EXHIBIT 2.1
-----------
ACQUISITION OF FIBER-GEL TECHNOLOGIES, INC.
BY
CIRCLE GROUP INTERNET, INC.
AGREEMENT AND PLAN OF ACQUISITION
THIS AGREEMENT AND PLAN OF ACQUISITION ("Agreement") is entered into by
and between Fiber-Gel Technologies, Inc., a Florida corporation, ("FGTI"), UTEK
Corporation, a Delaware corporation, ("UTEK"), and Circle Group Internet, Inc.,
an Illinois corporation, ("CRGQ").
WHEREAS, UTEK owns 100% of the issued and outstanding shares of common
stock of FGTI ("FGTI Shares"); and
WHEREAS, before the Closing Date, FGTI has acquired the license for the
fields of use as described in the License Agreement, a part of Exhibit "A"
attached to and made a part of this Agreement ("License Agreement") and the
rights to develop and market a patented and proprietary technology for the
fields of uses specified in the License Agreement ("Technology").
WHEREAS, the parties desire to provide for the terms and conditions
upon which FGTI will be acquired by CRGQ in a, stock-for-stock exchange
("Acquisition") in accordance with the respective corporation laws of their
state, upon consummation of which all FGTI Shares will be owned by CRGQ, and all
issued and outstanding FGTI Shares will be exchanged for common stock of CRGQ
with terms and conditions as set forth more fully in this Agreement; and
WHEREAS, for federal income tax purposes, it is intended that the
Acquisition qualifies within the meaning of Section 368 (a)(1)(B) of the
Internal Revenue Code of 1986, as amended ("Code").
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which are by
this Agreement acknowledged, the parties agree as follows:
ARTICLE 1
THE STOCK-FOR-STOCK ACQUISITION
1.01 The Acquisition
---------------
(a) Acquisition Agreement. Subject to the terms and conditions of this
Agreement, at the Effective Date, as defined below, all FGTI
Shares shall be acquired from UTEK by CRGQ in accordance with the
respective corporation laws of their state and the provisions of
this Agreement and the separate corporate existence of FGTI, as a
wholly-owned subsidiary of CRGQ, shall continue after the closing.
(b) Effective Date. The Acquisition shall become effective ("Effective
Date") upon the execution of this Agreement and closing of the
transaction.
(c) Exchange of Stock. At the Effective Date, by virtue of the
Acquisition, all of the FGTI Shares that are issued and
outstanding at the Effective Date shall be exchanged for 2,800,000
unregistered shares of common stock of CRGQ ("CRGQ Shares") and a
warrant to purchase 500,000 CRGQ common at $0.36 exercisable
within 36 months of execution of this agreement.
1.02 Effect of Acquisition.
----------------------
a) Rights in FGTI Cease. At and after the Effective Date, the holder
of each certificate of common stock of FGTI shall cease to have
any rights as a shareholder of FGTI.
b) Closure of FGTI Shares Records. From and after the Effective Date,
the stock transfer books of FGTI shall be closed, and there shall
be no further registration of stock transfers on the records of
FGTI.
1.03 Closing. Subject to the terms and conditions of this Agreement, the
Closing date of this Acquisition shall be the date of the last executed
signature affixed to this agreement, but in no event later than September 2,
2002.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of UTEK and FGTI. UTEK and FGTI
represent and warrant to CRGQ that the facts set forth below are true and
correct:
a) Organization. FGTI and UTEK are corporations duly organized,
validly existing and in good standing under the laws of their
respective states of incorporation, and they have the requisite
power and authority to conduct their business and consummate the
transactions contemplated by this Agreement. True, correct and
complete copies of the articles of incorporation, bylaws and all
corporate minutes of FGTI have been provided to CRGQ and such
documents are presently in effect and have not been amended or
modified.
b) Authorization. The execution of this Agreement and the
consummation of the Acquisition and the other transactions
contemplated by this Agreement have been duly authorized by the
board of directors and shareholders of FGTI 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 FGTI 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 FGTI consists of
1,000,000 shares of common stock, with a par value $0.01 per
share. At the date of this Agreement, 1,000 FGTI Shares are issued
and outstanding as follows:
SHAREHOLDER NUMBER OF FGTI SHARES
----------- ---------------------
UTEK CORPORATION 1000
d) All issued and outstanding FGTI 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. FGTI is not authorized to
issue any preferred stock. All dividends on FGTI Shares which have
been declared prior to the
2
date of this Agreement have been paid in full. There are no
outstanding options, warrants, commitments, calls or other rights
or agreements requiring FGTI to issue any FGTI Shares or
securities convertible into FGTI Shares to anyone for any reason
whatsoever. None of the FGTI 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.
e) Binding Effect. The execution, delivery, performance and
consummation of this Agreement, the Acquisition and the
transactions contemplated by this Agreement will not violate any
obligation to which FGTI or UTEK is a party and will not create a
default under any such obligation or under any agreement to which
FGTI or UTEK is a party. This Agreement constitutes a legal, valid
and binding obligation of FGTI, 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.
f) Litigation Relating to this Agreement. There are no suits, actions
or proceedings pending or, to the best of FGTI 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 FGTI.
g) No Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by FGTI 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, FGTI
or UTEK's articles of incorporation or bylaws, the Technology, the
License Agreement, or any agreement, contract, instrument, order,
judgment or decree to which FGTI or UTEK is a party or by which
FGTI 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.
h) 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 FGTI and UTEK or
performance of the obligations of FGTI and UTEK hereunder or under
any other agreement to which FGTI 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 FGTI or its assets or business.
i) Title to Assets. FGTI has or has agreed to enter into the
agreements as listed on Exhibit A attached hereto. These
agreements and the assets shown on the balance sheet of attached
Exhibit B are the sole assets of FGTI. FGTI has or will by Closing
Date have good and marketable title to its assets, free and clear
of all liens, claims, charges, mortgages, options, security
agreements and other encumbrances of every kind or nature
whatsoever.
3
j) Intellectual Property
---------------------
1. The U.S. Government as represented by the U.S. Department
of Agriculture, Agricultural Research Service (hereinafter
referred to as "USDA") owns the Technology and has all
right, power, authority and ownership and entitlement to
file, prosecute and maintain in effect the Patent
application with respect to the Invention listed in Exhibit
A hereto, and
2. The Technology was invented by George E. Inglett
("Inventor"). The Inventor, has assigned all of his rights,
title and interests in the Technology to the USDA, and
3. The License Agreement between the USDA and FGTI covering
the Invention is legal, valid, binding and enforceable in
accordance with its terms as contained in Exhibit A.
4. Except as otherwise set forth in this Agreement, CRGQ
acknowledges and understands that FGTI and UTEK make no
representations and provide no assurances that the rights
to the Technology and Intellectual Property contained in
the License Agreement do not, and will not in the future,
infringe or otherwise violate the rights of third parties,
and
5. Except as otherwise expressly set forth in this Agreement,
FGTI 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 Technology.
k) Liabilities of FGTI. FGTI has no assets, no liabilities or
obligations of any kind, character or description except those
listed on the attached schedules and exhibits.
l) Financial Statements. The unaudited financial statements of FGTI,
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 FGTI'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. FGTI 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 FGTI except as
specifically set forth in the financial statements and the other
attached schedules and exhibits. There is no information known to
FGTI or UTEK that would prevent the financial statements of FGTI
from being audited in accordance with generally accepted
accounting principles.
m) Taxes. All returns, reports, statements and other similar filings
required to be filed by FGTI 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 FGTI 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 FGTI by any taxing authority, have been
properly paid, except to the extent reflected on FGTI's financial
statements, where FGTI has contested in good faith by appropriate
proceedings and reserves have been established on its financial
statements to the full extent if the contest is adversely decided
against it. FGTI has not received any notice of assessment or
proposed assessment in connection with any tax returns, nor is
FGTI a party to or to the best of its knowledge, expected to
become a party
4
to any pending or threatened action or proceeding, assessment or
collection of taxes. FGTI 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. FGTI 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 FGTI. FGTI is not and has never
been a party to any tax sharing agreements with any other person
or entity.
n) Absence of Certain Changes or Events. From the date of the full
execution of the Term Sheet until the Closing Date, FGTI has not,
and without the written consent of CRGQ, it will not have:
1. Sold, encumbered, assigned let lapsed or transferred any of its
material assets, including without limitation the Technology, the
Patent License Agreement or any other material asset;
2. Amended or terminated the License Agreement or other material
agreement or done any act or omitted to do any act which would
cause the breach of the License Agreement or any other material
agreement;
3. Suffered any damage, destruction or loss whether or not in
control of FGTI,
4. Made any commitments or agreements for capital expenditures or
otherwise,
5. Entered into any transaction or made any commitment not
disclosed to CRGQ,
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 FGTI, or
8. Taken any action which could reasonably be foreseen to make any
of the representations or warranties made by FGTI or UTEK untrue
as of the date of this Agreement or as of the Closing Date.
o) Material Agreements. Exhibit A attached contains a true and
complete list of all contemplated and executed agreements between
FGTI and a third party. A complete and accurate copies of all
material agreements, contracts and commitments of the following
types, whether written or oral to which it is a party or is bound
("Contracts"), has been provided to CRGQ 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 FGTI in accordance with their respective
terms and will continue to be valid and enforceable following the
Acquisition. FGTI is not in default of any of the Contracts. In
addition:
1. There are no outstanding unpaid promissory notes, mortgages,
indentures, deed of trust, security agreements and other
agreements and instruments relating to the borrowing of money by
or any extension of credit to FGTI; and
2. There are no outstanding operating agreements, lease agreements
or similar agreements by which FGTI is bound; and
5
3. The complete final drafts of the License Agreement have has
been provided to CRGQ; 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 FGTI's property; and
6. There are no breaches of any agreement to which FGTI is a
party.
p) Compliance with Laws. FGTI 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.
q) Litigation. There is no suit, action or any arbitration,
administrative, legal or other proceeding of any kind or
character, or any governmental investigation pending or to the
best knowledge of FGTI or UTEK, threatened against FGTI, the
Technology, License Agreement, affecting its assets or business
(financial or otherwise), and neither FGTI 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 FGTI or the
transactions contemplated hereby. There are no pending or
threatened actions or proceedings before any court, arbitrator or
administrative agency, which would, if adversely determined,
individually or in the aggregate, materially and adversely affect
the assets or business of FGTI or the transactions contemplated.
r) Employees. FGTI has no and never had any employees. FGTI is not a
party to or bound by any employment agreement or any collective
bargaining agreement with respect to any employees. FGTI is not in
violation of any law, regulation relating to employment of
employees.
s) Neither FGTI nor UTEK has any knowledge of any existing or
threatened occurrence, action or development that could cause a
material adverse effect on FGTI or its business, assets or
condition (financial or otherwise) or prospects.
t) Employee Benefit Plans. FGTI states that there are no and have
never been any employee benefit plans, and there are no
commitments to create any, including without limitation as such
term is defined in the Employee Retirement Income Security Act of
1974, as amended, in effect, and there are no outstanding or
un-funded liabilities nor will the execution of this Agreement and
the actions contemplated in this Agreement result in any
obligation or liability to any present or former employee.
u) Books and Records. The books and records of FGTI 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.
v) No Broker's Fees. Neither UTEK nor FGTI has incurred any
investment banking, advisory or other similar fees or obligations
in connection with this Agreement or the transactions contemplated
by this agreement.
w) Full Disclosure. All representations or warranties of UTEK and
FGTI 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
6
their behalf pursuant to this Agreement contains an untrue
statement of material fact or omits to state all material facts
necessary to make the statements in this Agreement not misleading
in any material respect in light of the circumstances in which
they were made.
2.02 Representations and Warranties of CRGQ. CRGQ represents and
warrants to UTEK and FGTI that the facts set forth are true and correct.
a) Organization. CRGQ is a corporation duly organized, validly
existing and in good standing under the laws of Illinois, is
qualified to do business as a foreign corporation in other
jurisdictions in which the conduct of its business or the
ownership of its properties require such qualification, and have
all requisite power and authority to conduct its business and
operate properties.
b) Authorization. The execution of this Agreement and the
consummation of the Acquisition and the other transactions
contemplated by this Agreement have been duly authorized by the
board of directors of CRGQ; no other corporate action on their
respective parts is necessary in order to execute, deliver,
consummate and perform their obligations hereunder; and they have
all requisite corporate and other authority to execute and deliver
this Agreement and consummate the transactions contemplated by
this Agreement.
c) Capitalization. The authorized capital of CRGQ consists of
20,375,915 shares of common stock with a par value $.00005 per
share ("CRGQ Shares"); and on the Effective Date of the
Acquisition, less than 23,175,915 CRGQ Shares (which will include
the 2,800,000 CRGQ Shares issued at the closing of the
Acquisition) will be issued and outstanding. All issued and
outstanding CRGQ Shares have been duly and validly issued and are
fully paid and non-assessable shares and have not been issued in
violation of any preemptive or other rights of any other person or
any applicable laws.
d) Binding Effect. The execution, delivery, performance and
consummation of the Acquisition and the transactions contemplated
by this Agreement will not violate any obligation to which CRGQ is
a party and will not create a default hereunder, and this
Agreement constitutes a legal, valid and binding obligation of
CRGQ, enforceable in accordance with its terms, except as the
enforcement may be limited by bankruptcy, insolvency, moratorium,
or similar laws affecting creditor's rights generally and by the
availability of injunctive relief, specific performance or other
equitable remedies.
e) Litigation Relating to this Agreement. There are no suits, actions
or proceedings pending or to its knowledge threatened which seek
to enjoin the Acquisition or the transactions contemplated by this
Agreement or which, if adversely decided, would have a materially
adverse effect on its business, results of operations, assets,
prospects or the results of its operations of CRGQ
f) No Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by CRGQ 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 FGTI'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 CRGQ or its assets or business.
7
h) Financial Statements. The unaudited financial statements of CRGQ
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. CRGQ 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
CRGQ except as specifically set forth in the CRGQ financial
statements.
i) Full Disclosure. All representations or warranties of CRGQ are
true, correct and complete in all material respects on the date of
this Agreement and shall be true, correct and complete in all
material respects as of the Closing Date as if they were made on
such date. No statement made by them in this Agreement or in the
exhibits to this Agreement or any document delivered by them or on
their behalf pursuant to this Agreement contains an untrue
statement of material fact or omits to state all material facts
necessary to make the statements in this Agreement not misleading
in any material respect in light of the circumstances in which
they were made.
j) Compliance with Laws. CRGQ is in compliance with all applicable
laws, rules, regulations and orders promulgated by any federal,
state or local government body or agency relating to its business
and operations.
k) Litigation. There is no suit, action or any arbitration,
administrative, legal or other proceeding of any kind or
character, or any governmental investigation pending or, to the
best knowledge of CRGQ, threatened against CRGQ materially
affecting its assets or business (financial or otherwise), and
CRGQ 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) CRGQ has no knowledge of existing or threatened occurrences,
actions and developments that could cause a material adverse
effect on CRGQ or its business, assets or condition (financial or
otherwise) or prospects.
2.03 Investment Representations of UTEK. UTEK represents and warrants
to CRGQ 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 CRGQ Shares pursuant to the
Acquisition. It is able to bear the economic risk of the
investment in CRGQ Shares, including the risk of a total loss of
the investment in CRGQ Shares. The acquisition of CRGQ Shares is
for its own account and is for investment and not with a view to
the distribution of this Agreement. Except a permitted by law, it
has a no present intention of selling, transferring or otherwise
disposing in any way of all or any portion of the shares at the
present time. All information that it has supplied to CRGQ is true
and correct. It has conducted all investigations and due diligence
concerning CRGQ 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 CRGQ
concerning CRGQ Shares and the business and financial condition of
and prospects for CRGQ, and the officers and directors of CRGQ
8
have adequately answered all questions asked and made all relevant
information available to them. UTEK is an "accredited investor,"
as the term is defined in Regulation D, promulgated under the
Securities Act of 1933, as amended, and the rules and regulations
thereunder.
b) Stock Transfer Restrictions. UTEK acknowledges that the CRGQ
Shares will not be registered and UTEK will not be permitted to
sell or otherwise transfer the CRGQ Shares in any transaction in
contravention of the following legend, which will be imprinted in
substantially the follow form on the stock certificate
representing CRGQ Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT'), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED PURSUANT TO
THE PROVISION OF THE ACT AND THE LAWS OF SUCH STATES UNDER WHOSE
LAWS A TRANSFER OF SECURITIES WOULD BE SUBJECT TO A REGISTRATION
REQUIREMENT, UNLESS UTEK CORPORATION HAS OBTAINED AN OPINION OF
COUNSEL STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
ARTICLE 3
TRANSACTIONS PRIOR TO CLOSING
3.01. Corporate Approvals. Prior to Closing Date, each of the parties shall
submit this Agreement to its board of directors and when necessary, its
respective shareholders and obtain approval of this Agreement. Copies of
corporate actions taken shall be provided to each party.
3.02 Access to Information. Each party agrees to permit, upon reasonable
notice, the attorneys, accountants, and other representatives of the other
parties reasonable access during normal business hours to its properties and its
books and records to make reasonable investigations with respect to its affairs,
and to make its officers and employees available to answer questions and provide
additional information as reasonably requested.
3.03 Expenses. Each party agrees to bear its own expenses in connection
with the negotiation and consummation of the Acquisition and the transactions
contemplated by this Agreement.
3.04 Covenants. Except as permitted in writing, each party agrees that it
will:
a) Use its good faith efforts to obtain all requisite licenses, permits,
consents, approvals and authorizations necessary in order to
consummate the Acquisition; and
b) Notify the other parties upon the occurrence of any event which would
have a materially adverse effect upon the Acquisition or the
transactions contemplated by this Agreement or upon the business,
assets or results of operations; and
c) Not modify its corporate structure, except as necessary or advisable
in order to consummate the Acquisition and the transactions
contemplated by this Agreement.
ARTICLE 4
CONDITIONS PRECEDENT
The obligation of the parties to consummate the Acquisition and the
transactions contemplated by this Agreement are subject to the following
conditions that may be waived, to the extent permitted by law:
9
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 FGTI Shares or the right of FGTI 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 FGTI, the License Agreement is valid
and in full force and effect without any default in this Agreement.
4.07. CRGQ shall have received, at or within 30 days of Closing Date, each
of the following:
a) the stock certificates representing the FGTI Shares, duly endorsed (or
accompanied by duly executed stock powers) by UTEK for cancellation;
b) all documentation relating to the FGTI's business, all in a form and
substance satisfactory to CRGQ;
c) such agreements, files and other data and documents pertaining to
FGTI's business as CRGQ may reasonably request;
d) copies of the general ledgers and books of account of FGTI, and all
federal, state and local income, franchise, property and other tax
returns filed by FGTI since the inception of FGTI;
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 FGTI in Florida;
f) the original corporate minute books of FGTI, including the articles of
incorporation and bylaws of FGTI, and all other documents filed in
this Agreement;
g) all consents, assignments or related documents of conveyance to give
CRGQ 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 CRGQ and FGTI, and
i) such other documents, instruments or certificates as CRGQ, or their
counsel may reasonably request.
4.08. CRGQ shall have completed due diligence investigation of FGTI to
CRGQ's satisfaction in their sole discretion.
10
4.09. CRGQ shall receive the resignation effective the Closing Date of each
director and officer of FGTI.
ARTICLE 5
LIMITATIONS
5.01. Survival of Representations and Warranties.
(a) The representations and warranties made by UTEK and FGTI 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 CRGQ shall survive for a
period of 1 year after the Closing Date, and thereafter all such representations
and warranties shall be extinguished, except with respect to claims then pending
for which specific notice has been given during such 1-year period.
5.02. Limitations on Liability. Notwithstanding any other provision to this
Agreement the contrary, neither party to this Agreement shall be liable to the
other party for any cost, damage, expense, liability or loss under this
indemnification provision until after the sum of all amounts individually when
added to all other such amounts in the aggregate exceeds $1,000 and then such
liability shall apply only to matters in excess of $1,000.
ARTICLE 6
REMEDIES
6.01 Specific Performance. Each party's obligations under this Agreement is
unique. If any party should default in its obligations under this agreement, the
parties each acknowledge that it would be extremely impracticable to measure the
resulting damages. Accordingly, the non-defaulting party, in addition to any
other available rights or remedies, may sue in equity for specific performance,
and the parties each expressly waive the defense that a remedy in damages will
be adequate.
6.02 Costs. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this agreement or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may be
entitled.
ARTICLE 7
ARBITRATION
In the event a dispute arises with respect to the interpretation or
effect of this Agreement or concerning the rights or obligations of the parties
to this Agreement, the parties agree to negotiate in good faith with reasonable
diligence in an effort to resolve the dispute in a mutually acceptable manner.
Failing to reach a resolution of this Agreement, either party shall have the
right to submit the dispute to be settled by arbitration under the Commercial
Rules of Arbitration of the American Arbitration Association. The parties agree
that, unless the parties mutually agree to the contrary such arbitration shall
be conducted in the state in which the defending party resides. 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 CRGQ, one by UTEK and a third by the two selected
arbitrators. The third arbitrator shall be the chairman of the panel.
11
ARTICLE 8
MISCELLANEOUS
8.01. No party may assign this Agreement or any right or obligation of it
hereunder without the prior written consent of the other parties to this
Agreement. No permitted assignment shall relieve a party of its obligations
under this Agreement without the separate written consent of the other parties.
8.02. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective permitted successors and assigns.
8.03. Each party agrees that it will comply with all applicable laws, rules and
regulations in the execution and performance of its obligations under this
Agreement.
8.04. This Agreement shall be governed by and construct in accordance with the
laws of the State of Florida without regard to principles of conflicts of law.
8.05. This document constitutes a complete and entire agreement among the
parties with reference to the subject matters set forth in this Agreement. No
statement or agreement, oral or written, made prior to or at the execution of
this Agreement and no prior course of dealing or practice by either party shall
vary or modify the terms set forth in this Agreement without the prior consent
of the other parties to this Agreement. This Agreement may be amended only by a
written document signed by the parties.
8.06. Notices or other communications required to be made in connection with
this Agreement shall be sent by U.S. mail, certified, return receipt requested,
personally delivered or sent by express delivery service and delivered to the
parties at the addresses set forth below or at such other address as may be
changed from time to time by giving written notice to the other parties.
8.07. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
8.08. This Agreement may be executed in multiple counterparts, each of which
shall constitute one and a single Agreement.
8.09 Any facsimile signature of any part to this Agreement or to any other
agreement or document executed in connection of this Agreement should constitute
a legal, valid and binding execution by such parties.
8.10 PRESS RELEASES OR ANY OTHER FORMS OF COMMUNICATION TO THIRD PARTIES WHICH
MENTION BOTH UTEK CORPORATION AND CRGQ SHALL BE RELEASED WITHOUT THE PRIOR
WRITTEN CONSENT AND APPROVAL OF BOTH UTEK AND CRGQ.
12
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by a duly authorized officer of each party.
CIRCLE GROUP INTERNET, INC. FIBER-GEL
TECHNOLOGIES,INC.
By:/s/Gregory J. Halpern Date:08/27/02 By:/s/Sam Reiber, J.D. Date:08/27/02
--------------------- -------- ------------------- --------
Gregory J. Halpern Sam Reiber, J.D.
President and Chief Executive Officer President
Address: Address:
- -------- --------
1011 Campus Dr. 202 South Wheeler Street
Mundelein, IL 60060 Plant City, Florida 33566
UTEK CORPORATION
By:/s/Clifford M. Gross, Ph.D. Date:08/27/02
--------------------------- --------
Clifford M. Gross, Ph.D.
Chief Executive Officer
Address:
- --------
202 South Wheeler Street
Plant City, Florida 33566
13
EXHIBIT A
OUTSTANDING AGREEMENTS
14
EXHIBIT B
FGTI FINANCAL STATEMENTS
15
EXHIBIT C
CRGQ FINANCIAL STATEMENTS
16