EXHIBIT 2.1
ACQUISITION OF DIGITAL IMAGE ENHANCEMENT TECHNOLOGIES, INC.
BY
IMAGE ANALYSIS, INC.
AGREEMENT AND PLAN OF ACQUISITION
THIS AGREEMENT AND PLAN OF ACQUISITION ("Agreement") is entered into by
and between Digital Image Enhancement Technologies, Inc., a Florida corporation,
("DIET"), UTEK Corporation, a Delaware corporation, ("UTEK"), and IMAGE
ANALYSIS, INC., an Oklahoma corporation, ("IMAGE").
WHEREAS, UTEK owns 93% of the issued and outstanding shares of common
stock of DIET ("DIET Shares"); and
WHEREAS, before the Closing Date, DIET has acquired the license for the
fields of use as described in the license agreement, a part of Exhibit "A"
attached to 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 DIET will be acquired by IMAGE in a, stock-for-stock exchange
("Acquisition") in accordance with the respective corporation laws of their
state, upon consummation of which all DIET Shares will be owned by IMAGE, and
all issued and outstanding DIET Shares will be exchanged for common stock of
IMAGE 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:
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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 DIET Shares shall
be acquired from UTEK by IMAGE in accordance with the respective corporation
laws of their state and the provisions of this Agreement and the separate
corporate existence of DIET, as a wholly-owned subsidiary of IMAGE, 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 DIET Shares that are issued and outstanding at the Effective
Date shall be exchanged for 500,000 unregistered shares of common stock
of IMAGE ("IMAGE Shares"), which by agreement of the shareholders of
DIET shall be issued as follows:
SHAREHOLDER NUMBER OF IMAGE SHARES
----------- ----------------------
UTEK CORPORATION 465,000
UNIVERSITY OF HOUSTON 35,000
-------
TOTAL 500,000
1.03 Effect of Acquisition.
(a) Rights in DIET Cease. At and after the Effective Date, the
holder of each certificate of common stock of DIET shall cease to have any
rights as a shareholder of DIET.
(b) Closure of DIET Shares Records. From and after the Effective
Date, the stock transfer books of DIET shall be closed, and there shall be no
further registration of stock transfers on the records of DIET.
1.04 Closing. Subject to the terms and conditions of this
Agreement, the Closing of the Acquisition shall take place on or before May 7,
2002 ("Closing Date") unless extended by mutual consent of the parties in
writing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of UTEK and DIET. UTEK and DIET
represent and warrant to IMAGE that the facts set forth below are true and
correct:
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(a) Organization. DIET 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 DIET have been provided to IMAGE 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 DIET 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 DIET 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 DIET 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 DIET Shares are issued and outstanding as follows:
SHAREHOLDER NUMBER OF DIET SHARES
----------- ---------------------
UTEK CORPORATION 1,000
All issued and outstanding DIET Shares 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. DIET
is not authorized to issue any preferred stock. All dividends on DIET 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 DIET to issue any DIET Shares or securities
convertible into DIET Shares to anyone for any reason whatsoever. None of the
DIET Shares 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 by this Agreement will not violate any obligation to which DIET or
UTEK is a party and will not create a default under any such obligation or under
any agreement to which DIET or UTEK is a party. This Agreement constitutes a
legal, valid and binding obligation of DIET, 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 the best of DIET 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 DIET.
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(f) No Conflicting Agreements. Neither the execution and delivery
of this Agreement nor the fulfillment of or compliance by DIET 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,
DIET or UTEK's articles of incorporation or bylaws, the Technology, the License
Agreement, or any agreement, contract, instrument, order, judgment or decree to
which DIET or UTEK is a party or by which DIET 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 DIET and UTEK or performance of the
obligations of DIET and UTEK hereunder or under any other agreement to which
DIET 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 DIET or its
assets or business.
(h) Title to Assets. DIET 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
DIET. DIET 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.
(i) Intellectual Property
(1) University of Houston owns the Technology and has all right,
power, authority and ownership and entitlement to file,
prosecute and maintain in effect the Patent application with
respect to the Invention listed in Exhibit "A" hereto, and
(2) The Technology was invented by Kouri, Gunaratne, Kakadiaris,
Shi, Zhang, Wang and Zhang ("Inventors"). The Inventors have
assigned all of their rights, title and interest in the
Technology to University of Houston, and
(3) The License Agreement between University of Houston and DIET
covering the Invention is legal, valid, binding and will be
enforceable in accordance with its terms as contained in
Exhibit "A".
(4) Except as otherwise set forth in this Agreement, IMAGE
acknowledges and understands that DIET 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
(5) Except as otherwise expressly set forth in this Agreement,
DIET 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.
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(j) Liabilities of DIET. DIET has no assets, no liabilities or
obligations of any kind, character or description except those listed on the
attached schedules and exhibits.
(k) Financial Statements. The unaudited financial statements of
DIET, including a balance sheet, attached as Exhibit B and made a part of this
Agreement, are, in all respects, complete and correct and present fairly DIET's
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. DIET 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 DIET except as specifically set forth in the financial statements and the
other attached schedules and exhibits. There is no information known to DIET or
UTEK that would prevent the financial statements of DIET from being audited in
accordance with generally accepted accounting principles.
(l) Taxes. All returns, reports, statements and other similar
filings required to be filed by DIET 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 DIET 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 DIET by any taxing
authority, have been properly paid, except to the extent reflected on DIET's
financial statements, where DIET 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. DIET has not
received any notice of assessment or proposed assessment in connection with any
tax returns, nor is DIET 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. DIET 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. DIET 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 DIET.
DIET 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, DIET has not, and
without the written consent of IMAGE, it will not have:
(1) Sold, encumbered, assigned let lapsed or transferred any of
its material assets, including without limitation the
Intellectual Property, the Patent License Agreement or any
other material asset;
(2) Amended or terminated the Patent License Agreement or other
material agreement or done any act or omitted to do any act
which would cause the breach of the Patent License Agreement
or any other material agreement;
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(3) Suffered any damage, destruction or loss whether or not in
control of DIET;
(4) Made any commitments or agreements for capital expenditures or
otherwise;
(5) Entered into any transaction or made any commitment not
disclosed to IMAGE;
(6) Incurred any material obligation or liability for borrowed
money;
(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
DIET; or
(7) Taken any action which could reasonably be foreseen to make
any of the representations or warranties made by DIET or UTEK
untrue as of the date of this Agreement or as of the Closing
Date.
(n) Material Agreements. Exhibit "A" attached contains a true and
complete list of all contemplated and executed agreements between DIET and a
third party. 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 IMAGE 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 DIET in accordance with their respective terms and will continue
to be valid and enforceable following the Acquisition. DIET is not 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 DIET; and
(2) There are no outstanding operating agreements, lease
agreements or similar agreements by which DIET is bound; and
(3) The complete final drafts of the License Agreement have has
been provided to IMAGE; 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 or otherwise dispose of any of DIET's property; and
(6) There are no breaches of any agreement to which DIET is a
party.
(o) Compliance with Laws. DIET 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.
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(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 DIET or UTEK,
threatened against DIET, the Technology, Patent License Agreement, Consulting
Agreement or Research Agreement affecting its assets or business (financial or
otherwise), and neither DIET 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 DIET 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, materially and
adversely affect the assets or business of DIET or the transactions
contemplated.
(q) Employees. DIET has no and never had any employees. DIET is
not a party to or bound by any employment agreement or any collective bargaining
agreement with respect to any employees. DIET is not in violation of any law,
regulation relating to employment of employees.
(r) Neither DIET nor UTEK has any knowledge of any existing or
threatened occurrence, action or development that could cause a material adverse
effect on DIET or its business, assets or condition (financial or otherwise) or
prospects.
(s) Employee Benefit Plans. DIET 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 DIET 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 DIET 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. All representations or warranties of UTEK and
DIET 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.
2.02 Representations and Warranties of IMAGE. IMAGE represents and
warrants to UTEK and DIET that the facts set forth are true and correct.
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(a) Organization. IMAGE is a corporation duly organized, validly
existing and in good standing under the laws of Florida, 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 IMAGE; 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 IMAGE consists of
45,000,000 shares of common stock with a par value $.001 per share ("IMAGE
Shares"); and on the Effective Date of the Acquisition, 8,619,600 (as of
5-7-2002) IMAGE Shares (which will include the 500,000 IMAGE Shares issued at
the closing of the Acquisition) will be issued and outstanding. All issued and
outstanding IMAGE Shares 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 by this
Agreement will not violate any obligation to which IMAGE is a party and will not
create a default hereunder, and this Agreement constitutes a legal, valid and
binding obligation of IMAGE, 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 IMAGE.
(f) No Conflicting Agreements. Neither the execution and delivery
of this Agreement nor the fulfillment of or compliance by IMAGE with the terms
or provisions of 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,
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 DIET'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 IMAGE or its assets or business.
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(h) Financial Statements. The unaudited financial statements of
IMAGE attached as Exhibit C present fairly 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. IMAGE 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 IMAGE except as specifically set forth in the IMAGE financial
statements.
(i) Full Disclosure. All representations or warranties of IMAGE
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. IMAGE 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.
(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 IMAGE,
threatened against IMAGE materially affecting its assets or business (financial
or otherwise), and IMAGE 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.
(l) IMAGE has no knowledge of any existing or threatened
occurrence, action or development that could cause a material adverse effect on
IMAGE or its business, assets or condition (financial or otherwise) or
prospects.
2.03 Investment Representations of UTEK. UTEK represents and
warrants to IMAGE 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 IMAGE Shares pursuant to the Acquisition. It is able to bear the
economic risk of the investment in IMAGE Shares, including the risk of a total
loss of the investment in IMAGE Shares. The acquisition of IMAGE 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 IMAGE is
true and correct. It has conducted all investigations and due diligence
concerning IMAGE 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 IMAGE concerning IMAGE Shares and the business and
financial condition of and prospects for IMAGE, and the officers and directors
of
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IMAGE 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, and the rules and regulations thereunder.
(b) Stock Transfer Restrictions.
UTEK acknowledges that the IMAGE Shares will not be registered and UTEK
will not be permitted to sell or otherwise transfer the IMAGE Shares in any
transaction in contravention of the following legend, which will be imprinted in
substantially the follow form on the stock certificate representing IMAGE
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
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 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 or
results of operations; and
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(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
CONDITIONS PRECEDENT
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 DIET Shares or the right of DIET 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. To the best knowledge of UTEK and DIET, the License Agreement
is valid and in full force and effect without any default in this Agreement.
4.07. IMAGE shall have received, at or within 5 days of Closing
Date, each of the following:
(a) the stock certificates representing the DIET Shares, duly
endorsed (or accompanied by duly executed stock powers) by UTEK for
cancellation;
(b) all documentation relating to the DIET's business, all in a
form and substance satisfactory to IMAGE;
(c) such agreements, files and other data and documents pertaining
to DIET's business as IMAGE may reasonably request;
(d) copies of the general ledgers and books of account of DIET,
and all federal, state and local income, franchise, property and other tax
returns filed by DIET since the inception of DIET;
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(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 DIET in Florida;
(f) the original corporate minute books of DIET, including the
articles of incorporation and bylaws of DIET, and all other documents filed in
this Agreement;
(g) all consents, assignments or related documents of conveyance
to give IMAGE the benefit of the transactions contemplated hereunder;
(h) such documents as may be needed to accomplish the Closing
under the corporate laws of the states of incorporation of IMAGE and DIET, and
(i) such other documents, instruments or certificates as IMAGE, or
their counsel may reasonably request.
4.08. IMAGE shall have completed due diligence investigation of DIET
to IMAGE's satisfaction in their sole discretion.
4.09. IMAGE shall receive the resignation effective the Closing Date
of each director and officer of DIET.
ARTICLE 5
LIMITATIONS
5.01. Survival of Representations and Warranties.
(a) The representations and warranties made by UTEK and DIET 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 IMAGE 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.
ARTICLE 6
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-defaulting party, in
addition to any other available rights or remedies, may xxx in equity for
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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 7
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
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 Tampa, Florida. 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
IMAGE, one by UTEK and a third by the two selected arbitrators. The third
arbitrator shall be the chairman of the panel.
ARTICLE 8
MISCELLANEOUS
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 by and construct in
accordance with the laws of the State of Florida 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.
Page 13 of 17
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.
8.10 No press releases or any other forms of communication to third
parties which mention both UTEK Corporation and Image shall be released without
the prior written consent and approval of both UTEK and Image.
ARTICLE 9
PIGGYBACK REGISTRATION RIGHTS
IMAGE covenants and agrees that if it files with the Securities and Exchange
Commission an underwritten registration statement on SEC Form S-SB1 or Form S-1
or its equivalent which includes the offer of shares owned by shareholders of
IMAGE, IMAGE will use its best efforts to include all of the shares of IMAGE
common stock issued to and then held by UTEK pursuant to this Agreement. If the
underwriters include any selling shareholder shares, UTEK shall be permitted to
include all of its IMAGE shares on a pro rata basis to the extent and upon the
same terms and conditions as other IMAGE shareholders are permitted to have
their IMAGE shares included in the proposed offering. If the underwriters do not
permit for any reason the inclusion of selling shareholder shares in the
offering, UTEK shares shall also not be included. It is the expressed intent of
this Article that UTEK be treated exactly the same as any other seller of IMAGE
common stock, no better and no worse. If IMAGE proposes an underwritten
offering, IMAGE will give UTEK 15 days prior written notice thereof, and UTEK
shall give IMAGE notice within 10 days thereafter of UTEK's desire to include in
the offering. IMAGE will notify the lead underwriters of UTEK's desire, and
IMAGE will include UTEK shares in accordance with this Article.
Page 14 of 17
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by a duly authorized officer of each party on May 7, 2002.
IMAGE ANALYSIS, INC. DIGITAL IMAGE ENHANCEMENT
TECHNOLOGIES, INC.
By: By:
-------------------------------------- ---------------------------
Xxxxxx Xxxxxxx Xxx Xxxxxxx, Ph.D., M.D.
Vice President, Image Analysis, Inc. President
Address: Address:
0000 Xx. Xxxx Xxx. #000 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000 Xxxxx Xxxx, Xxxxxxx 00000
UTEK CORPORATION
By:
--------------------------------------
Xxxxxxxx X. Xxxxx, Ph.D.
Chief Executive Officer
Address:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000
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