ACQUISITION OF SEPERATION AND RECOVERY TECHNOLOGIES, INC.
by
INSEQ CORPORATION
AGREEMENT AND PLAN OF ACQUISITION
This Agreement and Plan of Acquisition (Agreement) is entered into by
and between Separation and Recovery Technologies, Inc., a Florida
corporation, (SRTI), UTEK CORPORATION, a Delaware corporation, (UTEK), and
INSEQ CORPORATION a Delaware corporation, (INSEQ)
WHEREAS, UTEK owns 100% of the issued and outstanding shares of common
stock of SRTI (SRTI Shares); and
WHEREAS, SRTI will acquire the license for the fields of use described
in the License Agreement with Argonne National Laboratory (Technology) and
will put in place and pre-pay the Consulting Agreement with the inventors.
These Agreements are attached hereto in Exhibit A and made a part of this
Agreement.
WHEREAS, the parties desire to provide for the terms and conditions
upon which SRTI will be acquired by Inseq in a stock-for-stock exchange
(Acquisition) in accordance with the respective corporation laws of their
state, upon consummation of which all SRTI Shares will be owned by Inseq, and
all issued and outstanding SRTI Shares will be exchanged for a common stock
of Inseq with terms and conditions as set forth more fully in this Agreement;
and
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 ACQUISITION of SRTI STOCK
1.01 The Acquisition
(a) Acquisition Agreement. Subject to the terms and conditions
of this Agreement, at the Effective Date, as defined below, all SRTI Shares
shall be acquired from UTEK by Inseq in accordance with the respective
corporation laws of their state and countries and the provisions of this
Agreement and the separate corporate existence of SRTI, as a wholly-owned
subsidiary of Inseq, shall continue after the closing.
(b) Effective Date. The Acquisition shall become effective
(Effective Date) upon the last date of signature to execute this Agreement.
1.02 Exchange of Stock. At the Effective Date, by virtue of the
Acquisition, all of the SRTI Shares that are issued and outstanding at the
Effective Date shall be exchanged for 434,782,608 unregistered shares of
common stock of INSQ (Inseq Shares). Of the 434,782,608 shares to be
exchanged and issued to UTEK Corporation, 434,782,608 shares will have Piggy
Back registration rights. These 434,782,608 shares will become registered at
the next time INSQ does a follow on registration, at that time such shares
will be unrestricted and free trading and not subject to Rule 144. By
agreement of the shareholders of SRTI, the shares shall be issued as follows:
SHAREHOLDER NUMBER OF INSEQ SHARES
----------------- ----------------------
UTEK Corporation 434,782,608
1.03 Effect of Acquisition.
(a) Rights in SRTI Cease. At and after the Effective Date, the
holder of each certificate of common stock of SRTI shall cease to have any
rights as a shareholder of SRTI.
(b) Closure of SRTI Shares Records. From and after the
Effective Date, the stock transfer books of SRTI shall be closed, and there
shall be no further registration of stock transfers on the records of SRTI.
1.04 Closing. Subject to the terms and conditions of this Agreement,
the Closing of the Acquisition shall take place September 15, 2005.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of UTEK and SRTI. UTEK and SRTI
represent and warrant to Inseq that the facts set forth below are true and
correct:
(a) Organization. SRTI and UTEK are corporations duly
organized, validly existing and in good standing under the laws of their
respective states and countries 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 SRTI have been
provided to Inseq 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 SRTI 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 SRTI 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 SRTI
consists of 1,000,000 shares of common stock with a par value $.01 per share.
At the date of this Agreement, 1,000 SRTI Shares are issued and outstanding
as follows:
SHAREHOLDER NUMBER OF SRTI SHARES
---------------- ---------------------
UTEK Corporation 1000
All issued and outstanding SRTI 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. SRTI is not authorized to issue any preferred stock. All
dividends on SRTI 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 SRTI to issue any
SRTI Shares or securities convertible into SRTI Shares to anyone for any
reason whatsoever. None of the SRTI 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 SRTI
or UTEK is a party and will not create a default under any such obligation or
under any agreement to which SRTI or UTEK is a party. This Agreement
constitutes a legal, valid and binding obligation of SRTI, 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 SRTI 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 SRTI.
(f) No Conflicting Agreements. Neither the execution and
delivery of this Agreement nor the fulfillment of or compliance by SRTI 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, SRTI or UTEK's articles of incorporation or bylaws, the
Technology, the License Agreement, or any agreement, contract, instrument,
order, judgment or decree to which SRTI or UTEK is a party or by which SRTI
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 SRTI and UTEK or performance of
the obligations of SRTI and UTEK hereunder or under any other agreement to
which SRTI 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 SRTI or its assets or business.
(h) Title to Assets. SRTI 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 SRTI. SRTI has or will by Closing Date have good and marketable title to
its assets, free and clear of all liens, claims, charges, mortgages, options,
security agreements and other encumbrances of every kind or nature
whatsoever.
(i) Intellectual Property
(1) Argonne National Laboratory (ARGONNE) 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 ARGONNE and SRTI
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,
Inseq acknowledges and understands THAT SRTI 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, SRTI 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. IN SHORT, WE DO
NOT GUARANTEE OR WARRANTEE THAT THE TECHNOLOGY WILL WORK FOR ANY INTENDED
USE.
(j) Liabilities of SRTI. SRTI 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
SRTI, 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
SRTI'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. SRTI 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 SRTI except as specifically set
forth in the financial statements and the other attached schedules and
exhibits. There is no information known to SRTI or UTEK that would prevent
the financial statements of SRTI 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 SRTI 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 SRTI 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 SRTI by any taxing authority, have been properly paid, except to the
extent reflected on SRTI's financial statements, where SRTI 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. SRTI has not received any notice of assessment or
proposed assessment in connection with any tax returns, nor is SRTI 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. SRTI
has not extended or waived the application of any statute of limitations of
any jurisdiction regarding the assessment or collection of any taxes. There
are no tax liens (other than any lien which arises by operation of law for
current taxes not yet due and payable) on any of its assets. There is no
basis for any additional assessment of taxes, interest or penalties. SRTI 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 SRTI. SRTI 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, SRTI has not,
and without the written consent of Inseq, 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 SRTI;
(4) Made any commitments or agreements for capital
expenditures or otherwise;
(5) Entered into any transaction or made any commitment
not disclosed to Inseq;
(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 SRTI; or
(8) Taken any action, which could reasonably be
foreseen to make any of the representations or warranties made by SRTI 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 SRTI and a
third party. A complete and accurate copies of all material agreements,
contracts and commitments of the following types, whether written or oral to
which it is a party or is bound (Contracts), has been provided to Inseq 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 SRTI in accordance with their respective terms and
will continue to be valid and enforceable following the Acquisition. SRTI 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 SRTI; and
(2) There are no outstanding operating agreements,
lease agreements or similar agreements by which SRTI is bound; and
(3) The complete final drafts of the License Agreement
have has been provided to Inseq; and
(4) Except as set forth in (3) above, there are no
outstanding licenses to or from others of any intellectual property and trade
names; and
(5) There are no outstanding agreements or commitments to
sell, lease or otherwise dispose of any of SRTI's property; and
(6) There are no breaches of any agreement to which SRTI
is a party.
(o) Compliance with Laws. SRTI 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 SRTI or UTEK,
threatened against SRTI, the Technology, or Patent License Agreement,
affecting its assets or business (financial or otherwise), and neither SRTI
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 SRTI 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 SRTI or the transactions
contemplated.
(q) Employees. SRTI has no and never had any employees. SRTI is
not a party to or bound by any employment agreement or any collective
bargaining agreement with respect to any employees. SRTI is not in violation
of any law, regulation relating to employment of employees.
(r) Adverse Effect. Neither SRTI nor UTEK has any knowledge of
any or threatened existing occurrence, action or development that could cause
a material adverse effect on SRTI or its business, assets or condition
(financial or otherwise) or prospects.
(s) Employee Benefit Plans. SRTI 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 SRTI 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 SRTI 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 SRTI 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 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 Inseq. Inseq represents and
warrants to UTEK and SRTI that the facts set forth are true and correct.
(a) Organization. Inseq 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 Inseq;
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 Inseq Corporation consists of 5,000,000,000 (Five
Billion) shares of common stock with a par value $0.001 per share (Inseq
Corporation Common Shares) and on the Effective Date of the Acquisition,
3,937,491,043 shares of common stock (Three Billion, Nine Hundred and Thirty-
Seven Million, Four Hundred and Ninety-One Thousand, Forty-Three ) Inseq
Corporation Shares (which will include the 434,782,608 (Four Hundred and
Thirty-Four Million, Seven Hundred and Eighty-Two Thousand, Six Hundred and
Eight) Inseq Corporation Shares issued at the closing of the Acquisition)
will be issued and outstanding. All issued and outstanding Inseq Corporation
Shares have been duly and validly issued and are fully paid and
non-assessable shares and have not been issued in violation of any preemptive
or other rights of any other person or any applicable laws.
(d) Binding Effect. The execution, delivery, performance and
consummation of the Acquisition and the transactions contemplated by this
Agreement will not violate any obligation to which Inseq is a party and will
not create a default hereunder, and this Agreement constitutes a legal, valid
and binding obligation of Inseq, enforceable in accordance with its terms,
except as the enforcement may be limited by bankruptcy, insolvency,
moratorium, or similar laws affecting creditor's rights generally and by the
availability of injunctive relief, specific performance or other equitable
remedies.
(e) Litigation Relating to this Agreement. There are no suits,
actions or proceedings pending or to its knowledge threatened which seek to
enjoin the Acquisition or the transactions contemplated by this Agreement or
which, if adversely decided, would have a materially adverse effect on its
business, results of operations, assets, prospects or the results of its
operations of Inseq.
(f) No Conflicting Agreements. Neither the execution and
delivery of this Agreement nor the fulfillment of or compliance by Inseq 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.
(g) Consents. Assuming the correctness of UTEK and SRTI'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 Inseq or its assets or business.
(h) Financial Statements. The unaudited financial statements of
Inseq 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. Inseq 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 Inseq except as specifically set
forth in the Inseq financial statements.
(i) Full Disclosure. All representations or warranties of Inseq
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.
(j) Compliance with Laws. Inseq is in compliance with all
applicable laws, rules, regulations and orders promulgated by any national or
local government body or agency relating to its business and operations.
(k) Litigation. There is no suit, action or any arbitration,
administrative, legal or other proceeding of any kind or character, or any
governmental investigation pending or, to the best knowledge of Inseq,
threatened against Inseq materially affecting its assets or business
(financial or otherwise), and Inseq 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. Inseq has no knowledge of any
existing or threatened occurrence, action or development that could cause a
material adverse affect on Inseq or its business, assets or condition
(financial or otherwise) or prospects.
(l) Development. Inseq agrees and warrants that it has the
expertise necessary to and has had the opportunity to independently evaluate
the Licensed Technology and know-how and develop same for the market.
2.03 Investment Representations of UTEK. UTEK represents and warrants
to Inseq 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 Inseq Shares pursuant to the Acquisition. It is able to bear
the economic risk of the investment in Inseq Shares, including the risk of a
total loss of the investment in Inseq Shares. The acquisition of Inseq 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 Inseq is true and correct. It has conducted all
investigations and due diligence concerning Inseq 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 Inseq concerning
Inseq Shares and the business and financial condition of and prospects for
Inseq, and the officers and directors of Inseq 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
Inseq Shares will not be registered and UTEK will not be permitted to sell or
otherwise transfer the Inseq Shares in any transaction in contravention of
the following legend, which will be imprinted in substantially the following
form on the stock certificate representing Inseq 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 Inseq agrees to and shall direct its transfer agent
to remove the above legend upon the issuance by UTEK's counsel that the
above legend can be removed from UTEK's shares. Inseq agrees to and
promptly shall provide any information requested by UTEK or UTEK's counsel
and to make sure 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 Section 144 or other available exemption from
registration.
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 parties reasonable access during normal business hours to its
properties and its books and records to make reasonable investigations with
respect to its affairs, and to make its officers and employees available to
answer questions and provide additional information as reasonably requested.
3.03 Expenses. Each party agrees to bear its own expenses in
connection with the negotiation and consummation of the Acquisition and the
transactions contemplated by this Agreement.
3.04 Covenants. Except 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. If required, each party must obtain the approval of its board of
directors and such approval shall not have been rescinded or restricted.
4.02. Each party shall obtain all requisite licenses, permits,
consents, authorizations and approvals required to complete the Acquisition
and the transactions contemplated by this Agreement.
4.03. There shall be no claim or litigation instituted or threatened
in writing by any person or government authority seeking to restrain or prohibit
any of the contemplated transactions contemplated by this Agreement or
challenge the right, title and interest of UTEK in the SRTI Shares or the
right of SRTI 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.
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 SRTI, the License Agreement
and the Consulting Agreement are valid and in full force and effect without any
default in this Agreement.
4.07. INSEQ HAS COMPLETED ITS DUE DILIGENCE INVESTIGATION OF SRTI AND
THE ARGONNE TECHNOLOGY TO INSEQ'S SATISFACTION IN THEIR SOLE DISCRETION,
PRIOR TO THE EXECUTION OF THIS AGREEMENT.
4.08. Inseq shall have received, at or within 5 days of Closing Date,
each of the following:
(a) the stock certificates representing the SRTI Shares, duly
endorsed (or accompanied by duly executed stock powers) by UTEK for
cancellation;
(b) all documentation relating to SRTI's business, all in a
form and substance satisfactory to Inseq;
(c) such agreements, files and other data and documents
pertaining to SRTI's business as Inseq may reasonably request;
(d) copies of the general ledgers and books of account of SRTI,
and all federal, state and local income, franchise, property and other tax
returns filed by SRTI since the inception of SRTI;
(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 SRTI in Florida;
(f) the original corporate minute books of SRTI, including the
articles of incorporation and bylaws of SRTI, and all other documents filed
in this Agreement;
(g) all consents, assignments or related documents of
conveyance to give Inseq 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 and countries of incorporation of
Inseq and SRTI, and
(i) such other documents, instruments or certificates as Inseq,
or their counsel may reasonably request.
4.09. Inseq shall receive the resignation effective the Closing Date of
each director and officer of SRTI.
ARTICLE 5
INDEMNIFICATION AND LIABILITY LIMITATION
5.01. Survival of Representations and Warranties.
(a) The representations and warranties made by UTEK and
SRTI 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 Inseq 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. INSEQ AGREES THAT UTEK SHALL NOT
BE LIABLE UNDER THIS AGREEMENT TO INSEQ OR THEIR RESPECTIVE SUCCESSOR'S,
ASSIGNS OR AFFILIATES EXCEPT WHERE DAMAGES RESULT DIRECTLY FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF UTEK OR ITS EMPLOYEES. IN NO
EVENT SHALL UTEK'S LIABILITY EXCEED THE TOTAL AMOUNT OF THE FEES PAID TO
UTEK UNDER THIS AGREEMENT, NOR SHALL UTEK BE LIABLE FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND. INSEQ SHALL INDEMNIFY UTEK, AND HOLD
UTEK HARMLESS AGAINST ANY AND ALL CLAIMS BY THIRD PARTIES FOR LOSSES,
DAMAGES OR LIABILITIES, INCLUDING REASONABLE ATTORNEYS FEES AND EXPENSES
("LOSSES"), ARISING IN ANY MANNER OUT OF OR IN CONNECTION WITH THE
RENDERING OF SERVICES BY UTEK UNDER THIS AGREEMENT, UNLESS IT IS FINALLY
JUDICIALLY DETERMINED THAT SUCH LOSSES RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF UTEK. THE TERMS OF THIS PARAGRAPH
SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND SHALL APPLY TO ANY
CONTROLLING PERSON, DIRECTOR, OFFICER, EMPLOYEE OR AFFILIATE OF UTEK.
5.03 INDEMNIFICATION. INSEQ AGREES TO INDEMNIFY AND HOLD
HARMLESS UTEK AND ITS SUBSIDIARIES AND AFFILIATES AND EACH OF ITS AND
THEIR OFFICERS, DIRECTORS, PRINCIPALS, SHAREHOLDERS, AGENTS, INDEPENDENT
CONTACTORS AND EMPLOYEES (COLLECTIVELY "INDEMNIFIED PERSONS") FROM AND
AGAINST ANY AND ALL CLAIMS, LIABILITIES, DAMAGES, OBLIGATIONS, COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES AND COSTS OF
INVESTIGATION) ARISING OUT OF OR RELATING TO MATTERS OR ARISING FROM
THIS AGREEMENT, EXCEPT TO THE EXTENT THAT ANY SUCH CLAIM, LIABILITY,
OBLIGATION, DAMAGE, COST OR EXPENSE SHALL HAVE BEEN DETERMINED BY FINAL
NON-APPEALABLE ORDER OF A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
INDEMNIFIED PERSON OR PERSONS IN RESPECT OF WHOM SUCH LIABILITY IS
ASSERTED.
(a) LIMITATION OF LIABILITY. INSEQ 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 FEES 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 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 Tampa, Florida. 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 Inseq, 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.
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)
INSEQ Corporation SEPERATION AND RECOVERY
TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxx
----------------------- --------------------
Xxxxx Xxxxxxxx Xxxx Xxxxxxx
Chairman of the Board President
Address: Address:
000 Xxxxxx Xxxx 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000 Xxxxx Xxxx, Xxxxxxx 00000
Xxxxx Xxxxxxxxx, XX 00000
Date: September 15, 2005 Date: September 15, 2005
UTEK CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx, Ph.D.
Chief Executive Officer
Address:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000
Date: September 15, 2005