THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), NOR REGISTERED UNDER ANY
STATE SECURITIES LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN
RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
ACQUISITION AGREEMENT
---------------------
AGREEMENT made this 30th day of September, 2003, by and between REXRAY
CORPORATION, a Colorado corporation, (the "ISSUER"), its principal shareholders
and officers and directors (hereinafter "Shareholders"), and CytoDyn of New
Mexico, Inc., a New Mexico corporation ("CytoDyn").
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration, including $10,000
in cash, receipt of which is hereby acknowledged by ISSUER,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. ACQUISITION OF TRADE NAME AND PATENT LICENSE.
---------------------------------------------
i. Subject to the terms and conditions of this Agreement, ISSUER agrees
to issue to CytoDyn, a total of 5,362,640 post-reverse split shares of the
common stock of ISSUER, in exchange for the following assets: 1) the trademarks,
CytoDyn Cytolin, and that certain trademark symbol, a copy of which is attached
hereto as Schedule 1(i) (hereinafter collectively"trademark"), and 2) the
assignment of that certain patent license agreement dated July 1, 1994 by and
between Xxxxx X. Xxxxx and CytoDyn of New Mexico, Inc., ("license"), which
license is attached hereto as Exhibit "A" and covers U.S. Patent No.s 5424066,
5651970, and 6534057, and described as a "method for inhibiting disease
associated with the Human Immunodeficiency Virus through the use of monoclonal
antibodies directed against anti-self cytotoxic T-lymphocytes or their lytics"
(hereinafter "license.")
ii. The above-referenced shares are calculated after the effectuation
of a one for two reverse split of the common share capital of ISSUER, which
shall be duly approved by its shareholders.
1
2. REPRESENTATIONS AND WARRANTIES. ISSUER and Shareholders
represent and warrants to CytoDyn the following:
i. Organization. ISSUER is a corporation duly organized,
validly existing, and in good standing under the laws of Colorado, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Colorado. All actions
taken by the Incorporators, directors and shareholders of ISSUER have been valid
and in accordance with the laws of the State of Colorado. ISSUER is current in
its reporting obligations to the Securities and Exchange Commission.
ii. Capital. The authorized capital stock of ISSUER currently
consists of 20,000,000 shares of common stock, $0.001 par value, of which
1,780,000 are issued and outstanding, prior to the effectuation of a one for two
(1:2) reverse split of ISSUER's common share capital. All outstanding shares are
fully paid and nonassessable, free of liens, encumbrances, options, restrictions
(with the exception of Rule 144 requirements) and legal or equitable rights of
others not a party to this Agreement. Following the one for two reverse split of
share capital contemplated by this Agreement, and the closing, there shall be a
total of 6,277,640 shares of common stock of ISSUER issued and outstanding and
there will be no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments obligating ISSUER to
issue or to transfer from treasury any additional shares of its capital stock.
None of the outstanding shares of ISSUER are subject to any stock restriction
agreements. All of the shareholders of ISSUER have valid title to such shares
and acquired their shares in a lawful transaction and in accordance with the
laws of Colorado.
iii. Financial Statements. The financial statements of the
ISSUER have been audited and prepared in accordance with generally accepted
accounting principles consistently followed by ISSUER throughout the periods
indicated, and fairly present the financial position of ISSUER as of the date of
the balance sheet and the financial statements, and the results of its
operations for the periods indicated. ISSUER is current in its filings with the
Securities and Exchange Commission, and all such filings are accurate and
complete.
iv. Absence of Changes. Since the date of the financial
statements filed with the Securities and Exchange Commission, there has not been
any change in the financial condition or operations of ISSUER, except changes in
the ordinary course of business, which changes have not in the aggregate been
materially adverse.
v. Liabilities. ISSUER does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected on the ISSUERS'
financial statement. ISSUER is not aware of any pending, threatened or asserted
claims, lawsuits or contingencies involving ISSUER or its common stock. There is
no dispute of any kind between the ISSUER and any third party, and no such
dispute will exist at the closing of this Agreement. At closing, ISSUER will be
free from any and all liabilities, liens, claims and/or commitments.
2
vi. Ability to Carry Out Obligations. ISSUER has the right,
power, and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by Issuer and the
performance by ISSUER of its obligations hereunder will not cause, constitute,
or conflict with or result in (a) any breach or violation or any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaw, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by which they may
be bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would cause ISSUER to be liable to any
party, or (c) an event that would result in the creation or imposition or any
lien, charge or encumbrance on any asset of ISSUER or upon the securities of
ISSUER to be acquired.
vii. Full Disclosure. None of the representations and
warranties made by the ISSUER and/or Shareholders, or in any memorandum,
document or whatever form, or in any certificate or memorandum furnished or to
be furnished by the ISSUER, contains or will contain any untrue statement of a
material fact, or omit any material fact the omission of which would be
misleading.
viii. Contract and Leases. ISSUER is not currently carrying on
any business and is not a party to any contract, agreement or lease. No person
holds a power of attorney from ISSUER.
ix. Compliance with Laws. ISSUER has complied with, and is not
in violation of any federal, state, or local statute, law, and/or regulation
pertaining to ISSUER. ISSUER has complied with all federal and state securities
laws in connection with the issuance, sale and distribution of its securities
and in its filings with the Securities and Exchange Commission and all of such
filings have been timely made. All of the certifications made in connection with
its filings are true and correct. All of ISSUER's affiliates who are subject to
Section 16 of the Securities and Exchange Act of 1934 have made timely and
accurate filings under that section.
x. Litigation. ISSUER is not (and has not been) a party to any
suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER is not subject to or in default with
respect to any order, writ, injunction, or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
xi. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course, and shall not (1) sell, pledge, or
assign any assets (2) amend its Articles of Incorporation or Bylaws, (3) declare
dividends, redeem or sell or issue stock or other securities, (4) incur any
liabilities, (5) acquire or dispose of any assets, enter into any contract,
guarantee obligations of any third party, or (6) enter into any other
transaction or commit to or agree to do any of the foregoing. There are no
cumulative voting rights with respect to the common stock issued by ISSUER.
3
xii. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in accordance
with the laws of Colorado.
xiv. Title. The Shares to be issued to CytoDyn will be, at
closing, free and clear of all liens, security interests, pledges, charges,
claims, encumbrances and restrictions of any kind, shall be issued pursuant to
Regulation D, Section 506 and 4(2)of the Act and shall bear a legend in the
following format: "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
BY THE ISSUEE FOR INVESTMENT PURPOSES. SAID SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE SECURITIES ACT OF 1933, OR A PRIOR OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT." None of such Shares
are or will be subject to any voting trust or agreement. No person holds or has
the right to receive any proxy or similar instrument with respect to such
shares, except as provided in this Agreement, the ISSUER is not a party to any
agreement which offers or grants to any person the right to purchase or acquire
any of the securities to be issued to CytoDyn. There is no applicable local,
state or federal law, rule, regulation, or decree which would, as a result of
the issuance of the Shares to CytoDyn, impair, restrict or delay CytoDyn's
voting rights with respect to the Shares.
xv. Employees. Except for the fact that the ISSUER has
officers who are deemed to be employees by law, the ISSUER does not have now,
nor has it ever had any employees and is not now, nor has it ever had any COBRA
or other benefit obligations. The current directors and officers of the ISSUER
are not entitled to any compensation of any form, whether past, current or
future that has not been paid and no severance benefits are payable to them.
xvi. Taxes. There are no outstanding or threatened tax liens,
assessments, or audits against ISSUER or any of its assets.
3. CytoDyn represents and warrants to ISSUER the following:
i. Organization. CytoDyn is a corporation duly organized,
validly existing, and in good standing under the laws of New Mexico, has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in New Mexico. All actions
taken by the Incorporators, directors and CytoDyn of CytoDyn have been valid and
in accordance with the laws of New Mexico.
ii. CytoDyn and Issued Stock. CytoDyn currently has
outstanding 63,283 shares of common stock.
iii. Counsel. CytoDyn represents and warrants that prior to
Closing, that it has been represented by independent counsel or has had the
opportunity to retain independent counsel to represent it in this transaction.
4
iv. Financial Statements. The financial statements of CytoDyn
have been prepared in accordance with generally accepted accounting principles
consistently followed by CytoDyn throughout the periods indicated, and fairly
present the financial position of CytoDyn as of the date of the balance sheet
and the financial statements, and the results of its operations for the periods
indicated.
v. Absence of Changes. Since the date of the letter of intent
executed by the parties, there has not been any change in the financial
condition or operations of CytoDyn, except changes in the ordinary course of
business, which changes have not in the aggregate been materially adverse.
vi. Liabilities. CytoDyn does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected on the CytoDyn's
financial statement. CytoDyn is not aware of any pending, threatened or asserted
claims, lawsuits or contingencies involving CytoDyn or its common stock. There
is no dispute of any kind between CytoDyn and any third party, and no such
dispute will exist at the closing of this Agreement. At closing, CytoDyn will be
free from any and all liabilities, liens, claims and/or commitments, except
those disclosed in its financial statements, which include but are not limited
to loans taken and legal fees outstanding for the protection of its U.S. and
foreign patents. All such liabilities are under $150,000.
vii. Ability to Carry Out Obligations. CytoDyn has the right,
power, and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by Issuer and the
performance by CytoDyn of its obligations hereunder will not cause, constitute,
or conflict with or result in (a) any breach or violation or any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaw, or other agreement or
instrument to which CytoDyn or its shareholders are a party, or by which they
may be bound, nor will any consents or authorizations of any party other than
those hereto be required, (b) an event that would cause CytoDyn to be liable to
any party, or (c) an event that would result in the creation or imposition or
any lien, charge or encumbrance on any asset of CytoDyn to be acquired.
viii. Full Disclosure. None of the representations and
warranties made by CytoDyn and/or its principals, or in any memorandum, document
or whatever media form furnished or to be furnished by the ISSUER, contains or
will contain any untrue statement of a material fact, or omit any material fact
the omission of which would be misleading.
ix. Contract and Leases. CytoDyn is not currently carrying on
any business and is not a party to any contract, agreement or lease. No person
holds a power of attorney from CytoDyn.
x. Compliance with Laws. CytoDyn has complied with, and is not
in violation of any federal, state, or local statute, law, and/or regulation
pertaining to CytoDyn. CytoDyn has complied with all federal and state
securities laws in connection with the issuance, sale and distribution of its
securities.
5
xi. Litigation. CytoDyn is not (and has not been) a party to
any suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation, with the exception of that which is
disclosed herein on Schedule B attached hereto. To the best knowledge of the
CytoDyn, there is no basis for any such action or proceeding and no such action
or proceeding is threatened against CytoDyn and CytoDyn is not subject to or in
default with respect to any order, writ, injunction, or decree of any federal,
state, local, or foreign court, department, agency, or instrumentality. CytoDyn
is a party plaintiff to a lawsuit against Xxx Xxxxx for fraud it believes was
committed against the company, and the controversy surrounding this litigation
is set forth in subparagraph xvii and Schedule B.
xii. Conduct of Business. Prior to the closing, CytoDyn shall
conduct its business in the normal course, and shall not (1) sell, pledge, or
assign any assets (2) amend its Articles of Incorporation or Bylaws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party, or (6) enter into any other transaction.
xiii. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in accordance
with the laws of New Mexico.
xiv. Accredited Status. CytoDyn is an accredited investor, as
that term is defined in Rule 501 promulgated under the Securities Act of 1933.
CytoDyn represents that it is able to fend for itself in the transaction
contemplated by this agreement, has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of its
investment, has the ability to bear the economic risks of its investment and has
been furnished with and has had access to such information as would be made
available in the form of a registration statement together with such additional
information as is necessary to verify the accuracy of the information supplied.
xv. Employees. Except for the fact that CytoDyn has officers
who are deemed to be employees by law, CytoDyn does not have now, nor has it
ever had any employees and is not now, nor has it ever had any COBRA or other
benefit obligations.
xvi. Taxes. There are no outstanding or threatened tax liens,
assessments, or audits against CytoDyn or any of its assets.
xvii. Prior Acquisition failure. Xxxxx X. Xxxxx and CytoDyn
had previously licensed the CytoDyn patents and trademarks to Amerimmune
Pharmaceuticals, Inc. This license was attached as Document 2 to the annual
report on Form 10SB, filed by Amerimmune with the Securities and Exchange
Commission on June 29, 2000. The license terminated under its own terms
(paragraph 11.2 thereof) on August 14, 2001 when Amerimmune filed a quarterly
report on Form 10Q with the Securities and Exchange Commission, indicating that
it would not abide by paragraph 6, page 8 of the license agreement. This
provision of the license is required by federal law. Amerimmune's C.E.O., Xxx H:
Xxxxx, subsequently filed for bankruptcy protection for Amerimmune in the U.S.
Bankruptcy Court in Las Vegas, Nevada, and claimed therein that Amerimmune not
6
only owned the rights it had abandoned under the license, but also the major
assets of its key vendors. After resigning as an officer and director of
Amerimmune, Xxxxx then attempted to buy all such property rights and other
property allegedly owned by Amerimmune for the sum of $10,000. This transaction
was rejected by the Bankruptcy Court as a sham transaction. Further adverse
actions by Xx. Xxxxx against CytoDyn and its assets are possible, but records of
the U.S. Patent and Trademark Office currently show that the patents are owned
by Xxxxx X. Xxxxx, the trademarks are owned by CytoDyn, and they are
unencumbered by any assignment.
xiv. Patent Ownership. Xxxxx X. Xxxxx hereby warrants and
represents that all of the patents referred to in this agreement are under his
sole control and ownership, and that CytoDyn has his full agreement and
authority to license the said patents to ISSUER pursuant to this Agreement. Only
this subparagraph of this Agreement and the miscellaneous provisions of
paragraph 8 that apply to it are binding upon and enforceable against Xxxxx X.
Xxxxx in his individual capacity.
4. INVESTMENT INTENT. CytoDyn agrees that the shares being issued
pursuant to this Agreement may be sold, pledged, assigned, hypothecated or
otherwise transferred, with or without consideration (a "Transfer"), only
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of ISSUER, or an applicable exemption from
registration. CytoDyn agrees, prior to any transfer, to give written notice to
ISSUER expressing its desire to effect the transfer and describing the proposed
transfer.
5. CLOSING. The closing of this transaction shall take place at
the offices of the ISSUER's counsel at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxx
Xxxxxxx, Xxxxxxxxxx, on or before **, 2003.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
-------------------------------------
i. By the ISSUER:
(1) A certificate or certificates for 5,362,640 Shares,
registered in the name of CytoDyn.
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing such
person as CytoDyn shall designate as a director(s) of ISSUER.
(4) The resignation of all the directors of ISSUER.
(5) Current SEC filings of the ISSUER, which shall
include a current balance sheet and statements of operations, stockholders
equity and cash flows for the twelve (12) month period then ended.
7
(6) All of the business and corporate records of ISSUER,
including but not limited to correspondence files, bank statements, checkbooks,
savings account books, minutes of shareholder and directors meetings, financial
statements, shareholder listings, stock transfer records, agreements and
contracts.
(7) Such other minutes of ISSUER's shareholders or
directors as may reasonably be required by CytoDyn.
(8) An Opinion Letter from ISSUER's Attorney attesting to
the validity and condition of the ISSUER, this transaction, the issuance of
ISSUER's outstanding shares and the status of ISSUER's filings with the
Securities and Exchange Commission.
ii. By CytoDyn:
-----------
(1) Delivery of a valid assignment of the trademark and
license.
(2) Consents signed by CytoDyn, consenting to the terms
of this Agreement.
7. PRE AND POST CLOSING COVENANTS.
-------------------------------
i. Forgiveness of Rexray debt. Prior to the closing, all
indebtedness of Rexray, if any, shall be forgiven and discharged by the
obligee(s) thereof pursuant to a written instrument executed by said obligee(s)
in favor of Rexray.
ii. Shareholder approval. Following the closing, Rexray shall
obtain approval, if required by law, of this acquisition from its shareholders.
iii. License. An assignment of the license shall be executed
by CytoDyn, in which paragraph 11 of the license will be redacted.
iv. Reverse split. Prior to the closing, ISSUER shall effect a
one for two (1-2) reverse split of its common share capital, which will require
a proxy statement or information statement filing, shareholder notice and
approval of a majority of the outstanding common shares.
8. MISCELLANEOUS.
i. Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
8
ii. No oral change. This Agreement and any provision hereof,
may not be waived, changed, modified, or discharged orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
iii. Non Waiver. Except as otherwise provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (I) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver with
respect to any other or subsequent breach.
iv. Time of Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
v. Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vi. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
vii. Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by fax, as follows:
ISSUER: Xxxxx X. Xxxxxxx
00000 XXX 00X
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
CytoDyn: Xxxxx X. Xxxxx
0000 Xxxxxxxxx Xxx.
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
9
ix. Costs. All costs and expenses incurred in connection with
this transaction, including all reasonable legal and accounting fees and
expenses, whether or not the transaction is consummated, and any actions taken
by either party in reliance upon this Agreement shall be at such party's sole
risk and expense.
x. Cooperation. The parties agree to cooperate with each other
to execute any and all documents which may be required to consummate the
transaction, to file any documents required under local, state or federal law to
consummate the transaction, and to obtain any necessary approvals of
shareholders or any third parties.
xi. No third party beneficiaries. This Agreement is intended
to benefit only the parties to this transaction, and there are no third party
beneficiaries to this Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
30th day of September, 2003.
REXRAY CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxx, President
CytoDyn of New Mexico, Inc.
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx, President pursuant to a
resolution of the Board of Directors of
CytoDyn adopted on September 30, 2003.
As to paragraph 3xviii and paragraph 6
subparagraph ii (1) as the registered
owner of the patents only:
/s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx, Individually
10
SCHEDULE B
Legal Disputes
In Nevada
---------
Xxxxx and CytoDyn had previously licensed the patents and trademarks to
Amerimmune Pharmaceuticals, Inc. This license was attached as Document 2 to the
annual report (10-KSB) filed by Amerimmune with the SEC on June 29, 2000 and is
available for public inspection.
The license terminated under its own terms (paragraph 11.2) on August 13, 2001
when Amerimmune filed a 10Q with the SEC acknowledging on page 12 of the 10Q
that Amerimmune would not abide by paragraph 6, page 6, of the license
agreement. This provision of the license is required by federal law. There were
several other breaches of the license, including, without limitation, default of
the payments for patent and license fees.
Amerimmune's CEO, Xxx X. Xxxxx, subsequently had Amerimmune file for Chapter 7
bankruptcy in Las Vegas, Nevada, claiming through his agent, Xxxxxx X. Xxxxxxxx,
that Amerimmune not only owned the rights it had abandoned but also the chief
assets of its key vendors. After resigning as an officer and director of
Amerimmune, Xxxxx then attempted to buy all such alleged property for himself
for a payment of $10,000. This was immediately rejected by the bankruptcy judge.
The trustee, on instruction from the judge, moved to dismiss the bankruptcy
case, which the judge then dismissed on September 24, 2003.
The records of the U.S. Patent and Trademark Office (xxx.xxxxx.xxx) and its
foreign counterparts confirm that the patents are owned by Xxxxx, the trademarks
are owned by CytoDyn, and they are unencumbered by any assignment.
In California
-------------
Apparently by converting the proprietary methods of CytoDyn's chief laboratory
vendor, Amerimmune abandoned the laboratory technology that CytoDyn had spent
approximately $900,000 developing. To recover this loss, CytoDyn brought suit in
California against Amerimmune's officers and directors which is scheduled to be
heard as a jury trial in April of 2004. CytoDyn, and therefore Rexray, will only
receive two thirds of any monetary damages recovered because CytoDyn is being
represented under a partial contingent-fee agreement for legal services.
Xxx Xxxxx (only) filed a cross-complaint against CytoDyn and its Directors.
CytoDyn already has a summary judgment against some of the cross-complaint,
which the judge ruled contained improper and prohibited causes of action.
Surviving elements of the cross-complaint will be dealt with on merit since they
are false and, in any event, do not specify any harm done to Xxxxx, who himself
rendered Amerimmune insolvent and then made an unsuccessful attempt to acquire
its assets for himself.
11
AMENDMENT NUMBER 1
TO
ACQUISITION AGREEMENT
Rexray Corporation and CytoDyn of New Mexico, Inc. entered into an Acquisition
Agreement dated September 30, 2003. The parties wish to amend that Agreement as
set forth in this Amendment Number 1. Defined terms in this Amendment have the
same meanings as they have in the Acquisition Agreement.
I. The parties agree to amend the Acquisition Agreement as follows:
A. Article 1.i. is amended to add the following sentence:
ISSUER understands and agrees that the trademark and license are only
part of the assets of CytoDyn, and that Issuer is not acquiring the
business of CytoDyn. As a result, Issuer also understands that CytoDyn is
not entering into a covenant not to compete or any other restriction on
CytoDyn's business in connection with this Acquisition Agreement.
B. Article 3.ii. is deleted and the following Article 3.ii. is added in its
place:
Ownership of Assets. CytoDyn owns and has title to the trademark and
license, subject to no liens or encumbrances.
C. Article 3.xii. is amended by adding the italicized language to the
paragraph:
Conduct of Business. Prior to the closing, CytoDyn shall conduct its
business in the normal course, and shall not DO ANY OF THE FOLLOWING IN
SUCH A WAY AS TO AFFECT THE SALE OF THE TRADEMARK AND LICENSE UNDER THIS
ACQUISITION AGREEMENT: (1) sell, pledge, or assign any of the TRADEMARK
OR LICENSE assets, (2) amend its Articles of Incorporation or Bylaws,
(33) declare dividends, redeem or sell stock or other securities, (4)
incur any liabilities, (5) acquire or dispose of any assets, enter into
any contract, guarantee obligations of any third party, or (6) enter into
any other transaction.
D. Article 3.xvii is amended by deleting the title and adding in its place:
Prior License Failure.
II. The parties further agree that:
A. The amendments to the Acquisition Agreement will be deemed to have been
made as of the date of the Acquisition Agreement.
Amendment Number 1
Page 1 of 2
B. Except for the amendments, the terms and conditions of the Acquisition
Agreement will remain unchanged.
Dated: November 20, 2003
REXRAY CORPORATION
By: /s/ Xxxxx X. XxXxxxx
------------------------------------------
Xxxxx X. XxXxxxx, Executive Vice President
CytoDyn of New Mexico, Inc.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx, President
As to paragraph 3xiv and the provisions of paragraph 8 that apply to him only:
/s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx, Individually
Amendment Number 1
Page 2 of 2
