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Exhibit 2
ACQUISITION OF TECHNOLOGY DEVELOPMENT, INC.
BY
THE QUANTUM GROUP, INC.
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is entered into by
and among The Quantum Group, Inc. ("QGI"), a Nevada Corporation, UTEK
Corporation, a Delaware Corporation ("UTEK") and Technology Development,
Inc. (TDI) a Florida Corporation.
WHEREAS, UTEK owns 100% of the outstanding shares of the capital stock of
TDI; and
WHEREAS, TDI has negotiated with Dartmouth College (DARTMOUTH) and seeks to
acquire by the Closing Date, the exclusive worldwide license (for the
fields of use described in the License Agreement contained in Exhibit A) to
develop and market a proprietary technology for modifying ice adhesion
strength to conductive surfaces which is described in a US patent entitled
"Systems and Methods for Modifying Ice Adhesion Strength" (TECHNOLOGY)
Inventor: Xx. Xxxxxx X. Xxxxxxxx. US Patent Number 6,027,075. DARTMOUTH is
the owner of US Patent Number 6,027,075.
WHEREAS, the parties desire to provide for the terms and conditions upon
which TDI will be acquired by QGI in a tax free, stock for stock exchange
("Acquisition") in accordance with the Corporation Law of Nevada and the
State of Florida, upon consummation of which the assets and business of TDI
will be owned by QGI, and all issued and outstanding shares of capital
stock of TDI will be exchanged for common stock of QGI with terms and
conditions as set forth more fully herein; and
WHEREAS, for federal income tax purposes, it is intended that the
Acquisition qualify as a tax-free reorganization 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
hereby acknowledged, the parties agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 The Acquisition
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(a) Agreement to Merge. Subject to the terms and conditions of
this Agreement, at the Effective Time, as defined below, TDI shall be
merged with and into QGI in accordance with the Nevada Act and the
provisions of this Agreement; the separate corporate existence of TDI shall
cease; and QGI shall continue as the surviving corporation ("Surviving
Corporation"). The constituent corporations ("Constituent Corporations") to
the Acquisition are QGI and TDI. The name of the Surviving Corporation, The
Quantum Group, Inc., shall not be changed by reason of the Acquisition.
(b) Effective Time. The Acquisition shall become effective
("Effective Time") upon the execution of this Agreement. Following this
execution, QGI will file of a Certificate of Merger ("Certificate of
Merger") with the Secretary of State of the State of Nevada in accordance
with the applicable provisions of the Nevada Act and UTEK will file the
Articles of Merger with the Secretary of State of the State of Florida in
accordance with the applicable provisions of the Florida Act.
(c) Effect of the Acquisition. At the Effective Time the effect of
the Acquisition as shall be as provided herein and as set forth in the
Nevada Act and the Florida Act, without limiting the generality of the
foregoing and subject thereto, as of the Effective Time, all rights,
powers, privileges, franchises, licenses and permits of the Constituent
Corporations and all property, real, personal and mixed, shall be vested in
the Surviving Corporation; and all debts, duties, liabilities and claims of
every kind, character and description of the Constituent Corporations shall
be debts, duties, liabilities and claims of the Surviving Corporation and
may be enforced against the Surviving Corporation to the same extent as if
such debts, duties, liabilities and claims had been incurred by it
originally. All rights of creditors of the Constituent Corporations and all
liens upon property of any Constituent Corporation shall be preserved
unimpaired and shall not be altered in any way by reason of the
Acquisition.
(d) Tax Consequences. It is intended that the Acquisition shall
constitute reorganization within the meaning of Section 368 (a) (1) (B) of
the Code and that the Agreement shall constitute a "Plan of Reorganization"
within the meaning of Treasury Regulation Section 1.350-2(g).
1.02 Conversion of Stock. At the Effective Time, by virtue of the
Acquisition and without any action on the part of the shareholders of the
Constituent Corporations:
(i) All of the shares of TDI stock that are issued and outstanding at
the Effective Time shall be converted into 1,446,153 unregistered
shares (the actual number of shares has been adjusted based on the
bid price on the day prior to closing to equal a value of
$2,350,000 as per the signed Term Sheet in Exhibit C) of common
stock of the Surviving
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Corporation ("QGI") which by agreement of the shareholders of TDI
shall be issued to UTEK.
1.03 Effect of Acquisition.
(a) Rights in TDI Cease. At and after the Effective Time, the
holder of each certificate of common stock of TDI shall cease to have any
rights as a shareholder of TDI.
(b) Closure of TDI Stock Records. From and after the Effective
Time, the stock transfer books of TDI shall be closed, and there shall be
no further registration of stock transfers on the records of TDI.
1.04 Certificate of Incorporation of the Surviving Corporation. The
certificate of Incorporation of the Surviving Corporation shall not be
changed by reason of the Acquisition.
1.05 Bylaws of the Surviving Corporation. The Bylaws of the
Surviving Corporation shall not be changed by reason of the Acquisition.
1.06 Closing. Subject to the terms and conditions of this
Agreement, the Closing of the Acquisition shall take place on or before
February 19, 2000, ("Closing Date") unless extended by mutual consent of
the parties in writing.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
2.01 General Representations and Warranties of UTEK and TDI. UTEK
and TDI represents and warrants to QGI that the facts set forth below are
true and correct:
(a) Organization. TDI and UTEK are corporations duly organized,
validly existing and in good standing under the laws of their respective
States, 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 minutes of TDI have been provided to QGI 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
hereby have been duly authorized by the Board of Directors and
shareholders of TDI and the Board of Directors of UTEK; no other corporate
action by the
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respective parties is necessary in order to execute, deliver, consummate
and perform their respective obligations hereunder; and TDI and UTEK have
all requisite corporate and other authority to execute and deliver this
Agreement and consummate the transactions contemplated hereby.
(c) Capitalization. The authorized capital of TDI consists of
1,000,000 shares of common stock, par value $.00 per share; at the date
hereof, 1,000 shares of common stock were issued and outstanding. UTEK
owns all of the 1,000 shares in TDI. All issued and outstanding shares of
common stock of TDI have been duly 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. TDI
is not authorized to issue any preferred stock. All dividends on TDI stock
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 it to issue any shares of
TDI common stock or securities convertible into shares of TDI's common
stock to anyone for any reason whatsoever. None of the TDI stock is
subject to any change, claim, 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 hereby will not violate any obligation to which TDI or UTEK is
a party and will not create a default hereunder; and this Agreement
constitutes a legal, valid and binding obligation of TDI, 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. To the best knowledge
of TDI or UTEK, there are no suits, actions or proceedings pending or
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, prospects, the Patent, the License, the Consulting Agreement, or
the results of the operations of TDI.
(f) No Conflicting Agreements. Neither the execution and delivery
of this Agreement nor the fulfillment of or compliance by TDI or UTEK with
the terms or provisions hereof nor all other documents or agreements
contemplated hereby 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,
TDI's or UTEK's
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corporate charters or bylaws, the Patent, the License (as defined below),
Consulting Agreement, or any agreement, contract, instrument, order,
judgment or decree to which TDI is a party or by which TDI or any of its
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 its assets or business.
(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 TDI and UTEK or performance of
the obligations of TDI and UTEK hereunder or under any other agreement to
which TDI 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 Patent, the License,
Consulting Agreement, or any other material right, privilege, license or
agreement relating to TDI or its assets or business.
(h) Title to Assets. The License Agreement between Dartmouth and
TDI and the Consulting Agreement between TDI and Xx. Xxxxxxxx are
contained in Exhibit A. These are the sole assets of TDI. TDI 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. All
of the tangible assets of TDI have been operated in accordance with
customary operating practices generally acceptable in its industry to
which and have been maintained and are in good working order and repair in
the ordinary course of business, subject only to reasonable and ordinary
wear and tear; and
(i) Intellectual Property
a) The TECHNOLOGY is owned by DARTMOUTH. DARTMOUTH has all right,
power, authority and ownership and entitlement to file, prosecute
and maintain in effect the Patent with respect to the Invention
listed in Exhibit A hereto; and
b) The TECHNOLOGY was invented by Xx. Xxxxxx Xxxxxxxx while he
was employed at DARTMOUTH, and he has assigned his interest in the
TECHNOLOGY to DARTMOUTH;
Exhibit A sets forth a brief description of all of TDI's right,
title and interest in and to all intellectual property rights,
including but not limited to, inventions (whether patentable or
not), discoveries, trade secrets, technology, technical
information, proprietary information, processes, know-how,
designs, United States and foreign patents and patent
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applications (and all reissues, divisions, renewals, extensions,
provisionals, continuations, and continuations-in-part thereof),
trade names, logos, trademarks, service marks, trademark and
service marks registrations, copyrights, copyright registrations,
and all computer software, data and databases owned by or licensed
to TDI (collectively "Intellectual Property"). TDI has or will
have by the Closing Date, good and exclusive licensee interests to
the Intellectual Property free and clear of all liens, claims,
conditions, charges, equitable interests, or other encumbrances or
restrictions, with the exception of those outlined in the License
Agreement between TDI and DARTMOUTH. To the best of TDI's
knowledge, TDI has not infringed nor is infringing any
Intellectual Property owned or used by another person or entity.
However, TDI has not conducted an infringement investigation and
provides no warrantees or assurances that the Licensed Technology
does not infringe any other parties' technology. There are no
pending or threatened actions against TDI for infringement of any
such Intellectual Property. The License Agreement dated February
16, 2000 from DARTMOUTH to TDI licensing certain Intellectual
Property more particularly described Exhibit A ("License
Agreement") for the use of any Intellectual Property owned by or
licensed by third parties to TDI are described in Exhibit A in
full force and effect and following the consummation of the
transactions contemplated by this Agreement shall remain in full
force and effect and (ii) legal, valid, binding and enforceable in
accordance with their respective terms. Except as disclosed in
Exhibit A, TDI is not a party to any license (in or out) with
respect to the Intellectual Property. Except as set forth in
Exhibit A, TDI is not a party to any agreement that imparts or has
imparted an obligation of non-competition, secrecy,
confidentiality or non-disclosure upon TDI. TDI is or was not
under any obligation of non-competition, secrecy, confidentiality
or non-disclosure to any third party.
(1) QGI acknowledges and understands that TDI and UTEK
make no representations and provide no assurances that rights
contained in the License Agreement does not, and will not in the
future, infringe or otherwise violate the rights of others, and
(2) Except as otherwise expressly set forth in this
Agreement, TDI and UTEK makes no representations and extends 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 said patent
rights.
(j) Liabilities of TDI. TDI has no assets, no liabilities or
obligations of any kind, character or description except those created by
the License
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Agreement with DARTMOUTH and the Consulting Agreement with Xx. Xxxxxxxx,
final copies of which have been provided to QGI (Exhibit A).
(k) Financial Statements. The unaudited financial statements of
TDI, including a Balance Sheet attached as (Exhibit B) and in all respects
is complete and correct and present fairly its financial position and the
results of its operations on the dates and for the periods shown therein;
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. TDI 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 TDI except as specifically
set forth in the TDI financial statements and Licensing and/or Consulting
Agreement with DARTMOUTH and Xx. Xxxxxxxx.
(l) Taxes. All returns, reports, statements and other similar
filings required to be filed by TDI 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 TDI for taxes for the
periods, property or events covered thereby; and all taxes, whether or not
reflected on those tax returns, and all taxes claimed to be due from TDI by
any taxing authority, have been properly paid, except to the extent
reflected on section 2.01(i) where TDI 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. TDI has not received any notice of assessment or proposed assessment in
connection with any tax returns, nor is TDI 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. TDI 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. TDI
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 TDI. TDI 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 February 1, 2001
until the Closing Date, TDI has not, and without the written consent of
QGI, it will not have:
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(i) Sold, encumbered, assigned let lapsed or
transferred any of its material assets including without
limitation its intellectual property, or its License or
any other material asset; or
(ii) Amended or terminated the License or other
material contract or done any act or omitted to do any act
which would cause the breach of the License or any other
material contract; or
(iii) Suffered any damage, destruction or loss
whether or not in control of TDI; or
(iv) Made any commitments or agreements for
capital expenditures or otherwise; or
(v) Entered into any transaction or made any
commitment not disclosed to QGI; or
(vi) Incurred any material obligation or
liability for borrowed money
(vii) 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 TDI.
(n) Material Contracts. Exhibit A contains a true and complete
list of all contracts. A complete and accurate copies of all material
agreements, contracts and commitments of the following types, whether
written or oral to which it is a party or is bound ("Contracts"), has been
provided to QGI 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 TDI in accordance with their
respective terms and will continue to be valid and enforceable following
the Acquisition. TDI is not in default of any of the Contracts. In
addition:
(i) 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
TDI; and
(ii) There are no outstanding operating
agreements, lease agreements or similar agreements by
which TDI is bound; and
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(iii) The complete final drafts of the License
Agreement, and the US Patent has been provided to QGI; and
(iv) Except as set forth in (iii) above, there
are no outstanding licenses to or from others of any
intellectual property and trade names; and
(v) There are not outstanding contracts or
commitments to sell, lease or otherwise dispose of any of
TDI's property; and
(vi) There are no breaches of any Contract
(o) Compliance with Laws. TDI 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. To the best knowledge of TDI there is no suit,
action or any arbitration, administrative, legal or other proceeding of any
kind or character, or any governmental investigation pending or threatened
against TDI, Patent, the License Agreement or the Consulting Agreement
affecting its assets or business (financial or otherwise), and TDI 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 agency, which would, if adversely determined, individually
or in the aggregate, materially and adversely affect its assets or
business.
(q) Employees. TDI has no and never had any employees. TDI is not
a party to or bound by any employment agreement or any collective
bargaining agreement with respect to any employees. TDI is not in violation
of any law, regulation relating to employment of employees.
(r) Neither TDI nor UTEK has any knowledge of any existing or
threatened occurrence, action or development which could cause a material
adverse effect on TDI or its business, assets or condition (financial or
otherwise) or prospects.
(s) Employee Benefit Plans. TDI 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 herein result in any obligation
or liability to any present or former employee.
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(t) Books and Records. The books and records of TDI 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 TDI has incurred any
investment banking, advisory or other similar fees or obligations in
connection with this Agreement or the transactions contemplated thereby.
(v) Full Disclosure. All representations or warranties of UTEK and
TDI are true, correct and complete in all material respects to the best of
our knowledge on the date hereof and shall be true, correct and complete in
all material respects as of the Closing Date as if they were made on such
date.
2.02 General Representations and Warranties of QGI. QGI represents
and warrants to UTEK and TDI that the facts set forth are true and correct.
(a) Organization. QGI is a corporation duly organized, validly
existing and in good standing under the laws of its State, 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
hereby have been duly authorized by the Board of Directors of QGI; 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 hereby.
(c) Capitalization. The authorized capital of QGI consists of
50,000,000 shares of common stock, par value $.001 per share; and at the
Effective Time of the Acquisition, up to ___________ shares of its common
stock will be issued and outstanding immediately after the Effective Time.
All issued and outstanding shares of common stock of QGI have been duly 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.
(d) Binding Effect. The execution, delivery, performance and
consummation of the Acquisition and the transactions contemplated hereby
will not violate any obligation to which QGI is a party and will not create
a default hereunder, and this Agreement constitutes a legal, valid and
binding obligation of QGI, enforceable in accordance with its terms, except
as the
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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 QGI.
(f) No Conflicting Agreements. Neither the execution and delivery
of this Agreement nor the fulfillment of or compliance by QGI with the
terms or provisions thereof will result in a breach of the terms,
conditions or provisions of, or constitute a 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's and TDI'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 QGI or its assets or business.
(h) Financial Statements. The unaudited financial statements of
QGI attached as Exhibit D present fairly its financial position and the
results of its operations on the dates and for the periods shown therein;
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. QGI 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 QGI except as specifically
set forth in the QGI financial statements.
(i) Full Disclosure. All representations or warranties of QGI are
true, correct and complete in all material respects on the date hereof 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
herein or in the exhibits hereto or any document delivered by them or on
their behalf pursuant to this Agreement contains an untrue statement of
material fact or omits to
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state all material facts necessary to make the statements therein not
misleading in any material respect in light of the circumstances in which
they were made.
(j) Compliance with Laws. QGI 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. To the best knowledge of QGI there is no suit,
action or any arbitration, administrative, legal or other proceeding of any
kind or character, or any governmental investigation pending or threatened
against QGI materially affecting its assets or business (financial or
otherwise), and QGI 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 agency, which would, if adversely
determined, individually or in the aggregate, materially and adversely
affect its assets or business.
(q) QGI has no knowledge of any existing or threatened occurrence,
action or development that could cause a material adverse effect on QGI or
its business, assets or condition (financial or otherwise) or prospects.
2.03 Investment Representations of UTEK. UTEK represents and
warrant to QGI 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 the shares ("Shares") of common stock of QGI pursuant to the
Acquisition. It is able to bear the economic risk of the investment in the
Shares, including the risk of a total loss of the investment in the Shares.
The acquisition of the Shares is for its own account and is for investment
and not with a view to the distribution thereof. 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. All information
that it has supplied to QGI is true and correct. It has conducted all
investigations and due diligence concerning QGI 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 QGI
concerning the Shares and the business and financial condition of and
prospects for QGI, and the officers and directors of QGI have adequately
answered all questions asked and made all relevant information available to
them. UTEK is an "accredited investor," as the term is defined in
Regulation D, promulgated under the Securities Act of 1933, as amended.
(b) Stock Transfer Restrictions.
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UTEK acknowledges that the QGI Stock will not be registered
and UTEK will be permitted to sell or otherwise transfer the QGI Stock in
any transaction in contravention of the following legend, which will be
imprinted in substantially the follow form on the QGI Stock:
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 OBTAINED AN OPINION OF COUNSEL STATING
THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION.
ARTICLE III
TRANSACTIONS PRIOR TO CLOSING
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 shareholders and obtain approval thereof. 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 hereby.
3.04 Covenants. Except as permitted in writing, each party agrees
that it will:
(i) Use its good faith efforts to obtain all requisite licenses,
permits, consents, approvals and authorizations necessary in order to
consummate the Acquisition; and
(ii) Notify the other parties upon the occurrence of any event
which would have a materially adverse effect upon the Acquisition or
the transactions
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contemplated hereby or upon the business, assets or results of
operations; and
(iii) Not modify its corporate structure, except as necessary or
advisable in order to consummate the Acquisition and the transactions
contemplated hereby.
ARTICLE IV
CONDITIONS PRECEDENT
The obligation of the parties to consummate the Acquisition and the
transactions contemplated hereby are subject to the following conditions
that may be waived to the extent permitted by law:
(a) Each party must obtain the approval of its Board of Directors
and such approval shall not have been rescinded or restricted; and
(b) Each party shall obtain all requisite licenses, permits,
consents, authorizations and approvals required to complete the Acquisition
and the transactions contemplated hereby; and
(c) 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 hereby or
challenge the right, title and interest of UTEK in the TDI stock or the
right of TDI or UTEK to consummate the Acquisition contemplated hereunder;
and
(d) The representations and warranties of the parties shall be
true and correct in all material respects at the Effective Time; and
(e) The DARTMOUTH Patent has been prosecuted in good faith with
reasonable diligence.
(f) The License Agreement is valid and in full force and effect
without any default therein.
(g) QGI shall have received at or within 5 days of Closing Date
each of the following:
i. the stock certificates representing the TDI Stock,
duly endorsed (or accompanied by duly executed stock powers)
by UTEK for cancellation;
ii. all documentation relating to the TDI's business, all
in form and substance satisfactory to QGI;
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iii. such contracts, files and other data and documents
pertaining to TDI's business as QGI may reasonably request;
iv. copies of the general ledgers and books of account of
TDI, and all federal, state and local income, franchise,
property and other tax returns filed by TDI since inception of
TDI;
v. 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 TDI in Florida;
vi. the original minute books of TDI, including the
articles or certificate of incorporation and bylaws of TDI,
and all other documents filed therein;
vii. all consents, assignments or related documents of
conveyance to give QGI the benefit of the transactions
contemplated hereunder;
viii. such documents as may be needed to accomplish the
Closing under the corporate laws of the states of
incorporation of QGI and TDI, and
ix. such other documents, instruments or certificates as
QGI, or their counsel may reasonably request.
(h) QGI shall have completed due diligence investigation of TDI to
QGI satisfaction in their sole discretion.
(i) QGI shall receive the resignation effective the Closing Date
of each Director and officer of TDI.
ARTICLE IV
LIMITATIONS
(A) Survival of Representations and
Warranties.
(1) The representations and warranties made by
UTEK and TDI shall survive for a period of 1 year after 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.
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(2) The representations and warranties made by
QGI shall survive for a period of 1 year after 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.
(B) Limitations on Liability. Notwithstanding
any other provision hereto the contrary, neither
party hereto 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 $500, and then
such liability shall apply only to matters in excess
of $500.
(C) Indemnification.
(1) Indemnification by UTEK. UTEK agrees to
defend, indemnify and hold QGI harmless from and
against any and all claims, actions, damages,
obligations, losses, liabilities, costs, and
expenses (including attorneys' fees and expenses)
(collectively, "Losses") arising out of or resulting
from a misrepresentation, breach or warranty, or
breach or non-fulfillment of any covenant of TDI or
UTEK contained herein or in the Schedules or
Exhibits annexed hereto or in any other documents or
instruments furnished or to be furnished by TDI or
UTEK pursuant hereto or in connection with the
transaction contemplated hereby.
(2) Indemnification by QGI. QGI agrees to
defend, indemnify and hold UTEK harmless from and
against any and all claims, actions, damages,
obligations, losses, liabilities, costs, and
expenses (including attorneys' fees and expenses)
(collectively, "Losses") arising out of or resulting
from a misrepresentation, breach or warranty, or
breach or non-fulfillment of any covenant of QGI or
contained herein or in the Schedules or Exhibits
annexed hereto or in any other documents or
instruments furnished or to be furnished by QGI
pursuant hereto or in connection with the
transaction contemplated hereby.
ARTICLE V
REMEDIES
6.01 Specific Performance. Each party's obligations under
this agreement is 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-
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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.
ARTICLE VI
ARBITRATION
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 hereto, 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 thereof, 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 all arbitration shall
be conducted in Tampa, Florida, unless the parties mutually agree to
the contrary. 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 QGI, one by UTEK and a third by the two
selected arbitrators. The third arbitrator shall be the chairman of
the panel.
ARTICLE VII
MISCELLANEOUS
No party may assign this Agreement or any right or obligation of it
hereunder without the prior written consent of the other parties
hereto. No permitted assignment shall relieve a party of its
obligations under this Agreement without the separate written consent
of the other parties. This Agreement shall be binding upon and enure
to the benefit of the parties and their respective permitted
successors and assigns. 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. This Agreement
shall be governed by and construct in accordance with the laws of the
State of Florida without regard to principles of conflicts of law.
This document
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constitutes a complete and entire agreement among the parties with
reference to the subject matters set forth herein. No statement or
agreement, oral or written, made prior to or at the execution hereof
and no prior course of dealing or practice by either party shall vary
or modify the terms set forth herein without the prior consent of the
other parties hereto. This Agreement may be amended only by a written
document signed by the parties. Notices or other communications
required to be made in connection with this Agreement shall be
delivered to the parties at the address set forth below or at such
other address as may be changed from time to time by giving written
notice to the other parties. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement. This
Agreement may be executed in multiple counterparts, each of which
shall constitute one and a single Agreement. Any facsimile signature
of any part hereto or to any other agreement or document executed in
connection hereof should constitute a legal, valid and binding
execution by such parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by a duly authorized officer this 19th day of February 2001.
The Quantum Group, Inc. Technology Development, Inc.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxx
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Xxxxx Xxxxx Xxxxxxxx X. Xxxxx, Ph.D.
President and COO Chief Executive Officer
UTEK Corporation
By: /s/ Xxx Xxxxxxx
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Xxx Xxxxxxx, Ph. D., M.D.
President
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