Exhibit 2.01
ACQUISITION OF ADVANCED INFLUENZA TECHNOLOGIES, INC.
by
CYTODYN, INC.
AGREEMENT AND PLAN OF ACQUISITION
This Agreement and Plan of Acquisition (Agreement) is entered into by
and between Advanced Influenza Technologies, Inc., a Florida corporation (AITI),
UTEK CORPORATION, a Delaware corporation (UTEK), and CYTODYN, Inc., a Colorado
corporation (CYDY).
WHEREAS, UTEK owns 100% of the issued and outstanding shares of common
stock of AITI (AITI Shares);
WHEREAS, before the Closing Date, AITI will acquire the licenses for
the fields of use as described in the Exclusive and Non-Exclusive License
Agreements and Sponsored Research Agreement (SRA) as described which is attached
hereto as part of Exhibit A and made a part of this Agreement (License and SRA
Agreements) and the rights to develop and market a patented and proprietary
technology for the fields of uses specified in the License and SRA Agreements
(Technology);
WHEREAS, the parties desire to provide for the terms and conditions
upon which AITI will be acquired by CYDY in a stock-for-stock exchange
(Acquisition) in accordance with the respective corporation laws of their state,
upon consummation of which all AITI Shares will be owned by CYDY, and all issued
and outstanding AITI Shares will be exchanged for common stock of CYDY 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 AITI Shares
shall be acquired from UTEK by CYDY in accordance with the respective
corporation laws of their states and the provisions of this Agreement and the
separate corporate existence of AITI, as a wholly-owned subsidiary of CYDY,
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.
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1.02 Exchange of Stock. At the Effective Date, by virtue of the
Acquisition, all of the AITI Shares that are issued and outstanding at the
Effective Date shall be exchanged for 2,000,000 unregistered shares of common
stock of CYDY (CYDY Shares) as follows:
Shareholder Number of CYDY Shares
----------- ---------------------
UTEK Corporation 2,000,000
Total 2,000,000
1.03 Effect of Acquisition.
----------------------
(a) Rights in AITI Cease. At and after the Effective Date, the
holder of each certificate of common stock of AITI shall cease to have any
rights as a shareholder of AITI.
(b) Closure of AITI Shares Records. From and after the
Effective Date, the stock transfer books of AITI shall be closed, and there
shall be no further registration of stock transfers on the records of AITI.
1.04 Closing. Subject to the terms and conditions of this Agreement,
the Closing of the Acquisition shall be the date of the last executed signature
affixed to this Agreement, but in no event later than July __, 2006.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of UTEK and AITI. UTEK and AITI
jointly and severally represent and warrant to CYDY that the facts set forth
below are true and correct:
(a) Organization. AITI 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 AITI have been provided to
CYDY 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 shareholder of
AITI 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 AITI 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 AITI consists of
1,000,000 shares of common stock with a par value $.01 per share. At the date of
this Agreement, 1,000 AITI Shares are issued and outstanding as follows:
Shareholder Number of AITI Shares
----------- ---------------------
UTEK Corporation 1000
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All issued and outstanding AITI 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. AITI
is not authorized to issue any preferred stock. All dividends on AITI 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 AITI to issue any AITI Shares or securities
convertible, exercisable or exchangeable into AITI Shares to anyone for any
reason whatsoever. None of the AITI Shares is subject to any charge, 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 AITI or
UTEK is a party and will not create a default under any such obligation or under
any Agreement to which AITI or UTEK is a party. This Agreement constitutes a
legal, valid and binding obligation of AITI, 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 AITI 's 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 AITI .
(f) No Conflicting Agreements. Neither the execution and
delivery of this Agreement nor the fulfillment of or compliance by AITI 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, AITI 's or UTEK's articles of incorporation or bylaws, the
Technology, the License and SRA Agreements, or any agreement, contract,
instrument, order, judgment or decree to which AITI or UTEK is a party or by
which AITI 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 AITI and UTEK or performance of the
obligations of AITI and UTEK hereunder or under any other agreement to which
AITI 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 and SRA Agreements, or
any other material right, privilege, license or agreement relating to AITI or
its assets or business.
(h) Title to Assets. AITI 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
AITI. Except as set forth on Schedule 2.01(h), AITI has 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. On the Closing Date, AITI will 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 and nature whatsoever.
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(i) Intellectual Property
(1) The University of Massachusetts Medical School in
Worcester, MA (UMASS) invented and 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 Inventions listed in Exhibit A
hereto.
(2) The License and SRA Agreements between UMASS and
AITI 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,
CYDY acknowledges and understands that AITI and UTEK make no representations and
provide no assurances that the rights to the Technology and Intellectual
Property contained in the License and SRA Agreements do not, and will not in the
future, infringe or otherwise violate the rights of third parties; however, AITI
and UTEK have no knowledge of pending or threatened claims by, or any basis for
any claims by, any third parties alleging such infringement or other violation,
and
(4) Except as otherwise expressly set forth in this
Agreement, AITI 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 AITI . AITI has no assets (except as set
forth in Section 2.01 (h)), 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 AITI , 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
AITI '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. AITI 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 AITI except as specifically set forth in the financial statements
and the other attached schedules and exhibits. There is no information known to
AITI or UTEK that would prevent the financial statements of AITI 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 AITI 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 AITI 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 AITI by any taxing
authority, have been properly paid, except to the extent reflected on AITI 's
financial statements, where AITI 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. AITI has not
received any notice of assessment or proposed assessment in connection with any
tax returns, nor is AITI 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. AITI has not extended or waived the application of any
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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. AITI 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 AITI.
AITI 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, AITI has not, and
without the written consent of CYDY, it will not have:
(1) Sold, encumbered, assigned let lapsed or
transferred any of its material assets, including without limitation the
Intellectual Property, the License and SRA Agreements or any other material
asset;
(2) Amended or terminated the License and SRA
Agreements or other material agreement or done any act or omitted to do any act
which would cause the breach of the License and SRA Agreements or any other
material agreement;
(3) Suffered any damage, destruction or loss whether
or not in control of AITI;
(4) Made any commitments or agreements for capital
expenditures or otherwise;
(5) Entered into any transaction or made any
commitment not disclosed to CYDY;
(6) Incurred any material obligation or liability for
borrowed money;
(7) Done or omitted to do any act, or 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 AITI ; or
(8) Taken any action, which could reasonably be
foreseen to make any of the representations or warranties made by AITI 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 AITI 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 CYDY. Such
executed Contracts are, and such contemplated Contracts will be, at the Closing
Date, in full force and effect without modifications or amendment and constitute
the legally valid and binding obligations of AITI in accordance with their
respective terms and will continue to be valid and enforceable following the
Acquisition. AITI is not, and will not be at the Closing Date, 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 AITI ; and
(2) There are no outstanding operating agreements,
lease agreements or similar agreements by which AITI is bound; and
(3) The complete final draft of the License and SRA
Agreements has been provided to CYDY; 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
Page 5 of 17
(5) There are no outstanding agreements or
commitments to sell, lease or otherwise dispose of any of AITI's property; and
(6) There are no breaches of any agreement to which
AITI is a party.
(o) Compliance with Laws. AITI 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 AITI or UTEK,
threatened against AITI , the Technology, or License and SRA Agreements,
affecting its assets or business (financial or otherwise), and neither AITI 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 AITI 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 AITI or the transactions contemplated hereby.
(q) Employees. AITI has no and never had any employees. AITI
is not a party to or bound by any employment agreement or any collective
bargaining agreement with respect to any employees. AITI is not in violation of
any law, rule or regulation relating to employment of employees.
(r) Neither AITI nor UTEK has any knowledge of any existing or
threatened occurrence, action or development that could cause a material adverse
effect on AITI or its business, assets or condition (financial or otherwise) or
prospects.
(s) Employee Benefit Plans. 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 AITI 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 AITI 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 AITI are true, correct and complete in all material respects to the best of
UTEK's and AITI 's 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 and schedules 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 CYDY. CYDY represents and
warrants to UTEK and AITI that the facts set forth below are true and correct.
Page 6 of 17
(a) Organization. CYDY 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 its 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 CYDY; no other
corporate action on CYDY's part is necessary in order to execute, deliver,
consummate and perform its obligations hereunder; and it has 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 CYDY consists of
25,000,000 (Twenty Five Million) shares (20,000,000 shares of common and
5,000,000 shares of preferred stock) with no par value per share (CYDY Common
Shares) and on the Effective Date of the Acquisition, 11,201,264 (Eleven
Million, Two Hundred One Thousand, Two Hundred Sixty Four) shares of CYDY Common
Shares (which will include the 2,000,000 (Two Million) CYDY Shares issued at the
closing of the Acquisition) will be issued and outstanding. All issued and
outstanding CYDY Common 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 CYDY is a party and will not
create a default hereunder, and this Agreement constitutes a legal, valid and
binding obligation of CYDY, 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 CYDY.
(f) No Conflicting Agreements. Neither the execution and
delivery of this Agreement nor the fulfillment of or compliance by CYDY 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, the corporate charter 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 AITI'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 CYDY or its assets or business.
(h) Financial Statements. The unaudited financial statements
of CYDY attached as Exhibit C present fairly its financial position and the
results of its operations on the dates and for the periods shown on such
statements; 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. CYDY 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
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the date of its financial statements. There are no outstanding obligations or
liabilities of CYDY except as specifically set forth in the CYDY financial
statements.
(i) Full Disclosure. All representations or warranties of CYDY
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 it in
this Agreement or in the exhibits to this Agreement or any document delivered by
it or on its 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. CYDY 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 CYDY, threatened
against CYDY materially affecting its assets or business (financial or
otherwise), and CYDY 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, to the knowledge of CYDY, 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. CYDY has no knowledge of any existing
or threatened occurrence, action or development that could cause a material
adverse affect on CYDY or its business, assets or condition (financial or
otherwise) or prospects.
(l) Development. CYDY agrees and warrants that it has the
expertise necessary to and has had the opportunity to independently evaluate the
inventions of the Licensed Patents and develop same for the market.
(m) Investment Company Status. CYDY is not an investment
company, either registered or unregistered.
2.03 Investment Representations of UTEK. UTEK represents and warrants
to CYDY 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 CYDY Shares pursuant to the Acquisition. It is able to bear the
economic risk of the investment in CYDY Shares, including the risk of a total
loss of the investment in CYDY Shares. The acquisition of CYDY Shares is for its
own account and is for investment and not with a view to any distribution of
such shares. Except a permitted by law, it has 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 CYDY is true
and correct. It has conducted all investigations and due diligence concerning
CYDY 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 officers and
directors of CYDY concerning CYDY Shares and the business and financial
condition of and prospects for CYDY, and the officers and directors of CYDY 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, amended, and the
rules and regulations thereunder.
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(b) Stock Transfer Restrictions. UTEK acknowledges that the
CYDY Shares will not be registered and UTEK will not be permitted to sell or
otherwise transfer the CYDY Shares in any transaction in contravention of the
following legend, which will be imprinted in substantially the following form on
the stock certificate representing CYDY 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.
(c) Legend. Subject to Rule 144 restrictions, 24 months
following the stock acquisition described herein, CYDY agrees to and shall
direct its transfer agent to remove the above legend upon the issuance by UTEK's
legal counsel that the above legend can be removed from UTEK's shares. CYDY
agrees to and promptly shall provide any information requested by UTEK or UTEK's
counsel and to make further direction to its transfer agent as necessary for
such issuance of an opinion regarding removal of the legend or the sale of such
restricted shares under Rule 144 or other available exemption from registration.
(d) 144 Sales. Notwithstanding the restrictions set forth in
(c) above, CYDY agrees to instruct its transfer agent to comply with UTEK's
request, following the issuance of an opinion letter from UTEK's legal counsel,
allowing UTEK to sell the referenced shares 12 months following the stock
acquisition, which will be subject to Rule 144 restrictions.
(e) Damages. In the event that CYDY fails to direct its
transfer agent to remove the legend within fifteen (15) days of request by UTEK,
CYDY shall be liable to pay damages to UTEK equaling the difference between the
amount UTEK would have sold the shares for and what it actually did sell the
shares for due to the legend not being removed.
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, if 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 with the prior written approval of CYDY or of
AITI or UTEK, as the case may be, each party agrees that it will:
Page 9 of 17
(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
(c) Not modify its corporate structure, except, upon prior
written notice to the other parties, 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 AITI Shares, AITI in the License
and SRA Agreements, or the right of AITI 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 shall have been
prosecuted in good faith with reasonable diligence.
4.06. The License and SRA Agreements shall have been executed and
delivered by all parties thereto and, to the best knowledge of UTEK and AITI ,
the License and SRA Agreements shall be valid and in full force and effect
without any default under such agreement.
4.07. CYDY shall have received, at or within 5 days before the Closing
Date, each of the following:
(a) the stock certificates representing the AITI Shares, duly
endorsed (or accompanied by duly executed stock powers) by UTEK for
cancellation;
(b) all documentation relating to AITI 's business, all in
form and substance satisfactory to CYDY;
(c) such agreements, files and other data and documents
pertaining to AITI 's business as CYDY may reasonably request;
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(d) copies of the general ledgers and books of account of
AITI, and all federal, state and local income, franchise, property and other tax
returns filed by AITI since the inception of AITI ;
(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 AITI in Florida;
(f) the original corporate minute books of AITI , including
the articles of incorporation and bylaws of AITI , and all other documents filed
in this Agreement;
(g) all consents, assignments or related documents of
conveyance to give CYDY 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 CYDY and AITI , and
(i) such other documents, instruments or certificates as CYDY,
or its counsel may reasonably request.
4.08. CYDY shall have completed its due diligence investigation of AITI
to CYDY's satisfaction in its sole discretion.
4.09. CYDY shall receive the resignations of each director and officer
of AITI effective the Closing Date.
ARTICLE 5
INDEMNIFICATION AND LIABILITY LIMITATION
5.01. Survival of Representations and Warranties.
-------------------------------------------
(a) The representations and warranties made by UTEK and AITI
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 CYDY 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. CYDY agrees that UTEK shall not be
liable under this agreement to CYDY or their respective successor's, assigns or
affiliates except where damages result directly from the gross negligence or
willful misconduct of UTEK or its employees. In no event shall UTEK's liability
exceed the total amount of the fees paid to UTEK under this agreement, nor shall
UTEK be liable for incidental or consequential damages of any kind. CYDY shall
indemnify UTEK, and hold UTEK harmless against any and all claims by third
parties for losses, damages or liabilities, including reasonable attorneys fees
and expenses ("Losses"), arising in any manner out of or in connection with the
rendering of services by UTEK under this Agreement, unless it is finally
judicially determined that such Losses resulted from the negligence or willful
misconduct of UTEK. The terms of this paragraph shall survive the termination of
this agreement and shall apply to any controlling person, director, officer,
employee or affiliate of UTEK.
5.03 Indemnification. CYDY agrees to indemnify and hold harmless UTEK
and its subsidiaries and affiliates and each of its and their officers,
directors, principals, shareholders, agents, independent contactors and
employees (collectively "Indemnified Persons") from and against any and all
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claims, liabilities, damages, obligations, costs and expenses (including
reasonable attorneys' fees and expenses and costs of investigation) arising out
of or relating to matters or arising from this Agreement, except to the extent
that any such claim, liability, obligation, damage, cost or expense shall have
been determined by final non-appealable order of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Indemnified Person or Persons in respect of whom such liability is asserted.
ARTICLE 6
REMEDIES
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.
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 New York, New York. 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
CYDY, 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 document constitutes a complete and entire agreement among
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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.
8.05. 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.
8.06. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
8.07. This Agreement may be executed in multiple counterparts, each of
which shall constitute one and a single Agreement.
8.08. 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 next page)
Page 13 of 17
CYTODYN, INC. ADVANCED INFLUENZA TECHNOLOGIES, INC.
By:__________________________________ By:__________________________________
Xxxxx X. Xxxxx, Xxxx Xxxxxxx
Chief Executive Officer President
Address: Address:
00 X. Xxxxxx Xxxxxx 0000 X. Xxxx Xxxxxx
Xxxxx X Xxxxx, Xxxxxxx 00000
Xxxxx Xx XX 00000
Date: _________________________ Date: _________________________
UTEK CORPORATION
By:___________________________
Xxxxxxx X. Xxxxxxxxx,
Chief Operating Officer
Address:
0000 X. Xxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Date: _________________________
By:_________________________________
____________________________________
Compliance Officer Approval
Date: _________________________
Page 14 of 17
EXHIBIT A
Outstanding Agreements:
Exclusive and non-exclusive license agreements from the University of
Massachusetts Medical School in Worcester, MA, and the Sponsored Research
Agreement from the University of Massachusetts Medical School in Worcester, MA,
all attached hereto and embodied herein by reference as if fully set forth in
this Agreement.
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EXHIBIT B
ASSETS OF ADVANCED INFLUENZA TECHNOLOGIES, INC.
When delivered to CYDY by Utek, AITI shall have the following assets:
1) The exclusive and non-exclusive license agreements referenced in
Appendix A, with the first year's fees fully paid,
2) $675,000 in cash against which there is no obligation or liability over
the first year as shown in the Financial Statements as of July 7, 2006
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EXHIBIT C
CytoDyn, Inc.
FORM 10-QSB AMENDED
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: February 28, 2006
Commission File Number 000-49908
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