Exhibit 10.34
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
July 11, 2000 by and among Titan Pharmaceuticals, Inc., a Delaware corporation
having its principal offices at 000 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000 ("Titan"), GeoMed Merger Sub Corp., a Delaware
corporation and wholly-owned subsidiary of Titan ("Merger Corp."), GeoMed, Inc.,
a California corporation having its principal offices at 000 Xxxxxx Xxxx, Xxxxx
Xxxx, Xxxxxxxxxx 00000 ("GeoMed") and Xx. Xxxxxxxx Xxxxxxxxx, Dr. Xxxx
Xxxxxxxxxx, Xxxxxx Xxxxxx and Xx. Xxxxxx Place (collectively, the "Founders").
W I T N E S S E T H:
WHEREAS, the Boards of Directors and stockholders of each of
Merger Corp. and GeoMed have determined that it is in the best interests of each
such company and its respective stockholders for GeoMed to merge into Merger
Corp. upon the terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of GeoMed has adopted a
resolution approving this Agreement pursuant to Section 307(b) of the CGCL;
WHEREAS, the Board of Directors of GeoMed Merger Corp has
adopted a resolution approving this Agreement pursuant to Section 252(c) of the
DGCL;
WHEREAS, the individuals listed on Schedule A as holders of
100% of the capital stock of GeoMed (collectively with the Founders, the
"Stockholders") have adopted this Agreement in accordance with Section 603(a) of
the CGCL;
WHEREAS, as a condition to entering into this Agreement and
consummating the Merger, Titan and Merger Corp. require that no GeoMed Options,
GeoMed Preferred Shares or GeoMed Warrants be outstanding at the Effective Time.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements hereinafter set
forth, the parties hereto do hereby agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the
meanings specified or referred to below (terms defined in the singular to have
the correlative meaning in the plural and vice versa):
"ACCREDITED INVESTOR" shall have the meaning set forth in
Section 501(a) of the Securities Act.
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"AFFILIATE" of any Person shall mean any entity which,
directly or indirectly, controls or is controlled by that Person, or is under
common control with that Person. For the purposes of this definition, "control"
(including, with correlative meaning, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise.
"APPROVALS" shall have the meaning set forth in SECTION 4.5
"BALANCE SHEET DATE" shall mean May 31, 2000.
"BEST KNOWLEDGE" of GeoMed or the Founders means the actual
knowledge of each of the Founders, after (i) review of such person's own files
and (ii) inquiry of those other officers or employees of GeoMed who in the
reasonable judgement of GeoMed would be expected to have knowledge of the
specific matter at issue.
"BUSINESS DAY" shall mean any day that is not a Saturday or a
Sunday or a day on which banks located in New York City are authorized or
required to be closed.
"CGCL" means the General Corporation Law of California.
"CLOSING" shall have the meaning set forth in SECTION 3.1
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"CONSULTING AGREEMENT" shall mean the Consulting Agreement
between Titan and Xx. Xxxxxxxx Xxxxxxxxx in the form of EXHIBIT A hereto.
"CONTEMPLATED TRANSACTIONS" shall mean the merger of GeoMed
into Merger Corp. and the execution, delivery and performance of and compliance
with this Agreement and all other agreements to be executed and delivered
pursuant to this Agreement.
"CONTINGENT MERGER CONSIDERATION" shall have the meaning set
forth in SECTION 2.3.1
"DAMAGES" shall mean any loss, liability, damage or expense
(including, without limitation, attorneys' fees and disbursements).
"DGCL" shall mean the Delaware General Corporation Law.
"EFFECTIVE TIME" shall mean the date and time of consummation
of the Merger, as evidenced by the filing of a certificate of merger with the
Secretary of State of the State of Delaware and the Secretary of State of
California.
"ENCUMBRANCE" shall mean any security interest, mortgage,
lien, charge, license, easement, right-of-way, cloud on title, adverse claim or
restriction of any kind, including, but not
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limited to, any restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.
"ENVIRONMENTAL LAWS" shall mean all federal, state, local and
foreign laws and regulations relating to pollution or protection of the
environment (including, without limitation, ambient air, surface water, ground
water, wetland, land surface and subsurface strata), including, without
limitation, laws and regulations relating to the importation, manufacture,
processing, formulation, testing, distribution, use, treatment, storage,
disposal, transport, handling or release of any "hazardous waste," "hazardous
substance" or "pollutant or contaminant" (as defined under any Environmental
Law, including without limitation in the Resource Conservation and Recovery Act
of 1976, as amended, or the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, and regulations promulgated thereunder),
radioactive materials, genetically modified organisms, asbestos, and petroleum,
its derivatives, by-products and other petroleum-related hydrocarbons.
"FAIR MARKET VALUE" shall mean the average of the closing
prices for a share of Titan Common Stock on the American Stock Exchange for the
twenty (20) consecutive trading days ending on the Business Day immediately
preceding the date of the execution of this Agreement.
"FDA NOTICE DATE" shall mean the date that Titan or Merger
Corp. receives written notification from the United States Food and Drug
Administration indicating approval for sale in the United States of a Product.
"FINANCIAL STATEMENTS" shall have the meaning set forth in
SECTION 4.6.
"GAAP" shall mean generally accepted accounting principles in
the United States.
"GEOMED KNOW-HOW" shall mean any information and materials,
including but not limited to, discoveries, information, Improvements, processes,
formulas, data, inventions, know-how and trade secrets, patentable or otherwise,
which relates to the Licensed Subject Matter, the Products or GeoMed's business.
"GEOMED COMMON SHARES" shall mean the Common Stock, $.001 par
value per share, of GeoMed.
"GEOMED OPTIONS" shall mean all of the options and warrants to
acquire capital stock of GeoMed, including without limitation options issued
pursuant to the GeoMed 1995 Stock Plan, but excluding the GeoMed Warrants.
"GEOMED PREFERRED SHARES" shall mean the Series A Preferred
Stock, $.001 par value per share, of GeoMed.
"GEOMED WARRANTS" shall mean the Warrants dated July 9, 1996
to purchase Series A Preferred Stock of GeoMed.
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"GOVERNMENTAL BODY" shall mean any domestic or foreign
national, state, multi-state or municipal or other local government, any
subdivision, agency, commission or authority thereof, or any quasi-governmental
or private body exercising any regulatory or taxing authority thereunder.
"INFORMATION STATEMENT" shall mean an information statement to
be distributed by GeoMed to the Stockholders, which is in form and substance
reasonably satisfactory to Titan and which satisfies the requirements of Rule
506 promulgated under the Securities Act.
"INTELLECTUAL PROPERTY" shall mean any and all United States
and foreign: (a) patents (including, without limitation, design patents,
industrial designs and utility models) and patent applications (including,
without limitation, certificates of invention, applications for certificates of
invention, docketed patent disclosures awaiting filing, reissues, renewals,
divisions, continuations, continuations-in-part, extensions and supplementary
protection certificates), patent disclosures awaiting filing determination,
unfiled invention disclosures, inventions and improvements thereto; (b)
trademarks, service marks, trade names, trade dress, logos, business and product
names, slogans, and registrations and applications for registration thereof; (c)
copyrights and registrations thereof; and (d) inventions, processes, designs,
formulae, trade secrets, GeoMed Know-How, industrial models, confidential and
technical information, manufacturing, engineering and technical drawings,
product specifications and confidential business information.
"LAW" shall have the meaning set forth in SECTION 4.18.
"LICENSE AGREEMENT" shall mean that Amended and Restated
License Agreement dated as of the Closing between GeoMed and Xx. Xxxxxxxx
Xxxxxxxxx in the form attached as EXHIBIT B hereto.
"LICENSED SUBJECT MATTER" shall have the meaning ascribed to
it in the License Agreement.
"MATERIAL ADVERSE EFFECT" shall mean any act, occurrence,
fact, event, omission or circumstance which in the reasonable judgment of an
experienced, prudent business person would (a) materially reduce the value of
the business of GeoMed, or (b) result in a decision not to consummate the
Contemplated Transactions on the terms and conditions set forth in this
Agreement.
"MATERIAL CONTRACTS" shall have the meaning set forth in
SECTION 4.17.
"MATERIAL LEASE" shall have the meaning set forth in SECTION
4.8.
"MERGER" shall mean the merger of Merger Corp. with and into
GeoMed pursuant to Section 252 of the DGCL and Section 1108 of the CGCL, as
contemplated by Article 2 of this Agreement.
"MERGER CONSIDERATION" shall have the meaning set forth in
SECTION 2.3.1.
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"PARTY" shall mean any of Titan, Merger Corp., GeoMed and each
of the Founders.
"PATENT RIGHTS" shall mean the Patent Rights, as defined in
the License Agreement, and listed on EXHIBIT C hereto.
"PERMITTED ENCUMBRANCES" shall have the meaning set forth in
SECTION 4.7.
"PERSON" shall mean any individual, corporation, limited
liability company, partnership, joint venture, trust, association,
unincorporated organization, other entity or Governmental Body.
"PLANS" shall have the meaning set forth in SECTION 4.15.
"PROCEEDING" shall have the meaning set forth in SECTION 4.12.
"PRODUCTS" shall mean all drugs, diagnostic products and other
products incorporating, utilizing or based upon the Licensed Subject Matter or
the Technology.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration
Rights Agreement entered into on the date of this Agreement by and among Titan
and each of the Stockholders, a copy of which is attached hereto as EXHIBIT D.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder by the Securities
and Exchange Commission.
"STOCKHOLDER DOCUMENTS" shall have the meaning set forth in
SECTION 4.3.
"STOCKHOLDERS" shall mean all of the stockholders of GeoMed
listed on Schedule A to the Registration Rights Agreement.
"SUBSIDIARY" shall mean with respect to any specified Person,
any other Person (a) whose board of directors or similar governing body, or a
majority thereof, may presently be directly or indirectly elected or appointed
by such specified Person, (b) whose management decisions and corporate actions
are directly or indirectly subject to the present control of such specified
Person, or (c) whose voting securities or equity securities are more than fifty
percent (50%) owned, directly or indirectly, by such specified Person.
"TAX RETURNS" shall mean any returns, reports, declarations,
forms, claims for refund or information returns or statements relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
"TAXES" shall mean (a) any federal, state, local, foreign and
other income, alternative or add-on minimum, accumulated earnings, personal
holding company, franchise, capital stock, profits, windfall profits, gross
receipts, value added, sales, use, excise (including the golden parachute excise
tax imposed by Section 4999 of the Code and the green mail excise tax imposed by
Section 5881 of the Code), customs duties, transfer, conveyance, registration,
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stamp, documentation, recording, premium, severance, environmental (including
taxes under Section 59A of the Code), real property, personal property, ad
valorem, intangibles, rent, occupancy, firearm, ammunition, license, occupation,
employment, unemployment insurance, social security, disability, workers'
compensation, payroll, withholding, estimated or any other tax, duty,
governmental fee or other like assessment or charge of any kind whatsoever
(including all interest and penalties thereon and additions thereto whether
disputed or not) imposed by any Governmental Body and (b) any obligations under
any agreements or arrangements with respect to Taxes described in clause (a)
above.
"THIRD PARTY" shall mean a Person who or which is neither a
Party nor an Affiliate of a Party.
"TITAN COMMON STOCK" shall mean the Common Stock, $.001 par
value per share, of Titan.
"TITAN DOCUMENTS" shall have the meaning set forth in SECTION
5.2.
"TITAN SEC DOCUMENTS" shall mean (a) Titan's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999; (b) Titan's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2000; and (c) any Current
Reports on Form 8-K filed subsequent to the Form 10-Q.
"TITAN SHARES" shall have the meaning set forth in SECTION
2.3.1 hereof.
"VALID CLAIM" means a claim of an issued and unexpired patent
included within the Intellectual Property, which has not been revoked or held
unenforceable or invalid by a decision of a court or other Governmental Body of
competent jurisdiction, unappealable or unappealed within the time allowed for
appeal, and which has not been disclaimed, denied or admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise. For the purposes of
this Agreement, a Valid Claim shall also include a claim in a pending
application included within the Intellectual Property, which application (i) is
under active prosecution, (ii) for which formal examination has been requested,
or (iii) is entitled to provisional protection.
2. THE MERGER
2.1 THE MERGER. Upon the terms and subject to the
conditions hereof, and in accordance with the provisions of the DGCL, the CGCL
and the Certificate of Incorporation and By-Laws of Merger Corp. and GeoMed,
Merger Corp. shall be merged with and into GeoMed as soon as practicable
following the satisfaction or waiver of the conditions set forth in ARTICLE 6
AND 7 hereof. Following the Merger, GeoMed shall continue as the surviving
corporation (the "Surviving Corporation") under the name GeoMed and shall
continue its existence under the laws of the State of California and the
separate existence of Merger Corp. shall thereupon cease. The Merger shall have
the effects set forth in Section 252 of the DGCL and Section 1108 of the CGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all properties, rights, privileges, powers and franchises of
GeoMed and Merger Corp. shall vest in the Surviving Corporation, and all debts,
liabilities and duties of
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GeoMed and Merger Corp. shall become the debts, liabilities and duties of the
Surviving Corporation.
2.2 CONSUMMATION OF THE MERGER AND EFFECTIVE TIME.
Upon the terms and subject to the conditions hereof, Merger Corp. (and GeoMed,
if appropriate) shall cause to be filed with the Secretary of State of the State
of Delaware a duly executed certificate of merger pursuant to Section 252(c) of
the DGCL and shall cause to be filed with the Secretary of State of the State of
California a duly executed Certificate of Merger and a copy of this Agreement
and Plan of Merger pursuant to Section 1108 of the CGCL, and the Parties hereto
shall take all such other and further actions as may be required by law to make
the Merger effective. As of the Effective Time, by virtue of the Merger, GeoMed
shall become a wholly-owned subsidiary of Titan.
2.3 CONVERSION OR CANCELLATION OF SHARES. The manner
of converting or cancelling shares of GeoMed and Merger Corp. in the Merger
shall be as follows. At the Effective Time,
2.3.1 each of the GeoMed Common Shares issued and
outstanding immediately prior to the Effective Time, other than GeoMed Common
Shares held by Merger Corp., shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to receive
the Merger Consideration, payable in accordance with Section 3.2.1 and subject
to the provision concerning fractional shares of Section 3.2.4. The Merger
Consideration shall mean the number of shares of Titan Common Stock determined
by dividing (i) the quotient obtained by dividing (x) $3,500,000 by (y) the Fair
Market Value by (ii) the fully-diluted outstanding GeoMed Common Shares
(determined as of the Effective Time and after the conversion of all GeoMed
Preferred Shares) and rounding the result to three decimal places. In the event
the FDA Notice Date occurs prior to the tenth anniversary of the date of the
Closing, each of the GeoMed Common Shares issued and outstanding immediately
prior to the Effective Time shall be entitled to receive the Contingent Merger
Consideration. The Contingent Merger Consideration shall mean the number of
shares of Titan Common Stock determined by dividing (i) the quotient obtained by
dividing (x) $2,500,000 by (y) the Fair Market Value by (ii) the fully-diluted
outstanding GeoMed Common Shares (determined as of the Effective Time and after
the conversion of all GeoMed Preferred Shares, GeoMed Options and GeoMed
Warrants into GeoMed Common Shares) and rounding the result to three decimal
places. The shares of Titan Common Stock delivered in payment of the Merger
Consideration and the Contingent Merger Consideration shall be referred to as
the "Titan Shares." All GeoMed Common Shares, by virtue of the Merger and
without any action on the part of the holders thereof, shall no longer be
outstanding and shall be cancelled and retired and shall cease to exist, and
each holder of a certificate representing any such GeoMed Common Shares shall
thereafter cease to have any rights with respect to such GeoMed Common Shares,
except, in the case of GeoMed Common Shares other than GeoMed Common Shares held
by Merger Corp., the right to receive the Merger Consideration for such GeoMed
Common Shares upon the surrender of such certificate.
2.3.2 each GeoMed Common Share issued and held at
such time by Merger Corp. shall, by virtue of the Merger and without any action
on the part of the holder
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thereof, cease to be outstanding, shall be cancelled and retired without payment
of any consideration therefor and shall cease to exist.
2.3.3 each GeoMed Preferred Share and GeoMed
Warrant Share outstanding immediately prior to the Effective Time shall either
(i) be cancelled or (ii) converted into GeoMed Common Shares which, in turn,
shall be converted in the Merger into the right to receive the Merger
Consideration and cancelled and retired.
2.3.4 each share of Common Stock, par value $.01
per share, of Merger Corp. issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the part
of Merger Corp. or the holders of such shares, be converted into one share of
the Surviving Corporation's common stock, par value $.01 per share.
2.4 CERTIFICATE OF INCORPORATION AND BY-LAWS. The
Certificate of Incorporation and the By-Laws of Merger Corp. shall be the
Certificate of Incorporation and By-Laws of the Surviving Corporation. The name
of the Surviving Corporation shall be "GeoMed."
2.5 DIRECTORS AND OFFICERS. Except as set forth on
SCHEDULE 2.5, those persons who immediately prior to the Effective Time are (a)
directors of Merger Corp., shall be the directors of the Surviving Corporation
and (b) officers of Merger Corp., shall be the officers of the Surviving
Corporation, in each case until their respective successors are duly elected and
qualified.
2.6 TAX-FREE REORGANIZATION. It is intended by the
parties hereto that the Merger shall constitute a reorganization with the
meaning of Section 368(a) of the Code. No party to this Agreement shall take any
action inconsistent with such intention.
3. THE CLOSING.
3.1 CLOSING.
3.1.1 Provided GeoMed and the Founders have
executed this Agreement on or before July 12, 2000 and the provisions of SECTION
6 and SECTION 7 hereof have been satisfied or waived, and unless this Agreement
shall have been terminated pursuant to SECTION 10, the closing of the Merger
(the "CLOSING") will be held on such date as Titan and GeoMed agree, but in any
event, no later than August 7, 2000, at the offices of Titan (or such other
place and date as Titan and GeoMed may agree).
3.1.2 At the Closing:
(a) GeoMed, the Founders and the
Stockholders, as applicable, shall deliver to Merger Corp. or Titan, as
applicable, all documents contemplated by ARTICLE 7, to the extent not therefore
delivered.
(b) Merger Corp. or Titan shall deliver to
GeoMed all documents contemplated by ARTICLE 6, to the extent not theretofore
delivered.
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(c) Titan, Merger Corp. or the Surviving
Corporation shall pay the Merger Consideration to the extent required by SECTION
3.2 and make the payments as required by Section 7.7.
3.2 PAYMENT FOR SHARES.
3.2.1 No fewer than ten (10) Business Days prior
to the Effective Time, GeoMed will mail and/or make available to each record
holder of a certificate or certificates (the "CERTIFICATES") which represent
GeoMed Common Shares, a notice and letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to GeoMed) and
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration, subject to the consummation of the Merger. Upon
the consummation of the Merger and after surrender to GeoMed of a Certificate,
free and clear of all encumbrances, together with such letter of transmittal
duly executed and completed in accordance with the instructions thereon not
later than one business day prior the Effective Time, the holder of such
Certificate shall receive certificates, registered in the respective name of
such holder and bearing the legends set forth in the Registration Rights
Agreement, representing the number of Titan Shares equal to the number of GeoMed
Common Shares evidenced in the Certificate multiplied by the Merger
Consideration, and such Certificate shall forthwith be cancelled. In addition,
in the event the FDA Notice Date occurs on or before the tenth anniversary of
the date of Closing, then no later than one month after the FDA Notice Date,
Titan or the Surviving Corporation shall send to each holder of such Certificate
at its address set forth on the signature page hereto (or such other address of
which the Stockholder notifies Titan pursuant to SECTION 11.4 hereof),
certificates, registered in the respective name of such holder and bearing the
legends set forth in the Registration Rights Agreement, representing the number
of Titan Shares equal to the number of GeoMed Common Shares evidenced in the
Certificate multiplied by the Contingent Merger Consideration.
3.2.2 No interest shall be paid or accrued in
respect of payments of the Merger Consideration. If payment is to be made to a
person other than the person in whose name the Certificate surrendered is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the surrendered Certificate or establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable. Until
surrendered in accordance with the provisions of this SECTION 3.2.2, each
Certificate (other than Certificates representing GeoMed Common Shares held in
the treasury of the Company) shall represent for all purposes the right to
receive the Merger Consideration therefor without any interest thereon.
3.2.3 At the Effective Time, the stock transfer
books for the GeoMed Common Shares shall be closed and after the Effective Time
there shall be no transfers of GeoMed Common Shares. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
cancelled and, so long as the holder and the GeoMed Common Shares being so
presented are listed on Schedule 4.2, such holder executes and delivers
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a Registration Rights Agreement and Titan has not previously paid the Merger
Consideration with respect to such shares, exchanged for the Merger
Consideration.
3.2.4 No fractional Titan Shares shall be issued
pursuant to the Merger. In lieu of the issuance of any such fractional shares,
cash adjustments will be paid to holders in respect of any fractional share that
would otherwise be issuable. The amount of such adjustment shall be the product
of such fraction of a Titan Share multiplied by the Fair Market Value thereof.
3.3 REGISTRATION RIGHTS. The Stockholders shall be
entitled to enter into the Registration Rights Agreement with respect to the
Titan Shares, in the form of EXHIBIT D hereto.
4. REPRESENTATIONS AND WARRANTIES OF GEOMED AND
FOUNDERS.
GeoMed represents and warrants, and, as to the specific
representations and warranties specifically made by them, the Founders jointly
and severally represent and warrant, to Titan and Merger Corp. that, except as
otherwise disclosed on a Schedule corresponding in number to the applicable
Section of this ARTICLE 4:
4.1 ORGANIZATION AND GOOD STANDING. (a) GeoMed is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California. GeoMed (i) has all requisite corporate power to own,
operate and lease its properties and carry on its business as the same is now
being conducted and (ii) is qualified to do business in each jurisdiction where
the properties owned, leased or operated, or the business conducted, by it
require such qualifications, as set forth in SCHEDULE 4.1.
(a) Complete and correct copies of the
articles of incorporation and by-laws of GeoMed as currently in effect have been
delivered to Titan. GeoMed has no Subsidiaries. GeoMed has not assumed by
merger, contract, assignment or assumption any liabilities of any other Person.
4.2 CAPITALIZATION OF GEOMED; TITLE TO THE GEOMED
SHARES. The authorized capital stock of GeoMed consists of 12,000,000 shares of
common stock, par value $.001 per share, of which 4,703,700 shares (constituting
the GeoMed Common Shares) are issued and outstanding and are owned beneficially
and of record as set forth on SCHEDULE 4.2 and 3,842,500 (4,560,279 GeoMed
Common Shares on an as converted basis) shares of Series A Preferred Stock, par
value $.001 per share, of which immediately upon the Effective Time no shares
(constituting the GeoMed Preferred Shares) are issued outstanding. All of the
GeoMed Common Shares and GeoMed Preferred Shares have been duly authorized and
validly issued and are fully paid and non-assessable. Immediately upon the
Effective Time, no GeoMed Preferred Shares or GeoMed Warrants will be
outstanding. Except as set forth in SCHEDULE 4.2 (constituting the GeoMed
Options and GeoMed Warrants) there are no outstanding subscriptions, options,
rights, warrants, convertible securities or other agreements (other than this
Agreement) or calls, demands or commitments of any kind relating to the
issuance, sale or
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transfer of any capital stock or other equity securities of GeoMed, whether
directly or upon the exercise or conversion of other securities.
4.3 AUTHORITY RELATIVE TO AGREEMENT. GeoMed and each
Founder has all requisite power and authority, corporate or otherwise, to
execute, deliver and perform its obligations, as applicable, under this
Agreement, the Registration Rights Agreement, and, to the extent applicable, the
License Agreement, the Consulting Agreement (collectively, the "Stockholder
Documents") and has taken all action necessary, corporate or otherwise, in order
to execute and deliver this Agreement and the other Stockholder Documents to
which it is a party and to consummate the Contemplated Transactions. This
Agreement and each of the other Stockholder Documents has been duly executed and
delivered by GeoMed and each Stockholder who is a party thereof. Each of this
Agreement and the other Stockholder Documents constitutes a valid and binding
obligation of GeoMed and each Stockholder which is a party thereto, enforceable
against GeoMed and of each Stockholder in accordance with its terms, subject to
laws relating to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, marshalling or other laws and rules of law affecting the enforcement
generally of creditors' rights and remedies (including such as may deny giving
effect to waivers of debtors' or guarantors' rights).
4.4 ABSENCE OF CONFLICT. Neither the execution and
delivery of this Agreement and the other Stockholders Documents, nor the
consummation of the Contemplated Transactions will, (a) violate, conflict with
or result in a breach or termination of or constitute a default or give rise to
a right to terminate or accelerate (or an event which, with notice or lapse of
time or both, would constitute a default or give rise to such right) (i) any
agreement, commitment, mortgage, corporate or otherwise, deed of trust,
indenture, lease or other instrument to which any Founder or GeoMed is a party
or by which any of their respective properties or assets is bound, (ii) the
certificate of incorporation or by-laws of GeoMed or (iii) any Law or any other
restriction of any kind or character applicable to any Founder or GeoMed or any
of their respective properties or assets, or (b) result in any Encumbrance which
would reasonably be expected to detract from the value of or interfere with the
use of any of the properties or assets of GeoMed under any agreement to which
any Founder or GeoMed is a party or by which any Founder or GeoMed or any of
their respective properties or assets may be bound.
4.5 CONSENTS AND APPROVALS; EFFECT OF CHANGE IN
CONTROL. No consent, waiver, registration, certificate, approval, grant,
franchise, concession, permit, license, exception or authorization of, or
declaration or filing with, or notice or report to, (a) any Governmental Body
and (b) any other Person (including, but not limited to, any party to a lease or
other agreement or commitment of GeoMed) (collectively, the "Approvals"), is
required, and has not been obtained, in connection with the execution, delivery
and performance of the Stockholder Documents or the consummation of the
Contemplated Transactions. All such required Approvals have been obtained and
are in full force and effect, and GeoMed and the Stockholders are in full
compliance with each of such Approvals. There are no Material Contracts,
Material Leases or Approvals by which Stockholders or GeoMed or any of their
respective assets or properties may be bound that contain any change in control
provisions or other terms or
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conditions that will become applicable or inapplicable as a result of the
consummation of the Contemplated Transactions.
4.6 FINANCIAL STATEMENTS. (a) GeoMed has delivered to
Titan the unaudited balance sheet of GeoMed as at the Balance Sheet Date and
shall, prior to Closing, deliver to Titan the unaudited balance sheets as at
December 31, 1999 and statements of operations and retained earnings and cash
flows for the year ended December 31, 1999 (collectively, the "Financial
Statements") attached hereto as EXHIBIT E. The Financial Statements shall be
prepared from the books and records of GeoMed in accordance with GAAP
consistently applied throughout the periods indicated, and shall fairly present
the financial position, results of operations and cash flows of GeoMed as at the
respective dates thereof and for the periods therein referred to and shall
contain and reflect all necessary adjustments and accruals for a fair
presentation of GeoMed's financial condition as of their dates and contain and
reflect adequate provision for all reasonably anticipated liabilities for all
material income, property, sales, payroll or other taxes applicable to GeoMed
with respect to the period then ended.
(a) Except as set forth in the Financial
Statements, GeoMed does not have any liabilities or obligations (whether known
or unknown, absolute, accrued, contingent or otherwise and whether due or to
become due) of a nature and type required to be set forth on a balance sheet
prepared in accordance with GAAP or in the footnotes thereto.
(b) Except as set forth in the Financial
Statements, GeoMed has no indebtedness in respect of borrowed money or
represented by notes, bonds, debentures or other similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or representing the
balance deferred and unpaid of the purchase price of any property (other than
trade payables constituting current liabilities, all of which are current except
as reflected on SCHEDULE 4.6) hereto.
(c) Since the Balance Sheet Date, there has
been no material adverse change in the business, operations or financial
condition of GeoMed.
4.7 TITLE TO PROPERTY; SUFFICIENCY; ENCUMBRANCES. (a)
GeoMed has never owned any real property.
(a) GeoMed has good and marketable title to
all of the personal property used in the operation of its business which it
purports to own, including without limitation the property reflected as being so
owned on the Financial Statements (except for immaterial personal property sold
or otherwise disposed of since the respective balance sheet dates in the
ordinary course of business and except for property held under leases), free and
clear of all Encumbrances other than Permitted Encumbrances. As used herein,
"Permitted Encumbrances" means (i) those Encumbrances disclosed in the Financial
Statements or the notes thereto; (ii) statutory liens for taxes or assessments
not yet due or delinquent or the validity of which are being contested in good
faith by appropriate Proceedings (a list of all such Proceedings as of the date
of this Agreement is included on SCHEDULE 4.7); (iii) mechanics',
12
carriers', workers', repairmen's and other similar liens arising or incurred in
the ordinary course of business with respect to charges not yet due and payable;
and (iv) those Encumbrances disclosed on SCHEDULE 4.7.
(b) All of the assets and properties (real
and personal, tangible and intangible) necessary for the conduct of the business
of GeoMed as conducted by GeoMed prior to the date of this Agreement are owned
by GeoMed or held by GeoMed under a valid lease which will continue in effect
following the Closing, in each case free and clear of all Encumbrances except
Permitted Encumbrances.
4.8 LEASED PROPERTY. SCHEDULE 4.8 sets forth a true
and complete list of each lease (each, a "Material Lease") under which GeoMed is
a lessee or lessor which (a) is a lease of real property, or (b) provides for
aggregate future payments of more than Twenty-Five Thousand Dollars ($25,000) or
(c) provides for payments of more than Fifteen Thousand Dollars ($15,000) per
year, has a term exceeding one year and which may not be canceled upon ninety
(90) or fewer days' notice without any liability, penalty or premium (other than
a nominal cancellation fee or charge). GeoMed has delivered to Titan complete
and correct copies of each of such Material Leases. Each of such Material Leases
is a valid and binding obligation of GeoMed, enforceable in accordance with its
terms, and is in full force and effect. There is not, with respect to any such
Material Lease, any existing breach or event of default, or event which with
notice or lapse of time or both would constitute a breach or event of default,
on the part of GeoMed, or on the part of any other person thereto. GeoMed has
good and valid title to the leasehold estate under each such Material Lease for
real property, free and clear of all Encumbrances other than Permitted
Encumbrances and has not assigned, transferred, conveyed, mortgaged, deeded in
trust or encumbered any interest in any Material Lease.
4.9 INTELLECTUAL PROPERTY RIGHTS. (a) The conduct by
GeoMed of its business does not, to the best of its knowledge, infringe upon or
violate or involve the misappropriation or other improper use of the trade
secrets or the Intellectual Property of any Person. EXHIBIT C sets forth a
complete and correct list of all Patent Rights licensed by GeoMed and pursuant
to the License Agreement. SCHEDULE 4.9 sets forth a complete and correct list of
the Intellectual Property registered in the name of GeoMed or as to which
applications are currently pending. GeoMed is the exclusive licensee of the
Licensed Subject Matter and has not entered into any sublicense or assignment
agreement with respect to, or otherwise directly or indirectly conveyed to any
Person any interest in any of, the Licensed Subject Matter. Except as provided
in the License Agreement, GeoMed is the sole and exclusive owner of all of the
Intellectual Property, all of which is free from any Encumbrances and, to the
best of its knowledge, no other Person or Governmental Body or subdivision
thereof, has any valid claim of ownership with respect to the Intellectual
Property whatsoever. To the best of GeoMed's knowledge, the Intellectual
Property and the development, manufacture, use and sale of Products do not
infringe any patent rights owned or possessed by any Third Party.
(a) SCHEDULE 4.17 indicates a true and
complete list of all agreements or arrangements (i) pursuant to which any of the
Intellectual Property set forth on SCHEDULE 4.9 has been licensed to any Person
other than GeoMed, or which permits use by any
13
such other Person or (ii) pursuant to which GeoMed has had Intellectual Property
licensed to it, or has otherwise been permitted to use Intellectual Property.
(b) No claim or demand of any Person has
been made, nor is there any Proceeding that is pending or, to the best knowledge
of the GeoMed and the Founders, threatened, nor to the best knowledge of the
GeoMed and the Founders is there any basis for any valid claim, demand or
Proceeding which (in any such case) (i) challenges the rights of GeoMed, or Xx.
Xxxxxxxx Xxxxxxxxx or any of their respective Affiliates in respect of the
License Agreement or any Licensed Subject Matter or Intellectual Property or
(ii) asserts that GeoMed, or any of their respective Affiliates are infringing
or otherwise in conflict with, or are required to pay any royalty, license fee,
charge or other amount with regard to, the License Agreement or any Licensed
Subject Matter or Intellectual Property. None of the License Agreement or the
Licensed Subject Matter and none of the Intellectual Property set forth on
SCHEDULE 4.9 is subject to any outstanding order, ruling, decree, judgement or
stipulation where GeoMed or Xx. Xxxxxxxx Xxxxxxxxx is or has been made a party
by or with any court, arbitrator, or administrative agency, or has been the
subject of any litigation within the last five (5) years, whether or not
resolved in favor of GeoMed. Neither GeoMed nor Xx. Xxxxxxxx Xxxxxxxxx has
assigned, transferred, conveyed or otherwise encumbered its right, title and
interest in the License Agreement or any Licensed Subject Matter or Intellectual
Property or entered into any agreement with any Third Party with respect to the
License Agreement or any Licensed Subject Matter or Intellectual Property which
is in conflict with this Agreement.
(c) The Patent Rights and the Intellectual
Property set forth on SCHEDULE 4.9 are valid and enforceable and have been duly
registered with, filed in or issued by, as the case may be, the United States
Patent and Trademark Office, United States Copyright Office or such other filing
offices, domestic or foreign, as are listed on EXHIBIT C and SCHEDULE 4.9. With
respect to the Patent Rights and the Intellectual Property set forth on SCHEDULE
4.9, GeoMed has taken such other actions to ensure protection under any
applicable laws or regulations, and such registrations, filings, issuances and
other actions remain in full force and effect.
(d) GeoMed and the Founders have disclosed
to Titan all material information known by it regarding the License Agreement or
the Licensed Subject Matter and the Intellectual Property, including, without
limitation, the exercise of all options by it under the License Agreement.
(e) The copy of the License Agreement
attached hereto as EXHIBIT B is true, complete and correct and there have been
no further amendments to such agreement, and such agreement is in full force and
effect as of the date hereof.
(f) it has not previously assigned,
transferred, conveyed or otherwise encumbered any of its right, title and
interest in the License Agreement, the Licensed Subject Matter or the
Intellectual Property or entered into any agreement with any third party which
is in conflict with the Contemplated Transactions pursuant to this Agreement;
14
4.10 BUILDINGS, PLANTS AND EQUIPMENT. To the best of
its knowledge, GeoMed is not in violation of any applicable building, zoning or
other Law in respect of its buildings, plants or structures or their operation.
4.11 NO DEFAULT. There is no current event of default
or other breach or default, and no event which with the giving of notice or the
lapse of time or both would constitute an event of default or other breach or
default, on the part of GeoMed or any other party thereto, under any agreement
or instrument, to which GeoMed is a party or by which it or any of its
properties or assets is bound, which events of default or other breaches or
defaults, separately or in the aggregate, have or would have a Material Adverse
Effect or a material adverse effect on GeoMed's rights or obligations under any
Material Lease or Material Contract set forth or required to be set forth on
SCHEDULE 4.8 or SCHEDULE 4.17.
4.12 LITIGATION. There is no (a) investigation or
other inquiry by any Governmental Body, (b) action, suit, proceeding, claim,
demand, citation, summons, subpoena or inquiry of any kind or nature whatsoever,
civil, criminal, regulatory or otherwise, at law or equity (each, a
"Proceeding"), excluding claims relating to workers' compensation, pending or,
to the best knowledge of GeoMed, threatened against GeoMed or any of the
Stockholders, or their respective businesses, properties or assets (including,
without limitation, a Proceeding to enjoin, in whole or in part, any of the
Contemplated Transactions), or (c) existing orders, writs, injunctions,
judgments or decrees of any court, arbitrator, tribunal or other Governmental
Body against GeoMed or any Founders or their respective businesses, properties
or assets, which, in each case of clauses (a), (b) or (c) above, separately or
in the aggregate, (i) seek monetary damages in excess of Fifty Thousand Dollars
($50,000), (ii) could, if adversely determined, have a Material Adverse Effect
on GeoMed or (iii) could, if adversely determined, give any Third Party the
right to enjoin or rescind the Contemplated Transactions or otherwise prevent
GeoMed from complying with the terms and provisions of this Agreement.
4.13 TAX MATTERS. (a) All Tax Returns for all periods
ending on or before the Closing Date that are or were required to be filed on or
before the Closing Date (other than those for which extensions were requested in
a timely manner) by GeoMed have been or will be filed on a timely basis in
accordance with the laws, regulations and administrative requirements of each
Governmental Body. As of the time of filing, such Tax Returns were (or will be),
true, correct and complete in all material respects.
(a) None of the United States federal,
foreign, state and local Tax Returns that have been filed by GeoMed since its
formation have been audited by any Governmental Body, nor have any adjustments
to Tax Returns filed by or on behalf of GeoMed been proposed by any
representative of any Governmental Body. GeoMed has not given nor been requested
to give waivers or extensions (or is or would be subject to a waiver or
extension given by any other entity) of any statute of limitations relating to
the payment of Taxes for which GeoMed may be liable. There are no other
agreements between GeoMed and any Governmental Body relating to Taxes.
(b) GeoMed has paid, accrued for payment or
made provision for the payment of, all Taxes that have or may become due for all
periods ending on or
15
before the Closing Date attributable to such periods, including, without
limitation, all Taxes reflected on the Tax Returns referred to in Section
4.13(a), or in any assessment, proposed assessment, or notice, either formal or
informal, received by GeoMed except such Taxes, if any, that are being contested
in good faith and as to which adequate accruals (to the extent required by GAAP
consistently applied) have been provided. (For purposes of the preceding
sentence, the Closing Date shall be treated as the last day of a taxable period
whether or not the taxable period in fact ends on the Closing Date.) The charges
and accruals with respect to Taxes on the books of GeoMed are adequate (as
determined in accordance with GAAP consistently applied). All Taxes that GeoMed
is, or was, required by law to withhold or collect for all periods ending on or
before the Closing Date have been duly withheld or collected and, to the extent
required, have been paid to the appropriate Governmental Body. There are no
liens with respect to Taxes upon any of the properties or assets, real or
personal, tangible or intangible, of GeoMed other than Permitted Encumbrances.
(c) There is no existing tax sharing
agreement that may or will require that any payment be made by or to GeoMed on
or after the Closing Date. GeoMed has never been a member of an affiliated group
of corporations filing a combined federal income Tax return, nor does GeoMed
have any liability for Taxes of any other Person under Treasury Regulation ss.
1-1502-6 (or any similar provision of foreign, state or local law), as a
transferee or successor, by contract or otherwise.
(d) No Stockholder is a foreign person
within the meaning of Section 1445 of the Code.
(e) GeoMed has not agreed to and is not
required to make any adjustment pursuant to Section 481(a) of the Code. No
Governmental Body has proposed any such adjustment or change in accounting
method with respect to GeoMed, nor does GeoMed have any application pending with
any Governmental Body requesting permission for any change in accounting method.
(f) There is no contract, agreement, plan
or arrangement of GeoMed covering any Person that, individually or collectively,
as a consequence of the Contemplated Transactions could give rise to the payment
of any amount that would not be deductible by Titan, Surviving Corporation or
GeoMed by reason of Section 280G of the Code.
(g) GeoMed does not own an interest in any
(i) domestic international sales corporation, (ii) foreign sales corporation,
(iii) controlled foreign corporation, or (iv) passive foreign investment
company.
(h) During the previous two (2) years
GeoMed has not engaged in any exchange under which the gain realized on such
exchange was not recognized due to Section 1031 of the Code.
4.14 ABSENCE OF CERTAIN CHANGES OR EVENTS. GeoMed has
not actively engaged in business operations. Since the Balance Sheet Date,
GeoMed has not:
16
(a) declared or paid any dividend or made
any other payment or distribution in respect of its capital stock;
(b) purchased, redeemed, issued, sold or
otherwise acquired or disposed of, either directly or indirectly, any of its
capital stock or reclassified, split or otherwise changed any of its capital
stock or granted or entered into any options, warrants, puts or calls or other
rights to purchase, sell or convert any obligation into any of, its capital
stock;
(c) paid, discharged or satisfied any
Encumbrance (other than an Encumbrance then required to be paid, discharged or
satisfied), claim, liability or obligation (whether fixed, accrued, contingent
or otherwise, whether due or to become due), other than a claim, liability or
obligation that is a current liability shown on the most recent Interim
Financial Statement or incurred since the date of such Interim Financial
Statement in the ordinary course of business consistent with prior practice;
(d) canceled or compromised any debt or
claim, or waived or released any material right, other than adjustments in the
ordinary course of business for goods sold and received which, in the aggregate,
are not material;
(e) sold, assigned, transferred, conveyed,
leased, pledged, encumbered or otherwise disposed of any of its rights, assets
or properties (real or personal, tangible or intangible) in excess of Ten
Thousand Dollars ($10,000) in the aggregate or otherwise material to the
business;
(f) transferred or granted any right under,
or entered into any settlement regarding the breach or infringement of, any
Licensed Subject Matter or Intellectual Property right, or modified any existing
right with respect thereto;
(g) made or granted any increase in the
compensation (whether salary, commission, bonus, benefits (retirement, severance
or other) or other direct or indirect remuneration) of any of GeoMed's
employees, or made or granted any increase in the compensation of the 5 highest
paid employees of GeoMed, or entered into any employment, severance, bonus or
similar agreement with any employee of GeoMed;
(h) written off or been required by GAAP to
write off any accounts receivable in excess of Five Thousand Dollars ($5,000) in
the aggregate;
(i) received any notice of termination of
any Material Contract or Material Lease or suffered any damage, destruction or
loss (whether or not covered by insurance) which, in the aggregate, has had or
would be reasonably expected to have a Material Adverse Effect on GeoMed;
(j) incurred any Tax liability other than
in the ordinary course of business; or
17
(k) agreed or otherwise committed, whether
in writing or otherwise, (x) to do, or taken any action or omitted to take any
action that would result in, any of the foregoing, or (y) to enter into or
modify or waive any Material Lease or Material Contract other than the consents
described in Section 4.5 hereof.
4.15 EMPLOYEE BENEFITS; EXECUTIVE OFFICERS; LABOR.
(a) No employees of GeoMed are covered by collective bargaining agreements.
SCHEDULE 4.15 sets forth a true and complete list of (i) all written employment
and consulting agreements in effect to which GeoMed is a party, indicating which
will terminate at the Closing; and (ii) all written executive compensation
plans, bonus plans, incentive compensation plans, deferred compensation plans or
agreements, employee pension plans or retirement plans, employee profit sharing
plans, employee stock purchase plans, group life insurance, hospitalization
insurance, severance or other employee benefit plans (as defined in Section 3(3)
of ERISA) of GeoMed or any of its Affiliates (collectively, the "Plans")
providing for benefits for any employees of GeoMed. True and correct copies of
all of the foregoing have been provided to Titan and, since the date the
documents were so provided, there has not been any material change to the assets
or liabilities of any Plan. There are no other binding plans or commitments of
the type referred to in this Section 4.15(a) which are not reduced to writing,
and GeoMed has no agreement or commitment to create any additional such Plan.
(a) SCHEDULE 4.15 includes a true and
complete list of all officers or other employees of GeoMed receiving
compensation (including bonuses, incentives and similar compensation) at a rate
in excess of Twenty-Five Thousand Dollars ($25,000) per annum, and their
corresponding level of compensation for the year ended 1999. To the best
knowledge of the Founders and GeoMed, no past or present officer or other
executive employee of GeoMed has ever been indicted, tried or convicted of a
criminal felony. To the best knowledge of the Founders and GeoMed, no officer or
other executive employee of GeoMed is in violation of (a) any material term of
any employment agreement, non-disclosure agreement, noncompete agreement or
other similar agreement with any previous employer (and the employment of such
employee by Titan or by GeoMed as a subsidiary of Titan will not result in a
violation of any such agreement) or (b) any obligation binding on such employee
which would prohibit the use of information obtained from such employee which
GeoMed has used or proposes to use.
(b) Neither the execution and delivery of
this Agreement nor the consummation of any of the Contemplated Transactions
under this Agreement will entitle any current or former employee of GeoMed to
severance pay or other similar payment, or accelerate the time of payment or
increase the amount of compensation due to any such employee or former employee.
4.16 INSURANCE; CLAIMS. (a) SCHEDULE 4.16 sets forth
a true, correct and complete list of all insurance policies of any kind or
nature maintained as of the date of this Agreement by or on behalf of GeoMed and
relating to its business and/or assets, indicating the type of coverage, name of
insured, name of insurance carrier or underwriter, premium there-on, policy
limits and expiration date of each policy. All such insurance
18
policies are in full force and effect, and GeoMed is not in default with respect
to its obligations under any such insurance policy. GeoMed have delivered to
Titan complete and correct copies of all insurance policies (together with all
riders and amendments thereto) set forth on SCHEDULE 4.16.
(a) SCHEDULE 4.16 sets forth all claims
made by GeoMed under any insurance policy (regardless of whether such policy is
set forth on such Schedule) since the date of its formation, setting forth as to
each claim the date, nature and amount thereof and its disposition (indicating
the date and amount as applicable) or current status. No insurance carrier or
underwriter has ever denied coverage on any claim by GeoMed.
4.17 MATERIAL CONTRACTS. (a) SCHEDULE 4.17 sets forth
a true and complete list of all agreements, contracts, commitments and
arrangements, written or, to the best knowledge of the Founders, oral, to which
GeoMed is a party or under which GeoMed or any of its properties or assets is
bound or affected, other than the Material Leases (each of the foregoing being a
"Material Contract"), including, without limitation, Material Contracts: (i) to
undertake capital expenditures, or to acquire any property or assets other than
in the ordinary course of business consistent with past practice, in an
aggregate amount exceeding Twenty Thousand Dollars ($20,000) for any individual
contract; (ii) providing for or evidencing indebtedness (other than trade
payables and accrued liabilities constituting current liabilities); (iii) having
a remaining term of more than six months and providing for payments to or by
GeoMed in excess of Twenty Thousand Dollars ($20,000); (iv) to loan money or
extend credit (other than trade credit in the ordinary course of business
consistent with past practice) to or guarantee the obligations of any other
Person (other than guarantees by way of endorsement of negotiable instruments in
the ordinary course of business consistent with past practice); (v) which
involve any joint venture, partnership or other arrangement involving sharing of
profits with any Person; (vi) which would restrict GeoMed from carrying on
business anywhere in the world; (vii) providing for mortgages or security
interests (other than a vendor's security interest in goods delivered and not
paid); (viii) providing for brokerage or finder's fees; (ix) providing for any
purchase of assets, shares of capital stock or other equity interests, or other
acquisition or divestiture, in connection with the purchase or sale of a
business or any substantial part of a business; (x) with any employee or officer
of GeoMed other than in connection with their employment; (xi) described in
Sections 4.9 or 4.15 and (xii) which are otherwise material to GeoMed.
(a) GeoMed has delivered to the Titan
complete and correct copies of all written Material Contracts, together with all
amendments thereto, and, to the best knowledge of the Founders, accurate
descriptions of all material terms of oral contracts, set forth on SCHEDULE
4.17.
(b) All Material Contracts are valid,
binding and enforceable against GeoMed in accordance with their respective terms
and in full force and effect, subject to bankruptcy and other creditors' rights
laws. There does not exist under any such Material Contracts any event of
default or event or condition that constitutes or that, after notice or lapse of
time or both, would constitute, a violation, breach or event of default
thereunder on the part of GeoMed or, any other party thereto.
19
(c) There is (i) no outstanding power of
attorney relating to the GeoMed Common Shares, and (ii) neither the Stockholders
nor GeoMed have outstanding any power of attorney issued outside of the ordinary
course of GeoMed's business or which affects a material part of GeoMed's
business.
4.18 COMPLIANCE WITH LAW. The operation of the
business of GeoMed is being and since its formation has been conducted in
accordance with all applicable laws, regulations, rules, ordinances, orders,
decisions, judgments, awards, decrees and other requirements of all Governmental
Bodies, including, without limitation, all Environmental Laws, all laws relating
to age, race, disability, national origin and sex discrimination and harassment,
laws relating to antitrust, consumer protection, health, occupational safety,
employee relations, worker's compensation, pension, and securities (each, a
"Law"). Except as set forth on SCHEDULE 4.18 hereto, GeoMed has never received
any notification from any Person or Governmental Body of any asserted present or
past failure by it to comply with any such Laws.
4.19 TRANSACTIONS WITH RELATED PARTIES. Except as
disclosed in the 1999 Financial Statements or the notes thereto, GeoMed is not a
party to any contract, lease, commitment or arrangement, written, or to the best
knowledge of GeoMed or the Founders, oral, which, if GeoMed were a "Registrant"
as defined under the Securities Exchange Act of 1934, would be required to be
disclosed pursuant to Item 404(a) or (c) of Regulation S-K as promulgated by the
Securities Exchange Commission, and except as disclosed in SCHEDULE 4.19 hereto,
there are no loans outstanding to or from any Person specified in Item 404(a)
from or to GeoMed.
4.20 BANK ACCOUNTS. SCHEDULE 4.20 hereto sets forth a
true, correct and complete list of the names and addresses of all banks and
other financial institutions in which GeoMed maintains an account, deposit or
safe-deposit box, together with the names of all Persons authorized to draw on
these accounts or deposits or to have access to these boxes.
4.21 ABSENCE OF CERTAIN BUSINESS PRACTICES. None of
(a) GeoMed, any officer or any of GeoMed's 5 highest paid employees, acting on
its behalf, or (b) to the best knowledge of GeoMed or the Founders, any other
employee or agent of GeoMed acting on its behalf, has, directly or indirectly,
given or agreed to give any improper or illegal gift or similar benefit to any
customer, supplier, governmental employee or other person who is or may be in a
position to help or hinder the business of GeoMed (or assist GeoMed in
connection with any actual or proposed transaction relating to the business of
GeoMed) (i) which subjected or might have subjected GeoMed to any damage or
penalty in any Proceeding, (ii) which if not given in the past, might have had a
Material Adverse Effect on GeoMed, (iii) which if not continued in the future,
would have a Material Adverse Effect on GeoMed or subject GeoMed to suit or
penalty in any Proceeding, (iv) for any of the purposes described in Section
162(c) of the Code or (v) for the purpose of establishing or maintaining any
concealed fund or concealed bank account.
4.22 NO GUARANTIES. Except as set forth on SCHEDULE
4.22, none of the obligations or liabilities of GeoMed incurred in connection
with the operation of its business is guaranteed by or subject to a similar
contingent obligation of any other Person. GeoMed has not
20
guaranteed or become subject to a similar contingent obligation in respect of
the obligations or liabilities of any other Person. There are no outstanding
letters of credit, surety bonds or similar instruments of GeoMed or any of its
Affiliates.
4.23 RECORDS. The books of account and minute books
of GeoMed are complete and correct in all material respects.
4.24 NO BROKERS OR FINDERS. The Founders and GeoMed
have not, and their respective Affiliates, officers, directors or employees have
not, employed any broker or finder or incurred any liability for any brokerage
or finder's fee or commissions or similar payment in connection with any of the
Contemplated Transactions.
4.25 ACCREDITED INVESTORS. Immediately prior to the
Effective Time, GeoMed has no more than thirty-five (35) Stockholders which fail
to meet the definition of "Accredited Investors."
4.26 OTHER INFORMATION. Neither this Agreement nor
any of the documents or other information made available to Titan, its
attorneys, accountants, agents or representatives pursuant hereto in connection
with Titan's due diligence review of the business of GeoMed or the transactions
contemplated by this Agreement contains or will contain any untrue statement of
a material fact or omits or will omit to state at material fact necessary in
order to make the statement contained therein not misleading. GeoMed has
provided Titan all material information regarding the business of GeoMed.
5. REPRESENTATIONS AND WARRANTIES OF TITAN.
Titan hereby represents and warrants to GeoMed and to
Stockholders that, except as otherwise disclosed on a Schedule corresponding in
number to the applicable Section of this ARTICLE 5 (which Schedule shall be
deemed to modify and limit only the representations and warranties contained in
the Section to which it corresponds in number):
5.1 ORGANIZATION AND GOOD STANDING. Titan is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Titan (a) has all requisite corporate power to own,
operate and lease its properties and carry on its business as the same is now
being conducted and (b) is qualified to do business as a foreign corporation in
each jurisdiction set forth on Schedule 5.1. Complete and correct copies of the
certificate of incorporation and by-laws of Titan as currently in effect have
been delivered to GeoMed.
5.2 AUTHORITY RELATIVE TO AGREEMENT; COMPLIANCE WITH
OTHER INSTRUMENTS; ABSENCE OF CONFLICT. Titan has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement, the Consulting Agreement and the Registration Rights Agreement (such
agreements, being collectively, the "Titan Documents"). The execution, delivery
and performance by Titan of each of the Titan Documents, and the consummation by
Titan of the Contemplated Transactions have been duly authorized by all
necessary corporate action on the part of Titan and, (a) do not require the
Approval of any Person or other Governmental Body, (b) do not violate, with or
without
21
the giving of notice or the passage of time or both, any provision of Law, and
(c) do not conflict with or result in a breach or termination of, or constitute
a default or give rise to a right of termination or acceleration under (or an
event which, with notice or lapse of time or both, would constitute a default or
give rise to such right), or result in the creation of any Encumbrance upon any
of the respective properties or assets of Titan pursuant to any corporate
charter, by-law, mortgage, deed of trust, indenture, commitment or other
agreement or instrument or any Law or any other restriction of any kind or
character to which Titan is a party or by which any of its respective assets or
properties may be bound, the consequence of which violation, conflict, breach,
termination or default referred to in clauses (b) and (c) would be reasonably
expected to materially adversely affect the ability of Titan to perform its
obligations hereunder or consummate the Contemplated Transactions in accordance
with the terms hereof.
5.3 EFFECT OF AGREEMENT. This Agreement and each of
the other Titan Documents has been duly executed and delivered by Titan. This
Agreement and each such other Titan Document constitute legal and valid
obligations of Titan, enforceable against it in accordance with their terms,
subject to laws relating to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshalling or other laws and rules of law affecting
the enforcement generally of creditors' rights and remedies (including such as
may deny giving effect to waivers of debtors' or guarantors' rights).
5.4 PURCHASE FOR INVESTMENT. The GeoMed Common Shares
being acquired by Titan hereunder are being acquired for investment for Titan's
own account, without any view to the unregistered public distribution or resale
thereof, all without prejudice, however, to the right of Titan at any time
lawfully to sell or otherwise to dispose of all or any part of the GeoMed Common
Shares pursuant to registration or any exemption therefrom under the Securities
Act and applicable state securities laws.
5.5 NO BROKERS OR FINDERS. Titan has not, nor have
its officers, directors or employees, employed any broker or finder or incurred
any liability for any brokerage or finder's fee or commissions or similar
payment in connection with any of the Contemplated Transactions. All transfer
taxes, if any, required to be paid in connection with the issuance of the Titan
Shares to the Stockholders will have been fully paid or provided for by Titan.
6. CONDITIONS TO THE OBLIGATIONS OF TITAN AND MERGER
CORP.
The obligations of Titan and Merger Corp. to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of each
of the following conditions, any one or more of which may be waived by Titan, to
the extent permitted by applicable law:
6.1 GEOMED PREFERRED SHARES, GEOMED WARRANTS AND
GEOMED OPTIONS. Each of the holders of GeoMed Preferred Shares and the GeoMed
Warrants and, if applicable, GeoMed, shall have duly executed and delivered such
consents, waivers and agreements in form satisfactory to Titan in order that all
GeoMed Preferred Shares and GeoMed Warrants shall have been cancelled or
converted into the GeoMed Common Shares, which will in turn be converted into
the right to receive the Merger Consideration, at the Effective Time,
22
and such consents, waivers and agreements shall be in full force and effect at
the Effective time. Immediately prior to and after the Closing, no GeoMed
Options shall be outstanding.
6.2 LEGAL OPINION. Titan shall have received the
opinion of counsel to GeoMed, dated the Effective Time and addressed to Titan,
in the form and substance reasonably satisfactory to Titan.
6.3 NO INJUNCTION. There shall not be in effect any
injunction, order or decree of a court of competent jurisdiction that prohibits
or delays consummation of the Contemplated Transactions, or that will require
any divestiture by Titan as a result of Titan's acquisition of the GeoMed Common
Shares.
6.4 REPRESENTATIONS, WARRANTIES AND AGREEMENTS. (a)
The representations and warranties of GeoMed and the Founders set forth in this
Agreement and of the Stockholders in the Registration Rights Agreement shall be
true and correct in all material respects as of the date of this Agreement, and
as of the Effective Time with the same effect as though made on the Effective
Time, (b) the Founders, Stockholders and GeoMed shall have performed and
complied with the agreements contained in this Agreement required to be
performed and complied with by them prior to or as of the Effective Time, and
(c) Titan shall have received a certificate to the foregoing effect signed by
the President of GeoMed and the Founders.
6.5 LITIGATION. No Proceeding shall have been
instituted by any Governmental Body or by any other Person and, at what would
otherwise have been the Effective Time, remain pending to delay, restrain or
prohibit the Contemplated Transactions or to seek any divestiture or to revoke
or suspend any Approval by reason of any or all of the Contemplated
Transactions; nor shall any Governmental Body have notified any Party or any of
their respective Affiliates that consummation of any part of the Contemplated
Transactions would constitute a violation of any Law or that it intends to
commence a Proceeding to restrain or prohibit any part of the Contemplated
Transactions or to require such divestiture, revocation or suspension; unless,
in either such case, such Governmental Body or other Person shall have withdrawn
such notice and abandoned such Proceeding.
6.6 APPROVALS. All Approvals of (a) any Person and
(b) Governmental Bodies necessary in connection with the execution, delivery and
performance of this Agreement and the Stockholder Documents by GeoMed, the
Founders and the Stockholders and for the consummation of the Contemplated
Transactions, and with Material Leases, Material Contracts, and Intellectual
Property shall have been obtained and shall be in full force and effect,
including without limitation, all consents in form satisfactory to Titan to the
assignment of the License Agreement to Merger Corp. All approvals of the
American Stock Exchange for the listing and issuance of the Titan Shares shall
have been obtained and shall be in full force and effect.
6.7 NO MATERIAL ADVERSE EFFECT. No event, occurrence,
fact, condition, change, development or effect shall have occurred, exist or
come to exist since the date of this Agreement that, individually or in the
aggregate, has constituted or resulted in, or could reasonably be expected to
constitute or result in a Material Adverse Effect.
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6.8 COMPLETION OF DUE DILIGENCE. Titan shall have
completed its due diligence investigation of GeoMed, including accounting and
legal matters (including receipt of the Financial Statements), and Titan in its
sole discretion shall be satisfied with the results of such investigation.
6.9 RESIGNATIONS. The officers and directors of
GeoMed listed on SCHEDULE 6.9 shall have delivered to GeoMed duly executed
resignations, dated as of the Closing.
6.10 OTHER AGREEMENTS. Each of the Stockholders shall
have executed and delivered the Registration Rights Agreement in the form of
EXHIBIT D attached hereto, each of which agreements shall be in full force and
effect.
6.11 ASSIGNMENTS. GeoMed shall have executed and
delivered all other assignments and other instruments necessary or desirable to
transfer all rights, title and interest to the License Agreement and the
Intellectual Property to Titan.
6.12 PROCEEDINGS SATISFACTORY. All certificates,
opinions and other documents to be delivered by the Founders, Xx. Xxxxxxxxx, the
Stockholders and GeoMed and all other matters to be accomplished by the
Founders, Xx. Xxxxxxxxx, the Stockholders and GeoMed prior to or at the Closing
shall be satisfactory in the reasonable judgment of Titan and its counsel.
6.13 STOCKHOLDER APPROVAL. This Agreement, the
Merger and the Contemplated Transactions shall have been duly approved by the
holders of at least a majority of the GeoMed Common Shares and at least a
majority of the GeoMed Preferred Shares, in accordance with applicable law
and the certificate of incorporation and by-laws of GeoMed on or before July
19, 2000. By July 19, 2000, holders of at least 51% of GeoMed's Common Shares
and 51% of the GeoMed Preferred Shares shall have executed and delivered the
Registration Rights Agreement.
6.14 INDEBTEDNESS. GeoMed shall not have any
liability obligation (whether fixed, accrued, contingent or otherwise, including
without limitations pursuant to guarantees, letters of credit or surety bonds)
whether due or to become due in excess $1,400,000 in the aggregate except for
current liabilities incurred in the ordinary course of business in connection
with the Contemplated transactions or the purchase of goods or services
consistent with prior practice. Other than as set forth on SCHEDULE 6.14 hereto,
the Stockholders shall have cancelled any notes payable by GeoMed to the
Stockholders; any indebtedness owed by GeoMed to the Stockholders shall have
been repaid, discharged or contributed to the capital of GeoMed and as of the
Effective Time, there shall be no outstanding notes, loans, payables or other
indebtedness owed by GeoMed to any of the Stockholders.
6.15 CONSULTING AGREEMENT. Xx. Xxxxxxxxx shall have
executed and delivered the Consulting Agreement.
6.16 FINANCIAL INFORMATION. GeoMed shall have
assisted Titan in the preparation of and shall have delivered the financial
statements.
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6.17 REGISTRATION RIGHTS AGREEMENT. That number of
Stockholders, constituting 90% of the Stockholders shall have duly executed and
delivered the Registration Rights Agreement.
6.18 INFORMATION STATEMENT. GeoMed shall supply
evidence satisfactory to Titan that it has delivered the Information
Statement, to each of the Stockholders at their respective last known
addresses not less than five Business Days prior to the date of the Closing.
7. CONDITIONS TO THE OBLIGATIONS OF GEOMED AND
STOCKHOLDERS.
The obligations of GeoMed and the Stockholders to effect
the Merger shall be subject to the satisfaction at or prior to the Effective
Time of each of the following conditions, any one or more of which may be
waived by GeoMed, to the extent permitted by applicable law:
7.1 NO INJUNCTION. There shall not be in effect
any injunction, order or decree of a court of competent jurisdiction that
prohibits or delays consummation of any material part of the Contemplated
Transactions.
7.2 REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) The representations and warranties of Titan set forth in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date with the same effect as though made as
of the Closing Date, (b) Titan shall have performed and complied in all
material respects with the agreements contained in this Agreement required to
be performed and complied with by it prior to or at the Closing and (c)
GeoMed shall have received a certificate to the foregoing effect signed by an
authorized officer of Titan.
7.3 LITIGATION. No Proceeding shall have been
instituted by any Governmental Body or by any other Person and, at what would
otherwise have been the Closing Date, remain pending to delay, restrain or
prohibit any material part of the Contemplated Transactions; nor shall any
Governmental Body have notified any Party or any of their respective
Affiliates that consummation of any material part of the Contemplated
Transactions would constitute a violation of any Law or that it intends to
commence a Proceeding to restrain or prohibit any material part of the
Contemplated Transactions; unless, in either such case, such Governmental
Body or other Person shall have withdrawn such notice and abandoned such
Proceeding.
7.4 APPROVALS. All Approvals of (a) any Person or
(b) Governmental Bodies, necessary for the consummation of the Contemplated
Transactions shall have been obtained or made and shall be in full force and
effect.
7.5 OTHER AGREEMENTS. Titan and at least 90% of
the Stockholders shall have entered into and delivered a Registration Rights
Agreement in the form of EXHIBIT C attached hereto.
7.6 CONSULTING AGREEMENT. Titan shall have
executed and delivered the Consulting Agreement.
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7.7 PAYMENT OF INDEBTEDNESS. At the Effective Time,
Titan shall make the payments to certain creditors of GeoMed in accordance with
Schedule 7.7.
7.8 LEGAL OPINION. GeoMed shall have received a legal
opinion of counsel to Titan and Merger Corp., dated the Effective Time and
addressed to GeoMed, in the form and substance reasonably satisfactory to
GeoMed.
8. FURTHER AGREEMENTS OF THE PARTIES.
8.1 EXPENSES. Titan, Merger Corp., GeoMed and the
Stockholders shall bear their own respective expenses incurred in connection
with the Contemplated Transactions, except as otherwise specifically provided
herein.
8.2 ACCESS PRIOR TO THE CLOSING. (a) Between the date
of this Agreement and the Effective Time, the Founders shall, and shall cause
GeoMed to, as Titan may from time to time request with reasonable notice to
GeoMed, (i) give Titan and its authorized representatives full and complete
access to all properties, personnel, facilities and offices of GeoMed and to the
books and records of GeoMed (and permit Titan to make copies thereof), including
such books and records sufficient to enable Titan's auditors to review (at
Titan's expense) the Financial Statements, (ii) permit Titan to make inspections
thereof, (iii) cause the officers and employees of, and consultants to GeoMed to
furnish Titan with all financial information and operating data and other
information with respect to the business and properties of GeoMed, including any
information relating to the Intellectual Property, and to discuss with Titan and
its authorized representatives the affairs of GeoMed.
(a) Between the date of this Agreement and
the Effective Time, each of Titan, GeoMed and the Founders shall and shall cause
their respective Affiliates and officers and directors, and shall use reasonable
efforts to cause all their other respective employees, auditors, attorneys,
consultants, advisors and agents, to treat as confidential and hold in strict
confidence, unless compelled to disclose by judicial or administrative process
or, in the opinion of its counsel, by other requirements of Law, and after prior
written notice to the other Party, all confidential information of GeoMed, or
Titan, as the case may be, furnished to Titan by the Founders and GeoMed or to
the Founders and GeoMed by Titan, as the case may be, or any of their respective
representatives in connection with the Contemplated Transactions and will not
release or disclose such confidential information to any other Person, except
their respective auditors, attorneys, financial advisors and other consultants,
agents and advisors in connection with the consummation of the Contemplated
Transactions. If the Closing does not occur (i) such confidence shall be
maintained by the Stockholders and GeoMed, or Titan, as the case may be, and
each Party shall cause its officers and directors and Affiliates and shall use
reasonable efforts to cause such other Persons to maintain such confidence,
except to the extent such information comes into the public domain (other than
as a result of an action by such Party, its officers, directors or such other
persons in contravention of this Agreement), (ii) each Party shall and shall
cause its officers and directors and Affiliates and shall use reasonable efforts
to cause such other Persons to refrain from using any of such confidential
information except in connection with this Agreement, and (iii) upon the request
of any Party, the other Party shall promptly return to the requesting Party any
written materials
26
remaining in its possession, which materials it has received from the requesting
Party, or their respective representatives.
8.3 PUBLICITY. Between the date of this Agreement
and the Effective Time, except to the extent required by law or, in the case
of Titan, in accordance with the advice of its counsel, neither Titan nor any
of the Stockholders nor GeoMed shall, and none of them shall permit any
Affiliate to, issue any press release or public announcement of any kind
concerning, or otherwise publicly disclose, the Contemplated Transactions
without the consent of the other; and in the event any such public
announcement, release or disclosure is required by law, the Parties will
consult prior to the making thereof and use their best efforts to agree upon
a mutually satisfactory text.
8.4 CONDUCT OF BUSINESS OF GEOMED. Except as
expressly permitted by this Agreement, between the date of this Agreement and
the Effective Time, GeoMed shall conduct its business only in the ordinary
course in substantially the same manner as heretofore conducted, and use all
its reasonable efforts to preserve intact its present business organization
and to preserve the goodwill of Persons having business relations with
GeoMed. Without limiting the generality of the foregoing, except as otherwise
expressly provided in this Agreement, between the date of this Agreement and
the Effective Time, GeoMed shall not:
(1) amend its articles or certificate of incorporation
or by-laws;
(2) declare or pay any dividend or make any other
payment or distribution in respect of its capital stock;
(3) purchase, redeem, issue, sell or otherwise acquire
or dispose of, either directly or indirectly, any of its capital stock, or
reclassify, split or otherwise change any of its capital stock or grant or
enter into any options, warrants, puts or calls or other rights to purchase,
sell or convert any obligation into any of, its capital stock;
(4) organize any Subsidiary or acquire any capital
stock or other equity securities of any Person or any equity or ownership
interest in any business;
(5) subject to SECTION 6.15 borrow any funds or incur,
assume or acquire any obligation or liability (whether fixed, accrued,
contingent or otherwise, whether due or to become due) except for current
liabilities incurred in the ordinary course of business in connection with
the Contemplated Transactions or the purchase of goods or services consistent
with prior practice;
(6) pay, discharge or satisfy any Encumbrance (other
than an Encumbrance then required to be paid, discharged or satisfied),
claim, liability or obligation (whether fixed, accrued, contingent or
otherwise, whether due or to become due), except for payment, discharge or
satisfaction for cash of a claim, liability or obligation that is a current
liability either shown on the most recent Financial Statement, or incurred
since the Balance Sheet Date of such Financial Statement in the ordinary
course of business consistent with prior practice;
27
(7) make or grant any increase in the compensation
(whether salary, commission, bonus, benefits (retirement, severance or other)
or other direct or indirect remuneration) of any employees of GeoMed, or
enter into any employment contract with any employee of GeoMed other than as
contemplated by SECTIONS 4.15;
(8) sell, assign, transfer, convey, lease, pledge,
encumber or otherwise dispose of or convey any interest in any of its assets
or properties (real or personal, tangible or intangible) or any other
material right (including without limitation the License Agreement or the
Licensed Subject Matter);
(9) transfer or grant any right under, or enter into
any settlement regarding the breach or infringement of, any Patent Rights or
Intellectual Property right, or modify any existing right with respect
thereto;
(10) enter into any instrument which would constitute a
Material Lease or Material Contract or enter into any amendment, supplement
or waiver in respect of any Material Lease or Material Contract;
(11) incur any severance pay obligation by reason of
this Agreement or the Contemplated Transactions;
(12) grant or extend any power of attorney other than
in the ordinary course of business which does not affect a material part of
GeoMed's business or act as guarantor, surety, co-signer, endorser, co-maker,
indemnitor or otherwise in respect of the obligation of any Person other than
through endorsements of negotiable instruments in the ordinary course of
business or;
(13) cancel or compromise any debt or claim, or waive
or release any material right, other than adjustments in the ordinary course
of business for goods sold and received which, in the aggregate, are not
material;
(14) make any capital expenditures or capital additions
or improvements other than pursuant to capital expenditure commitments
disclosed on SCHEDULE 4.14 or not required to be disclosed thereon;
(15) enter into or amend any collective bargaining or
union contract or agreement;
(16) institute or settle any Proceeding;
(17) incur any Tax liability other than in the ordinary
course of business;
(18) in any other manner, modify, change or otherwise
alter the fundamental nature of the business of GeoMed as presently
conducted; or
(19) agree or otherwise commit, whether in writing or
otherwise, to do, or take any action or omit to take any action that would
result in, any of the foregoing.
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8.5 FURTHER ASSURANCES. Following the Closing, the
Stockholders, GeoMed and Titan shall, and shall cause each of their
Affiliates to, from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take such other actions
as shall be necessary, or otherwise reasonably requested by the other Party,
to confirm and assure the rights and obligations provided for in this
Agreement and the other Stockholder Documents and Titan Documents and render
effective the consummation of the Contemplated Transactions.
8.6 TAX MATTERS. Between the date of this
Agreement and the Effective Time, GeoMed shall (x) file on a timely basis all
Tax Returns required to be filed by or with respect to GeoMed within such
time period and pay all Taxes shown to be due thereon, and (y) shall not make
or cause to be made any election, or file any Tax Return or amended Tax
Return reflecting any position, that could result in any adverse Tax
consequences to Titan or to GeoMed for any period, except for elections made
in accordance with historical practices of GeoMed.
8.7 EXCLUSIVITY. Through the earlier of the
Effective Time or the date of termination of this Agreement pursuant to
Article 10 hereof, but no later than August 7, 2000, neither any of the
Founders nor GeoMed shall (i) solicit, initiate or encourage the submission
of inquiries, proposals or offers from any Person relating to (x) any
business combination with GeoMed (y) the sale or transfer of, or conveyance
of any interest in, the License Agreement, any Licensed Subject Matter or any
Intellectual Property of GeoMed or to which GeoMed has rights or (z) the sale
of a material portion of the assets and/or capital stock of GeoMed (a
"Transaction"), (ii) enter into or participate in any negotiations, nor
initiate any discussions or continue any discussions initiated by others,
regarding any Transaction, or furnish to any other person any information
with respect to the assets or business of GeoMed for the purposes of pursuing
a possible Transaction with any other party, or (iii) otherwise participate
in, assist, facilitate or encourage any effort or attempt by any other Person
to do any of the foregoing. Neither the Founders nor GeoMed shall authorize
their investment bankers or other advisors to violate the provisions of this
paragraph and shall use reasonable efforts to prevent their investment
bankers or other advisors from violating the provisions of this paragraph.
8.8 RECEIPT OF CONFIDENTIAL INFORMATION. At the
Closing, the Founders and GeoMed shall deliver to Titan a list of all Persons
(other than directors, officers and employees of GeoMed) who received
confidential information concerning GeoMed and copies of all confidentiality
agreements entered into by such Persons in connection with the solicitation
of prospective acquirors of GeoMed.
8.9 PATENT MATTERS. With regard to the Licensed
Subject Matter and Intellectual Property, each of the Founders and GeoMed
agree to fully cooperate with Titan and provide such information as Titan may
request, in connection with: (a) the filing, prosecution and maintenance of
patents and patent applications; (b) any opposition or cancellation
proceeding; (c) any Proceeding regarding the enforcement or defense of any
infringement action or (d) the obtaining of supplemental protection
certificates, or their equivalents. Titan shall be responsible for the
payment of all costs and expenses incurred pursuant to this SECTION 8.9.
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8.10 AMENDING SCHEDULES. From time to time prior
to the Closing, GeoMed and the Founders shall promptly supplement or amend
the Schedules hereto with respect to any matter arising after the date of
this Agreement which, if existing or occurring at the date of this Agreement,
would have been required to have been set forth in the Schedules hereto. Such
supplement or amendment shall have the effect of curing any related
misrepresentation or breach of warranty made in connection with the
transactions contemplated by this Agreement; provided, however, that Titan
shall have a commercially reasonable period of time following receipt of any
supplemented or amended Schedules to elect (i) to terminate this Agreement
without any further liability to GeoMed or the Founders or (ii) in Titan's
sole discretion, to elect to waive such breach and consummate the
transactions contemplated by this Agreement.
8.11 CONSENTS: REGULATORY APPROVAL. Each Party
will take all such commercially reasonable actions as may be necessary to
obtain all approvals or consents from Persons or Governmental Bodies in order
to permit the consummation of the Contemplated Transactions.
8.12 CONFIDENTIALITY. Each of Titan and Merger
Corp. shall hold all information provided to either of them by or on behalf
of GeoMed (and any information derived therefrom, or reflecting any such
information, prepared by or on behalf of GeoMed) relating to GeoMed in
confidence and will not, in the event of termination of this Agreement, for a
period of the later of three (3) years after termination of this Agreement
disclose any such information other than to directors, officers, employees
and agents of Titan or Merger Corp. who need to know such information for the
purposes of the transactions contemplated by this Agreement and as required
in connection with making any regulatory application or complying with any
other applicable Laws. Upon any termination of this Agreement, Titan and
Merger Corp. shall promptly return to GeoMed all such information and will
destroy any such information prepared by any of them or on their behalf,
including any copies of such information. This Section shall not apply to:
(i) information now or hereafter in the public domain through no fault of
Titan or Merger Corp., (ii) information which Titan or Merger Corp. knew (and
was not restricted from disclosing or using) and can be shown to have existed
before GeoMed first disclosed to Titan or Merger Corp. in connection with the
transactions contemplated herein, (iii) information obtained from a source
other than GeoMed, provided such source was not at the time it furnished such
information bound by confidentiality obligations for the benefit of GeoMed
and had authorization to disclose same, and (iv) compliance with any
applicable Law by Titan, Merger Corp. or GeoMed of any of the foregoing.
9. INDEMNIFICATION AND RELATED MATTERS.
9.1 INDEMNIFICATION. Subject to the limitations of
Sections 9.2 and 9.3 hereof:
(a) GeoMed and the Founders agree to
indemnify, defend and hold Titan and its affiliates, subsidiaries, officers,
directors, employees or agents thereof (the "Buyer Indemnified Parties")
harmless from and against any and all Damages, resulting from (i) any
misrepresentation or breach of warranty or covenant on the part of
30
GeoMed or the Founders under the terms of this Agreement or other Stockholder
Documents, or in any certificate delivered hereunder or pursuant hereto or
non-fulfillment of any agreement on the part of GeoMed or the Founders under
the terms of this Agreement or other Stockholder Documents, or (ii) any claim
of age, race, disability, national origin or sex discrimination or harassment
in the operation of GeoMed's business to the extent the conduct complained of
occurred prior to the Closing.
(b) Titan agrees to indemnify, defend
and hold the Founders and GeoMed (the "Seller Indemnified Parties") harmless
from and against any and all Damages resulting from any misrepresentation or
breach of warranty or covenant on the part of Titan under the terms of this
Agreement or in any certificate delivered hereunder or pursuant hereto or
non-fulfillment of any agreement on the part of Titan under the terms of this
Agreement or arising out of any death or injury to any Person resulting from
the manufacturing, sale or use of Product by Titan, except to the extent such
Damages resulted from negligence or willful misconduct of GeoMed or the
Founders or any matter for which GeoMed or the Founders must indemnify Titan
under Section 9.1(a) or for which the Stockholders must indemnify Titan
pursuant to the Registration Rights Agreement.
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
LIMITATIONS ON INDEMNIFICATION.
(a) The representations and warranties
of the Founders, GeoMed and of Titan contained in this Agreement shall
survive the Closing notwithstanding any investigation conducted, or knowledge
acquired, with respect thereto; provided, that the sole remedy for any breach
thereof shall be by way of a claim for indemnification pursuant to Section
9.1 which shall be subject to the following limitations of this Section 9.2.
With respect to any claim for indemnification under this Agreement (whether
for breach of representation or warranty or otherwise), neither the Founders
and GeoMed, on the one hand, nor Titan, on the other hand, shall be liable to
the other for indemnification unless the aggregate amount of the damages
incurred by the other as a result of such breach exceeds the sum of $50,000
(whereupon such Party shall be liable for the full amount of such damages).
Nothing in this Section 9.2 shall be deemed to limit or otherwise apply to
any covenant under Section 8 which, by its terms, is to be performed
following the Closing. Notwithstanding the foregoing and subject to the last
sentence of this Section 9.2(a), with respect to Damages referred to in
Section 9.1(a) the liability of GeoMed shall not exceed $350,000 (the
"Basket"), and the liability of the Founders shall be borne pro rata by the
Founders, in an amount not to exceed the lesser of (i) the amount obtained by
multiplying the Basket by the percentage received by such Founder of the
total number of Titan Shares issued pursuant hereto and (ii) the net proceeds
received by such Founder from the sale of all of the Titan Shares after
deduction of customary brokerage commissions actually paid. Indemnification
claims under Section 9.1(a) for breach of the representations contained in
Sections 4.2, 4.3 or 4.24 or those relating to an Indemnifying Party's
fraudulent acts or willful misrepresentations or willful omissions shall not
be subject to the Basket, provided, however, that for GeoMed shall be limited
to the sum of $3,500,000 (or, if the Contingent Merger Consideration is paid,
$6,000,000), and for any Founder shall not exceed the greater of (i) the net
proceeds received by such Founder from the sale of all of the Titan Shares
after deduction of customary brokerage commissions actually paid and (ii) the
amount obtained by multiplying the
31
sum of $3,500,000 (or, if the Contingent Merger Consideration is paid,
$6,000,000) by the percentage received by the Founder of the total number of
Titan Shares issued pursuant hereto, all such amounts to be borne pro rata by
the Founders. Notwithstanding the foregoing, delivery by a holder of such
number of Titan Shares as were issued issued to him in connection with the
Merger shall in all cases satisfy such holder's indemnity obligations
hereunder in full.
(b) Notwithstanding anything contained
herein to the contrary any indemnity payment made pursuant to Section 9.1
above shall be treated as an adjustment to the Purchase Price for tax
purposes, unless a final determination with respect to the Indemnified Party
causes any such payment not to be treated as such an adjustment.
(c) No liability shall be enforced
against any Indemnifying party to the extent of any insurance proceeds
received by any Indemnified Party with respect to such damages. If the
Indemnified Party receives any such insurance proceeds after the Indemnifying
Party shall have made any payment to the Indemnified Party with respect to
such Damages, the Indemnified Party shall promptly return such payment to the
Indemnifying Party to the extent of such insurance proceeds received.
(d) The indemnity obligations of GeoMed
and the Founders under Section 9.1(a) and of Titan under Section 9.1(b) shall
terminate on such date that is 18 months after the Closing Date except (i) as
to matters as to which the applicable Indemnified Party has made a claim for
indemnification on or prior to such date specifically addressing an actual
claim or demand and (ii) as to matters as to which the applicable Indemnified
Party has suffered losses arising out of the Indemnifying Party's fraudulent
acts or willful misrepresentations or willful omissions. The obligation to
indemnify referred to in:
(x) the preceding clause (i) shall
survive the expiration of such period until such claims are finally
resolved and any obligations with respect thereto are fully satisfied;
and
(y) the preceding clause (ii) shall
terminate on such date that is 24 months after the Closing Date.
9.3 PROCEDURES WITH RESPECT TO THIRD-PARTY
CLAIMS.
(a) In the case of any claim asserted by a
Third Party against a Party entitled to indemnification under this Agreement
(the "Indemnified Party"), notice shall be given by the Indemnified Party to the
Party required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim (or can otherwise
identify with specificity the nature of the claims even though such claim is not
yet imminent or liquidated in amount, such as where a misrepresentation can be
identified but no claim by a Third Party has as yet been raised or liquidated in
amount) as to which indemnity may be sought, and the Indemnified Party shall
permit the Indemnifying Party (at the expense of such Indemnifying Party) to
assume the defense of any claim or any litigation resulting therefrom, provided
that (i) the counsel for the Indemnifying Party who shall conduct the defense of
such claim or litigation shall be reasonably satisfactory to the Indemnified
Party,
32
(ii) the Indemnified Party may participate in such defense at such
Indemnified Party's expense, and (iii) the omission by any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its indemnification obligation under this Agreement except to the extent that
such Indemnifying Party is materially damaged as a result of such failure to
give notice. After notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of the claim or litigation,
the Indemnifying Party shall not be liable to such Indemnified Party under
Section 9.1(a) or 9.1(b) for any fees of other counsel or any other expenses,
in each case subsequently incurred by such Indemnified Party in connection
with the defense thereof, other than reasonable costs of investigation. If an
Indemnifying Party assumes the defense of such an action, (I) no compromise
or settlement thereof may be effected by the Indemnifying Party without the
Indemnified Party's consent (which shall not be unreasonably withheld) unless
(x) there is no finding or admission of any violation of law or any violation
of the rights of any person and no effect on any other claims that may be
made against the Indemnified Party and (y) the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party and (II) the
Indemnifying Party shall have no liability with respect to any compromise or
settlement thereof effected without its consent (which shall not be
unreasonably withheld). If notice is given to an Indemnifying Party of the
commencement of any action and it does not, within 30 days after the
Indemnified Party's notice is given, give notice to the Indemnified Party of
its election to assume the defense thereof, the Indemnifying Party shall be
bound by any determination made in such action or any compromise or
settlement thereof effected by the Indemnified Party. Pending notification
from the Indemnifying Party as to whether it will assume the defense of a
claim, the Indemnified Party will not incur or agree to incur expenses
(whether of investigation, defense or otherwise) with respect to such claim
in excess of $5,000 without giving the Indemnifying Party 10 days prior
notice of such incurrence or agreement.
(b) Notwithstanding the provisions of
Section 9.3(a), if in the reasonable judgment of the Indemnified Party, based
upon written advice of counsel that there are one or more legal defenses
available to it which are different from or in addition to those available to
the Indemnifying Party, a conflict of interest may exist, such Indemnified
Party may, by notice to the Indemnifying Party, employ separate counsel and
may participate in the defense, compromise or settlement of such action at
the expense of the Indemnifying Party, but the Indemnifying Party shall not
be bound by any compromise or settlement thereof effected without its consent
(which shall not be unreasonably withheld).
(c) The Indemnifying Party and the
Indemnified Party shall cooperate in the defense of any claim or litigation
subject to this Section 9.3 and the records of each shall be available to the
other with respect to such defense.
10. TERMINATION.
10.1 TERMINATION PROCEDURES. This Agreement may be
terminated before the Effective Time only as follows:
(1) by written agreement of GeoMed and Titan at any
time;
33
(2) by Titan, by notice to GeoMed, if satisfaction of
any of the conditions to Titan's obligations set forth in Section 6 becomes
impossible or has not been achieved by the thirtieth (30th) day after the
Notification Date, and such condition has not been waived by Titan; or
(3) by GeoMed, by notice to Titan, if satisfaction of
any of the conditions to GeoMed's and Stockholders' obligations set forth in
Section 7 becomes impossible or has not been achieved by the thirtieth (30th)
day after the Notification Date, and such condition has not been waived by
GeoMed.
10.2 EFFECT OF TERMINATION. In the event that this
Agreement is terminated pursuant to Section 10.1, this Agreement shall
terminate without any liability or further obligation of any Party to
another, except for the obligations of Titan, GeoMed and the Founders under
Sections 9.1 and 9.2.
11. MISCELLANEOUS.
11.1 ENTIRE AGREEMENT. This Agreement and the
other Stockholders Documents and the Titan Documents contain, and are
intended as, a complete statement of all of the terms and the arrangements
between the Parties with respect to the matters provided for, supersede any
previous agreements and understandings between the Parties with respect to
those matters, and cannot be changed or terminated orally. No Party makes,
and each Party hereby expressly disclaims reliance upon, any representations
or warranties with respect to the Contemplated Transactions other than as
expressly set forth herein as limited by the exceptions contained in the
Schedules hereto or in the other Stockholder Documents and Titan Documents.
11.2 GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the law of the State of Delaware
applicable to agreements made and to be performed therein.
11.3 HEADINGS. The section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
Agreement of the Parties and shall not in any way affect the meaning or
interpretation of this Agreement. All references in this Agreement to
Sections, Schedules and Exhibits are to sections, schedules and exhibits to
this Agreement, unless otherwise indicated.
11.4 NOTICES. All notices and other communications
under this Agreement shall be in writing and shall be deemed given when (a)
delivered by hand, (b) transmitted by facsimile (and confirmed by return
facsimile), or (c) delivered, if sent by Express Mail, Federal Express or
other express delivery service, or registered or certified mail, return
receipt requested, to the addressee at the following addresses or telecopier
numbers (or to such other addresses, telex number or telecopier number as a
party may specify by notice given to the other party pursuant to this
provision):
If to Titan or Merger Corp. to:
34
Titan Pharmaceuticals Inc.
000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx Xxx Xxxxxxxxx, XX
Attention: Xxxxx X. Xxxxxx, M.D., Chief Executive Officer
Facsimile No.: 000-000-0000
If to GeoMed or the Founders, to them c/o:
GeoMed, Inc.
000 Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xx. Xxxxxxxx Xxxxxxxxx
Facsimile No.:
11.5 BINDING EFFECT; ASSIGNMENT. This Agreement
shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns. Nothing in this Agreement shall
create or be deemed to create any Third Party beneficiary rights in any
Person who is not a Party. No assignment of this Agreement or of any rights
or obligations hereunder may be made by GeoMed or the Stockholders (by
operation of law or otherwise) and any such attempted assignment shall be
void. Titan may assign this Agreement to an Affiliate.
11.6 SET OFF. Titan shall have the right to set
off against any amounts payable by it under this Agreement (a) any amounts
owed by GeoMed or any Founder to Titan or any other Buyer Indemnified Party
and (b) any amounts for indemnification payments any amounts for
indemnification payments to the extent set forth in Section 6.2 of the
Registration Rights Agreement.
11.7 COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
11.8 AMENDMENT AND WAIVER. This Agreement may be
amended, or any provision of this Agreement may be waived, provided that such
amendment or waiver will be binding on Titan only if such amendment or waiver
is set forth in a writing executed by Titan, and provided that any such
amendment or waiver will be binding upon GeoMed only if such amendment or
waiver is set forth in writing executed by GeoMed only if such amendment or
waiver is set forth in a writing executed by persons holding, or entitled to
receive in the Merger, at least 51% of the Merger Consideration. The waiver
of any Party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other breach.
11.9 DISPUTE RESOLUTION. The Parties agree to
attempt initially to solve all claims, disputes, or controversies arising
under, out of, or in connection with this Agreement by conducting good faith
negotiations. If the Parties are unable to settle the matter between
themselves, the matter shall thereafter be resolved by alternative dispute
resolution, starting with mediation and including, if necessary, a final and
binding arbitration. Whenever a Party shall
35
decide to institute arbitration proceedings, it shall give written notice to
that effect to the other Party. The Party giving such notice shall refrain
from instituting the arbitration proceedings for a period of sixty (60) days
following such notice. During such period, the Parties shall make good faith
efforts to amicably resolve the dispute without arbitration. Any arbitration
hereunder shall be conducted under the rules of the American Arbitration
Association. Each such arbitration shall be conducted by a panel of three
arbitrators: One arbitrator shall be appointed by each of Titan and the
Representative of the Stockholders and the third shall be appointed by the
American Arbitration Association. Any such arbitration shall be held in San
Mateo County, California. The arbitrators shall have the authority to grant
specific performance. Judgment upon the award so rendered may be entered in
any court having jurisdiction or application may be made to such court for
judicial acceptance of any award and an order of enforcement, as the case may
be. In no event shall a demand for arbitration be made after the date when
institution of a legal or equitable proceeding based on such claim, dispute
or other matter in question would be barred by the applicable statute of
limitations.
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IN WITNESS WHEREOF, the Parties hereto have executed this
instrument as of the date and year first above written.
TITAN PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx, M.D.
Title: Chairman, President and CEO
GEOMED MERGER SUB CORP.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx, M.D.
Title: President and CEO
GEOMED, INC
By: /s/ Xxxx Xxxxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxxxxx, M.D.
Title: Chairman
/s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------------------------
Xx. Xxxxxxxx Xxxxxxxxx
Address: 000 Xxxxxx Xx., Xxxxx
Xxxx, XX 00000
/s/ Xxxx Xxxxxxxxxx
---------------------------------------------
Dr. Xxxx Xxxxxxxxxx
Address: 000 Xxxxxxx Xx., Xxx Xxxxx.
XX 00000
/s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Xxxxxx Xxxxxx
Address: 000 Xxxx Xxxxx Xx., Xxxxx
Xxxx, XX 00000
/s/ Xxxxxx X. Place
---------------------------------------------
Xx. Xxxxxx Place
Address: X.X. Xxx 00000, 00 Xxx
Xxxxx Xx., Xxxxxxxx, XX 00000
37
