ACQUISITION OF WIDEBAND DETECTION TECHNOLOGIES, INC.
BY
MACHINETALKER, INC.
------------------------------
AGREEMENT AND PLAN OF ACQUISITION
THIS AGREEMENT AND PLAN OF ACQUISITION (Agreement) is entered into by
and between Wideband Detection Technologies, Inc., a Florida corporation,
(WDTI), UTEK CORPORATION, a Delaware corporation, (UTEK), and MachineTalker,
Inc., a Delaware corporation, (MTKN)
WHEREAS, UTEK owns 100% of the issued and outstanding shares of common
stock of WDTI (WDTI Shares); and
WHEREAS, before the Closing Date, WDTI will acquire the license for the
fields of use as described in the License Agreement as described and which are
attached hereto as part of Exhibit A and made a part of this Agreement (License
Agreement) and the rights to develop and market a proprietary technology for the
fields of uses specified in the License Agreement (Technology).
WHEREAS, the parties desire to provide for the terms and conditions
upon which WDTI will be acquired by MTKN in a stock-for-stock exchange
(Acquisition) in accordance with the respective corporation laws of their state,
upon consummation of which all WDTI Shares will be owned by MTKN, and all issued
and outstanding WDTI Shares will be exchanged for common stock of MTKN with
terms and conditions as set forth more fully in this Agreement; and
WHEREAS, for federal income tax purposes, it is intended that the
Acquisition qualifies within the meaning of Section 368 (a)(1)(B) of the
Internal Revenue Code of 1986, as amended (Code).
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which are by
this Agreement acknowledged, the parties agree as follows:
ARTICLE 1
THE STOCK-FOR-STOCK ACQUISITION
1.01 THE ACQUISITION
(a) ACQUISITION AGREEMENT. Subject to the terms and conditions
of this Agreement, at the Effective Date, as defined below, all WDTI Shares
shall be acquired from UTEK by MTKN in accordance with the respective
corporation laws of their state and the provisions of this Agreement and the
separate corporate existence of WDTI, as a wholly-owned subsidiary of MTKN,
shall continue after the closing.
(b) EFFECTIVE DATE. The Acquisition shall become effective
(Effective Date) upon the execution of this Agreement and closing of the
transaction.
1.02 EXCHANGE OF STOCK. At the Effective Date, by virtue of the
Acquisition, all of the WDTI Shares that are issued and outstanding at the
Page 1 of 18
Effective Date shall be exchanged for
o An equivalent value of $240,000 payable with 3,000,000 unregistered
shares of MachineTalker, Inc. (MTKN.OB) common stock (based on the
value of $.08 per share as of close of business July 11, 2007).
o Piggyback registration rights for issued shares
-------------------------------------- ---------------------------------------
SHAREHOLDER NUMBER OF COMMON MTKN SHARES
-------------------------------------- ---------------------------------------
UTEK Corporation 3,000,000
-------------------------------------- ---------------------------------------
1.03 EFFECT OF ACQUISITION.
(a) RIGHTS IN WDTI CEASE. At and after the Effective Date, the
holder of each certificate of common stock of WDTI shall cease to have any
rights as a shareholder of WDTI.
(b) CLOSURE OF WDTI SHARES RECORDS. From and after the
Effective Date, the stock transfer books of WDTI shall be closed, and there
shall be no further registration of stock transfers on the records of WDTI.
1.04 CLOSING. Subject to the terms and conditions of this Agreement,
the Closing of the Acquisition shall take place July 20, 2007.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.01 REPRESENTATIONS AND WARRANTIES OF UTEK AND WDTI. UTEK and WDTI
represent and warrant to MTKN that the facts set forth below are true and
correct:
(a) ORGANIZATION. WDTI and UTEK are corporations duly
organized, validly existing and in good standing under the laws of their
respective states of incorporation, and they have the requisite power and
authority to conduct their business and consummate the transactions contemplated
by this Agreement. True, correct and complete copies of the articles of
incorporation, bylaws and all corporate minutes of WDTI have been provided to
MTKN and such documents are presently in effect and have not been amended or
modified.
(b) AUTHORIZATION. The execution of this Agreement and the
consummation of the Acquisition and the other transactions contemplated by this
Agreement have been duly authorized by the board of directors and shareholders
of WDTI 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 WDTI and UTEK have all
requisite corporate and other authority to execute and deliver this Agreement
and consummate the transactions contemplated by this Agreement.
(c) CAPITALIZATION. The authorized capital of WDTI consists of
1,000,000 shares of common stock with a par value $.01 per share. At the date of
this Agreement, 1,000 WDTI Shares are issued and outstanding and owned by UTEK
Corporation, as follows:
Page 2 of 18
All issued and outstanding WDTI Shares have been duly and validly issued and are
fully paid and non-assessable shares and have not been issued in violation of
any preemptive or other rights of any other person or any applicable laws. WDTI
is not authorized to issue any preferred stock. All dividends on WDTI Shares
which have been declared prior to the date of this Agreement have been paid in
full. There are no outstanding options, warrants, commitments, calls or other
rights or agreements requiring WDTI to issue any WDTI Shares or securities
convertible into WDTI Shares to anyone for any reason whatsoever. None of the
WDTI Shares is subject to any change, claim, condition, interest, lien, pledge,
option, security interest or other encumbrance or restriction, including any
restriction on use, voting, transfer, receipt of income or exercise of any other
attribute of ownership.
(d) BINDING EFFECT. The execution, delivery, performance and
consummation of this Agreement, the Acquisition and the transactions
contemplated by this Agreement will not violate any obligation to which WDTI or
UTEK is a party and will not create a default under any such obligation or under
any agreement to which WDTI or UTEK is a party. This Agreement constitutes a
legal, valid and binding obligation of WDTI, enforceable in accordance with its
terms, except as the enforcement may be limited by bankruptcy, insolvency,
moratorium, or similar laws affecting creditor's rights generally and by the
availability of injunctive relief, specific performance or other equitable
remedies.
(e) LITIGATION RELATING TO THIS AGREEMENT. There are no suits,
actions or proceedings pending or, to the best of WDTI and UTEK's knowledge,
information and belief, threatened, which seek to enjoin the Acquisition or the
transactions contemplated by this Agreement or which, if adversely decided,
would have a materially adverse effect on the business, results of operations,
assets or prospects of WDTI.
(f) NO CONFLICTING AGREEMENTS. Neither the execution and
delivery of this Agreement nor the fulfillment of or compliance by WDTI or UTEK
with the terms or provisions of this Agreement nor all other documents or
agreements contemplated by this Agreement and the consummation of the
transaction contemplated by this Agreement will result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in a
violation of, WDTI or UTEK's articles of incorporation or bylaws, the
Technology, the License Agreement, or any agreement, contract, instrument,
order, judgment or decree to which WDTI or UTEK is a party or by which WDTI or
UTEK or any of their respective assets is bound, or violate any provision of any
applicable law, rule or regulation or any order, decree, writ or injunction of
any court or government entity which materially affects their respective assets
or businesses.
(g) CONSENTS. No consent from or approval of any court,
governmental entity or any other person is necessary in connection with
execution and delivery of this Agreement by WDTI and UTEK or performance of the
obligations of WDTI and UTEK hereunder or under any other agreement to which
WDTI or UTEK is a party; and the consummation of the transactions contemplated
by this Agreement will not require the approval of any entity or person in order
to prevent the termination of the Technology, the License Agreement, or any
other material right, privilege, license or agreement relating to WDTI or its
assets or business.
(h) TITLE TO ASSETS. WDTI has or has agreed to enter into the
agreements as listed on Exhibit A attached hereto. These agreements and the
assets shown on the balance sheet of attached Exhibit B are the sole assets of
WDTI. WDTI has or will by Closing Date have good and marketable title to its
assets, including but not limited to all of its intellectual and other
intangible property, free and clear of all liens, claims, charges, mortgages,
options, security agreements and other encumbrances of every kind or nature
whatsoever.
Page 3 of 18
(i) INTELLECTUAL PROPERTY
(1) The Xxxxxxxx Livermore National Laboratory (LLNL) owns
the Technology and has all right, power, authority and ownership and entitlement
to file, prosecute and maintain in effect the Patent application with respect to
the Inventions listed in Exhibit A hereto.
(2) The License Agreement between LLNL and WDTI covering the
Inventions is legal, valid, binding and will be enforceable in accordance with
its terms as contained in Exhibit A.
(3) Except as otherwise set forth in this Agreement, MTKN
acknowledges and understands that WDTI and UTEK make no representations and
provide no assurances that the rights to the Technology and Intellectual
Property contained in the License Agreement do not, and will not in the future,
infringe or otherwise violate the rights of third parties, and
(4) Except as otherwise expressly set forth in this
Agreement, WDTI and UTEK make no representations and extend no warranties of any
kind, either express or implied, including, but not limited to warranties of
merchantability, fitness for a particular purpose, non-infringement and validity
of the Intellectual Property.
(j) LIABILITIES OF WDTI. WDTI has no assets, no liabilities or
obligations of any kind, character or description except those listed on the
attached schedules and exhibits.
(k) FINANCIAL STATEMENTS. The unaudited financial statements
of WDTI, including a balance sheet, attached as Exhibit B and made a part of
this Agreement, are, in all respects, complete and correct and present fairly
WDTI's financial position and the results of its operations on the dates and for
the periods shown in this Agreement; provided, however, that interim financial
statements are subject to customary year-end adjustments and accruals that, in
the aggregate, will not have a material adverse effect on the overall financial
condition or results of its operations. WDTI has not engaged in any business not
reflected in its financial statements. There have been no material adverse
changes in the nature of its business, prospects, the value of assets or the
financial condition since the date of its financial statements. There are no,
and on the Closing Date there will be no, outstanding obligations or liabilities
of WDTI except as specifically set forth in the financial statements and the
other attached schedules and exhibits. There is no information known to WDTI or
UTEK that would prevent the financial statements of WDTI from being audited in
accordance with generally accepted accounting principles.
(l) TAXES. All returns, reports, statements and other similar
filings required to be filed by WDTI 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 WDTI for taxes for the periods, property or
events covered by this Agreement; and all taxes, whether or not reflected on
those tax returns, and all taxes claimed to be due from WDTI by any taxing
authority, have been properly paid, except to the extent reflected on WDTI's
financial statements, where WDTI 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. WDTI has not
received any notice of assessment or proposed assessment in connection with any
tax returns, nor is WDTI a party to or to the best of its knowledge, expected to
become a party to any pending or threatened action or proceeding, assessment or
collection of taxes. WDTI 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
Page 4 of 18
its assets. There is no basis for any additional assessment of taxes, interest
or penalties. WDTI 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 WDTI.
WDTI is not and has never been a party to any tax sharing agreements with any
other person or entity.
(m) ABSENCE OF CERTAIN CHANGES OR EVENTS. From the date of the
full execution of the Term Sheet until the Closing Date, WDTI has not, and
without the written consent of MTKN, it will not have:
(1) Sold, encumbered, assigned, let lapsed or transferred
any of its material assets, including without limitation the Intellectual
Property, the License Agreement or any other material asset;
(2) Amended or terminated the License Agreement or other
material agreement or done any act or omitted to do any act which would cause
the breach of the License Agreement or any other material agreement;
(3) Suffered any damage, destruction or loss whether or not
in control of WDTI;
(4) Made any commitments or agreements for capital
expenditures or otherwise;
(5) Entered into any transaction or made any commitment not
disclosed to MTKN;
(6) Incurred any material obligation or liability for
borrowed money;
(7) 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 WDTI; or
(8) Taken any action, which could reasonably be foreseen to
make any of the representations or warranties made by WDTI or UTEK untrue as of
the date of this Agreement or as of the Closing Date.
(n) MATERIAL AGREEMENTS. Exhibit A attached contains a true
and complete list of all contemplated and executed agreements between WDTI and a
third party. A complete and accurate copy 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 MTKN 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 WDTI in
accordance with their respective terms and will continue to be valid and
enforceable following the Acquisition. WDTI is not in default of any of the
Contracts. In addition:
(1) There are no outstanding unpaid promissory notes,
mortgages, indentures, deed of trust, security agreements and other agreements
and instruments relating to the borrowing of money by or any extension of credit
to WDTI; and
(2) There are no outstanding operating agreements, lease
agreements or similar agreements by which WDTI is bound; and
(3) The complete final drafts of the License Agreement have
been provided to MTKN; and
Page 5 of 18
(4) Except as set forth in (3) above, there are no
outstanding licenses to or from others of any intellectual property and trade
names; and
(5) There are no outstanding agreements or commitments to
sell, lease or otherwise dispose of any of WDTI's property; and
(6) There are no breaches of any agreement to which WDTI is
a party.
(o) COMPLIANCE WITH LAWS. WDTI is in compliance with all
applicable laws, rules, regulations and orders promulgated by any federal, state
or local government body or agency relating to its business and operations.
(p) LITIGATION. There is no suit, action or any arbitration,
administrative, legal or other proceeding of any kind or character, or any
governmental investigation pending or to the best knowledge of WDTI or UTEK,
threatened against WDTI, the Technology, or License Agreement, affecting its
assets or business (financial or otherwise), and neither WDTI nor UTEK is in
violation of or in default with respect to any judgment, order, decree or other
finding of any court or government authority relating to the assets, business or
properties of WDTI or the transactions contemplated hereby. There are no pending
or threatened actions or proceedings before any court, arbitrator or
administrative agency, which would, if adversely determined, individually or in
the aggregate, materially and adversely affect the assets or business of WDTI or
the transactions contemplated.
(q) EMPLOYEES. WDTI has no and never had any employees. WDTI
is not a party to or bound by any employment agreement or any collective
bargaining agreement with respect to any employees. WDTI is not in violation of
any law, regulation relating to employment of employees.
(r) ADVERSE EFFECT. Neither WDTI nor UTEK has any knowledge of
any or threatened existing occurrence, action or development that could cause a
material adverse effect on WDTI or its business, assets or condition (financial
or otherwise) or prospects.
(s) EMPLOYEE BENEFIT PLANS. WDTI states that there are no and
have never been any employee benefit plans, and there are no commitments to
create any, including without limitation as such term is defined in the Employee
Retirement Income Security Act of 1974, as amended, in effect, and there are no
outstanding or un-funded liabilities nor will the execution of this Agreement
and the actions contemplated in this Agreement result in any obligation or
liability to any present or former employee.
(t) BOOKS AND RECORDS. The books and records of WDTI 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 WDTI has incurred any
investment banking, advisory or other similar fees or obligations in connection
with this Agreement or the transactions contemplated by this Agreement.
(v) FULL DISCLOSURE. All representations or warranties of UTEK
and WDTI are true, correct and complete in all material respects to the best of
our knowledge on the date of this Agreement and shall be true, correct and
complete in all material respects as of the Closing Date as if they were made on
such date. No statement made by them in this Agreement or in the exhibits to
this Agreement or any document delivered by them or on their behalf pursuant to
Page 6 of 18
this Agreement contains an untrue statement of material fact or omits to state
all material facts necessary to make the statements in this Agreement not
misleading in any material respect in light of the circumstances in which they
were made.
2.02 REPRESENTATIONS AND WARRANTIES OF MTKN. MTKN represents and
warrants to UTEK and WDTI that the facts set forth are true and correct.
(a) ORGANIZATION. MTKN is a corporation duly organized,
validly existing and in good standing under the laws of Delaware, is qualified
to do business as a foreign corporation in other jurisdictions in which the
conduct of its business or the ownership of its properties require such
qualification, and have all requisite power and authority to conduct its
business and operate properties.
(b) AUTHORIZATION. The execution of this Agreement and the
consummation of the Acquisition and the other transactions contemplated by this
Agreement have been duly authorized by the board of directors of MTKN; 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 by this Agreement.
(c) CAPITALIZATION. The authorized capital of MTKN consists
of 500,000,000 (Five Hundred Million) shares of common stock with a par value
$0.001 per share (MTKN Common Shares) and on the Effective Date of the
Acquisition 165,437,842 MTKN Shares (which will include the 3,000,000 MTKN
Common Shares issued at the closing of the Acquisition) will be issued and
outstanding. All issued and outstanding MTKN Shares have been duly and validly
issued and are fully paid and non-assessable shares and have not been issued in
violation of any preemptive or other rights of any other person or any
applicable laws.
(d) ANTI DILUTION ADJUSTMENTS. UTEK currently owns zero common
shares of MTKN and will be acquiring 3,000,000 unregistered shares of MTKN
totaling 3,000,000 registered and unregistered shares; and based on a total of
165,437,842 issued shares this total will represent a 1.8% ownership position in
MTKN shares on an "as if converted basis". For a period of twelve months from
the Effective date of this Agreement, the aggregate number of shares of stock
that UTEK has received shall be adjusted proportionately by the Board of
Directors of MTKN for any increase in the number of outstanding shares of Stock
resulting from the issuance of any additional equity securities by the Company
to any of its current list of officers and directors as of the Effective Date,
other than the issuance of stock pursuant to an option or other convertible
security already outstanding on or before the Effective Date, or stock purchased
by officers and directors for a price equal to or greater than fair market
value.
For purposes in this Agreement, "as if converted basis" shall mean total
outstanding common shares after giving effect to the conversion of all
outstanding equity securities including preferred stock or other convertible
instruments.
(e) BINDING EFFECT. The execution, delivery, performance and
consummation of the Acquisition and the transactions contemplated by this
Agreement will not violate any obligation to which MTKN is a party and will not
create a default hereunder, and this Agreement constitutes a legal, valid and
binding obligation of MTKN, 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.
Page 7 of 18
(f) 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 MTKN.
(g) NO CONFLICTING AGREEMENTS. Neither the execution and
delivery of this Agreement nor the fulfillment of or compliance by MTKN with the
terms or provisions of this Agreement will result in a breach of the terms,
conditions or provisions of, or constitute default under, or result in a
violation of, their respective corporate charters or bylaws, or any agreement,
contract, instrument, order, judgment or decree to which it is a party or by
which it or any of its assets are bound, or violate any provision of any
applicable law, rule or regulation or any order, decree, writ or injunction of
any court or governmental entity which materially affects its assets or
business.
(h) CONSENTS. Assuming the correctness of UTEK and WDTI'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 MTKN or its assets or business.
(i) FINANCIAL STATEMENTS. The unaudited financial statements
of MTKN attached as Exhibit C present fairly its financial position and the
results of its operations on the dates and for the periods shown in this
Agreement; provided, however, that interim financial statements are subject to
customary year-end adjustments and accruals that, in the aggregate, will not
have a material adverse effect on the overall financial condition or results of
its operations. MTKN 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 MTKN except as specifically set forth in the MTKN financial
statements.
(j) FULL DISCLOSURE. All representations or warranties of MTKN
are true, correct and complete in all material respects on the date of this
Agreement and shall be true, correct and complete in all material respects as of
the Closing Date as if they were made on such date. No statement made by them in
this Agreement or in the exhibits to this Agreement or any document delivered by
them or on their behalf pursuant to this Agreement contains an untrue statement
of material fact or omits to state all material facts necessary to make the
statements in this Agreement not misleading in any material respect in light of
the circumstances in which they were made.
(k) COMPLIANCE WITH LAWS. MTKN 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.
(l) LITIGATION. There is no suit, action or any arbitration,
administrative, legal or other proceeding of any kind or character, or any
governmental investigation pending or, to the best knowledge of MTKN, threatened
against MTKN materially affecting its assets or business (financial or
otherwise), and MTKN 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. MTKN has no knowledge of any existing or threatened occurrence, action
or development that could cause a material adverse affect on MTKN or its
business, assets or condition (financial or otherwise) or prospects.
Page 8 of 18
(m) DEVELOPMENT. MTKN agrees and warrants that it has the
expertise necessary to and has had the opportunity to independently evaluate the
inventions of the Licensed Technology and develop same for the market.
(n) INVESTMENT COMPANY STATUS. MTKN is not an investment
company, either registered or unregistered.
2.03 INVESTMENT REPRESENTATIONS OF UTEK. UTEK represents and warrants
to MTKN 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 MTKN Shares pursuant to the Acquisition. It is able
to bear the economic risk of the investment in MTKN Shares, including the risk
of a total loss of the investment in MTKN Shares. The acquisition of MTKN Shares
is for its own account and is for investment and not with a view to the
distribution of this Agreement. Except a permitted by law, it has a no present
intention of selling, transferring or otherwise disposing in any way of all or
any portion of the shares at the present time. All information that it has
supplied to MTKN is true and correct. It has conducted all investigations and
due diligence concerning MTKN 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 MTKN concerning MTKN Shares and the
business and financial condition of and prospects for MTKN, and the officers and
directors of MTKN have adequately answered all questions asked and made all
relevant information available to them. UTEK is an accredited investor, as the
term is defined in Regulation D, promulgated under the Securities Act of 1933,
as amended, and the rules and regulations thereunder.
(b) STOCK TRANSFER RESTRICTIONS. UTEK acknowledges that the
MTKN Shares will not be registered and UTEK will not be permitted to sell or
otherwise transfer the MTKN Shares in any transaction in contravention of the
following legend, which will be imprinted in substantially the following form on
the stock certificate representing MTKN Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS
OF ANY STATE. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED PURSUANT TO THE PROVISION
OF THE ACT AND THE LAWS OF SUCH STATES UNDER WHOSE LAWS A TRANSFER OF SECURITIES
WOULD BE SUBJECT TO A REGISTRATION REQUIREMENT, UNLESS UTEK CORPORATION HAS
OBTAINED AN OPINION OF COUNSEL STATING THAT SUCH DISPOSITION IS IN COMPLIANCE
WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
(c) LEGEND. Subject to Rule 144 restrictions, 24 months or as
amended, following the stock acquisition described herein, MTKN agrees to and
shall direct its transfer agent to remove the above legend upon the issuance by
UTEK's legal counsel that the above legend can be removed from UTEK's shares.
MTKN agrees to and promptly shall provide any information requested by UTEK or
UTEK's counsel and to make further direction to its transfer agent as necessary
for such issuance of an opinion regarding removal of the legend or the sale of
such restricted shares under Rule 144 or other available exemption from
registration.
(d) In the event that MTKN fails to direct its transfer agent
to remove the legend within fifteen (15) days of request by UTEK, MTKN shall be
liable to an additional fee of ten percent (10%) of the current value of the
shares held by UTEK, as well as any and all attorney fees and costs that UTEK
may incur as a result of MTKN failing to comply in this request.
Page 9 of 18
ARTICLE 3
TRANSACTIONS PRIOR TO CLOSING
3.01. CORPORATE APPROVALS. Prior to Closing Date, each of the parties
shall submit this Agreement to its board of directors and when necessary, its
respective shareholders and obtain approval of this Agreement. Copies of
corporate actions taken shall be provided to each party.
3.02 ACCESS TO INFORMATION. Each party agrees to permit, upon
reasonable notice, the attorneys, accountants, and other representatives of the
other party's reasonable access during normal business hours to its properties
and its books and records to make reasonable investigations with respect to its
affairs, and to make its officers and employees available to answer questions
and provide additional information as reasonably requested.
3.03 EXPENSES. Each party agrees to bear its own expenses in connection
with the negotiation and consummation of the Acquisition and the transactions
contemplated by this Agreement.
3.04 COVENANTS. Except as permitted in writing, each party agrees that
it will:
(a) Use its good faith efforts to obtain all requisite
licenses, permits, consents, approvals and authorizations necessary in order to
consummate the Acquisition; and
(b) Notify the other parties upon the occurrence of any event
which would have a materially adverse effect upon the Acquisition or the
transactions contemplated by this Agreement or upon the business, assets or
results of operations; and
(c) Not modify its corporate structure, except as necessary
or advisable in order to consummate the Acquisition and the transactions
contemplated by this Agreement.
ARTICLE 4
CONDITIONS PRECEDENT
The obligation of the parties to consummate the Acquisition and the
transactions contemplated by this Agreement are subject to the following
conditions that may be waived, to the extent permitted by law:
4.01. Each party must obtain the approval of its board of directors and
such approval shall not have been rescinded or restricted.
4.02. Each party shall obtain all requisite licenses, permits,
consents, authorizations and approvals required to complete the Acquisition and
the transactions contemplated by this Agreement.
4.03. There shall be no claim or litigation instituted or threatened in
writing by any person or government authority seeking to restrain or prohibit
any of the contemplated transactions contemplated by this Agreement or
challenges the right, title and interest of UTEK in the WDTI Shares or the right
of WDTI or UTEK to consummate the Acquisition contemplated hereunder.
4.04. The representations and warranties of the parties shall be true
and correct in all material respects at the Effective Date.
Page 10 of 18
4.05. The Technology and Intellectual Property has been prosecuted in
good faith with reasonable diligence.
4.06. To the best knowledge of UTEK and WDTI, the License Agreement
with The Xxxxxxxx Livermore National Laboratory is valid and in full force and
effect without any default in this Agreement.
4.07. MTKN shall have received, at or within 5 days of Closing Date,
each of the following:
(a) the stock certificates representing the WDTI Shares, duly
endorsed (or accompanied by duly executed stock powers) by UTEK for
cancellation;
(b) all documentation relating to WDTI's business, all in a
form and substance satisfactory to MTKN, including but not limited to the signed
License Agreement with The Xxxxxxxx Livermore National Laboratory;
(c) such agreements, files and other data and documents
pertaining to WDTI's business as MTKN may reasonably request;
(d) copies of the general ledgers and books of account of
WDTI, and all federal, state and local income, franchise, property and other tax
returns filed by WDTI since the inception of WDTI;
(e) certificates of (i) the Secretary of State of the State
of Florida as to the legal existence and good standing, as applicable,
(including tax) of WDTI in Florida;
(f) the original corporate minute books of WDTI, including
the articles of incorporation and bylaws of WDTI, and all other documents filed
in this Agreement;
(g) all consents, assignments or related documents of
conveyance to give MTKN the benefit of the transactions contemplated hereunder;
(h) such documents as may be needed to accomplish the Closing
under the corporate laws of the states of incorporation of MTKN and WDTI, and
(i) such other documents, instruments or certificates as
MTKN, or their counsel may reasonably request.
4.08. MTKN shall have completed due diligence investigation of WDTI to
MTKN's satisfaction in their sole discretion.
4.09. MTKN shall receive the resignation effective the Closing Date of
each director and officer of WDTI.
Page 11 of 18
ARTICLE 5
INDEMNIFICATION AND LIABILITY LIMITATION
5.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties made by UTEK and WDTI
shall survive for a period of 1 year after the Closing Date, and thereafter all
such representation and warranties shall be extinguished, except with respect to
claims then pending for which specific notice has been given during such 1-year
period.
(b) The representations and warranties made by MTKN shall
survive for a period of 1 year after the Closing Date, and thereafter all such
representations and warranties shall be extinguished, except with respect to
claims then pending for which specific notice has been given during such 1-year
period.
5.02 LIMITATIONS ON LIABILITY. MTKN agrees that UTEK shall not be
liable under this agreement to MTKN or their respective successor's, assigns or
affiliates except where damages result directly from the negligence or willful
misconduct of UTEK or its employees. In no event shall UTEK's liability exceed
the total amount of the consideration paid to UTEK under this agreement, nor
shall UTEK be liable for incidental or consequential damages of any kind. MTKN
shall indemnify UTEK, and hold UTEK harmless against any and all claims by third
parties for losses, damages or liabilities, including reasonable attorneys fees
and expenses ("Losses"), arising in any manner out of or in connection with the
rendering of services by UTEK under this Agreement, unless it is finally
judicially determined that such Losses resulted from the negligence or willful
misconduct of UTEK. The terms of this paragraph shall survive the termination of
this agreement and shall apply to any controlling person, director, officer,
employee or affiliate of UTEK.
5.03 INDEMNIFICATION. MTKN agrees to indemnify and hold harmless UTEK
and its subsidiaries and affiliates and each of its and their officers,
directors, principals, shareholders, agents, independent contactors and
employees (collectively "Indemnified Persons") from and against any and all
claims, liabilities, damages, obligations, costs and expenses (including
reasonable attorneys' fees and expenses and costs of investigation) arising out
of or relating to matters or arising from this Agreement, except to the extent
that any such claim, liability, obligation, damage, cost or expense shall have
been determined by final non-appealable order of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct,
or breach of this agreement by the Indemnified Person or Persons in respect of
whom such liability is asserted.
(a) LIMITATION OF LIABILITY. MTKN agrees that no Indemnified
Person shall have any liability as a result of the execution and delivery of
this Agreement, or other matters relating to or arising from this Agreement,
other than liabilities that shall have been determined by final non-appealable
order of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Indemnified Person or Persons in respect
of whom such liability is asserted. Without limiting the generality of the
foregoing, in no event shall any Indemnified Person be liable for consequential,
indirect or punitive damages, damages for lost profits or opportunities or other
like damages or claims of any kind. In no event shall UTEK's liability exceed
the total amount of the consideration paid to UTEK under this Agreement.
ARTICLE 6
REMEDIES
6.01 SPECIFIC PERFORMANCE. Each party's obligations under this
Agreement are unique. If any party should default in its obligations under this
agreement, the parties each acknowledge that it would be extremely impracticable
to measure the resulting damages. Accordingly, the non-defaulting party, in
Page 12 of 18
addition to any other available rights or remedies, may xxx in equity for
specific performance, and the parties each expressly waive the defense that a
remedy in damages will be adequate.
6.02 COSTS. If any legal action or any arbitration or other proceeding
is brought for the enforcement of this agreement or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
ARTICLE 7
ARBITRATION
In the event a dispute arises with respect to the interpretation or
effect of this Agreement or concerning the rights or obligations of the parties
to this Agreement, the parties agree to negotiate in good faith with reasonable
diligence in an effort to resolve the dispute in a mutually acceptable manner.
Failing to reach a resolution of this Agreement, either party shall have the
right to submit the dispute to be settled by arbitration under the Commercial
Rules of Arbitration of the American Arbitration Association. The parties agree
that, unless the parties mutually agree to the contrary such arbitration shall
be conducted in the State of California. 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 MTKN, one by UTEK and a third by the two selected arbitrators.
The third arbitrator shall be the chairman of the panel.
ARTICLE 8
MISCELLANEOUS
8.01. No party may assign this Agreement or any right or obligation of
it hereunder without the prior written consent of the other parties to this
Agreement. No permitted assignment shall relieve a party of its obligations
under this Agreement without the separate written consent of the other parties.
8.02. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective permitted successors and assigns.
8.03. Each party agrees that it will comply with all applicable laws,
rules and regulations in the execution and performance of its obligations under
this Agreement.
8.04. This Agreement shall be governed by and construct in accordance
with the laws of the State of Florida without regard to principles of conflicts
of law.
8.05. This document constitutes a complete and entire agreement among
the parties with reference to the subject matters set forth in this Agreement.
No statement or agreement, oral or written, made prior to or at the execution of
this Agreement and no prior course of dealing or practice by either party shall
vary or modify the terms set forth in this Agreement without the prior consent
of the other parties to this Agreement. This Agreement may be amended only by a
written document signed by the parties.
8.06. Notices or other communications required to be made in connection
with this Agreement shall be sent by U.S. mail, certified, return receipt
requested, personally delivered or sent by express delivery service and
delivered to the parties at the addresses set forth below or at such other
address as may be changed from time to time by giving written notice to the
other parties.
Page 13 of 18
8.07. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
8.08. This Agreement may be executed in multiple counterparts, each of
which shall constitute one and a single Agreement.
8.09 Any facsimile signature of any part to this Agreement or to any
other agreement or document executed in connection of this Agreement should
constitute a legal, valid and binding execution by such parties.
(SIGNATURES ON THE FOLLOWING PAGE)
Page 14 of 18
MACHINETALKER, INC. WIDEBAND DETECTION TECHNOLOGIES, INC.
By: /s/Xxxxxx X. Xxxxx By: /s/Xxxx Xxxxxxx
___________________________ ____________________________
Xxxxxx X. Xxxxx, Xxxx Xxxxxxx
Chief Executive Officer President
Address: Address:
000 Xx Xx Xxxx Xxxxxx 0000 Xxxx Xxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000 Xxxxx, Xxxxxxx 00000
Date: July 20, 2007 Date: July 20, 2007
__________________________ _________________________
UTEK CORPORATION
By: /s/Xxxx Xxxxxxxxx
____________________________
Xxxx Xxxxxxxxx
Chief Operating Officer
Address:
0000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Date: July 20, 2007
_________________________
UTEK CORPORATION
By: /s/Xxxx Xxxxxxxxx
___________________________
Xxxx Xxxxxxxxx
Chief Compliance Officer
Address:
0000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Date: July 20, 2007
_________________________
Page 15 of 18
EXHIBIT A
Page 16 of 18
EXHIBIT B
Page 17 of 18
WIDEBAND DETECTION TECHNOLOGIES, INC.
TAMPA, FLORIDA
------------------------------
FINANCIAL STATEMENTS
FOR THE INTERIM PERIOD JUNE 19, 2007 TO JULY 20, 2007
CONTENTS
FINANCIAL STATEMENTS: PAGE
Balance Sheet 1
Statement of Operations and Retained Earnings 2
Statement of Cash Flows 3
Notes to Financial Statements 4
WIDEBAND DETECTION TECHNOLOGIES, INC.
BALANCE SHEET
JULY 20, 2007
ASSETS
ASSETS:
License agreement $ 40,000
------------
TOTAL ASSETS $ 40,000
============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES: $ -
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; 1,000,000 shares authorized,
1,000 issued and outstanding 1,000
Additional paid in capital 39,000
Retained earnings -
------------
Total stockholders' equity 40,000
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 40,000
============
Page 1
Unaudited
WIDEBAND DETECTION TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
FOR THE INTERIM PERIOD JUNE 19, 2007 TO JULY 20, 2007
REVENUE $ -
EXPENSES:
--------------
NET LOSS BEFORE INCOME TAX -
PROVISION FOR INCOME TAX -
--------------
NET LOSS -
RETAINED EARNINGS, JUNE 19, 2007 -
--------------
RETAINED EARNINGS, JULY 20, 2007 $ -
==============
Page 2
Unaudited
WIDEBAND DETECTION TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
FOR THE INTERIM PERIOD JUNE 19, 2007 TO JULY 20, 2007
OPERATING ACTIVITIES:
Net loss $ -
Adjustments to reconcile net loss to net cash
provided by operating activities -
License agreement (40,000)
-----------------
Net cash used by operating activities (40,000)
-----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from capital contributions 40,000
-----------------
Net cash provided by financing activities 40,000
-----------------
NET INCREASE IN CASH -
CASH AT JUNE 19, 2007 -
-----------------
CASH AT JULY 20, 2007 $ -
=================
Page 3
Unaudited
WIDEBAND DETECTION TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE INTERIM PERIOD JUNE 19, 2007 TO JULY 20, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
---------------------------------------------------
FORMATION -
The Corporation was formed under the laws of the State of Florida
on June 19, 2007. Utek Corporation owns 100% of the outstanding
common stock.
ACCOUNTING BASIS -
The financial statements were prepared on the accrual basis of
accounting.
Page 4
Unaudited
EXHIBIT C
Page 18 of 18
