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Agreement and Plan of Merger - CytRx Corp. and Global Genomics Capital Inc. - Sample Contracts and Business Forms

Feb 10, 2016

Announce Merger with Possible Employee Reallocations Sponsored Links AGREEMENT AND PLAN OF MERGER Dated as of February 11, 2002 among CytRx Corporation, GGC MERGER CORPORATION AND Global Genomics Capital, Inc.<PAGE> AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), is made and ---------entered into as of February 11, 2002, by and among CytRx Corporation, a Delawarecorporation ("CytRx"), GGC Merger Corporation, a California corporation and awholly-owned subsidiary of CytRx ("Merger Sub"), and Global Genomics Capital,Inc., a California corporation ( "GGC") and is made with respect to thefollowing facts: A. CytRx has proposed that CytRx acquire all of the issued and outstandingshares of GGC capital stock (collectively, the "Shares") pursuant to the merger ------of Merger Sub with and into GGC, with GGC continuing as the survivingcorporation (the "Merger"), in accordance with the California Corporation Code ------(the "CCC") and upon the terms and subject to the conditions set forth herein; --- B. The board of directors of CytRx (the "Board") has received (i) theopinion of Sanli Pastore & Hill, Inc. (the "Independent Advisor"), an -------------------independent financial advisor to the Board, that, as of February 8, 2002, theMerger is fair to CytRx and its stockholders from a financial point of view and(ii) the opinion of A.M. Pappas & Associates regarding the technology ofBlizzard Genomics, Inc.; C. The Board, has, after consultation with the Independent Advisor, and inlight of and subject to the terms and conditions set forth herein, (i)determined that (x) the Merger is fair to CytRx and its stockholders from afinancial point of view, and (y) the Merger is advisable and in the bestinterests of CytRx and its stockholders, (ii) adopted and approved thisAgreement, and (iii) determined to recommend that the stockholders of CytRx voteto approve the issuance of the Merger Consideration in accordance with thisAgreement and the amendment to CytRx's certificate of incorporation ascontemplated in this Agreement; D. The board of directors and sole shareholder of Merger Sub have adoptedand approved this Agreement, and the board of directors of GGC has adopted andapproved this Agreement and has determined to recommend that the shareholders ofGGC approve this Agreement; E. Concurrently with the execution and delivery of this Agreement by theParties hereto, (i) each Designated GGC Shareholder (as defined in Section 9.2)and CytRx have entered into a voting agreement in the form attached hereto asExhibit A (the "Voting Agreement"), pursuant to which each Designated GGC--------- ----------------Shareholder has agreed to vote the Shares held by them at the GGC ShareholdersMeeting in favor of the Merger and has granted CytRx an irrevocable proxy tovote such Shares at the GGC Shareholders Meeting in favor of the Merger, (ii)CytRx and Steven A. Kriegsman entered into an Employment Agreement effective asof the Effective Time in the form attached hereto as Exhibit B (the "Employment --------- ----------Agreement"), (iii) each of Elliott J. Cody and Leonard P. Ruiz, Jr. entered into---------consulting agreements in the forms attached hereto as Exhibits C and D with ----------------CytRx that will be effective as of the Effective Time, (iv) each of Elliott J.Cody, Leonard P. Ruiz, Jr. and Steven A. Kriegsman have entered into terminationand release agreements in the forms attached hereto as Exhibit E with GGC that ---------will be effective as of the Effective Time, (v) Wasserman, Comden, Casselman &Pearson LLP and GGC have entered into an agreement in the form attached heretoas Exhibit F (the "Letter Agreement"), pursuant to which Wasserman, Comden, --------- ----------------Casselman & Pearson LLP have agreed, promptly after the 1<PAGE>Effective Time, to receive shares of CytRx Common Stock in lieu of cash tosatisfy all fees, expenses and costs owed to it by GGC at the Effective Time and(vi) Kriegsman Capital Group, LLC and CytRx have entered into an agreement inthe form attached hereto as Exhibit G regarding certain post-Effective Time rent ---------and other overhead expenses to be paid by CytRx; F. GGC, CytRx and Merger Sub desire to make certain representations,warranties, covenants and agreements in connection with the merger and also toprescribe various conditions to the Merger. Certain capitalized terms used in this Agreement are defined in Section 9.2of this Agreement Now, therefore, upon the above premises and in consideration of the mutualpromises, covenants, representations and warranties contained herein, theparties hereto agree as follows: ARTICLE I THE MERGER 1.1 The Merger. Upon the terms and subject to the conditions set forth ----------in this Agreement, and in accordance with the CCC, Merger Sub shall be mergedwith and into the GGC at the Effective Time. At the Effective Time, the separateexistence of Merger Sub shall cease, and GGC shall continue as the survivingcorporation (the "Surviving Corporation") and shall amend its articles of ---------------------incorporation to change its name to "GGC, Inc." At the Effective Time, CytRxwill amend its certificate of incorporation to change its name to "GlobalGenomics, Inc." 1.2 Closing. Unless this Agreement shall have been terminated pursuant -------to Section 7.1 and subject to the satisfaction or waiver of the conditions setforth in Article VI, the closing of the Merger (the "Closing") will take place -------on the date occurring two business days following satisfaction or waiver of theconditions set forth in Article VI (the "Closing Date"), but in no event later ------------than July 31, 2002, at 10:00 a.m., Eastern standard time, at the offices ofWasserman, Comden, Casselman & Pearson LLP, 11755 Wilshire Boulevard, Suite1230, Los Angeles, California 90025, unless another date, time or place isagreed to in writing by the parties hereto. 1.3 Effective Time of the Merger. On the Closing Date, the Surviving ----------------------------Corporation shall file a certificate of merger conforming to the requirements ofthe CCC (the "Certificate of Merger") with the Secretary of State of the State ---------------------of California and make all other filings or recordings required by the CCC inconnection with the Merger. The Merger shall become effective at such time asthe Certificate of Merger is duly filed with the Secretary of State of the Stateof California (the "Effective Time"). -------------- 1.4 Effects of the Merger. The Merger shall have the effects set forth ---------------------in this Agreement and in the applicable provisions of the CCC. 1.5 Articles of Incorporation; By-Laws. ---------------------------------- 2<PAGE> (a) The articles of incorporation of Merger Sub, which are attached asExhibit 1.5(a) hereto, as in effect immediately prior to the Effective Time,--------------shall be the articles of incorporation of the Surviving Corporation untilthereafter changed or amended as provided therein or by applicable law; providedthat Article I of the articles of incorporation of the Surviving Corporationshall be amended by the Certificate of Merger to read as follows: "The name ofthe corporation is GGC, Inc." (b) The by-laws of Merger Sub, which are attached as Exhibit 1.5(b) --------------hereto, shall be the by-laws of the Surviving Corporation until thereafterchanged or amended as provided therein or by applicable law. 1.6 Directors; Officers. ------------------- (a) The directors of GGC immediately prior to the Effective Time shallbe the directors of the Surviving Corporation, until the earlier of theirresignation or removal or until their respective successors are duly elected andqualified, as the case may be. (b) The officers of GGC immediately prior to the Effective Time shallbe the officers of the Surviving Corporation, until the earlier of theirresignation or removal or until their respective successors are duly elected andqualified, as the case may be. 1.7 Further Actions. At and after the Effective Time, the Surviving ---------------Corporation shall take all action as shall be required in connection with theMerger, including, without limitation, the execution and delivery of anyinstruments, certificates or other documents as are necessary or desirable tocarry out the provisions of this Agreement. ARTICLE II CANCELLATION OF THE CAPITAL STOCK OF GGC AND EXCHANGE WITH RESPECT THERETO 2.1 Effect on Capital Stock. At the Effective Time, by virtue of the -----------------------Merger, and without any action on the part of CytRx, GGC or Merger Sub or theshareholders of GGC or Merger Sub thereof: (a) subject to the other provisions of Article II, each share of commonstock of GGC issued and outstanding immediately prior to the Effective Time(other than Dissenting Shares) shall be converted into the right to receive anumber of shares of CytRx Common Stock equal to the quotient of (i) 9,962,881divided by (ii) the sum of the total number of shares of GGC common stockoutstanding at the Effective Time (including those shares issued between thedate hereof and the Effective Time upon the exercise of GGC Stock Optionsoutstanding on the date hereof), plus the number of shares of GGC common stockissuable upon the exercise of any Converting Options (as defined in Section 2.4)and any other GGC Stock Options that are 3<PAGE>outstanding at the Effective Time (such quotient, the "Exchange Ratio"). Nofractional shares will be issued in the Merger. Each fractional share less thanone-half of share shall be rounded down to the nearest whole share and eachfractional share equal to or greater than one-half of a share shall be roundedup to the nearest whole share. The total number of shares of CytRx Common Stockissued pursuant to Section 2.1(a) above are collectively referred to herein as,the "Merger Consideration". In no event will the aggregate number of shares of --------------------CytRx Common Stock issued in the Merger as Merger Consideration (includingshares of CytRx Common Stock issuable upon the exercise of Converting Options)exceed 9,962,881 shares, unless increased in accordance with Article VIIIhereof. (b) each share of GGC capital stock issued and held in GGC's treasuryimmediately prior to the Effective Time shall, by virtue of the Merger, cease tobe outstanding and shall be cancelled and retired without payment of anyconsideration therefor; (c) each share of common stock, par value $.01 per share, of Merger Subissued and outstanding immediately prior to the Effective Time shall beconverted into and become one fully paid and nonassessable share of common stockof the Surviving Corporation; and (d) notwithstanding anything in this Agreement to the contrary, to theextent required by the CCC, CytRx will not make any payment of MergerConsideration with respect to Shares held by any person (a "Dissenting ----------Stockholder") who elects to demand appraisal of such Dissenting Stockholder's-----------Shares and duly and timely complies with all the provisions of the CCCconcerning the right of holders of Shares to require appraisal of their Shares("Dissenting Shares"), but such Dissenting Stockholders shall have the right to -----------------receive such consideration as may be determined to be due such DissentingStockholders pursuant to the dissenters' rights/shareholder appraisal laws ofthe State of California after such Dissenting Stockholder has surrendered his orher Certificate or Certificates representing Shares for which payment is beingmade and has complied with all other requirements of the CCC. If, after theEffective Time, a Dissenting Stockholder withdraws such Dissenting Stockholder'sdemand for appraisal or fails to perfect or otherwise is no longer entitled tosuch Dissenting Stockholder's right of appraisal and payment for such holder'sShares, in any case pursuant to the CCC, such Dissenting Stockholder's Shareswill be deemed to have been converted as of the Effective Time into the right toreceive the applicable portion of the Merger Consideration pursuant to Section2.1(a) and the Payment Agent shall issue and deliver the applicable portion ofthe Merger Consideration to which such Dissenting Stockholder is entitled underSection 2.1(a) upon surrender by such holder of the Certificate or Certificatesrepresenting the Shares of GGC held by such Dissenting Stockholder immediatelyprior to the Effective Time, in accordance with Section 2.2(b). GGC will giveCytRx prompt notice of any demands for appraisal of Dissenting Shares receivedby GGC.2.2 Delivery of Merger Consideration. -------------------------------- (a) Payment Agent. Promptly after the Effective Time, CytRx shall -------------deposit with CytRx's transfer agent or another exchange agent selected by CytRx(the "Payment Agent"), for the benefit of the holders of the Shares, for payment -------------in accordance with this Article II through the Payment Agent, a number of sharesof CytRx Common Stock equal to the Merger 4<PAGE>Consideration, reduced by (i) the Secondary Merger Consideration (as definedbelow) and (ii) the number of shares of CytRx Common Stock issuable upon theexercise of Converting Options and any other GGC Stock Options outstanding atthe Effective Time (the "Initial Merger Consideration"). Five percent (5%) ofthe Merger Consideration, or 498,144 shares of CytRx Common Stock (the"Secondary Merger Consideration") will be held by CytRx (the "Escrow Agent") in ------------escrow in accordance with Section 2.3 and the Escrow Agreement. (b) Payment Procedures. As soon as reasonably practicable after the ------------------Effective Time, the Payment Agent shall mail to each holder of record of acertificate or certificates which at the Effective Time represented Shares (the"Certificates"), the following documents: (i) a letter of transmittal (which ------------shall specify that delivery shall be effected, and risk of loss and title to theCertificates shall pass, only upon delivery of the Certificates to the PaymentAgent and shall be in such form and have such other provisions as GGC, CytRx andthe Payment Agent may reasonably specify); and (ii) instructions for use ineffecting the surrender of the Certificates in exchange for payment with respectthereto. Upon surrender of a Certificate for cancellation to the Payment Agenttogether with such letter of transmittal, duly executed, the holder of suchCertificate shall be entitled, subject to Section 2.3, to receive in exchangetherefor the Merger Consideration payable with respect to the Shares representedby such Certificate pursuant to the provisions of this Article II, and theCertificate so surrendered shall forthwith be cancelled. In the event that aholder has lost or misplaced a Certificate, or a Certificate has been destroyedor stolen, an affidavit of loss thereof (together with an appropriate indemnityand bond and any other document necessary to evidence and effect such bona fidetransfer, if CytRx so requires by notice in writing to the holder of suchCertificate) satisfactory in form and substance to CytRx and the Payment Agentshall accompany such letter of transmittal in lieu of the applicableCertificate. In the event of a transfer of ownership of Shares which is notregistered in the transfer records of GGC, payment of the applicable MergerConsideration may be made to a transferee if the Certificate representing suchShares is presented to the Payment Agent, accompanied by all documents requiredto evidence and effect such transfer and by evidence that any applicable stocktransfer taxes have been paid. Until surrendered as contemplated by this Section2.2, each Certificate (other than Dissenting Shares to which statutorydissenters' rights have been perfected as provided in Section 2.1(d)) shall bedeemed at any time after the Effective Time to represent only the right toreceive upon such surrender the Merger Consideration with respect theretosubject to Sections 2.3 and Article VIII. No interest shall accrue or be paid toany beneficial owner of Shares or any holder of any Certificate with respect tothe Merger Consideration payable upon the surrender of any Certificate. CytRxand the Payment Agent shall not be obligated to deliver any Merger Considerationuntil a holder of Shares surrenders such holder's Certificate or Certificates ofShares for exchange in accordance with this Section 2.2(b). (c) No Further Ownership Rights in the Shares. The Merger Consideration -----------------------------------------(as may be adjusted by Sections 2.3, 2.5 and Article VIII) paid with respect tothe cancellation of Shares in accordance with the terms hereof shall be deemedto have been paid in full satisfaction of all rights pertaining to such Sharesand after the Effective Time there shall be no further registration of transferson the stock transfer books of the Surviving Corporation of the Shares whichwere outstanding immediately prior to the Effective Time. If, after theEffective Time, Certificates are presented to the Surviving Corporation for anyreason, they shall be cancelled and exchanged as provided in this Article II,subject to applicable law in the case of Dissenting Shares. No dividend or otherdistribution payable to the holders of record of CytRx Common Stock as of any 5<PAGE>time subsequent to the Effective Time shall be delivered to the holder of anyCertificate until such holder surrenders such Certificate for exchange asprovided in this Article II. (d) No Liability. If any Certificates shall not have been surrendered ------------prior to five (5) years after the Effective Time (or immediately prior to suchearlier date on which the Merger Consideration in respect of such Certificatewould otherwise escheat to or become the property of any Regulatory Authority),any cash or other property payable in respect of such Certificate shall, to theextent permitted by applicable law, become the property of the SurvivingCorporation, free and clear of all claims or interest of any person previouslyentitled thereto. Notwithstanding the foregoing, none of the SurvivingCorporation, CytRx or the Payment Agent shall be liable to any holder of aCertificate or the Shares represented thereby for any Merger Considerationdelivered in respect of such Certificate or the Shares represented thereby to apublic official pursuant to any abandoned property, escheat or other similarlaw. (e) Withholding Rights. CytRx or the Payment Agent shall be entitled to ------------------deduct and withhold from the consideration otherwise payable pursuant to thisAgreement to any holder of Certificates or Shares represented thereby suchamounts (if any) as CytRx or the Payment Agent is required to deduct andwithhold with respect to the making of such payment under the Internal RevenueCode of 1986, as amended (the "Code"), or any provision of state, local or ----foreign tax Law. To the extent that amounts are so withheld by CytRx or thePayment Agent, such withheld amounts shall be treated for all purposes of thisAgreement as having been paid to the holder of the Shares in respect of whichsuch deduction and withholding was made by CytRx or the Payment Agent. 2.3 Escrow Agreement. At Closing, CytRx, the Escrow Agent and the GGC ----------------Shareholder Representative shall enter into an escrow agreement in the formattached hereto as Exhibit 2.3 (the "Escrow Agreement"). Promptly after the ----------------Effective Time, each GGC Escrowee will be deemed to have received and consentedto the deposit of the Secondary Merger Consideration with the Escrow Agent to beheld in escrow in accordance with the terms of the Escrow Agreement. 2.4 Stock Options and Warrants with Respect to Shares. ------------------------------------------------- (a) GGC shall take all actions necessary pursuant to the terms andprovisions of any outstanding options or warrants to acquire shares of itscapital stock, or otherwise, to cause the following: (i) all outstanding optionsor warrants to acquire shares of GGC capital stock granted by GGC (the "GGC ---Stock Options") shall be exercisable in full immediately prior to the Effective-------------Time and (ii) all GGC Stock Options that are not exercised one day prior to theEffective Time will terminate and expire as of the Effective Time, except forthose options or warrants granted by GGC to Steven A. Kriegsman, Clifford H.Pearson, Steve K. Wasserman, David B. Casselman, Leonard J. Comden, Leonard P.Ruiz, Jr., Elliott J. Cody and Jeffrey L. Davidson (copies of which are attachedhereto as Exhibit 2.4) (the "Converting Options"), which shall be treated as set ------------------forth in subparagraph (b) below. GGC shall give written notice to the holders ofall GGC Stock Options of the foregoing. All actions required to be takenpursuant to this Section 2.4 with respect to GGC Stock Options has been, orprior to the Effective Time will be, taken by GGC. (b) At the Effective Time, the Converting Options shall be convertedinto and become an option to purchase CytRx Common Stock, and CytRx shall assumeeach Converting Option, in accordance with its terms, except that from and afterthe Effective Time, (i) each 6<PAGE>Converting Option assumed by CytRx hereunder may be exercised solely for sharesof CytRx Common Stock, (ii) the number of shares of CytRx Common Stock subjectto such Converting Option shall be equal to the number of shares of GGC commonstock subject to such Converting Option immediately prior to the Effective Timemultiplied by the Exchange Ratio, and (iii) the per share exercise price undereach such Converting Option shall be adjusted by dividing the per share exerciseprice under each such Converting Option by the Exchange Ratio and rounding up tothe nearest cent. CytRx shall not be obligated to issue any fraction of a shareof CytRx Common Stock upon exercise of Converting Options and any fraction of ashare of CytRx Common Stock that otherwise be subject to a Converting Optionshall rounded to the nearest whole share. 2.5 Accrued GGC Liabilities; Adjustment to Merger Consideration. At -----------------------------------------------------------Closing, GGC shall deliver a certificate (the "Closing Liabilities Certificate") -------------------------------signed by the chief executive officer and chief financial officer of GGC,certifying as to GGC's good faith estimate as to the amount of liabilities ofGGC accrued but unpaid at Closing (other than liabilities for (i) the AuditExpenses (as defined in Section 5.1(b)) and (ii) the fees, costs and expenses ofWasserman, Comden, Casselman & Pearson LLP, which will be handled in accordancewith the Letter Agreement). To the extent that such estimate exceeds $5,000, thenumber of shares of CytRx Common Stock issuable as Merger Considerationhereunder at Closing shall be reduced by a number of shares (rounded to thenearest whole share) that, when multiplied by the Average Closing Price (asdefined in Section 8.5(c)) equals the amount of such accrued but unpaidliabilities. If the Merger Consideration is adjusted downwards in accordancewith this Section 2.5, the reduced number of shares (instead of 9,962,881) shallbe the number used to determine the Exchange Ratio in Section 2.1(a). ARTICLE III REPRESENTATIONS AND WARRANTIES 3.1 Representations and Warranties of GGC. GGC represents and warrants -------------------------------------to CytRx and Merger Sub that, except as specifically disclosed in the letterdated the date hereof and delivered by GGC to CytRx simultaneously with theexecution and delivery of this Agreement (the "GGC Disclosure Letter"): ---------------------(a) Organization, Standing and Power. GGC is a corporation duly organized, --------------------------------validly existing and in good standing under the laws of the state of California,has all requisite power and authority and all necessary governmental approvalsto own, lease and operate its properties and assets and to conduct its businessas it is now being conducted and is duly qualified or licensed and in goodstanding to do business in each jurisdiction in which the nature of its businessor the ownership or leasing of its properties and assets makes suchqualification or license necessary, other than in such jurisdictions where thefailure to be so qualified or licensed would not, individually or in theaggregate, have a Material Adverse Effect on GGC. Blizzard is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofMinnesota. GGC has made available to CytRx true and complete copies of itsarticles of incorporation and by-laws, each as amended and in effect as of thedate of this Agreement. Such articles of incorporation and by-laws are in fullforce and effect, and GGC is not in violation of any provision of its articlesof incorporation or by-laws. The minute book of GGC has been 7<PAGE>made available to CytRx for its review and the minutes contained therein aretrue and complete in all material respects as in effect as of the date of thisAgreement and accurately reflect all amendments thereto and all proceedings ofthe board of directors (including any and all committees of the board ofdirectors) and the shareholders of GGC(b) Capital Structure. ----------------- (i) The authorized capital stock of GGC consists of 20,000,000shares of common stock and 1,000,000 shares of preferred stock, no par value pershare (the "Preferred Stock"). There are no shares of Preferred Stock issued or ---------------outstanding. There are (A) 12,206,853 shares of GGC common stock outstanding,(B) 1,274,701 shares of GGC common stock authorized and reserved for issuanceupon the exercise of outstanding GGC Stock Options and (C) no shares of GGCcommon stock held by GGC in its treasury. Schedule 3.1(b)(i) to the GGC ------------------Disclosure Letter sets forth a true and complete list of all granted oroutstanding GGC Stock Options (including the Converting Options), including theholders thereof, the exercise prices and the vesting schedules therefor. (ii) No bonds, debentures, notes or other indebtedness havingthe right to vote (or convertible into or exercisable for securities having theright to vote) on any matters on which shareholders of GGC may vote ("Voting ------Debt") are issued or outstanding.---- (iii) All outstanding shares of GGC's capital stock arevalidly issued, fully paid and nonassessable and were issued free of preemptiverights (contractual or otherwise) and in compliance with applicable securitiesLaws. All shares of GGC common stock subject to issuance upon the exercise ofGGC Stock Options will be duly authorized, validly issued, fully paid andnonassessable and free of preemptive rights and will be issued in compliancewith applicable securities laws and regulations. (iv) Except as set forth in Section 3.1(b)(i), there are noshares of capital stock or other equity securities of GGC outstanding and noEquity Rights relating to the capital stock of GGC. Except as specificallycontemplated by this Agreement, no Person has any Contract or any right orprivilege (whether pre-emptive or contractual) capable of becoming a Contract orEquity Right for the purchase, subscription or issuance of any securities ofGGC. (v) The authorized capital stock of Blizzard consists of (i)10,000,000 shares of common stock, of which 3,251,109 shares are issued andoutstanding as of the date of this Agreement and not more than 3,251,109 shareswill be issued and outstanding at the Effective Time. All of the issued andoutstanding shares of capital stock of Blizzard are duly and validly issued andoutstanding and are fully paid and nonassessable. None of the outstanding sharesof capital stock of Blizzard has been issued in violation of any preemptiverights (contractual or otherwise) of the current or past shareholders ofBlizzard. Except as set forth in Schedule 3.1(b)(v) to the GGC Disclosure ------------------Letter, there are no shares of capital stock or other equity securities ofBlizzard outstanding and no outstanding Equity Rights relating to the capitalstock of Blizzard. Except as specifically contemplated by this Agreement, noPerson has any Contract or any right or privilege (whether pre-emptive orcontractual) capable of becoming a Contract or 8<PAGE>Equity Right for the purchase, subscription or issuance of any securities ofBlizzard. As of the date hereof, GGC holds, of record and beneficially,1,300,444 shares of Blizzard common stock. (c) Authority. --------- (i) GGC has all requisite corporate power and authority toenter into, deliver and perform this Agreement and to consummate thetransactions contemplated hereby, including the Merger. The execution, deliveryand performance of this Agreement and the consummation of the transactionscontemplated hereby, including the Merger, have been duly and validly authorizedby all necessary corporate action on the part of GGC, subject to approval of theGGC shareholders. This Agreement has been duly executed and delivered by GGC andconstitutes a valid and binding obligation of GGC enforceable in accordance withits terms, except as such enforceability may be limited by bankruptcy,insolvency, fraudulent conveyance, reorganization, moratorium and other similarlaws relating to or affecting creditors' rights generally and general equitableprinciples (whether considered in a proceeding in equity or at law). (ii) Neither the execution and delivery of this Agreement byGGC, nor the consummation by GGC of the transactions contemplated hereby, norcompliance by GGC with any of the provisions hereof, will (i) conflict with orresult in a breach of any provision of the certificate or articles ofincorporation or bylaws of any GGC Entity or any resolution adopted by the boardof directors or the shareholders of any GGC Entity, or (ii) except as disclosedin Schedule 3.1(c)(ii) of the GGC Disclosure Letter, constitute or result in a -------------------Default under, or require any Consent pursuant to, or result in the creation ofany Lien on any Asset of any GGC Entity under, any Contract or Permit of any GGCEntity, or (iii) subject to receipt of the requisite Consents referred to insubsection (iii) below, constitute or result in a Default under, or require anyConsent pursuant to, any Law or Order applicable to any GGC Entity or any oftheir respective material Assets (including CytRx or any GGC Entity becomingsubject to or liable for the payment of any Tax or any of the Assets owned byCytRx or any GGC Entity being reassessed or revalued by any RegulatoryAuthority). (iii) No notice to, Consent of or filing with, any RegulatoryAuthority is required by or with respect to GGC in connection with the executionand delivery of this Agreement and the Certificate of Merger by GGC, theconsummation by GGC of the transactions contemplated hereby and thereby, andcompliance of GGC with any of the provisions hereof or thereof, except thefiling of the Certificate of Merger as contemplated by Section 1.3. (d) Investment. There are no more than thirty-five holders of capital ----------stock of GGC (each a "GGC Shareholder") that fail to qualify as an "accredited ---------------investors" as such term is defined in Rule 501 of Regulation D promulgated underthe Securities Act. To the Knowledge of GGC, each GGC Shareholder is acquiringCytRx Common Stock pursuant to this Agreement for investment for such GGCShareholder's own account, not as a nominee or agent, and not with the view to,or for resale in connection with, any distribution thereof. Neither GGC nor, tothe Knowledge of GGC, any GGC Shareholder, owns any right, title or interest(legal or beneficial) to any securities of a CytRx or any Equity Rights or rightof any kind to have any such security issued. 9<PAGE> (e) Absence of Certain Changes or Events. Except as disclosed in ------------------------------------Schedule 3.1(e) to the GGC Disclosure Letter, since December 31, 2001, GGC has---------------conducted its business only in the ordinary course and consistent with priorpractice and there has not been any event, occurrence, fact, condition, change,development or effect that has had or could reasonably be expected to have,individually or in the aggregate, a Material Adverse Effect on GGC. None of theGGC Entities has taken any action, or failed to take any action, prior to thedate of this Agreement, which action or failure, if taken after the date of thisAgreement, would represent or result in a material breach or violation of any ofthe covenants and agreements of GGC provided in this Agreement. (f) Litigation. There is no Litigation pending against, nor, to GGC's ----------Knowledge, threatened against or affecting any GGC Entity or any GGC Entity'sAssets, or to which any GGC Entity, or any director, officer or employee of anyGGC Entity in his or her capacity as such, is a party, before or by any federal,foreign, state, local or other governmental or non-governmental department,commission, board, bureau, agency, court or other instrumentality, or by anyprivate person or entity. There are no existing nor, to the Knowledge of GGC,threatened orders, judgments or decrees of any court or other RegulatoryAuthority which specifically apply to GGC or any GGC Entity. (g) Financial Statements. Attached as Schedule 3.1(g)-1 to the GGC -------------------- -----------------Disclosure Letter are the unaudited financial statements of GGC for the yearended December 31, 2001, which reflect the results of operations and financialcondition of GGC for such period and at such date (the "GGC Financial -------------Statements"). The GGC Financial Statements have been prepared in accordance with----------GAAP consistently applied other than as indicated in Schedule 3.1(g)-2 to the -----------------GGC Disclosure Letter and except for the omission of notes thereto. The GGCFinancial Statements present fairly the financial position of GGC as of the dateindicated and present fairly the results of GGC's operations for the period thenended, and are in accordance with the books and records of GGC, which have beenproperly maintained and are complete and correct in all material respects.Attached as Schedule 3.1(g)-3 to the GGC Disclosure Letter are the unaudited -----------------financial statements of Blizzard for the year ended December 31, 2001, which, tothe Knowledge of GGC, reflect the results of operations and financial conditionof Blizzard for such period and at such date (the "Blizzard Financial ------------------Statements"). To the Knowledge of GGC, the Blizzard Financial Statements have----------been prepared in accordance with GAAP consistently applied other than asindicated in Schedule 3.1(g)-4 to the GGC Disclosure Letter and except for the -----------------omission of notes thereto. To the Knowledge of GGC, the Blizzard FinancialStatements have been prepared from and in accordance with GGC's books andrecords. To the Knowledge of GGC, the Blizzard Financial Statements presentfairly the financial position of Blizzard as of the date indicated and presentfairly the results of Blizzard's operations for the period then ended, and arein accordance with the books and records of Blizzard, which have been properlymaintained and are complete and correct in all material respects. (h) Absence of Undisclosed Liabilities. GGC has no, and, to the ----------------------------------Knowledge of GGC, no other GGC Entity has any, Liabilities that are reasonablylikely to have, individually or in the aggregate, a Material Adverse Effect onGGC, except Liabilities which are accrued or reserved against in the balancesheet of GGC as of December 31, 2001 included in the GGC Financial Statements orthe balance sheet of Blizzard as of December 31, 2001, included in the BlizzardFinancial Statements delivered prior to the date of this Agreement. Neither GGCnor, to the Knowledge of GGC, any other GGC Entity has incurred or paid anyLiability since December 10<PAGE>31, 2001, except for such Liabilities incurred or paid (i) in the ordinarycourse of business consistent with past business practice and which are notreasonably likely to have, individually or in the aggregate, a Material AdverseEffect on GGC or (ii) in connection with the transactions contemplated by thisAgreement. Except as disclosed in Schedule 3.1(h) to the GGC Disclosure ---------------Letter, neither GGC nor, to the Knowledge of GGC, any other GGCEntity is directly or indirectly liable, by guarantee, indemnity, or otherwise,upon or with respect to, or obligated, by discount or repurchase agreement or inany other way, to provide funds in respect to, or obligated to guarantee orassume any Liability or any Person for any amount in excess of $10,000. (i) Compliance with Laws. Neither GGC nor, to the Knowledge of GGC, any --------------------other GGC Entity has been or currently is in violation of any applicable local,state or federal Law, Order or any other requirement of any RegulatoryAuthority, affecting or relating to any GGC Entity or any GGC Entity assets.Neither GGC nor, to the Knowledge of GGC, any other GGC Entity is subject to anyfine, penalty, Liability or disability as the result of a failure to comply withany requirement of federal, state or local Law nor has any GGC Entity receivedany notice of such noncompliance, affecting or relating to any GGC Entity. (j) Tax Matters. ----------- (i) GGC and, to the Knowledge of GGC, each other GGC Entityhave timely filed with the appropriate Taxing authorities all Tax Returns in alljurisdictions in which Tax Returns are required to be filed, and such TaxReturns are correct and complete in all respects. All Taxes of GGC and, to theKnowledge of GGC, of each other GGC Entity, whether or not shown on any TaxReturn, have been fully and timely paid. There are no Liens for any Taxes (otherthan a Lien for current real property or ad valorem Taxes not yet due andpayable) on any of the Assets of GGC and, to the Knowledge of GGC, there are noLiens for any Taxes (other than a Lien for current real property or ad valoremTaxes not yet due and payable) on any of the Assets of any other GGC Entity. Noclaim has ever been made by an authority in a jurisdiction where GGC does notfile a Tax Return that GGC may be subject to Taxes by that jurisdiction and, tothe Knowledge of GGC, no claim has ever been made by an authority in ajurisdiction where any other GGC Entity does not file a Tax Return that such GGCEntity may be subject to Taxes by that jurisdiction. (ii) GGC has not received any notice of assessment or proposedassessment in connection with any Taxes, and there are no threatened or pendingdisputes, claims, audits or examinations regarding any Taxes of GGC or theAssets of GGC. None of the other GGC Entities has received any notice ofassessment or proposed assessment in connection with any Taxes, and there are nothreatened or pending disputes, claims, audits or examinations regarding anyTaxes of any other GGC Entity or the Assets of any other GGC Entity. No officeror employee responsible for Tax matters of GGC or, to the Knowledge of GGC, ofany other GGC Entity expects any Regulatory Authority to assess any additionalTaxes for any period for which Tax Returns have been filed. Neither GGC nor, tothe Knowledge of GGC, any other GGC Entity has waived any statute of limitationsin respect of any Taxes or agreed to a Tax assessment or deficiency. 11<PAGE> (iii) GGC, and, to the Knowledge of GGC, each other GGCEntity, has complied with all applicable Laws, rules and regulations relating tothe withholding of Taxes and the payment thereof to appropriate authorities,including Taxes required to have been withheld and paid in connection withamounts paid or owing to any employee or independent contractor, and Taxesrequired to be withheld and paid pursuant to Sections 1441 and 1442 of theInternal Revenue Code or similar provisions under foreign Law. (iv) The unpaid Taxes of GGC, and, to the Knowledge of GGC,each other GGC Entity (i) did not, as of the most recent fiscal month end,exceed the reserve for Tax Liability (rather than any reserve for deferred Taxesestablished to reflect timing differences between book and Tax income) set forthon the face of the most recent balance sheet (rather than in any notes thereto)for such GGC Entity and (ii) do not exceed that reserve as adjusted for thepassage of time through the Closing Date in accordance with past custom andpractice of the GGC Entities in filing their Tax Returns. (v) Neither GGC nor, to the Knowledge of GGC, any other GGCEntity, is a party to any Tax allocation or sharing agreement and neither GGCnor, to the Knowledge of GGC, any other GGC Entity has been a member of anaffiliated group filing a consolidated federal income Tax Return (other than agroup the common parent of which was GGC) or has any Tax Liability of any Personunder Treasury Regulation Section 1.1502-6 or any similar provision of state,local or foreign Law (other than the other members of the consolidated group ofwhich GGC is parent), or as a transferee or successor, by contract or otherwise. (vi) During the five-year period ending on the date hereof,neither GGC nor, to the Knowledge of GGC, any other GGC Entity was adistributing corporation or a controlled corporation in a transaction intendedto be governed by Section 355 of the Internal Revenue Code. (vii) Neither GGC nor, to the Knowledge of GGC, any other GGCEntity has made any payments, is obligated to make any payments, or is a partyto any contract that could obligate it to make any payments that could bedisallowed as a deduction under Section 280G or 162(m) of the Internal RevenueCode. Neither GGC nor, to the Knowledge of GGC, any other GGC Entity has been aUnited States real property holding corporation within the meaning of CodeSection 897(c)(1)(A)(ii). None of the GGC Entities has been or will be requiredto include any adjustment in taxable income for any Tax period (or portionthereof) pursuant to Section 481 of the Internal Revenue Code or any comparableprovision under state or foreign Tax Laws as a result of transactions or eventsoccurring prior to the Closing. (viii) GGC and, to the Knowledge of GGC, each of the other GGCEntities is in compliance with, and its records contain all information anddocuments (including properly completed IRS Forms W-9) necessary to comply with,all applicable information reporting and Tax withholding requirements underfederal, state, and local Tax Laws, and such records identify with specificityall accounts subject to backup withholding under Code Section 3406. 12<PAGE> (ix) Neither GGC nor, to the Knowledge of GGC, any GGC Entity,has or has had in any foreign country a permanent establishment, as defined inany applicable tax treaty or convention between the United States and suchforeign country. (k) Assets. ------ (i) Except as disclosed in Schedule 3.1(k) to the GGC ---------------Disclosure Letter or as disclosed or reserved against in the GGC FinancialStatements or Blizzard Financial Statements, the GGC Entities have good andmarketable title, free and clear of all Liens, to all of their respectiveAssets, except for any such Liens or other defects of title which are notreasonably likely to have a Material Adverse Effect on GGC. All tangibleproperties used in the GGC's businesses, and, to the Knowledge of GGC, alltangible properties used in the businesses of each of the other GGC Entities,are in good condition, reasonable wear and tear excepted, and are usable in theordinary course of business consistent with such GGC Entity's past practices. (ii) All Assets which are material to GGC's business heldunder leases or subleases by GGC, are held under valid Contracts enforceable inaccordance with their respective terms (except as enforceability may be limitedby applicable bankruptcy, insolvency, reorganization, moratorium, or other Lawsaffecting the enforcement of creditors' rights generally and except that theavailability of the equitable remedy of specific performance or injunctiverelief is subject to the discretion of the court before which any proceedingsmay be brought), and each such Contract is in full force and effect. To theKnowledge of GGC, all Assets which are material to each other GGC Entity'sbusiness held under leases or subleases by such GGC Entity, are held under validContracts enforceable in accordance with their respective terms (except asenforceability may be limited by applicable bankruptcy, insolvency,reorganization, moratorium, or other Laws affecting the enforcement ofcreditors' rights generally and except that the availability of the equitableremedy of specific performance or injunctive relief is subject to the discretionof the court before which any proceedings may be brought), and each suchContract is in full force and effect. (iii) GGC and, to the Knowledge of GGC, each other GGC Entity,have maintained and currently maintain insurance in amounts, scope, and coveragethat are deemed adequate by such GGC Entity's board of directors or executivemanagement. Neither GGC nor, to the Knowledge of GGC, any other GGC Entity, hasreceived notice from any insurance carrier that (i) any policy of insurance willbe canceled or that coverage thereunder will be reduced or eliminated, or (ii)premium costs with respect to such policies of insurance will be substantiallyincreased. To the Knowledge of GGC, there are presently no claims for amountsexceeding in any individual case $10,000 pending under such policies ofinsurance and no notices of claims in excess of such amounts have been given byany GGC Entity under such policies. (iv) The Assets of GGC include all Assets required to operatethe business of GGC as presently conducted. (l) Environmental Matters. --------------------- (i) Each GGC Entity and its Operating Properties are, and havebeen, in compliance with all Environmental Laws. 13<PAGE> (ii) During the period of (i) each GGC Entity's ownership oroperation of any of its current properties or (ii) each GGC Entity's holding ofa security interest in any Operating Property, to the Knowledge of GGC, therehave been no releases, discharges, spillages, or disposals of Hazardous Materialin, on, under, adjacent to, or affecting (or potentially affecting) suchproperties. Prior to the period of (i) any GGC Entity's ownership or operationof any of their respective current properties or (ii) any GGC Entity's holdingof a security interest in any Operating Property, to the Knowledge of GGC, therewere no releases, discharges, spillages, or disposals of Hazardous Material in,on, under, or affecting any such property or Operating Property. (m) Labor Relations. --------------- i) Neither GGC nor, to the Knowledge of GGC, any other GGCEntity, is the subject of any Litigation asserting that it or any other GGCEntity has committed an unfair labor practice (within the meaning of theNational Labor Relations Act or comparable state Law) or other violation ofstate or federal labor Law or seeking to compel it or any other GGC Entity tobargain with any labor organization or other employee representative as to wagesor conditions of employment, nor is GGC nor, to the Knowledge of GGC, any otherGGC Entity, party to any collective bargaining agreement or subject to anybargaining order, injunction or other Order relating to GGC's or any other GGCEntity's relationship or dealings with its employees, any labor organization orany other employee representative. There is no strike, slowdown, lockout orother job action or labor dispute involving GGC nor, to the Knowledge of GGC,any other GGC Entity, pending or threatened and there has been no such actionsor disputes in the past five years. To the Knowledge of GGC, in the past fiveyears, there has not been any attempt by any GGC Entity employees or any labororganization or other employee representative to organize or certify acollective bargaining unit or to engage in any other union organization activitywith respect to the workforce of any GGC Entity. The employment of each employeeand the engagement of each independent contractor of GGC is terminable at willby GGC without any penalty, liability or severance obligation incurred by GGC.GGC will not owe any amounts to any of its employees or independent contractorsas of the Closing Date, including any amounts incurred for any wages, bonuses,vacation pay, sick leave, contract notice periods, change of control payments orseverance obligations. ii) All of GGC's employees employed in the United States areeither United States citizens or are legally entitled to work in the UnitedStates under the Immigration Reform and Control Act of 1986, as amended, otherUnited States immigration Laws and the Laws related to the employment ofnon-United States citizens applicable in the state in which the employees areemployed. (n) Employee Benefit Plans. GGC has never had and currently does not ----------------------have any Employee Benefit Plans. (o) Material Contracts. Except as disclosed on Schedule 3.1(o) of the ------------------ ---------------GGC Disclosure Letter or otherwise reflected in the GGC Financial Statements,neither GGC, nor any of its Assets, businesses, or operations, is a party to, oris bound or affected by, or receives benefits under, (i) any employment,severance, termination, consulting, or retirement Contract providing foraggregate payments to any Person in any calendar year in excess of $10,000, (ii)any Contract 14<PAGE>relating to the borrowing of money by GGC or the guarantee by GGC of any suchobligation (other than Contracts evidencing trade payables and Contractsrelating to borrowings or guarantees made in the ordinary course of business),(iii) any Contract which prohibits or restricts GGC from engaging in anybusiness activities in any geographic area, line of business or otherwise incompetition with any other Person, (iv) any Contract between or among GGC andthe other GGC Entities, (v) any Contract involving Intellectual Property (otherthan Contracts entered into in the ordinary course with customers and"shrink-wrap" software licenses), (vi) any Contract relating to the purchase orsale of any goods or services (other than Contracts entered into in the ordinarycourse), (vii) any Contract material to GGC's business or (viii) any Contractrelating to GGC's capital stock (collectively, the "GGC Contracts"). With -------------respect to each GGC Contract and except as disclosed in Schedule 3.1(o) to the ---------------GGC Disclosure Letter: (A) the Contract is in full force and effect; (B) GGC isnot in Default thereunder; (C) GGC has not repudiated or waived any materialprovision of any such Contract; and (D) no other party to any such Contract is,to the Knowledge of GGC, in Default in any respect or has repudiated or waivedany material provision thereunder. All of the indebtedness of GGC for moneyborrowed is prepayable at any time by GGC without penalty or premium. (p) Intellectual Property. --------------------- (i) To the Knowledge of GGC, Schedule 3.1(p)(i) to the GGC ------------------Disclosure Letter contains a true and complete list of all Intellectual Propertyowned by, registered in the name of or used by any GGC Entity in its business orfor which application has been made. To GGC's Knowledge, each GGC Entity owns orhas a license to use all of the Intellectual Property used by such GGC Entity inthe course of its business, including sufficient rights in each copy possessedby each GGC Entity. To the Knowledge of GGC, each GGC Entity is the owner of orhas a license, with the right to sublicense, to any Intellectual Property soldor licensed to a third party by such GGC Entity in connection with such GGCEntity's business operations, and such GGC Entity has the right to convey bysale or license any Intellectual Property so conveyed. To GGC's Knowledge, noGGC Entity is in Default under any of its Intellectual Property licenses. To theKnowledge of GGC, no proceedings have been instituted or are pending orthreatened, which challenge the rights of any GGC Entity with respect toIntellectual Property used, sold or licensed by such GGC Entity in the course ofits business, nor has any person claimed or alleged any rights to suchIntellectual Property. To GGC's Knowledge, the conduct of the business of theGGC Entities does not infringe any Intellectual Property of any other person. ToGGC's Knowledge, except as disclosed in Schedule 3.1(p)(i) to the GGC Disclosure ------------------Letter, every officer, director, or employee of any GGC Entity is a party to aContract which requires such officer, director or employee to assign anyinterest in any Intellectual Property to a GGC Entity and to keep confidentialany trade secrets, proprietary data, customer information, or other businessinformation of a GGC Entity. GGC and, to GGC's Knowledge, each other GGC Entityhas taken all reasonable precautions to preserve and document its trade secretsand to protect the secrecy, confidentiality and value of its trade secrets. (ii) Blizzard is the sole owner or has the exclusive perpetualright to use, without consideration, all Intellectual Property necessary toconduct its business as currently conducted and as currently contemplated to beconducted in the future (the "Blizzard Intellectual Property"), free and clear ------------------------------of any Lien or Liability. Blizzard has not granted or licensed to any 15<PAGE>person or entity any rights with respect to any Blizzard Intellectual Propertyand no other Person has any rights in or to any of the Blizzard IntellectualProperty. The rights of Blizzard in and to any of the Blizzard IntellectualProperty will not be limited or otherwise affected by reason of any of thetransactions contemplated hereby. To GGC's Knowledge, the Blizzard IntellectualProperty does not infringe and is not alleged to have infringed any trademark,copyright, patent or other proprietary right of any person. To GGC's Knowledge,each item of Blizzard Intellectual Property is valid and enforceable and thereare no infringements of Blizzard's rights in and to the Blizzard IntellectualProperty by any person or entity. To GGC's Knowledge, Blizzard has not enteredinto any consent, indemnification, forbearance to sue or settlement agreementwith any person or entity relating to any item of Blizzard Intellectual Propertyor those of any person or entity. (q) Reports. Since the date of organization, GGC and, to the Knowledge -------of GGC, each other GGC Entity, has timely filed all reports and statements,together with any amendments required to be made with respect thereto, that itwas required to file with Regulatory Authorities. To GGC's Knowledge, as oftheir respective dates, each of such reports complied in all material respectswith all applicable Laws. (r) Statements True and Correct. --------------------------- (i) To GGC's Knowledge, no statement, certificate, instrument,or other writing furnished or to be furnished by any GGC Entity or any Affiliatethereof to CytRx pursuant to this Agreement or any other document, agreement, orinstrument referred to herein contains or will contain any untrue statement ofmaterial fact or will omit to state a material fact necessary to make thestatements therein, in light of the circumstances under which they were made,not misleading. (ii) None of the information supplied or to be supplied by anyGGC Entity or any Affiliate thereof for inclusion in (i) the Proxy Statement tobe mailed to CytRx stockholders in connection with the CytRx Stockholders'Meeting, (ii) any materials to be delivered to GGC Shareholders in connectionwith the GGC Shareholders Meeting, or (iii) any other documents to be filed by aGGC Entity or any Affiliate thereof with the SEC or any other RegulatoryAuthority in connection with the transactions contemplated hereby, will, at therespective time such documents are filed or delivered, and with respect to theProxy Statement, when first mailed to the stockholders of CytRx, be false ormisleading with respect to any material fact, or omit to state any material factnecessary to make the statements therein, in light of the circumstances underwhich they were made, not misleading, or, in the case of the Proxy Statement orany amendment thereof or supplement thereto, at the time of the CytRxStockholders' Meeting, be false or misleading with respect to any material fact,or omit to state any material fact necessary to correct any statement in anyearlier communication with respect to the solicitation of any proxy for theCytRx Stockholders' Meeting. (iii) All documents that any GGC Entity or any Affiliatethereof is responsible for filing with any Regulatory Authority in connectionwith the transactions contemplated hereby will comply as to form in all materialrespects with the provisions of applicable Law. 16<PAGE> (s) GGC Subsidiaries. Except as set forth in Schedule 3.1(s) to the GGC ---------------- ---------------Disclosure Letter, GGC has not owned and does not currently own, directly orindirectly, of record, beneficially or equitably, any capital stock or otherequity, ownership or proprietary interest in any corporation, partnership,limited liability company, association, trust, joint venture or other entity.Set forth in Schedule 3.1(s) to the GGC Disclosure Letter is a listing of all ---------------predecessor companies of GGC, including the names of any entities from whom GGCpreviously acquired material assets, and any other entity of which GGC has beena subsidiary or division. Except as listed on Schedule 3.1(s) to the GGC ---------------Disclosure Letter, GGC has not sold or disposed of, by way of asset sale, stocksale, spin-off or otherwise, any material assets or business of GGC. (t) Blizzard Stock Purchase Agreement. Blizzard is not in breach of or ---------------------------------in Default under that certain Stock Purchase Agreement dated November 15, 2000between GGC and Blizzard. 3.2 Representations and Warranties of CytRx and Merger Sub. CytRx and ------------------------------------------------------Merger Sub, jointly and severally, represent and warrant to GGC that, except asdisclosed in (i) the letter dated the date hereof and delivered by CytRx andMerger Sub to GGC simultaneously with the execution and delivery of thisAgreement (the "CytRx Disclosure Letter") or (ii) the CytRx SEC Documents (as -----------------------defined in Section 3.2(g)): (a) Organization, Standing and Power. CytRx is a corporation, duly --------------------------------organized, validly existing and in good standing under the laws of the state ofDelaware and Merger Sub is a corporation, duly organized, validly existing andin good standing under the laws of the state of California. Each of CytRx andMerger Sub has all requisite power and authority and all necessary governmentalapprovals to own, lease and operate its properties and to carry on its businessas it is now being conducted, and is duly qualified or licensed and in goodstanding to do business in each jurisdiction in which the nature of its businessor the ownership or leasing of its properties makes such qualification orlicense necessary, other than in such jurisdictions where the failure to be soqualified or licenses would not, individually or in the aggregate, have aMaterial Adverse Effect on CytRx or Merger Sub. (b) Authority. --------- (i) CytRx and Merger Sub have all requisite corporate powerand authority to enter into, deliver and perform this Agreement and toconsummate the transactions contemplated hereby, subject to the approval of theissuance of the Merger Consideration by the CytRx stockholders. The execution,delivery and performance of this Agreement and the consummation of thetransactions contemplated hereby have been duly authorized by all necessarycorporate action on the part of CytRx or Merger Sub, as the case may be, subjectto the approval of the issuance of the Merger Consideration by the CytRxstockholders. Subject to such stockholder approval, this Agreement has been dulyexecuted and delivered by CytRx and Merger Sub and constitutes a valid andbinding obligation of CytRx or Merger Sub, as the case may be, enforceable inaccordance with its terms, except as such enforceability may be limited bybankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium andother similar laws relating to or affecting creditors' rights generally andgeneral equitable principles (whether considered in a proceeding in equity or atlaw). 17<PAGE> (ii) Neither the execution and delivery of this Agreement byCytRx or Merger Sub, nor the consummation by CytRx or Merger Sub of thetransactions contemplated hereby, nor compliance by CytRx or Merger Sub with anyof the provisions hereof, will (i) conflict with or result in a breach of anyprovision of any CytRx Entity's certificate or articles of incorporation orbylaws or any resolution adopted by the board of directors or the shareholdersof any CytRx Entity, or (ii) except as disclosed in Schedule 3.2(b)(ii) of the -------------------CytRx Disclosure Letter, constitute or result in a Default under, or require anyConsent pursuant to, or result in the creation of any Lien on any Asset of anyCytRx Entity, any Contract or Permit of any CytRx, or, (iii) subject to receiptof the requisite Consents referred to in subsection (iii) below, constitute orresult in a Default under, or require any Consent pursuant to, any Law or Orderapplicable to any CytRx Entity or any of their respective material Assets(including any CytRx Entity becoming subject to or liable for the payment of anyTax or any of the Assets owned by any CytRx Entity being reassessed or revaluedby any Regulatory Authority). (iii) No notice to, Consent of or filing with, any RegulatoryAuthority is required by or with respect to CytRx or Merger Sub in connectionwith the execution and delivery of this Agreement by CytRx and Merger Sub, theconsummation by CytRx or Merger Sub, as the case may be, of the transactionscontemplated hereby, and compliance by CytRx and Merger Sub with any of theprovisions hereof, except (A) in connection or compliance with the provisions ofthe Securities Laws, applicable state corporate and securities Laws and therules of the Nasdaq National Market, and notices to or filings with the InternalRevenue Service or the Pension Benefit Guaranty Corporation with respect to anyemployee benefit plans, and (B) the filing of the Certificate of Merger ascontemplated by Section 1.3. (c) Interim Operations of Merger Sub.

Global Genomics Capital Acquisitions

1 Acquisition

Global Genomics Capital acquired 1 company. Their latest acquisition was CytRx Corporation on February 12, 2002.

Date

Investment Stage

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Total Funding

Note

Sources

2/12/2002

$99M

Reverse Merger

1

Date

2/12/2002

Investment Stage

Companies

Valuation

$99M

Total Funding

Note

Reverse Merger

Sources

1

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