EXHIBIT 2.2
ACQUISITION OF
NITRONE SCIENTIFIC, INC. BY
PRIME PHARMACEUTICAL CORPORATION
AGREEMENT AND PLAN OF ACQUISITION
This acquisition Agreement ("Agreement") is entered into by and among Prime
Pharmaceutical Corporation ("PRIME"), an Ontario, Canada Corporation, Nitrone
Scientific, Inc. (NITRONE) a Florida Corporation and UTEK Corporation, a
Delaware Corporation ("UTEK").
WHEREAS, UTEK owns 93% of the outstanding shares of the capital stock of
NITRONE; and
WHEREAS, NITRONE has negotiated with the Xxxxx Xxxxxx and has acquired, the
exclusive Canadian license (for the fields of use described in the License
Agreement contained in Exhibit A) to develop and market a proprietary Azulenyl
Nitrone Spin Trapping technology WIPO # 97/19054; Inventor: Xxxxx Xxxxxx.
WHEREAS, the parties desire to provide for the terms and conditions upon which
NITRONE will be acquired by PRIME in a tax free, stock for stock exchange
("Reorganization") in accordance with the respective corporation laws of their
states, upon consummation of which the assets and business of NITRONE will be
owned by PRIME, and all issued and outstanding shares of capital stock of
NITRONE will be exchanged for common stock of PRIME with terms and conditions as
set forth more fully herein; and
WHEREAS, for federal income tax purposes, it is intended that the Reorganization
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:
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ARTICLE 1
STOCK FOR STOCK REORGANIZATION
1.01 The Acquisition
(a) Acquisition. Subject to the terms and conditions of this
Agreement, at the Effective Time, as defined below, NITRONE shall be acquired by
PRIME in accordance with the laws of the respective states and the provisions of
this Agreement. The constituent corporations to this acquisition are PRIME and
NITRONE.
(b) Effective Time. The acquisition shall become effective
("Effective Time") upon the execution of this Agreement.
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:
(a) All of the shares of NITRONE stock that are issued and
outstanding at the Effective Time shall be exchanged for 735,000 shares of
common stock of PRIME which by agreement of the shareholders of NITRONE shall be
issued as follows:
(i) to UTEK Corporation: 683,550 shares
(ii) to Xxxxx Xxxxxx: 51,450 shares.
1.03 Effect of Acquisition.
(a) Rights in NITRONE Cease. At and after the Effective Time, the
holder of each certificate of common stock of NITRONE shall cease to have any
rights as a shareholder of NITRONE.
(b) Closure of NITRONE Stock Records. From and after the Effective
Time, the stock transfer books of NITRONE shall be closed, and there shall be no
further registration of stock transfers on the records of NITRONE.
1.04 Closing. Subject to the terms and conditions of this
Agreement, the Closing of the transaction shall take place on or before May 7,
2002, ("Closing Date") with the conveyance to follow unless extended by mutual
consent of the parties in writing.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.01 General Representations and Warranties of UTEK and NITRONE.
UTEK and NITRONE represent and warrant to PRIME that the facts set forth below
are true and correct:
(a) Organization. NITRONE 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 NITRONE have been provided to PRIME 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 Reorganization and the other transactions contemplated
hereby have been duly authorized by the Board of Directors and shareholders of
NITRONE 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 NITRONE 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 NITRONE consists of
1,000,000 shares of common stock, par value $.01 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 NITRONE. All issued and outstanding shares of common stock of
NITRONE 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. NITRONE is not authorized to issue
any preferred stock. All dividends on NITRONE 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 NITRONE common stock or securities
convertible into shares of NITRONE's common stock to anyone for any reason
whatsoever. None of the NITRONE 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 Reorganization and the transactions
contemplated hereby will not violate any obligation to which NITRONE or UTEK
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is a party and will not create a default hereunder; and this Agreement
constitutes a legal, valid and binding obligation of NITRONE, 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 NITRONE or UTEK, there are no suits, actions or proceedings pending or
threatened which seek to enjoin the Reorganization 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 Sponsored Research Agreement, or the
results of the operations of NITRONE.
(f) No Conflicting Agreements. Neither the execution and delivery
of this Agreement nor the fulfillment of or compliance by NITRONE 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, NITRONE's or UTEK's
corporate charters or bylaws, the Patent Application, the License (as defined
below), Sponsored Research Agreement, or any agreement, contract, instrument,
order, judgment or decree to which NITRONE is a party or by which NITRONE 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 NITRONE and UTEK or performance of
the obligations of NITRONE and UTEK hereunder or under any other agreement to
which NITRONE 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, Sponsored
Research Agreement, or any other material right, privilege, license or agreement
relating to NITRONE or its assets or business.
(h) Title to Assets. The License Agreement to be executed with the
Xxxxx Xxxxxx and NITRONE is contained in Exhibit A. This will be the sole asset
of NITRONE. NITRONE will have by the conveyance date 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 NITRONE 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
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repair in the ordinary course of business, subject only to reasonable and
ordinary wear and tear; and
(i) Intellectual Property
i. The TECHNOLOGY is owned by Xxxxx Xxxxxx. Xxxxx Xxxxxx
has all foreign rights, 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
ii. The TECHNOLOGY was invented by Xxxxx Xxxxxx while he
was at Florida International University, and the university
has assigned their foreign interest in the TECHNOLOGY to Xxxxx
Xxxxxx; and
iii. The License Agreement to be executed by and between
Xxxxx Xxxxxx and NITRONE, covering the invention is legal,
valid, binding and will be enforceable in accordance with its
terms as contained in Exhibit A.
iv. All of the tangible assets of NITRONE have been
operated in accordance with customary operating practices
generally acceptable in the industry.
v. PRIME acknowledges and understands that NITRONE and
UTEK make no representations and provide no assurances that
the intellectual property rights contained in the License
Agreement do not, and will not in the future, infringe or
otherwise violate the rights of others, and
vi. PRIME acknowledges and understands that except as
otherwise expressly set forth in this Agreement, NITRONE 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
application rights, and
(j) Liabilities of NITRONE. NITRONE has no assets, no liabilities
or obligations of any kind, character or description except those created by the
Agreement with XXXXX XXXXXX, copies of which have been provided to PRIME
(Exhibit A). NITRONE acknowledges and agrees to pay the Xxxxx Xxxxxx the $62,500
upfront Consulting fee at the time of Closing.
(k) Financial Statements. The unaudited financial statements of
NITRONE, 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
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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. NITRONE 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 NITRONE except as specifically set
forth in NITRONE's Licensing and Research and Development Agreements with XXXXX
XXXXXX
(l) Taxes. All returns, reports, statements and other similar
filings required to be filed by NITRONE 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 NITRONE 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 NITRONE by any taxing authority,
have been properly paid. NITRONE has not received any notice of assessment or
proposed assessment in connection with any tax returns, nor is NITRONE 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. NITRONE 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. NITRONE 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 NITRONE. NITRONE 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 May 7, 2002 until
the Closing Date, NITRONE has not, and without the written consent of PRIME, it
will not have:
(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
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(iii) Suffered any damage, destruction or loss whether or
not in control of NITRONE; 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 PRIME; 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 NITRONE.
(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
PRIME and such agreements are in full force and effect without modifications or
amendment and constitute the legally valid and binding obligations of NITRONE in
accordance with their respective terms and will continue to be valid and
enforceable following the Reorganization. NITRONE 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 NITRONE; and
(ii) There are no outstanding operating agreements, lease
agreements or similar agreements by which NITRONE is bound;
and
(iii) The complete License Agreement, and International
Patent have been provided to PRIME; 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 NITRONE's property;
and
(vi) There are no breaches of any Contract
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(o) Compliance with Laws. NITRONE 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 NITRONE 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
NITRONE, the License Agreement or the Research and Development Agreement
affecting its assets or business (financial or otherwise), and NITRONE 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. NITRONE has no and never had any employees. NITRONE
is not a party to or bound by any employment agreement or any collective
bargaining agreement with respect to any employees. NITRONE is not in violation
of any law, regulation relating to employment of employees.
(r) Neither NITRONE nor UTEK has any knowledge of any existing or
threatened occurrence, action or development, which could cause a material
adverse effect on NITRONE or its business, assets or condition (financial or
otherwise) or prospects.
(s) Employee Benefit Plans. NITRONE 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.
(t) Books and Records. The books and records of NITRONE 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) Full Disclosure. All representations or warranties of UTEK and
NITRONE 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.
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2.02 General Representations and Warranties of PRIME. PRIME
represents and warrants to UTEK and NITRONE that the facts set forth are true
and correct.
(a) Organization. PRIME 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 PRIME; 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 aggregate number of shares of common stock
that PRIME is authorized to issue is unlimited without par value, and 12,244,372
shares of common stock are issued and outstanding, at no par value, at the
Effective Time of the Acquisition. All issued and outstanding shares of common
stock of PRIME 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 Reorganization and the transactions contemplated hereby will
not violate any obligation to which PRIME is a party and will not create a
default hereunder, and this Agreement constitutes a legal, valid and binding
obligation of PRIME, 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 Reorganization 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 PRIME.
(f) Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by PRIME 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
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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 NITRONE'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 PRIME or its assets or business.
(h) Financial Statements. The unaudited financial statements of
PRIME as attached hereto are incorporated here by reference (Exhibit C) 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. PRIME 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 PRIME except as specifically set forth
in the PRIME financial statements.
(i) Full Disclosure. All representations or warranties of PRIME
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 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. PRIME 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. To the best knowledge of PRIME 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
PRIME materially affecting its assets or business (financial or otherwise), and
PRIME 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,
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which would, if adversely determined, individually or in the aggregate,
materially and adversely affect its assets or business.
(l) PRIME has no knowledge of any existing or threatened
occurrence, action or development that could cause a material adverse effect on
PRIME or its business, assets or condition (financial or otherwise) or
prospects.
2.03 Investment Representations of UTEK. UTEK represents and
warrants to PRIME 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 PRIME 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
receipt 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 PRIME
is true and correct. It has conducted all investigations and due diligence
concerning PRIME 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 PRIME concerning the Shares and the business and
financial condition of and prospects for PRIME, and the officers and directors
of PRIME 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. UTEK acknowledges that the PRIME
Stock will not be registered and UTEK will not be permitted to sell or otherwise
transfer the PRIME Stock in any transaction in contravention of the following
legend, which will be imprinted in substantially the follow form on the PRIME
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
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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 Reorganization and the
transactions contemplated hereby.
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 Reorganization; and
(b) Notify the other parties upon the occurrence of any event
which would have a materially adverse effect upon the Reorganization or the
transactions contemplated hereby or upon the business, assets or results of
operations; and
(c) Not modify its corporate structure, except as necessary or
advisable in order to consummate the Reorganization and the transactions
contemplated hereby.
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ARTICLE IV
CONDITIONS PRECEDENT
4.01 The obligation of the parties to consummate the Reorganization
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 Reorganization
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 NITRONE stock or the right of NITRONE or UTEK
to consummate the Reorganization 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 License and Consulting Agreement are valid and in full
force and effect without any default therein.
(f) PRIME shall have received at or within 5 days of Closing Date
each of the following:
i. the stock certificates representing the NITRONE
Stock, duly endorsed (or accompanied by duly executed stock
powers) by UTEK for cancellation;
ii. such contracts, files and other data and documents
pertaining to NITRONE's business as PRIME may reasonably
request;
iii. copies of the general ledgers and books of account of
NITRONE, and all federal, state and local income, franchise,
property and other tax returns filed by NITRONE since
inception of NITRONE;
iv. certificates of (i) the Secretary of State as to the
legal existence and good standing, as applicable, (including
tax) of NITRONE in Florida;
v. the original minute books of NITRONE, including the
articles or certificate of incorporation and bylaws of
NITRONE, and all other documents filed therein;
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vi. all consents, assignments or related documents of
conveyance to give PRIME the benefit of the transactions
contemplated hereunder;
vii. such documents as may be needed to accomplish the
Closing under the corporate laws of the states of
incorporation of PRIME and NITRONE, and
viii. such other documents, instruments or certificates as
PRIME, or their counsel may reasonably request.
(g) PRIME shall have completed due diligence of NITRONE to PRIME's
satisfaction in their sole discretion.
(h) PRIME shall receive the resignation effective the Closing Date
of each Director and officer of NITRONE.
(i) UTEK shall have received at or within 5 days of Closing Date
the following:
i. The stock certificates representing 735,000 shares of
PRIME common stock issued as follows:
a) UTEK Corporation: 683,550 shares
b) Xxxxx Xxxxxx: 51,450 shares
ARTICLE V
LIMITATIONS
5.01 Survival of Representations and Warranties.
(a) The representations and warranties made by UTEK and NITRONE
shall survive for a period of one (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 one (1) year period.
(b) The representations and warranties made by PRIME shall survive
for a period of one (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 one (1)
year period.
5.02 Limitations on Liability. Notwithstanding any other provision
hereto the contrary, neither party hereto shall be liable to the other party for
any cost,
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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.
(A) Indemnification.
i. Indemnification by UTEK. UTEK agrees to defend,
indemnify and hold PRIME 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 NITRONE 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 NITRONE or UTEK pursuant hereto or in connection
with the transaction contemplated hereby.
ii. Indemnification by PRIME. PRIME 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 PRIME or contained herein
or in the Schedules or Exhibits annexed hereto or in any other
documents or instruments furnished or to be furnished by PRIME
pursuant hereto or in connection with the transaction
contemplated hereby.
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ARTICLE VI
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
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 VII
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 PRIME, one by UTEK
and a third by the two selected arbitrators. The third arbitrator shall be the
chairman of the panel.
ARTICLE VIII
TRANSACTIONS FOLLOWING CLOSING
PRIME acknowledges and agrees to provide to UTEK on a timely basis, unaudited
quarterly financial statements and such other financial information that UTEK
may request.
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ARTICLE IX
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 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.
ARTICLE X
PIGGYBACK REGISTRATION RIGHTS
PRIME 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
PRIME, PRIME will use its best efforts to include all of the shares of PRIME
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 PRIME shares on a pro rata basis to the extent and upon the
same terms and conditions as other PRIME shareholders are permitted to have
their PRIME 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 PRIME
common stock, no better and no worse. If PRIME proposes an underwritten
offering,
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PRIME will give UTEK 15 days' prior written notice thereof, and UTEK shall give
PRIME notice within 10 days thereafter of UTEK's desire to include in the
offering. PRIME will notify the lead underwriters of UTEK's desire, and PRIME
will include UTEK shares in accordance with this Article.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by a duly authorized officer this 7th day of May 2002.
PRIME Pharmaceutical Corporation Nitrone Scientific, Inc.
By: By:
--------------------- ------------------------
Xxxxx Xxxxxxx Xxx Xxxxxxx, Ph.D., M.D.
President President
UTEK Corporation
By:
---------------------
Xxxxxxxx X. Xxxxx, Ph.D.
Chief Executive Officer
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