Exhibit 2.1
ACQUISITION OF FINGERPRINT DETECTION TECHNOLOGIES, INC.
by
SEQUIAM CORPORATION
AGREEMENT AND PLAN OF ACQUISITION
This Agreement and Plan of Acquisition ("Agreement") is entered into as of
September 11, 2003, by and between FINGERPRINT DETECTION TECHNOLOGIES, INC., a
Florida corporation, ("FDTI"), UTEK CORPORATION, a Delaware corporation,
("UTEK"), and SEQUIAM CORPORATION, a California corporation, ("SQUM").
WHEREAS, UTEK owns 100% of the issued and outstanding shares of common
stock of FDTI ("FDTI Shares"); and
WHEREAS, before the Closing Date, FDTI has acquired the license for the
fields of use as described in the License Agreement, reflected in the list of
assets set forth on Exhibit "A" attached to and made a part of this Agreement
("License Agreement") which includes the rights to develop and market a patented
and proprietary technology for the fields of uses specified in the License
Agreement ("Technology").
WHEREAS, the parties desire to provide for the terms and conditions upon
which FDTI will be acquired by SQUM in a, stock-for-stock exchange
("Acquisition") in accordance with the respective corporation laws of their
state, upon consummation of which all FDTI Shares will be owned by SQUM, and all
issued and outstanding FDTI Shares will be exchanged for common stock of SQUM
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
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(a) Transfer of FDTI Shares. Subject to the terms and conditions of this
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Agreement, at Closing, as defined below, UTEK shall transfer and assign all FDTI
Shares
to SQUM in accordance with the respective corporation laws of their state and
the provisions of this Agreement and the separate corporate existence of FDTI,
as a wholly-owned subsidiary of SQUM, shall continue after the closing.
(b) Effective Date. The Acquisition shall become effective ("Effective
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Date") upon the execution of this Agreement that signifies the closing of the
transaction.
1.02 Issuance of Sequiam Stock. At the Closing, SQUM shall issue to UTEK
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Corporation 485,000 shares of common stock of SQUM ("SQUM Shares"), and shall
irrevocably instruct its transfer agent to issue one (1) stock certificate to
UTEK Corporation for the SQUM Shares, bearing the restrictive legend set forth
in Section 2.03(b) below.
1.03 Effect of Acquisition.
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(a) Rights in FDTI Cease. At and after the Effective Date, the holder of
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each certificate of common stock of FDTI shall cease to have any rights as a
shareholder of FDTI.
(b) Closure of FDTI Shares Records. From and after the Effective Date, the
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stock transfer books of FDTI shall be closed, and there shall be no further
registration of stock transfers on the records of FDTI.
1.04 Closing. Subject to the terms and conditions of this Agreement, the
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"Closing" of the Acquisition shall take place on or before September 12 2003 by
delivery of the FDTI stock certificates duly endorsed for transfer to SQUM.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of UTEK and FDTI. Each of UTEK and
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FDTI represents and warrants, jointly and severally, to SQUM that the facts set
forth below are true and correct:
(a) Organization. FDTI and UTEK are corporations duly organized, validly
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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 FDTI have been provided to SQUM 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
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the Acquisition and the other transactions contemplated by this Agreement have
been duly authorized by the board of directors and shareholders of FDTI 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 FDTI 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 FDTI consists of 1,000,000
shares of common stock with a par value $1.00 per share. As of the Closing,
1,000 FDTI Shares are issued and outstanding as follows:
Shareholder Number of FDTI Shares
UTEK Corporation 1,000
All issued and outstanding FDTI 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. FDTI
is not authorized to issue any preferred stock. All dividends on FDTI 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 FDTI to issue any FDTI Shares or securities
convertible into FDTI Shares to anyone for any reason whatsoever. None of the
FDTI Shares is subject to any change, claim, condition, interest, lien, pledge,
option, security interest or other encumbrance or restriction, including any
restriction on use, voting, transfer, receipt of income or exercise of any other
attribute of ownership.
(d) Binding Effect. The execution, delivery, performance and consummation
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of this Agreement, the Acquisition and the transactions contemplated by this
Agreement will not violate any obligation to which FDTI or UTEK is a party and
will not create a default under any such obligation or under any agreement to
which FDTI or UTEK is a party. This Agreement constitutes a legal, valid and
binding obligation on each of FDTI and UTEK, 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
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proceedings pending or, to the best of FDTI 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 FDTI.
(f) No Conflicting Agreements. Neither the execution and delivery of this
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Agreement nor the fulfillment of or compliance by FDTI 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, FDTI or UTEK's articles
of incorporation or bylaws, the
Technology, the License Agreement, or any agreement, contract, instrument,
order, judgment or decree to which FDTI or UTEK is a party or by which FDTI 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, or result in the creation or imposition of any lien, change, or
encumbrance on any of the Assets.
(g) Consents. No consent from or approval of any court, governmental
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entity or any other person is necessary in connection with execution and
delivery of this Agreement by FDTI and UTEK or performance of the obligations of
FDTI and UTEK hereunder or under any other agreement to which FDTI or UTEK is a
party; and the consummation of the transactions contemplated by this Agreement
will not require the approval of any entity or person in order to prevent the
termination of the Technology, the License Agreement, or any other material
right, privilege, license or agreement relating to FDTI or its assets or
business.
(h) Title to Assets. FDTI has entered into the agreements identified on
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Exhibit A attached hereto. The License Agreement and the assets shown on the
balance sheet of attached Exhibit B are the sole assets of FDTI (the "Assets").
FDTI has or will by Closing Date have good and marketable title to the Assets,
free and clear of all liens, claims, charges, mortgages, options, restrictions
on transfer, security agreements and other encumbrances of every kind or nature
whatsoever.
(i) Intellectual Property
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(1) The Westinghouse Savannah River Company (SRC) owns the Technology
and has all right, power, authority and ownership and entitlement to file,
prosecute and maintain in effect the Patent application with respect to the
Invention listed in Exhibit A hereto, and
(2) The License Agreement between the SRC and FDTI covering the
Invention 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, SQUM
acknowledges and understands that FDTI and UTEK make no representations and
provide no assurances that the rights to the Technology and Intellectual
Property contained in the License Agreement do not, and will not in the future,
infringe or otherwise violate the rights of third parties, and
(4) Except as otherwise expressly set forth in this Agreement, FDTI
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 FDTI. FDTI has no assets, no liabilities or obligations
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of any kind, character or description except those listed on the attached
schedules and exhibits.
(k) Financial Statements. The unaudited financial statements of FDTI,
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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 FDTI'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. FDTI 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 FDTI except as specifically set forth in the financial statements and the
other attached schedules and exhibits. There is no information known to FDTI or
UTEK that would prevent the financial statements of FDTI from being audited in
accordance with generally accepted accounting principles.
(l) Taxes. All returns, reports, statements and other similar filings
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required to be filed by FDTI 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 FDTI 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 FDTI by any taxing authority, have been
properly paid. FDTI has not received any notice of assessment or proposed
assessment in connection with any tax returns, nor is FDTI 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. FDTI 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. FDTI 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 FDTI. FDTI is not and has never been a party to any tax
sharing agreements with any other person or entity. FDTI is, and at all times
since its incorporation has been, properly characterized as a corporation for
federal, state and local income tax purposes.
FDTI does not have any permanent establishment in any foreign country, as
defined in any applicable tax treaty or convention between the U.S. and the
relevant foreign jurisdiction.
(m) Absence of Certain Changes or Events. From the date of the full
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execution of the Term Sheet until the Closing Date, FDTI has not, and without
the written consent of SQUM, it will not have:
(1) Sold, encumbered, assigned let lapsed or transferred any of its
material assets, including without limitation the Intellectual Property, the
Patent License Agreement or any other material asset;
(2) Amended or terminated the Patent License Agreement or other
material agreement or done any act or omitted to do any act which would cause
the breach of the Patent License Agreement or any other material agreement;
(3) Suffered any damage, destruction or loss whether or not in
control of FDTI;
(4) Made any commitments or agreements for capital expenditures or
otherwise;
(5) Entered into any transaction or made any commitment not
disclosed to SQUM;
(6) Incurred any material obligation or liability for borrowed money;
(7) Suffered any other event of any character, which is
reasonable to expect, would adversely affect the future condition (financial or
otherwise) assets or liabilities or business of FDTI; or
(8) Taken any action which could reasonably be foreseen to
make any of the representations or warranties made by FDTI 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
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list of all contemplated and executed agreements between FDTI and any third
party. 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"), have been provided to SQUM and such agreements
are or will be at the Closing Date, in full force and effect without
modifications or amendment and constitute the legally valid and binding
obligations of FDTI in accordance with their respective terms and will continue
to be valid and enforceable following the Acquisition. FDTI is not in default of
any of the Contracts. In addition:
(1) There are no outstanding unpaid promissory notes, mortgages,
indentures, deed of trust, security agreements or other agreements or
instruments relating to the borrowing of money by or any extension of credit to
FDTI; and
(2) There are no outstanding operating agreements, lease agreements
or similar agreements by which FDTI is bound; and
(3) The complete final drafts of the License Agreement have has been
provided to SQUM; and
(4) Except as set forth in (3) above, there are no outstanding
licenses to or from others of any intellectual property and trade names; and
(5) There are no outstanding agreements or commitments to sell, lease
or otherwise dispose of any of FDTI's property; and
(6) There are no breaches of any agreement to which FDTI is a party.
(o) Compliance with Laws. To the best of its knowledge, FDTI has complied
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and is in compliance with all applicable laws, rules, regulations, ordinances,
codes, writs, injunctions 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,
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administrative, legal or other proceeding of any kind or character, or any
governmental investigation pending or to the best knowledge of FDTI or UTEK,
threatened against FDTI, UTEK, the Technology, Patent License Agreement,
Consulting Agreement or Research Agreement, and neither FDTI 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 FDTI or the transactions contemplated hereby. There are no pending
or threatened actions or proceedings before any court, arbitrator or
administrative agency. To the best of their knowledge, neither FDTI nor UTEK
have infringed upon or are infringing upon any copyright or trademark.
Employees. FDTI has no and never had any employees. FDTI is not a party to or
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bound by any employment agreement or any collective bargaining agreement with
respect to any employees. FDTI is not in violation of any law, regulation
relating to employment of employees.
Future Use. FDTI has no present information and is unaware of any facts which
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would or could adversely affect the future use of the Assets by SQUM.
Neither FDTI nor UTEK has any knowledge of any existing or threatened
occurrence, action or development that could cause a material adverse effect on
FDTI or its business, assets or condition (financial or otherwise) or prospects.
(s) Employee Benefit Plans. FDTI states that there are no and have never
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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 FDTI are complete and
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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. No broker finder or similar agent has been employed
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by or on behalf of UTEK or FDTI in connection with this Agreement or the
transactions contemplated hereby. Neither UTEK nor FDTI 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 FDTI
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are true, correct and complete in all material respects to the best of our
knowledge on the date of this Agreement and shall be true, correct and complete
in all material respects as of the Closing Date as if they were made on such
date. No statement made by them in this Agreement or in the exhibits to this
Agreement or any document delivered by them or on their behalf pursuant to this
Agreement contains an untrue statement of material fact or omits to state all
material facts necessary to make the statements in this Agreement not
misleading.
(w) Use of Trade Name. UTEK shall not use the tradename "Fingerprint
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Detection Technologies" or any variation thereon.
2.02 Representations and Warranties of SQUM. SQUM represents and warrants
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to UTEK and FDTI that the facts set forth are true and correct.
(a) Organization. SQUM is a corporation duly organized, validly existing
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and in good standing under the laws of Florida, is qualified to do business as a
foreign corporation in other jurisdictions in which the conduct of its business
or the ownership of its properties require such qualification, and has all
requisite power and authority to conduct its business and operate properties.
(b) Authorization. The execution of this Agreement and the consummation
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of the Acquisition and the other transactions contemplated by this Agreement
have been duly authorized by the board of directors of SQUM; no other corporate
action 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. SQUM has authorized 36,267,747 shares of common stock
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with a par value $.001 per share ("SQUM Shares"); and on the Effective Date of
the Acquisition, 36,752,747 SQUM Shares (which will include the 485,000 SQUM
Shares issued at the closing of the Acquisition) will be issued and outstanding.
All issued and
outstanding SQUM 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
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of the Acquisition and the transactions contemplated by this Agreement will not
violate any obligation to which SQUM is a party and will not create a default
hereunder, and this Agreement constitutes a legal, valid and binding obligation
of SQUM, 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
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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
SQUM.
(f) No Conflicting Agreements. Neither the execution and delivery of this
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Agreement nor the fulfillment of or compliance by SQUM with the terms or
provisions of this Agreement will result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in a violation of, their
respective corporate charters or bylaws, or any agreement, contract, instrument,
order, judgment or decree to which it is a party or by which it or any of its
assets are bound, or violate any provision of any applicable law, rule or
regulation or any order, decree, writ or injunction of any court or governmental
entity which materially affects its assets or business.
(g) Consents. Assuming the correctness of UTEK and FDTI's representations,
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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 SQUM or its assets or business.
(h) Financial Statements. The unaudited financial statements of SQUM
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attached as Exhibit C present fairly its financial position and the results of
its operations on the dates and for the periods shown in this Agreement;
provided, however, that interim financial statements are subject to customary
year-end adjustments and accruals that, in the aggregate, will not have a
material adverse effect on the overall financial condition or results of its
operations. SQUM 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 SQUM except as specifically set forth in the SQUM financial
statements.
(i) Full Disclosure. All representations or warranties of SQUM are true,
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correct and complete to the best of SQUM's knowledge, 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. SQUM is in compliance with all applicable laws,
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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,
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administrative, legal or other proceeding of any kind or character, or any
governmental investigation pending or, to the best knowledge of SQUM, threatened
against SQUM materially affecting its assets or business (financial or
otherwise), and SQUM is not in violation of or in default with respect to any
judgment, order, decree or other finding of any court or government authority.
There are no pending or threatened actions or proceedings before any court,
arbitrator or administrative agency, which would, if adversely determined,
individually or in the aggregate, materially and adversely affect its assets or
business.
(l) SQUM has no knowledge of any existing or threatened occurrence, action
or development that could cause a material adverse effect on SQUM or its
business, assets or condition (financial or otherwise) or prospects.
2.03 Investment Representations of UTEK. UTEK represents and warrants to
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SQUM that:
(a) General. It has such knowledge and experience in financial and
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business matters as to be capable of evaluating the risks and merits of an
investment in SQUM Shares pursuant to the Acquisition. It is able to bear the
economic risk of the investment in SQUM Shares, including the risk of a total
loss of the investment in SQUM Shares. The acquisition of SQUM Shares is for its
own account and is for investment and not with a view toward distribution of
this Agreement or further sale. Except as 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 SQUM is true and correct. It has conducted all investigations and
due diligence concerning SQUM 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 SQUM concerning SQUM Shares and the
business and financial condition of and prospects for SQUM, and the officers and
directors of SQUM have adequately answered all questions asked and made all
relevant information available to them. UTEK is an "accredited investor," as the
term is defined in Regulation D, promulgated under the Securities Act of 1933,
as amended, and the rules and regulations thereunder.
(b) Stock Transfer Restrictions.
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The SQUM Shares have not been registered under the Securities Act and may
not be transferred, sold, assigned, hypothecated or otherwise disposed of unless
such transaction is the subject of a registration statement filed with and
declared effective by the Securities and Exchange Commission (the "SEC") or
unless an exemption from the registration requirements under the Securities Act,
such as Rule 144, is available. The Seller represents and warrants and hereby
agrees that all offers and sales of the SQUM Shares shall be made only pursuant
to such registration or to such exemption from registration. The Seller
acknowledges that the certificate for any of the SQUM Shares shall contain the
following restrictive legend in accordance with Rule 144:
The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the "ACT"), or the securities laws of
any state, and may not be offered, sold, transferred, pledged, hypothecated or
otherwise disposed of except pursuant to (i) an effective registration statement
under the 1933 ACT and any applicable state laws, or valid exception thereto,
(ii) to the extent applicable, in accordance with Rule 144 under the 1933 ACT
(or any similar rule under the 1933 ACT relating to the disposition of
securities), and (iii) an opinion of counsel, reasonably satisfactory to counsel
to the issuer, that an exemption from registration under the 1933 ACT and
applicable state law is available and such transfer is made in accordance with
Rule 144.
ARTICLE 3
TRANSACTIONS PRIOR TO CLOSING
3.01. Corporate Approvals. Prior to Closing Date, each of the parties shall
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submit this Agreement to its board of directors and when necessary, its
respective shareholders and obtain approval of this Agreement. Copies of
corporate actions taken shall be provided to each party.
3.02 Access to Information. Each party agrees to permit, upon reasonable
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notice, the attorneys, accountants, and other representatives of the other
parties reasonable access during normal business hours to the Assets, 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
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with the negotiation and consummation of the Acquisition and the transactions
contemplated by this Agreement.
3.04 Covenants. Except as permitted in writing, each party agrees that it
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will:
(a) Use its good faith efforts to obtain all requisite licenses, permits,
consents, approvals and authorizations necessary in order to consummate the
Acquisition; and
(b) Notify the other parties upon the occurrence of any event which would
have a materially adverse effect upon the Acquisition or the transactions
contemplated by this Agreement or upon the business, assets or results of
operations; and
(c) Not modify its corporate structure, except as necessary or advisable
in order to consummate the Acquisition and the transactions contemplated by this
Agreement.
3.05 Maintain Assets. UTEK and FDTI shall maintain the Assets in good
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working condition and shall take reasonably steps to insure that the Assets are
not damaged, lost, destroyed or impaired.
3.06 Qualification. UTEK and FDTI shall remain in good standing in Florida.
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3.07 Tax Assessments and Audits. UTEK and FDTI shall furnish promptly to
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SQUM a copy of all notices of proposed assessment or similar notices or reports
that are received from any taxing authority and which relate to FDTI's
operations for periods ending on or prior to the Closing.
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 precedent 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 FDTI Shares or the right of FDTI or UTEK to
consummate the Acquisition contemplated hereunder.
4.04. The representations and warranties of the parties shall be true and
correct in all material respects at the Effective Date.
4.05. The Technology and Intellectual Property has been prosecuted in good faith
with reasonable diligence.
4.06. To the best knowledge of UTEK and FDTI, the License Agreement is valid
and in full force and effect without any default in this Agreement.
4.07. SQUM shall have received, at or within 5 days of Closing Date, each of the
following:
(a) the stock certificates representing the FDTI Shares, duly endorsed (or
accompanied by duly executed stock powers) by UTEK for cancellation;
(b) all documentation relating to the FDTI's business, all in a form and
substance satisfactory to SQUM;
(c) such agreements, files and other data and documents pertaining to FDTI's
business as SQUM may reasonably request;
(d) copies of the general ledgers and books of account of FDTI, and all
federal, state and local income, franchise, property and other tax returns filed
by FDTI since the inception of FDTI;
(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 FDTI in
Florida;
(f) the original corporate minute books of FDTI, including the articles of
incorporation and bylaws of FDTI, and all other documents filed in this
Agreement;
(g) all consents, assignments or related documents of conveyance to give SQUM
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 SQUM and FDTI, and
(i) such other documents, instruments or certificates as SQUM, or their counsel
may reasonably request.
4.08. SQUM shall have completed due diligence investigation of FDTI to SQUM's
satisfaction in their sole discretion.
4.09. SQUM shall receive the resignation effective the Closing Date of each
director and officer of FDTI.
ARTICLE 5
CONFIDENTIALITY
Acknowledgment. Each of FDTI, UTEK and SQUM acknowledges the confidential and
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proprietary nature of the Confidential Information (as defined below), agrees to
hold and keep the same as provided in this Article 5, and otherwise agrees to
each and every restriction and obligation in this Article 5.
Confidential Information. Confidential Information means and includes any and
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all:
trade secrets concerning the business and affairs of either UTEK, FDTI or SQUM
(the "Provider") provided to the other party (the "Recipient"), including
product specifications, data, know-how, formulae, compositions, processes,
designs, sketches, photographs, graphs, drawings, samples, inventions and ideas,
past, current, and planned research and development, current and planned
manufacturing or distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies, business plans,
computer software and programs (including object code and source code), computer
software and database technologies, systems, structures and architectures (and
related processes, formulae, composition, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and information), and
any other information, however documented, that is a trade secret within the
meaning of the applicable state trade secret law); and
information concerning the business and affairs of the Provider (which includes
historical financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans, the names and
backgrounds of key personnel, and personnel training techniques and materials,
however documented) that has been or may hereafter be provided or shown to the
Recipient by the Provider or by the Provider's representatives or is otherwise
obtained from review of Provider documents or property or discussions with the
Provider's representatives by the Recipient or by the Recipient's
representatives (including current or prospective financing sources) or
representatives of the Recipient's representatives irrespective of the form of
the communication, and also includes all notes, analyses, compilations, studies,
summaries, and other material prepared by the Recipient or the Recipient's
representatives containing or based, in whole or in part, on any information
included in the foregoing. Any trade secrets of the Provider will also be
entitled to all of the protections and benefits under the applicable state trade
secret law and any other applicable law.
Restricted Use of Confidential Information. The Recipient agrees that the
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Confidential Information (a) will be kept confidential by the Recipient and the
Recipient's representatives and (b) without limiting the foregoing, will not be
disclosed by the Recipient or the Recipient's representatives to any person
except as expressly otherwise permitted by the terms of this Article 5. It is
understood that the Recipient may disclose Confidential Information to only
those of the Recipient's representatives who (i) require such material for the
purpose of evaluating the Transaction, and (ii) are informed by the Recipient of
the confidential nature of the Confidential Information and the obligations of
this Article 5. The Recipient further agrees that the Recipient and the
Recipient's representatives will not use any of the Confidential Information
either for any reason or purpose other than to evaluate the Transaction or in
any way detrimental to the Provider (it being acknowledged that any use other
than evaluation of and negotiating the Transaction will be deemed detrimental).
The Recipient also agrees to be responsible for enforcing the terms of this
Article 5 as to the Recipient's representatives and the confidentiality of the
Confidential Information and to take such action, legal or otherwise, to the
extent necessary to cause them to comply with the terms and conditions of this
Article 5 and thereby prevent any disclosure of the Confidential Information by
any of the Recipient's representatives (including all actions that the Recipient
would take to protect its own trade secrets and confidential information).
Exceptions. All of the foregoing obligations and restrictions do not apply to
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that part of the Confidential Information that the Recipient demonstrates (a)
was or becomes generally available to the public other than as a result of a
disclosure by the Recipient or the Recipient's representatives or (b) was
available, or becomes available, to the Recipient on a non-confidential basis
prior to its disclosure to the Recipient by the Provider or Provider's
representatives. Nothing contained in this Article 5 shall limit or otherwise
apply to Buyer's use and disclosure of the Assets after the Closing.
Required Disclosure. The Recipient or such Recipient's representative may
-------------------
furnish that portion (and only that portion) of the Confidential Information
that is required to disclose under the applicable federal and state securities
Laws; provided, however, that the Recipient and the recipient's representatives
must use reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded any Confidential Information so disclosed.
Return of Confidential Information. If this Agreement is terminated for any
----------------------------------
reason, then (a) the Recipient (i) will promptly deliver to the Provider all
documents or other materials furnished by the Provider or any of Provider's
representative to the Recipient or the Recipient's representatives constituting
Confidential Information, together with all copies and summaries thereof in the
possession or under the control of the Recipient or the Recipient's
representatives, and (ii) will destroy materials generated by the Recipient or
the Recipient's representatives that include or refer to any part of the
Confidential Information, without retaining a copy of any such material or (b)
alternatively, if the Provider requests or gives its prior written consent to
the Recipient's request, the Recipient will destroy all documents or other
matters constituting Confidential Information in the possession or under the
control of the Recipient or the Recipient's representatives. Any such
destruction pursuant to the foregoing must be confirmed by the Recipient in
writing to the Provider (such confirmation must include a list of the destroyed
materials).
Remedies. The Recipient agrees to indemnify and hold the Provider and its
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stockholders harmless from any damages, loss, cost, or liability (including
legal fees and the cost of enforcing this indemnity) arising out of or resulting
from any unauthorized use or disclosure by the Recipient or the Recipient's
representatives of the Confidential Information or other violation of this
Article 5. In addition, because an award of money damages (whether pursuant to
the foregoing sentence or otherwise) would be inadequate for any breach of this
Article 5 by the Recipient or the Recipient's representatives and any such
breach would cause the Provider irreparable harm, the Recipient also agrees
that, in the event of any breach or threatened breach of this Article 5, the
Provider will also be entitled, without the requirement of posting a bond or
other security, to equitable relief, including injunctive relief and specific
performance. Such remedies will not be the
exclusive remedies for any breach of this Agreement but will be in addition to
all other remedies available at law or equity to the Provider.
Press Releases. Except as required by applicable law, neither FDTI nor UTEK
--------------
shall not make any public statement or press releases concerning this Agreement
or the transactions contemplated hereby except for such written information as
shall have been approved in writing as to form and content by both the Buyer and
seller, which approval shall not be unreasonably withheld. Notwithstanding the
foregoing, following the Closing, SQUM may announce its ownership of the Assets.
Survival of Representations and Warranties.
-------------------------------------------
(a) The representations and warranties made by UTEK and FDTI 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 SQUM shall survive for a
period of 1 year after the Closing Date, and thereafter all such representations
and warranties shall be extinguished, except with respect to claims then pending
for which specific notice has been given during such 1-year period.
5.02. Limitations on Liability. Notwithstanding any other provision to this
-------------------------
Agreement the contrary, neither party to this Agreement shall be liable to the
other party for any cost, damage, expense, liability or loss under this
indemnification provision until after the sum of all amounts individually when
added to all other such amounts in the aggregate exceeds $1,000 and then such
liability shall apply only to matters in excess of $1,000.
ARTICLE 6
REMEDIES
6.01 Specific Performance. Each party's obligations under this Agreement
---------------------
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 prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other
costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be entitled.
ARTICLE 7
ARBITRATION
In the event a dispute arises with respect to the interpretation or effect
of this Agreement or concerning the rights or obligations of the parties to this
Agreement, the parties agree to negotiate in good faith with reasonable
diligence in an effort to resolve the dispute in a mutually acceptable manner.
Failing to reach a resolution of this Agreement, either party shall have the
right to submit the dispute to be settled by arbitration under the Commercial
Rules of Arbitration of the American Arbitration Association. The parties agree
that, unless the parties mutually agree to the contrary such arbitration shall
be conducted in Tampa, Florida. The cost of arbitration shall be borne by the
party against whom the award is rendered or, if in the interest of fairness, as
allocated in accordance with the judgment of the arbitrators. All awards in
arbitration made in good faith and not obtained by means of fraud or other
misconduct shall be final and binding. The arbitrators shall be selected as
follows: one by SQUM, one by UTEK and a third by the two selected arbitrators.
The third arbitrator shall be the chairman of the panel.
ARTICLE 8
INDEMNITY
8.01 Indemnification by UTEK and FDTI. From and after the Closing, UTEK and
FDTI, jointly and severally, shall indemnify, defend and hold harmless SQUM and
its shareholders, officers, directors, managers, constituent members,
constituent partners, beneficiaries, trustees, affiliates, agents, employees,
representatives, assigns, attorneys, heirs, predecessors, and successors
(collectively, "Buyer's Indemnified Parties") from and against any and all
claims, demands, actions, causes of action, judgments, settlements, losses,
damages, liabilities, compromises, injuries, lawsuits, deficiencies,
obligations, costs and expenses, including reasonable attorneys' fees, expert
witness fees and related costs as incurred by SQUM, including any and all costs
associated with defense of this Agreement or the transactions contemplated
herein, or any other claim before a bankruptcy court or other court, trustee or
receiver regarding this Agreement, the Assets or the transactions contemplated
herein (collectively, "Claims"), whether such Claims are fixed or contingent,
that any Buyer's Indemnified Parties shall incur or suffer, that arise, result
from or relate to:
(a) any breach of, or failure by either UTEK or FDTI to perform, any of its
representations, warranties, covenants, or agreements set forth in this
Agreement;
(b) any event or circumstance occurring prior to the Closing which is
attributable or related to the operation or ownership of the Business or Assets
by either UTEK or FDTI; or
(c) any obligation, debt or liability of either UTEK or FDTI.
8.02 Indemnification by SQUM. From and after the Closing, SQUM shall
indemnify, defend and hold harmless UTEK and FDTI and its shareholders,
officers, directors, managers, constituent members, constituent partners,
beneficiaries, trustees, affiliates, agents, employees, representatives,
assigns, attorneys, heirs, predecessors, and successors (collectively, "Seller's
Indemnified Parties") from and against any and all claims, demands, actions,
causes of action, judgments, settlements, losses, damages, liabilities,
compromises, injuries, lawsuits, deficiencies, obligations, costs and expenses,
including reasonable attorneys' fees, expert witness fees and related costs as
incurred by UTEK or FDTI, including any and all costs associated with defense of
this Agreement or the transactions contemplated herein, or any other claim
before a bankruptcy court or other court, trustee or receiver regarding this
Agreement, the Assets or the transactions contemplated herein (collectively,
"Claims"), whether such Claims are fixed or contingent, that any Seller's
Indemnified Parties shall incur or suffer, that arise, result from or relate to:
(a) any breach of, or failure by SQUM to perform, any of its representations,
warranties, covenants, or agreements in this Agreement but subject to each and
all of the terms, conditions and limitations set forth therein; or
(b) any event or circumstance occurring following the Closing which is
attributable or related to the operation or ownership of the Assets by SQUM.
8.03 Survival. Notwithstanding any provision of this Agreement to the
--------------
contrary, the indemnity obligations of the parties in this Article 8 and the
covenants set forth in this Agreement shall be deemed to be continuing and shall
survive the Closing.
ARTICLE 9
MISCELLANEOUS
9.01. 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.
9.02. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective permitted successors and assigns.
9.03. 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.
9.04. This Agreement shall be governed by and construct in accordance with the
laws of the State of Florida without regard to principles of conflicts of law.
9.05. This document constitutes a complete and entire agreement among the
parties with reference to the subject matters set forth in this Agreement. No
statement or agreement, oral or written, made prior to or at the execution of
this Agreement and no prior course of dealing or practice by either party shall
vary or modify the terms set forth
in this Agreement without the prior consent of the other parties to this
Agreement. This Agreement may be amended only by a written document signed by
the parties.
9.06. Notices or other communications required to be made in connection with
this Agreement shall be sent by U.S. mail, certified, return receipt requested,
personally delivered or sent by express delivery service and delivered to the
parties at the addresses set forth below or at such other address as may be
changed from time to time by giving written notice to the other parties.
9.07. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
9.08 Waiver. Any term or provision of this Agreement may be waived in writing
at any time by the party or parties entitled to the benefits thereof. Any
waiver effected pursuant to this Section shall be binding upon all parties
hereto. No failure to exercise and no delay in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude the exercise of any other
right, power or privilege. No waiver of any breach of any covenant or agreement
hereunder shall be deemed a waiver of any preceding or subsequent breach of the
same or any other covenant or agreement.
9.09 This Agreement may be executed in multiple counterparts, each of which
shall constitute one and a single Agreement.
9.10 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.
SEQUIAM CORPORATION FINGERPRINT DETECTION
TECHNOLOGIES, INC.
By: By:
------------------------------- -------------------------------
Xxxx X. Xxxxxxxxxxx XXX X. XXXXXX, Esq.
Senior Vice President and CFO President
Address: Address:
000 Xxxxxxx Xxxx 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000 Xxxxx Xxxx, Xxxxxxx 00000
UTEK CORPORATION
By:
-------------------------------
Xxxxxxxx X. Xxxxx, Ph.D.
Chief Executive Officer
Address:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000
EXHIBIT A
"ASSETS"
License Agreement between FDTI & Westinghouse Savannah River Company
EXHIBIT B
Financial Statements of FDTI
EXHIBIT C
SQUM Financial Statement
