Stock Purchase Agreement - UTEK Corp. and Pax Technology Transfer Ltd.
STOCK PURCHASE AGREEMENT
This Agreement is made and entered into as of this 28th day of
September, 2001, by and among UTEK Corporation, a Delaware corporation having
its principal offices at 202 South Wheeler Street, Plant City, Florida 33566
(the "Purchaser"); John Emanuel ("Emanuel") who resides at 20 Regent's Park
Road, London NW1 7TX, England; David Mooring ("Mooring") and Jill Mooring who
reside at Rosebank House, Gravel Path, Berkhamsted, Herts HP4 2PF, England; John
Allies ("Allies") who resides at Tudor Cottage, 2 Castle Green, Kenilworth,
Warwickshire CV8 1NE, England, and Anouk Emanuel ("Mrs. Anouk Leggo"), who
resides at 10 Falkland Road, London NW5 2PT, England, (hereinafter individually
a "Seller" and collectively the "Sellers"), and Pax Technology Transfer, Ltd. of
the United Kingdom having its principal offices at Buckland House, Dover Mews,
Berkhamsted, Herts HP4 2BL, England (the "Company").
W I T N E S S E T H:
WHEREAS, the Company is engaged in general consulting and professional
services in the technology industry (hereinafter the "Business"), and the
Sellers are the owners of all of the Company's issued and outstanding capital
stock; and
WHEREAS, the Purchaser desires to acquire the Company and the Sellers
desire to sell the Company upon the terms and subject to the conditions set
forth herein;
NOW THEREFORE, in consideration of the premises, the mutual
representations, warranties, covenants and agreements hereinafter contained, and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties agree as
follows:
1. SALE OF SHARES. Subject to and upon the terms and conditions
hereinafter set forth and in reliance upon the representations and warranties
contained herein, Sellers hereby sell, assign, transfer and deliver to
Purchaser, free and clear of all liens, claims, and encumbrances, and the
Purchaser agrees to purchase from Sellers, all of the issued and outstanding
shares of capital stock of the Company (the "Shares"), which will consist of
2,000 shares of common stock, par value _1.00 (UK Pounds Sterling) per share.
The Shares are owned by the Sellers in the respective amounts set forth in
SCHEDULE 2.01.
2. PRICE AND CONSIDERATION. The purchase price to be paid by Purchaser
for the Shares is that number of shares of common stock, $.01 par value, of
Purchaser ("Purchaser Common Stock"), equal to Four Hundred Forty Four Thousand
U.S. Dollars (U.S.$440,000.00) (the "Purchase Price"). The number of shares of
Purchaser Common Stock that Sellers receive has been determined based on the
closing price of Purchaser's common stock ending one trading day before the date
of this Agreement, as reported on the NASDAQ Small Cap Market.
Page 1 of 36
<PAGE>
2.01. Consideration. Contemporaneously with the transfer and
assignment from Sellers to Purchaser of the Shares and the Parties' delivery of
the various certificates, instruments and documents referred to in Section 5,
Purchaser hereby delivers to Sellers the Purchase Price in the amount to be paid
to each Seller as specified in SCHEDULE 2.01.
2.02. Securities Act Compliance; Registration; Securities Act
Exemption. The Purchaser Common Stock issued pursuant to this Agreement has not
been registered under the Securities Act in reliance on the exemptions from the
registration requirements of Section 5 of the Securities Act set forth in
Section 4(2) thereof. Sellers have provided and will provide Purchaser with such
representations, warranties, certifications and additional information as
Purchaser may reasonably request to ensure the availability of such exemptions
from the registration requirements of the Securities Act.
2.03. Closing. The Closing of this transaction shall take
place at the office of UTEK Corporation, Plant City, Florida on or about
September 28th, 2001 or earlier date as the parties mutually agree (Closing
Date).
3. REPRESENTATIONS AND WARRANTIES. The Sellers, jointly and severally,
make the following representations and warranties to the purchaser as an
inducement for it to enter into this Agreement.
3.01. Organization and Good Standing of the Company. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the United Kingdom, and is legally qualified in the United
Kingdom, to the best of Sellers' knowledge and belief, to transact business in
each jurisdiction where the failure to so qualify would have an adverse effect
on the business of the Company.
3.02. Authority.
(a) The Company has full power and authority (corporate and
otherwise) to carry on its business, to the best of Sellers' knowledge and
belief, has all permits and licenses that are necessary to the conduct of its
business or to the ownership, lease or operation of its properties and assets.
(b) The execution of this Agreement and the delivery hereof to
the Purchaser and the sale contemplated herein have been duly authorized by the
Company's Board of Directors and by the Company's shareholders having full power
and authority to authorize such actions.
(c) Subject to any consents required under Subsection 3.07
below, the Sellers and the Company have the full legal right, power and
authority to execute, deliver and carry out the terms and provisions of this
Agreement; and this Agreement has been duly and validly executed and delivered
on behalf of Sellers and the Company and constitutes a valid and binding
obligation of each Seller and the Company enforceable in accordance with its
terms.
Page 2 of 36
<PAGE>
(d) To the best of Sellers' knowledge and belief, neither the
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated, nor compliance with the terms of this Agreement will
violate, conflict with, accelerate any obligations under, result in a breach of,
or constitute a default under any statute, regulation, indenture, mortgage, loan
agreement, or other agreement or instrument to which the Company or any Seller
is a party or by which it or any of them is bound, any charter, regulation, or
by-law provision of the Company, or any decree, order, or rule of any court or
governmental authority or arbitrator that is binding on the Company or any
Seller in any way.
3.03. Shares.
(a) The Company's authorized capital stock consists of 2,000
shares of Common Stock, par value _1.00 (UK Pounds Sterling) per share, of which
2,000 shares have been issued to Sellers and constitute the Shares as defined
above. All of the Shares are duly authorized, validly issued, fully paid and
non-assessable.
(b) The Sellers are the lawful record and beneficial owners of
all the Shares as set forth on SCHEDULE 2.01, free and clear of any liens,
pledges, encumbrances, charges, claims or restrictions of any kind, and have the
absolute, unilateral right, power, authority and capacity to enter into and
perform this Agreement without any other or further authorization, action or
proceeding, except as specified herein. The Sellers are not citizens of the
United States and no shares of the Company have ever been owned by a resident
person of the United States. The term "Person" shall mean any individual,
corporation, general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization, or entity.
(c) There are no authorized or outstanding subscriptions,
options, warrants, calls, contracts, demands, commitments, convertible
securities or other agreements or arrangements of any character or nature
whatever under which any Seller or the Company are or may become obligated to
issue, assign or transfer any shares of capital stock of the Company.
3.04. Basic Corporate Records. The copies of the Memoranda and
Articles of Association of the Company (certified by authorized official of the
jurisdiction of incorporation) and the By-Laws of the Company (certified as of
the date of this Agreement as true, correct and complete by the Company's
secretary or assistant secretary), all of which have been delivered to the
Purchaser, are true, correct and complete as of the date of this Agreement.
3.05. Minute Books. The minute books of the Company each
contain true, correct and complete minutes and records of all meetings,
proceedings and other actions of the shareholders, Boards of Directors and
committees of such Boards of Directors of each such corporation from the date of
organization to the date hereof.
Page 3 of 36
<PAGE>
3.06. Subsidiaries and Affiliates. The Company has no
subsidiaries and there are no businesses, entities, enterprises and
organizations in which the Company has any ownership, voting or profit and loss
sharing percentage interest, provided, further, that (i) the Company has made no
advances to, or investments in, nor owns beneficially or of record, any
securities of or other interest in, any business, entity, enterprise or
organization, (ii) there are no arrangements through which the Company has
acquired from, or provided to, any of the Sellers or their affiliates any goods,
properties or services, and (iii) there are no rights, privileges or advantages
now enjoyed by the Company as a result of the ownership of the Company by the
Sellers which, to the knowledge of the Sellers or the Company, might be lost as
a result of the consummation of the transactions contemplated by this Agreement.
3.07. Consents. Except as set forth in SCHEDULE 3.07, to the
best of Sellers' knowledge and belief, no consents or approvals of any public
body or authority and no consents or waivers from other parties to leases,
licenses, franchises, permits, indentures, agreements or other instruments are
(i) required for the lawful consummation of the transactions contemplated
hereby, or (ii) necessary in order that the Business can be conducted by the
Purchaser in the same manner after the date hereof as heretofore conducted by
the Company, nor will the consummation of the transactions contemplated hereby
result in creating, accelerating or increasing any liability of the Company.
3.08. Financial Statements. Attached hereto as SCHEDULE 3.08
are true and complete copies of the Company's estimated balance sheet prepared
in good faith as of 30th September 2001 (the "Balance Sheet") and the estimates
of income, shareholders' equity and cash flows for the period then ended,
including the notes thereto (the "Financial Statements"). The date of the
Balance Sheet is referred to herein as the "Balance Sheet Date." The Financial
Statements, including the notes thereto, have been prepared in accordance with
generally accepted accounting principles consistently applied by the Company
according to past practice throughout the periods indicated. The Financial
Statements are complete and correct in all respects and fairly present the
financial condition and the results of operations of the Company as at the dates
and for the periods indicated.
3.09. Records and Books of Account. The records and books of
account of the Company reflect all material items of income and expense and all
material assets, liabilities and accruals, and have been regularly kept and
maintained in conformity with generally accepted accounting principles applied
on a consistent basis with preceding years.
3.10. Absence of Undisclosed Liabilities. To the best of
Sellers' knowledge and belief, except as and to the extent reflected or reserved
against in the Company's Balance Sheet as of the Balance Sheet Date or disclosed
in SCHEDULE 3.10, there are no liabilities or obligations of the Company of any
kind whatsoever, whether accrued, fixed, absolute, contingent, determined or
determinable, and including without limitation (i) liabilities to former,
retired or active
Page 4 of 36
<PAGE>
employees of the Company under any pension, health and welfare benefit plan,
vacation plan or other plan of the Company, (ii) tax liabilities incurred in
respect of or measured by income for any period prior to the close of business
on the Balance Sheet Date, or arising out of transactions entered into, or any
state of facts existing, on or prior to said date, and (iii) contingent
liabilities in the nature of an endorsement, guarantee, indemnity or warranty,
and there is no condition, situation or circumstance existing or which has
existed that could reasonably be expected to result in any liability of the
Company, other than liabilities and contingent liabilities incurred in the
ordinary course of business since the Balance Sheet Date consistent with the
Company's recent customary business practice, none of which is materially
adverse to the Company.
3.11. Tax Matters. To the best of Seller's knowledge and
belief, except as set forth in SCHEDULE 3.11, the sum of the reserves for
current and deferred national and local tax liabilities on the Balance Sheet as
of the Balance Sheet Date are sufficient for the payment of all United Kingdom,
foreign, state, county and local taxes of the Company (including interest and
penalties to the Balance Sheet Date) whether or not disputed, for all its fiscal
years and accounting periods ended on or before the Balance Sheet Date, which
(i) are shown on a Return of the Company (as defined below), (ii) have been
asserted by a taxing authority against the Company, or (iii) are otherwise owed
by the Company with respect to its operations or property conducted or held on
or prior to the Balance Sheet Date. The Company's United Kingdom and all other
local income tax, franchise tax, any foreign tax, and other business tax
returns, if any, have been examined by the Inland Revenue Service and/or by the
appropriate Local or foreign tax commissions as set forth in SCHEDULE 3.11. The
results of such examinations are properly reflected in the Financial Statements
in accordance with generally accepted accounting principles applied consistently
with prior statements and all deficiencies proposed as a result of such
examinations have been paid and settled, except as disclosed in SCHEDULE 3.11.
Except as disclosed in SCHEDULE 3.11: (i) the Company has filed when due all
returns, declarations and reports and information returns and statements in
respect of any taxes required to be filed by or with respect to it on or before
the date hereof (collectively, "Returns"); (ii) the Returns which have not been
examined and for which the statute of limitations remains open were either
prepared consistently with Returns which have been examined or for which the
statute of limitations has expired, or adequate provision has been made therefor
in the Financial Statements; (iii) the Company has timely paid all taxes that
have been shown as due and payable on its Returns; (iv) the Company is not
delinquent in the payment of any taxes and has not requested any extension of
time within which to file or send any Return, which Return has not since been
filed or sent; and (v) no deficiency for any taxes has been proposed, asserted
or assessed against the Company for which the Company could be liable.
3.12. Accounts Receivable. The accounts receivable of the
Company shown on the Balance Sheet as of the Balance Sheet Date are, and will
be, actual bona fide receivables from transactions in the ordinary course of
business representing valid and binding obligations of others for the total _
Sterling amount shown thereon, and as of the Balance Sheet Date were not (and
presently are not) subject to any recoupments, set-offs, or counterclaims. All
such accounts receivable are and will be collectible in amounts not less than
the amounts (net of reserves) carried
Page 5 of 36
<PAGE>
on the books of the Company and will be paid in accordance with their terms. All
such accounts receivable are and will be actual bona fide receivables from
transactions in the ordinary course of business.
3.13. Inventory. The inventories of the Company shown on its
Balance Sheet as of the Balance Sheet Date are so shown on the basis of a
complete physical count and are carried at values which reflect the normal
inventory valuation policy of the Company of stating the items of inventory at
cost or market value, whichever is lower, on a first in, first out basis in
accordance with generally accepted accounting principles consistently applied.
3.14. Machinery and Equipment. Except for items disposed of in
the ordinary course of business, all machinery, tools, equipment and all other
tangible personal property (hereinafter "Fixed Assets") of the Company currently
being used in the conduct of its business, or included in determining the net
worth of the Company on the Balance Sheet as of the Balance Sheet Date, together
with any machinery or equipment that is leased or operated by the Company, are
in good and fully serviceable working condition and repair. The Fixed Assets are
described in SCHEDULE 3.14. Since the Balance Sheet Date the Company has not
written up the value of any such Fixed Assets.
3.15. Title to Properties; Certain Real Property Matters. The
Company does not own any real property.
3.16. Leases. All leases of real and personal property of the
Company are described in SCHEDULE 3.16, are in full force and effect and
constitute legal, valid and binding obligations of the respective parties
thereto enforceable in accordance with their terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting generally the enforcement of creditor's rights, and have not been
assigned or encumbered. The Company has performed in all material respects the
obligations required to be performed by it under all such leases to date and it
is not in default in any material respect under any of said leases, except as
set forth in SCHEDULE 3.16, nor has it made any leasehold improvements required
to be removed at the termination of any lease, except signs. No other party to
any such lease is in material default thereunder. Except as noted on SCHEDULE
3.16, none of the leases listed thereon require the consent of a third party in
connection with the transfer of the Shares.
3.17. Patents, Trademarks, Etc. The Company owns, or possesses
adequate licenses or other rights to us, all patents, trademarks, service marks,
trade names and copyrights and trade secrets, if any, necessary to conduct its
business as now operated by it. The patents, trademarks, service marks,
copyrights, trade names and trade secrets, if any, registered in the name of or
owned or used by or licensed to the Company and applications for any thereof
(hereinafter the "Intangibles") are described or referenced in SCHEDULE 3.17.
Sellers hereby specifically acknowledge that all right, title and interest in
and to all patents listed in SCHEDULE 3.17 as patents owned by the Company are
owned by the Company and that the ownership of such patents
Page 6 of 36
<PAGE>
will be transferred as part of the Company to Purchaser as part of the
transaction contemplated hereby. No officer, director, shareholder or employee
of the Company or any relative or spouse of any such person owns any patents or
patent applications or any inventions, secret formulae or processes, trade
secrets or other similar rights, nor is any of them a party to any license
agreement, used by or useful to the Company or related to the Business except as
listed in SCHEDULE 3.17. All of said Intangibles are valid and in good standing,
are free and clear of all liens, security interests, charges, restrictions and
encumbrances of any kind whatsoever, and have not been licensed to any third
party except as described in SCHEDULE 3.17. The Company has not been charged
with, nor has it infringed, nor to the Sellers' knowledge is it threatened to be
charged with infringement of, any patent, proprietary rights or trade secrets of
others in the conduct of its business, and, to the date hereof, neither the
Sellers nor the Company has received any notice of conflict with or violation of
the asserted rights in intangibles or trade secrets of others. The Company is
not now manufacturing any goods under a present permit, franchise or license,
except as set forth in said SCHEDULE 3.17. To the best of Sellers' knowledge and
belief, the consummation of the transactions contemplated hereby will not alter
or impair any rights of the Company in any such Intangibles or in any such
permit, franchise or license, except as described in SCHEDULE 3.17. The
Intangibles and the Company's tooling, manufacturing and engineering drawings,
process sheets, specifications, bills of material and other like information and
data are in such form and of such quality that the Company can design, produce,
manufacture, assemble and sell the products and provide the services heretofore
provided by it so that such products and services meet applicable specifications
and conform with the standards of quality and cost of production standards
heretofore met by it. The Company has the sole and exclusive right to use its
corporate and trade names in the jurisdictions where it transacts business.
3.18. Insurance Policies. There is set forth in SCHEDULE 3.18
a list and brief description of all insurance policies on the date hereof held
by the Company or on which it pays premiums, including, without limitation, life
insurance and title insurance policies, which description includes the premiums
payable by it thereunder. SCHEDULE 3.18 also sets forth, in the case of any life
insurance policy held by the Company, the name of the insured under such policy,
the cash surrender value thereof and any loans thereunder. All such insurance
premiums in respect of such coverage have been paid in full, or if not due,
properly accrued on the Balance Sheet as of the Balance Sheet Date. All claims,
if any, made against the Company which are covered by such policies have been,
or are being, settled or defended by the insurance companies that have issued
such policies and no excess liability exists. No such policy has been canceled
by the issuer thereof.
3.19. Banking and Personnel Lists. The Sellers and the Company
have delivered to the Purchaser as of the date hereof an accurate list and
summary descriptions relating to the Company banking relations.
(i) The name of each bank in which the Company has an account
or safe deposit box and the names of all persons authorized to draw
thereon or have access thereto.
Page 7 of 36
<PAGE>
(ii) The names, current annual salary rates and total
compensation for the preceding fiscal year of all of the present
directors and officers of the Company, and any other employees whose
current base accrual salary or annualized hourly rate equivalent is
U.S.$20,000 or more, together with a summary of the bonuses, percentage
compensation and other like benefits, if any, paid or payable to such
persons for the last full fiscal year completed, together with a
schedule of changes since that date, if any.
(iii) A schedule of workers' compensation payments of the
Company over the past five full fiscal years and the fiscal year to
date, a schedule of claims by employees of the Company against the
workers' compensation fund for any reason over such period,
identification of all compensation and medical benefits paid to date on
each such claim and the estimated amount of compensation and medical
benefits to be paid in the future on each such claim.
(iv) The name of all pensioned employees of the Company
whose pensions are unfunded and are not paid or payable pursuant to any
formalized pension arrangements, their agent and annual unfunded
pension rates.
3.20. Lists of Contracts, Etc. There is included in SCHEDULE
3.20 a list of the following items (whether written or oral) relating to the
Company, which list identifies and fairly summarizes each item:
(i) All collective bargaining and other labor union agreements
(if any); all employment agreements with any officer, director,
employee or consultant; and all employee pension, health and welfare
benefit plans, group insurance, bonus, profit sharing, severance,
vacation, hospitalization, and retirement plans, post-retirement
medical benefit plans, and any other plans, arrangements or custom
requiring payments or benefits to current or retiring employees.
(ii) All joint venture contracts of the Company or affiliates
relating to the Business;
(iii) All contracts of the Company relating to (a) obligations
for borrowed money, (b) obligations evidenced by bonds, debentures,
notes or other similar instruments, (c) obligations to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (d) obligations under
capital leases, (e) debt of others secured by a lien on any asset of
the Company, and (f) debts of others guaranteed by the Company.
(iv) All contracts of the Company that have a term exceeding
one year and that may not be canceled without any liability, penalty or
premium, to the extent not
Page 8 of 36
<PAGE>
included in (i) through (v) above;
(v) All contracts that individually provide for aggregate
future payments to or from the Company of U.S.$10,000 or more, to the
extent not included in (i) through (iv) above;
(vi) All contracts of the Company that have a term exceeding
one year and that may not be canceled without any liability, penalty or
premium, to the extent not included in (i) through (v) above;
(vii) A complete list of all outstanding powers of attorney
granted by the Company; and
(viii) All other contracts of the Company material to the
business, assets, liabilities, financial condition, results of
operations or prospects of the Business taken as a whole.
Except as set forth in SCHEDULE 3.20, to the best of Sellers'
knowledge and belief, (i) all contracts, agreements and commitments of the
Company set forth in SCHEDULE 3.20 are valid, binding and in full force and
effect, and (ii) neither the Company nor any other party to any such contract,
agreement, or commitment has materially breached any provision thereof or is in
default thereunder. Except as set forth in SCHEDULE 3.20, the sale of the Shares
by the Sellers in accordance with this Agreement will not result in the
termination of any contract, agreement or commitment of the Company set forth in
SCHEDULE 3.20, and immediately after the date hereof, each such contract,
agreement or commitment will continue in full force and effect without the
imposition or acceleration of any burdensome condition or other obligation on
the Company resulting from the sale of the Shares by the Sellers. True and
complete copies of the contracts, leases, licenses and other documents referred
to in this SCHEDULE 3.20 have been delivered to the Purchaser, certified by the
Secretary or Assistant Secretary of the Company as true, correct and complete
copies.
There are no pending disputes with customers or vendors of the
Company regarding quality or return of goods involving amounts in dispute with
any one customer, whether for related or unrelated claims, in excess of
U.S.$10,000 except as described on SCHEDULE 3.20 hereto. To the best knowledge
of Sellers and the Company, there has not been any event, happening, threat or
fact that would lead them to believe that any of said customers or vendors will
terminate or materially alter their business relationship with the Company after
completion of the transactions contemplated by this Agreement.
3.21. Compliance With the Law. To the best of Sellers'
knowledge and belief after due inquiry in the normal course of business, the
Company is not in violation of any applicable national, state, local or foreign
law, regulation or order or any other, decree or requirement of any
governmental, regulatory or administrative agency or authority or court or
Page 9 of 36
<PAGE>
other tribunal (including, but not limited to, any law, regulation order or
requirement relating to securities, properties, business, products,
manufacturing processes, advertising, sales or employment practices, terms and
conditions of employment, occupational safety, health and welfare, conditions of
occupied premises, product safety and liability, civil rights, or environmental
protection, including, but not limited to, those related to waste management,
air pollution control, waste water treatment or noise abatement). The Company
has not been and is not now charged with, or to the knowledge of the Sellers or
the Company under investigation with respect to, any violation of any applicable
law, regulation, order or requirement relating to any of the foregoing, nor, to
the knowledge of any Seller or the Company after due inquiry, are there any
circumstances that would or might give rise to any such violation. To the best
of Sellers' knowledge and belief, the Company has filed all reports required to
be filed with any governmental, regulatory or administrative agency or
authority.
3.22. Litigation; Pending Labor Disputes. Except as
specifically identified on the Balance Sheet as of the Balance Sheet Date or
footnotes thereto or set forth in SCHEDULE 3.22:
(i) There are no legal, administrative, arbitration or other
proceedings or governmental investigations pending or, to the knowledge
of Sellers or the Company, threatened, against the Sellers or the
Company, relating to the Business or the Company or its properties
(including leased property), or the transactions contemplated by this
Agreement, nor is there any basis known to the Company or any Seller
for any such action.
(ii) To the best of Sellers' knowledge and belief, there are
no judgments, decrees or orders of any court, or any governmental
department, commission, board, agency or instrumentality binding upon
Sellers or the Company relating to the Business or the Company the
effect of which is to prohibit any business practice or the acquisition
of any property or the conduct of any business by the Company or which
limit or control or otherwise adversely affect its method or manner of
doing business.
(iii) No work stoppage has occurred and is continuing or, to
the knowledge of Sellers or the Company, is threatened affecting the
Business, and no representation question involving recognition of a
collective bargaining agent exists in respect of any employees of the
Company.
(iv) There are no pending labor negotiations or union
organization efforts relating to employees of the Company.
(v) There are no charges of discrimination (relating to sex,
age, race, national origin, handicap or veteran status) or unfair labor
practices pending or, to the knowledge of the Sellers or the Company,
threatened before any governmental or regulatory agency or authority or
any court relating to employees of the
Page 10 of 36
<PAGE>
Company.
3.23. Absence of Certain Changes or Events. The Company has
not, since the Balance Sheet Date, except as described on SCHEDULE 3.23:
(i) Incurred any material obligation or liability (absolute,
accrued, contingent or otherwise) except in the ordinary course of its
business or in connection with the performance of this Agreement, and
any such obligation or liability incurred in the ordinary course is not
materially adverse, except for claims, if any, that are adequately
covered by insurance;
(ii) Discharged or satisfied any lien or encumbrance, or paid
or satisfied any obligations or liability (absolute, accrued,
contingent or otherwise) other than (a) liabilities shown or reflected
on the Balance Sheet as of the Balance Sheet Date, and (b) liabilities
incurred since such Balance Sheet Date in the ordinary course of
business that were not materially adverse;
(iii) Increased or established any reserve or accrual for
taxes or other liability on its books or otherwise provided therefor,
except (a) as disclosed on the Balance Sheet as of the Balance Sheet
Date or any subsequent interim financial statement, or (b) as may have
been required under generally accepted accounting principles due to
income earned or expense accrued since the Balance Sheet Date and as
disclosed to the Purchaser in writing;
(iv) Mortgaged, pledged or subjected to any lien, charge or
other encumbrance any of its assets, tangible or intangible;
(v) Sold or transferred any of its assets or canceled any
debts or claims or waived any rights, except in the ordinary course of
business and which has not been materially adverse;
(vi) Disposed of or permitted to lapse any patents or
trademarks or any patent or trademark applications material to the
operation of its business;
(vii) Incurred any significant labor trouble or granted any
general or uniform increase in salary or wages payable or to become
payable by it to any director, officer, employee or agent, or by means
of any bonus or pension plan, contract or other commitment increased
the compensation of any director, officer, employee or agent;
(viii) Authorized any capital expenditure for real estate or
leasehold improvements, machinery, equipment or molds in excess of
U.S.$10,000 in the aggregate;
Page 11 of 36
<PAGE>
(ix) Except for this Agreement, entered into any material
transaction other than in the ordinary course of business;
(x) Issued any stocks, bonds, or other corporate securities,
or made any declaration or payment of any dividend or any distribution
in respect of its capital stock; or
(xi) Experienced damage, destruction or loss (whether or not
covered by insurance) individually or in the aggregate materially and
adversely affecting any of its properties, assets or business, or
experienced any other material adverse change or changes individually
or in the aggregate affecting its financial condition, assets,
liabilities or business, including, without limitation of the
foregoing, the loss or (to the Company's or any Seller's knowledge)
impending loss of any materially important contract or customer.
No information has been brought to the attention of the
Company or any Seller that might reasonably lead the Company or any Seller to
believe that any customer (other than Ambirad -- see Schedule 3.20(v)) or
supplier of the Company intends to cease dealing with the Company, nor has
information been brought to the attention of the Company or any Seller that
might reasonably lead any of them to believe that any customer or supplier
intends to alter in any material respect the amount of such customer's or
supplier's dealings with the Company or would alter in any material respect such
dealings in the event of the consummation of the transactions contemplated
hereby. Neither the Company nor any Seller has knowledge that any officer or
other key employee of the Company is considering the termination of employment.
3.24. Employee Benefit Plans and Arrangements. The Company has
no employee benefit plans, pension plans or individual account plans or any
other plans that covers any employee or former employee of the Company.
3.25. Assets. The assets of the Company are sufficient in all
material respects to carry on the operations of the Business as now conducted by
the Company. The Company is the only business organization through which the
Business is conducted. Except as set forth in SCHEDULE 3.16, all assets used by
the Sellers and the Company to conduct the Business are owned by the Company.
3.26. Absence of Certain Commercial Practices. Neither the
Company nor any Seller has made any payment (directly or by secret commissions,
discounts, compensation or other payments) or given any gifts to another
business concern, to an agent or employee of another business concern or of any
governmental entity (domestic or foreign) or to a political party or candidate
for political office (domestic or foreign), to obtain or retain business for the
Company or to receive favorable or preferential treatment, except for gifts and
entertainment given to
Page 12 of 36
<PAGE>
representatives of customers or potential customers (i) of sufficiently limited
value and in a form (other than cash) that would not be construed as a bribe or
payoff, (ii) which are consistent with accepted ethical customs and practices,
and (iii) public disclosure of which would not embarrass either Sellers or
Purchaser.
3.27. Licenses, Permits, Consents and Approvals. To the best
of Sellers' knowledge and belief, the Company has all licenses, permits or other
authorizations of governmental, regulatory or administrative agencies or
authorities (collectively, "Licenses") required to conduct the Business. No
registration, filing, application, notice, transfer, consent, approval, order,
qualification, waiver or other action of any kind (collectively, a "Filing")
will be required as a result of the sale of the Shares by Sellers in accordance
with this Agreement (a) to avoid the loss of any License or the violation,
breach or termination of, or any default under, or the creation of any lien on
any asset of the Company pursuant to the terms of, any law, regulation, order or
other requirement or any contract binding upon the Company or to which any such
asset may be subject, or (b) to enable Purchaser (directly or through any
designee) to continue the operation of the Company and the Business
substantially as conducted as of the date hereof.
3.28. Broker. Neither the Company nor any Seller has retained
any broker in connection with any transaction contemplated by this Agreement for
which Purchaser would be obligated to pay any fee or commission.
3.29. Related Party Transactions. All transactions of the
Company during the past five years have been conducted on an arms-length basis.
All transactions during the past five years between the Company and any current
or former shareholder or any entity in which the Company or any current or
former shareholder had or has a direct or indirect interest have been fair to
the Company and on terms comparable to those that would have prevailed in an
arms-length transaction. No portion of the sales or other on-going business
relationships of the Company is dependent upon the friendship or the personal
relationships (other than those customary within business generally) of any
Seller or any of the Company's officers, directors, consultants, agents or other
key employees. During the past five years, the Company has not forgiven or
canceled, without receiving full consideration, any indebtedness owing to it by
any Seller, any officer, director, consultant, agent or other employee of the
Company, or any entity in which any Seller or the Company has a direct or
indirect interest. Except for the ownership of not more than 1% of the
outstanding securities of any class of any publicly-held corporation, no Seller
owns, and to the best knowledge of the Sellers none of the Company's officers,
directors, consultants, agents or other key employees (including purchasing
agents and departmental managers) owns, directly or indirectly, any interest in
or has any investment or profit participation in any corporation or other entity
that is a competitor or potential competitor of or that otherwise, directly or
indirectly, does business with the Company. Sellers have advised Purchasers
that, with the full knowledge and consent of the Company, some transactions have
been carried out by the consultancies of Sellers Emanuel, Mooring and Allies.
3.30. Disclosure. All statements contained in any schedule,
certificate, opinion,
Page 13 of 36
<PAGE>
instrument, or other document delivered by or on behalf of the Sellers or the
Company pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed representations and warranties by Sellers Emanuel,
Mooring and Allies herein. No statement, representation or warranty by the
Sellers in this Agreement or in any schedule, certificate, opinion, instrument,
or other document furnished or to be furnished to the Purchaser pursuant hereto
or in connection with the transactions contemplated hereby contains or will
contain to the best of Sellers' knowledge and belief, any untrue statement of a
material fact or omits or, to the best of Sellers' knowledge and belief, will
omit to state a material fact required to be stated therein or necessary to make
the statements contained therein not misleading or necessary in order to provide
a prospective purchaser of the business of the Company with full and fair
disclosure concerning the Company, the Business, and the Company's affairs.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser makes the
following representations and warranties to the Sellers and the Company.
4.01. Organization. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Purchaser has the corporate power to own its properties, to carry
on its business as now being conducted, and to enter into and perform the terms
and provisions of this Agreement.
4.02. Authorization. The execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly and validly approved and acknowledged by all necessary corporate action on
the part of the Purchaser.
4.03. No Conflict or Violation. The execution and delivery of
this Agreement, the acquisition of the Shares by Purchaser and the consummation
of the transactions herein contemplated, and the compliance with the provisions
and terms of this Agreement, are not prohibited by the Articles of Incorporation
or By-laws of the Purchaser and will not violate, conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, any
court order, indenture, mortgage, loan agreement, or other agreement or
instrument to which the Purchaser is a party or by which it is bound.
4.04. Investment Representation. The Shares are being
purchased by the Purchaser solely for investment and not for the purpose of
resale to any third party, except that it is agreed by the Sellers that the
Purchaser may assign the Shares at the time of this Agreement or thereafter to a
subsidiary or affiliate of the Purchaser.
4.05. Disclosure. All statements contained in any schedule,
certificate, opinion, instrument, or other document delivered by or on behalf of
the Purchaser pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed representations and warranties by the
Purchaser herein. No statement, representation or warranty of Purchaser
contained in this Agreement or in any document, schedule or certificate
furnished or to be furnished to Sellers pursuant hereto or in connection with
the transactions contemplated hereby
Page 14 of 36
<PAGE>
contains any untrue statement of a material fact or omits to state a material
fact known to Purchaser and necessary in order to make the statements of
Purchaser contained herein or therein not misleading.
5. EXCHANGE OF CONSIDERATION. In reliance on the representations and
warranties contained herein, and subject to the terms and conditions of this
Agreement, the following exchanges are made as of the date hereof:
5.01. Stock to Sellers. Sellers have entered into subscription
agreements for the Purchaser Common Stock and the Purchaser has delivered to
Sellers the stock consideration as set forth in Section 2.01 above.
5.02 Transfer of Shares. The Sellers have sold, assigned,
transferred and delivered to the Purchaser all of the issued and outstanding
capital stock of the Company ("the Shares") as provided in Section 1 herein
above, free and clear of any liens, pledges, charges, encumbrances, restrictions
and transfer taxes of any kind. The Sellers have delivered to the Purchaser all
of their certificates evidencing the Shares duly endorsed for transfer, or with
a duly executed stock power attached, signatures guaranteed.
5.03. Employment Agreements. Seller Emanuel has entered into
two (2) year employment agreements and Sellers Mooring and Allies into three (3)
year employment agreements containing the non-competition provisions set forth
in the form attached hereto and made a part hereof as EXHIBIT 5.03.
5.04. Consents, Approvals and Waivers. The Sellers and the
Company shall have obtained any and all consents and approvals to the transfer
or assignment to the Purchaser of all of the Shares of the Company that may be
necessary to avoid any breach of, default by, or acceleration of obligations of
the Company under any agreement or instrument by reason of such transfer and
assignment, and any waivers by any parties to such agreements necessary to avoid
any such breaches, defaults or accelerations.
5.05. Receipt of Other Documents. Purchaser has received the
following:
(i) A copy of the Memoranda and Articles of Association or
equivalent charter documents of the Company certified as of a recent
date;
(ii) Certified copies of resolutions duly adopted by the Board
of Directors of the Company and by the Sellers in their capacity as
shareholders authorizing the execution and delivery of this Agreement
and the sale and transfer of the Shares to Purchaser;
(iii) Certificates of Incumbency covering all officers of the
Company
Page 15 of 36
<PAGE>
signing this Agreement and any other document delivered in connection
herewith.
(iv) Certificates of each of the Sellers Emanuel, Mooring and
Allies certifying that as of the date of this Agreement that (I) each
representation and warranty of the Sellers contained in this Agreement
shall have been true and correct; (II) performed or complied in all
material respects with all agreements and covenants required by this
Agreement; and (III) Seller and the Company shall have obtained all
consents, waivers and approvals required in connection with the
consummation of the transactions contemplated hereby.
(v) Written resignations from each of the officers and
directors of Company listed on SCHEDULE 5.06.
(vi) The corporate or statutory books of the Company complete
and accurate as of the date of this Agreement.
(vii) Such additional certificates and other documents as
Purchaser or its counsel may deem reasonably necessary to evidence the
truth and accuracy, as of the date hereof, of the representations and
warranties contained herein or contemplated hereby and the due
satisfaction and performance of all agreements and covenants to be
complied with, satisfied and performed by the Sellers and the Company.
5.06. Further Assurances. Subsequent to the date hereof,
Sellers shall execute and deliver from time to time at the request of Purchaser
all such further instruments as, in the reasonable opinion of Purchaser's
counsel, may be required in order to vest in Purchaser full, unencumbered and
complete title to the Shares to be conveyed by Sellers to Purchaser hereunder or
to maintain intact all right, title and interest of the Company under any
contract, license, permit or other document or instrument of the Company or
relating to the Business that would otherwise be adversely affected by such
transfer of the Shares.
6. CLOSING CONDITIONS
Purchase obligation to close on this transaction as contemplated in
this Agreement shall be and is expressly conditioned upon the occurrence or
satisfaction of the following events, conditions and requirements to wit:
(i) Company and Shareholders will have performed, satisfied
and complied with all covenants, agreements and conditions to be
performed or complied by this Agreement;
7. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES.
Page 16 of 36
<PAGE>
All of the covenants and agreements contained in or made in connection
with or pursuant to this Agreement shall survive the date hereof and any
investigation at any time made by or on behalf of Purchaser and shall be
perpetual; provided, however, that any covenants or agreements that are
expressly limited in duration pursuant to the terms thereof shall survive the
date hereof only for such specified duration. The representations, warranties
and covenants of the parties contained in this Agreement, or in any certificate
or other instrument delivered pursuant to this Agreement, shall terminate on
September 30, 2005; provided, however, that those contained in Section 3.11 (Tax
Matters) shall survive until the 30th day after expiration of the applicable
statute of limitations, and those contained in Section 3.01 (Organization),
Section 3.02 (Authority), Section 3.03 (Shares), and Section 3.21 (Compliance
With the Law), shall survive indefinitely.
Notwithstanding the foregoing provisions, Sellers Emanuel, Mooring and
Allies' joint and several obligation to indemnify Purchaser pursuant to Section
7 hereof shall continue for the applicable statute of limitations with respect
to any claim involving intentional misrepresentation by or on behalf of any
Seller or the Company, and any representation and warranty that is the subject
of such claim shall survive for such period.
8. INDEMNIFICATION.
8.01. Indemnity of Purchaser. The Sellers Emanuel, Mooring and
Allies, jointly and severally, agree to indemnify and hold harmless the
Purchaser, the Company, and their respective officers, directors, agents and
employees, successors and assigns, subject to any applicable limitation in time
set forth in Section 6 above, from and against and in respect of any and all
claims, demands, actions, suits, losses, costs, damages, consequential damages,
liabilities, charges, expenses, obligations, judgments, lost profits, diminution
in value and deficiencies of any kind or character, including, without
limitation, interest and penalties, whether or not involving a third party
claim, which may be asserted or secured against, sustained, suffered or incurred
by Purchaser, the Company or any of such other persons and arises out of or in
any manner is incident to, relates to or is attributable to:
(i) Any misrepresentation, misstatement, material omission,
breach of warranty or nonfulfillment of any obligation, covenant or
condition on the part of Sellers (a) herein or in any Schedule or
Exhibit hereto, or (b) in any certificate or other instrument or
document furnished to the Purchaser in connection herewith;
(ii) Any liability of the Purchaser for any liability or
obligation of the Company to be satisfied by Sellers pursuant to the
terms hereof, whether accrued, absolute, contingent or otherwise and
whether known or unknown, due or which became due;
(iii) Any failure by Sellers to perform or observe, or to have
performed or observed, in full, any covenant, agreement or condition to
be performed or
Page 17 of 36
<PAGE>
observed by them under this Agreement or any Schedule or Exhibit hereto
or under any certificate or other document or agreement executed by any
of them in connection herewith; and
(iv) Any and all material actions, suits, proceedings,
demands, assessments or judgments, including legal and other necessary
and reasonable costs and expenses, incident to any of the foregoing.
8.02. Defense of Claims. In the event any claim, action, suit
or proceeding is made or brought by any third party against the Company or
Purchaser, or if any governmental enforcement agency shall propose to issue an
order, with respect to which Sellers may have liability under this Agreement,
the Sellers shall be entitled to participate in, and, to the extent that they
shall wish, to assume the defense thereof, with independent counsel reasonably
satisfactory to such indemnified party. If the Sellers elect to assume the
defense of any such third-party claim, the Sellers shall have the right to
contest, pay, settle or compromise any such claim on such terms and conditions
as they may determine, provided that the Sellers shall not pay, settle or
compromise any such claim without the prior written consent of the Purchaser,
which consent shall not be unreasonably withheld. If the Sellers do not elect to
assume the defense of any such claim, the Purchaser may engage counsel to assume
the defense and may contest, pay, settle or compromise any such claim on such
terms and conditions as the Purchaser may determine. The reasonable fees and
disbursements of such counsel shall be among the expenses for which Purchaser is
indemnified pursuant to Section 7 hereof. Purchaser and the Sellers, as the case
may be, shall (as the other may reasonably request) keep the other fully
informed of such claim, action, suit or proceeding at all stages thereof whether
or not such party is represented by its own counsel.
8.03. Dispute Resolution. Any dispute between Sellers and
Purchaser relating to a claim for indemnification shall be resolved as follows:
(i) Mediation. Any controversies between the Company and
Employee involving the construction or application of any of the terms,
provisions or conditions of this Agreement shall on the written request
of either party served on the other first be submitted to mediation by
a single mediator to be agreed between the parties.
(ii) Arbitration. In the event that the controversies have not
been resolved to both party's satisfaction within a period not to
exceed six months from the date of request being submitted the
controversies shall be referred to and determined by an appraiser
mutually acceptable to the parties. In the event they cannot agree on
such selection, Purchaser and Sellers shall each nominate an appraiser
as its (or their) representative and the two appraisers so nominated
shall jointly select a third appraiser. In such event, the resolution
of the dispute shall be decided by a majority of the three appraisers.
The resolution of the dispute by the appraisers
Page 18 of 36
<PAGE>
shall be final and binding upon all parties as to financial matters,
but shall not extend to any nonfinancial interpretation of this
Agreement unless Purchaser and Sellers shall mutually agree in writing
to the contrary.
(ii) If the dispute does not involve financial matters, or if
the parties are unable to agree whether the dispute involves financial
matters, then the dispute shall be submitted to and settled by
arbitration as provided in Section 19 hereof.
8.04. Effect of Purchaser's Knowledge. Any knowledge of any
matter by Purchaser or any disclosure to Purchaser by Sellers of any matter
shall not reduce or affect any indemnification claim of Purchaser hereunder
unless and except for any disclosures by Sellers on any schedule hereto
delivered at the time of execution hereof or beforehand in due diligence
disclosures and other formal written documents.
9. FEES AND EXPENSES. The Sellers, at their own cost, agree to be
liable for and pay the following liabilities or expenses:
(i) Fees and expenses of any person for financial services
rendered to the Sellers in connection with the sale contemplated by
this Agreement;
(ii) Fees and expenses of legal counsel and accountants and
other advisors retained by the Sellers or the Company in connection
with the sale of the Shares contemplated by this Agreement; and
(iii) Documentary stamp taxes or other similar charges or
taxes levied by authorities in the UK on the transfer of the Shares to
the Purchaser.
10. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or to a national courier service, or mailed by registered
or certified mail, return receipt requested, to the addresses herein designated
or at such other address as may be designated in writing by notice given
personally or by national courier service or by registered or certified mail
return receipt requested:
Page 19 of 36
<PAGE>
If to the Sellers:
John D. Emanuel
20 Regent's Park Road
London NW1 7TX
England
With copies to:
David G. Mooring
Rosebank House
Gravel Path
Berkhamsted
Herts HP4 2PF
England
And
John Allies
Tudor Cottage
2 Castle Green
Kenilworth
Warwickshire CV8 1NE
England
Page 20 of 36
<PAGE>
If to the Purchaser:
UTEK Corporation
202 S. Wheeler Street
Plant City, Florida 33566
Attention: Chief Executive Officer
and a copy to:
Linsky & Reiber
601 E. Twiggs St., Suite 200
Tampa, Florida 33602-3921
Attention: Sam Reiber, Esq.
and
Shumaker, Loop & Kendrick, LLP
101 East Kennedy Blvd., Suite 2800
Tampa, Florida 33602
Attention: Gregory C. Yadley, Esq.
11. GOVERNING LAW. The Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
12. ASSIGNABILITY. This Agreement shall not be assignable by any party
without the prior written consent of the other parties hereto; provided,
however, that rights and obligations of Purchaser under this Agreement (i) shall
pass to any successor corporation which assumes its business and affairs by
merger, consolidation or by acquisition of substantially all its assets or
substantially all its stock and (ii) may be assigned to any affiliate of
Purchaser, without any such prior written consent by any other party hereto.
13. ENTIRE AGREEMENT. This instrument, together with the Schedules and
Exhibits hereto and the financial statements referred to herein, contains the
entire Agreement between the parties hereto with respect to the transactions
contemplated herein and supersedes all previous written or oral negotiations,
commitments and representations.
14. AMENDMENTS. This Agreement may be changed or modified only by an
instrument executed by the Sellers and by the Company and the Purchaser acting
by their respective officers thereunto duly authorized by their respective
Boards of Directors.
15. PARTIES IN INTEREST. This Agreement shall inure to the benefit of
and be binding upon the parties named herein and their respective heirs,
successors and assigns; nothing in this Agreement, expressed or implied, is
intended to confer upon any other person any rights or remedy under or by reason
of this Agreement.
Page 21 of 36
<PAGE>
16. SECTION AND OTHER HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and do not affect
the interpretation or meaning of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
18. WAIVER. The waiver by any party hereto of any breach, default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall not be deemed to extend to any prior or subsequent
breach, default, misrepresentation, or breach of warranty or covenant hereunder
and shall not affect in any way any rights arising by virtue of any such prior
or subsequent occurrence.
19. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or any transactions provided for herein, or the breach thereof,
if it cannot be settled by mediation within six (6) months as per 8.03 above,
shall be settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in effect at the time demand for
arbitration is made by any party. The evidentiary and procedural rules in such
proceedings shall be kept to the minimum level of formality that is consistent
with such Commercial Arbitration Rules. If the parties cannot agree on a single
arbitrator, an arbitrator shall be named by Purchaser, a second shall be named
by Sellers, and the third arbitrator shall be named by the two arbitrators so
chosen. In the event that the third arbitrator is not agreed upon, he or she
shall be named by the American Arbitration Association. Arbitration shall occur
in such location agreed to in writing by Sellers and Purchaser. The award made
by all or a majority of the panel of arbitrators shall be final and binding, and
judgment may be entered in any court of law having competent jurisdiction. The
award is subject to confirmation, modification, correction, or vacation only as
explicitly provided in Title 9 of the United States Code. The prevailing party
shall be entitled to an award of pre- and post-award interest as well as
reasonable attorneys' fees incurred in connection with the arbitration and any
judicial proceedings related thereto.
Page 22 of 36
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed effective as of the day and year first above written.
PURCHASER COMPANY
UTEK Corporation Pax Technology Transfer Limited
By By John Emanuel
----------------------------- -----------------------------
Clifford M. Gross, chairman___, 9/28/01
Chief Executive Officer
SHAREHOLDERS
WITNESSES:
------------------------------- -------------------------------
John D. Emanuel
-------------------------------
------------------------------- -------------------------------
David G. Mooring
-------------------------------
------------------------------- -------------------------------
John Allies
-------------------------------
------------------------------- -------------------------------
Jill Mooring
-------------------------------
------------------------------- -------------------------------
Anouk D. Emanuel (Leggo)
------------------------------
Page 23 of 36
<PAGE>
SCHEDULE 2.01
SHARES OWNED AND CONSIDERATION
Sellers Shares Owned Value of Shares No. of Purchaser's
to be Received Common Stock
$ Received
John D. Emanuel 1,169 257,180 34,754
David G. Mooring 629 138,380 18,700
John Allies 200 44,000 5,946
Jill Mooring l 220 30
Anouk Emanuel (Leggo) l 220 30
Page 24 of 36
<PAGE>
SCHEDULE 3.07
CONSENTS
NONE
Page 25 of 36
<PAGE>
SCHEDULE 3.08
FINANCIAL STATEMENTS
As discussed with Mr. C. Pope of Purchasers, a statement will be forwarded
immediately following the end of September 2001 showing the remaining bank
balances and prepayments which will have been adjusted by Sellers, in good
faith, to be equivalent in estimated value of any current liabilities (excluding
future salaries) and including those for taxation and work outstanding.
Page 26 of 36
<PAGE>
SCHEDULE 3.10
UNDISCLOSED LIABILITIES
NONE
Page 27 of 36
<PAGE>
SCHEDULE 3.11
TAX MATTERS
NONE other than as per estimated balance sheet.
Page 28 of 36
<PAGE>
SCHEDULE 3.14
FIXED ASSETS
See `Due Diligence' Report and bundle.
Page 29 of 36
<PAGE>
SCHEDULE 3.16
LEASES OF REAL AND PERSONAL PROPERTY
See `Due Diligence' Report and bundle.
Page 30 of 36
<PAGE>
SCHEDULE 3.17
INTANGIBLES
See `Due Diligence" Report and bundle.
Page 31 of 36
<PAGE>
SCHEDULE 3.18
INSURANCE POLICIES
See `Due Diligence' Report and bundle.
Page 32 of 36
<PAGE>
SCHEDULE 3.20
CONTRACTS
(i) Employment Agreements - See `Due Diligence' Report and bundle.
(ii) Joint Ventures - NONE
(iii) Loans, etc. - NONE
(iv) Non-cancelable contracts - Office lease, see `Due Diligence' Report and
bundle.
(v) Current contracts each expected to yield over $10,000
Technology Searches - rolling contracts subject to 3 months notice unless
otherwise indicated
Ambi-Rad Ltd _4,340/q terminates mid-December
Arch Chemicals _4,500/q
Askern Group Ltd _4,500/q
Cordek Ltd _4,750/q rolling contract subject to 30 not 90 days notice
Floform Ltd _5,000/q to be renewed December
James Dewhurst Ltd _5,500/q
Reckitt-Benkiser plc _18,500/yr annual renewal expected 1st November at
marginally higher fees
Warman International Ltd _5,000/q
Technology Marketing
PBT Ltd _7,000 total fee part performed
Expert Witness Work
Olswang/Dyson _15-_35,000 total estimated in next year
(vi) as (iv) above
(vii) Powers of Attorney - NONE
(viii) Other - Normal ongoing client service contracts, one of which, Ambi-Rad
Ltd, is due to
Page 33 of 36
<PAGE>
terminate in mid-December.
SCHEDULE 3.22
LITIGATION
Page 34 of 36
<PAGE>
SCHEDULE 3.23
CHANGES SINCE BALANCE SHEET DATE
Page 35 of 36
<PAGE>
EXHIBIT 5.04
EMPLOYMENT AGREEMENT
Exhibit 5.06
Director's Resignations
NONE - However, Jill Mooring and Anouk Emanuel are expected to resign their
directorships in the near future. These resignations are not expected to have
any material effect on the company or its future prospects.
Page 36 of 36