AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of August 16, 2005 (this
"Agreement"), is made by and between ADVANCED 3-D ULTRASOUND SERVICES, INC., a
Florida corporation maintaining its principal place of business at 0000X 00xx
Xxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000 ("Advanced" or "Surviving Company")
and World Energy Solutions, Inc., a Florida corporation maintaining its
principal place of business at 000 00xx Xxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx
00000 ("WESI" or "Merging Company").
WHEREAS, The Boards of Directors of Advanced and WESI have determined
that the merger of WESI into Advanced (the "Merger"), on the terms and subject
to the conditions of this Agreement would be advantageous and beneficial to the
corporations and their respective shareholders and have approved the merger of
WESI into Advanced (the "Merger"), pursuant to this Agreement and the
transactions contemplated hereby, and in accordance with applicable provisions
of the Florida Business Corporation Act, Fla. Xxxx.xx. 607.0101 et seq. (2004)
which permit such Merger;
WHEREAS, it is intended by the parties hereto, for federal income tax
purposes, that the Merger shall qualify as a reorganization within the meaning
of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"); and
WHEREAS, each of the parties to this Agreement desires to make certain
agreements in connection with the Merger and also to prescribe various
conditions to the consummation of such Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. On the terms and subject to the conditions
set forth in this Agreement, the Merging Company shall be merged with and into
the Surviving Company. As a result of the Merger, the separate corporate
existence of the Merging Company shall cease and the Surviving Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation").
SECTION 1.02. Closing; Closing Date; Effective Time. Unless this
Agreement is terminated and subject to the satisfaction or waiver of the
conditions contained in this Agreement, the consummation of the Merger and the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of the Merging Company on or before September 12,
2005, or at such other date, time and place as the Surviving Company and the
Merging Company may agree. The date on which the Closing takes place is referred
to herein as the "Closing Date." On or before the Closing Date, the parties
shall cause the Merger to be consummated by filing Articles of Merger with the
Secretary of State of the State of Florida, in substantially the form attached
as Exhibit 1.01, and executed in accordance with the relevant provisions of
Florida Law.
SECTION 1.03. Effect of the Merger. All the properties, rights,
privileges and powers of the Merging Company and the Surviving Company will vest
in the Surviving Corporation, and all debts, liabilities and duties of the
Merging Company and the Surviving Company shall become the debts, liabilities
and duties of the Surviving Corporation.
SECTION 1.04. Articles of Incorporation; Bylaws. The Articles of
Incorporation and bylaws of Surviving Company, as in effect immediately prior to
the Merger, shall be the Articles of Incorporation and bylaws of the Surviving
Corporation after the Merger.
SECTION 1.05. Directors and Officers. The directors and officers of
Merging Company immediately prior to the Merger shall be the directors and
officers of the Surviving Corporation after the Merger.
SECTION 1.06. Merger Consideration. In consideration of the agreement
by Merging Company to vend into Surviving Company the Merging Company's
technology and corporate goodwill, among other assets, the Surviving Company
agrees that each Merging Company shareholder shall at the Closing Date receive
one share of restricted common stock of the Surviving Company (the "Common
Stock") in exchange for each share of Merging Company common stock held by the
Merging Company shareholders on the Closing Date, whereupon the issued and
outstanding shares of Merging Company common stock shall then be cancelled by
operation of Florida Law.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE MERGING COMPANY
Except as otherwise disclosed in writing by the Merging Company to
Surviving Company prior to the Closing Date, the Merging Company represents and
warrants to Surviving Company that:
SECTION 2.01. Organization and Qualification. The Merging Company is a
corporation duly organized, validly existing and in good standing under the laws
of Florida, has all requisite power and authority to own its assets and to carry
on its business as it is now being conducted and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of the business
conducted by it or the ownership or leasing of its properties makes such
qualification necessary.
SECTION 2.02. Articles, Bylaws and Capitalization. The Merging Company
has furnished to Surviving Company complete and correct copies of its Articles
of Incorporation and bylaws, in each case as amended or restated, of the Merging
Company. The Merging Company is not in violation of any of the provisions of its
Articles of Incorporation or bylaws. The Merging Company is authorized by its
Articles of Incorporation to issue 100,000,000 shares of $.0001 par value common
stock (the "Common Stock"). Unless otherwise disclosed to Surviving Company in
writing by Merging Company, as of the Closing Date there will be 11,463,500
shares of the Common Stock issued and outstanding. Merging Company anticipates
engaging in an offering of securities pursuant to Section 4(2) of the Securities
Act of 1933 and various states' securities exempt transaction laws up to the
Closing Date. There are no other classes of capital stock of the Merging Company
authorized or issued and outstanding.
SECTION 2.03. Authority. The Merging Company has all requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Merging Company and
the consummation by the Merging Company of the transactions contemplated hereby
have been duly authorized by all necessary corporate action, and no other
corporate proceedings on the part of the Merging Company or its shareholders are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Merging Company and constitutes the legal, valid and binding obligation of the
Merging Company enforceable against the Merging Company and the shareholders in
accordance with its terms.
SECTION 2.04. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the
Merging Company does not, and the consummation of the transactions contemplated
hereby will not (i) conflict with or violate the Articles of Incorporation or
bylaws, in each case as amended or restated, of the Merging Company, (ii)
conflict with or violate any federal, state, or local law, statute, ordinance,
rule, regulation, order, judgment, or decree (collectively, "Laws") applicable
to the Merging Company or by which any of its properties or assets is bound or
subject or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or require payment under, or result in the creation of any lien or encumbrance
on any of the properties or assets of the Merging Company pursuant to any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Merging Company is a
party or by or to which the Merging Company or any of its properties or assets
is bound or subject.
(b) The execution and delivery of this Agreement by the
Merging Company does not, and consummation of the transactions contemplated
hereby will not, require the Merging Company to obtain any consent, license,
permit, approval, waiver, authorization or order of, or to make any filing with
or notification to, any governmental or regulatory authority (each individually,
a "Governmental Entity," and collectively "Governmental Entities"), except for
the filing and recordation of appropriate merger documents as required by
Florida Law.
SECTION 2.05. Permits; Compliance. The Merging Company does not require
any franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted. The Merging Company and its assets and operations are currently and
have at all times been in compliance with all Laws applicable to the Merging
Company and its operations or by or to which any of its assets is bound or
subject, including without limitation all Laws related to environmental
protection, employee benefits, labor and employment and occupational health and
safety. The Merging Company has not received from any Governmental Entity any
written notification with respect to possible violations of Laws.
SECTION 2.06. Financial Statements.
(a) Schedule 2.06(a) includes (i) the balance sheet data of
the Merging Company as of July 31, 2005.
(b) The foregoing financial statement (i) has been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the period involved and (ii) fairly presents in all material
respects the financial position of the Merging Company as of the respective
dates thereof and the period indicated.
SECTION 2.07. Absence of Certain Changes or Events. Since the date of
the Balance Sheet, the Merging Company has conducted its business only in the
ordinary course and in a manner consistent with past practice and there has not
been: (a) any damage, destruction or loss (whether or not covered by insurance)
with respect to any material assets of the Merging Company; (b) any change by
the Merging Company in its accounting methods, principles or practices; (c) any
declaration, setting aside or payment of any dividends or distributions in
respect of shares of the capital stock of the Merging Company or any redemption,
purchase or other acquisition by the Merging Company of any of its securities;
(d) any increase in the benefits under, or the establishment or amendment of,
any bonus, insurance, severance, deferred compensation, pension, retirement,
profit sharing or other employee benefit plan, or any increase in the
compensation payable or to become payable to directors, officers or employees of
the Merging Company, except for annual bonuses or merit increases in salaries or
wages in the ordinary course of business and consistent with past practice; (e)
any payment or other transfer of assets by the Merging Company, other than
compensation payments in the ordinary course of business and consistent with
past practice; (f) any revaluation by the Merging Company of any of its assets,
including the writing down or off of notes or accounts receivable, other than in
the ordinary course of business and consistent with past practices; (g) any
entry by the Merging Company into any commitment or transaction material to the
Merging Company including, without limitation, incurring or agreeing to incur
capital expenditures in excess of $10,000; (h) any incurrence of indebtedness
for borrowed money other than trade payables incurred in the ordinary course of
business; (i) the termination of employment (whether voluntary or involuntary)
of any officer or key employee of the Merging Company; or (j) any change,
occurrence or circumstance having or reasonably likely to have, individually or
in the aggregate, a material adverse effect on the business, operations, assets,
financial condition, results of operations or prospects of the Merging Company.
SECTION 2.08. No Undisclosed Liabilities. The Merging Company does not
have any direct or indirect debts, liabilities or obligations, whether known or
unknown, absolute, accrued, contingent or otherwise ("Liabilities"), except (a)
Liabilities fully reflected in the Latest Balance Sheet and related financial
statement notations; (b) accounts payable and Liabilities incurred in the
ordinary course of business and consistent with past practice since the Latest
Balance Sheet Date; and (c) obligations to be performed in the ordinary course
of business, consistent with past practice, under the Material Contracts. The
Merging Company does not and will not have any obligations for severance costs,
vacation pay or sick leave associated with any employee of the Merging Company,
other than obligations that are satisfied prior to the Effective Time.
SECTION 2.09. Absence of Litigation. There is no claim, action, suit,
litigation, proceeding, arbitration or investigation of any kind, at law or in
equity (including actions or proceedings seeking injunctive relief), pending or,
to the Merging Company's knowledge, threatened against the Merging Company or
any assets or rights of the Merging Company. The Merging Company is not subject
to any continuing order of, consent decree, settlement agreement or other
similar written agreement with, or, continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction, decree or award
of any Government Entity or arbitrator, including, without limitation,
cease-and-desist or other orders.
SECTION 2.10. Taxes.
(a) All returns and reports ("Tax Returns") of or with respect
to any Tax which is required to be filed on or before the Closing Date (taking
into account extensions of filing dates) by or with respect to the Merging
Company have been or will be duly and timely filed. All items of income, gain,
loss, deduction and credit or other items required to be included in each such
Tax Return have been or will be so included and all information provided in each
such Tax Return is true, correct and complete. All Taxes which have become or
will become due with respect to the period covered by each such Tax Return have
been or will be timely paid in full, other than any Taxes for which adequate
reserves have been established on the Latest Balance Sheet. All withholding Tax
requirements imposed on or with respect to the Merging Company have been or will
be satisfied in full in all respects. No penalty, interest or other charge is or
will become due with respect to the late filing of any such Tax Return or late
payment of any such Tax.
(b) There are no Tax Returns of or with respect to the Merging
Company with extended or waived statutes of limitations that have not been
audited by the applicable governmental authority.
(c) There is not in force any extension of time with respect
to the due date for the filing of any Tax Return of or with respect to the
Merging Company or any waiver or agreement for any extension of time for the
assessment, collection or payment of any Tax of or with respect to the Merging
Company.
(d) There are no pending audits, actions, proceedings,
investigations, disputes or claims with respect to or against the Merging
Company for or with respect to any Taxes of the Merging Company; no assessment,
deficiency or adjustment has been assessed or proposed with respect to any Tax
Return of or with respect to the Merging Company; and there is no reasonable
basis on which any claim for material Taxes can be asserted against the Merging
Company.
(e) Except for statutory liens for current Taxes not yet due,
no liens for Taxes exist upon the assets of any of the Merging Company.
(f) None of the transactions contemplated by this Agreement
will result in any Tax liability or the recognition of any item of income or
gain to the Merging Company.
SECTION 2.11. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Merging Company.
SECTION 2.12. Information Supplied. Without limiting any of the
representations and warranties contained herein, no written representation or
written warranty of the Merging Company or the Members and no statement by the
Merging Company or the Members contained in the Schedules to this Agreement
contains any untrue statement of material fact, or omits to state a material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which such statements were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SURVIVING COMPANY
Except as otherwise disclosed in writing by the Surviving Company to
Merging Company prior to the Closing Date, Surviving Company hereby represents
and warrants to the Merging Company that:
SECTION 3.01. Organization and Qualification. Surviving Company is a
corporation duly organized, validly existing and in good standing under Florida
Law and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being conducted
and is duly qualified and in good standing to do business in each jurisdiction
in which the nature of the business conducted by it or the ownership or leasing
of its properties makes such qualification necessary.
SECTION 3.02. Authority. Surviving Company has all requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Surviving Company and the
consummation by Surviving Company of the transactions contemplated hereby have
been duly authorized by all necessary corporate action and no other corporate
proceedings on the part of Surviving Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Surviving Company and constitutes the
legal, valid and binding obligation of Surviving Company, enforceable against it
in accordance with its terms.
SECTION 3.03. No Conflict; Required Filings and Consent.
(a) The execution and delivery of this Agreement by Surviving
Company does not, and the consummation of the transactions contemplated hereby
will not (i) conflict with or violate the Articles of Incorporation, in each
case as amended or restated, of Surviving Company, (ii) conflict with or violate
any Laws applicable to Surviving Company or by which any of its properties or
assets is bound or subject, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Surviving
Company is a party or by or to which Surviving Company or any of its properties
is bound or subject.
(b) The execution and delivery of this Agreement by Surviving
Company does not, and the consummation of the transactions contemplated hereby
will not, require Surviving Company to obtain any consent, license, permit,
approval, waiver, authorization or order of, or to make any filing with or
notification to, any Governmental Entities, except for the filing and
recordation of appropriate merger documents as required by Florida Law and
required filings with the United States Securities and Exchange Commission.
SECTION 3.04. Articles, Bylaws and Capitalization. The Surviving
Company has furnished to Merging Company complete and correct copies of its
Articles of Incorporation and bylaws, in each case as amended or restated, of
the Surviving Company. The Surviving Company is not in violation of any of the
provisions of its Articles of Incorporation or bylaws. The Surviving Company is
authorized by its Articles of Incorporation to issue 50,000,000 shares of $
..0001 par value common stock (the "Common Stock"). As of the Closing Date there
will be 198,063 shares of the Common Stock issued and outstanding. There are no
other classes of capital stock of the Surviving Company authorized or issued and
outstanding. There are not currently and as of the Closing Date there shall not
be any stock option, stock option agreement, warrant, warrant agreement or any
other contractual right or obligation of the Surviving Company in existence that
could, if exercised or performed, result in the issuance of any additional
shares to the pre-Merger existing shareholders of the Surviving Company.
SECTION 3.05. Financial Statements.
(a) Schedule 3.05(a) includes (i) the balance sheet data of
the Surviving Company as of December 31, 2004 and the income and cash flow
statements of the Surviving Company for the year ended on such date and (ii)
contains the balance sheet of the Surviving Company (the "Latest Balance Sheet")
as of March 31, 2005 (the "Latest Balance Sheet Date"), and the income and cash
flow statement for the three month period ended on such date.
(b) Each of the foregoing financial statements (i) has been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved and (ii) fairly present in
all material respects the financial position of the Surviving Company as of the
respective dates thereof and the results of its operations and cash flows for
the periods indicated, except that the interim financial statements are subject
to normal and recurring year-end adjustments, which will not be material
individually or in the aggregate.
(c) All accounts receivable reflected in the Latest Balance
Sheet or generated since the Latest Balance Sheet Date arose in the ordinary
course of business and are fully collectible in the ordinary course of business,
without resort to litigation, at the face amount thereof less any reserve
reflected in the Latest Balance Sheet, and will not be subject to counterclaim,
set-off or other reduction.
SECTION 3.06. Absence of Certain Changes or Events. Since the Latest
Balance Sheet Date, the Surviving Company has conducted its business only in the
ordinary course and in a manner consistent with past practice and there has not
been: (a) any damage, destruction or loss (whether or not covered by insurance)
with respect to any material assets of the Surviving Company; (b) any change by
the Surviving Company in its accounting methods, principles or practices; (c)
any declaration, setting aside or payment of any dividends or distributions in
respect of shares of the capital stock of the Surviving Company or any
redemption, purchase or other acquisition by the Surviving Company of any of its
securities; (d) any increase in the benefits under, or the establishment or
amendment of, any bonus, insurance, severance, deferred compensation, pension,
retirement, profit sharing or other employee benefit plan, or any increase in
the compensation payable or to become payable to directors, officers or
employees of the Surviving Company, except for annual bonuses or merit increases
in salaries or wages in the ordinary course of business and consistent with past
practice; (e) any payment or other transfer of assets by the Surviving Company,
other than compensation payments in the ordinary course of business and
consistent with past practice; (f) any revaluation by the Surviving Company of
any of its assets, including the writing down or off of notes or accounts
receivable, other than in the ordinary course of business and consistent with
past practices; (g) any entry by the Surviving Company into any commitment or
transaction material to the Surviving Company including, without limitation,
incurring or agreeing to incur capital expenditures in excess of $10,000; (h)
any incurrence of indebtedness for borrowed money other than trade payables
incurred in the ordinary course of business; (i) the termination of employment
(whether voluntary or involuntary) of any officer or key employee of the
Surviving Company; or (j) any change, occurrence or circumstance having or
reasonably likely to have, individually or in the aggregate, a material adverse
effect on the business, operations, assets, financial condition, results of
operations or prospects of the Surviving Company.
SECTION 3.07. No Undisclosed Liabilities. The Surviving Company does
not have any direct or indirect debts, liabilities or obligations, whether known
or unknown, absolute, accrued, contingent or otherwise ("Liabilities"), except
(a) Liabilities fully reflected in the Latest Balance Sheet and related
financial statement notations; (b) accounts payable and Liabilities incurred in
the ordinary course of business and consistent with past practice since the
Latest Balance Sheet Date; and (c) obligations to be performed in the ordinary
course of business, consistent with past practice, under the Material Contracts.
The Surviving Company does not and will not have any obligations for severance
costs, vacation pay or sick leave associated with any employee of the Surviving
Company, other than obligations that are satisfied prior to the Effective Time.
SECTION 3.08. Absence of Litigation. There is no claim, action, suit,
litigation, proceeding, arbitration or investigation of any kind, at law or in
equity (including actions or proceedings seeking injunctive relief), pending or,
to the Surviving Company's knowledge, threatened against the Surviving Company
or any assets or rights of the Surviving Company. The Surviving Company is not
subject to any continuing order of, consent decree, settlement agreement or
other similar written agreement with, or, continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction, decree or award
of any Government Entity or arbitrator, including, without limitation,
cease-and-desist or other orders.
SECTION 3.09. Taxes.
(a) All returns and reports ("Tax Returns") of or with respect
to any Tax which is required to be filed on or before the Closing Date (taking
into account extensions of filing dates) by or with respect to the Surviving
Company have been or will be duly and timely filed. All items of income, gain,
loss, deduction and credit or other items required to be included in each such
Tax Return have been or will be so included and all information provided in each
such Tax Return is true, correct and complete. All Taxes which have become or
will become due with respect to the period covered by each such Tax Return have
been or will be timely paid in full, other than any Taxes for which adequate
reserves have been established on the Latest Balance Sheet. All withholding Tax
requirements imposed on or with respect to the Surviving Company have been or
will be satisfied in full in all respects. No penalty, interest or other charge
is or will become due with respect to the late filing of any such Tax Return or
late payment of any such Tax.
(b) There are no Tax Returns of or with respect to the
Surviving Company with extended or waived statutes of limitations that have not
been audited by the applicable governmental authority.
(c) There is not in force any extension of time with respect
to the due date for the filing of any Tax Return of or with respect to the
Surviving Company or any waiver or agreement for any extension of time for the
assessment, collection or payment of any Tax of or with respect to the Surviving
Company.
(d) There are no pending audits, actions, proceedings,
investigations, disputes or claims with respect to or against the Surviving
Company for or with respect to any Taxes of the Surviving Company; no
assessment, deficiency or adjustment has been assessed or proposed with respect
to any Tax Return of or with respect to the Surviving Company; and there is no
reasonable basis on which any claim for material Taxes can be asserted against
the Surviving Company.
(e) Except for statutory liens for current Taxes not yet due,
no liens for Taxes exist upon the assets of any of the Surviving Company.
(f) None of the transactions contemplated by this Agreement
will result in any Tax liability or the recognition of any item of income or
gain to the Surviving Company.
SECTION 3.10. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Surviving Company.
SECTION 3.11. Regulatory Filings. Surviving Company has filed all
forms, reports, schedules, statements and other documents required to be filed
by it (collectively, as supplemented and amended since the time of filing, the
"SEC Reports") with the SEC. The Surviving Company SEC Reports (i) were prepared
in all material respects with all applicable requirements of the Securities Act
and the Exchange Act, as the case may be, and (ii) did not at the time they were
filed contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The representation in clause (ii) of the preceding sentence does
not apply to any misstatement or omission in any Surviving Company SEC Report
filed prior to the date of this Agreement which was superseded by a subsequent
Surviving Company SEC Report filed prior to the date of this Agreement.
SECTION 3.12. Shareholder List.Schedule 3.12 is a true and accurate
copy of the Surviving Company's shareholder list and an accurate representation
regarding the number of shares principally and/or beneficially owned by each of
its shareholders as of the Closing Date.
ARTICLE IV
COVENANTS
SECTION 4.01. Affirmative Covenants of the Merging Company. The Merging
Company hereby covenants and agrees that, prior to the Closing Date, unless
otherwise expressly contemplated by this Agreement or consented to in writing by
Surviving Company, the Merging Company will:
(a) operate its business only in the usual and ordinary course
consistent with past practices;
(b) use commercially reasonable efforts to preserve
substantially intact its business organization, maintain its Material Contracts,
and Intellectual Property and other material rights, retain the services of its
respective officers and key employees and maintain its relationships with its
material customers and suppliers;
(c) maintain and keep its assets in as good repair and
condition as at present, ordinary wear and tear excepted;
(d) maintain and keep in full force and effect insurance
comparable in amount and scope of coverage to that currently in effect; and
(e) from the date of this Agreement and to the Closing Date,
promptly supplement or amend the Schedules to this Agreement with respect to any
matter that arises or that is required to be set forth or listed in the
Schedules or is necessary to complete or correct any information in the
Schedules; provided, that for purposes of determining the rights and obligations
of the parties hereunder, any such supplemental or amended disclosure will not
be deemed to have been disclosed to Surviving Company unless Surviving Company
otherwise expressly consents in writing.
SECTION 4.02. Negative Covenants of the Merging Company. Except as
expressly contemplated by this Agreement or otherwise consented to in writing by
Surviving Company, from the date of this Agreement until the Closing Date, the
Merging Company will not do any of the following:
(a) amend or otherwise modify any of the Material Contracts or
enter into any new Material Contracts outside the ordinary course of its
business;
(b) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its assets;
(c) settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy;
(d) take any action that would result in a breach (as of the
Closing) of any of its representations and warranties in this agreement;
(e) pay or agree to pay any bonus, or similar payment to any
of its employees or increase the compensation of any employee;
(f) make any material expenditure or commitment except in the
ordinary course of business consistent with past practice; or
(g) agree in writing or otherwise to do any of the foregoing.
SECTION 4.03. Access and Information.
(a) The Merging Company shall (i) afford to Surviving Company
and its officers, directors, employees, accountants, consultants, legal counsel,
agents and other representatives (collectively, the "Surviving Company
Representatives") reasonable access at reasonable times, upon reasonable prior
notice, to the officers, employees, agents, properties, offices and other
facilities of the Merging Company and to the books and records thereof, and (ii)
authorize Surviving Company to contact and obtain relevant information from the
Merging Company's accountants and any governmental agencies having dealings with
the Merging Company.
(b) No investigation by the parties hereto made heretofore or
hereafter shall affect the representations and warranties of the parties which
are herein contained and each such representation and warranty shall survive
such investigation.
SECTION 4.04. Affirmative Covenants of the Surviving Company. The
Surviving Company hereby covenants and agrees that, prior to the Closing Date,
unless otherwise expressly contemplated by this Agreement or consented to in
writing by Merging Company, the Surviving Company will:
(a) operate its business only in the usual and ordinary course
consistent with past practices;
(b) use commercially reasonable efforts to preserve
substantially intact its business organization, maintain its Material Contracts,
and Intellectual Property and other material rights, retain the services of its
respective officers and key employees and maintain its relationships with its
material customers and suppliers;
(c) maintain and keep its assets in as good repair and
condition as at present, ordinary wear and tear excepted;
(d) maintain and keep in full force and effect insurance
comparable in amount and scope of coverage to that currently in effect; and
(e) from the date of this Agreement and to the Closing Date,
promptly supplement or amend the Schedules to this Agreement with respect to any
matter that arises or that is required to be set forth or listed in the
Schedules or is necessary to complete or correct any information in the
Schedules; provided, that for purposes of determining the rights and obligations
of the parties hereunder, any such supplemental or amended disclosure will not
be deemed to have been disclosed to Surviving Company unless Surviving Company
otherwise expressly consents in writing.
SECTION 4.05. Negative Covenants of the Surviving Company. Except as
expressly contemplated by this Agreement or otherwise consented to in writing by
Merging Company, from the date of this Agreement until the Closing Date, the
Surviving Company will not do any of the following:
(a) amend or otherwise modify any of the Material Contracts or
enter into any new Material Contracts outside the ordinary course of its
business;
(b) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its assets;
(c) settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy;
(d) take any action that would result in a breach (as of the
Closing) of any of its representations and warranties in this agreement;
(e) pay or agree to pay any bonus, or similar payment to any
of its employees or increase the compensation of any employee;
(f) make any material expenditure or commitment except in the
ordinary course of business consistent with past practice; or
(g) agree in writing or otherwise to do any of the foregoing.
SECTION 4.06. Access and Information.
(a) The Surviving Company shall (i) afford to Merging Company
and its officers, directors, employees, accountants, consultants, legal counsel,
agents and other representatives (collectively, the "Merging Company
Representatives") reasonable access at reasonable times, upon reasonable prior
notice, to the officers, employees, agents, properties, offices and other
facilities of the Surviving Company and to the books and records thereof, and
(ii) authorize Merging Company to contact and obtain relevant information from
the Surviving Company's accountants and any governmental agencies having
dealings with the Surviving Company.
(b) No investigation by the parties hereto made heretofore or
hereafter shall affect the representations and warranties of the parties which
are herein contained and each such representation and warranty shall survive
such investigation.
SECTION 4.07. Appropriate Action; Consents; Filings.
(a) Each of Surviving Company and the Merging Company shall
use all reasonable efforts to (i) take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement, and (ii) obtain from any
Governmental Entities or other third parties any consents, licenses, permits,
waivers, approvals, authorizations or orders required to be obtained or made by
Surviving Company or the Merging Company or any of their subsidiaries or
affiliates, as applicable, in connection with the authorization, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, including, without limitation, the Merger. The Merging Company and
Surviving Company shall furnish all information required for any application or
other filing to be made pursuant to the rules and regulations of any applicable
Law in connection with the transactions contemplated by this Agreement.
(b) The Surviving Company and the Merging Company shall give
any notices to third parties, and use all reasonable efforts to obtain any third
party consents (i) necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, or (ii) otherwise required under any Material
Contracts, or other agreements in connection with, or in order to allow the
Merging Company to continue to be entitled to the benefits thereof following,
the consummation of the transactions contemplated hereby. In the event that any
party shall fail to obtain any third party consent described above and the
parties agree to consummate the Merger without such consent, such party shall
use commercially reasonable efforts, and shall take any such actions reasonably
requested by the other parties, to limit the adverse effect upon the Merging
Company and Surviving Company, and their respective businesses resulting, or
which could reasonably be expected to result after the Closing Date, from the
failure to obtain such consent.
SECTION 4.08. Public Announcements. Surviving Company will issue a
press release regarding the Merger and shall provide notice to the Merging
Company before issuing any press release or otherwise making any public
statements with respect to the Merger. Neither party shall issue any press
release or make any public statement prior to such press release, except as
otherwise required by applicable Law.
ARTICLE V
CLOSING CONDITIONS
SECTION 5.01. Conditions to Obligations of Surviving Company. The
obligations of Surviving Company to effect the Merger and the other transactions
contemplated hereby are also subject to the satisfaction at or prior to the
Closing Date of the following conditions, any or all of which may be waived in
writing by Surviving Company, in whole or in part:
(a) Each of the representations and warranties of the Merging
Company contained in this Agreement shall be true and correct in all material
respects as of the Closing Date as though made on and as of the Closing Date
(except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date).
(b) The Merging Company shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
(c) Since the Latest Balance Sheet Date, there has not
occurred any material adverse change in the condition (financial or otherwise),
results of operations, business, prospects, assets or liabilities of the Merging
Company.
(d) No Governmental Entity or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in effect and
which has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger (an "Order"); and no such Governmental Entity or
third party shall have initiated or threatened to initiate any proceeding
seeking an Order.
(e) The Merging Company shall have obtained any required
consent and approval necessary in order that the transactions contemplated
hereby do not constitute a material breach or violation of, or result in a right
of termination or acceleration of any encumbrance on any material portion of the
Merging Company's properties or assets, any Material Contract, material
arrangement or understanding.
(f) The results of the financial review and other due
diligence performed by the Surviving Company and its Representatives shall be
satisfactory to Surviving Company in Surviving Company's sole discretion.
(g) All proceedings taken by the Merging Company and all
instruments executed and delivered by the Merging Company, on or prior to the
Closing Date in connection with the transactions herein contemplated shall be
reasonably satisfactory in form and substance to Surviving Company.
SECTION 5.02. Conditions to Obligations of the Merging Company. The
obligation of the Merging Company to effect the Merger and the other
transactions contemplated hereby is also subject to the satisfaction at or prior
to the Closing Date of the following conditions, any or all of which may be
waived in writing by the Merging Company, in whole or in part:
(a) Each of the representations and warranties of Surviving
Company contained in this Agreement shall be true and correct in all material
respects as of the Closing Date as though made on and as of the Closing Date
(except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date).
(b) The Surviving Company shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
(c) Since the Latest Balance Sheet Date, there has not
occurred any material adverse change in the condition (financial or otherwise),
results of operations, business, prospects, assets or liabilities of the
Surviving Company.
(d) No Governmental Entity or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in effect and
which has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger (an "Order"); and no such Governmental Entity or
third party shall have initiated or threatened to initiate any proceeding
seeking an Order.
(e) All proceedings taken by Surviving Company and all
instruments executed and delivered by Surviving Company on or prior to the
Closing Date in connection with the transactions herein contemplated shall be
reasonably satisfactory in form and substance to the Merging Company.
(f) The Surviving Company shall have obtained any required
consent and approval necessary in order that the transactions contemplated
hereby do not constitute a material breach or violation of, or result in a right
of termination or acceleration of any encumbrance on any material portion of the
Surviving Company's properties or assets, any Material Contract, material
arrangement or understanding.
(g) The results of the financial review and other due
diligence performed by the Merging Company and its Representatives shall be
satisfactory to Merging Company in Merging Company's sole discretion.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
SECTION 6.01. Termination. This Agreement may be terminated at any
time prior to the Closing Date, as follows:
(a) by mutual consent of Surviving Company and the Merging
Company;
(b) by Surviving Company, upon a breach of any representation,
warranty, covenant or agreement on the part of the Merging Company set forth in
this Agreement or if at any time the results of its investigation are
unacceptable in its sole discretion;
(c) by the Merging Company, upon a breach of any
representation, warranty, covenant or agreement on the part of Surviving Company
set forth in this Agreement or if at any time the results of its investigation
are unacceptable in its sole discretion;
(d) by either Surviving Company or the Merging Company, if
there shall be any Order that is final and nonappealable preventing the
consummation of the Merger or any similar condition that would prevent or
prohibit the Merger;
(e) by either Surviving Company or the Merging Company, if the
Merger shall not have been consummated before November 1, 2005.
SECTION 6.02. Effect of Termination. In the event of the termination of
this Agreement, this Agreement shall forthwith become void, there shall be no
liability on the part of the parties to the other parties and all rights and
obligations of any party hereto shall cease.
SECTION 6.03. Amendment. This Agreement may not be amended except by
an instrument in writing signed by each of the parties hereto.
SECTION 6.04. Waiver. At any time prior to the Closing Date, Surviving
Company, on the one hand, and the Merging Company, on the other hand, may (a)
extend the time for the performance of any of the obligations or other acts of
the other party hereto, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto and (c) waive compliance by the other party with any of the
agreements or conditions contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party to be
bound thereby.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.01. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given upon receipt, if delivered personally or by overnight delivery service or
if mailed by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like changes of address):
(a) If to: Advanced 3-D Ultrasound Services, Inc.
0000X 00xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
(b) If to: World Energy Solutions, Inc.
0000X 00xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
SECTION 7.02. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement Section references herein are, unless the
context otherwise requires, references to sections of this Agreement.
SECTION 7.03. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 7.04. Entire Agreement. This Agreement (together with the
Exhibits and the Schedules to this Agreement) constitutes the entire agreement
of the parties, and supersede all prior agreements and undertakings, both
written and oral, among the parties or between any of them, with respect to the
subject matter hereof.
SECTION 7.05. Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
SECTION 7.06. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, except as expressly provided herein.
SECTION 7.07. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive to, and not exclusive
of, any rights or remedies otherwise available.
SECTION 7.08. Further Assurances. Each party hereto agrees to execute
any and all documents and to perform such other acts as may be necessary or
expedient to further the purposes of this Agreement and the transactions
contemplated hereby.
SECTION 7.09. Governing Law. This Agreement and all transactions
contemplated by this Agreement shall be governed by, construed, and enforced in
accordance with the Laws of the State of Florida without regard to any conflicts
of laws, statutes, rules, regulations or ordinances. The Parties consent to
personal jurisdiction and venue in the Circuit Court in and for Pinellas County,
Florida regarding any action for injunctive relief arising under the terms of
this Agreement and to enforce the agreement to arbitrate any and all other
disputes between them.
SECTION 7.10 Arbitration. Any and all controversies and disputes
between the Parties arising from this Agreement or regarding any other matter
whatsoever shall be submitted to arbitration before the American Arbitration
Association, utilizing its Commercial Rules. Any arbitration action brought
pursuant to this section shall be heard in St. Petersburg, Pinellas County,
Florida. The Circuit Court in and for Pinellas County, Florida shall have
concurrent jurisdiction with any arbitration panel for the purpose of entering
temporary and permanent injunctive relief.
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ADVANCED 3-D ULTRASOUND SERVICES, INC.
/s/ Xxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxxxx, Chief Executive Officer
WORLD ENERGY SOLUTIONS, INC.
/s/ Xxxx Xxxxxxxx
--------------------------------------------
Xxxx Xxxxxxxx, Chairman of the Board of Directors
