the same may be from
time to time amended, and to do or refrain from doing all such further acts and
things, and to execute all such documents, as the AIC Post-Merger Representative
shall deem necessary or appropriate in connection with any of the transactions
contemplated under this Agreement and the Escrow Agreement.
10.1.2 XTRANA POST-MERGER REPRESENTATIVE. By approval of
this Agreement, each of the stockholders of Xtrana approving this Agreement and
the Merger appoints the Xtrana Post-Merger Representative as the true and lawful
agent and attorney-in-fact of such Person with full powers of substitution to
act in the name, place and stead of such Person with respect to the performance
on behalf of such Person under terms and provisions of this Agreement and the
Escrow Agreement, as the same may be from time to time amended, and to do or
refrain from doing all such further acts and things, and to execute all such
documents, as the Xtrana Post-Merger Representative shall deem necessary or
appropriate in connection with any of the transactions contemplated under this
Agreement and the Escrow Agreement.
45
10.1.3 RELIANCE ON EXPERTS; LIMITATION OF LIABILITY. Each of
the Post-Merger Representative shall act for the AIC Shareholders or Xtrana
stockholders, as applicable, on all of the matters set forth in this Agreement
and the Escrow Agreement in the manner such Post-Merger Representative believes
to be in the best interest of such Persons; PROVIDED, HOWEVER, that (i) such
Post-Merger Representative shall be entitled to rely on the advice of counsel,
public accountants or other independent experts experienced in the matter at
issue, and any error in judgment or other act or omission of such Post-Merger
Representative pursuant to such advice will not subject such Post-Merger
Representative to liability to any such Person, and (ii) such Post-Merger
Representative shall not be responsible to any such Person for any loss or
damage any such Person may suffer by reason of the performance by such
Post-Merger Representative of such Person's duties under this Agreement or the
Escrow Agreement, other than loss or damage arising from willful misconduct in
the performance of such Post-Merger Representative's duties under this Agreement
or the Escrow Agreement.
10.2 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the Parties.
10.3 EXTENSION; WAIVER. The Parties may (a) extend the time for the
performance of any of the obligations or other acts of the other Parties, (b)
waive any inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement, or (c) waive
compliance with any of the agreements or conditions contained in this Agreement.
Any agreement on the part of a Party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
Party. The failure of any Party to assert any of its rights under this Agreement
or otherwise shall not constitute a waiver of such rights.
10.4 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered Personally or sent by facsimile, electronic mail, or
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a Party as shall be specified by like
notice):
if to AIC, to:
Alpha Innotech Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
46
if to Xtrana or MergerCo, to:
Xtrana, Inc.
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, CEO
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Markiles, LLP
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
10.5 INTERPRETATION. When a reference is made in this Agreement to
a Section, Exhibit or Schedule, such reference shall be to a Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
10.6 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
and the other agreements referred to herein constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement. Except as
expressly provided herein, this Agreement is not intended to confer upon any
Person other than the parties any rights or remedies.
10.7 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
10.8 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
10.9 ENFORCEMENT. The parties agree that irreparable damage may
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal or state court located
in the State of Delaware, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of any court sitting
in the State of Delaware in the event any dispute arises out of this
47
Agreement or any of the transactions contemplated by this Agreement to the
extent such courts would have subject matter jurisdiction with respect to such
dispute and (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction or venue by motion or other request for leave from any such court.
10.10 SEVERABILITY. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
10.11 SCHEDULES AND EXHIBITS. The Schedules and Exhibits to this
Agreement are hereby incorporated into this Agreement and are hereby made a part
of this Agreement as if set out in full in this Agreement.
10.12 COUNTERPARTS. This Agreement may be executed in one or more
identical counterparts, all of which shall be considered one and the same
instrument and shall become effective when one or more such counterparts shall
have been executed by each of the parties and delivered to the other parties.
Delivery of a copy of this Agreement bearing an original signature by facsimile
transmission, by electronic mail in "portable document format" (".pdf") form, or
by any other electronic means intended to preserve the original graphic and
pictorial appearance of a document, will have the same effect as physical
delivery of the paper document bearing the original signature.
[SIGNATURE PAGE FOLLOWS.]
48
IN WITNESS WHEREOF, the undersigned have caused their duly authorized
officers to execute this Agreement as of the date first above written.
ALPHA INNOTECH CORPORATION
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
XTRANA, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
AIC MERGER CORPORATION
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
S-1
INDEX OF SCHEDULES AND EXHIBITS
SCHEDULES:
AIC Disclosure Schedule
Xtrana Disclosure Schedule
Schedule 6.11: Deferred Compensation
EXHIBITS:
Exhibit A: Secured Promissory Note
Exhibit B: Form of Escrow Agreement
Exhibit C: Form of Certificate of Merger
Exhibit D: Form of AIC Officer's Certificate
Exhibit E: Form of AIC Secretary's Certificate
Exhibit F: Form of Opinion of AIC Counsel
Exhibit G: Form of Xtrana Officer's Certificate
Exhibit H: Form of Xtrana Secretary's Certificate
Exhibit I: Form of Opinion of Xtrana Counsel
Exhibit J: Articles of Incorporation of Surviving Corporation
ALL OF THE SCHEDULES, EXHIBITS AND OTHER ATTACHMENTS HAVE BEEN OMITTED
PURSUANT TO ITEM 601(B)(2) OF REGULATION S-B. THE REGISTRANT HEREBY AGREES TO
FURNISH SUPPLEMENTALLY A COPY OF ANY OMITTED ATTACHMENT TO THE SECURITIES AND
EXCHANGE COMMISSION UPON REQUEST.