Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
PATHOGENICS, INC.
TYROL THERAPEUTICS, LLC
AND
MEMBERS OF TYROL THERAPEUTICS, LLC
DATED AS OF FEBRUARY 10, 2005
TABLE OF CONTENTS
PAGE
ARTICLE I THE EXCHANGE 1
SECTION 1.01. The Exchange 1
SECTION 1.02. Effective Time; Closing 1
SECTION 1.03. Effect of the Exchange 1
SECTION 1.04. Directors and Officers 1
ARTICLE II DELIVERY OF SECURITIES; EXCHANGE OF CERTIFICATES 1
SECTION 2.01. Delivery of Securities 1
SECTION 2.02. Exchange of Certificates 2
SECTION 2.03. Transfer Books 2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF TYROL THERAPEUTICS 2
SECTION 3.01. Organization and Qualification; Subsidiaries 2
SECTION 3.02. Articles of Organization and Operating Agreement 2
SECTION 3.03. Capitalization 3
SECTION 3.04. Authority Relative to This Agreement 3
SECTION 3.05. No Conflict; Required Filings and Consents 3
SECTION 3.06. Permits; Compliance; Tyrol Therapeutics Products; Regulation 3
SECTION 3.07. Absence of Certain Changes or Events 4
SECTION 3.08. Absence of Litigation 4
SECTION 3.09. Employee Benefit Plans 4
SECTION 3.10. Contracts 4
SECTION 3.11. Trademarks, Patents and Copyrights 5
SECTION 3.12. Taxes 5
SECTION 3.13. Brokers 5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PATHOGENICS 5
SECTION 4.01. Organization and Qualification; Subsidiaries 5
SECTION 4.02. Certificate of Incorporation and By-Laws 6
SECTION 4.03. Capitalization 6
SECTION 4.04. Authority Relative to This Agreement 7
SECTION 4.05. No Conflict; Required Filings and Consents 7
SECTION 4.06. Permits; Compliance 7
SECTION 4.07. Absence of Certain Changes or Events 7
SECTION 4.08. Absence of Litigation 7
SECTION 4.09. Employee Benefit Plans 8
SECTION 4.11. Contracts 8
SECTION 4.12. Trademarks, Patents and Copyrights 8
SECTION 4.13. Taxes 8
SECTION 4.14. Accounting and Tax Matters 9
SECTION 4.15. Brokers 9
ARTICLE V CONDUCT OF BUSINESSES PENDING THE EXCHANGE 9
SECTION 5.01. Conduct of Business by Tyrol Therapeutics Pending the Exchange 9
SECTION 5.02. Conduct of Business by Pathogenics Pending the Exchange 9
ARTICLE VI ADDITIONAL AGREEMENTS 10
SECTION 6.01. Access to Information; Confidentiality 10
SECTION 6.02. Obligations of Pathogenics 10
SECTION 6.03. Obligations of Tyrol Therapeutics 10
SECTION 6.04. Directors and Officers 10
SECTION 6.05. Change of Corporate Name 10
SECTION 6.06. Application to Standard & Poor's 10
SECTION 6.07. Further Action; Consents; Filings 10
SECTION 6.08. Agreement to Deliver Tyrol Therapeutics Securities 10
SECTION 6.09. Plan of Exchange 11
SECTION 6.10. Public Announcements 11
SECTION 6.11. Conveyance Taxes 11
SECTION 6.12. Spin-Off of Pathogenics Common Stock 11
ARTICLE VII CONDITIONS TO THE EXCHANGE 11
SECTION 7.01. Conditions to the Obligations of Each Party 11
SECTION 7.02. Conditions to the Obligations of Pathogenics 11
SECTION 7.03. Conditions to the Obligations of Tyrol Therapeutics 13
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER 14
SECTION 8.01. Termination 14
SECTION 8.02. Effect of Termination 15
SECTION 8.03. Amendment 15
SECTION 8.04. Waiver 15
ARTICLE IX GENERAL PROVISIONS 15
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements 15
SECTION 9.02. Notices 15
SECTION 9.03. Certain Definitions 16
SECTION 9.04. Severability 16
SECTION 9.05. Assignment; Binding Effect; Benefit 17
SECTION 9.06. Incorporation of Documents and Exhibits 17
SECTION 9.07. Specific Performance 17
SECTION 9.08. Governing Law; Forum 17
SECTION 9.09. Headings 17
SECTION 9.10. Counterparts 17
SECTION 9.11. Entire Agreement 17
EXHIBITS
A - Certificates to be Exchanged
B - Exceptions to Representations and Warranties of Tyrol Therapeutics
C - Exceptions to Representations and Warranties of Pathogenics
D - Form of Officer's Certificate of Tyrol Therapeutics concerning
accuracy
E - Form of Officer's Certificate of Pathogenics concerning accuracy
F - Form of Investment Agreement
G - Officers and Directors after the Effective Time
ii
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of February 10, 2005 (this
"Agreement") among Pathogenics, Inc., a Delaware corporation ("Pathogenics"),
Tyrol Therapeutics, LLC, a Delaware limited liability company ("Tyrol
Therapeutics") and the members of Tyrol Therapeutics ("Members").
W I T N E S S E T H
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WHEREAS, upon the terms and subject to the conditions of this Agreement,
all Members will exchange all of the equity interest of Tyrol Therapeutics for a
specified number of shares of Pathogenics's common stock to be issued and
Pathogenics will acquire all of the outstanding equity interests of Tyrol
Therapeutics, making Tyrol Therapeutics a wholly-owned subsidiary of Pathogenics
(the "Exchange");
WHEREAS, the Exchange shall qualify as a transaction in securities exempt
from registration or qualification under the Securities Act of 1933, as amended,
and under the applicable securities laws of each state or jurisdiction where
Members reside;
WHEREAS, for federal income tax purposes, the Exchange is intended to
qualify as a reorganization under the provisions of section 368(a)(1)(B) of the
United States Internal Revenue Code of 1986, as amended (the "Code"); and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Pathogenics, Tyrol Therapeutics and Members hereby agree as follows:
ARTICLE I
THE EXCHANGE
SECTION 1.01. The Exchange. Upon the terms and subject to the conditions
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set forth in Article VII, at the Effective Time (as defined below in Section
1.02), as a result of the Exchange, Tyrol Therapeutics will become a wholly
owned subsidiary of Pathogenics.
SECTION 1.02. Effective Time; Closing. As promptly as practicable and in
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no event later than the fifth business day following the satisfaction or, if
permissible, waiver of the conditions set forth in Article VII (or such other
date as may be agreed in writing by each of the parties hereto), the parties
hereto shall cause the Exchange to be consummated by Members delivering to
Pathogenics, or its representatives, the certificates, amended operating
agreement or other documents representing all of the outstanding Tyrol
Therapeutics Securities (as defined below in Section 2.02), duly endorsed so as
to make Pathogenics the sole owner thereof free and clear of all claims and
encumbrances except as specifically assumed by Pathogenics. The term "Effective
Time" means the date and time of the Closing (or such later time as may be
agreed in writing by each of the parties hereto) to be held at the offices of
Sonfield & Sonfield, Houston, Texas (or such other place as the parties may
agree).
SECTION 1.03. Effect of the Exchange. At the Effective Time, the effect
----------------------
of the Exchange shall be Tyrol Therapeutics becoming a wholly owned subsidiary
of Pathogenics.
SECTION 1.04. Directors and Officers. The sole officer and director of
----------------------
Pathogenics immediately prior to the Effective Time shall be Xxxxxxx X. Xxxxx
until his successor is duly elected or appointed and qualified. In any event,
he shall remain as a director for not less than one year after the Effective
Time.
ARTICLE II
DELIVERY OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Delivery of Securities. At the Effective Time, by virtue of
----------------------
the Exchange:
(a) 40,900,000 shares of common stock, $.001 par value, of Pathogenics
(the "Pathogenics Common Stock") shall be issued in exchange for all
outstanding equity interest of Tyrol Therapeutics (the "Pathogenics
Securities") issued and outstanding immediately prior to the Effective Time
(all such shares of Pathogenics Common Stock being herein referred to as
the "Pathogenics Securities" or the "Exchange Consideration"); and
(b) each Share owned by Pathogenics or any direct or indirect wholly
owned subsidiary of Pathogenics or any equity interest owned by Tyrol
Therapeutics immediately prior to the Effective Time shall be cancelled and
extinguished without any conversion thereof and no payment or distribution
shall be made with respect thereto.
SECTION 2.02. Exchange of Certificates. At the Closing, Members shall
------------------------
deliver to Pathogenics all certificates, amended operating agreement or other
documents ("Certificates") representing an equity interest of Tyrol Therapeutics
("Tyrol Therapeutics Securities") delivered to it (together with any transfer
tax stamps required by reason of the payment of the Exchange Consideration to a
person other than the registered holder of the Certificate surrendered),
together with such other customary documents as may reasonably be required by
Pathogenics, in exchange for the Exchange Consideration. Certificates
representing the Exchange Consideration shall be issued to the persons and in
the amounts described in Exhibit A. Any member of Tyrol Therapeutics whose
Certificates are not delivered at the Closing shall receive the Exchange
Consideration with respect to such Certificates upon delivery to Pathogenics
after the Closing of such Certificates and the other items required pursuant to
the first sentence of this Section 2.02.
SECTION 2.03. Transfer Books. At the Effective Time, the member transfer
--------------
books of Tyrol Therapeutics shall be closed and there shall be no further
registration of transfers of memberships thereafter on the records of Tyrol
Therapeutics. From and after the Effective Time, the holders of Certificates
representing Tyrol Therapeutics Securities outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Tyrol
Therapeutics Securities, except as otherwise provided in this Agreement or by
Law.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TYROL THERAPEUTICS
Except as set forth in this Agreement and disclosed in Exhibit B, Tyrol
Therapeutics hereby represents and warrants to Pathogenics that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of Tyrol
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Therapeutics and each subsidiary of Tyrol Therapeutics (the "Tyrol Therapeutics
Subsidiaries") is a limited liability company duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has all requisite power and to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, have not had, and could not reasonably be expected to have,
individually or in the aggregate, a Tyrol Therapeutics Material Adverse Effect
(as defined below). Each of Tyrol Therapeutics and Tyrol Therapeutics
Subsidiaries is duly qualified or licensed as a foreign entity to do business,
and is in good standing, in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its business makes
such qualification or licensing necessary, except for such failures to be so
qualified or licensed and in good standing that have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Tyrol
Therapeutics Material Adverse Effect. The term "Tyrol Therapeutics Material
Adverse Effect" means any change in or effect on the business of Tyrol
Therapeutics and Tyrol Therapeutics Subsidiaries that is materially adverse to
the financial condition or results of operations of Tyrol Therapeutics and Tyrol
Therapeutics Subsidiaries taken as a whole, except for any such changes or
effects resulting from or arising in connection with (i) this Agreement or the
transactions contemplated by this Agreement or the announcement hereof, (ii) any
changes in economic, regulatory or political conditions or (iii) any issue or
condition otherwise known to Tyrol Therapeutics prior to the date of this
Agreement.
SECTION 3.02. Articles of Organization and Operating Agreement. Tyrol
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Therapeutics has heretofore made available to Pathogenics a complete and correct
copy of the Articles of Organization and Operating Agreement of Tyrol
Therapeutics. Such Articles of Organization and Operating Agreement are in full
force and effect. Tyrol Therapeutics is not in violation of any of the
provisions of its Articles of Organization and Operating Agreement.
SECTION 3.03. Capitalization. Except as indicated on Exhibit A, all Tyrol
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Therapeutics Securities will be issued and outstanding and will be validly
issued, fully paid and non-assessable and (ii) no interests are reserved for
future issuance pursuant to Tyrol Therapeutics equity interests. All interests
of Tyrol Therapeutics Securities subject to issuance as aforesaid, upon issuance
on the terms and conditions specified in the instruments pursuant to which they
are issuable, will be duly authorized, validly issued, fully paid and
non-assessable. There are no outstanding contractual obligations of Tyrol
Therapeutics or any Tyrol Therapeutics Subsidiary to repurchase, redeem or
otherwise acquire any interests of Tyrol Therapeutics Securities or any equity
interest of any Tyrol Therapeutics Subsidiary. Each outstanding equity interest
of each Tyrol Therapeutics Subsidiary is duly authorized, validly issued, fully
paid and non-assessable and each such equity interest owned by Tyrol
Therapeutics or another Tyrol Therapeutics Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on Tyrol Therapeutics' or such other Tyrol Therapeutics
Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever, except where failure to own such interests free and clear would not,
individually or in the aggregate, have a Tyrol Therapeutics Material Adverse
Effect. There are no material outstanding contractual obligations of Tyrol
Therapeutics or any Tyrol Therapeutics Subsidiary to provide funds to, or make
any investment (in the form of a loan, capital contribution or otherwise) in,
any Tyrol Therapeutics Subsidiary or any other person.
SECTION 3.04. Authority Relative to This Agreement. Tyrol Therapeutics
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has all necessary power and authority to execute and deliver this Agreement and
to perform its obligations hereunder and to consummate the Exchange and the
other transactions contemplated by this Agreement. The execution and delivery
of this Agreement by Tyrol Therapeutics and the consummation by Tyrol
Therapeutics of the Exchange and the other transactions contemplated by this
Agreement have been duly and validly authorized by all necessary action and no
other proceedings on the part of Tyrol Therapeutics are necessary to authorize
this Agreement or to consummate the Exchange and the other transactions
contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by Tyrol Therapeutics and, assuming the due
authorization, execution and delivery by Tyrol Therapeutics, constitutes a
legal, valid and binding obligation of Tyrol Therapeutics, enforceable against
Tyrol Therapeutics in accordance with its terms.
SECTION 3.05. No Conflict and Consents. Except as described on Exhibit B,
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the execution and delivery of this Agreement by Tyrol Therapeutics does not, and
the performance of this Agreement by Tyrol Therapeutics will not, (i) conflict
with or violate the Articles of Organization and Operating Agreement of Tyrol
Therapeutics or any equivalent organizational documents of any Tyrol
Therapeutics Subsidiary, (ii) to the best knowledge of Tyrol Therapeutics after
inquiry, conflict with or violate any foreign or domestic law, statute,
ordinance, rule, regulation, order, judgment or decree ("Law") applicable to
Tyrol Therapeutics or any Tyrol Therapeutics Subsidiary or by which any property
or asset of Tyrol Therapeutics or any Tyrol Therapeutics Subsidiary is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any property or
asset of Tyrol Therapeutics or any Tyrol Therapeutics Subsidiary pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, except, with respect to
clause (iii), for any such conflicts, violations, breaches, defaults or other
occurrences that have not had, and could not reasonably be expected to have,
individually or in the aggregate, a Tyrol Therapeutics Material Adverse Effect,
and that could not reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
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SECTION 3.06. Permits; Compliance. Each of Tyrol Therapeutics and Tyrol
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Therapeutics Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity necessary for
Tyrol Therapeutics or any Tyrol Therapeutics Subsidiary to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the "Tyrol Therapeutics Permits"), except where the failure to have, or the
suspension or cancellation of, any of Tyrol Therapeutics Permits has not had,
and could not reasonably be expected to have, individually or in the aggregate,
a Tyrol Therapeutics Material Adverse Effect, and, as of the date of this
Agreement, no suspension or cancellation of any of Tyrol Therapeutics Permits is
pending or, to the knowledge of Tyrol Therapeutics, threatened, except where the
failure to have, or the suspension or cancellation of, any of Tyrol Therapeutics
Permits has not had, and could not reasonably be expected to have, individually
or in the aggregate, a Tyrol Therapeutics Material Adverse Effect.
SECTION 3.07. Absence of Certain Changes or Events. Since the date of its
------------------------------------
organization, except as contemplated by or as disclosed in this Agreement, Tyrol
Therapeutics has conducted its businesses only in the ordinary course and in a
manner consistent with past practice and, since such date, there has not been
(a) any material change by Tyrol Therapeutics in its accounting methods,
principles or practices, (b) any declaration, setting aside or payment of any
dividend or distribution in respect of the Tyrol Therapeutics Securities or any
redemption, purchase or other acquisition of any of Tyrol Therapeutics
Securities or (c) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any executive officers of Tyrol
Therapeutics, except in the ordinary course of business.
SECTION 3.08. Absence of Litigation. Except as set forth on Exhibit B, as
---------------------
of the date of this Agreement, there is no litigation, suit, claim, action,
proceeding or investigation pending or, to the knowledge of Tyrol Therapeutics,
threatened against Tyrol Therapeutics, or any property or asset of Tyrol
Therapeutics, before any court, arbitrator or governmental entity, domestic or
foreign, which (i) has had, or could reasonably be expected to have,
individually or in the aggregate, a material adverse effect on Tyrol
Therapeutics or (ii) seeks to delay or prevent the consummation of any other
material transaction contemplated by this Agreement. As of the date of this
Agreement, neither Tyrol Therapeutics nor any property or asset of Tyrol
Therapeutics is subject to any continuing order of, consent decree, settlement
agreement or other similar written agreement with, or, to the knowledge of Tyrol
Therapeutics, continuing investigation by, any governmental entity, or any
order, writ, judgment, injunction, decree, determination or award of any
governmental entity or arbitrator having, individually or in the aggregate, a
material adverse effect on Tyrol Therapeutics.
SECTION 3.09. Employee Benefit Plans . Tyrol Therapeutics and the Tyrol
----------------------
Therapeutics Subsidiaries presently do not have any employees. Tyrol
Therapeutics and Tyrol Therapeutics Subsidiaries presently do not, and have
never in the past, maintained or contributed to any employee benefit plan,
program, arrangement and contract (including, without limitation, any "employee
benefit plan", as defined in section 3(3) of ERISA).
SECTION 3.10. Contracts. (a) Tyrol Therapeutics has furnished to
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Pathogenics the following written contracts and agreements of Tyrol Therapeutics
(such contracts and agreements being "Material Contracts"):
(i) each contract and agreement for the purchase or lease of personal
property with any supplier or for the furnishing of services to Tyrol
Therapeutics that in each case involves annual payment in excess of
US$10,000;
(ii) all broker, exclusive dealing or exclusivity, distributor,
dealer, manufacturer's representative, franchise, agency, sales promotion
and market research agreements involving annual payments in excess of
US$10,000, to which Tyrol Therapeutics is a party or any other material
contract that compensates any person other than employees based on any
sales by Tyrol Therapeutics;
(iii) all leases and subleases of real property;
(iv) all contracts and agreements relating to indebtedness for
borrowed money other than trade indebtedness of Tyrol Therapeutics;
(v) all contracts and agreements involving annual payments in
excess of $10,000 with any Governmental Entity to which Tyrol
Therapeutics is a party; and
(vi) any other material agreement of Tyrol Therapeutics which is
terminable upon or prohibits a change of ownership or control of Tyrol
Therapeutics.
4
(b) Each Material Contract: (i) is valid and binding on Tyrol
Therapeutics and, to the knowledge of Tyrol Therapeutics, on the other
parties thereto, and is in full force and effect, and (ii) upon
consummation of the transactions contemplated by this Agreement, shall
continue in full force and effect without material penalty or other
material adverse consequence. Tyrol Therapeutics is not in material breach
of, or material default under, any Material Contract and, to the knowledge
of Tyrol Therapeutics, no other party to any Material Contract is in
material breach thereof or material default thereunder.
SECTION 3.11. Trademarks, Patents and Copyrights. Except as would not,
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individually or in the aggregate, have a Tyrol Therapeutics Material Adverse
Effect, Tyrol Therapeutics and Tyrol Therapeutics Subsidiaries own or possess
adequate licenses or other valid rights to use all patents, patent rights,
trademarks, trademark rights, trade names, trade dress, trade name rights,
copyrights, service marks, trade secrets, applications for trademarks and for
service marks, know-how and other proprietary rights and information used or
held for use in connection with the business of Tyrol Therapeutics and Tyrol
Therapeutics Subsidiaries as currently conducted, and Tyrol Therapeutics has no
knowledge of any assertion or claim challenging the validity of any of the
foregoing. To the knowledge of Tyrol Therapeutics, the conduct of the business
of Tyrol Therapeutics and Tyrol Therapeutics Subsidiaries as currently conducted
does not and will not conflict in any way with any patent, patent right,
license, trademark, trademark right, trade dress, trade name, trade name right,
service xxxx or copyright of any third party that has had, or could reasonably
be expected to have, individually or in the aggregate, a Tyrol Therapeutics
Material Adverse Effect. To the knowledge of Tyrol Therapeutics, there are no
infringements of any proprietary rights owned by or licensed by or to Tyrol
Therapeutics or any Tyrol Therapeutics Subsidiary that have had, or could
reasonably be expected to have, individually or in the aggregate, a Tyrol
Therapeutics Material Adverse Effect.
SECTION 3.12. Taxes. Except as for such matters that could not reasonably
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be expected to have a Tyrol Therapeutics Material Adverse Effect, (a) Tyrol
Therapeutics and each of Tyrol Therapeutics Subsidiaries have timely filed or
will timely file all returns and reports required to be filed by them with any
taxing authority with respect to Taxes for any period ending on or before the
Effective Time, taking into account any extension of time to file granted to or
obtained on behalf of Tyrol Therapeutics and Tyrol Therapeutics Subsidiaries,
(b) all Taxes shown to be payable on such returns or reports that are due prior
to the Effective Time have been paid or will be paid, (c) as of the date of this
Agreement, no deficiency for any material amount of Tax has been asserted or
assessed by a taxing authority against Tyrol Therapeutics or any of Tyrol
Therapeutics Subsidiaries and (d) Tyrol Therapeutics and each of Tyrol
Therapeutics Subsidiaries have provided adequate reserves in their financial
statements for any Taxes that have not been paid in accordance with generally
accepted accounting principles, whether or not shown as being due on any
returns. As used in this Agreement, "Taxes" shall mean any and all taxes, fees,
levies, duties, tariffs, imposts and other charges of any kind (together with
any and all interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes;
license, registration and documentation fees; and customers' duties, tariffs and
similar charges.
SECTION 3.13. Brokers. No broker, finder or investment banker is entitled
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to any brokerage, finder's or other fee or commission in connection with the
Exchange or the other transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Tyrol Therapeutics.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PATHOGENICS
Except as set forth in this Agreement and disclosed in Exhibit C,
Pathogenics hereby represents and warrants to Tyrol Therapeutics that:
5
SECTION 4.01. Organization and Qualification; Subsidiaries. Each of
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Pathogenics and each subsidiary of Pathogenics (the "Pathogenics Subsidiaries")
is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all corporate
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or in good
standing or to have such corporate power, authority and governmental approvals
have not had, and could not reasonably be expected to have, individually or in
the aggregate, a Pathogenics Material Adverse Effect (as defined below). Each
of Pathogenics and Pathogenics Subsidiaries is duly qualified or licensed as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that have not had, and could not reasonably be expected to have,
individually or in the aggregate, a Pathogenics Material Adverse Effect. The
term "Pathogenics Material Adverse Effect" means any change in or effect on the
business of Pathogenics and Pathogenics Subsidiaries that is materially adverse
to the financial condition or results of operations of Pathogenics and
Pathogenics Subsidiaries taken as a whole, except for any such changes or
effects resulting from or in connection with (i) this Agreement or the
transactions contemplated by this Agreement or the announcement hereof, (ii) any
changes in economic, regulatory or political conditions or (iii) any issue or
condition otherwise known to Tyrol Therapeutics prior to the date of this
Agreement.
SECTION 4.02. Certificate of Incorporation and By-Laws. Pathogenics has
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heretofore made available to Tyrol Therapeutics a complete and correct copy of
the Certificate of Incorporation and the By-Laws of Pathogenics. Such
Certificates of Incorporation and By-Laws are in full force and effect.
Pathogenics is not violation of any of the provisions of its Certificate of
Incorporation or By-Laws.
SECTION 4.03. Capitalization. The authorized capital stock of Pathogenics
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consists of (a) 110,000,000 shares of Pathogenics Common Stock, $.001 par value,
and (b) 10,000,000 shares of preferred stock, $.001 par value. As of the date
of the spin-off (as described in Section 6.12, (i) 603,830 shares of Pathogenics
Common Stock will be issued and outstanding, all of which will be validly
issued, fully paid and non-assessable, (ii) no shares of Pathogenics Common
Stock are held in the treasury of Pathogenics or by Pathogenics Subsidiaries and
(iii) no shares are reserved for future issuance pursuant to stock options.
There are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
Pathogenics or any Pathogenics Subsidiary or obligating Pathogenics or any
Pathogenics Subsidiary to issue or sell any shares of capital stock of, or other
equity interests in, Pathogenics or any Pathogenics Subsidiary. All shares of
Pathogenics Common Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and
non-assessable. There are no outstanding contractual obligations of Pathogenics
or any Pathogenics Subsidiary to repurchase, redeem or otherwise acquire any
shares of Pathogenics Common Stock or any capital stock of any Pathogenics
Subsidiary. Each outstanding share of capital stock of each Pathogenics
Subsidiary is duly authorized, validly issued, fully paid and non-assessable and
each such share owned by Pathogenics or another Pathogenics Subsidiary is free
and clear of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on Pathogenics's or such other
Pathogenics Subsidiary's voting rights, charges and other encumbrances of any
nature whatsoever, except where failure to own such shares free and clear would
not, individually or in the aggregate, have a Pathogenics Material Adverse
Effect. There are no material outstanding contractual obligations of
Pathogenics or any Pathogenics Subsidiary to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
Pathogenics Subsidiary or any other person. The shares of Pathogenics Common
Stock to be issued pursuant to the Exchange in accordance with Section 2.01 (i)
will be duly authorized, validly issued, fully paid and non-assessable and not
subject to preemptive rights created by statute, Pathogenics's Certificate of
Incorporation or By-Laws or any agreement to which Pathogenics is a party or is
bound and (ii) will, when issued, be exempt from registration under the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act") and the Securities Exchange Act of
1934, as amended (together with the rules and regulations promulgated
thereunder, the "Exchange Act") and exempt from registration under applicable
Blue Sky Laws. The shares of Pathogenics Common Stock to be issued pursuant to
the Exchange in accordance with Section 2.01 will bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates for such Pathogenics Securities):
"The Securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The Securities may
not be sold, transferred or assigned in the absence of an effective
registration statement for the Securities under said Act, or an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, that registration is not required under said Act."
SECTION 4.04. Authority Relative to This Agreement. Pathogenics has all
------------------------------------
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the Exchange and the
other transactions contemplated by this Agreement. The execution and delivery
of this Agreement by Pathogenics and the consummation by Pathogenics of the
Exchange and the other transactions contemplated by this Agreement have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Pathogenics are necessary to authorize this
Agreement or to consummate the Exchange and the other transactions contemplated
by this Agreement. This Agreement has been duly and validly executed and
delivered by Pathogenics and, assuming the due authorization, execution and
delivery by Tyrol Therapeutics, constitutes a legal, valid and binding
obligation of Pathogenics, enforceable against Pathogenics in accordance with
its terms.
SECTION 4.05. No Conflict and Consents. (a) The execution and delivery
------------------------
of this Agreement by Pathogenics does not, and the performance of this Agreement
by Pathogenics will not, (i) conflict with or violate the Certificate of
Incorporation or By-laws of Pathogenics, (ii) conflict with or violate any Law
applicable to Pathogenics or any Pathogenics Subsidiary or by which any property
or asset of Pathogenics or any Pathogenics Subsidiary is bound or affected, or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any right of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or other encumbrance on any property or asset of
Pathogenics or any Pathogenics Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clause (iii), for any such
conflicts, violations, breaches, defaults, or other occurrences that have not
had, and could not reasonably be expected to have, individually or in the
aggregate, a Pathogenics Material Adverse Effect, and that could not reasonably
be expected to prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
SECTION 4.06. Permits; Compliance. Each of Pathogenics and Pathogenics
-------------------
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for Pathogenics or any
Pathogenics Subsidiary to own, lease and operate its properties or to carry on
its business as it is now being conducted (the "Pathogenics Permits"), except
where the failure to have, or the suspension or cancellation of, any of
Pathogenics Permits has not had, and could not reasonably be expected to have,
individually or in the aggregate, a Pathogenics Material Adverse Effect, and, as
of the date of this Agreement, no suspension or cancellation of any of
Pathogenics Permits is pending or, to the knowledge of Pathogenics, threatened,
except where the failure to have, or the suspension or cancellation of, any of
Pathogenics Permits has not had, and could not reasonably be expected to have,
individually or in the aggregate, a Pathogenics Material Adverse Effect.
SECTION 4.07. Absence of Certain Changes or Events. Since the date of the
------------------------------------
filing of the Annual Report on Form 10-KSB (the "Annual Report"), except as
contemplated by or as disclosed in this Agreement, or as disclosed in any
amendment to the Annual Report, Pathogenics and Pathogenics Subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been (a) any
Pathogenics Material Adverse Effect, (b) any material change by Pathogenics in
its accounting methods, principles or practices, (c) any declaration, setting
aside or payment of any dividend or distribution in respect of the Shares or any
redemption, purchase or other acquisition of any of Pathogenics's securities or
(d) any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any executive officers of
Pathogenics or any Pathogenics Subsidiary, except in the ordinary course of
business consistent with past practice.
SECTION 4.08. Absence of Litigation. As of the date of this Agreement,
---------------------
there is no litigation, suit, claim, action, proceeding or investigation pending
or, to the knowledge of Pathogenics, threatened against Pathogenics or any
Pathogenics Subsidiary, or any property or asset of Pathogenics or any
Pathogenics Subsidiary, before any court, arbitrator or Governmental Entity,
domestic or foreign, which (i) has had, or could reasonably be expected to have,
individually or in the aggregate, a Pathogenics Material Adverse Effect or (ii)
seeks to delay or prevent the consummation of the Exchange or any other material
transaction contemplated by this Agreement. As of the date of this Agreement,
neither Pathogenics nor any Pathogenics Subsidiary nor any property or asset of
Pathogenics or any Pathogenics Subsidiary is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with,
or, to the knowledge of Pathogenics, continuing investigation by, any
Governmental Entity, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity or arbitrator having,
individually or in the aggregate, a Pathogenics Material Adverse Effect.
7
SECTION 4.09. Employee Benefit Plans. Pathogenics and Pathogenics
----------------------
Subsidiary presently do not have any employees. Pathogenics and Pathogenics
Subsidiary presently do not, and have never in the past, maintained or
contributed to any employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
section 3(3) of ERISA).
SECTION 4.11. Contracts. (a) Pathogenics has furnished Tyrol Therapeutics
---------
each of the following written contracts and agreements of Pathogenics (such
contracts and agreements being "Material Contracts"):
(i) each contract and agreement for the purchase or lease of
personal property with any supplier or for the furnishing of services
to Pathogenics;
(ii) all broker, exclusive dealing or exclusivity, distributor,
dealer, manufacturer's representative, franchise, agency, sales
promotion and market research agreements, to which Pathogenics is a
party or any other material contract that compensates any person other
than employees based on any sales by Pathogenics;
(iii) all leases and subleases of real property;
(iv) all contracts and agreements relating to indebtedness for
borrowed money other than trade indebtedness of Pathogenics;
(v) all contracts and agreements involving annual payments in
excess of $100,000 with any Governmental Entity to which Pathogenics
is a party; and
(iv) any other material agreement of Pathogenics which is
terminable upon or prohibits a change of ownership or control of
Pathogenics
(b) Each Material Contract: (i) is valid and binding on Pathogenics
and, to the knowledge of Pathogenics, on the other parties thereto, and is
in full force and effect, and (ii) upon consummation of the transactions
contemplated by this Agreement, shall continue in full force and effect
without material penalty or other material adverse consequence. Pathogenics
is not in material breach of, or material default under, any Material
Contract and, to the knowledge of Pathogenics, no other party to any
Material Contract is in material breach thereof or material default
thereunder.
SECTION 4.12. Trademarks, Patents and Copyrights. Except as would not,
----------------------------------
individually or in the aggregate, have a Pathogenics Material Adverse Effect,
Pathogenics and Pathogenics Subsidiaries own or possess adequate licenses or
other valid rights to use all patents, patent rights, trademarks, trademark
rights, trade names, trade dress, trade name rights, copyrights, service marks,
trade secrets, applications for trademarks and for service marks, know-how and
other proprietary rights and information used or held for use in connection with
the business of Pathogenics and Pathogenics Subsidiaries as currently conducted,
and Pathogenics has no knowledge of any assertion or claim challenging the
validity of any of the foregoing. To the knowledge of Pathogenics, the conduct
of the business of Pathogenics and Pathogenics Subsidiaries as currently
conducted does not and will not conflict in any way with any patent, patent
right, license, trademark, trademark right, trade dress, trade name, trade name
right, service xxxx or copyright of any third party that has had, or could
reasonably be expected to have, individually or in the aggregate, a Pathogenics
Material Adverse Effect. To the knowledge of Pathogenics, there are no
infringements of any proprietary rights owned by or licensed by or to
Pathogenics or any Pathogenics Subsidiary that have had, or could reasonably be
expected to have, individually or in the aggregate, a Pathogenics Material
Adverse Effect.
8
SECTION 4.13. Taxes. Except for such matters that would not have a
-----
Pathogenics Material Adverse Effect, (a) Pathogenics and each of Pathogenics
Subsidiaries have timely filed or will timely file all returns and reports
required to be filed by them with any taxing authority with respect to Taxes for
any period ending on or before the Effective Time, taking into account any
extension of time to file granted to or obtained on behalf of Pathogenics and
Pathogenics Subsidiaries, (b) all Taxes shown to be payable on such returns or
reports that are due prior to the Effective Time have been paid or will be paid,
(c) as of the date of this Agreement, no deficiency for any material amount of
Tax has been asserted or assessed by a taxing authority against Pathogenics or
any of Pathogenics Subsidiaries and (d) Pathogenics and each of Pathogenics
Subsidiaries have provided adequate reserves in their financial statements for
any Taxes that have not been paid in accordance with generally accepted
accounting principles, whether or not shown as being due on any returns.
SECTION 4.14. Accounting and Tax Matters. To the knowledge of
--------------------------
Pathogenics, neither Pathogenics nor any of its affiliates has taken or agreed
to take any action that would prevent the Exchange from constituting a
transaction qualifying under Section 368(a) of the Code. Pathogenics is not
aware of any agreement, plan or other circumstance that would prevent the
Exchange from qualifying under Section 368(a) of the Code.
SECTION 4.15. Brokers. No broker, finder or investment banker is entitled
-------
to any brokerage, finder's or other fee or commission in connection with the
Exchange or the other transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Pathogenics.
ARTICLE V
CONDUCT OF BUSINESSES PENDING THE EXCHANGE
SECTION 5.01. Conduct of Business by Tyrol Therapeutics Pending the
-----------------------------------------------------
Exchange. Tyrol Therapeutics agrees that, between the date of this Agreement
--------
and the Effective Time, except as contemplated by any other provision of this
Agreement, unless Pathogenics shall otherwise consent in writing:
(a) the businesses of Tyrol Therapeutics and Tyrol Therapeutics
Subsidiaries shall be conducted only in, and Tyrol Therapeutics and Tyrol
Therapeutics Subsidiaries shall not take any action except in, the ordinary
course of business and in a manner consistent with past practice; and
(b) Tyrol Therapeutics shall use its reasonable best efforts to
preserve substantially intact its business organization, to keep available
the services of the current officers and consultants of Tyrol Therapeutics
and Tyrol Therapeutics Subsidiaries and to preserve the current
relationships of Tyrol Therapeutics and Tyrol Therapeutics Subsidiaries
with customers, suppliers and other persons with which Tyrol Therapeutics
or any Tyrol Therapeutics Subsidiary has significant business relations.
SECTION 5.02. Conduct of Business by Pathogenics Pending the Exchange.
-------------------------------------------------------
Pathogenics agrees that, between the date of this Agreement and the Effective
Time, except as contemplated by any other provision of this Agreement, unless
Tyrol Therapeutics shall otherwise consent in writing (such consent not to be
unreasonably withheld or delayed):
(a) the business of Pathogenics and Pathogenics Subsidiaries shall be
conducted only in, and Pathogenics and Pathogenics Subsidiaries shall not
take any action except in the ordinary course of business and in a manner
consistent with past practice; and
(b) Pathogenics shall use its reasonable best efforts to preserve
substantially intact its business organization, to keep available the
services of the current officers, employees and consultants of Pathogenics
and Pathogenics Subsidiaries and to preserve the current relationships of
Pathogenics and Pathogenics Subsidiaries with customers, suppliers and
other persons with which Pathogenics or any Pathogenics Subsidiary has
significant business relations.
9
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Access to Information; Confidentiality. Except as required
--------------------------------------
pursuant to any confidentiality agreement or similar agreement or arrangement to
which Pathogenics or Tyrol Therapeutics or any of their respective subsidiaries
is a party or pursuant to applicable Law, from the date of this Agreement to the
Effective Time, Pathogenics and Tyrol Therapeutics shall (and shall cause their
respective subsidiaries to): (i) provide to the other (and its officers,
directors, employees, accountants, consultants, legal counsel, agents and other
representatives, collectively, "Representatives") access at reasonable times
upon prior notice to the officers, employees, agents, properties, offices and
other facilities of the other and its subsidiaries and to the books and records
thereof and (ii) furnish promptly such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects of the
other party and its subsidiaries as the other party or its Representatives may
reasonably request.
SECTION 6.02. Obligations of Pathogenics. Pathogenics shall take all
--------------------------
action necessary to cause Pathogenics to perform its obligations under this
Agreement and to consummate the Exchange on the terms and subject to the
conditions set forth in this Agreement.
SECTION 6.03. Obligations of Tyrol Therapeutics. Tyrol Therapeutics shall
---------------------------------
take all action necessary to cause Tyrol Therapeutics to perform its obligations
under this Agreement and to consummate the Exchange on the terms and subject to
the conditions set forth in this Agreement.
SECTION 6.04. Directors and Officers. Immediately after the Effective
----------------------
Time, the holders of a majority of the Pathogenics Securities shall elect the
officers and directors named in Exhibit G to serve until their respective
successors are duly elected or appointed and qualified.
SECTION 6.05. Change of Corporate Name. New management of Pathogenics may
------------------------
take the appropriate corporate action to change the name of Pathogenics to any
appropriate name selected by new management of Pathogenics.
SECTION 6.06. Application to Standard & Poor's. New management of Tyrol
--------------------------------
Therapeutics shall promptly make application to the Standard & Poor's editorial
board to approve your corporation for a full description in Standard & Poor's
Standard Corporation Manual, Standard & Poor's Daily News Section, coverage of
Pathogenics as part of the S&P Market Access Program and coverage on Standard &
Poor's Internet Site, xxx.xxxxxxxxxxxxxx.xxx, as well as S&P Marketscope and the
S&P Stock Guide database.
SECTION 6.07. Further Action; Consents; Filings. Upon the terms and
---------------------------------
subject to the conditions hereof, each of the parties hereto shall use its
reasonable best efforts to (i) take, or cause to be taken, all appropriate
action and do, or cause to be done, all things necessary, proper or advisable
under applicable law or otherwise to consummate and make effective the Exchange
and the other transactions contemplated by this Agreement, (ii) obtain from
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by Pathogenics or Tyrol
Therapeutics or any of their subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the Exchange
and the other transactions contemplated by this Agreement and (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement, the Exchange and the other transactions contemplated
by this Agreement required under (A) the Exchange Act and the Securities Act and
the rules and regulations thereunder and any other applicable federal or state
securities laws and (B) any other applicable Law. The parties hereto shall
cooperate with each other in connection with the making of all such filings,
including by providing copies of all such documents to the non-filing party and
its advisors prior to filing and, if requested, by accepting all reasonable
additions, deletions or changes suggested in connection therewith.
SECTION 6.08. Agreement to Deliver Tyrol Therapeutics Securities. The
--------------------------------------------------
owners of the Tyrol Therapeutics Securities, Members agree to vote their Tyrol
Therapeutics Securities in favor of approving this Agreement and the
transactions contemplated hereby and not to approve or support any competing
transaction,
10
SECTION 6.09. Plan of Exchange. This Agreement is intended to constitute
----------------
a "plan of reorganization" within the meaning of section 1.368-2(g) of the
income tax regulations promulgated under the Code. From and after the date of
this Agreement and until the Effective Time, each party hereto shall use its
reasonable best efforts to cause the Exchange to qualify, and will not knowingly
take any action, cause any action to be taken, fail to take any action or cause
any action to fail to be taken which action or failure to act could prevent the
Exchange from qualifying, as a reorganization under the provisions of section
368(a) of the Code. Following the Effective Time, neither Pathogenics nor any
of its affiliates shall knowingly take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken, which action or
failure to act could cause the Exchange to fail to qualify as a reorganization
under section 368(a) of the Code.
SECTION 6.10. Public Announcements. The initial press release relating to
--------------------
this Agreement shall be a joint press release the text of which has been agreed
to by each of Pathogenics and Tyrol Therapeutics.
SECTION 6.11. Conveyance Taxes. Pathogenics shall be liable for and shall
----------------
hold Tyrol Therapeutics and the holders of Tyrol Therapeutics Securities who are
holders of Tyrol Therapeutics Securities immediately prior to the Effective Time
harmless against any real property transfer or gains, sales, use, transfer,
value added, stock transfer or stamp taxes, any transfer, recording
registration, and other fees, and any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement. The parties
acknowledge that this Section 6.14 is specifically intended to benefit the
holders of Tyrol Therapeutics Securities who are holders of Tyrol Therapeutics
Securities immediately prior to the Effective Time.
SECTION 6.12. Spin-Off of Pathogenics Common Stock. As soon as
------------------------------------
practicable after the Effective Time, Pathogenics shall cause shares of its
common stock held by Vulcan Corporation (formerly GS Financial Services, Inc.)
to be distributed to the shareholders of Vulcan Corporation in the ratio of one
Pathogenics share for each of the 603,830 issued and outstanding shares of
Vulcan Corporation. The spin-off shares will be distributed without
registration under the Securities Act of 1933 in reliance on Staff Legal
Bulletin No. 4 published by the Securities and Exchange Commission Division of
Corporation Finance on September 16, 1997.
ARTICLE VII
CONDITIONS TO THE EXCHANGE
SECTION 7.01. Conditions to the Obligations of Each Party. The
-------------------------------------------
obligations of Tyrol Therapeutics, Pathogenics and Members to consummate the
Exchange are subject to the satisfaction or waiver (where permissible) of the
following conditions:
(a) this Agreement and the issuance of the Exchange Consideration
pursuant to the terms of the Exchange, as the case may be, contemplated
hereby shall have been approved and adopted by the requisite affirmative
vote of (i) the Members of Tyrol Therapeutics under the laws of its
jurisdiction of organization and Tyrol Therapeutics' Articles of
Organization, and (ii) the board of directors of Pathogenics, the laws of
its jurisdiction of organization and Pathogenics's Certificate of
Incorporation;
(b) no Governmental Entity or court of competent jurisdiction located
or having jurisdiction in the United States shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, judgment,
decree, executive order or award (an "Order") which is then in effect and
has the effect of making the Exchange illegal or otherwise prohibiting
consummation of the Exchange; and
(c) all consents, approvals and authorizations legally required to be
obtained to consummate the Exchange shall have been obtained from and made
with all Governmental Entities.
SECTION 7.02. Conditions to the Obligations of Pathogenics. The
--------------------------------------------
obligations of Pathogenics to consummate the Exchange are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions:
11
(a) to the best of Tyrol Therapeutics' knowledge and belief, each of
the representations and warranties of Tyrol Therapeutics contained in this
Agreement shall be true and correct as of the Effective Time as though made
on and as of the Effective Time, except where failure to be so true and
correct would not have a Tyrol Therapeutics Material Adverse Effect, and
except that those representations and warranties which address matters only
as of a particular date shall remain true and correct as of such date,
except where failure to be so true and correct would not have a Tyrol
Therapeutics Material Adverse Effect, and Pathogenics shall have received a
certificate of the Managing Member of Tyrol Therapeutics substantially in
the form of Exhibit D to such effect;
(b) Tyrol Therapeutics shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time, except where the
failure to so comply would not have a Tyrol Therapeutics Material Adverse
Effect;
(c) Pathogenics shall have received an investment representation from
each Tyrol Therapeutics Members substantially in the form of Exhibit F;
(d) The consummation of the transactions contemplated by this
Agreement shall have been approved at or before the Closing by the
affirmative vote of the members of not less than a majority of Tyrol
Therapeutics Securities, and shall have received any other member approval
necessary to the consummation of the transactions contemplated by this
Agreement;
(e) Pathogenics shall have received on the Closing Date an opinion,
dated the Closing Date, of counsel for Tyrol Therapeutics in form and
substance satisfactory to counsel for Pathogenics, to the effect that:
(i) Tyrol Therapeutics is a limited liability company validly
existing and in good standing under the laws of its jurisdiction of
organization with all requisite power and authority to own, lease,
license, and use their respective properties and assets and to carry
on the business in which each is now engaged.
(ii) All necessary proceedings of Tyrol Therapeutics have been
duly taken to authorize the execution, delivery, and performance of
this Agreement by Tyrol Therapeutics.
(iii) Tyrol Therapeutics has all requisite power and authority to
execute, deliver, and perform this Agreement, and this Agreement has
been duly authorized, executed, and delivered by Tyrol Therapeutics,
constitutes the legal, valid, and binding obligation of Tyrol
Therapeutics, and (subject to applicable bankruptcy, insolvency, and
other laws affecting the enforceability of creditors' rights
generally) is enforceable as to Tyrol Therapeutics in accordance with
its terms.
(iv) The execution, delivery, and performance of this Agreement
by Tyrol Therapeutics will not violate or result in a breach of any
term of Tyrol Therapeutics' Articles of Organization or Operating
Agreement; and the execution, delivery, and performance of this
Agreement by Tyrol Therapeutics will not violate, result in a breach
of, conflict with, or (with or without the giving of notice or the
passage of time or both) entitle any party to terminate or call a
default under any terms of any agreement to which Tyrol Therapeutics
are a party.
(v) After reasonable investigation, such counsel has no actual
knowledge of any consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any
federal, state, local, or other governmental authority or any court or
other tribunal which is required of Tyrol Therapeutics for the
execution, delivery, or performance of this Agreement by Tyrol
Therapeutics.
(vi) After reasonable investigation, such counsel has no actual
knowledge of any litigation, arbitration, governmental or other
proceeding (formal or informal), or investigation pending or
threatened with respect to Tyrol Therapeutics, or any of its business,
properties, or assets that (i) can reasonably be expected to result in
any materially adverse change in the financial condition, results of
operations, business, properties, liabilities, or future prospects of
Tyrol Therapeutics taken as a whole or (ii) seeks to prohibit or
otherwise challenge the consummation of the transactions contemplated
by this Agreement, or to obtain substantial damages with respect
thereto, except as disclosed in this Agreement.
12
(vii) The consummation of the transactions contemplated by this
Agreement has been approved at or before the Closing by the holders of
Tyrol Therapeutics' Securities, and has received any other member
approval necessary to the consummation of the transactions
contemplated by this Agreement.
In giving such opinions counsel may state that their opinion and
belief are based upon their participation in the preparation of the
Agreement and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but is without independent check or verification except as
specified.
SECTION 7.03. Conditions to the Obligations of Tyrol Therapeutics. The
---------------------------------------------------
obligations of Tyrol Therapeutics to consummate the Exchange are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions:
(a) each of the representations and warranties of Pathogenics
contained in this Agreement shall be true and correct as of the Effective
Time, as though made on and as of the Effective Time, except where the
failure to be so true and correct would not have a Pathogenics Material
Adverse Effect, and except that those representations and warranties which
address matters only as of a particular date shall remain true and correct
as of such date, except where the failure to be so true and correct would
not have a Pathogenics Material Adverse Effect, and Tyrol Therapeutics
shall have received a certificate of the Chief Executive Officer or Chief
Financial Officer of Pathogenics substantially in the form of Exhibit E to
such effect;
(b) Pathogenics shall have performed or complied with all agreements
and covenants required by this Agreement to be performed or complied with
by it on or prior to the Effective Time, except where the failure to comply
would not have a Pathogenics Material Adverse Effect;
(c) Tyrol Therapeutics shall have received on the Closing Date an
opinion, dated the Closing Date, of counsel for Pathogenics in form and
substance satisfactory to counsel for Tyrol Therapeutics, to the effect
that:
(i) Pathogenics is a corporations validly existing and in good
standing under the laws of its jurisdiction of organization with all
requisite power and authority to own, lease, license, and use their
respective properties and assets and to carry on the business in which
each is now engaged.
(ii) All necessary proceedings of Pathogenics have been duly
taken to authorize the execution, delivery, and performance of this
Agreement by Pathogenics.
(iii) Pathogenics have all requisite corporate power and
authority to execute, deliver, and perform this Agreement, and this
Agreement has been duly authorized, executed, and delivered by
Pathogenics, constitutes the legal, valid, and binding obligation of
Pathogenics, and (subject to applicable bankruptcy, insolvency, and
other laws affecting the enforceability of creditors' rights
generally) is enforceable as to Pathogenics in accordance with its
terms.
(iv) The execution, delivery, and performance of this Agreement
by Pathogenics will not violate or result in a breach of any term of
Pathogenics's certificate of incorporation or by-laws; and the
execution, delivery, and performance of this Agreement by Pathogenics
will not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle
any party to terminate or call a default under any terms of any
agreement to which Pathogenics is a party.
13
(v) After reasonable investigation, such counsel has no actual
knowledge of any consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any
federal, state, local, or other governmental authority or any court or
other tribunal which is required of Pathogenics for the execution,
delivery, or performance of this Agreement by Pathogenics.
(vi) After reasonable investigation, such counsel has no actual
knowledge of any litigation, arbitration, governmental or other
proceeding (formal or informal), or investigation pending or
threatened with respect to Pathogenics, or any of their respective
business, properties, or assets that (i) can reasonably be expected to
result in any materially adverse change in the financial condition,
results of operations, business, properties, liabilities, or future
prospects of Pathogenics taken as a whole or (ii) seeks to prohibit or
otherwise challenge the consummation of the transactions contemplated
by this Agreement, or to obtain substantial damages with respect
thereto, except as disclosed in this Agreement.
(vii) the Shares to be issued by Pathogenics hereunder have been
duly authorized and, when issued and when delivered to Tyrol
Therapeutics Members as provided by this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights;
In giving such opinions counsel may state that their opinion and belief are
based upon their participation in the preparation of the Agreement and any
amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but is without
independent check or verification except as specified.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the
-----------
Exchange and the other transactions contemplated by this Agreement may be
abandoned at any time prior to the Effective Time, notwithstanding any requisite
approval and adoption of this Agreement and the transactions contemplated by
this Agreement, as follows:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of Pathogenics and Tyrol Therapeutics;
(b) by either Pathogenics or Tyrol Therapeutics if the Effective
Time shall not have occurred on or before February 28, 2005 provided,
however, that the right to terminate this Agreement under this Section
8.01(b) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Effective Time to occur on or before such date;
(c) there shall be any Order which is final and non-appealable
preventing the consummation of the Exchange;
(d) by Pathogenics upon a breach of any material representation,
warranty, covenant or agreement on the part of Tyrol Therapeutics set
forth in this Agreement, or if any representation or warranty of Tyrol
Therapeutics shall have become untrue, in either case such that the
conditions set forth in Section 7.02(a) and Section 7.02(b) would not
be satisfied ("Terminating Tyrol Therapeutics Breach"); provided,
however, that, if such Terminating Tyrol Therapeutics Breach is
curable by Tyrol Therapeutics through the exercise of its best efforts
and for so long as Tyrol Therapeutics continues to exercise such best
efforts, Pathogenics may not terminate this Agreement under this
Section 8.01(d).
(e) by Tyrol Therapeutics upon a breach of any material
representation, warranty, covenant or agreement on the part of
Pathogenics set forth in this Agreement, or if any representation or
warranty of Pathogenics shall have become untrue, in either case such
that the conditions set forth in Section 7.03(a) and Section 7.03(b)
would not be satisfied ("Terminating Pathogenics Breach"); provided,
however, that, if such Terminating Tyrol Therapeutics Breach is
curable by Pathogenics through the exercise of its best efforts and
for so long as Pathogenics continues to exercise such best efforts,
Tyrol Therapeutics may not terminate this Agreement under this Section
8.01(e).
14
SECTION 8.02. Effect of Termination. Except as provided in Section 9.01,
---------------------
in the event of termination of this Agreement pursuant to Section 8.01, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of Pathogenics or Tyrol Therapeutics or any of their
respective officers or directors, and all rights and obligations of each party
hereto shall cease, provided, however, that nothing herein shall relieve any
party from liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the parties
---------
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after the
approval of this Agreement by the members of Tyrol Therapeutics, no amendment
may be made which would reduce the amount or change the type of consideration
into which each Share shall be converted upon consummation of the Exchange.
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any party
------
hereto may (a) extend the time for the performance of any obligation or other
act of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto,
and (c) waive compliance with any agreement or condition contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
SECTION 8.05. Expenses. All Expenses (as defined below) incurred in
--------
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses, whether or not the
Exchange or any other transaction is consummated. "Expenses" as used in this
Agreement shall include all reasonable out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates) incurred
by a party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement and all
other matters related to the closing of the Exchange and the other transactions
contemplated by this Agreement.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements.
----------------------------------------------------------
The representations, warranties and agreements in this Agreement and in any
certificate delivered pursuant hereto shall terminate at the Effective Time or
upon the termination of this Agreement pursuant to Section 8.01, as the case may
be, except that the agreements set forth in Articles I and II and Sections 6.01,
6.04, 6.05, 6.06 and this Article IX shall survive the Effective Time and those
set forth in Sections 8.02 and 8.05 and this Article IX shall survive
termination.
SECTION 9.02. Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, facsimile, telegram or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.02):
15
if to Pathogenics
Pathogenics, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
Attn: Xxxxxxx X. Xxxxx, President
with a copy to (which shall not constitute notice to such party):
Xxxxxx X. Xxxxxxxx, Xx., Esq.
Sonfield & Sonfield
000 Xxxxx Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
if to Tyrol Therapeutics:
Tyrol Therapeutics, LLC
00 Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx, Esq., Managing Member
Facsimile: (000) 000-0000
SECTION 9.03. Certain Definitions. For purposes of this Agreement, the
-------------------
term:
(a) "affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with such specified person;
(b) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(c) "knowledge" means, with respect to any matter in question, that
the executive officers of Tyrol Therapeutics or Pathogenics, as the case
may be, have actual knowledge of such matter;
(d) "person" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person"
as defined in section 13(d)(3) of the Exchange Act), trust, association or
entity or government, political subdivision, agency or instrumentality of a
government; and
(e) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary)
owns, directly or indirectly, more than 50% of the stock or other equity
interests, the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.
SECTION 9.04. Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the fullest extent possible.
16
SECTION 9.05. Assignment; Binding Effect; Benefit. Neither this Agreement
-----------------------------------
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
SECTION 9.06. Incorporation of Documents and Exhibits. All documents
---------------------------------------
furnished by Tyrol Therapeutics pursuant to Section 3.10 and all documents
furnished by Pathogenics pursuant to Section 4.11 and all exhibits attached
hereto and referred to herein are hereby incorporated herein and made a part
hereof for all purposes as if fully set forth herein.
SECTION 9.07. Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 9.08. Governing Law; Forum. This Agreement shall be governed by,
--------------------
and construed in accordance with, the laws of the State of Delaware.
SECTION 9.09. Headings. The descriptive headings contained in this
--------
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10. Counterparts. This Agreement may be executed and delivered
------------
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 9.11. Entire Agreement. This Agreement (including the Exhibits)
----------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision
of this Agreement shall be binding upon any party hereto unless made in writing
and signed by all parties hereto.
17
IN WITNESS WHEREOF, Pathogenics, Members and Tyrol Therapeutics have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
ATTEST: TYROL THERAPEUTICS, LLC
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxx
------------------------------- --------------------------------
Name: Xxxxxxxx X. Xxxxx Xxxxxxxx X. Xxxxx, Esq.,
----------------------------- Managing Member
Title: Secretary
-----------------------------
ATTEST PATHOGENICS, INC.
Name: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------------------- --------------------------------
Xxxxxxx X. Xxxxx, Secretary Xxxxxxx X. Xxxxx, Chief
Executive Officer
MEMBERS OF TYROL THERAPEUTICS, LLC
/s/ Xxxxxxxx X. Xxxxx /s/ Xxxxxxx Xxxxxxx
------------------------------- -----------------------------
Name: Xxxxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxxx
Number of Equity Interests: 48.9% Number of Equity Interests: 48.9%
--------------- -------
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx 2.2%
Number of Equity Interests: --------------
18
