Exhibit 2.1
ACQUISITION OF ADVANCED CYBER SECURITY, INC.
by
MANAKOA SERVICES CORPORATION
AGREEMENT AND PLAN OF ACQUISITION
This Agreement
and Plan of
Acquisition
(Agreement) is entered into by and
between ADVANCED CYBER SECURITY, INC., a Florida corporation, (ACSI), UTEK
CORPORATION, a Delaware corporation,
(UTEK), and MANAKOA SERVICES CORPORATION, a
Nevada corporation, (MANAKOA)
WHEREAS,
UTEK owns 100% of the
issued and outstanding shares of common
stock of ACSI (ACSI Shares); and
WHEREAS,
before the Closing
Date, ACSI will acquire the license for the
fields of use as described in the License
Agreement (the "License Agreement")
and a Consulting Agreement (the "Consulting
Agreement") as
described and which
are attached hereto as part of Exhibit A and
made a part of this
Agreement and
the rights to develop and market a patented
and proprietary
technology for the
fields of use specified in the License
Agreement (the "Technology").
WHEREAS,
the parties desire to
provide for the terms and conditions upon
which ACSI will be acquired by MANAKOA in a stock-for-stock exchange
(Acquisition) in accordance with the respective corporation laws of their
states, upon consummation of which all ACSI
Shares will be owned by MANAKOA, and
all issued and outstanding ACSI Shares will be exchanged for common stock of
MANAKOA 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 ACSI Shares shall be
acquired from UTEK by MANAKOA in accordance
with the respective corporation laws
of their states and the provisions of this
Agreement and the separate corporate
existence of ACSI, as a wholly-owned
subsidiary of MANAKOA, 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.
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(b) Effective Date - continued
1.02
Exchange of Stock. At the Effective Date, by virtue of the
Acquisition:
All of the ACSI Shares that are issued and
outstanding
at the Effective Date
shall be exchanged for 2,000,000
unregistered shares of
common stock of MANAKOA
(MANAKOA Shares), which shall be issued as
follows:
Shareholder
Number of MANAKOA Shares
-------------
------------------------
UTEK Corporation
2,000,000
1.03 Effect of
Acquisition.
(a) Rights in
ACSI Cease. At and
after the Effective
Date, the holder
of
each certificate of common stock of ACSI shall cease to have any rights as a
shareholder of ACSI.
(b) Closure of
ACSI Shares Records.
From and after the Effective Date, the
stock transfer books of ACSI shall be closed, and there shall be no further
registration of stock transfers on the
records of ACSI.
1.04 Closing.
Subject to the terms
and conditions of this
Agreement, the
Closing of the Acquisition shall take place
Aug 3rd, 2004.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.01
Representations and Warranties of UTEK and ACSI. UTEK and ACSI
jointly
and severally represent and warrant to MANAKOA that the
facts set forth below
are true and correct:
(a)
Organization. ACSI 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 ACSI have been provided
to MANAKOA 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 ACSI 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 ACSI
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 ACSI consists of
1,000,000
shares of common stock with a par value
$1.00 per share. At the date of this
Agreement, 1,000 ACSI Shares are issued and
outstanding as follows:
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(c) Capitalization - continued
Shareholder
Number of ACSI Shares
--------------
---------------------
UTEK Corporation
1000
All issued and outstanding ACSI 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. ACSI
is not authorized to issue any preferred
stock. All dividends on ACSI 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 ACSI to issue any ACSI
Shares or securities
convertible into ACSI Shares to anyone for any
reason whatsoever.
None of the
ACSI 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
of this Agreement, the Acquisition and the transactions contemplated by this
Agreement will not violate any obligation to which ACSI or UTEK
is a party and
will not create a default under any such obligation or under any agreement to
which ACSI or UTEK is a party. This Agreement constitutes a legal, valid and
binding obligation of ACSI, enforceable in accordance with its
terms, except as
the enforcement may be limited by
bankruptcy, insolvency, moratorium, or similar
laws affecting creditors' 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 the best of ACSI
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 ACSI.
(f) No
Conflicting
Agreements. Neither
the execution and delivery of this
Agreement nor the fulfillment of or
compliance by ACSI 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, ACSI or UTEK's articles
of incorporation or bylaws, the Technology, the License Agreement, or any
agreement, contract, instrument, order,
judgment or decree to which ACSI or UTEK
is a party or by which ACSI 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.
(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 ACSI and UTEK or
performance
of the obligations of ACSI and
UTEK hereunder or under any other agreement to which ACSI 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
ACSI or its assets or business.
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(g) Consents - continued
(h) Title to
Assets. ACSI 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
ACSI. Except as
set forth on Schedule 2.01(h), ACSI has
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.
On the
Closing Date, ACSI will have good and
marketable title to
its assets, free
and
clear of all liens, claims, charges,
mortgagers,
options, security agreements
and other encumbrances of every kind and
nature whatsoever.
(i) Intellectual
Property
(1) Pacific
Northwest National Laboratory, managed by Department of
Energy
and operated by Battelle Memorial
Institute (BATTELLE) 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 Inventions
listed in Exhibit A hereto.
(2) The License
Agreement between BATTELLE and ACSI covering the Inventions
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, MANAKOA acknowledges
and understands that ACSI 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; however,
ACSI and UTEK have
no
knowledge of pending or threatened claims by, or any basis for any
claims by,
any third parties alleging such
infringement or other violation, and
(4) Except as
otherwise expressly
set forth in this
Agreement,
ACSI 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 ACSI. ACSI has no assets (except as set forth in Section
2.01(h)), no liabilities or obligations of any kind,
character or
description
except those listed on the attached
schedules and exhibits.
(k) Financial Statements. The unaudited financial statements of ACSI,
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 ACSI'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.
ACSI 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 ACSI except as specifically set forth in the financial
statements
and the
other attached schedules and exhibits.
There is no
information known to ACSI or
UTEK that would prevent the financial statements of ACSI from being
audited in
accordance with generally accepted
accounting principles.
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(k) Financial Statements - continued
(l) Taxes.
All returns,
reports, statements and other similar filings
required to be filed by ACSI 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 ACSI 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 ACSI by any taxing
authority,
have been
properly paid, except to the extent reflected on
ACSI's financial
statements,
where ACSI 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. ACSI has not
received any notice
of
assessment or proposed assessment in connection with any tax returns, nor is
ACSI 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. ACSI 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.
ACSI 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
ACSI. ACSI is not and has never
been a party to any tax sharing agreements
with any other person or entity.
(m) Absence of Certain Changes or Events. From the date of the full
execution of the Term Sheet until the
Closing Date,
ACSI has not, and
without
the prior written consent of MANAKOA, it
will not have:
(1) Sold,
encumbered, assigned let lapse or transferred any of its
material
assets, including without limitation the Intellectual
Property, the 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
ACSI;
(4) Made any commitments or agreements for capital expenditures or
otherwise;
(5) Entered into
any transaction
or made any
commitment not
disclosed to
MANAKOA;
(6) Incurred any
material obligation or liability for borrowed money;
(7) Done or
omitted to do any other act, or suffered any other event of any
character, which it is reasonable to expect
would adversely
affect the future
condition (financial or otherwise) assets
or liabilities or business of ACSI; or
(8) Taken any action
which could reasonably
be foreseen to make any of the
representations or warranties made by ACSI
or UTEK untrue as of the date of this
Agreement or as of the Closing Date.
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(m) Absence of Certain Changes or Events - continued
(n) Material
Agreements.
Exhibit A attached
contains a true and
complete
list of all contemplated and executed
agreements between ACSI and a 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 (the "Contracts"), has
been provided to MANAKOA. Such executed
agreements are, and such contemplated agreements will be, at the Closing
Date,
in full force and effect without
modifications
or amendment and
constitute the
legally valid and binding obligations of ACSI in accordance with their
respective terms and will continue to be valid and
enforceable
following the
Acquisition. ACSI is not, and will not be at
the Closing Date, in default under
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
ACSI; and
(2) There are no
outstanding
operating agreements, lease agreements or
similar agreements by which ACSI is bound;
and
(3) The complete
final draft of the License Agreement has been provided to
MANAKOA; and (these will be completed after
license agreement is signed)
(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 ACSI's
property; and
(6) There are no
breaches of any agreement to which ACSI is a party.
(o) Compliance with Laws.
ACSI is in compliance
with all applicable
laws,
rules, regulations and orders promulgated by any federal, state or local
government body or agency relating to its
business and operations.
(p) Litigation. 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 ACSI or UTEK,
threatened against ACSI, the Technology, or
Patent License Agreement, affecting
its assets or business (financial or
otherwise), and neither ACSI 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 ACSI or the transactions
contemplated hereby. There are no pending
or, to the knowledge of ACSI or UTEK,
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 ACSI or the
transactions contemplated.
(q) Employees.
ACSI has no and never had any employees. ACSI is not a party
to or bound by any employment agreement or any collective
bargaining
agreement
with respect to any employees. ACSI is not in violation of any
law, regulation
relating to employment of employees.
(r) Neither ACSI
nor UTEK has any knowledge of any or threatened existing
occurrence, action or development that could
cause a material adverse effect on
ACSI or its business, assets or condition
(financial or otherwise) or prospects.
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(r) Neither ACSI nor UTEK - continued
(s) Employee
Benefit Plans. ACSI 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.
(t) Books and
Records. The books and records of ACSI are complete and
accurate in all material respects, fairly present its business and
operations,
have been maintained in accordance with
good business practices, and applicable
legal requirements, and accurately reflect in all material respects its
business, financial condition and
liabilities.
(u) No Broker's
Fees. Neither UTEK nor ACSI 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 ACSI
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 in any
material respect in light of the
circumstances in which they were made.
2.02
Representations
and Warranties of MANAKOA.
MANAKOA represents and
warrants to UTEK and ACSI that the facts
set forth are true and correct.
(a)
Organization. MANAKOA is a corporation duly organized, validly
existing
and in good standing under the laws of
Nevada, 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 MANAKOA;
no other corporate
action on MANAKOA's 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 by this
Agreement.
(c) Capitalization. The authorized capital of MANAKOA consists of
_____________ shares of common stock with a par
value $0.001 per share (MANAKOA
Common Shares); and on the Effective Date of the Acquisition, 30,_________
MANAKOA Shares (which will include the
2,000,000 MANAKOA
Shares issued at
the
closing of the Acquisition) will be issued and outstanding. All issued and
outstanding MANAKOA 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 MANAKOA is
a party and will not create a default
hereunder, and this Agreement constitutes a
legal, valid and binding obligation
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(d) Binding Effect - continued
of MANAKOA, enforceable in accordance with its
terms, except as the enforcement
may be limited by bankruptcy, insolvency, moratorium, or similar
laws affecting
creditors' 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
MANAKOA.
(f) No
Conflicting
Agreements. Neither
the execution and delivery of this
Agreement nor the fulfillment of or compliance by MANAKOA with the terms or
provisions of this Agreement will result in
a breach of the terms, conditions or
provisions of, or constitute 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 ACSI'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 MANAKOA or its assets or
business.
(h) Financial
Statements.
The unaudited
financial statements of MANAKOA
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. MANAKOA 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 MANAKOA except as
specifically set forth in the MANAKOA financial
statements.
(i) Full
Disclosure. All representations or warranties of MANAKOA 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 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. MANAKOA 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.
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(j) Compliance with Laws - continued
(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 MANAKOA,
threatened against MANAKOA materially affecting its assets or business
(financial or otherwise), and MANAKOA 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, to the knowledge of MANAKOA,
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) MANAKOA has
no knowledge
of any existing or threatened occurrence,
action or development that could cause a material
adverse effect on
MANAKOA or
its business, assets or condition
(financial or otherwise) or prospects.
2.03
Investment
Representations
of UTEK. UTEK
represents and warrants to
MANAKOA 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
MANAKOA Shares pursuant to the Acquisition.
It is able to bear the economic risk
of the investment in MANAKOA Shares, including the risk of a total loss
of the
investment in MANAKOA Shares. The acquisition of MANAKOA Shares
is for its own
account and is for investment and not with
a view to any. 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 MANAKOA is true and
correct. It has
conducted all investigations and due diligence concerning MANAKOA 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 MANAKOA
concerning MANAKOA Shares and the business and financial condition of and
prospects for MANAKOA, and the officers and
directors of MANAKOA 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 MANAKOA
Shares will not be registered and UTEK
will not be permitted to sell or
otherwise transfer the MANAKOA Shares in any
transaction in contravention of the
following legend, which will be imprinted in
substantially the following form on the
stock certificate
representing
MANAKOA
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
PROVISIONS 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. (Our SEC
counsel requires the above language - as
long as we meet the 144 requirements)
9
<PAGE>
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 with the prior
written approval of MANAKOA or of
ACSI or UTEK, as the case may be, 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,
upon prior written notice
to the other parties, 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, which 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 ACSI Shares or the right of ACSI 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
shall have been prosecuted
in good faith with reasonable
diligence.
10
<PAGE>
CONDITIONS PRECEDENT - continued
4.06. The
License Agreement
Consulting Agreement
shall have been executed
and delivered by all parties thereto and, to the best knowledge of UTEK and
ACSI, each of such agreements shall be valid and in full force and effect
without any default under such
agreement.
4.07.
MANAKOA shall have received, at or within 5 days of Closing
Date,
each of the following:
(a) the stock
certificates
representing the ACSI Shares, duly endorsed (or
accompanied by duly executed stock powers)
by UTEK for cancellation;
(b) all
documentation
relating to ACSI's business, all in a form and
substance satisfactory to MANAKOA;
(c) such
agreements,
files and other
data and documents pertaining to
ACSI's business as MANAKOA may reasonably
request;
(d) copies of
the general
ledgers and books of account of ACSI,
and all
federal, state and local income, franchise,
property and other tax returns filed
by ACSI since the inception of ACSI;
(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 ACSI
in Florida;
(f) the original
corporate minute books of ACSI, including the articles of
incorporation and bylaws of ACSI, and all
other documents filed pursuant to this
Agreement;
(g) all
consents, assignments
or related
documents of
conveyance to give
MANAKOA 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 MANAKOA and ACSI, and
(i) such other
documents, instruments
or certificates as MANAKOA, or their
counsel may reasonably request.
4.08. MANAKOA
shall have completed its due diligence investigation of ACSI
to MANAKOA's satisfaction in its sole
discretion.
4.09.
MANAKOA shall receive
the resignation
effective the Closing Date of
each director and officer of ACSI.
ARTICLE 5
LIMITATIONS
5.01. Survival
of Representations and Warranties.
(a) The
representations and
warranties made by UTEK and ACSI 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.
11
<PAGE>
LIMITATIONS - continued
(b) The
representations and
warranties made by MANAKOA 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 until after the sum
of all amounts individually when added to all other such amounts in the
aggregate exceeds $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, a 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 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
infected with fraud or other misconduct
shall be final and binding. The arbitrators
shall be selected as follows: one by
MANAKOA, one by UTEK and a third by the two
selected arbitrators. The third
arbitrator shall be the chairman of the
panel.
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.
12
<PAGE>
MISCELLANEOUS - continued
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 Washington without regard to the choice of law or
conflict of laws principles thereof.
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 deemed given when 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.
MANAKOA SERVICES CORPORATION
ADVANCED CYBER SECURITY, INC.
By: /s/ Dr. Robert Williams
By: /s/ Joel Edelson
-------------------------------
-----------------------------
Dr. Robert Williams,
Joel Edelson
Chief Executive Officer
President
Address:
Address:
7203 Deschutes Avenue
202 South Wheeler Street
Kennewick, Washington 99336
Plant City, Florida 33563
Date: _________________________
Date: _________________________
UTEK CORPORATION
13
<PAGE>
Signatured - continued
By: /s/ Clifford M. Gross, Ph.D.
------------------------------------
Clifford M. Gross, Ph.D.
Chief Executive Officer
Address:
202 South Wheeler
Street
Plant City, Florida 33563
Date: _________________________
14
<PAGE>
Plam of Acquisition
EXHIBIT A
Outstanding Agreements
License Agreement from Pacific Northwest National Laboratory
and
Consulting Agreement with Pacific Northwest National Laboratory
--------------------------------------------------------------------------------
LICENSE AGREEMENT NO. 515074
--------------------------------------------------------------------------------
BETWEEN
BATTELLE MEMORIAL INSTITUTE
AND
ADVANCED CYBER SECURITY, INC.
August 2004
15
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT made and entered into at Richland,
Washington,
by and between
Advanced Cyber Security, Inc., a wholly owned subsidiary of UTEK Corporation,
having a principal place of business in Plant
City, Florida, herein called
"LICENSEE", and Battelle Memorial Institute, having a place of business in
Richland, Washington, herein called "BATTELLE". This
Agreement is effective on
the date affixed hereto by the party last
signing this Agreement (the "Effective
Date").
WITNESSETH
THAT:
WHEREAS, BATTELLE has certain rights in
inventions and
copyrightable
software
relating to training and simulation of
system administrators
for cyber threats
and vulnerabilities;
WHEREAS, LICENSEE recognizes that BATTELLE owns inventions and intellectual
property useful in the conduct of
LICENSEE's business; and
WHEREAS, LICENSEE recognizes that its anticipated business activity will
encompass the practice of technology
that requires a
license under
copyrights
and patents owned or controlled by
BATTELLE; and
WHEREAS, LICENSEE wishes to acquire the
right to practice the inventions of such
copyrightable software and patents.
NOW, THEREFORE in consideration of the mutual covenants herein contained and
intending to be legally bound hereby, the
parties agree as follows:
1. DEFINITIONS
--------------
As used herein, the following terms shall
have the meanings set forth below:
A. AFFILIATE or AFFILIATES
means any entity that
controls, is
controlled by,
or is under
common control of LICENSEE where control consists of ownership
of at least
twenty-five percent
(25%) of the outstanding voting securities
or other
ownership interest of the entity.
B. DERIVATIVE WORKS shall mean a work that is based on one or more
pre-existing
versions of the SOFTWARE and that, if prepared without
BATTELLE's
permission,
would constitute a
copyright
infringement. It
is
expressly
understood
that LICENSEE may offer the SOFTWARE in
connection
with other
products and services
and that such products and services shall
not constitute DERIVATIVE WORKS by reason of being offered
in connection
with the
SOFTWARE.
C. INVENTION means the following BATTELLE invention report: (i) Invention
Report
No. 13562-E*, "Synthetic Computer Network Traffic Generator
(TrafficBot)"
(Drop dead patent filing date February 1, 2005)
--------------
*This INVENTION
arose under U.S.
Government funding and is included herein
only
until such time that a patent application is filed or a PATENT is
issued on such
INVENTION, at which
time such patent
application or issued
PATENT shall be
included in the
definition of the term
"PATENT" set forth
in Paragraph
1H.
16
<PAGE>
DEFINITIONS - continued
D. LICENSED FIELD means, and is limited to, the use of the SOFTWARE and
PATENTS to train
and certify personnel
to enable such personnel to perform
testing and
assessment of enterprise vulnerabilities.
E. (i) LICENSED PRODUCT NO. 1 means any and all
products incorporating or
services
utilizing the SOFTWARE identified as SAST (12671-E) and
DERIVATIVE
WORKS based on
the SOFTWARE identified as SAST, or any portion thereof.
(ii)
LICENSED PRODUCT NO. 2 means any and all
products incorporating
or
services
utilizing the PATENTS,
the SOFTWARE
identified as CAT
(12669-E)
and TrafficBot (13562-E), and DERIVATIVE WORKS based on the SOFTWARE
identified
as CAT and
TrafficBot,
or any portion thereof singly or in
combination.
(iii)
LICENSED PRODUCT NO. 1 and LICENSED PRODUCT NO. 2 shall herein
collectively
be known as LICENSED PRODUCT(S) when no distinction is
desired.
F. LICENSED TERRITORY shall be
world wide.
G. NET SALES REVENUE means all
non-refundable
revenues actually received by
LICENSEE and
AFFILIATES from the
sale, rental,
licensing,
transfer, or
other
disposition of LICENSED PRODUCTS without deduction, excluding (a)
any
sales taxes,
VAT, customs duties,
excise taxes, import
fees, export fees,
costs of
collection and related
litigation
expenses, (b) any documented
returns,
demonstration copies
of LICENSED PRODUCTS used for sales purposes
only,
and the cost of warranty work, and (c) amounts received from
SUBLICENSEES that are not AFFILIATES on which LICENSEE has made or is
obligated to
make a fifty percent
(50%) payment to BATTELLE pursuant to
Paragraph
10D.
H. PATENT or PATENTS means any
patent applications
and the resulting
issued
patents filed on
the INVENTION,
including all
divisions,
continuations,
reissues,
substitutes,
and extensions
thereof, together with
all foreign
counterparts.
At the time of this
Agreement, there are no PATENTS, but the
parties
anticipate there will
be PATENTS in the future, at which time such
PATENTS and
patent applications will be listed herein.
I. SOFTWARE means the following in object code only, including any
documentation in
printed or electronic form:
(i) Coordinated
Attack Tool (CAT), Version 1.0* (12669-E)
(ii)
Systems Administrator Simulation Trainer (SAST), Version 1.0*
(12671-E)
(iii) Synthetic
Computer Network
Traffic Generator
(TrafficBot),
Version
1.0*
(13562-E)
-----------
* This SOFTWARE
arose under U.S. Government funding.
J. SUBLICENSEE shall mean any
third party whom LICENSEE licenses to make, have
made,
use and sell
LICENSED PRODUCTS to END USERS under the terms and
conditions
set forth herein, and to END USERS under a separate
END USER
license
agreement.
K. TOTAL ANNUAL REVENUE means
the sum of all gross income of any kind and from
any source
derived by LICENSEE
and AFFILIATES in a
calendar year,
minus
payments
made by LICENSEE to
BATTELLE under the
provisions of
Paragraphs
17
<PAGE>
DEFINITIONS - continued
10D and 10E,
and shall include income not recognized for income tax
purposes.
L. END USER shall mean a party
to whom LICENSEE or SUBLICENSEE(S) (as defined
in 1K)
provides a copy of the
SOFTWARE object code under the terms of a
separate END
USER license agreement.
M. The word "use" means any form of utilization of SOFTWARE or any portion
thereof
including, but not
limited to, copying the SOFTWARE from any media
into equipment
for processing,
utilizing the SOFTWARE
in printed form, or
distributing
and using the SOFTWARE by means of the Internet or any
broadcast
medium.
2. PATENT LICENSE
-----------------
A. BATTELLE hereby grants to
LICENSEE, to the extent of the LICENSED FIELD and
LICENSED
TERRITORY, a nonexclusive license to make, have made, use and
sell
LICENSED PRODUCT
NO. 2 falling within the claims of the PATENTS.
B. If BATTELLE does not file a patent
application
by the drop dead
patent
filing
date as noted in Paragraph 1C on the INVENTION, or if a patent
application
is abandoned on the INVENTION, then the PATENT License of
Paragraph 2A
shall terminate, and
any information of BATTELLE's related to
the INVENTION or
patent application shall become public information.
C. The license granted
pursuant to Paragraph
A hereof shall be subject to any
rights the
Government of the United States of America may presently have
or
may assert in the future for any
reason including,
but not limited to,
those
rights set forth in 35
USC ss.202
and ss.203 and 37
C.F.R. 401 et
seq.
3. SOFTWARE LICENSE
-------------------
A. BATTELLE hereby grants to LICENSEE, in the LICENSED FIELD and LICENSED
TERRITORY, an
exclusive license under any BATTELLE copyrights, or any other
BATTELLE
intellectual property rights necessary to prepare DERIVATIVE
WORKS
based on the
SOFTWARE identified as SAST (12671-E), and to reproduce,
use,
modify, perform
publicly, display publicly, license and distribute LICENSED
PRODUCT NO.
1.
B. BATTELLE hereby grants to LICENSEE, in the LICENSED FIELD and LICENSED
TERRITORY,
a nonexclusive
license under any
BATTELLE copyrights,
or any
other BATTELLE
intellectual property rights necessary to prepare DERIVATIVE
WORKS based on
the SOFTWARE
identified as CAT
(12669-E) and Traff