AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November 3, 1995,
among BIOPOOL INTERNATIONAL, INC., a Delaware corporation ("Biopool"), SOURCE
ACQUISITION CORPORATION, a California corporation and a wholly owned subsidiary
of Biopool ("Merger Sub"), and SOURCE SCIENTIFIC, a California corporation
("Source").
RECITALS
The Board of Directors of Biopool and the Board of Directors
of Source have each determined that a business combination between Biopool and
Source is in the best interests of their respective companies and shareholders
and presents an opportunity for their respective companies to achieve long-term
strategic and financial benefits, and accordingly have agreed to effect the
merger provided for herein upon the terms and subject to the conditions set
forth herein.
For federal income tax purposes, it is intended that the
merger provided for herein shall qualify as a reorganization within the meaning
of Section 368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986,
as amended (the "Code"), and for financial accounting purposes shall be
accounted for as a "pooling."
Biopool, Merger Sub and Source desire to make certain
representations, warranties and agreements in connection with the merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1.
The Merger
1.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 1.3), Merger Sub shall be merged
with and into Source in accordance with this Agreement and the separate
corporate existence of Merger Sub shall thereupon cease (the "Merger"). Source
shall be the surviving corporation in the Merger (sometimes hereinafter referred
to as the "Surviving Corporation"). The Merger shall have the effects specified
in Section 1107 of the California General Corporation Law (the "CGCL").
1.2. The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place (a) at the
offices of Xxxx Xxxxx Troop & Xxxxxxxxx, 00000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000-0000, at 9:00 a.m., local time, on the first business day
immediately following the day on which the last to be fulfilled or waived of the
conditions set forth in Article 8 shall be fulfilled or waived in accordance
herewith, or (b) at such other time, date or place as Biopool and Source may
agree. The date on which the Closing occurs is hereinafter referred to as the
"Closing Date."
1.3 Effective Time. If all the conditions to the Merger set forth in
Article 8 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article 9, the parties
hereto shall cause an agreement of merger (the "Agreement of Merger") meeting
the requirements of the CGCL to be properly executed, verified and delivered for
filing in accordance with the CGCL on the Closing Date. The Merger shall become
effective upon the filing of the Agreement of Merger with the Secretary of State
of the State of California in accordance with the CGCL or at such later time
which the parties hereto shall have agreed upon and designated in such filing in
accordance with applicable law as the effective time of the Merger (the
"Effective Time").
ARTICLE 2.
Charter and Bylaws of the Surviving Corporation
2.1 Charter. The Certificate of Incorporation of Source in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation, until duly amended in accordance
with applicable law.
2.2. Bylaws. The Bylaws of Source in effect immediately prior
to the Effective Time shall be the Bylaws of t he Surviving Corporation, until
duly amended in accordance with applicable law.
ARTICLE 3.
Directors and Officers of the Surviving Corporation
3.1 Directors. The directors of Merger Sub immediately prior
to the Effective Time, Xxxxxxx Xxxx, Xxxxx X. Xxxxxxx, Xxxxxxx Xxxx, Xxxxxx
Xxxxxxx and Xxxxxxx Xxxxxxxx, shall be the directors of the Surviving
Corporation as of the Effective Time.
3.2. Officers. The officers of Merger Sub immediately prior to the
Effective Time shall be the officers of the Surviving Corporation as of th
Effective Time.
ARTICLE 4.
Source and Merger Sub Stock
4.1 Conversion of the Source and Merger Sub Stock.
At the Effective Time, each share of the Common Stock,
without par value, of Merger Sub outstanding immediately prior to the Effective
Time shall remain outstanding and shall represent one share of Common Stock,
without par value, of the Surviving Corporation.
At the Effective Time, each share of the Common Stock,
without par value, of Source (the "Source Common Shares"), issued and
outstanding immediately prior to the Effective Time, excluding any Source Common
Shares then held by any Dissenting Shareholder (as defined in Section 4.2.(i),
below), shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive 0.14 shares of Common
Stock of Biopool, $.001 par value per share (the "Biopool Common Stock"). The
exchange ratio of shares of Biopool Common Stock for Source Common Shares is
hereinafter referred to as the "Exchange Ratio."
As a result of the Merger and without any action on the
part of the holder thereof, all Source Common Shares shall cease to be
outstanding and shall be canceled and retired and shall cease to exist, and each
holder of a certificate (a "Certificate") representing any Source Common Shares
shall thereafter cease to have any rights with respect to such Source Common
Shares, except the right to receive, without interest, the Biopool Common Stock
and cash for fractional shares of Biopool Common Stock in accordance with
Sections 4.1(b) and 4.2.(e) upon the surrender of such Certificate.
Each Source Common Share issued and held in Source's
treasury at the Effective Time, if any, shall, by virtue of the Merger, cease to
be outstanding and shall be canceled and retired and shall cease to exist
without payment of any consideration therefor.
At the Effective Time, all options to purchase Source
Common Shares then outstanding (individually, a "Source Option" and
collectively, the "Source Options") which were issued under any stock option or
compensation plan or arrangement or otherwise, shall, subject to the terms of
any applicable stock option agreement or plan, remain outstanding following the
Effective Time. At the Effective Time, such Source Options shall, by virtue of
the Merger and without any further action on the part of Source or the holder of
any Source Option, be assumed by Biopool in such manner that Biopool (x) is a
corporation "assuming a stock option in a transaction to which Section 424
applied" within the meaning of Section 422 of the Code or (y) to the extent
Section 424 of the Code does not apply to any such Company Option, would be such
a corporation were Section 424 applicable to such option. Each Source Option
assumed by Biopool shall be exercisable upon the same terms and conditions as
under the applicable Stock Option agreement or plan, except that (i) each such
Source Option shall be exercisable for that number of shares of Biopool Common
Stock (to the nearest whole share) into which the number of Source Common Shares
subject to such Source Option immediately prior to the Effective Time would be
converted under Section 4.1(b) of this Agreement, and (ii) the option price per
share of Biopool Common Stock shall be equal to (A) the per share exercise price
of such Source Option in effect immediately prior to the Effective Time
multiplied by the number of Source Common Shares subject to such Source Option
immediately prior to the Effective Time, divided by (B) the number of Source
Common Shares subject to such Source Option immediately prior to the Effective
Time multiplied by 0.14(the price per share, as so determined, shall be rounded
up to the nearest whole cent). No payment shall be made for fractional
interests. In connection with the assumption of Source Options outstanding under
Source's stock option plans, Biopool shall effect such assumption in such manner
as not to affect the "incentive" status of those options which are "incentive"
stock options within the meaning of the Code at the Effective Time. From and
after the date hereof, no additional options or other rights shall be granted
under Source's stock option plans or otherwise, and no "vesting" or exercise
schedule of any Source Options shall be modified or accelerated.
At the Effective Time, all warrants to purchase Source
Common Shares then outstanding (individually, a "Source Warrant" and
collectively, the "Source Warrants") which were granted by Source pursuant to
any agreement, contract or arrangement, shall, subject to the terms of the
Source Warrants, as such terms may hereafter be amended or modified, remain
outstanding following the Effective Time. At the Effective Time, such Source
Warrants shall, by virtue of the Merger and without any further action on the
part of Source or the holder of any Source Warrant, be assumed by Biopool. Each
Source Warrant assumed by Biopool shall be exercisable upon the same terms and
conditions as under the applicable Warrant agreement governing such Source
Warrant, except that (i) each such Source Warrant shall be exercisable for that
number of shares of Biopool Common Stock (to the nearest whole share) into which
the number of Source Common Shares subject to such Source Warrant immediately
prior to the Effective Time would be converted under Section 4.1(b) of this
Agreement, and (ii) the exercise price per share of Biopool Common Stock shall
be equal to (A) the per share exercise price of such Source Warrant in effect
immediately prior to the Effective Time multiplied by the number of Source
Common Shares subject to such Source Warrant immediately prior to the Effective
Time, divided by (B) the number of Source Common Shares subject to such Source
Warrant immediately prior to the Effective Time multiplied by 0.14 (the price
per share, as so determined, shall be rounded up to the nearest whole cent). No
payment shall be made for fractional interests. From and after the date hereof,
no additional warrants or other similar rights shall be granted by Source, and
no "vesting" or exercise schedule of any Source Warrant shall be modified or
accelerated.
4.2. Exchange of Certificates Representing Source Common Shares.
(a) As of the Effective Time, Biopool shall deposit, or shall
cause to be deposited, with an exchange agent selected by Biopool, which shall
be Biopool's Transfer Agent (the "Exchange Agent"), for the benefit of the
holders of Source Common Shares, for exchange in accordance with this Article 4,
certificates representing the shares of Biopool Common Stock and the cash in
lieu of fractional shares (such cash and certificates for shares of Biopool
Common Stock, together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund") to be issued pursuant to
Section 4.1.and paid pursuant to this Section 4.2. in exchange for outstanding
Source Common Shares.
(b) Promptly after the Effective Time, Biopool shall cause the
Exchange Agent to mail to each holder of record of a Certificate or Certificates
(i) a letter of transmittal which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Biopool may reasonably specify and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for certificates
representing shares of Biopool Common Stock and cash in lieu of fractional
shares. Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, the holder of such Certificate shall
be entitled to receive in exchange therefor (x) a certificate representing the
number of whole shares of Biopool Common Stock, and (y) a check representing the
amount of cash in lieu of fractional shares, if any, and unpaid dividends and
distributions, if any, which such holder has the right to receive in respect of
the Certificate surrendered pursuant to the provisions of this Article 4, and
the Certificate so surrendered shall forthwith be canceled. The Exchange Agent
may, if required by law, give effect to any required withholding tax. No
interest will be paid or accrued on the cash in lieu of fractional shares and
unpaid dividends and distributions, if any, payable to holders of Certificates.
In the event of a transfer of ownership of Source Common Shares which is not
registered in the transfer records of Source, a certificate representing the
proper number of shares of Biopool Common Stock, together with a check for the
cash to be paid in lieu of fractional shares, may be issued to such a transferee
if the Certificate representing shares of such Source Common Shares is presented
to the Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and to evidence that any applicable stock transfer taxes
have been paid.
(c) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions on Biopool Common Stock shall be paid with
respect to any Source Common Shares represented by a Certificate until such
Certificate is surrendered for exchange as provided herein. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing whole shares of
Biopool Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore payable with respect to such
whole shares of Biopool Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Biopool Common Stock,
less the amount of any withholding taxes which may be required thereon.
(d) At and after the Effective Time, there shall be no
transfers on the stock transfer books of Source of the Source Common Shares
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be canceled and exchanged for certificates for shares of Biopool Common
Stock and cash in lieu of fractional shares, if any, and unpaid dividends and
distributions deliverable in respect thereof pursuant to this Agreement in
accordance with the procedures set forth in this Article 4. Certificates
surrendered for exchange by any person constituting an "affiliate" of Source for
purposes of Rule 145(c) under the Securities Act of 1933, as amended (the
"Securities Act"), shall not be exchanged until Biopool has received a written
agreement from such a person as provided in Section 7.10.
(e) No fractional shares of Biopool Common Stock shall be
issued pursuant hereto. In lieu of the issuance of any fractional share of
Biopool Common Stock pursuant to Section 4.1(b), cash payments will be paid to
holders in respect of any fractional share of Biopool Common Stock that would
otherwise be issuable, and the amount of such cash adjustment shall be equal to
such fractional proportion of the "Average Price" of a share of Biopool Common
Stock. The "Average Price" of a share of Biopool Common Stock shall be the
average of the closing sales prices thereof on the National Association of
Securities Dealers Automated Quotation System (the "NASDAQ") as reported by The
Wall Street Journal or, if not reported thereby, by another authoritative
source, over the twenty (20) trading days immediately preceding the Closing
Date.
(f) Any portion of the Exchange Fund (including the proceeds
of any investments thereof and any shares of Biopool Common Stock) that remains
unclaimed by the former shareholders of Source one year after the Effective Time
shall be delivered to the Surviving Corporation. Any former shareholders of
Source who have not theretofore complied with this Article 4 shall thereafter
look only to the Surviving Corporation for exchange of their Source Common
Shares for shares of Biopool Common Stock, cash in lieu of fractional shares and
unpaid dividends and distributions of the Biopool Common Stock deliverable in
respect of each such Source Common Share such shareholder holds as determined
pursuant to this Agreement, in each case, without any interest thereon.
(g) None of Biopool, Source, the Exchange Agent or any other
person shall be liable to any former holder of Source Common Shares for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(h) In the event any Certificate shall have 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
the Surviving Corporation, the posting of such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent or the Surviving Corporation will issue in exchange for such
lost, stolen or destroyed Certificate the shares of Biopool Common Stock and
cash in lieu of fractional shares, and unpaid dividends and distributions on
shares of Biopool Common Stock as provided in Section 4.2.(b), deliverable in
respect thereof pursuant to this Agreement.
(i) Notwithstanding anything in this Agreement to the
contrary, Source Common Shares which are issued and outstanding immediately
prior to the Effective Time and which are held by holders of such Source Common
Shares who have properly exercised dissenters' rights with respect thereto in
accordance with Sections 1300 et seq. of the CGCL (the "Dissenting Shares")
shall not be converted into or be exchangeable for the right to receive the
consideration paid in the Merger, and holders of such Source Common shares shall
be entitled to receive payment of the fair value of such Source Common Shares in
accordance with the provisions of such Sections unless and until such holders
fail to perfect or shall have effectively withdrawn or lost their rights to
receive fair value under the CGCL. If, after the Effective Time, any such holder
fails to perfect or shall have effectively withdrawn or lost such right, such
Source Common Shares shall thereupon be treated as if they had been converted
into and become exchangeable for, at the Effective Time, the right to receive
consideration paid in the Merger to which the holder of such Source Common
Shares is entitled, without any interest thereon, Source shall give Biopool
prompt notice of any demands received by Source for the receipt of fair value
for Source Common Shares and, prior to the Effective Time, Biopool shall have
the right to participate in all negotiations and proceedings with respect to
such demands. Prior to the Effective Time, Source shall not, except with the
prior written consent of Biopool, make any payment with respect to, or settle or
offer to settle, any such demands.
ARTICLE 5.
Representations and Warranties of Source
Except as set forth in the disclosure letter delivered to Biopool at or prior to
the execution hereof, which shall refer to the relevant Sections of this
Agreement (the "Source Disclosure Letter"). Source represents and warrants to
Biopool as follows:
5.1 Existence: Good Standing; Authority; Compliance With Law. Source is
a corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation. Source is duly licensed or qualified
to do business as a foreign corporation and is in good standing under the laws
of any other state of the United States in which the character of the properties
owned or leased by it therein or in which the transaction of its business makes
such qualification necessary, except where the failure to be so qualified would
not have a material adverse effect on the business, results of operations or
financial condition of Source and its Subsidiaries taken as a whole (a "Source
Material Adverse Effect"). Source has all requisite corporate power and
authority to own, operate, lease and encumber its properties and carry on its
business as now conducted. Each of Source's Subsidiaries is a corporation or
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own its properties and to carry on its
business as it is now being conducted, and is duly qualified to do business and
is in good standing in each jurisdiction in which the ownership of its property
or the conduct of its business requires such qualification, except for
jurisdictions in which such failure to be so qualified or to be in good standing
would not have a Source Material Adverse Effect. To the best knowledge of the
executive officers of Source, neither Source nor any of its Subsidiaries is in
violation of any order of any court, governmental authority or arbitration board
or tribunal, or any law, ordinance, governmental rule or regulation to which
Source or any Source Subsidiary or any of their respective properties or assets
is subject, where such violation would have a Source Material Adverse Effect.
Source and its Subsidiaries have obtained all licenses, permits and other
authorizations and have taken all actions required by applicable law or
governmental regulations in connection with their business as now conducted,
except where the failure to obtain any such item or to take any such action
would not have a Source Material Adverse Effect. Copies of Source's and its
Subsidiaries' Articles of Incorporation, Bylaws, organization documents and
partnership and joint venture agreements have been previously delivered or made
available to Biopool and such documents are listed in the Source Disclosure
Letter and are true and correct.
5.2. Authorization, Validity and Effect of Agreements. Source has the
requisite corporate power and authority to enter into the transactions
contemplated hereby and to execute and deliver this Agreement and the agreements
and documents listed on Schedule 5.2. attached hereto (the "Ancillary
Agreements") to which it is a party. Subject only to the approval of this
Agreement and the transactions contemplated hereby by the holders of a majority
of the outstanding Source Common Shares, the consummation by Source of this
Agreement, the Ancillary Agreements to which it is a party and the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of Source. This Agreement constitutes, and the
Ancillary Agreements to which it is a party (when executed and delivered
pursuant hereto for value received) will constitute, the valid and legally
binding obligations of Source, enforceable against Source in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, moratorium
or other similar laws relating to creditors' rights and general principles of
equity.
5.3 Capitalization. The authorized capital stock of Source consists of
75,000,000 Source Common Shares, and 1,000,000 shares of preferred stock, no par
value per share (the "Source Preferred Stock"), 150,000 of which have been
designated by the Board of directors of Source as Series C Convertible Preferred
Stock. As of the date hereof, there were 15,386,101 Source Common Shares issued
and outstanding, and 1,555 shares of Series C Convertible Preferred Stock issued
and outstanding. Other than as set forth in the Source Disclosure Letter, Source
has no other series of Source Preferred Stock designated or outstanding, and no
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the shareholders of Source on any
matter. All such issued and outstanding Source Common Shares and shares of
Series C Convertible Preferred Stock are duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights. There are not at the date of
this Agreement any existing options, warrants, calls, subscriptions, convertible
securities, or other rights, agreements or commitments which obligate Source or
any of its Subsidiaries to issue, transfer or sell any shares of capital stock
of Source or any of its Subsidiaries, other than the Series C Convertible
Preferred Stock and the issuance by Source of Source Common Shares upon the
exercise of certain warrants and certain Stock Options issued to officers,
directors, consultants and employees, as set forth in the Source Disclosure
Letter. After the Effective Time, the Surviving Corporation will have no
obligation to issue, transfer or sell any shares of capital stock or other
equity interest in Source or the Surviving Corporation pursuant to any Source
Benefit Plan (as defined in Section 5.14).
5.4 Subsidiaries. Source owns directly or indirectly each of the
outstanding shares of capital stock or all of the partnership or other equity
interests of each of Source's Subsidiaries. Each of the outstanding shares of
capital stock of or other equity interest in each of Source's Subsidiaries is
duly authorized, validly issued, fully paid and nonassessable, and is owned,
directly or indirectly, by Source free and clear of all liens, pledges, security
interests, claims or other encumbrances other than liens imposed by local law
which are not material. The following information for each Subsidiary of Source
is set forth on the Source Disclosure Letter, if applicable: (i) its name and
jurisdiction of incorporation or organization; (ii) its authorized capital stock
or share capital; and (iii) the name of each shareholder or owner of an equity
interest and the number of issued and outstanding shares of capital stock or
share capital or percentage ownership for non-corporate entities held by it.
5.5 Other Interests. Except for interests in the Source Subsidiaries,
neither Source nor any Source Subsidiary owns directly or indirectly any
interest or investment (whether equity or debt) in any corporation, partnership,
joint venture, business, trust or entity (other than investments in short-term
investment securities).
5.6 No Violation. Neither the execution and delivery by Source of this
Agreement nor the consummation by Source of the transactions contemplated hereby
in accordance with the terms hereto, will: (i) conflict with or result in a
breach of any provisions of the Articles of Incorporation or Bylaws of Source;
(ii) result in a breach of violation of, a default under, or the triggering of
any payment or other material obligations pursuant to, or accelerate vesting
under, any Source Option, or any grant or award made under any of the foregoing;
(iii) violate, or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or accelerate the performance required by, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties of Source or its Subsidiaries under, or result in
being declared void, voidable or without further binding effect, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust or any license, franchise, permit, lease, contract, agreement, or other
instrument, commitment or obligation to which Source or any of its Subsidiaries
is a party, or by which Source or any of its Subsidiaries or any of their
properties is bound or affected, except for any of the foregoing matters which,
individually or in the aggregate, would not have a Source Material Adverse
Effect (the "Source Material Contracts"); or (iv) other than the filings
provided for in Article 1, any filings required under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), the Securities Act or applicable state
securities and "Blue Sky" laws (collectively, the Regulatory Filings"), require
any consent, approval or authorization of, or declaration, filing or
registration with, any domestic governmental or regulatory authority.
5.7 SEC Documents. Source has delivered or made available to Biopool
the registration statement of Source filed with the United States Securities and
Exchange Commission ("SEC") in connection with Source's initial public offering
of Source Common Shares, and all exhibits, amendments and supplements thereto
(the "Source Registration Statement"), and each registration statement, report,
proxy statement or information statement and all exhibits thereto prepared by it
since the effective date of the Source Registration Statement, which are set
forth on the Source Disclosure Letter, each in the form (including exhibits and
any amendments thereto) filed with the SEC (collectively, the "Source Reports").
The Source Reports, which were filed with the SEC in a timely manner, constitute
all forms, reports and documents required to be filed by Source under the
Securities Act, the Exchange Act and the rules and regulations promulgated
thereunder (the "Securities Laws"). As of their respective dates, the Source
Reports (i) complied as to form in all material respects with the applicable
requirements of the Securities Laws and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading. Each of the
consolidated balance sheets of Source included in or incorporated by reference
into the Source Reports (including the related notes and schedules) fairly
presents the consolidated financial position of Source and its Subsidiaries as
of its date and each of the consolidated statements of income, retained earnings
and cash flows of Source included in or incorporated by reference into the
Source Reports (including any related notes and schedules) fairly presents the
results of operations, retained earnings or cash flows, as the case may be, of
Source and its Subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments which would
not be material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein and except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC. Except as and to the extent
set forth on the consolidated balance sheet of Source and its Subsidiaries at
June 30, 1995, including all notes thereto (the "Source Balance Sheet"), or as
set forth in the Source Reports, neither Source nor any of its Subsidiaries has
any material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on, or
reserved against in, a balance sheet of Source or in the notes thereto, prepared
in accordance with generally accepted accounting principles consistently applied
during the periods involved, except liabilities arising in the ordinary course
of business since such date.
5.8 Litigation. There are (i) no continuing orders, injunctions or
decrees of any court, arbitrator or governmental authority to which Source or
any of its Subsidiaries is a party of by which any of its properties or assets
are bound or to which any of its directors, officers, employees or agents is a
party or by which any of their properties or assets are bound, and (ii) no
actions, suits or proceedings pending against Source or any of its Subsidiaries
or against any of its directors, officers, employees or agents or, to the actual
knowledge of the executive officers of Source, threatened against Source or any
of its Subsidiaries or against any of its directors, officers, employees or
agents, at law or in equity, or before or by any federal or state commission,
board, bureau, agency or instrumentality, that in the case of clauses (i) or
(ii) above are reasonably likely, individually or in the aggregate, to have a
Source Material Adverse Effect.
5.9 Absence of Certain Changes. Except as disclosed in the Source
Reports filed with the SEC prior to the date hereof, since June 30, 1995 Source
and its Subsidiaries have conducted their business only in the ordinary course
of such business and there has not been (i) any Source Material Adverse Effect;
(ii) as of the date hereof, any declaration, setting aside or payment of any
dividend or other distribution with respect to the Source Common Shares, (iii)
any commitment, contractual obligation, borrowing, capital expenditure or
transaction (each, a "Commitment") entered into by Source or any of its
Subsidiaries, other than immaterial Commitments in the ordinary course of
business; or (iv) any material change in Source's accounting principles,
practices or methods.
5.10 Taxes. Source and each of its Subsidiaries (i) has timely filed
all federal, state and foreign tax returns required to be filed by any of them
for tax years ended prior to the date of this Agreement or requests for
extensions have been timely filed and any such request has been granted and has
not expired and all such returns are complete in all material respects, (ii) has
paid or accrued all taxes shown to be due and payable on such returns or which
have become due and payable pursuant to any assessment, deficiency notice,
30-day letter or other notice received by it and (iii) has properly accrued all
such taxes for such periods subsequent to the periods covered by such returns.
The federal, state and local income and franchise tax returns of Source and each
of its Subsidiaries have not been examined by the appropriate taxing authority.
Neither Source nor any of its Subsidiaries has executed or filed with the
Internal Revenue Service or any other taxing authority any agreement now in
effect extending the period for assessment or collection of any income or other
taxes. Neither Source nor any of its Subsidiaries is a party to any pending
action or proceeding by any governmental authority for assessment or collection
of taxes, and no claim or assessment or collection of taxes has been asserted
against it.
5.11 Books and Records.
(a) The books of account and other financial records of Source
and its Subsidiaries are in all material respects true, complete and correct,
have been maintained in accordance with good business practices, and are
accurately reflected in all material respects in the financial statements
included in the Source Reports.
(b) The minute books and other records of Source and its
Subsidiaries which have been or will be made available to Biopool, contain in
all material respects accurate records of all meetings and accurately reflect in
all material respects all other corporate action of the shareholders and
directors and any committees of the Board of Directors of Source and its
Subsidiaries.
5.12 Warranty Obligations and Returns. Source maintains in the ordinary
course of business adequate reserves for anticipated warranty liability or
obligations and/or return of its products previously shipped to customers. The
reserves for customer returns and warranty obligations provided for on the
Source Balance Sheet are adequate to cover all costs arising from customer
returns and warranty obligations including, but not limited to, if applicable,
(i) the gross profit recognized by Source on the original sale/licensing of the
item of product to the customer; plus (ii) the processing costs that will be
incurred by Source or its Subsidiaries to receive and repair the item of product
or perform applicable warranty obligations; plus (iii) any write-down
necessitated should the returned product not be saleable at the original price.
5.13 Environmental Matters. None of Source, any of its Subsidiaries or,
to the actual knowledge of the executive officers of Source, any other person,
has caused or permitted (a) the unlawful presence of any hazardous substances,
hazardous materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any real property now or previously owned or leased by
Source (the "Source Properties"), or (b) any unlawful spills, releases,
discharges or disposal of Hazardous Materials to have occurred or be presently
occurring on or from the Source Properties as a result of any construction on or
operation and use of such properties, which presence or occurrence would,
individually or in the aggregate, have a Source Material Adverse Effect; and in
connection with the construction on or operation and use of the Source
Properties, Source and its Subsidiaries have not failed to comply, in any
material respect, with all applicable local, state and federal environmental
laws, regulations, ordinances and administrative and judicial orders relating to
the generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials.
5.14 Employee Benefit Plans. All employee benefit plans and other
benefit arrangements covering employees of Source and the Source Subsidiaries
(the "Source Benefit Plans") are listed in the Source Disclosure Letter. True
and complete copies of the Source Benefit Plans have been or will be made
available to Biopool. To the extent applicable, the Source Benefit Plans comply,
in all material respects, with the requirements of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and the Code, and any Source
Benefit Plan intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service (the "IRS") to be so qualified. No
Source Benefit Plan is covered by Title IV of ERISA or Section 412 of the Code.
No Source Benefit Plan nor Source has incurred any liability or penalty under
Section 4975 of the Code or Section 502(i) of ERISA. Each Source Benefit Plan
has been maintained and administered in all material respects in compliance with
its terms and with ERISA and the Code to the extent applicable thereto. There
are no pending or anticipated claims against or otherwise involving any of the
Source Benefit plans and no suit, action or other litigation (excluding claims
for benefits incurred in the ordinary course of Source Benefit Plan activities)
has been brought against or with respect to any such Source Benefit Plan, except
for any of the foregoing which would not have a Source Material Adverse Effect.
All material contributions required to be made as of the date hereof to the
Source Benefit Plans have been made or provided for. Neither Source nor any
entity under "common control" with Source within the meaning of ERISA Section
4001 has contributed to, or been required to contribute to, any "multiemployer
plan" (as defined in Sections 3(37) and 4001(a)(3) of ERISA). Source does not
maintain or contribute to any plan or arrangement which provides or has any
liability to provide life insurance, medical or other employee welfare benefits
to any employee or former employee upon his retirement or termination of
employment and Source has never represented, promised or contracted (whether in
oral or written form) to any employee or former employee that such benefits
would be provided.
5.15 Labor Matters. Neither Source nor any of its Subsidiaries is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor union organization. There
is no unfair labor practice or labor arbitration proceeding pending or, to the
knowledge of the executive officers of Source, threatened against Source or its
Subsidiaries relating to their business, except for any such proceeding which
would not have a Source Material Adverse Effect. There are no organizational
efforts with respect to the formation of a collective bargaining unit presently
being made or threatened involving employees of Source or any of its
Subsidiaries.
5.16 No Brokers. Source has not entered into any contract, arrangement
or understanding with any person or firm which may result in the obligation of
Source or Biopool to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby. Source is
not aware of any claim for payment of any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
5.17 Opinion of Financial Advisor. Source has retained Xxxxxxxx
Xxxxxxx, Inc. to render its opinion to the effect that, as of the date this
Agreement shall be presented to the Source Shareholders and as at the Closing
Date, the Exchange Ratio is fair to holders of Source Common Shares from a
financial point of view.Xxxxxxxx Xxxxxxx, Inc.
5.18 Biopool Share Ownership. Neither Source nor any of its Subsi-
diaries owns any shares of Biopool Common Stock or other securities convertible
into any shares of Biopool Common Stock.
5.19 Related Party Transactions. Set forth in the Source Disclosure
Letter is a list of all arrangements, agreements and contracts entered into by
Source or any of its Subsidiaries with (i) any consultant, (ii) any person who
is an officer, director or affiliate of Source or any of its Subsidiaries, any
relative of any of the foregoing or any entity of which any of the foregoing is
an affiliate or (iii) any person who acquired Source Common Shares in a private
placement. The copies of such documents, all of which have been or will be
delivered to or made available to Biopool, are listed on the Source Disclosure
Letter and are true and correct.
5.20 Contracts and Commitments. The Source Disclosure Letter sets forth
(i) a list of all Source Material Contracts, and (ii) each Commitment entered
into by Source or any of its Subsidiaries which may result in total payments or
liability in excess of $50,000. Copies of the foregoing have been or will be
delivered to or made available to Biopool, are listed on the Source Disclosure
Letter and are true and correct. None of Source or any of its Subsidiaries has
received any notice of a default that has not been cured under any Source
Material Contract or is in default respecting any payment obligations thereunder
beyond any applicable grace periods. All joint venture agreements to which
Source or any of its Subsidiaries is a party are set forth on the Source
Disclosure letter and Source or its Subsidiaries are not in default with respect
to any obligations, which individually or in the aggregate are material,
thereunder.
5.2.1 Certain Payments Resulting From Transactions. The execution of,
and performance of the transactions contemplated by, this Agreement will not
(either alone or upon the occurrence of any additional or subsequent events) (i)
constitute an event under any Source Benefit Plan, policy, practice, agreement
or other arrangement or any trust or loan (the "Employee Arrangements") that
will or may result in any payment (whether of severance pay or otherwise),
accelerations, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any employee, director
or consultant of Source or any of its Subsidiaries, or (ii) result in the
triggering or imposition of any restrictions or limitations on the right of
Source, Merger Sub or Biopool to amend or terminate any Employee Arrangement and
receive the full amount of any excess assets remaining or resulting from such
amendment or termination, subject to applicable taxes. No payment or benefit
will be required to be made pursuant to the terms of any agreement, commitment
or Source Benefit Plan, as a result of the transactions contemplated by this
Agreement, to any officer, director or employee of Source or any of its
Subsidiaries.
5.22 Title To Properties, Encumbrances. Source has good title to all of
the material properties and assets (real, personal and mixed, tangible and
intangible) that are reflected on the Source Balance Sheet or have been acquired
after the date thereof (except for properties and assets sold or otherwise
disposed of since the date of the Source Balance Sheet in the ordinary course of
business consistent with past practice) free and clear of all liens except (a)
materialmen's, mechanics', carriers', worker's, repairmen's and other similar
liens arising or incurred in the ordinary course of business, or statutory
landlord's liens under leases to which Source is a party, with respect to which
Source is a party, with respect to which the underlying obligation is not in
default or such obligation or lien is being contested in good faith, (b) the
rights of third parties with respect to inventory or work in progress under
orders or contracts entered into by Source in the ordinary course of business,
(c) liens that do not materially detract from or materially interfere with the
present use of the properties or assets subject thereto or affected thereby, or
otherwise materially impair present business operations in which such properties
are used or materially interfere with the sale, or materially detract from the
aggregate value, of any properties held for sale, (d) as reflected in the Source
Balance Sheet or the notes thereto, (e) liens for taxes not yet delinquent or
the validity or amount of which are being contested in good faith, and (f)
claims consisting of leases. The term "lien" as used in this Section 5.22 shall
include any mortgage, pledge, security, interest, encumbrance, lien, claim or
charge of any kind.
5.23 Patents, Trade Names and Other Intellectual Property Rights.
Source owns or is validly licensed or otherwise has the right to use, free and
clear of all liens, claims and restrictions of any kind or nature, any and all
patents, trademarks, trade names, service marks, copyrights, trade secrets,
technology, know-how and processes (collectively, "Intellectual Property"), used
in or necessary for the conduct of its business as now conducted or as proposed
to be conducted. To the actual knowledge of the officers of Source, the
operations and products of Source do not infringe any Intellectual Property
rights of any other person. Each contract, license, permit or other agreement or
instrument which grants to Source the right, or permits Source, to manufacture
or distribute Source's products or the products of others, or which is otherwise
material (for the purposes of Regulation S-K of the SEC) to the business or
operations of Source as currently conducted or as proposed to be conducted is in
full force and effect and valid and binding in accordance with its terms, and
Source is not in default under any of the material terms thereof, nor has Source
relinquished, forfeited or waived any of its rights or privileges thereunder
which are material to its ongoing business operations or received a notice of
any such default, and, except as set forth in the Source Disclosure Letter,
there exists no event which with notice or the passing of time or both would
constitute such a default or grant to any other party thereto the right to
cancel or terminate the same or withhold or suspend its performance thereunder.
Source has not received any communication alleging or stating that Source or any
employee has violated or infringed, or by conducting business as proposed, would
violate or infringe any Intellectual Property right of any other person.
5.24 Insurance Coverage. Source has in full force and effect with
insurers, which in respect of amounts, premiums, types of risks insured
(including but not limited to, risks for fire, general liability (including
automobile and product liability), and workers' compensation) constitutes
reasonably adequate coverage against all risks customarily insured against by
companies in the same industry as Source. Other than with respect to reasonable
deductibles on property, casualty and liability insurance, Source and its
Subsidiaries are not self insured, nor do they maintain insurance policies with
provisions for retrospective premium adjustments.
5.25 Backlog. The backlog of Source at September 30, 1995 was
approximately $ 2,571,061consisting of unrecognized revenues from duly executed,
firm contracts or purchase orders for the sale and delivery of Source's products
which are scheduled to be and, to the best knowledge of Source will be, shipped
prior to June 30, 1996.
5.26 Board Approval. The Board of Directors of Source has duly approved
this Agreement, has determined that the Merger is in the best interests of
Source and its shareholders and has resolved to recommend the adoption of this
Agreement and the Merger by its shareholders.
5.27 No Change of Control Provision. Source is not a party or subject
to any agreement, contract or other obligation which would require the making of
any payment, other than payments as contemplated by this Agreement, to any
employee of Source or to any other Person as a result of the consummation of the
transactions contemplated herein.
5.28 Information. All written information provided to Biopool, Merger
Sub or their respective agents by or on behalf of Source or any of its
representatives (including, without limitation, each representation and warranty
of Source set forth in this Agreement) is, and Source covenants that any such
information provided hereafter shall be, true and correct in all material
respects and does not, or shall not, omit any material fact required to be
included therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that no representation or warranty is made by Source as to any financial
forecasts or projections previously furnished to Biopool by Source, except that
such financial forecast or projection has been prepared in good faith based on
assumptions that are believed by Source to have been reasonable at the time or
times made.
ARTICLE 6.
Representations and Warranties of Biopool and Merger Sub
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to Source, which shall refer to the relevant Sections of this
Agreement (the "Biopool Disclosure Letter"), Biopool and Merger Sub represent
and warrant to Source as follows:
6.1 Existence; Good Standing; Authority; Compliance With Law. Biopool
is a corporation, Merger Sub is a corporation, and each is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Biopool is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of any
other state of the United States in which the character of the properties owned
or leased by it therein or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified would not
have a material adverse effect on the business, results of operations or
financial condition of Biopool and its Subsidiaries taken as a whole (a "Biopool
Material Adverse Effect"). Biopool has all requisite corporate power and
authority to own, operate, lease and encumber its properties and carry on its
business as now conducted. Each of Biopool's Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has the corporate power and
authority to own its properties and to carry on its business as it is now being
conducted, and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its property or the conduct of its
business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing would not have a Biopool
Material Adverse Effect. To the best knowledge of the executive officers of
Biopool, neither Biopool nor any Biopool subsidiary is in violation of any order
of any court, governmental authority or arbitration board or tribunal, or any
law, ordinance, governmental rule or regulation to which Biopool or any of its
Subsidiaries or any of their respective properties or assets is subject, where
such violation would have a Biopool Material Adverse Effect. Biopool and its
Subsidiaries have obtained all licenses, permits and other authorizations and
have taken all actions required by applicable law or governmental regulations in
connection with their business as now conducted, except where the failure to
obtain any such item or to take any such action would not have a Biopool
Material Adverse Effect. Copies of Biopool's and its Subsidiaries' respective
charter documents and Bylaws have been previously delivered or made available to
Source and such documents are listed in the Biopool Disclosure Letter and are
true and correct.
6.2. Authorization, Validity and Effect of Agreements. Each of Biopool
and Merger Sub has the requisite corporate power and authority to enter into the
transactions contemplated hereby and to execute and deliver this Agreement and
the Ancillary Agreements to which it is a party. Subject only to the approval of
the issuance of the shares of Biopool Common Stock pursuant to the Merger
contemplated hereby by the holders of a majority of the shares of Biopool Common
Stock present and voting thereon, the consummation by Biopool and Merger Sub of
this Agreement, the Ancillary Agreement to which they are parties and the
transactions contemplated hereby has been duly authorized by all requisite
corporate action on the part of Biopool and Merger Sub. This Agreement
constitutes, and the Ancillary Agreements to which they are parties (when
executed and delivered pursuant hereto for value received) will constitute, the
valid and legally binding obligations of Biopool and Merger Sub, enforceable
against Biopool and Merger Sub in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of equity.
6.3 Capitalization. The authorized capital stock of Biopool consists of
50,000,000 shares of Biopool Common Stock, par value $0.01 per share. As of the
date hereof, there were 7,929,096 shares of Biopool Common Stock issued and
outstanding. Biopool has no outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the shareholders of Biopool on any matter. All such issued and outstanding
shares of Biopool Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. There are not at the date of this
Agreement any existing options, warrants, calls, subscriptions, convertible
securities, or other rights, agreements or commitments which obligate Biopool or
any of its Subsidiaries to issue, transfer or sell any shares of stock or other
equity interest of Biopool or any of its Subsidiaries, other than the issuance
by Biopool of (i) up to 1,020,826 shares of Biopool Common Stock upon the
exercise of stock options issued to officers, directors, consultants and
employees, and (ii) up to 174,951 shares of Biopool Common Stock upon the
exercise of certain stock purchase warrants.
6.4 Subsidiaries.
(a) Biopool owns directly or indirectly each of the
outstanding shares of capital stock or other equity interests of each of
Biopool's Subsidiaries. Each of the outstanding shares of capital stock of or
other equity interest in each of Biopool's Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable, and is owned, directly or
indirectly, by Biopool free and clear of all liens, pledges, security interests,
claims or other encumbrances other than liens imposed by local law which are not
material. The following information for each Subsidiary of Biopool is set forth
on the Biopool Disclosure Letter, if applicable: (i) its name and jurisdiction
of incorporation or organization; (ii) its authorized capital stock or share
capital; and (iii) the name of each shareholder or owner of an equity interest
and the number of issued and outstanding shares of capital stock or share
capital held by it.
(b) The authorized stock of Merger Sub consists of 1,000
shares of Common Stock, without par value, of which 100 shares are issued and
outstanding and owned by Biopool. Merger Sub has not engaged in any activities
other than in connection with the transactions contemplated by this Agreement.
6.5 Other Interests. Except for interests in the Biopool Subsidiaries,
neither Biopool nor any Biopool Subsidiary owns directly or indirectly any
interest or investment (whether equity or debt) in any corporation, partnership,
joint venture, business, trust or entity (other than investments in short-term
investment securities).
6.6 No Violation. Neither the execution and delivery by Biopool and
Merger Sub of this Agreement nor the consummation by Biopool and Merger Sub of
the transactions contemplated hereby in accordance with the terms hereof, will:
(i) conflict with or result in a breach of any provisions of the Certificate of
Incorporation of Biopool, the Articles of Incorporation of Merger Sub or their
respective Bylaws; (ii) result in a breach of violation of, a default under, or
the triggering of any payment or other material obligations pursuant to, or
accelerate vesting under, any of Biopool's stock option plans, or any grant or
award under any of the foregoing; (iii) violate, or conflict with, or result in
a breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination or in a right of termination or cancellation of, or accelerate
the performance required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties of Biopool or its
Subsidiaries under, or result in being declared void, voidable, or without
further binding effect, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust or any license, franchise, permit,
lease, contract, agreement or other instrument, commitment or obligation to
which Biopool or any of its Subsidiaries is a party, or by which Biopool or any
of its Subsidiaries or any of their properties is bound or affected, except for
any of the foregoing matters which, individually or in the aggregate, would not
have a Biopool Material Adverse Effect (the "Biopool Material Contracts"); or
(iv) other than the Regulatory Filings, require any consent, approval or
authorization of, or declaration, filing or registration with, any domestic
governmental or regulatory authority.
6.7 SEC Documents. Biopool has delivered or made available to Source
the registration statement of Biopool filed with the SEC in connection with
Biopool's initial public offering of Biopool Common Stock, and all exhibits,
amendments and supplements thereto (the "Biopool Registration Statement"), and
each registration statement, report, proxy statement or information statement
and all exhibits thereto prepared by it or relating to its properties since the
effective date of the Biopool Registration Statement, which are set forth on the
Biopool Disclosure Letter, each in the form (including exhibits and any
amendments thereto) filed with the SEC (collectively, the "Biopool Reports").
The Biopool Reports, which were filed with the SEC in a timely manner,
constitute all forms, reports and documents required to be filed by Biopool
under the Securities Laws. As of their respective dates, the Biopool Reports (i)
complied as to form in all material respects with the applicable requirements of
the Securities Laws and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. Each of the consolidated balance sheets of
Biopool included in or incorporated by reference into the Biopool Reports
(including the relating notes and schedules) fairly presents the consolidated
financial position of Biopool and its Subsidiaries as of its date and each of
the consolidated statements of income, retained earnings and cash flows of
Biopool included in or incorporated by reference into the Biopool Reports
(including any related notes and schedules) fairly presents the results of
operations, retained earnings or cash flows, as the case may be, of Biopool and
its Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which would not be
material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein and except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC. Except as and to the extent
set forth on the consolidated balance sheet of Biopool and its Subsidiaries at
September 30, 1995, including all notes thereto, or as set forth in the Biopool
Reports, neither Biopool nor any of its Subsidiaries has any material
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) that would be required to be reflected on, or reserved against in,
a balance sheet of Biopool or in the notes thereto, prepared in accordance with
generally accepted accounting principles consistently applied during the periods
involved, except liabilities arising in the ordinary course of business since
such date.
6.8 Litigation. There are (i) no continuing orders, injunctions or
decrees of any court, arbitrator or governmental authority to which Biopool or
any of its Subsidiaries is a party or by which any of its properties or assets
are bound or to which any of its directors, officers, employees or agents is a
party or by which any of their properties or assets are bound, and (ii) other
than that certain action entitled Medical Analysis Systems, Inc. vs. Biopool
International, Inc., et al., filed on November 30, 1994 in Ventura County
Superior Court against Biopool and certain of its employees and Subsidiaries, no
actions, suits or proceedings pending against Biopool or any of its Subsidiaries
or against any of its directors, officers, employees or agents or, to the actual
knowledge of the executive officers of Biopool, threatened against Biopool or
any of its Subsidiaries or against any of its directors, officers, employees or
agents, at law or in equity, or before or by any federal or state commission,
board, bureau, agency or instrumentality, that in the case of clauses (i) or
(ii) above are reasonably likely, individually or in the aggregate, to have a
Biopool Material Adverse Effect.
6.9 Absence of Certain Changes. Except as disclosed in the Biopool
Reports filed with the SEC prior to the date hereof, since September 30, 1995,
Biopool and its Subsidiaries have conducted their business only in the ordinary
course of such business, and there has not been (i) any Biopool Material Adverse
Effect; (ii) as of the date hereof, any declaration, setting aside or payment of
any dividend or other distribution with respect to the Biopool Common Stock; or
(iii) any material change in Biopool's accounting principles, practices or
methods.
6.10 No Brokers. Biopool has not entered into any contract, arrangement
or understanding with any person or firm which may result in the obligation of
Source or Biopool to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby. Biopool
is not aware of any claim for payment of any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
6.11 Opinion of Financial Advisor. Biopool has retained Channel Islands
Equities to render its opinion that, as of the date hereof, this Agreement will
be submitted to the shareholders of Source for approval and as of the Closing
Date, the consideration to be paid by Biopool pursuant to the Merger is fair to
Biopool from a financial point of view.
6.12 Source Stock Ownership. Neither Biopool nor any of its Subsi-
diaries owns any shares of capital stock of Source or other securities conver-
tible into capital stock of Source.
6.13 Biopool Common Stock. The issuance and delivery by Biopool of
Biopool Common Stock in connection with the Merger and this Agreement have been
duly and validly authorized by all necessary corporate action on the part of
Biopool except for the approval of its shareholders contemplated by this
Agreement. The Biopool Common Stock to be issued in connection with the Merger
and this Agreement, when issued in accordance with the terms of this Agreement,
will be validly issued, fully paid and nonassessable.
6.14 Convertible Securities. Biopool has no outstanding options,
warrants or other securities exercisable for, or convertible into, shares of
Biopool Common Stock, the terms of which would require any anti-dilution
adjustments by reason of the consummation of the transactions contemplated
hereby.
6.15 Taxes. Biopool and each of its Subsidiaries (i) has timely filed
all federal, state and foreign tax returns required to be filed by any of them
for tax years ended prior to the date of this Agreement or requests for
extensions have been timely filed and any such request has been granted and has
not expired and all such returns are complete in all material respects, (ii) has
paid or accrued all taxes shown to be due and payable on such returns or which
have become due and payable pursuant to any assessment, deficiency notice,
30-day letter or other notice received by it and (iii) has properly accrued all
such taxes for such periods subsequent to the periods covered by such returns.
The federal, state and local income and franchise tax returns of Biopool and
each of its Subsidiaries have not been examined by the appropriate taxing
authority. Neither Biopool nor any of its Subsidiaries has executed or filed
with the Internal Revenue Service or any other taxing authority any agreement
now in effect extending the period for assessment or collection of any income or
other taxes. Neither Biopool nor any of its Subsidiaries is a party to any
pending action or proceeding by any governmental authority for assessment or
collection of taxes, and no claim or assessment or collection of taxes has been
asserted against it.
6.16 Books and Records.
The books of account and other financial records of Biopool
and its Subsidiaries are in all material respects true, complete and correct,
have been maintained in accordance with good business practices, and are
accurately reflected in all material respects in the financial statements
included in the Biopool Reports.
The minute books and other records of Biopool and its
Subsidiaries which have been or will be made available to Source contain in all
material respects accurate records of all meetings and accurately reflect in all
material respects all other corporate action of the shareholders and directors
and any committees of the Board of Directors of Biopool and its Subsidiaries.
6.17 Employee Benefit Plans. All employee benefit plans and other
benefit arrangements covering employees of Biopool and the Biopool Subsidiaries
(the "Biopool Benefit Plans") are listed in the Biopool Disclosure Letter. True
and complete copies of the Biopool Benefit Plans have been or will be made
available to Source. To the extent applicable, the Biopool Benefit Plans comply,
in all material respects, with the requirements of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and the Code, and any Biopool
Benefit Plan intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service (the "IRS") to be so qualified. No
Biopool Benefit Plan is covered by Title IV of ERISA or Section 412 of the Code.
No Biopool Benefit Plan nor Biopool has incurred any liability or penalty under
Section 4975 of the Code or Section 502(i) of ERISA. Each Biopool Benefit Plan
has been maintained and administered in all material respects in compliance with
its terms and with ERISA and the Code to the extent applicable thereto. There
are no pending or anticipated claims against or otherwise involving any of the
Biopool Benefit plans and no suit, action or other litigation (excluding claims
for benefits incurred in the ordinary course of Biopool Benefit Plan activities)
has been brought against or with respect to any such Biopool Benefit Plan,
except for any of the foregoing which would not have a Biopool Material Adverse
Effect. All material contributions required to be made as of the date hereof to
the Biopool Benefit Plans have been made or provided for. Neither Biopool nor
any entity under "common control" with Biopool within the meaning of ERISA
Section 4001 has contributed to, or been required to contribute to, any
"multiemployer plan" (as defined in Sections 3(37) and 4001(a)(3) of ERISA).
Biopool does not maintain or contribute to any plan or arrangement which
provides or has any liability to provide life insurance, medical or other
employee welfare benefits to any employee or former employee upon his retirement
or termination of employment and Biopool has never represented, promised or
contracted (whether in oral or written form) to any employee or former employee
that such benefits would be provided.
6.18 Related Party Transactions. Set forth in the Biopool Disclosure
Letter is a list of all arrangements, agreements and contracts entered into by
Biopool or any of its Subsidiaries with (i) any consultant, (ii) any person who
is an officer, director or affiliate of Biopool or any of its Subsidiaries, any
relative of any of the foregoing or any entity of which any of the foregoing is
an affiliate or (iii) any person who acquired Biopool Common Shares in a private
placement. The copies of such documents, all of which have been or will be
delivered to or made available to Source, are listed on the Biopool Disclosure
Letter and are true and correct.
6.19 Contracts and Commitments. The Biopool Disclosure Letter sets
forth (i) a list of all Biopool Material Contracts, and (ii) each Commitment
entered into by Biopool or any of its Subsidiaries which may result in total
payments or liability in excess of $50,000. Copies of the foregoing have been or
will be delivered to or made available to Source, are listed on the Biopool
Disclosure Letter and are true and correct. None of Biopool or any of its
Subsidiaries has received any notice of a default that has not been cured under
any Biopool Material Contract or is in default respecting any payment
obligations thereunder beyond any applicable grace periods. All joint venture
agreements to which Biopool or any of its Subsidiaries is a party are set forth
on the Biopool Disclosure letter and Biopool or its Subsidiaries are not in
default with respect to any obligations, which individually or in the aggregate
are material, thereunder.
6.20 Certain Payments Resulting From Transactions. The execution of,
and performance of the transactions contemplated by, this Agreement will not
(either alone or upon the occurrence of any additional or subsequent events) (i)
constitute an event under any Biopool Benefit Plan, policy, practice, agreement
or other arrangement or any trust or loan (the "Employee Arrangements") that
will or may result in any payment (whether of severance pay or otherwise),
accelerations, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any employee, director
or consultant of Biopool or any of its Subsidiaries, or (ii) result in the
triggering or imposition of any restrictions or limitations on the right of
Biopool, Merger Sub or Source to amend or terminate any Employee Arrangement and
receive the full amount of any excess assets remaining or resulting from such
amendment or termination, subject to applicable taxes. No payment or benefit
will be required to be made pursuant to the terms of any agreement, commitment
or Biopool Benefit Plan, as a result of the transactions contemplated by this
Agreement, to any officer, director or employee of Biopool or any of its
Subsidiaries.
6.21 Board Approval. The Board of Directors of Biopool has duly
approved this Agreement, has determined that the Merger is in the best interests
of Biopool and its shareholders and has resolved to recommend the adoption of
this Agreement and the Merger by its shareholders.
6.22 Information. All written information provided to Source or its
agents by or on behalf of Biopool or any of its representatives (including,
without limitation, each representation and warranty of Biopool set forth in
this Agreement) is, and Biopool covenants that any such information provided
hereafter shall be, true and correct in all material respects and does not, or
shall not, omit any material fact required to be included therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that no representation or warranty
is made by Biopool as to any financial forecasts or projections previously
furnished to Source by Biopool, except that such financial forecast or
projection has been prepared in good faith based on assumptions that are
believed by Biopool to have been reasonable at the time or times made.
ARTICLE 7.
Covenants
7.1. Acquisition Proposals. Prior to the Effective Time, Source and
Biopool each agree (a) that neither of them nor any of their Subsidiaries shall,
and each of them direct and use its best efforts to cause its respective
officers, directors, employees, agent and representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) not to initiate solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to is shareholders)
with respect to a merger, acquisition, tender offer, exchange offer,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets of any equity securities of, such party or any
of its Subsidiaries, other than the transactions contemplated by this Agreement
(any such proposal or offer being hereinafter referred to as an "Acquisition
Proposal") or engage in any negotiations concerning, or provide any confidential
information or date to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; (b) that it will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing and each will
take the necessary steps to inform the individuals or entities referred to above
of the obligations undertaken in this Section 7.1; and (c) that it will notify
the other party immediately if any such inquiries or proposals are received by,
any such information is requested from, or any such negotiations or discussions
are sought to be initiated or continued with, it; provided, however, that
nothing contained in this Section 7.1.shall prohibit the Board of Directors of
such party from (i) furnishing information to or entering into discussions or
negotiations with, any person or entity that makes an unsolicited bona fide
Acquisition Proposal, if, and only to the extent that, (A) the Board of
Directors of such party determines in good faith that such action is required
for the Board of Directors to comply with its fiduciary duties to shareholders
imposed by law, (B) prior to furnishing such information to, or entering into
discussions or negotiations with, such person or entity, such party provides
written notice to the other party to this Agreement to the effect that it is
furnishing information to, or entering into discussions with, such person or
entity, and (C) subject to any confidentiality agreement with such person or
entity (which such party determined in good faith was required to be executed in
order for the Board of Directors to comply with its fiduciary duties to
shareholders imposed by law), such party keeps the other party to this Agreement
informed of the status (not the terms) of any such discussions or negotiations;
and (ii) to the extent applicable, complying with Rule 14e-2 promulgated under
the Exchange Act with regard to an Acquisition Proposal. Nothing in this Section
7.1.shall (x) permit any party to terminate this Agreement (except as
specifically provided in Article 9 hereof), (y) permit any party to enter into
any agreement with respect to an Acquisition Proposal during the term of this
Agreement (it being agreed that during the term of this Agreement, no party
shall enter into any agreement with any person that provides for, or in any way
facilitates, an Acquisition Proposal (other than a confidentiality agreement in
customary form)), or (z) affect any other obligation of any party under this
Agreement.
7.2. Conduct of Business.
(a) Prior to the Effective Time, except as set forth in the
Source Disclosure Letter or the Biopool Disclosure Letter or as contemplated by
this Agreement, unless the other party has consented in writing thereto, Biopool
and Source:
(i) Shall use their reasonable efforts, and
shall cause each of their respective Subsidiaries to use their reasonable
efforts, to preserve intact their business organizations and goodwill and keep
available the services of their respective officers and employees;
(ii) Shall confer on a regular basis with one or
more representatives of the other to report operational matters of materiality
and, subject to Section 7.1, any proposals to engage in material transactions;
(iii) Shall not amend its Articles of In-
corporation or Bylaws;
(iv) Shall promptly notify the other of any mat-
erial emergency or other material change in the conditions (financial or
otherwise), business, properties, assets, liabilities, prospects or the normal
course of their businesses or in the operation of their properties, any material
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the breach in any material
respect of any representation or warranty contained herein; and
(v) Shall promptly deliver to the other true and
correct copies of any report, statement or schedule filed with the SEC
subsequent to the date of this Agreement.
(b) Prior to the Effective Time, except as set forth in
the Source Disclosure Letter, unless Biopool has consented in writing thereto,
Source;
(i) Shall, and shall cause each of its Subsid-
iaries to, conduct its operations according to their usual, regular and ordinary
course in substantially the same manner as heretofore conducted;
(ii) Shall not, and shall cause its Subsidiaries
not to, acquire, enter into an option to acquire or exercise an option or
contract to acquire any material real or personal property, incur additional
indebtedness, or encumber assets;
(iii) Shall not (A) except pursuant to the exer-
cise of options, warrants, conversion rights and other contractual rights
existing on the date hereof and disclosed pursuant to this Agreement, issue any
shares of its capital stock, effect any stock split, reverse stock split, stock
dividend, recapitalization or other similar transaction, (B) grant, confer or
award any option, warrant, conversion right or other right not existing on the
date hereof to acquire any shares of its capital stock, (C) increase any
compensation or enter into or amend any employment agreement with any of its
present or future officers or directors, or (D) adopt any new employee benefit
plan (including any stock option, stock benefit or stock purchase plan) or amend
any existing employee benefit plan in any material respect, except for changes
which are less favorable to participants in such plans;
(iv) Shall not (A) declare, set aside or pay any
dividend or make any other distribution or payment with respect to any shares of
its capital stock, or (B) directly or indirectly redeem, purchase or otherwise
acquire any shares of its capital stock or capital stock of any of its
Subsidiaries, or make any commitment for any such action;
(v) Shall not, and shall not permit any of its
Subsidiaries to, sell, lease or otherwise dispose of (i) any Source Properties
or any of its capital stock of or other interests in Subsidiaries or (ii) except
in the ordinary course of business, any of its other assets which are material,
individually or in the aggregate;
(vi) Shall not, and shall not permit any of its
Subsidiaries to, make any loans, advances or capital contributions to, or
investments in, any other person;
(vii) Shall not, and shall not permit any of its
Subsidiaries to, pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes thereto) of Source
included in the Source Reports or incurred in the ordinary course of business
consistent with past practice;
(viii) Shall not, and shall not permit any of its
Subsidiaries to, enter into any Commitment which any result in total payments or
liability by or to it in excess of $50,000; and
(ix) Shall not, and shall not permit any of its
Subsidiaries to, enter into any Commitment with any officer, director,
consultant or affiliate of Source or any of its Subsidiaries.
(c) Prior to the Effective Time, unless Source has con-
sented in writing thereto, Biopool:
(i) Shall not (A) except pursuant to the exer-
cise of options, warrants, conversion rights and other contractual rights
existing on the date hereof and disclosed pursuant to this Agreement, effect any
issuance of its capital stock (other than pursuant to an transaction of the type
specified in the proviso to Section 7.2(c)(iii), below), stock split, reverse
stock split, stock dividend, recapitalization or other similar transaction or
(B) grant, confer or award any option, warrant, conversion right or other right
not existing on the date hereof to acquire any of its shares of beneficial
interest, other than options granted pursuant to and in accordance with
Biopool's employee stock option plans as in effect on the date hereof;
(ii) Shall not (A) declare, set aside or pay any
dividend or make any other distribution or payment with respect to any shares of
Biopool Common Stock, or (B) except for the use of shares of Biopool Common
Stock to pay the exercise price or tax withholding in connection with
stock-based employee benefit plans of Biopool, directly or indirectly redeem,
purchase or otherwise acquire any of its shares of capital stock of any of its
Subsidiaries, or make any commitment for any such action; and
(iii) Shall, and shall cause each of its Subsi-
diaries to, conduct its operations according to their usual, regular and
ordinary course in substantially the same manner as heretofore conducted,
provided, that it shall not be a breach of this Section 7.2.(c) for Biopool to
pursue and consummate acquisitions of companies which are in Biopool's existing
or demonstrably anticipated line of business, or other similar strategic
business alliances.
7.3 Meetings of Shareholders. Each of Biopool and Source will take all
action necessary in accordance with applicable law and its Certificate of
Incorporation, Articles of Incorporation and Bylaws to convene a meeting of its
shareholders as promptly as practicable to consider and vote upon (i) in the
case of Biopool, the approval of the issuance of the shares of Biopool Common
Stock pursuant to the Merger contemplated hereby and (ii) in the case of Source,
the approval of this Agreement and the transactions contemplated hereby. The
Board of Directors of Biopool and the Board of Directors of Source shall each
recommend such approval and Biopool and Source shall each take all lawful action
to solicit such approval, including, without limitation, timely mailing of the
Proxy Statement/Prospectus (as defined in Section 7.7); provided, however, that
such recommendation or solicitation is subject to any action taken by, or upon
authority of, the Board of Directors of Biopool or the Board of Directors of
Source, as the case may be, in the exercise of its good faith judgment as to its
fiduciary duties to its shareholders imposed by law. Biopool and Source shall
coordinate and cooperate with respect to the timing of such meetings and shall
use their best efforts to hold such meetings on the same day. It shall be a
condition to the mailing of the Proxy Statement/Prospectus that (i) Biopool
shall have received a "comfort" letter from Coopers and Xxxxxxx, independent
public accountants for Source, dated as of a date within two business days
before the date on which the Form S-4 (as defined in Section 7.7) shall become
effective, with respect to the financial statements of Source included in the
Proxy Statement/Prospectus, in form and substance reasonably satisfactory to
Biopool, and customary in scope and substance for "comfort" letters delivered by
independent public accountants in connection with registration statements and
proxy statements similar to the Form S-4 and the Proxy Statement/Prospectus, and
(ii) Source shall have received a "comfort" letter from Ernst & Young,
independent public accountants for Biopool, dated as of a date within two
business days before the date on which the Form S-4 shall become effective, with
respect to the financial statements of Biopool included in the Proxy
Statement/Prospectus, in form and substance reasonably satisfactory to Source,
and customary in scope and substance for "comfort" letters delivered by
independent public accountants in connection with registration statements and
proxy statements similar to the Form S-4 and the Proxy Statement/Prospectus.
7.4 Filings; Other Action. Subject to the terms and conditions herein
provided, Source and Biopool shall: (a) to the extent required, promptly make
their respective filings and thereafter make any other required submissions
under the HSR Act with respect to the Merger; (b) use all reasonable efforts to
cooperate with one another in (i) determining which filings are required to be
made prior to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective time from,
governmental or regulatory authorities of the United States, the several states
and foreign jurisdictions in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and (ii)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; (c) use all reasonable efforts to obtain in writing
any consents required from third parties in form reasonably satisfactory to
Source and Biopool necessary to effectuate the Merger; and (d) use all
reasonable efforts to take, or cause to be taken, all other action and do, or
cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the transactions contemplated by this Agreement.
If, at any time after the Effective Time, any further action is necessary or
desirable to carry out the purpose of this Agreement, the proper officers and
directors of Biopool and Source shall take all such necessary action.
7.5 Inspection of Records. From the date hereof to the Effective Time,
each of Source and Biopool shall allow all designated officers, attorneys,
accountants and other representatives of the other access at all reasonable
times to the records and files, correspondence, audits and properties, as well
as to all information relating to Commitments, contracts, titles and financial
position, or otherwise pertaining to the business and affairs of Source and
Biopool and their respective Subsidiaries.
7.6 Publicity. The initial press release relating to this Agreement
shall be a joint press release and thereafter Source and Biopool shall, subject
to their respective legal obligations (including requirements of stock exchanges
and other similar regulatory bodies), consult with each other, and use
reasonable efforts to agree upon the text of any press release, before issuing
any such press release or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filings with any federal or
state governmental or regulatory agency or with any national securities exchange
with respect thereto.
7.7 Registration Statements. Biopool and Source shall cooperate and
promptly prepare and Biopool shall file with the SEC as soon as practicable a
Registration Statement on Form S-4 (the "Form S-4") under the Securities Act,
with respect to the Biopool Common Stock issuable in the Merger, a portion of
which Registration Statement shall also serve as the joint proxy statement with
respect to the meetings of the shareholders of Source and of Biopool in
connection with the Merger (the "Proxy Statement/Prospectus"). The respective
parties will cause the Proxy Statement/Prospectus and the Form S-4 to comply as
to form in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the rules and regulations thereunder.
Biopool shall use all reasonable efforts, and Source will cooperate with
Biopool, to have the Form S-4 declared effective by the SEC as promptly as
practicable. Biopool shall use its best efforts to obtain, prior to the
effective date of the Form S-4, all necessary state securities law or "Blue Sky"
permits or approvals required to carry out the transactions contemplated by this
Agreement and will pay all expenses incident thereto. Biopool agrees that the
Proxy Statement/Prospectus and each amendment or supplement thereto at the time
of mailing thereof and at the time of the respective meetings of shareholders of
Biopool and Source, or, in the case of the Form S-4 and each amendment or
supplement thereto, at the time it is filed or becomes effective, will not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the foregoing shall not apply to the extent that any such untrue
statement of a material fact or omission to state a material fact was made by
Biopool in reliance upon and in conformity with written information concerning
Source furnished to Biopool by Source specifically for use in the Proxy
Statement/Prospectus. Source agrees that the information provided by it for
inclusion in the Proxy Statement/Prospectus and each amendment or supplement
thereto, at the time of mailing thereof and at the time of the respective
meetings of shareholders of Biopool and Source, or, in the case of information
provided by Source for inclusion in the Form S-4 or any amendment or supplement
thereto, at the time it is filed or becomes effective, will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Biopool will advise
Source, promptly after it receives notice thereof, of the time when the Form S-4
has become effective or any supplement or amendment has been filed, the issuance
of any stop order, the suspension of the qualification of the Biopool Common
Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the proxy
Statement/Prospectus or the Form S-4 or comments thereon and responses thereto
or requests by the SEC for additional information.
7.8 Listing Application. Biopool shall promptly prepare and submit to
the NASDAQ a listing application covering the Biopool Common Stock Issuable in
the Merger, and shall use its reasonable efforts to obtain, prior to the
Effective Time, approval for the listing of such Biopool Common Stock, subject
to official notice of issuance.
7.9 Further Action. Each party hereto shall, subject to the fulfillment
at or before the Effective Time of each of the conditions of performance set
forth herein or the waiver thereof, perform such further acts and execute such
documents as may reasonably be required to effect the Merger.
7.10 Rule 145 Affiliates of Source.
(a) At least 30 days prior to the Closing Date, Source shall
deliver to Biopool a list of names and addresses of those persons who were, in
Source's reasonable judgment, at the record date for its shareholders' meeting
to approve the Merger, "affiliates" (each such person, a "Rule 145 Affiliate")
of Source within the meaning of Rule 145 or the rules and regulations
promulgated under the Securities Act ("Rule 145"). Source shall provide Biopool
such information and documents as Biopool shall reasonably request for purposes
of reviewing such list. Source shall use all reasonable efforts to deliver or
cause to be delivered to Biopool, prior to the Closing Date, from each of the
Rule 145 Affiliates of Source identified in the foregoing list, an Affiliate
Letter in the form attached hereto as Exhibit "A". Biopool shall be entitled to
place legends as specified in such Affiliate Letters on the certificates
evidencing any Biopool Common Stock to be received by such Rule 145 Affiliates
pursuant to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for the Biopool Common Stock, consistent with
the terms of such Letters.
(b) Biopool shall file the reports required to be filed by it
under the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as any Rule 145 Affiliate of
Source may reasonably request, all to the extent required from time to time to
enable such Rule 145 Affiliate to sell Biopool Common Stock received by such
Rule 145 Affiliate in the Merger without registration under the Securities Act
pursuant to (i) Rule 145(d)(l) under the Securities Act, as such Rule may be
amended from time to time, or (ii) any successor rule or regulation hereafter
adopted by the SEC.
7.11 Expenses. Subject to Section 9.5, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses, except that (a) the filing fee in
connection with the HSR Act filing, if any, (b) the filing fee in connection
with the filing of the Form S-4 or Proxy Statement/Prospectus with the SEC, and
(c) the expenses incurred in connection with printing and mailing the Form S-4
and the Proxy Statement/Prospectus, shall be shared equally by Source and
Biopool.
7.12 Indemnification. From and after the Effective Date, Biopool shall
cause the Surviving Corporation to keep in effect provisions in its Articles of
Incorporation and Bylaws providing for exculpation of director liability and
indemnification of directors, officers, employees and agents to the fullest
extent provided for under the CGCL.
7.13 Governance. Biopool's Board of Directors shall take all action
necessary to cause the directors comprising the full Board of Directors of
Biopool at the Effective Time to be increased by one director, and shall take
all such action necessary to cause Xxxxxxx Xxxxxxxx to be selected as a director
of Biopool for a term expiring at the 1996 annual meeting of shareholder
following the Effective Time, in order to fill the vacancy resulting from such
newly created directorship; provided that, if, prior to the Effective Time, such
person shall decline or be unable to serve as a director. Source shall have no
right to designate another person to serve in such person's stead.
7.14 Employees.
(a) The Surviving Corporation agrees to initially employ at
the Effective Time all employees of Source and its Subsidiaries who are employed
on the Closing Date on terms consistent with Source's current employment
practices and at comparable levels of compensation and positions. Such
employment shall be at will and the Surviving Corporation shall be under no
obligation to continue to employ any individuals.
(b) For purposes of this Section 7.14, the term "employees"
shall mean all current employees of Source and its Subsidiaries (including those
on disability or leave of absence, paid or unpaid).
7.15 Reorganization. From and after the date hereof and until the
Effective Time, neither Biopool nor Source nor any of their respective
Subsidiaries or other affiliates shall (i) knowingly take any action, or
knowingly fail to take any action, that would jeopardize qualification of the
Merger as a reorganization within the meaning of Section 368(a) of the Code; or
(ii) enter into any contract, agreement, commitment or arrangement with respect
to the foregoing. Following the Effective Time, Biopool shall use its best
efforts to conduct its business in a manner that would not jeopardize the
characterization of the Merger as a reorganization within the meaning of Section
368(a) of the Code.
7.16 Accounting Treatment. From and after the date hereof and until the
Effective Time, neither Biopool nor Source nor any of their respective
Subsidiaries or other affiliates shall knowingly take any action, or knowingly
fail to take any action, that would jeopardize the ability of Biopool to account
for the Merger as a "pooling."
ARTICLE 8.
Conditions
8.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) This Agreement and the transactions contemplated hereby
shall have been approved (in the manner required by applicable law or by
applicable regulations of the National Association of Securities Dealers, Inc.
(the "NASD"), the NASDAQ, the Boston Stock Exchange or any stock exchange or
other regulatory body) by the holders of the issued and outstanding shares of
capital stock of Source and Biopool entitled to vote thereon.
(b) The waiting period applicable to the consummation of the
Merger under the HSR Act, if applicable, shall have expired or been terminated.
(c) Neither of the parties hereto shall be subject to any
order or injunction of a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement. In the event
any such order or injunction shall have been issued, each party agrees to use
its reasonable efforts to have any such injunction lifted.
(d) The Form S-4 shall have become effective and all necessary
state securities law or "Blue Sky" permits or approvals required to carry out
the transactions contemplated by this Agreement shall have been obtained and no
stop order with respect to any of the foregoing shall be in effect.
(e) Biopool shall have obtained the approval for the listing
of the Biopool Common Stock issuable in the Merger on the NASDAQ, subject to
official notice of issuance.
(f) All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board, other
regulatory body or third parties required in connection with the execution,
delivery and performance of this Agreement shall have been obtained or made,
except for filings in connection with the Merger and any other documents
required to be filed after the Effective Time and except where the failure to
have obtained or made any such consent, authorization, order, approval, filing
or registration would not have a material adverse effect on the business,
results of operations or financial condition of Biopool and Source (and their
respective Subsidiaries), taken as a whole, following the Effective Time.
8.2. Conditions to Obligations of Source to Effect the Merger. The
obligation of Source to effect the Merger shall be subject to the fulfillment at
or prior to the Closing Date of the following additional conditions, unless
waived by Source:
(a) Biopool shall have performed its agreements contained in
this Agreement required to be performed on or prior to the Closing Date and the
representations and warranties of Biopool and Merger Sub contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date as if made on the Closing Date, and Source shall have received a
certificate of the President or a Vice President of Biopool, dated the Closing
Date, certifying on behalf of Biopool to such effect.
(b) Source shall have received a "comfort" letter from Ernst &
Young, dated the Closing Date, with respect to the financial statements of
Biopool included in the Proxy Statement/Prospectus, substantially in the form
described in Section 7.3.
(c) From the date of this Agreement through the Effective
Time, there shall not have occurred any change in the financial condition,
business or operations of Biopool and its Subsidiaries, taken as a whole, that
would have or would be reasonably likely to have a Biopool Material Adverse
Effect other than any such change that affects both Source and Biopool in a
substantially similar manner.
(d) Source shall have received, on or prior to the date the
Proxy Statement/Prospectus is first distributed to the shareholders of Source or
Biopool, and as of the Closing Date, an opinion of Xxxxxxxx Xxxxxxx, Inc. to the
effect that the consideration to be received by the holders of the Source Common
Shares pursuant to the Merger is fair to the Source shareholders from a
financial point of view.
8.3. Conditions to Obligations of Biopool and Merger Sub to Effect the
Merger. The obligations of Biopool and Merger Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions, unless waived by Biopool:
(a) Source shall have performed its agreements contained in
this Agreement required to be performed on or prior to the Closing Date and the
representations and warranties of Source contained in this Agreement shall be
true and correct in all material respects as of the Closing Date as if made on
the Closing Date and Biopool shall have received a certificate of the President
or a Vice President of Source, dated the Closing Date, certifying on behalf of
Source to such effect.
(b) Biopool shall have received a "comfort" letter from
Coopers & Xxxxxxx dated the Closing Date, with respect to the financial
statements of Source included in the Proxy Statement/Prospectus, substantially
in the form described in Section 7.3.
(c) From the date of this Agreement through the Effective
Time, there shall not have occurred any change in the financial condition,
business or operations of Source and its Subsidiaries, taken as a whole, that
would have or would be reasonably likely to have a Source Material Adverse
Effect, other than any such change that affects both Source and Biopool in a
substantially similar manner.
(d) The number of Dissenting Shares, at the Effective Time,
shall not exceed 5% of the Source Common Shares outstanding immediately prior to
the Closing.
(e) There shall not have occurred and be continuing at any
time within 30 days prior to the Effective Time (i) any suspension in trading on
the New York Stock Exchange or the NASDAQ, any fixing of minimum or maximum
prices for trading, or maximum ranges for prices for securities on the New York
Stock Exchange or the NASDAQ by the New York Stock Exchange the NASD or by other
of the Securities and Exchange Commission or any other governmental authority
having jurisdiction, (ii) the declaration of a banking moratorium by federal,
New York, or California authorities, (iii) or any suspension of payments in
respect of banks in the United States, (iv) an outbreak or major escalation of
hostilities between the United States and any foreign power or of any other
insurrection or armed conflict involving the United States, (v) any limitation,
whether or not mandatory, by any governmental authority on, or any event which
might affect the extension of, credit by banks or other financial institutions,
or (vi) in the case of any of the foregoing existing on the date hereof a
material acceleration or worsening thereof.
(f) Biopool shall have received, on or prior to the date the
Proxy Statement/Prospectus is first distributed to the Source or Biopool
shareholders, and as of the Closing Date, an opinion of Channel Islands
Equities, to the effect that the consideration to be paid to the holders of the
Source Common Shares pursuant to the Merger is fair to Biopool from a financial
point of view.
(g) Biopool shall have received from each of Source's Rule 145
Affiliates, a written undertaking signed by such Rule 145 Affiliate and
substantially in the form of Exhibit "A."
(h) The Merger shall be treated for financial accounting
purposes as a "pooling of interests."
(i) Each outstanding Source Warrant shall have been amended or
modified so as to be in form and substance satisfactory to Biopool, including
without limitation, so as to eliminate any anti-dilution protection provisions.
(j) Biopool shall have received, on or before November 30,
1995, irrevocable proxies in form and substance satisfactory to Biopool, from
the holders of at least 7,000,000 Source Common Shares, authorizing Xxxxxxx
Xxxx, Ph.D., Xxxxxxx Xxxx, or another designee selected by them to vote such
Source Common Shares in favor of the Merger at the meeting of the Source
shareholders called for such purpose.
ARTICLE 9.
Termination
9.1 Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, before or
after the approval of this Agreement by the Shareholders of Source or Biopool,
by the mutual written consent of Biopool and Source.
9.2. Termination by Either Biopool or Source. This Agreement may be
terminated and the Merger may be abandoned by action of the Board of Directors
of Source or the Board of directors of Biopool if (a) the Merger shall not have
been consummated by June 30, 1996; provided, in the case of a termination
pursuant to this clause (a), that the terminating party shall not have breached
in any material respect its obligations under this Agreement in any manner that
shall have proximately contributed to the occurrence of the failure referred to
in said clause, or (b) a meeting of Source's shareholders shall have been duly
convened and held and the approval of Source's shareholders required by Section
8.1(a) shall not have been obtained at such meeting or at any adjournment
thereof by June 30, 1996, or (c) a meeting of Biopool's shareholders shall have
been duly convened and held and the approval of Biopool's shareholders required
by Section 8.1(a) shall not have been obtained at such meeting or at any
adjournment thereof by June 30, 1996, or (d) a United States federal or state
court of competent jurisdiction or United States federal or state governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable; provided, that the party seeking to terminate this Agreement
pursuant to this clause (d) shall have used all reasonable efforts to remove
such order, decree, ruling or injunction, or (e) either Biopool's or Source's
due diligence investigation of the other party conducted between the date hereof
and the date which is 45 days from the date hereof, discloses any matter which
is not acceptable to such party in its sole and absolute discretion, or such
party's due diligence investigation from and after such time through the Closing
Date discloses any matter which is either inconsistent in any material respect
with any of the representations and warranties of the other party contained in
this Agreement or, in the reasonable judgment of the Board of Directors of such
party, reflects any material deviation from the audited financial statements for
the most recent fiscal year or period ended of such other party.
9.3. Termination by Source. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or after
the adoption and approval by the Shareholders of Source referred to in Section
8.1(a), by action of the Board of Directors of Source, if (a) in the exercise of
its good faith judgment as to its fiduciary duties to its shareholders imposed
by law the Board of Directors of Source determines that such termination is
required by reason of an Acquisition Proposal being made, or (b) there has been
a breach by Biopool or Merger Sub of any representation or warranty contained in
this Agreement which would have or would be reasonably likely to have a Biopool
Material Adverse Effect, which breach is not curable by June 29, 1996, or (c)
there has been a material breach of any of the covenants or agreements set forth
in this Agreement on the part of Biopool, which breach is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by Source to Biopool. Notwithstanding the foregoing, any termination
pursuant to Section 9.3(a) shall only be effective if, simultaneously with such
termination, all sums that Source is required to pay to Biopool pursuant to
Section 9.5 have been paid in immediately available funds.
9.4 Termination by Biopool. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or after
the approval by the shareholders of Biopool referred to in Section 8.1(a), by
action of the Board of Directors of Biopool, if (a) the Board of Directors of
Source withdraws, materially modifies or changes in a manner adverse to Biopool
its recommendations to Source's shareholders of this Agreement or the Merger,
other than as a result of the occurrence of an event that, in the good faith
judgment of the Board of Directors of Source has or is reasonably likely to have
a Biopool Material Adverse Effect, or (b) the Board of Directors of Source
postpones the date scheduled for the meeting of shareholders of Source to
approve this Agreement and the transactions contemplated hereby beyond June 29,
1996 or fails to set a date for such meeting by such date, except with the
written consent of Biopool, or (c) there has been a breach by Source of any
representation or warranty contained in this Agreement which would have or would
be reasonably likely to have a Source Material Adverse Effect, which breach is
not curable by June 29, 1996, or (d) there has been a material breach of any of
the covenants or agreements set forth in this Agreement on the part of Source,
which breach is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by Biopool to Source.
9.5 Effect of Termination and Abandonment.
(a) If an election to terminate this Agreement is made
pursuant to (i) Section 9.2.(a) (except as a result of a default or breach
hereunder by Biopool) or Section 9.2.(b), and an Acquisition Proposal relating
to Source shall have been made and, within one year from the date of such
termination, Source consummates an Acquisition Proposal or enters into an
agreement to consummate an Acquisition Proposal which is subsequently
consummated, or (ii) Section 9.3(a), Section 9.4(a) or Section 9.4(b) and an
Acquisition Proposal relating to Source shall have been made, Source (or the
successor thereto) shall, provided that Biopool was not in material breach of
its obligations hereunder at the time of such termination, as liquidated damages
and not as a penalty or forfeiture, pay to Biopool, an amount in cash equal to
$1,000,000 (the "Liquidated Damages Amount") plus all documented out-of-pocket
costs and expenses, up to a maximum of $500,000, in connection with this
Agreement and the transactions contemplated hereby (the "Expenses") incurred by
Biopool. If this Agreement is terminated pursuant to Section 9.3(b), Section
9.3(c), Section 9.4(c) or Section 9.4(d), the non-terminating party shall,
provided that the terminating party was not in material breach of its
obligations hereunder at the time of such termination, pay the terminating party
all Expenses, up to a maximum of $500,000 incurred by it and the non-terminating
party shall remain liable to the terminating party for its breach. Except as
otherwise provided in Section 9.3, the payment of the Liquidated Damage Amount
or Expenses pursuant to this Section 9.5(a) shall be by wire transfer or bank
check within three days of the termination.
(b) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article 9, all obligations of the
parties hereto shall terminate, except the obligations of the parties pursuant
to this Section 9.5 and Section 7.11. In the event Biopool shall have received
the Liquidated Damage Amount, Biopool shall not (i) assert or pursue in any
manner, directly or indirectly, any claim or cause of action based in whole or
in part upon alleged tortious or other interference with rights under this
Agreement against any entity or person submitting an Acquisition Proposal, or
(ii) assert or pursue in any manner, directly or indirectly, any claim or cause
of action against Source or any of its officers or directors based in whole or
part upon its or their receipt, consideration, recommendation or approval of an
Acquisition Proposal or Source's exercise or its right of termination under
Section 9.3(a). Notwithstanding the foregoing, in the event Biopool is required
to file suit to seek all or a portion of such Liquidated Damage Amount, and it
ultimately succeeds, it shall be entitled to all expenses, including actual
attorneys' fees and expenses, which it has incurred in enforcing its rights
hereunder.
9.6 Extension Waiver. At any time prior to the Effective Time, any
party hereto, by action taken by its Board of Directors, may, to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto, and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of the party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE 10.
General Provisions
10.1. Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the Merger,
provided,that the agreements contained in Article 4, the last sentence of
Section 7.4 and Sections 7.10, 7.12, 7.13, 7.14 and 7.15, and this Article 10
shall survive the Merger.
10.2. Notices. Any notice required to be given hereunder shall be in
writing and shall be sent by facsimile transmission (confirmed by any of the
methods that follow), courier service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid) and addressed as follows:
If to Biopool or Merger Sub:
Xxxxxxx Xxxx, Ph.D.
Biopool International, Inc.
Xxxxxxx Xx.
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
With copies to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxx Xxxxx Troop & Xxxxxxxxx
Xxxxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
If to Source:
Xx. Xxxxxxx X. Xxxxxxxx
Source Scientific Systems, Inc.
Xxxxxxx Xxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxx Xxxxxx Xxxxx & Xxxxxx
First Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
delivered.
9.3 Assignment: Binding Effect; Benefit. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Article 4 and Sections 7.10, 7.12, 7.13, and 7.15 (collectively, the "Third
Party Provisions"), nothing in this Agreement expressed or implied, is intended
to confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement. The Third Party
Provisions may be enforced by the beneficiaries thereof or on behalf of the
beneficiaries thereof by the directors of Biopool who had been directors of
Source prior to the Effective time.
9.4 Entire Agreement. This Agreement, the Ancillary Agreements,
Exhibits, the Source Disclosure Letter and the Biopool Disclosure Letter and any
documents delivered by the parties in connection herewith constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement shall
be binding upon any party hereto unless made in writing and signed by all
parties hereto.
9.5 Confidentiality.
(a) As used herein, "Confidential Material" means, with
respect to either party hereto (the "Providing Party"), all information, whether
oral, written or otherwise, furnished to the other party hereto (the "Receiving
Party") or such Receiving Party's directors, officers, Affiliates (as defined in
Rule 12b-2 under the Exchange Act), employees, agents or representatives
(collectively, "Representatives"), by the Providing Party and all reports,
analyses, compilations, studies and other materials prepared by the Receiving
Party or its Representatives in whatever form maintained, whether documentary,
computer storage or otherwise containing, reflecting or based upon, in whole or
in part, any such information. The term "Confidential Material" does not include
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by the Receiving Party, its Representatives or
anyone to whom the Receiving Party or any of its Representatives transmit any
Confidential Material in violation of this Agreement, (ii) is or becomes known
or available to the Receiving Party on a non-confidential basis from a source
(other than the Providing Party or one of its Representatives) who is not, to
the knowledge of the Receiving Party after reasonable inquiry, prohibited from
transmitting the information to the Receiving Party or its Representatives by a
contractual, legal fiduciary or other obligation or (iii) is contained in Form
S-4 or the Proxy Statement/Prospectus.
(b) Subject to paragraph (c) below or except as required by
law, the Confidential Material will be kept confidential and will not, without
the prior written consent of the Providing Party, be disclosed by the Receiving
Party or its Representatives, in whole or in part, and will not be used by the
Receiving Party or its Representatives, directly or indirectly, for any purpose
other than in connection with this Agreement, the Merger or the evaluating,
negotiating or advising with respect to a transaction contemplated herein.
Moreover, each Receiving Party agrees to transmit Confidential Material to its
Representatives only if and to the extent that such Representatives need to know
the Confidential Material for purposes of such transaction and are informed by
such Receiving Party of the confidential nature of the Confidential Material and
of the terms of this Section. In any event, each Receiving Party will be
responsible for any actions by its Representatives which are not in accordance
with the provisions hereof.
(c) In the event that either Receiving Party, its
Representatives or anyone to whom such Receiving Party or its Representatives
supply the Confidential Material, are requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand, any informal or formal investigation by any government or
governmental agency or authority or otherwise in connection with legal
processes) to disclose any Confidential Material, such Receiving Party agrees
(i) to immediately notify the Providing Party of the existence, terms and
circumstances surrounding such a request, (ii) to consult with the Providing
Party on the advisability of taking legally available steps to resist or narrow
such request and (iii) if disclosure of such information is required, to furnish
only that portion of the Confidential Material which, in the opinion of such
Receiving Party's counsel, such Receiving Party is legally compelled to disclose
and to cooperate with any action by the Providing Party and obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Material (it being agreed that the
Providing Party shall reimburse the Receiving Party for all reasonable
out-of-pocket expenses incurred by the Receiving Party in connection with such
cooperation).
(d) In the event of the termination of this Agreement in
accordance with its terms, promptly upon request from either Providing Party,
the Receiving Party shall, except to the extent prevented by law, redeliver to
the Providing Party or destroy all tangible Confidential Material and will not
retain any copies, extracts or other reproductions thereof in whole or in part.
Any such destruction shall be certified in writing to the Providing Party by an
authorized officer of the Receiving Party supervising the same. Notwithstanding
the foregoing, each Receiving Party and one Representative designated by each
Receiving Party shall be permitted to retain one permanent file copy of each
document constituting Confidential Material.
9.6. Amendment. This Agreement may be amended by the parties hereto, by
action taken by their respective Board of Directors, at any time before or after
approval of matters presented in connection with the Merger by the shareholders
of Source and Biopool, but after any such shareholder approval, no amendment
shall be made which by law requires the further approval of shareholders without
obtaining such further approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
9.7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
9.8. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
9.9. Headings. Headings of the Articles and Sections of this Agree-
ment are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
9.10. Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporation and partnerships and vice
versa.
9.11 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
9.12 Incorporation. The Source Disclosure Letter and the Biopool
Disclosure Letter and all Exhibits attached hereto and thereto and referred to
herein and therein are hereby incorporated herein and made a part hereof for all
purposes as if fully set forth herein.
9.13 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or enforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
9.14. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any California Court,
this being in addition to any other remedy to which they are entitled at law or
in equity.
9.15. Subsidiaries. As used in this Agreement, the word "Subsidiary"
when used with respect to any party means any corporation, partnership, joint
venture, business trust or other entity, of which such party directly or
indirectly owns or controls at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation or other organization.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the same
to be duly delivered on their behalf on the day and year first written above.
BIOPOOL INTERNATIONAL, INC.
By: /s/ XXXXXXX X. XXXX
--------------------------------
Xxxxxxx X. Xxxx, Ph.D.
President
SOURCE ACQUISITION CORPORATION
By: /s/ XXXXXXX X. XXXX
--------------------------------
Xxxxxxx X. Xxxx, Ph.D.
President
SOURCE SCIENTIFIC
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------
Xxxxxxx X. Xxxxxxxx
President and CEO
