AGREEMENT AND PLAN OF ACQUISITION
Exhibit 10.43
ACQUISITION OF OPEN CELL BIOTECHNOLOGIES, INC.
by
Health Sciences Group, Inc.
AGREEMENT AND PLAN OF ACQUISITION
This Agreement and Plan of Acquisition (Agreement) is entered into by and between Open Cell Biotechnologies, Inc., a Florida corporation, (OCBI), UTEK CORPORATION, a Delaware corporation, (UTEK), and Health Sciences Group, Inc., a Colorado corporation, (HESG)
WHEREAS, UTEK owns 100% of the issued and outstanding shares of common stock of OCBI (OCBI Shares); and
WHEREAS, before the Closing Date, OCBI will acquire the exclusive license for the fields of use as described in the License Agreement as described and which are attached hereto as part of Exhibit A and made a part of this Agreement (License Agreement) and the rights to develop and market a patented and proprietary technology for the fields of uses specified in the License Agreement (Technology).
WHEREAS, the parties desire to provide for the terms and conditions upon which OCBI will be acquired by HESG in a stock-for-stock exchange (Acquisition) in accordance with the respective corporation laws of their state, upon consummation of which all OCBI Shares will be owned by HESG, and all issued and outstanding OCBI Shares will be exchanged for common stock of HESG with terms and conditions as set forth more fully in this Agreement; and
WHEREAS, for federal income tax purposes, it is intended that the Acquisition qualifies within the meaning of Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as amended (Code).
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are by this Agreement acknowledged, the parties agree as follows:
ARTICLE 1
THE STOCK-FOR-STOCK ACQUISITION
1.01 The Acquisition
(a) Acquisition Agreement. Subject to the terms and conditions of this Agreement, at the Effective Date, as defined below, all OCBI Shares shall be acquired from UTEK by HESG in accordance with the respective corporation laws of their state and the provisions of this Agreement and the separate corporate existence of OCBI, as a wholly-owned subsidiary of HESG, shall continue after the closing.
(b) Effective Date. The Acquisition shall become effective (Effective Date) upon the execution of this Agreement and closing of the transaction.
1.02 Exchange of Stock. At the Effective Date, by virtue of the Acquisition, all of the OCBI Shares that are issued and outstanding at the Effective Date shall be exchanged for 822,845* unregistered shares (* said number of HESG shares to be adjusted to a value of $954,500 based on the closing stock price the day before closing ($1.16 @ 2/18/05) of common stock of HESG (HESG Shares), which by agreement of the shareholders of OCBI shall be issued as follows:
Page 1
Shareholder | Number of HESG Shares |
UTEK Corporation | 822,845* |
1.03
(a) Rights in OCBI Cease. At and after the Effective Date, the holder of each certificate of common stock of OCBI shall cease to have any rights as a shareholder of OCBI.
(b) Closure of OCBI Shares Records. From and after the Effective Date, the stock transfer books of OCBI shall be closed, and there shall be no further registration of stock transfers on the records of OCBI.
1.04 Closing. Subject to the terms and conditions of this Agreement, the Closing of the Acquisition shall take place February 21st, 2005.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of UTEK and OCBI. UTEK and OCBI represent and warrant to HESG that the facts set forth below are true and correct:
(a) Organization. OCBI and UTEK are corporations duly organized, validly existing and in good standing under the laws of their respective states of incorporation, and they have the requisite power and authority to conduct their business and consummate the transactions contemplated by this Agreement. True, correct and complete copies of the articles of incorporation, bylaws and all corporate minutes of OCBI have been provided to HESG and such documents are presently in effect and have not been amended or modified.
(b) Authorization. The execution of this Agreement and the consummation of the Acquisition and the other transactions contemplated by this Agreement have been duly authorized by the board of directors and shareholders of OCBI and the board of directors of UTEK; no other corporate action by the respective parties is necessary in order to execute, deliver, consummate and perform their respective obligations hereunder; and OCBI and UTEK have all requisite corporate and other authority to execute and deliver this Agreement and consummate the transactions contemplated by this Agreement.
(c) Capitalization. The authorized capital of OCBI consists of 1,000,000 shares of common stock with a par value $1.00 per share. At the date of this Agreement, 1,000 OCBI Shares are issued and outstanding as follows:
All issued and outstanding OCBI Shares have been duly authorized and validly issued and are fully paid and non-assessable shares and have not been issued in violation of any preemptive or other rights of any other person or any applicable laws. OCBI is not authorized to issue any preferred stock. All dividends on OCBI Shares which have been declared prior to the date of this Agreement have been paid in full. There are no outstanding options, warrants, commitments, calls or other rights or agreements requiring OCBI to issue any OCBI Shares or securities convertible into OCBI Shares to anyone for any reason whatsoever. None of the OCBI Shares is subject to any change, claim,
Page 2
condition, interest, lien, pledge, option, security interest or other encumbrance or restriction, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.
(d) Binding Effect. The execution, delivery, performance and consummation of this Agreement, the Acquisition and the transactions contemplated by this Agreement will not violate any obligation to which OCBI or UTEK is a party and will not create a default under any such obligation or under any agreement to which OCBI or UTEK is a party. This Agreement constitutes a legal, valid and binding obligation of each of UTEK and OCBI, enforceable against each in accordance with its terms, except as the enforcement may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditor’s rights generally and by the availability of injunctive relief, specific performance or other equitable remedies.
(e) Litigation Relating to this Agreement. There are no suits, actions or proceedings pending or, to the best of OCBI and UTEK’s knowledge, information and belief, threatened, which seek to enjoin the Acquisition or the transactions contemplated by this Agreement or which, if adversely decided, would have a materially adverse effect on the business, results of operations, assets or prospects of OCBI.
(f) No Conflicting Agreements. Neither the execution and delivery of this Agreement nor the fulfillment of or compliance by OCBI or UTEK with the terms or provisions of this Agreement nor all other documents or agreements contemplated by this Agreement and the consummation of the transaction contemplated by this Agreement will result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in a violation of, OCBI or UTEK’s articles of incorporation or bylaws, the Technology, the License Agreement, or any agreement, contract, instrument, order, judgment or decree to which OCBI or UTEK is a party or by which OCBI or UTEK or any of their respective assets is bound, or violate any provision of any applicable law, rule or regulation or any order, decree, writ or injunction of any court or government entity which materially affects their respective assets or businesses
(g) Consents. No consent from or approval of any court, governmental entity or any other person is necessary in connection with execution and delivery of this Agreement by OCBI and UTEK or performance of the obligations of OCBI and UTEK hereunder or under any other agreement to which OCBI or UTEK is a party; and the consummation of the transactions contemplated by this Agreement will not require the approval of any entity or person in order to prevent the termination of the Technology, the License Agreement, or any other material right, privilege, license or agreement relating to OCBI or its assets or business.
(h) Title to Assets. OCBI has or has agreed to enter into the agreements as listed on Exhibit A attached hereto. These agreements and the assets shown on the balance sheet of attached Exhibit B are the sole assets of OCBI. OCBI has or will by Closing Date have good and marketable title to its assets, free and clear of all liens, claims, charges, mortgages, options, security agreements and other encumbrances of every kind or nature whatsoever.
(1) Yissum Research Development Company of the Hebrew University of Jerusalem, Jerusalem, Israel (“Yissum”) owns the Technology and has all right, power, authority and ownership and entitlement to file, prosecute and maintain in effect the Patent and Patent applications with respect to the Inventions listed in Exhibit A hereto.
(2) The License Agreement between Yissum and OCBI covering the Inventions is legal, valid, binding and will be enforceable in accordance with its terms as contained in Exhibit A.
(3) Except as otherwise set forth in this Agreement, HESG acknowledges and understands that OCBI and UTEK make no representations and provide no assurances that the rights to the Technology and Intellectual Property contained in the License Agreement do not, and will not in the future, infringe or otherwise violate the rights of third parties, and
Page 3
(4) Except as otherwise expressly set forth in this Agreement, OCBI and UTEK make no representations and extend no warranties of any kind, either express or implied, including, but not limited to warranties of merchantability, fitness for a particular purpose, non-infringement and validity of the Intellectual Property.
(j) Liabilities of OCBI. On the date hereof and on the Closing Date, OCBI has no (and will not have any) assets, no liabilities or obligations of any kind, character or description except those listed on the attached Financial Statements.
(k) Financial Statements. The unaudited financial statements of OCBI, including a balance sheet dated as of February 10, 2005, attached as Exhibit B and made a part of this Agreement (the “Financial Statements”) have been prepared from the books and records of OCBI consistently applied, are in all respects, true, complete and correct and present fairly OCBI’s financial position and the results of its operations on the dates and for the periods shown in this Agreement. Such Financial Statements have been prepared in accordance with generally accepted accounting principles. OCBI has not engaged in any business not reflected in its financial statements. There have been no material adverse changes in the nature of its business, prospects, the value of assets or the financial condition since the date of its Financial Statements. There are no, and on the Closing Date there will be no, outstanding obligations or liabilities of OCBI except as specifically set forth in the Financial Statements. (When used in this Agreement, “liabilities” shall mean debts, liabilities, obligations, duties and responsibilities of any kind and description (whether absolute or contingent, monetary or non-monetary, direct or indirect, known or unknown or matured or unmatured, or of any other nature). There is no information known to OCBI or UTEK that would prevent the financial statements of OCBI from being audited in accordance with generally accepted accounting principles. The records and books of account of OCBI reflect all transactions thereof and have been regularly kept and maintained consistently applied. None of the Financial Statements, including the notes thereto, contains any untrue statement of fact, or omits to state any fact necessary in order to make the statements contained in this paragraph or therein not misleading.
(l) Taxes. All returns, reports, statements and other similar filings required to be filed by OCBI with respect to any federal, state, local or foreign taxes, assessments, interests, penalties, deficiencies, fees and other governmental charges or impositions have been timely filed with the appropriate governmental agencies in all jurisdictions in which such tax returns and other related filings are required to be filed; all such tax returns properly reflect all liabilities of OCBI for taxes for the periods, property or events covered by this Agreement; and all taxes, whether or not reflected on those tax returns, and all taxes claimed to be due from OCBI by any taxing authority, have been properly paid, except to the extent reflected on OCBI’s Financial Statements, where OCBI has contested in good faith by appropriate proceedings and reserves have been established on its Financial Statements to the full extent if the contest is adversely decided against it. OCBI has not received any notice of assessment or proposed assessment in connection with any tax returns, nor is OCBI a party to or to the best of its knowledge, expected to become a party to any pending or threatened action or proceeding, assessment or collection of taxes. OCBI has not extended or waived the application of any statute of limitations of any jurisdiction regarding the assessment or collection of any taxes. There are no tax liens (other than any lien which arises by operation of law for current taxes not yet due and payable) on any of its assets. There is no basis for any additional assessment of taxes, interest or penalties. OCBI has made all deposits required by law to be made with respect to employees’ withholding and other employment taxes, including without limitation the portion of such deposits relating to taxes imposed upon OCBI. OCBI is not and has never been a party to any tax sharing agreements with any other person or entity.
(m) Absence of Certain Changes or Events. From the date of the full execution of the Term Sheet until the Closing Date, OCBI has not, and without the written consent of HESG, it will not have:
(1) Sold, encumbered, assigned let lapsed or transferred any of its assets, including without limitation the Intellectual Property, the License Agreement or any other material asset;
(2) Amended or terminated the License Agreement or other agreement or done any act or omitted to do any act which would cause the breach of the License Agreement or any other agreement;
Page 4
(3) Suffered any damage, destruction or loss whether or not in control of OCBI;
(4) Made any commitments or agreements for capital expenditures or otherwise;
(5) Entered into any transaction or made any commitment not disclosed to HESG;
(6) Incurred any obligation or liability for borrowed money in the aggregate in excess of $500;
(7) Suffered any other event of any character, which is reasonable to expect, would adversely affect the future condition (financial or otherwise) assets or liabilities or business of OCBI; or
(8) Taken any action that could reasonably be foreseen to make any of the representations or warranties made by OCBI or UTEK untrue as of the date of this Agreement or as of the Closing Date.
(n) Agreements. Exhibit A attached contains a true and complete list of all contemplated and executed agreements between OCBI and a third party. A complete and accurate copies of all agreements, contracts and commitments between OCBI and any third party, whether written or oral to which it is a party or is bound (Contracts), has been provided to HESG and such agreements are or will be at the Closing Date, in full force and effect without modifications or amendment and constitute the legally valid and binding obligations of OCBI and such each such third party in accordance with their respective terms and will continue to be valid and enforceable following the Acquisition. Neither OCBI nor any such third party is in default of any of the Contracts. In addition:
(1) There are no outstanding unpaid promissory notes, mortgages, indentures, deed of trust, security agreements and other agreements and instruments relating to the borrowing of money by or any extension of credit to OCBI; and
(2) There are no outstanding operating agreements, lease agreements or similar agreements by which OCBI is bound; and
(3) The complete final drafts of the License Agreement have has been provided to HESG; and
(4)Except as set forth in (3) above, there are no outstanding licenses to or from others of any intellectual property and trade names; and
(5) There are no outstanding agreements or commitments to sell, lease, license or otherwise dispose of any of OCBI’s property; and
(6) There are no breaches of any agreement to which OCBI is a party.
(o) Compliance with Laws. OCBI is in compliance with all applicable laws, rules, regulations and orders promulgated by any federal, state or local government body or agency relating to its business and operations.
(p) Litigation. There is no suit, action or any arbitration, administrative, legal or other proceeding of any kind or character, or any governmental investigation pending or to the best knowledge of OCBI or UTEK, threatened against OCBI, the Technology, or Patent License Agreement, affecting its assets or business (financial or otherwise), and neither OCBI nor UTEK is in violation of or in default with respect to any judgment, order, decree or other finding of any court or government authority relating to the assets, business or properties of OCBI or the transactions contemplated hereby. There are no pending or threatened actions or proceedings before any court, arbitrator or administrative agency, which would, if adversely determined, individually or in the aggregate, adversely affect the assets or business of OCBI or the transactions contemplated.
Page 5
(q) Employees. OCBI has no and never had any employees. OCBI is not a party to or bound by any employment agreement or any collective bargaining agreement with respect to any employees. OCBI is not in violation of any law, regulation relating to employment of employees.
(r) Neither OCBI nor UTEK has any knowledge of any or threatened existing occurrence, action or development that could cause a material adverse effect on OCBI or its business, assets or condition (financial or otherwise) or prospects.
(s) Employee Benefit Plans. OCBI states that there are no and have never been any employee benefit plans, and there are no commitments to create any, including without limitation as such term is defined in the Employee Retirement Income Security Act of 1974, as amended, in effect, and there are no outstanding or un-funded liabilities nor will the execution of this Agreement and the actions contemplated in this Agreement result in any obligation or liability to any present or former employee.
(t) Books and Records. The books and records of OCBI are complete and accurate in all material respects, fairly present its business and operations, have been maintained in accordance with good business practices, and applicable legal requirements, and accurately reflect in all material respects its business, financial condition and liabilities.
(u) No Broker’s Fees. Neither UTEK nor OCBI has incurred any investment banking, advisory or other similar fees or obligations in connection with this Agreement or the transactions contemplated by this Agreement.
(v) Full Disclosure. OCBI. All representations or warranties of UTEK and OCBI contained herein or in any Schedule or Exhibit are true, correct and complete in all material respects to the best of our knowledge on the date of this Agreement and shall be true, correct and complete in all material respects as of the Closing Date as if they were made on such date. No statement made by them in this Agreement or in the exhibits to this Agreement or any document delivered by them or on their behalf pursuant to this Agreement contains an untrue statement of material fact or omits to state all material facts necessary to make the statements in this Agreement not misleading in any material respect in light of the circumstances in which they were made. UTEK and OCBI are not aware of any facts or circumstances not disclosed to HESG which indicate that the License Agreement and/or the Technology or the future operations thereunder may be adversely affected or which otherwise should be disclosed to HESG in order to make any of the representations or warranties made herein on the part of UTEK or OCBI not misleading.
2.02 Representations and Warranties of HESG. HESG represents and warrants to UTEK and OCBI that the facts set forth are true and correct.
(a) Organization. HESG is a corporation duly organized, validly existing and in good standing under the laws of Colorado, is qualified to do business as a foreign corporation in other jurisdictions in which the conduct of its business or the ownership of its properties require such qualification, and have all requisite power and authority to conduct its business and operate properties.
(b) Authorization. The execution of this Agreement and the consummation of the Acquisition and the other transactions contemplated by this Agreement have been duly authorized by the board of directors of HESG; no other corporate action on their respective parts is necessary in order to execute, deliver, consummate and perform their obligations hereunder; and they have all requisite corporate and other authority to execute and deliver this Agreement and consummate the transactions contemplated by this Agreement.
(c) Capitalization. The authorized capital of HESG consists of 50,000,000 (Fifty Million) shares of common stock with a par value $0.001 per share (HESG Common Shares) and on the Effective Date of the Acquisition, 18,678,939 (Eighteen Million, Six Hundred Seventy Eight Thousand, Nine Hundred Thirty Nine) HESG Shares (which will include the 822,845* HESG Shares issued (to be adjusted at the closing of the Acquisition) will be issued and outstanding. All issued and outstanding HESG Shares have been duly and validly
Page 6
issued and are fully paid and non-assessable shares and have not been issued in violation of any preemptive or other rights of any other person or any applicable laws.
(d) Binding Effect. The execution, delivery, performance and consummation of the Acquisition and the transactions contemplated by this Agreement will not violate any obligation to which HESG is a party and will not create a default hereunder, and this Agreement constitutes a legal, valid and binding obligation of HESG, enforceable in accordance with its terms, except as the enforcement may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditor’s rights generally and by the availability of injunctive relief, specific performance or other equitable remedies.
(e) Litigation Relating to this Agreement. There are no suits, actions or proceedings pending or to its knowledge threatened which seek to enjoin the Acquisition or the transactions contemplated by this Agreement or which, if adversely decided, would have a materially adverse effect on its business, results of operations, assets, prospects or the results of its operations of HESG.
(f) No Conflicting Agreements. Neither the execution and delivery of this Agreement nor the fulfillment of or compliance by HESG with the terms or provisions of this Agreement will result in a breach of the terms, conditions or provisions of, or constitute default under, or result in a violation of, their respective corporate charters or bylaws, or any agreement, contract, instrument, order, judgment or decree to which it is a party or by which it or any of its assets are bound, or violate any provision of any applicable law, rule or regulation or any order, decree, writ or injunction of any court or governmental entity which materially affects its assets or business.
(g) Consents. Assuming the correctness of UTEK and OCBI’s representations, no consent from or approval of any court, governmental entity or any other person is necessary in connection with its execution and delivery of this Agreement; and the consummation of the transactions contemplated by this Agreement will not require the approval of any entity or person in order to prevent the termination of any material right, privilege, license or agreement relating to HESG or its assets or business.
(h) Financial Statements. The unaudited financial statements of HESG attached as Exhibit C present fairly in all material respects its financial position and the results of its operations on the dates and for the periods shown in this Agreement; provided, however, that interim financial statements are subject to customary year-end adjustments and accruals that, in the aggregate, will not have a material adverse effect on the overall financial condition or results of its operations. HESG has not engaged in any business not reflected in its financial statements. There have been no material adverse changes in the nature of its business, prospects, the value of assets or the financial condition since the date of its financial statements. There are no outstanding obligations or liabilities of HESG as of the dates of the balance sheets except as specifically set forth in the HESG financial statements or those not required under GAAP to be reflected on such balance sheets.
(i) Full Disclosure. All representations or warranties of HESG are true, correct and complete in all material respects on the date of this Agreement and shall be true, correct and complete in all material respects as of the Closing Date as if they were made on such date. No statement made by them in this Agreement or in the exhibits to this Agreement or any document delivered by them or on their behalf pursuant to this Agreement contains an untrue statement of material fact or omits to state all material facts necessary to make the statements in this Agreement not misleading in any material respect in light of the circumstances in which they were made.
(j) Compliance with Laws. HESG is in compliance with all applicable laws, rules, regulations and orders promulgated by any federal, state or local government body or agency relating to its business and operations, except where any such non-compliance would not have a material adverse effect on HESG.
(k) Litigation. There is no suit, action or any arbitration, administrative, legal or other proceeding of any kind or character, or any governmental investigation pending or, to the best knowledge of HESG, threatened against HESG materially affecting its assets or business (financial or otherwise), and HESG is not in violation of or in default with respect to any judgment, order, decree or other finding of any court or government authority. There are no pending or threatened actions or proceedings before any court, arbitrator or administrative
Page 7
agency, which would, if adversely determined, individually or in the aggregate, materially and adversely affect its assets or business.
2.03 Investment Representations of UTEK. UTEK represents and warrants to HESG that:
(a) General. It has such knowledge and experience in financial and business matters as to be capable of evaluating the risks and merits of an investment in HESG Shares pursuant to the Acquisition. It is able to bear the economic risk of the investment in HESG Shares, including the risk of a total loss of the investment in HESG Shares. The acquisition of HESG Shares is for its own account and is for investment and not with a view to the distribution of this Agreement. Except a permitted by law, it has a no present intention of selling, transferring or otherwise disposing in any way of all or any portion of the shares at the present time. All information that it has supplied to HESG is true and correct. It has conducted all investigations and due diligence concerning HESG to evaluate the risks inherent in accepting and holding the shares which it deems appropriate, and it has found all such information obtained fully acceptable. It has had an opportunity to ask questions of the officer and directors of HESG concerning HESG Shares and the business and financial condition of and prospects for HESG, and the officers and directors of HESG have adequately answered all questions asked and made all relevant information available to them. UTEK is an Aaccredited investor, as the term is defined in Regulation D, promulgated under the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b) Stock Transfer Restrictions. UTEK acknowledges that the HESG Shares will not be registered and UTEK will not be permitted to sell or otherwise transfer the HESG Shares in any transaction in contravention of the following legend, which will be imprinted in substantially the following form on the stock certificate representing HESG Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED PURSUANT TO THE PROVISION OF THE ACT AND THE LAWS OF SUCH STATES UNDER WHOSE LAWS A TRANSFER OF SECURITIES WOULD BE SUBJECT TO A REGISTRATION REQUIREMENT, UNLESS UTEK CORPORATION HAS OBTAINED AN OPINION OF COUNSEL STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
ARTICLE 3
3,01 Corporate Approvals. Prior to Closing Date, each of the parties shall submit this Agreement to its board of directors and when necessary, its respective shareholders and obtain approval of this Agreement. Copies of corporate actions taken shall be provided to each party.
3.02 Access to Information. Each party agrees to permit, upon reasonable notice, the attorneys, accountants, and other representatives of the other parties reasonable access during normal business hours to its properties and its books and records to make reasonable investigations with respect to its affairs, and to make its officers and employees available to answer questions and provide additional information as reasonably requested.
3.03 Expenses. Each party agrees to bear its own expenses in connection with the negotiation and consummation of the Acquisition and the transactions contemplated by this Agreement.
3.04 Covenants. Except as permitted in writing, each party agrees that it will:
(a) Use its good faith efforts to obtain all requisite licenses, permits, consents, approvals and authorizations necessary in order to consummate the Acquisition; and
(b) Notify the other parties upon the occurrence of any event which would have a materially adverse effect upon the Acquisition or the transactions contemplated by this Agreement or upon the business, assets
Page 8
or results of operations; and
(c) Not modify its corporate structure, except as necessary or advisable in order to consummate the Acquisition and the transactions contemplated by this Agreement.
ARTICLE 4
The obligation of the parties to consummate the Acquisition and the transactions contemplated by this Agreement are subject to the following conditions that may be waived, to the extent permitted by law:
4.01 Each party must obtain the approval of its board of directors and such approval shall not have been rescinded or restricted.
4.02 Each party shall obtain all requisite licenses, permits, consents, authorizations and approvals required to complete the Acquisition and the transactions contemplated by this Agreement.
4.03 There shall be no claim or litigation instituted or threatened in writing by any person or government authority seeking to restrain or prohibit any of the contemplated transactions contemplated by this Agreement or challenge the right, title and interest of UTEK in the OCBI Shares or the right of OCBI or UTEK to consummate the Acquisition contemplated hereunder.
4..04 The representations and warranties of the parties shall be true and correct in all material respects at the Effective Date.
4.05 The Technology and Intellectual Property has been prosecuted in good faith with reasonable diligence.
4.06 The License Agreement is valid and in full force and effect without any default in this Agreement.
4.07 HESG shall have received, at Closing Date, each of the following:
(a) the stock certificates representing the OCBI Shares, duly endorsed (or accompanied by duly executed stock powers) by UTEK for cancellation, and the federal wire transfer (from OCBI or UTEK) to an account designated by HESG of $200,000;
(b) all documentation relating to OCBI’s business, all in a form and substance satisfactory to HESG;
(c) such agreements, files and other data and documents pertaining to OCBI’s business as HESG may reasonably request;
(d) copies of the general ledgers and books of account of OCBI, and all federal, state and local income, franchise, property and other tax returns filed by OCBI since the inception of OCBI;
(e) certificates of (i) the Secretary of State of the State of Florida as to the legal existence and good standing, as applicable, (including tax) of OCBI in Florida;
(f) the original corporate minute books of OCBI, including the articles of incorporation and bylaws of OCBI, and all other documents filed in this Agreement;
(g) all consents, assignments or related documents of conveyance to give HESG the benefit of the transactions contemplated hereunder;
Page 9
(h) such documents as may be needed to accomplish the Closing under the corporate laws of the states of incorporation of HESG and OCBI, and
(i) such other documents, instruments or certificates as HESG, or their counsel may reasonably request.
4.08 HESG shall have completed due diligence investigation of OCBI to HESG’s satisfaction in their sole discretion.
4.09 HESG shall receive the resignation effective the Closing Date of each director and officer of OCBI.
ARTICLE 5
5.01 Survival of Representations and Warranties.
(a) The representations and warranties made by UTEK and OCBI shall survive for a period of 1 year after the Closing Date, and thereafter all such representation and warranties shall be extinguished, except with respect to claims then pending for which specific notice has been given during such 1-year period.
(b) The representations and warranties made by HESG shall survive for a period of 1 year after the Closing Date, and thereafter all such representations and warranties shall be extinguished, except with respect to claims then pending for which specific notice has been given during such 1-year period.
5.02 Limitations on Liability. Notwithstanding any other provision to this Agreement the contrary, neither party to this Agreement shall be liable to the other party for any cost, damage, expense, liability or loss under this indemnification provision until after the sum of all amounts individually when added to all other such amounts in the aggregate exceeds $1,000 and then such liability shall apply only to matters in excess of $1,000.
5.03 Indemnification. Each party agrees to indemnify the other party hereto (and its officers, directors, employees and shareholders) against and hold them harmless from any and all losses, liabilities, costs, damages (including lost profits), claims and expenses (including, without limitation, attorneys' fees, consultants', accountants' and disbursements) (collectively, “Damages”), as incurred, which they may sustain at any time by reason of the breach or inaccuracy of or failure to comply with any of the warranties, representations, conditions, covenants or agreements of such indemnifying party contained in this Agreement.
ARTICLE 6
6.01 Specific Performance. Each party’s obligations under this Agreement are unique. If any party should default in its obligations under this agreement, the parties each acknowledge that it would be extremely impracticable to measure the resulting damages. Accordingly, the non-defaulting party, in addition to any other available rights or remedies, may xxx in equity for specific performance, and the parties each expressly waive the defense that a remedy in damages will be adequate.
6.02 Costs. If any legal action or any arbitration or other proceeding is brought for the enforcement of this agreement or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.
Page 10
ARTICLE 7
In the event a dispute arises with respect to the interpretation or effect of this Agreement or concerning the rights or obligations of the parties to this Agreement, the parties agree to negotiate in good faith with reasonable diligence in an effort to resolve the dispute in a mutually acceptable manner. Failing to reach a resolution of this Agreement, either party shall have the right to submit the dispute to be settled by arbitration under the Commercial Rules of Arbitration of the American Arbitration Association. The parties agree that, unless the parties mutually agree to the contrary such arbitration shall be conducted in Los Angeles, CA. The cost of arbitration shall be borne by the party against whom the award is rendered or, if in the interest of fairness, as allocated in accordance with the judgment of the arbitrators. All awards in arbitration made in good faith and not infected with fraud or other misconduct shall be final and binding. The arbitrators shall be selected as follows: one by HESG, one by UTEK and a third by the two selected arbitrators. The third arbitrator shall be the chairman of the panel.
ARTICLE 8
8.01 No party may assign this Agreement or any right or obligation of it hereunder without the prior written consent of the other parties to this Agreement. No permitted assignment shall relieve a party of its obligations under this Agreement without the separate written consent of the other parties.
8.02 This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns.
8.03 Each party agrees that it will comply with all applicable laws, rules and regulations in the execution and performance of its obligations under this Agreement.
8.04 This Agreement shall be governed interpreted and construed by and in accordance with the laws of the State of California without regard to principles of conflicts of law.
8.05 This document constitutes a complete and entire agreement among the parties with reference to the subject matters set forth in this Agreement. No statement or agreement, oral or written, made prior to or at the execution of this Agreement and no prior course of dealing or practice by either party shall vary or modify the terms set forth in this Agreement without the prior consent of the other parties to this Agreement. This Agreement may be amended only by a written document signed by the parties.
8.06 Notices or other communications required to be made in connection with this Agreement shall be sent by U.S. mail, certified, return receipt requested, personally delivered or sent by express delivery service and delivered to the parties at the addresses set forth below or at such other address as may be changed from time to time by giving written notice to the other parties.
8.07 The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
8.08 This Agreement may be executed in multiple counterparts, each of which shall constitute one and a single Agreement.
8.09 Any facsimile signature of any part to this Agreement or to any other agreement or document executed in connection of this Agreement should constitute a legal, valid and binding execution by such parties.
(Signatures on the following page)
Page 11
Health Sciences Group, Inc. Open Cell Biotechnologies, Inc.
By:___________________________ By:____________________________
Xxxx X. Xxxxxxx, Xxxx Xxxxxxx
CEO President
Address: Address:
Xxxxxx Xxxxxx Center 000 Xxxxx Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxx, 0xx Xxxxx Xxxxx Xxxx, Xxxxxxx 00000
Xxx Xxxxxxx, XX 00000
Date: _________________________ Date: _________________________
UTEK CORPORATION
By:___________________________
Xxxxxxxx X. Xxxxx, Ph.D.
Chief Executive Officer
Address:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000
Date: _________________________
Page 12
EXHIBIT A
Outstanding Agreements
License Agreement from Yissum Research Development Company of the Hebrew University of Jerusalem, Jerusalem, Israel (“Yissum”)
Page 13
EXHIBIT B
Open Cell Biotechnologies, Inc.
Financial Statements as of February 18, 2005
Page 14
EXHIBIT C
HESG Corporation
Current Form 10-QSB
For the Fiscal Quarter Ending September 30, 2004
Including Financial Statements
Page 15