STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is entered into this 28th
day of January, 2000 by and between LEXON, INC., an Oklahoma corporation
("LEXON"), and UTEK Corporation, a Florida corporation ("UTEK") with respect to
CANCER DIAGNOSTICS, INC., a Florida corporation ("CDI"),
WHEREAS, UTEK is the sole shareholder of CDI; and
WHEREAS, Dr. Jeffrey Strovel and Dr. Judith Stamberg are the inventors
of and Dr. Ed Highsmith, PhD, is the project leader of a team of researchers at
the University of Maryland, Baltimore ("UM") that is developing a new
proprietary blood screen test, technology and related processes for the
identification of Telomerase Assay as a marker for lung and perhaps other forms
of cancer ("Invention") covered by US Provisional Patent Application Nos.
60/074,793; 09/250,336 and 99/03302, each of which is dated February 16,1999
("Patent Applications"), the ownership thereof having been assigned to the UM as
described more precisely in Schedule 2.01(i); and
WHEREAS, CDI and UM have entered into an Exclusive License Agreement
("License") which will grants CDI the exclusive worldwide right to manufacture,
market and commercialize products covered by the Invention attached hereto as
Schedule 2.01(e)(5) hereto and which is full force and effect; and
WHEREAS, CDI and UM have enter into a Sponsored Research Agreement
("Research Agreement") which provides for the funding of certain continued
research, development and completion of an ELISA based blood screening test
which will detect and measure to presence of the Telomerase Assay and related
research which is attached hereto as Schedule 2.01(e)(6) and which is full force
and effect; and
WHEREAS, UTEK desires to sell and LEXON desires to purchase all the
issued and outstanding shares of equity securities of CDI in accordance with the
terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.01. Purchase and Sale of the Shares. Upon execution of this
Agreement, LEXON purchases and UTEK sells, transfers, conveys and delivers to
LEXON certificates representing all of the issued and outstanding shares of
equity securities of CDI, duly endorsed for transfer to LEXON in exchange for
the Purchase Price. The certificates representing the Shares shall be executed
for transfer to LEXON or in blank and delivered
to the Escrow Agent in accordance with the terms and conditions of the Pledge
Agreemend as defined in Paragraph 1.02 below.
1.02. Purchase Price. The purchase price for the Shares is $200,000,
payable $50,000 in cash upon execution of this Agreement and $150,000 in 3 equal
principal installments of $50,000 each, payable on or before April 30, 2000, May
31, 2000 and June 30, 2000 in accordance with the terms of the Promissory Note
(" Note") which is attached hereto as Schedule 1.02(a) and delivered by LEXON
upon the execution of this Agreement. The Note is secured by a Pledge of the
Shares pursuant to the Pledge and Security Agreement ("Pledge Agreement") which
is attached hereto as Schedule 1.02(b) and pursuant to which the Shares will be
held in escrow by Sam Reiber, Esquire, as Escrow Agent, and delivered to LEXON
upon full payment of the Purchase Price. LEXON shall be entitled to all rights
as a shareholder of CDI while the Shares are pledged and the Note is not in
default in accordance with the Pledge Agreement.
1.03. Directors and Officers of CDI. Effective upon execution of this
Agreement, all the officers and directors of CDI shall be deemed to have
resigned; Gifford Mabie, Thomas Coughlin, and Rhonda Vincent shall be elected
directors of CDI ; and Gifford Mabie shall be elected President of CDI, Thomas
Coughlin shall be elected Vice President of CDI, Rhonda Vincent shall be elected
Vice President, Treasurer and Secretaryof CDI, and Frederick K. Slicker shall be
elected Vice President and Assistant Secretary of CDI.
1.04. Cancellation of Merger Agreement. Each of the parties
acknowledges and agrees that the execution of this Agreement and the closing of
the purchase and sale of the Shares of CDI hereunder terminates the rights,
duties, liabilities and obligations of the parties under that certain Agreement
and Plan of Merger dated August 5, 1999 ("Merger Agreement") for all purposes
and that this Merger Agreement shall be null and void. LEXON agrees to execute
the Release attached hereto as Schedule 1.04.
1.05 Cancellation of the UTEK Consulting Agreement. Each of the parties
acknowledges and agrees that the execution of this Agreement and the closing of
the purchase and sale of the Shares of CDI hereunder terminates the rights,
duties, liabilities and obligations of the parties under that certain Consulting
Agreement dated August 4, 1999 ("UTEK Consulting Agreement").
1.06 Indemnification. LEXON and CDI each agrees to indemnify UTEK and
all its directors, officers and representatives to the full extent of the law
for actions taken and omitted by CDI from and after the execution of this
Agreement reason of their good faith efforts for and on behalf of CDI, including
but not limited to all payments, duties and liabilities of CDI under the
Research Agreement and the License as set forth therein.
1.04. Closing. The Closing will take place upon execution of this
Agreement.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01. General Representations and Warranties of UTEK. UTEK represents
and warrants to LEXON that the facts set forth below are true and correct:
(a) Organization. CDI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, is qualified to do
business as a foreign corporation in each other jurisdiction 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 CDI's
business and operate properties.
(b) Authorization. The execution of this Agreement and the consummation
of the other transactions contemplated hereby have been duly authorized by the
Board of Directors and Shareholders of UTEK; no other corporate action on its
part is necessary in order to execute, deliver, consummate and perform its
obligations hereunder; and UTEK has all requisite corporate and other authority
to execute and deliver this Agreement and consummate the transactions
contemplated hereby.
(c) Capitalization. The authorized capital of CDI consists of 1,000
shares of common stock, no par value per share; at the date hereof and at the
Closing 1,000 shares of its common stock are issued and outstanding and owned by
UTEK, and no shares are held in CDI's treasury. All issued and outstanding
shares of common stock of CDI have been duly and validly issued, 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. There are
no outstanding options, warrants, commitments, calls or other rights or
agreements requiring it to issue any shares of CDI common stock or securities
convertible into shares of the common stock of CDI to anyone for any reason
whatsoever.
(d) Ownership of the Shares. The Shares are owned of record and
beneficially by UTEK, free and clear of all liens, claims, encumbrances, and
rights of any other person or entity of any kind, character or description.
(e) Binding Effect. The execution, delivery, performance and
consummation of the transactions contemplated hereby does not violate any
obligation of UTEK; and this Agreement constitutes a legal, valid and binding
obligation of 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 proceedings pending against CDI or UTEK or, to the knowledge of UTEK,
threatened which seek to enjoin the transactions contemplated by this Agreement
or which, if adversely
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decided, would have a materially adverse effect on the business, results of
operations, assets, prospects of CDI or upon the Patents, the Patent
Applications, the License, or the Research Agreement.
(f) No Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by UTEK with the terms or
provisions hereof will result in a breach of the terms, conditions or provisions
of, or constitute a default under, or result in a violation of, the corporate
charter or bylaws of CDI, the Patent Applications, the License, the Research
Agreement, or any agreement, contract, instrument, order, judgment or decree to
which either UTEK or CDI is a party or by which UTEK or CDI or any of their
respective 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 the Shares or the assets or
business or business of CDI.
(g) Consents. No consent from or approval of any court, governmental
entity or any other person is necessary in connection with execution and
delivery of this Agreement by UTEK or CDI or performance of the obligations of
UTEK hereunder or under any other agreement to which either CDI 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 or result in the
modification, cancellation, termination or other change in the Patent
Applications, the License, the Research Agreement or any other material right,
privilege, license or agreement relating to CDI or its assets or business.
(h) Title to Assets. CDI has good and marketable title to its assets
(tangible and intangible), free and clear of all liens, claims, charges,
mortgages, options, restrictions, security agreements and other encumbrances of
every kind or nature whatsoever, including the duly executed and delivered
License and Research Agreement.
(e) The Patent Applications, the License and the Research Agreement.
(1) To the best knowledge of UTEK, the Patent Applications
listed in Schedule 2.01(i) are pending and are being
prosecuted in good faith with diligence; and
(2) To the best knowledge of UTEK, without having made an
independent inquiry, the Invention does not and will
not infringe the intellectual or other rights of
another. This representation is not a representation
that there are no infringing intellectual rights of any
other but is a representation only that UTEK has no
knowledge thereof; and LEXON acknowledges that neither
UTEK nor CDI has conducted an independent investigation
to determine whether the Invention infringes the rights
of any other party or that the Invention itself is
useful or marketable; and
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(3) The Invention is owned by UM, and UM has all right,
power, authority, ownership and entitlement to file,
prosecute and maintain in effect the Patents and Patent
Applications with respect to the Invention listed in
Schedule 2.01(i) hereto and to grant the License to
CDI; and
(4) Dr. Jeffrey Strovel and Dr. Judith Stamburg are the
only Inventors of the Invention; and each has assigned
all of his and her rights, titles and interests in the
Invention to UM; and
(5) The License is in full force and effect and is legal,
valid, binding and enforceable in accordance with its
terms; and
(6) The Research Agreement is in full force and effect and
is legal, valid, binding and enforceable in accordance
with its terms.
(j) Liabilities of CDI. CDI has no assets, no liabilities of any kind,
character or description except those created by the License or the Research
Agreement. LEXON will not have any liabilities be reason of it ownership of the
Shares, except for the liabilities of LEXON to UTEK hereunder and under the
License and the Research Agreement.
(k) Condition of Tangible Assets. All of the tangible assets of CDI
have been operated in accordance with customary operating practices generally
acceptable in its industry to which and have been maintained and are in good
working order and repair in the ordinary course of business, subject only to
reasonable and ordinary wear and tear.
(l) Financial Statements. The unaudited financial statements of CDI
attached as Schedule 2.01(l) present fairly its financial position and the
results of its operations on the dates and for the periods shown therein. There
are no outstanding obligations or liabilities of CDI, except as specifically set
forth in the CDI financial statements, the License and the Research Agreement.
(m) Taxes. All returns, reports, statements and other similar filings
required to be filed by CDI 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 are
required to be filed; all such tax returns properly reflect all liabilities of
CDI for taxes for the periods, property or events covered thereby; and all
taxes, whether or not reflected on those tax returns, and all taxes claimed to
be due from CDI by any taxing authority, have been properly paid, except to the
extent contested in good faith by appropriate proceedings and reserves have been
established in its financial statements to the full extent if the contest is
adversely decided against it. CDI has not received any notice of
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assessment or proposed assessment in connection with any tax returns, CDI 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. CDI 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 CDI.
(n) Absence of Certain Changes or Events. Since August 4, 1999, CDI
has not:
(i) Sold, encumbered, assigned or transferred any of its
material assets or its interest in the Patents, the Patent
Applications, the Research Agreement, the License or any
other material asset; or
(ii) Amended or terminated the License or the Research Agreement,
except for the amendment dated September 25, 1999 and as
otherwise specifically disclosed to LEXON: or
(iii) Suffered any material damage, destruction or loss; or
(iv) Received notice or has knowledge of any material adverse
effect on the Patents, the Patent Applications, the Research
Agreement or the License or any other material asset or
liability of CDI; or
(v) Made any commitments or agreements for capital expenditures
by CDI; or
(vi) Entered into any transaction or made any commitment of CDI
not disclosed to LEXON; or
(vii)Agreed to take any of the actions set forth in this
paragraph.
(o) Material Contracts. A complete and accurate copy of all material
agreements, contracts and commitments of CDI has been provided to LEXON and such
agreements as amended are in full force and effect. In addition:
(i) There are no outstanding unpaid promissory notes, mortgages,
indentures, deeds of trust, security agreements and other
agreements and instruments relating to the borrowing of
money by or any extension of credit to CDI; and
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(ii) There are no outstanding operating agreements, lease
agreements or similar agreements by which CDI is bound; and
(iii)The complete and executed License and the Research
Agreement and the Patent Applications with all schedules,
exhibits and amendments related thereto and all material
correspondence with the patent authorities relating thereto
have been provided to LEXON; and
(iv) There are no outstanding licenses to or from others of any
intellectual property and trade names; and
(v) There are no outstanding contracts or commitments to sell,
lease or otherwise dispose of any of the property of CDI.
(p) Compliance with Laws. CDI is in compliance with all applicable
laws, rules, regulations and orders promulgated by any federal, state or local
governmental body or agency relating to its business and operations.
(q) Litigation. There is no suit or action or any arbitration,
administrative, legal or other proceeding of any kind or character, pending or
threatened against CDI or the Patents, the Patent Applications, the License or
the Research Agreement affecting CDI's assets or business, and there is no
factual basis therefor.
(r) Employees. CDI has no employees. CDI is not a party to or bound by
any employment agreement or any collective bargaining agreement with respect to
any of the employees.
(s) Employee Benefit Plans. There are no employee benefit plans in
effect, and there are no outstanding or unfunded liabilities to employees of
CDI.
(t) Books and Records. The books and records of CDI are complete and
accurate in all material respects, present fairly its business and operations,
have been maintained in accordance with good business practices, and accurately
reflect in all material respects its business, financial condition and
liabilities.
(u) No Broker's Fees. Neither CDI nor UTEK has not incurred any
finder's, broker's, investment banking, financial, advisory or other similar
fees or obligations for which LEXON shall be liable.
(v) Full Disclosure. All representations or warranties of UTEK are
true, correct and complete in all material respects. No statement made by UTEK
herein or in the exhibits and schedules hereto or any document delivered by UTEK
or on its behalf to LEXON pursuant to this Agreement contains an untrue
statement of material fact or omits to state all
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material facts necessary to make the statements therein not misleading in any
material respect.
Except as specifically set forth in this Agreement, UTEK and CDI make
no representations and extend no warranties of any kind, either expressed or
implied, including but not limited to warranties of merchantability, fitness for
a particular purpose, non-infringement and validity of UM's Patent Rights as set
forth in the documents referenced herein.
2.02. General Representations and Warranties of LEXON. LEXON represents
and warrants to UTEK that the facts set forth are true and correct:
(a) Organization. LEXON is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma, is
qualified to do business as a foreign corporation in each other jurisdiction 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, the Note, and the
Pledge Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors and Shareholders of LEXON;
no other corporate action on its part is necessary in order to execute, deliver,
consummate and perform its obligations hereunder; and it has all requisite
corporate and other authority to execute and deliver this Agreement and
consummate the transactions contemplated hereby.
(c) Binding Effect. The execution, delivery, performance and
consummation of the transactions contemplated hereby will not violate any
obligation to which LEXON is a party and will not create a default hereunder;
and this Agreement constitutes a legal, valid and binding obligation of LEXON,
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.
(d) Litigation Relating to this Agreement. There are no suits, actions
or proceedings pending or to its knowledge threatened which seek to enjoin 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 LEXON.
(e) No Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by LEXON with the terms or
provisions hereof will result in a breach of the terms, conditions or provisions
of, or constitute a default under, or result in a violation of, its corporate
charter or bylaws, or any agreement, contract, instrument, order, judgment or
decree to which it is a party or by which it or any of the assets
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is 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.
(f) Consents. 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 performance of the obligations of LEXON hereunder
or under any other agreement to which LEXON 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 any material right,
privilege, license or agreement relating to LEXON or its assets or business.
(g) Compliance with Laws. LEXON is in compliance with all applicable
laws, rules, regulations and orders promulgated by any federal, state or local
governmental body or agency relating to its business and operations. LEXON owns
all franchises, licenses, permits, easements, rights, applications, filings,
registration and other authorizations which are necessary for it to conduct
business, all of which are valid and in full force and effect, and it is in full
compliance therewith.
(h) No Broker or Other Fees. LEXON has incurred no finder's, broker's,
investment banking, financial, advisory or other similar fees in connection with
this Agreement.
(i) Full Disclosure. All representations or warranties of LEXON are
true, correct and complete in all material respects. No statement made by LEXON
herein or in the exhibits and schedules hereto or any document delivered by it
or on its behalf to UTEK pursuant to this Agreement contains an untrue statement
of material fact or omits to state all material facts necessary to make the
statements therein not misleading in any material respect.
2.03. Investment Representations of LEXON. LEXON represents and
warrants to UTEK that it has such knowledge and experience in financial and
business matters as to be capable of evaluating the risks and merits of an
investment in the Shares. It is able to bear the economic risk of the investment
in the Shares, including the risk of a total loss of the investment in the
Shares. The acquisition of the Shares is for its own account and is for
investment. Except as permitted by law, it has a no present intention of
selling, transferring or otherwise disposing in any way of all or any portion of
the Shares. All information that it has supplied to UTEK in connection with this
Agreement is true and correct in all material respects. It acknowledges that an
investment in the Shares involves a very high degree of risk. It has conducted
all investigations and due diligence concerning CDI which it deems appropriate,
and it has found all such information obtained fully acceptable. It is
knowledgeable about the prospects, business, financial condition, operations and
possible acquisitions of CDI. It has had an opportunity to ask questions of the
officers and directors of CDI and UTEK concerning the Shares and the business
and financial condition of and prospects for CDI, and the officers and directors
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of CDI and UTEK have adequately answered all questions asked and made all
relevant information requested available to it. It understands and agrees that
the following restrictions and limitations are applicable to the purchase,
resale and distribution of the Shares pursuant to applicable securities laws.
ARTICLE III
ARBITRATION
In the event a dispute arises with respect to the
interpretation or effect of this Agreement or concerning the rights or
obligations of the parties hereto, the parties agree to negotiate in good faith
with reasonable diligence in an effort to resolve the dispute in a mutually
acceptable manner. Failing to reach a resolution thereof, either party shall
have the right to submit the dispute to be settled by arbitration under the
Commercial Rules of Arbitration of the American Arbitration Association. The
parties agree that all arbitrations shall be conducted in Tampa, Florida, unless
the parties mutually agree to the contrary. The cost of arbitration shall be
borne by the party against whom the award is rendered or, if in the interest of
fairness, as allocated in accordance with the judgment of the arbitrators. All
awards in arbitration made in good faith and not infected with fraud or other
misconduct shall be final and binding.
ARTICLE IV
MISCELLANEOUS
No party may assign this Agreement or any right or obligation
of it hereunder without the prior written consent of the other parties hereto.
No permitted assignment shall relieve a party of its obligations under this
Agreement without the separate written consent of the other parties. This
Agreement shall be binding upon and enure to the benefit of the parties and
their respective permitted successors and assigns. Each party agrees that it
will comply with all applicable laws, rules and regulations in the execution and
performance of its obligations under this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida.
This document constitutes a complete and entire agreement among the parties with
reference to the subject matters set forth herein. No statement or agreement,
oral or written, made prior to or at the execution hereof and no prior course of
dealing or practice by either party shall vary or modify the terms set forth
herein without the prior consent of the other parties hereto. This Agreement may
be amended only by a written document signed by the parties. Notices or other
communications required to be made in connection with this Agreement shall be
delivered to the parties at the address set forth below or at such other address
as may be changed from time to time by giving written notice to the other
parties. This Agreement may be executed in multiple counterparts, each of which
shall constitute one and a single Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by a duly authorized officer this 28th day of January, 2000.
LEXON, INC. UTEK CORPORATION
By /s/ GIFFORD MABIE By /s/ CLIFFORD GROSS
Gifford Mabie, President Clifford Gross, Chairman and CEO
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