Agreement and Plan of Acquisition, dated as of June 13, 2006 by and between Advanced Biomass Gasification Technologies, Inc., UTEK Corporation and Xethanol Corporation.
Exhibit
10.4
Agreement
and Plan of Acquisition, dated as of June 13, 2006 by and between Advanced
Biomass Gasification Technologies, Inc., UTEK Corporation and Xethanol
Corporation.
by
XETHANOL
CORPORATION
This
Agreement and Plan of Acquisition
(Agreement) is entered into by and between Advanced Biomass Gasification
Technologies, Inc., a Florida corporation (ABGT),
UTEK
CORPORATION, a Delaware corporation (UTEK),
and
Xethanol Corporation, a Delaware corporation (XTHN).
WHEREAS,
UTEK
owns 100% of the issued and outstanding shares of common stock of ABGT (ABGT
Shares);
WHEREAS,
before
the Closing Date, ABGT will acquire the license for the fields of use as
described in the License Agreement and the proposed Cooperative Research
Agreement as
described which is attached hereto as part of Exhibit
A
and made
a part of this Agreement (License Agreement) and proposed Cooperative Research
Agreement
(Cooperative
Research Agreement) the
rights to develop and market a patented and proprietary technology for the
fields of uses specified in the License Agreement (Technology);
WHEREAS,
the
parties desire to provide for the terms and conditions upon which ABGT will
be
acquired by XTHN in a stock-for-stock exchange (Acquisition) in accordance
with
the respective corporation laws of their state, upon consummation of which
all
ABGT Shares will be owned by XTHN, and all issued and outstanding ABGT Shares
will be exchanged for common stock of XTHN 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 ABGT Shares shall be acquired from UTEK
by
XTHN in
accordance with the respective corporation laws of their states and the
provisions of this Agreement and the separate corporate existence of ABGT,
as a
wholly-owned subsidiary of XTHN, 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.
1.02 Exchange
of Stock.
At the
Effective Date, by virtue of the Acquisition, all of the ABGT Shares that are
issued and outstanding at the Effective Date shall be exchanged for 136,838
unregistered
shares of common stock of XTHN (XTHN Shares) as follows:
Page
1 of
17
|
Shareholder
|
Number
of XTHN Shares
|
|
UTEK
Corporation
|
136,838
|
1.03 Effect
of Acquisition.
(a) Rights
in ABGT Cease.
At and
after the Effective Date, the holder of each certificate of common stock of
ABGT
shall cease to have any rights as a shareholder of ABGT.
(b) Closure
of ABGT Shares Records.
From and
after the Effective Date, the stock transfer books of ABGT shall be closed,
and
there shall be no further registration of stock transfers on the records of
ABGT.
1.04 Closing.
Subject
to the terms and conditions of this Agreement, the Closing of the Acquisition
shall be the date of the last executed signature affixed to this Agreement,
but
in no event later than June 13, 2006.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES
2.01 Representations
and Warranties of UTEK and ABGT.
UTEK and
ABGT jointly and severally represent and warrant to XTHN that the facts set
forth below are true and correct:
(a) Organization.
ABGT 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 ABGT
have
been provided to XTHN 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 shareholder of ABGT 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 ABGT 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 ABGT consists of 1,000,000 shares of common stock with
a
par value $.01 per share. At the date of this Agreement, 1,000 ABGT Shares
are
issued and outstanding as follows:
|
Shareholder
|
Number
of ABGT Shares
|
|
UTEK
Corporation
|
1000
|
All
issued and outstanding ABGT 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.
ABGT
is not authorized to issue any preferred stock. All dividends on ABGT 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 ABGT to issue any ABGT Shares or securities
convertible, exercisable or exchangeable into ABGT Shares to anyone for any
reason whatsoever. None of the ABGT Shares is subject to any charge, 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.
Page
2 of
17
(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 ABGT or UTEK is a party and will not create a default
under any such obligation or under any Agreement to which ABGT or UTEK is a
party. This Agreement constitutes a legal, valid and binding obligation of
ABGT,
enforceable in accordance with its terms, except as the enforcement may be
limited by bankruptcy, insolvency, moratorium, or similar laws affecting
creditor’s rights generally and by the availability of injunctive relief,
specific performance or other equitable remedies.
(e) Litigation
Relating to this Agreement.
There
are no suits, actions or proceedings pending or, to the best of ABGT’s 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 ABGT.
(f) No
Conflicting Agreements.
Neither
the execution and delivery of this Agreement nor the fulfillment of or
compliance by ABGT 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, ABGT’s or UTEK’s articles of incorporation or
bylaws, the Technology, the License Agreement, or any agreement, contract,
instrument, order, judgment or decree to which ABGT or UTEK is a party or by
which ABGT 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
ABGT
and UTEK or performance of the obligations of ABGT and UTEK hereunder or under
any other agreement to which ABGT 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 ABGT or its assets or business.
(h) Title
to Assets.
ABGT 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 ABGT. Except as set forth on Schedule 2.01(h), ABGT 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, ABGT will have good and marketable
title
to its assets, free and clear of all liens, claims, charges, mortgages, options,
security agreements and other encumbrances of every kind and nature
whatsoever.
Page
3 of
17
(i) Intellectual
Property
(1) The
Energy & Environmental Research Center (EERC) a nonprofit branch of the
University of North Dakota (UND) invented and 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 and the Cooperative Research Agreement between EERC and ABGT
covering the Inventions are legal, valid, binding and will be enforceable in
accordance with their respective terms as contained in Exhibit
A.
(3)
Except as otherwise set forth in this Agreement, XTHN acknowledges and
understands that ABGT 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, ABGT 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, ABGT 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 ABGT.
ABGT 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 ABGT, 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 ABGT’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. ABGT 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 ABGT except as specifically set forth in the financial
statements and the other attached schedules and exhibits. There is no
information known to ABGT or UTEK that would prevent the financial statements
of
ABGT from being audited in accordance with generally accepted accounting
principles.
(l) Taxes.
All
returns, reports, statements and other similar filings required to be filed
by
ABGT 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
ABGT 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 ABGT by any taxing authority, have been properly paid,
except to the extent reflected on ABGT’s financial statements, where ABGT 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. ABGT has not received any notice of assessment
or
proposed assessment in connection with any tax returns, nor is ABGT 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. ABGT 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. ABGT 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 ABGT. ABGT is not and has never been
a
party to any tax-sharing agreements with any other person or entity.
Page
4 of
17
(m) Absence
of Certain Changes or Events.
From the
date of the full execution of the Term Sheet until the Closing Date, ABGT has
not, and without the written consent of XTHN, it will not have:
(1) Sold,
encumbered, assigned let lapsed 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 ABGT;
(4) Made
any
commitments or agreements for capital expenditures or otherwise;
(5) Entered
into any transaction or made any commitment not disclosed to XTHN;
(6) Incurred
any material obligation or liability for borrowed money;
(7) Done
or
omitted to do any act, or suffered any other event of any character, which
is
reasonable to expect, would adversely affect the future condition (financial
or
otherwise), assets or liabilities or business of ABGT; or
(8) Taken
any
action, which could reasonably be foreseen to make any of the representations
or
warranties made by ABGT or UTEK untrue as of the date of this Agreement or
as of
the Closing Date.
(n) Material
Agreements. Exhibit
A
attached
contains a true and complete list of all contemplated and executed agreements
between ABGT and a third party. A complete and accurate copies of all material
agreements, contracts and commitments of the following types, whether written
or
oral, to which it is a party or is bound (Contracts), has been provided to
XTHN.
Such executed Contracts are, and such contemplated Contracts will be, at the
Closing Date, in full force and effect without modifications or amendment and
constitute the legally valid and binding obligations of ABGT in accordance
with
their respective terms and will continue to be valid and enforceable following
the Acquisition. ABGT is not, and will not be at the Closing Date, in default
of
any of the Contracts. In addition:
(1) There
are
no outstanding unpaid promissory notes, mortgages, indentures, deed of trust,
security agreements and other agreements and instruments relating to the
borrowing of money by or any extension of credit to ABGT; and
(2) There
are
no outstanding operating agreements, lease agreements or similar agreements
by
which ABGT is bound; and
(3) The
complete final draft of the License Agreement has been provided to XTHN; and
(4) Except
as
set forth in (3) above, there are no outstanding licenses to or from others
of
any Intellectual Property and trade names; and
(5) There
are
no outstanding agreements or commitments to sell, lease or otherwise dispose
of
any of ABGT’s property; and
(6) There
are
no breaches of any agreement to which ABGT is a party.
(o) Compliance
with Laws.
ABGT 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.
Page
5 of
17
(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 ABGT or UTEK, threatened against ABGT, the Technology, or License
Agreement, affecting its assets or business (financial or otherwise), and
neither ABGT 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 ABGT or the transactions
contemplated hereby. There are no pending or threatened actions or proceedings
before any court, arbitrator or administrative agency, which would, if adversely
determined, individually or in the aggregate, materially and adversely affect
the assets or business of ABGT or the transactions contemplated
hereby.
(q) Employees.
ABGT has
no and never had any employees. ABGT is not a party to or bound by any
employment agreement or any collective bargaining agreement with respect to
any
employees. ABGT is not in violation of any law, rule or regulation relating
to
employment of employees.
(r) Neither
ABGT nor UTEK has any knowledge of any existing or threatened occurrence, action
or development that could cause a material adverse effect on ABGT or its
business, assets or condition (financial or otherwise) or
prospects.
(s) Employee
Benefit Plans.
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 ABGT 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 ABGT 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 ABGT are true, correct and complete
in
all material respects to the best of UTEK’s and ABGT’s 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 and schedules 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 XTHN.
XTHN
represents and warrants to UTEK and ABGT that the facts set forth below are
true
and correct.
(a) Organization.
XTHN is
a corporation duly organized, validly existing and in good standing under the
laws of Delaware, 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 its 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 XTHN; no other corporate action on XTHN’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.
Page
6 of
17
(c) Capitalization.
The
authorized capital of XTHN consists of 50,000,000 (Seventy Five Million)
shares of common stock with a par value $0.001 per share (XTHN Common Shares)
and on the Effective Date of the Acquisition, 23,071,609 (Twenty
Three Million, Seventy One Thousand, Six Hundred Nine) shares of XTHN Common
Shares (which will include the 136,838(One Hundred Thirty Six Thousand, Eight
Hundred Thirty Eight) XTHN Shares issued at the closing of the Acquisition)
will
be issued and outstanding. All issued and outstanding XTHN Common 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 XTHN is a party and will not create a default hereunder, and this
Agreement constitutes a legal, valid and binding obligation of XTHN, enforceable
in accordance with its terms, except as the enforcement may be limited by
bankruptcy, insolvency, moratorium, or similar laws affecting creditor’s rights
generally and by the availability of injunctive relief, specific performance
or
other equitable remedies.
(e) Litigation
Relating to this Agreement.
There
are no suits, actions or proceedings pending or to its knowledge threatened
which seek to enjoin the Acquisition or the transactions contemplated by this
Agreement or which, if adversely decided, would have a materially adverse effect
on its business, results of operations, assets, prospects or the results of
its
operations of XTHN.
(f) No
Conflicting Agreements.
Neither
the execution and delivery of this Agreement nor the fulfillment of or
compliance by XTHN 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, the corporate charter or bylaws, or any agreement,
contract, instrument, order, judgment or decree to which it is a party or by
which it or any of 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’s and ABGT’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 XTHN or its assets
or business.
(h) Financial
Statements.
The
unaudited financial statements of XTHN attached as Exhibit
C
present
fairly its financial position and the results of its operations on the dates
and
for the periods shown on such statements; 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. XTHN 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 XTHN except as
specifically set forth in the XTHN financial statements.
(i) Full
Disclosure.
All
representations or warranties of XTHN 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.
XTHN 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.
Page
7 of
17
(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 XTHN, threatened against XTHN materially affecting its assets
or
business (financial or otherwise), and XTHN 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 XTHN,
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. XTHN has no knowledge
of
any existing or threatened occurrence, action or development that could cause
a
material adverse affect on XTHN or its business, assets or condition (financial
or otherwise) or prospects.
(l) Development.
XTHN
agrees and warrants that it has the expertise necessary to and has had the
opportunity to independently evaluate the inventions of the Licensed Patents
and
develop same for the market.
2.03 Investment
Representations of UTEK.
UTEK
represents and warrants to XTHN 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 XTHN Shares pursuant
to
the Acquisition. It is able to bear the economic risk of the investment in
XTHN
Shares, including the risk of a total loss of the investment in XTHN Shares.
The
acquisition of XTHN Shares is for its own account and is for investment and
not
with a view to any distribution of such shares. Except a permitted by law,
it
has 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 XTHN is true and correct. It has conducted all
investigations and due diligence concerning XTHN 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 officers and directors of XTHN concerning XTHN Shares and
the
business and financial condition of and prospects for XTHN, and the officers
and
directors of XTHN 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,
amended, and the rules and regulations thereunder.
(b) Stock
Transfer Restrictions.
UTEK
acknowledges that the XTHN Shares will not be registered and UTEK will not
be
permitted to sell or otherwise transfer the XTHN Shares in any transaction
in
contravention of the following legend, which will be imprinted in substantially
the following form on the stock certificate representing XTHN
Shares:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS
OF
ANY STATE. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED PURSUANT TO THE PROVISION
OF THE ACT AND THE LAWS OF SUCH STATES UNDER WHOSE LAWS A TRANSFER OF SECURITIES
WOULD BE SUBJECT TO A REGISTRATION REQUIREMENT, UNLESS UTEK CORPORATION HAS
OBTAINED AN OPINION OF COUNSEL STATING THAT SUCH DISPOSITION IS IN COMPLIANCE
WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
However,
should XTHN file for additional registration of its shares, between the
execution of this Agreement and 180 days thereafter, UTEK will have “piggyback”
registration rights for the 136,838 shares it will receive in this transaction.
Should XTHN not file for additional registration rights within 180 days of
the
Effective date, then XTHN will provide full registration rights to the above
shares at no additional cost to UTEK.
(c)
Legend. Subject
to Rule 144 restrictions, 12 months following the stock acquisition described
herein, XTHN agrees to and shall direct its transfer agent to remove the
above legend upon the issuance by UTEK's legal counsel that the above legend
can
be removed from UTEK's shares. XTHN agrees to and promptly shall provide
any information requested by UTEK or UTEK's counsel and to make further
direction to its transfer agent as necessary for such issuance of an opinion
regarding removal of the legend or the sale of such restricted shares under
Rule 144 or other available exemption from registration. A letter affecting
the
issuance of the certificate without the restrictive legend one year from the
date of closing is attached as Exhibit D.
Page
8 of
17
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, if 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 XTHN or of ABGT 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 ARTICLE
4
CONDITIONS
PRECEDENT
The
obligation of the parties to consummate the Acquisition and the transactions
contemplated by this Agreement
are subject to the following conditions that may be waived, to the extent
permitted by law:
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 ABGT Shares, ABGT in the License Agreement,
or
the right of ABGT 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.
Page
9 of
17
4.05. The
Technology and Intellectual Property shall have been prosecuted in good faith
with reasonable diligence.
4.06. The
License Agreement shall have been executed and delivered by all parties thereto
and, to the best knowledge of UTEK and ABGT, the License Agreement shall be
valid and in full force and effect without any default under such agreement.
4.07. XTHN
shall have received, at or within 5 days before the Closing Date, each of the
following:
(a) the
stock
certificates representing the ABGT
Shares, duly endorsed (or accompanied by duly executed stock powers) by UTEK
for
cancellation;
(b) all
documentation relating to ABGT’s business, all in form and substance
satisfactory to XTHN;
(c) such
agreements, files and other data and documents pertaining to ABGT’s business as
XTHN may reasonably request;
(d) copies
of
the general ledgers and books of account of ABGT, and all federal, state and
local income, franchise, property and other tax returns filed by ABGT since
the
inception of ABGT;
(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 ABGT in Florida;
(f) the
original corporate minute books of ABGT, including the articles of incorporation
and bylaws of ABGT, and all other documents filed in this
Agreement;
(g) all
consents, assignments or related documents of conveyance to give XTHN 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 XTHN and ABGT, and
(i) such
other documents, instruments or certificates as XTHN, or its counsel may
reasonably request.
4.08. XTHN
shall have completed its due diligence investigation of ABGT to XTHN’s
satisfaction in its sole discretion.
4.09. XTHN
shall receive the resignations of each director and officer of ABGT effective
the Closing Date.
ARTICLE
5
INDEMNIFICATION
AND LIABILITY
LIMITATION
5.01. Survival
of Representations and Warranties.
(a)
The
representations and warranties made by UTEK and ABGT shall survive for a period
of 1 year after the Closing Date, and thereafter all such representation and
warranties shall be extinguished, except with respect to claims then pending
for
which specific notice has been given during such 1-year period.
(b)
The
representations and warranties made by XTHN 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.
Page
10
of 17
5.02
Limitations
on Liability.
XTHN
agrees that UTEK shall not be liable under this agreement to XTHN or their
respective successor’s, assigns or affiliates except where damages result
directly from the gross negligence or willful misconduct of UTEK or its
employees. In no event shall UTEK's liability exceed the total amount of the
fees paid to UTEK under this agreement, nor shall UTEK be liable for incidental
or consequential damages of any kind. XTHN shall indemnify UTEK, and hold UTEK
harmless against any and all claims by third parties for losses, damages or
liabilities, including reasonable attorneys fees and expenses (“Losses”),
arising in any manner out of or in connection with the rendering of services
by
UTEK under this Agreement, unless it is finally judicially determined that
such
Losses resulted from the gross negligence or willful misconduct of UTEK. The
terms of this paragraph shall survive the termination of this agreement and
shall apply to any controlling person, director, officer, employee or affiliate
of UTEK.
5.03
Indemnification.
XTHN
agrees to indemnify and hold harmless UTEK and its subsidiaries and affiliates
and each of its and their officers, directors, principals, shareholders, agents,
independent contactors and employees (collectively “Indemnified Persons”) from
and against any and all claims, liabilities, damages, obligations, costs and
expenses (including reasonable attorneys’ fees and expenses and costs of
investigation) arising out of or relating to matters or arising from this
Agreement, except to the extent that any such claim, liability, obligation,
damage, cost or expense shall have been determined by final non-appealable
order
of a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Indemnified Person or Persons in respect of whom
such liability is asserted.
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,
the non-defaulting party, in addition to any other available rights or remedies,
may xxx 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 New York, New York. 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
XTHN, one by UTEK and a third by the two selected arbitrators. The third
arbitrator shall be the chairman of the panel.
Page
11
of 17
ARTICLE
8
MISCELLANEOUS
8.01. No
party
may assign this Agreement or any right or obligation of it hereunder without
the
prior written consent of the other parties to this Agreement. No permitted
assignment shall relieve a party of its obligations under this Agreement without
the separate written consent of the other parties.
8.02. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective permitted successors and assigns.
8.03. Each
party agrees that it will comply with all applicable laws, rules and regulations
in the execution and performance of its obligations under this Agreement.
8.04. This
Agreement shall be governed by and construct in accordance with the laws of
the
State of Delaware without regard to principles of conflicts of law.
8.05. This
document constitutes a complete and entire agreement among the parties with
reference to the subject matters set forth in this Agreement. No statement
or
agreement, oral or written, made prior to or at the execution of this Agreement
and no prior course of dealing or practice by either party shall vary or modify
the terms set forth in this Agreement without the prior consent of the other
parties to this Agreement. This Agreement may be amended only by a written
document signed by the parties.
8.06. Notices
or other communications required to be made in connection with this Agreement
shall be sent by U.S. mail, certified, return receipt requested, personally
delivered or sent by express delivery service and delivered to the parties
at
the addresses set forth below or at such other address as may be changed from
time to time by giving written notice to the other parties.
8.07. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.
8.08. This
Agreement may be executed in multiple counterparts, each of which shall
constitute one and a single Agreement.
8.09
Any
facsimile signature of any part to this Agreement or to any other Agreement
or
document executed in connection of this Agreement should constitute a legal,
valid and binding execution by such parties.
(signatures
on next page)
Page
12
of 17
|
XETHANOL
CORPORATION
|
ADVANCED
BIOMASS GASIFICATION
|
|
|
TECHNOLOGIES,
INC.
|
|
By:/s/
Xxxxxxxxxxx x’Xxxxxx-Xxxxxx
|
By:/s/
Xxxx Xxxxxxx
|
|
Xxxxxxxxxxx
x’Xxxxxx-Xxxxxx,
|
Xxxx
Xxxxxxx
|
|
Chairman,
CEO and President
|
President
|
|
Address:
|
Address:
|
|
1185
Avenue of the Americas
|
0000
X. Xxxx Xxxxxx
|
|
Xxx
Xxxx, Xxx Xxxx 00000
|
Xxxxx,
Xxxxxxx 00000
|
|
Date:
May
22, 2006
|
Date:
May
22, 2006
|
UTEK
CORPORATION
By:
/s/
Xxxxx Xxxxx
Xxxxx
Xxxxx
Chief
Executive Officer
Address:
0000
X.
Xxxx Xxxxxx
Xxxxx,
Xxxxxxx 00000
Date:
June
13, 2006
|
By
___________________________
____________________________
Compliance
Officer Approval
Date:
__________________
|
Page
13
of 17
EXHIBIT
A
Outstanding
Agreements
| 1. |
License
Agreement from The
Energy & Environmental Research Center (EERC) a nonprofit branch of
the University of North Dakota
(UND)
|
| 2. |
Cooperative
Research Agreement with the EERC Foundation
|
Page
14
of 17
EXHIBIT
B
ADVANCED
BIOMASS GASIFICATION TECHNOLOGIES,
Inc.
Financial
Statements as of
June
13th
, 2006
Page
15
of 17
EXHIBIT
C
XETHANOL
CORPORATION
FORM
10-KSB
QUARTERLY
REPORT PURSUANT TO SEABGTON 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Including
Audited Financial Statements
For
the
fiscal year ended December 31, 2005
Page
16
of 17
EXHIBIT
D
(company
letterhead here)
June
13th
,
2006
Corporate
Stock Transfer, Inc.
0000
Xxxxxx Xxxxx Xxxxx Xxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Dear
Gentlemen:
Re: Transfer
of (XTHN) XETHANOL CORPORATION Stock to UTEK Corporation
This
letter does hereby authorize Corporate Stock Transfer, Inc., upon request by
UTEK Corporation or its authorized agent, to issue to UTEK Corporation a new
stock certificate representing 136,838(One
hundred eighty five thousand, seven hundred eighty) shares
in
XTHN. These new shares issued shall be issued without a restricted transfer
legend.
The
authorization for this letter shall become effective one year from the date
of
this letter.
Signed,
/s/
Xxxxxxxxxxx x’Xxxxxx-Xxxxxx
Xxxxxxxxxxx
x’Xxxxxx-Xxxxxx
Chairman,
CEO and President
Page
17
of 17
