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AGREEMENT AND PLAN OF ACQUISITION

Agreement and Plan of Merger

AGREEMENT AND PLAN OF ACQUISITION | Document Parties: MANAKOA SERVICES CORP | ACQUISITION OF ADVANCED CYBER SECURITY, INC. You are currently viewing:
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MANAKOA SERVICES CORP | ACQUISITION OF ADVANCED CYBER SECURITY, INC.

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Title: AGREEMENT AND PLAN OF ACQUISITION
Governing Law: Washington     Date: 9/7/2004

AGREEMENT AND PLAN OF ACQUISITION, Parties: manakoa services corp , acquisition of advanced cyber security  inc.
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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.

 

                                       1

<PAGE>

 

(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:

 

                                        2

<PAGE>

 

(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.

 

                                       3

<PAGE>

 

(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.

 

                                        4

<PAGE>

 

(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.

 

                                       5

<PAGE>

 

(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.

 

                                       6

<PAGE>

 

(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

 

 

                                       7

<PAGE>

 

(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.

 

                                       8

<PAGE>

 

(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


 
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