AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is dated May
25, 2001, and is by and between Farallon Corporation, a Delaware corporation
(the "Company") and ▇▇▇▇▇▇▇▇▇ Filters, LLC, a Delaware limited liability company
("▇▇▇▇▇▇▇▇▇").
R E C I T A L S
WHEREAS, the persons listed on Schedule I ("Members") own all of the
membership interests in ▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇▇▇ Interests");
WHEREAS, the Company is a public company, required to file reports under
Section 13 of the Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇");
WHEREAS, the Company desires to acquire all of the ▇▇▇▇▇▇▇▇▇ Interests,
and the Member desire to exchange all of the ▇▇▇▇▇▇▇▇▇ Interests for shares of
voting common stock of the Company, in a transaction that qualifies under
Section 368(a) (1)(B) of the Internal Revenue Code of 1986, as amended (the
"Code").
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the parties agree as follows:
I. EXCHANGE OF THE SHARES AND CONSIDERATION
1.01. Shares Being Exchanged. Effective at the closing of this Agreement
(the "Closing"), and subject to the terms and conditions of this Agreement the
Member shall assign, transfer and deliver to the Company all of the ▇▇▇▇▇▇▇▇▇
Interests which they own.
1.02. Consideration. Subject to the terms and conditions of this
Agreement, and in consideration of the assignment and delivery of ▇▇▇▇▇▇▇▇▇
Interests to the Company, the Company shall at Closing issue to the Member a
number of shares of voting common stock of the Company, $.001 par value per
share (the "Company Shares"), equal to the number of shares set forth opposite
the Shareholder's name on Schedule 1 attached hereto, and shall issue a total of
10,000,000 Company Shares.
1.03. Closing. The Closing of the transaction contemplated by this
Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇ upon
execution of this Agreement.
1.04. Deliveries. Upon Closing the parties are delivering the following
documents:
1.04(a). The items and documents set forth in Sections 1.01 and
1.02.
1.04(b). The Company Shares described in Section 1.02
1.04(c). The Company shall deliver the resignations of all of its
current officers and directors, and a board resolution electing ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and Learned J. Hand to the Board of Directors of
the Company.
1.05. Filings. Following the Closing, the Company shall file the
following documents:
1.05(a). A Current Report on Form 8-K with the U.S. Securities and
Exchange Commission, reporting the transactions set forth in this
Agreement, any change of auditors, or other events required to be
reported in such report.
1.05(b). A Form 3 report of beneficial ownership with the U.S.
Securities and Exchange Commission with respect to each director,
executive officer or greater than 10% holder of Company Shares, signed
by such director, executive officer or shareholder, as the case may be.
1.05(c). A Schedule 13D with the U.S. Securities and Exchange
Commission for each person who is required to file such form as a result
of obtaining greater than 5% beneficial ownership of the Company's Common
Stock as a result of the transactions contemplated by this Agreement.
1.05(d). A Certificate of Amendment to the Certificate of
Incorporation of the Company with the Delaware Secretary of State
changing the name of the Company to "▇▇▇▇▇▇▇▇▇ Filters, Inc." or a
similar name.
II. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ represents and warrants to the Company as follows, as of the
date of this Agreement and as of the Closing:
2.01. Organization.
2.01(a). ▇▇▇▇▇▇▇▇▇ is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
▇▇▇▇▇▇▇▇▇ has the corporate power and authority to carry on its business
as presently conducted; and ▇▇▇▇▇▇▇▇▇ is qualified to do business in all
jurisdictions where the failure to be so qualified would have a material
adverse effect on its business.
2.02. Capitalization.
2.02(a). The authorized capitalization of ▇▇▇▇▇▇▇▇▇ is as set
forth on Exhibit 2.02(a). All of the issued and outstanding interests
of ▇▇▇▇▇▇▇▇▇ are duly authorized, validly issued, fully paid and
nonassessable.
2.02(b). Except as set forth in Exhibit 2.02(b) there are no
outstanding options, warrants, or rights to purchase any securities of
▇▇▇▇▇▇▇▇▇.
2.03. Subsidiaries and Investments. ▇▇▇▇▇▇▇▇▇ does not own any capital
stock or have any interest in any corporation, partnership or other form of
business organization, except as described in Exhibit 2.03 hereto.
2.04. Financial Statements. The unaudited financial statements of
▇▇▇▇▇▇▇▇▇ as of and for the period inception to March 31, 2001, including the
unaudited balance sheets as of March 31, 2001 and the related unaudited
statement of operations for the periods then ended (the "Financial Statements")
present fairly the financial position and results of operations of ▇▇▇▇▇▇▇▇▇, on
a consistent basis. The financial records of ▇▇▇▇▇▇▇▇▇ are of such a character
and quality that an unqualified (except as to going concern) audit of the
▇▇▇▇▇▇▇▇▇ Financial Statements may be performed within 75 days of the Closing.
2.05. No Undisclosed Liabilities. Other than as described in Exhibit
2.05 attached hereto, ▇▇▇▇▇▇▇▇▇ is not subject to any material liability or
obligation of any nature, whether absolute, accrued, contingent, or otherwise
and whether due or to become due, which is not reflected or reserved against in
the Financial Statements, except those incurred in the normal course of
business.
2.06. Absence of Material Changes. Since March 31, 2001, except as
described in any Exhibit attached hereto or as required or permitted under this
Agreement, there has not been:
2.06(a). any material adverse change in the condition (financial
or otherwise) of the properties, assets, liabilities or business of
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▇▇▇▇▇▇▇▇▇, except changes in the ordinary course of business which,
individually and in the aggregate, have not been materially adverse;
2.06(b). any redemption, purchase or other acquisition of any
shares of the capital stock of ▇▇▇▇▇▇▇▇▇, or any issuance of any shares
of capital stock or the granting, issuance or exercise of any rights,
warrants, options or commitments by ▇▇▇▇▇▇▇▇▇ relating to their
authorized or issued capital stock; or
2.06(c). any change or amendment to the Articles of Incorporation
of ▇▇▇▇▇▇▇▇▇.
2.07. Litigation. Except as set forth in Exhibit 2.07 attached hereto,
there is no litigation, proceeding or investigation pending or threatened
against ▇▇▇▇▇▇▇▇▇ affecting any of its properties or assets against any officer,
director, or stockholder of ▇▇▇▇▇▇▇▇▇ that might result, either in any case or
in the aggregate, in any material adverse change in the business, operations,
affairs or condition of ▇▇▇▇▇▇▇▇▇ or its properties or assets, or that might
call into question the validity of this Agreement, or any action taken or to be
taken pursuant hereto.
2.08. Title To Assets. ▇▇▇▇▇▇▇▇▇ has good and marketable title to all
of its assets and properties now carried on its books including those reflected
in the balance sheets contained in the Financial Statements, free and clear of
all liens, claims, charges, security interests or other encumbrances, except as
described in Exhibit 2.08 attached hereto or any other Exhibit.
2.09. Transactions with Affiliates, Directors and Member. Except as set
forth in Exhibit 2.09 attached hereto, there are and have been no contracts,
agreements, arrangements or other transactions between ▇▇▇▇▇▇▇▇▇, and any
officer, director, or stockholder of ▇▇▇▇▇▇▇▇▇, or any corporation or other
entity controlled by the Member, a member of the Member' families, or any
affiliate of the Member.
2.10. No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the Articles of Incorporation or Bylaws of ▇▇▇▇▇▇▇▇▇, or any agreement, contract
or instrument to which ▇▇▇▇▇▇▇▇▇ is a party or by which it or any of its assets
are bound.
2.11. Disclosure. To the actual knowledge of ▇▇▇▇▇▇▇▇▇, neither this
Agreement, the Financial Statements nor any other agreement, document,
certificate or written or oral statement furnished to the Company by or on
behalf of ▇▇▇▇▇▇▇▇▇ in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact or when taken as a whole omits
to state a material fact necessary in order to make the statements contained
herein or therein not misleading.
2.12. Authority. ▇▇▇▇▇▇▇▇▇ has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, have been duly authorized and approved by the
Board of Directors of ▇▇▇▇▇▇▇▇▇ and no other corporate proceedings on the part
of ▇▇▇▇▇▇▇▇▇ are necessary to authorize this Agreement and the transactions
contemplated hereby.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to ▇▇▇▇▇▇▇▇▇ as follows, as
of the date of this Agreement and as of the Closing:
3.01. Organization.
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3.01(a). The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware;
has the corporate power and authority to carry on its business as
presently conducted; and is qualified to do business in all
jurisdictions where the failure to be so qualified would have a
material adverse effect on the business of the Company.
3.01(b). The copies of the Certificate of Incorporation, of
the Company, as certified by the Secretary of State of Delaware, and
the Bylaws of the Company are complete and correct copies of the
Certificate of Incorporation and the Bylaws of the Company as amended
and in effect on the date hereof. All minutes of meetings and actions
in writing without a meeting of the Board of Directors and shareholders
of the Company are contained in the minute book of the Company and no
minutes or actions in writing without a meeting have been included in
such minute book since such delivery to ▇▇▇▇▇▇▇▇▇ that have not also
been delivered to ▇▇▇▇▇▇▇▇▇.
3.02. Capitalization of the Company. The authorized capital stock of
the Company consists of 20,000,000 shares of Common Stock, par value $.001 per
share, of which 1,000,000 shares are outstanding, and 1,000,000 shares of
preferred stock, none of which is outstanding. All outstanding shares are duly
authorized, validly issued, fully paid and non-assessable. Following the
issuance of Company Shares, the debt cancellation described in Section 6.02, the
capitalization of the Company shall be 10,284,200 shares of common stock.
3.03. Subsidiaries and Investments. The Company does not own any
capital stock or have any interest in any corporation, partnership, or other
form of business organization.
3.04. Authority. The Company has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, and the issuance of the Company Shares in accordance with
the terms hereof, have been duly authorized and approved by the Board of
Directors of the Company and no other corporate proceedings on the part of
Company are necessary to authorize this Agreement, the transactions contemplated
hereby and the issuance of the Company Shares in accordance with the terms
hereof.
3.05. No Undisclosed Liabilities. Other than as described in Exhibit
3.05 attached hereto, the Company is not subject to any material liability or
obligation of any nature, whether absolute, accrued, contingent, or otherwise
and whether due or to become due.
3.06. Litigation. There is no litigation, proceeding or investigation
pending or to the knowledge of the Company, threatened against the Company
affecting any of its properties or assets, or, to the knowledge of the Company,
against any officer, director, or stockholder of the Company that might result,
either in any case or in the aggregate, in any material adverse change in the
business, operations, affairs or condition of the Company or any of its
properties or assets, or that might call into question the validity of this
Agreement, or any action taken or to be taken pursuant hereto.
3.07. Title To Assets. The Company has good and marketable title to all
of its assets and properties now carried on its books including those reflected
in the balance sheet contained in the Company's financial statements, free and
clear of all liens, claims, charges, security interests or other encumbrances,
except as described in the balance sheet included in the Company's financial
statements or on any Exhibits attached hereto.
3.08. Contracts and Undertakings. Exhibit 3.08 attached hereto contains
a list of all contracts, agreements, leases, licenses, arrangements,
commitments and other undertakings to which the Company is a party or by which
it or its property is bound. Each of said contracts, agreements, leases,
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licenses, arrangements, commitments and undertakings is valid, binding and in
full force and effect. The Company is not in material default, or alleged to be
in material default, under any contract, agreement, lease, license, commitment,
instrument or obligation and, to the knowledge of the Company, no other party to
any contract, agreement, lease, license, commitment, instrument or obligation to
which the Company is a party is in default thereunder nor, to the knowledge of
the Company, does there exist any condition or event which, after notice or
lapse of time or both, would constitute a default by any party to any such
contract, agreement, lease, license, commitment, instrument or obligation.
3.09. Underlying Documents. Copies of all documents described in any
Exhibit attached hereto (or a summary of any such contract, agreement or
commitment, if oral) have been made available to ▇▇▇▇▇▇▇▇▇ and are complete and
correct and include all amendments, supplements or modifications thereto.
3.10. Transactions with Affiliates, Directors and Member. Except as set
forth in Exhibit 3.10 hereto, there are and have been no contracts, agreements,
arrangements or other transactions between the Company, and any officer,
director, or 5% stockholder of the Company, or any corporation or other entity
controlled by any such officer, director or 5% stockholder, a member of any such
officer, director or 5% stockholder's family, or any affiliate of any such
officer, director or 5% stockholder.
3.11. No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the Certificate of Incorporation or Bylaws of the Company, or any agreement,
contract or instrument to which the Company is a party or by which it or any of
its assets are bound.
3.12. Disclosure. To the actual knowledge of the Company, neither this
Agreement nor any other agreement, document, certificate or written or oral
statement furnished to ▇▇▇▇▇▇▇▇▇ and the Members by or on behalf of the Company
in connection with the transactions contemplated hereby, contains any untrue
statement of a material fact or when taken as a whole omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.13. Financial Statements. The financial statements of the Company set
forth in its Form 10KSB for the year ended June 30, 2000 and its Form 10-QSB for
the quarter ended March 31, 2001 present fairly the financial position and
results of operations of the Company, on a consistent basis.
3.14. Absence of Material Changes. Since March 31, 2001, except as
described in any Exhibit hereto or as required or permitted under this
Agreement, there has not been:
3.14(a). any material change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of
Company, except changes in the ordinary course of business which,
individually and in the aggregate, have not been materially adverse.
3.14(b). any redemption, purchase or other acquisition of any
shares of the capital stock of Company, or any issuance of any shares
of capital stock or the granting, issuance or exercise of any rights,
warrants, options or commitments by ▇▇▇▇▇▇▇▇▇ relating to their
authorized or issued capital stock.
3.14(c). any amendment to the Certificate of Incorporation of
Company.
IV. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
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All representations, warranties and covenants of the Company and
▇▇▇▇▇▇▇▇▇ contained herein shall survive the consummation of the transactions
contemplated herein and remain in full force and effect.
V. CONDITIONS TO CLOSING
5.01. Conditions to Obligation of ▇▇▇▇▇▇▇▇▇. The obligations of
▇▇▇▇▇▇▇▇▇ under this Agreement shall be subject to each of the following condi-
tions:
5.01(a). The representations and warranties of Company herein
contained shall be true in all material respects at the Closing with
the same effect as though made at such time. Company shall have
performed in all material respects all obligations and complied in all
material respects, to its actual knowledge, with all covenants and
conditions required by this Agreement to be performed or complied with
by it at or prior to the Closing.
5.01(b). No injunction or restraining order shall be in
effect, and no action or proceeding shall have been instituted and, at
what would otherwise have been the Closing, remain pending before a
court to restrain or prohibit the transactions contemplated by this
Agreement.
5.01(c). All statutory requirements for the valid consummation
by Company of the transactions contemplated by this Agreement shall
have been fulfilled. All authorizations, consents and approvals of all
governments and other persons required to be obtained in order to
permit consummation by Company of the transactions contemplated by this
Agreement shall have been obtained.
5.02. Conditions to Obligations of Company. The obligation of Company
under this Agreement shall be subject to the following conditions:
5.02(a). The representations and warranties of ▇▇▇▇▇▇▇▇▇
herein contained shall be true in all material respects as of the
Closing, and shall have the same effect as though made at the Closing;
▇▇▇▇▇▇▇▇▇ shall have performed in all material respects all obligations
and complied in all material respects, to its actual knowledge, with
all covenants and conditions required by this Agreement to be performed
or complied with by it prior to the Closing.
5.02(b). No injunction or restraining order shall be in effect
prohibiting this Agreement, and no action or proceeding shall have been
instituted and, at what would otherwise have been the Closing, remain
pending before the court to restrain or prohibit the transactions
contemplated by this Agreement.
5.02(c). All statutory requirements for the valid consummation
by ▇▇▇▇▇▇▇▇▇ of the transactions contemplated by this Agreement shall
have been fulfilled. All authorizations, consents and approvals of all
governments and other persons required to be obtained in order to
permit consummation by ▇▇▇▇▇▇▇▇▇ of the transactions contemplated by
this Agreement shall have been obtained.
VI. CERTAIN AGREEMENTS
6.01. Stock Options. The Company at Closing will issue options to
purchase shares to certain scientific consultants.
6.02. Cancellation of Debt. At Closing all Company related parties shall
cancel all debt owned to him by the Company in exchange for 268,400 shares of
common stock.
6.03. Reporting Requirements. The Company shall file all reports
required by Section 13 of the Securities Exchange Act of 1934 and shall
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maintain its books and records in accordance with Sections 12 and 13 thereof.
The parties agree that the failure of the Company to make such filings with the
Securities and Exchange Commission shall constitute a material breach of this
Agreement.
VII. MISCELLANEOUS
7.01. Finder's Fees, Investment Banking Fees. Neither ▇▇▇▇▇▇▇▇▇ nor the
Company have retained or used the services of any person, firm or corporation in
such manner as to require the payment of any compensation as a finder or a
broker in connection with the transactions contemplated herein.
7.02. Tax Treatment. The transaction contemplated hereby is intended to
qualify as a so-called "tax-free" reorganization under the provisions of Section
368 of the Internal Revenue Code. The Company and ▇▇▇▇▇▇▇▇▇ acknowledge,
however, that they each have been represented by their own tax advisors in
connection with this transaction; that neither has made any representation or
warranty to the other with respect to the treatment of such transaction or the
effect thereof under applicable tax laws, regulations, or interpretations; and
that no attorney's opinion or private revenue ruling has been obtained with
respect to the effects thereof under the Internal Revenue Code of 1986, as
amended.
7.03. Further Assurances. From time to time, at the other party's
request and without further consideration, each of the parties will execute and
deliver to the others such documents and take such action as the other party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.
7.04. Parties in Interest. Except as otherwise expressly provided
herein, all the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors and assigns of the
parties hereto.
7.05. Entire Agreement; Amendments. This Agreement, including the
Schedules, Exhibits and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by the parties or their respective successors or assigns.
7.06. Headings, Etc. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretations of this Agreement.
7.07. Pronouns. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.
7.08. Counterparts; Facsimile. This Agreement may be executed in
several counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. This Agreement
may be executed by facsimile signatures by the parties.
7.09. Governing Law. This Agreement shall be governed by the laws of
the State of California (excluding conflicts of laws principles) applicable to
contracts to be performed in the State of California.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as the date first above written.
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FARALLON CORPORATION ▇▇▇▇▇▇▇▇▇ FILTERS, LLC
By: By:
Name: Name:
Title: Title:
