Exhibit 2.01
Agreement and Plan of Reorganization
Acquisition of Advanced Recycling Sciences, Inc.
By
The Quantum Group, Inc.
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is entered into by
and among The Quantum Group, Inc. ("QGI"), a Nevada Corporation, UTEK
Corporation, a Delaware Corporation ("UTEK") and Advanced Recycling
Sciences, Inc. (ARS) a Florida Corporation.
WHEREAS, UTEK owns 95% of the outstanding shares of the capital stock of
ARS and the University of South Alabama (USA) will own 5% of the capital
stock of ARS; and
WHEREAS, ARS has negotiated with the University of South Alabama (USA) and
seeks to acquire by the Closing Date, the exclusive worldwide license to
develop and market a proprietary technology for reclaiming scrap vulcanized
rubber which is described in a US patent entitled "Method of Reclaiming
Scrap Vulcanized Rubber Using Supercritcal Fluids" (TECHNOLOGY) Inventors:
Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxxx. US Patent Number 5,418,256. USA
is the owner of US Patent Number 5,418,256.
WHEREAS, the parties desire to provide for the terms and conditions upon
which ARS will be acquired by QGI in a tax free, stock for stock exchange
("Acquisition") in accordance with the Corporation Law of Nevada and the
State of Florida, upon consummation of which the assets and business of ARS
will be owned by QGI, and all issued and outstanding shares of capital
stock of ARS will be exchanged for common stock of QGI with terms and
conditions as set forth more fully herein; and
WHEREAS, for federal income tax purposes, it is intended that the
Acquisition qualify as a tax-free reorganization 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
hereby acknowledged, the parties agree as follows:
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ARTICLE 1
THE ACQUISITION
1.01 The Acquisition
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(a) Agreement to Acquire. Subject to the terms and conditions of
this Agreement, at the Effective Time, as defined below, ARS shall be
acquired by QGI in accordance with the Nevada Act and the provisions of
this Agreement; the separate corporate existence of ARS shall cease; and
QGI shall continue as the surviving corporation ("Surviving Corporation").
The constituent corporations ("Constituent Corporations") to the
Acquisition are QGI and ARS. The name of the Surviving Corporation, The
Quantum Group, Inc., shall not be changed by reason of the Acquisition.
(b) Effective Time. The Acquisition shall become effective
("Effective Time") upon filing of a Certificate of Merger ("Certificate of
Merger") with the Secretary of State of the State of Nevada in accordance
with the applicable provisions of the Nevada Act and the filing of the
Articles of Merger with the Secretary of State of the State of Florida in
accordance with the applicable provisions of the Florida Act.
(c) Effect of the Acquisition. At the Effective Time the effect of
the Acquisition as shall be as provided herein and as set forth in the
Nevada Act and the Florida Act, without limiting the generality of the
foregoing and subject thereto, as of the Effective Time, all rights,
powers, privileges, franchises, licenses and permits of the Constituent
Corporations and all property, real, personal and mixed, shall be vested in
the Surviving Corporation; and all debts, duties, liabilities and claims of
every kind, character and description of the Constituent Corporations shall
be debts, duties, liabilities and claims of the Surviving Corporation and
may be enforced against the Surviving Corporation to the same extent as if
such debts, duties, liabilities and claims had been incurred by it
originally. All rights of creditors of the Constituent Corporations and
all liens upon property of any Constituent Corporation shall be preserved
unimpaired and shall not be altered in any way by reason of the
Acquisition.
(d) Tax Consequences. It is intended that the Acquisition shall
constitute reorganization within the meaning of Section 368 (a) (1) (B) of
the Code and that the Agreement shall constitute a "Plan of Reorganization"
within the meaning of Treasury Regulation Section 1.350-2(g).
1.02 Issuance of Stock. At the Effective Time, by virtue of the
Acquisition and without any action on the part of the shareholders of the
Constituent Corporations:
(i) All of the 1,000,000 shares of ARS stock that are issued and
outstanding shall be delivered to QGI, duly indorsed for
transfer, with medallion signature guarantee by UTEK and USA,
free of all liens and encumbrances.
(ii) 980,000 unregistered shares of common stock of QGI shall be
issued to the shareholders of ARS as follows: UTEK (931,000)
Sshares
1.06 Closing.
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Subject to the terms and conditions of this Agreement, the
Closing of the Acquisition shall take place on June 24, 2000,
("Closing Date") unless extended by mutual consent of the parties
in writing.
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ARTICLE 11
REPRESENTATIONS AND WARRANTIES
2.01 General Representations and Warranties of UTEK and ARS. UTEK
and ARS represents and warrants to QGI that the facts set forth
below are true and correct:
(a) Organization. ARS and UTEK are corporations duly organized,
validly existing and in good standing under the laws of their
respective States, 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
minutes of ARS have been provided to QGI 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 hereby have been duly authorized by the Board of
Directors and shareholders of ARS 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 ARS and UTEK have all
requisite corporate and other authority to execute and deliver
this Agreement and consummate the transactions contemplated
hereby.
(c) Capitalization. The authorized capital of ARS consists of
1,000,000 shares of common stock, par value $.01 per share; at the
date hereof, 1,000,000 shares of common stock were issued and
outstanding and no shares were held in its treasury. UTEK owns
950,000 shares and USA owns 50,000 shares. All issued and outstanding
shares of common stock of ARS 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. ARS is not authorized to issue any preferred stock.
All dividends on ARS stock 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 it to issue any shares of ARS common stock or securities
convertible into shares of ARS's common stock to anyone for any reason
whatsoever. None of the ARS stock is subject to any change, claim,
condition, interest, lien, pledge, option, security interest or other
encumbrance or restriction, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of
ownership.
(d) Binding Effect. The execution, delivery, performance and
consummation of this Agreement, the Acquisition and the transactions
contemplated hereby will not violate any obligation to which ARS or
UTEK is a party and will not create a default hereunder; and this
Agreement constitutes a legal, valid and binding obligation of ARS,
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.
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(e) Litigation Relating to this Agreement. To the best knowledge of
ARS or UTEK, there are no suits, actions or proceedings pending or
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, prospects, the Patent, the License, the Consulting
Agreement, or the results of the operations of ARS.
(f) No Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by ARS or UTEK
with the terms or provisions hereof nor all other documents or
agreements contemplated hereby 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, ARS's or UTEK's corporate charters or bylaws, the
Patent, the License (as defined below), Consulting Agreement, or any
agreement, contract, instrument, order, judgment or decree to which
ARS is a party or by which ARS or any of its 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 its assets or business.
(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 ARS and UTEK or performance of the
obligations of ARS and UTEK hereunder or under any other agreement to
which ARS 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 Patent,
the License, Consulting Agreement, or any other material right,
privilege, license or agreement relating to ARS or its assets or
business.
(h) Title to Assets. Exhibit A sets forth a true and complete list
of all assets whether real personal, tangible or intangible owned by
ARS. ARS has or will by Closing Date 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 or
nature whatsoever. All of the tangible assets of ARS have been
operated in accordance with customary operating practices generally
acceptable in its industry to which and have been maintained and are
in good working order and repair in the ordinary course of business,
subject only to reasonable and ordinary wear and tear; and
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(i) Intellectual Property
a) The TECHNOLOGY is owned by USA. USA has all right, power,
authority and ownership and entitlement to file, prosecute and
maintain in effect the Patent with respect to the Invention
listed in Exhibit A hereto; and
b) The TECHNOLOGY was invented by X.X. Xxxxxx and X.X. Xxxxxxxx
while they were employed at the University of South Alabama, and
they have assigned their interests in the TECHNOLOGY to USA;
Exhibit A sets forth a brief description of all of ARS's right,
title and interest in and to all intellectual property rights,
including but not limited to, inventions (whether patentable or
not), discoveries, trade secrets, technology, technical
information, proprietary information, processes, know-how,
designs, United States and foreign patents and patent
applications (and all reissues, divisions, renewals, extensions,
provisionals, continuations, and continuations-in-part thereof),
trade names, logos, trademarks, service marks, trademark and
service marks registrations, copyrights, copyright registrations,
and all computer software, data and databases owned by or
licensed to ARS (collectively "Intellectual Property"). ARS has
or will have by the Closing Date, good and exclusive licensee
interests to the Intellectual Property free and clear of all
liens, claims, conditions, charges, equitable interests, or other
encumbrances or restrictions, with the exception of those
outlined in the License Agreement between ARS and USA. To the
best of ARS's knowledge, ARS has not infringed nor is infringing
any Intellectual Property owned or used by another person or
entity. However, ARS has not conducted an infringement
investigation and provides no warrantees or assurances that the
Licensed Technology does not infringe any other parties'
technology. There are no pending or threatened actions against
ARS for infringement of any such Intellectual Property. The
License Agreement dated May 18, 2000 from USA to ARS licensing
certain Intellectual Property more particularly described Exhibit
A ("License Agreement") for the use of any Intellectual Property
owned by or licensed by third parties to ARS are described in
Exhibit A in full force and effect and following the consummation
of the transactions contemplated by this Agreement shall remain
in full force and effect and (ii) legal, valid, binding and
enforceable in accordance with their respective terms. Except as
disclosed in Exhibit A, ARS is not a party to any license (in or
out) with respect to the Intellectual Property. Except as set
forth in Exhibit A, ARS is not a party to any agreement that
imparts or has imparted an obligation of non-competition,
secrecy, confidentiality or non-disclosure upon ARS. ARS is or
was not under any obligation of non-competition, secrecy,
confidentiality or non-disclosure to any third party.
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(1) QGI acknowledges and understands that ARS and UTEK make no
representations and provide no assurances that rights contained
in the License Agreement does not, and will not in the future,
infringe or otherwise violate the rights of others, and
(2) Except as otherwise expressly set forth in this Agreement,
ARS and UTEK makes no representations and extends 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 said patent rights.
(j) Liabilities of ARS. ARS has no assets, no liabilities or
obligations of any kind, character or description except those created
by the License Agreement with USA and the Consulting Agreement with
Xx. X.X. Xxxxxx, final copies of which have been provided to QGI
(Exhibit A).
(k) Financial Statements. The unaudited financial statements of ARS,
including a Balance Sheet attached as (Exhibit B) and in all respects
is complete and correct and present fairly its financial position and
the results of its operations on the dates and for the periods shown
therein; 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. ARS 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 ARS except as specifically set forth in
the ARS financial statements and Licensing and/or Consulting Agreement
with USA and Xx. X.X. Xxxxxx.
(l) Taxes. All returns, reports, statements and other similar
filings required to be filed by ARS 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 ARS for taxes for the periods, property or events
covered thereby; and all taxes, whether or not reflected on those tax
returns, and all taxes claimed to be due from ARS by any taxing
authority, have been properly paid, except to the extent reflected on
section 2.01(i) where ARS 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. ARS has not received any notice of assessment or proposed
assessment in connection with any tax returns, nor is ARS a party to
or to the best of its knowledge, expected to become a party to any
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pending or threatened action or proceeding, assessment or collection
of taxes. ARS 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. ARS 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 ARS. ARS is not and has
never been a party to any tax sharing agreements with any other person
or entity.
(m) Absence of Certain Changes or Events. From May 18, 2000 until
the Closing Date, ARS has not, and without the written consent of QGI,
it will not have:
(i) Sold, encumbered, assigned let lapsed or transferred any of
its material assets including without limitation its intellectual
property, or its License or any other material asset; or
(ii) Amended or terminated the License or other material
contract or done any act or omitted to do any act which would
cause the breach of the License or any other material contract;
or
(iii) Suffered any damage, destruction or loss whether or
not in control of ARS; or
(iv) Made any commitments or agreements for capital expenditures
or otherwise; or
(v) Entered into any transaction or made any commitment not
disclosed to QGI; or
(vi) Incurred any material obligation or liability for borrowed
money
(vii) 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
ARS.
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(n) Material Contracts. Exhibit A contains a true and complete list
of all contracts. 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 QGI and such agreements are or will be at the Closing
Date, in full force and effect without modifications or amendment and
constitute the legally valid and binding obligations of ARS in
accordance with their respective terms and will continue to be valid
and enforceable following the Acquisition. ARS is not in default of
any of the Contracts. In addition:
(i) 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 ARS; and
(ii) There are no outstanding operating agreements, lease
agreements or similar agreements by which ARS is bound; and
(iii) The complete final drafts of the License Agreement, and the
US Patent has been provided to QGI; and
(iv) Except as set forth in (iii) above, there are no outstanding
licenses to or from others of any intellectual property and trade
names; and
(v) There are not outstanding contracts or commitments to sell,
lease or otherwise dispose of any of ARS's property; and
(vi) There are no breaches of any Contract
(o) Compliance with Laws. ARS is in compliance with all applicable
laws, rules, regulations and orders promulgated by any federal, state
or local government body or agency relating to its business and
operations.
(p) Litigation. To the best knowledge of ARS there is no suit,
action or any arbitration, administrative, legal or other proceeding
of any kind or character, or any governmental investigation pending or
threatened against ARS, Patent, the License Agreement or the
Consulting Agreement affecting its assets or business (financial or
otherwise), and ARS 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 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.
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(g) Employees. ARS has no and never had any employees. ARS is not a
party to or bound by any employment agreement or any collective
bargaining agreement with respect to any employees. ARS is not in
violation of any law, regulation relating to employment of employees.
(r) Neither ARS nor UTEK has any knowledge of any existing or
threatened occurrence, action or development which could cause a
material adverse effect on ARS 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 herein result
in any obligation or liability to any present or former employee.
(t) Books and Records. The books and records of ARS 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 ARS has incurred any
investment banking, advisory or other similar fees or obligations in
connection with this Agreement or the transactions contemplated
thereby.
(v) Full Disclosure. All representations or warranties of UTEK and
ARS are true, correct and complete in all material respects to the
best of our knowledge on the date hereof and shall be true, correct
and complete in all material respects as of the Closing Date as if
they were made on such date.
2.02 General Representations and Warranties of QGI. QGI represents
and warrants to UTEK and ARS that the facts set forth are true and
correct.
(a) Organization. QGI is a corporation duly organized, validly
existing and in good standing under the laws of its State, is
qualified to do business as a foreign corporation in other
jurisdictions in which the conduct of its business or the ownership of
its properties require such qualification, and have all requisite
power and authority to conduct its business and operate properties.
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(b) Authorization. The execution of this Agreement and the
consummation of the Acquisition and the other transactions
contemplated hereby have been duly authorized by the Board of
Directors of QGI; no other corporate action on their respective parts
is necessary in order to execute, deliver, consummate and perform
their obligations hereunder; and they have all requisite corporate and
other authority to execute and deliver this Agreement and consummate
the transactions contemplated hereby.
(c) Capitalization. The authorized capital of QGI consists of
50,000,000 shares of common stock, par value $.001 per share; and at
the Effective Time of the Acquisition, up to 11,364,672 shares
(10,384,672 current shares + 980,000 newly issued shares for this
Acquisition) of its common stock will be issued and outstanding
immediately after the Effective Time. All issued and outstanding
shares of common stock of QGI 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
hereby will not violate any obligation to which QGI is a party and
will not create a default hereunder, and this Agreement constitutes a
legal, valid and binding obligation of QGI, 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 QGI.
(f) No Conflicting Agreements. Neither the execution and delivery
of this Agreement nor the fulfillment of or compliance by QGI with the
terms or provisions thereof will result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result
in a violation of, their respective corporate charters or bylaws, or
any agreement, contract, instrument, order, judgment or decree to
which it is a party or by which it or any of its assets are bound, or
violate any provision of any applicable law, rule or regulation or any
order, decree, writ or injunction of any court or governmental entity
which materially affects its assets or business.
(g) Consents. Assuming the correctness of UTEK's and ARS'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 QGI or its assets or business.
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(h) Financial Statements. The unaudited financial statements of QGI
attached as Exhibit C present fairly its financial position and the
results of its operations on the dates and for the periods shown
therein; 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. QGI 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 QGI except as specifically set forth in
the QGI financial statements.
(i) Full Disclosure. All representations or warranties of QGI are
true, correct and complete in all material respects on the date hereof
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 herein or in the exhibits hereto 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 therein not misleading in any
material respect in light of the circumstances in which they were
made.
(j) Compliance with Laws. QGI is in compliance with all applicable
laws, rules, regulations and orders promulgated by any federal, state
or local government body or agency relating to its business and
operations.
(p) Litigation. To the best knowledge of QGI there is no suit,
action or any arbitration, administrative, legal or other proceeding
of any kind or character, or any governmental investigation pending or
threatened against QGI materially affecting its assets or business
(financial or otherwise), and QGI 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 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.
(q) QGI has no knowledge of any existing or threatened occurrence,
action or development that could cause a material adverse effect on
QGI or its business, assets or condition (financial or otherwise) or
prospects.
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2.03 Investment Representations of UTEK. UTEK represents and
warrant to QGI 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 the shares ("Shares") of common stock of QGI
pursuant to the Acquisition. It is able to bear the economic risk of
the investment in the Shares, including the risk of a total loss of
the investment in the Shares. The acquisition of the Shares is for
its own account and is for investment and not with a view to the
distribution thereof. Except a permitted by law, it has a no present
intention of selling, transferring or otherwise disposing in any way
of all or any portion of the shares. All information that it has
supplied to QGI is true and correct. It has conducted all
investigations and due diligence concerning QGI to evaluate the risks
inherent in accepting and holding the shares which it deems
appropriate, and it has found all such information obtained fully
acceptable. It has had an opportunity to ask questions of the
officer and directors of QGI concerning the Shares and the business
and financial condition of and prospects for QGI, and the officers and
directors of QGI have adequately answered all questions asked and made
all relevant information available to them. UTEK is an "accredited
investor," as the term is defined in Regulation D, promulgated under
the Securities Act of 1933, as amended.
(b) Stock Transfer Restrictions. UTEK acknowledges that the QGI
Stock will not be registered and UTEK will be permitted to sell or
otherwise transfer the QGI Stock in any transaction in contravention
of the following legend, which will be imprinted in substantially the
follow form on the QGI Stock:
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 OBTAINED
AN OPINION OF COUNSEL STATING THAT SUCH DISPOSITION IS IN COMPLIANCE
WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
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ARTICLE III
TRANSACTIONS PRIOR TO CLOSING
3.01 Corporate Approvals. Prior to Closing Date, each of the
parties shall submit this Agreement to its Board of Directors and when
necessary its shareholders and obtain approval thereof. 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 hereby.
3.04 Covenants. Except as permitted in writing, each party agrees
that it will:
(i) Use its good faith efforts to obtain all requisite licenses,
permits, consents, approvals and authorizations necessary in
order to consummate the Acquisition; and
(ii) Notify the other parties upon the occurrence of any event
which would have a materially adverse effect upon the Acquisition
or the transactions contemplated hereby or upon the business,
assets or results of operations; and
(iii) Not modify its corporate structure, except as necessary or
advisable in order to consummate the Acquisition and the
transactions contemplated hereby.
ARTICLE IV
CONDITIONS PRECEDENT
The obligation of the parties to consummate the Acquisition and the
transactions contemplated hereby are subject to the following
conditions that may be waived to the extent permitted by law:
(a) Each party must obtain the approval of its Board of Directors and
such approval shall not have been rescinded or restricted; and
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(b) Each party shall obtain all requisite licenses, permits,
consents, authorizations and approvals required to complete the
Acquisition and the transactions contemplated hereby; and
(c) 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 hereby or
challenge the right, title and interest of UTEK in the ARS stock or
the right of ARS or UTEK to consummate the Acquisition contemplated
hereunder; and
(d) The representations and warranties of the parties shall be true
and correct in all material respects at the Effective Time; and
(e) The USA Patent has been prosecuted in good faith with reasonable
diligence.
(f) The License Agreement is valid and in full force and effect
without any default therein.
(g) QGI or shall have received at or within 5 days of Closing Date
each of the following:
i. the stock certificates representing the ARS Stock, duly
endorsed (or accompanied by duly executed stock powers) by UTEK
and USA for cancellation;
ii. all documentation relating to the ARS's business, all in
form and substance satisfactory to QGI.;
iii. such contracts, files and other data and documents
pertaining to ARS's business as QGI may reasonably request;
iv. copies of the general ledgers and books of account of ARS,
and all federal, state and local income, franchise, property and
other tax returns filed by ARS since inception of ARS;
v. 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 ARS in Florida;
vi. the original minute books of ARS, including the articles or
certificate of incorporation and bylaws of ARS, and all other
documents filed therein;
vii. all consents, assignments or related documents of conveyance
to give QGI the benefit of the transactions contemplated
hereunder;
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viii. such documents as may be needed to accomplish the Closing
under the corporate laws of the states of incorporation of QGI
and ARS, and
ix. such other documents, instruments or certificates as QGI, or
their counsel may reasonably request.
(h) QGI shall have completed due diligence investigation of ARS to
QGI satisfaction in their sole discretion.
(i) QGI shall receive the resignation effective the Closing Date of
each Director and officer of ARS.
ARTICLE IV
LIMITATIONS
(A) Survival of Representations and Warranties.
-------------------------------------------
(1) The representations and warranties made by UTEK and ARS shall
survive for a period of 1 year after 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.
(2) The representations and warranties made by QGI shall survive for
a period of 1 year after 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.
(B) Limitations on Liability. Notwithstanding any other
provision hereto the contrary, neither party hereto shall be
liable to the other party for any cost, damage, expense,
liability or loss under this indemnification provision until
after the sum of all amounts individually when added to all other
such amounts in the aggregate exceeds $500, and then such
liability shall apply only to matters in excess of $500.
(C) Indemnification. Indemnification by UTEK. UTEK agrees to
defend, indemnify and hold QGI harmless from and against any and
all claims, actions, damages, obligations, losses, liabilities,
costs, and expenses (including attorneys' fees and expenses)
(collectively, "Losses") arising out of or resulting from a
misrepresentation, breach or warranty, or breach or non-
fulfillment of any covenant of ARS or UTEK contained herein or in
the Schedules or Exhibits annexed hereto or in any other
documents or instruments furnished or to be furnished by ARS or
UTEK pursuant hereto or in connection with the transaction
contemplated hereby or thereby, whether asserted by QGI in its
own right or asserted against by any third-party, or any
allegation which, if true, would constitute a misrepresentation
or breach or non-fulfillment of any such covenant of ARS or UTEK.
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Indemnification by QGI. QGI shall indemnify, defend and hold
harmless UTEK from and against any and all Losses incurred
by the UTEK which arise out of or result from
misrepresentation, breach of warranty or breach or non-
fulfillment of any covenant of Buyer contained herein or in
the Exhibits or Schedules annexed hereto or in any other
documents or instruments furnished by QGI pursuant hereto or
in connection with the transactions contemplated hereby or
thereby.
ARTICLE V
REMEDIES
6.01 Specific Performance. Each party's obligations under this
agreement is 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.
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ARTICLE VI
ARBITRATION
In the event a dispute arises with respect to the interpretation or
effect of this Agreement or concerning the rights or obligations of
the parties hereto, the parties agree to negotiate in good faith with
reasonable diligence in an effort to resolve the dispute in a mutually
acceptable manner. Failing to reach a resolution thereof, either
party shall have the right to submit the dispute to be settled by
arbitration under the Commercial Rules of Arbitration of the American
Arbitration Association. The parties agree that all arbitration shall
be conducted in Tampa, Florida, unless the parties mutually agree to
the contrary. The cost of arbitration shall be borne by the party
against whom the award is rendered or, if in the interest of fairness,
as allocated in accordance with the judgment of the arbitrators. All
awards in arbitration made in good faith and not infected with fraud
or other misconduct shall be final and binding. The arbitrators
shall be selected as follows: one by QGI, one by UTEK and a third by
the two selected arbitrators. The third arbitrator shall be the
chairman of the panel.
ARTICLE VII
MISCELLANEOUS
No party may assign this Agreement or any right or obligation of it
hereunder without the prior written consent of the other parties
hereto. No permitted assignment shall relieve a party of its
obligations under this Agreement without the separate written consent
of the other parties. This Agreement shall be binding upon and enure
to the benefit of the parties and their respective permitted
successors and assigns. Each party agrees that it will comply with
all applicable laws, rules and regulations in the execution and
performance of its obligations under this Agreement. This Agreement
shall be governed by and construct in accordance with the laws of the
State of Florida without regard to principles of conflicts of law.
This document constitutes a complete and entire agreement among the
parties with reference to the subject matters set forth herein. No
statement or agreement, oral or written, made prior to or at the
execution hereof and no prior course of dealing or practice by either
party shall vary or modify the terms set forth herein without the
prior consent of the other parties hereto. This Agreement may be
amended only by a written document signed by the parties. Notices or
other communications required to be made in connection with this
Agreement shall be delivered to the parties at the address set forth
below or at such other address as may be changed from time to time by
giving written notice to the other parties. The invalidity or
unenforceability of any provision of this Agreement shall not affect
the validity or enforceability of any other provision of this
Agreement. This Agreement may be executed in multiple counterparts,
each of which shall constitute one and a single Agreement. Any
facsimile signature of any part hereto or to any other agreement or
document executed in connection hereof should constitute a legal,
valid and binding execution by such parties.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by a duly authorized officer this 24th day of May, 2000.
The Quantum Group, Inc. Advanced Recycling Sciences, Inc.
By: /s/ Xxxxxxxxxx Xxxxxxx By:/s/ Xxx Xxxxxxx
---------------------- ---------------
Ehrenfied Xxxxxxx Xxx Xxxxxxx, Ph.D., M.D.,
President and CEO President
UTEK Corporation
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx, Ph.D.
Chief Executive Officer
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EXHIBIT A
- License Agreement Between ARS and USA
- US Patent # 5,418,256
- Consulting Agreement between Xx. X.X. Xxxxxx and ARS
- CV of Xx. X. X. Xxxxxx
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EXHIBIT B
Financial Statement of ARS
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EXHIBIT C
Quantum Group, Inc. 10KSB
Including Financial Statements
Filing Type: 10KSB
Description: Annual Report
Filing Date: Apr 14, 2000
Period End: Dec 31, 1999
Primary Exchange: Over the Counter Includes
OTC and OTCBB
Ticker: QTMG
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