AAEI-WEGY
ACQUISITION OF ADVANCED
ALTERNATIVE ENERGY, INC.
by
WORLD
ENERGY SOLUTIONS, INC.
AGREEMENT AND PLAN OF
ACQUISITION
This
Agreement and Plan of Acquisition (Agreement) is entered into by and
between Advanced Alternative Energy, Inc., a Florida
corporation, (AAEI), UTEK CORPORATION, a Delaware corporation,
(UTEK), and World Energy Solutions, Inc., a Florida corporation,
(WEGY ).
WHEREAS, UTEK owns 100% of the issued and
outstanding shares of common stock of AAEI (AAEI Shares);
and
WHEREAS , before the Closing Date, AAEI will
acquire the license for the fields of use as described in
the License Agreement which is attached hereto as part of
Exhibit A and made a part of this Agreement (Agreements) 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 AAEI will be acquired by
WEGY in a stock-for-stock exchange (Acquisition) in accordance
with the respective corporation laws of their state, upon
consummation of which all AAEI Shares (as defined below) will be
owned by WEGY, and all issued and outstanding AAEI Shares will
be exchanged for shares of Series B Convertible Preferred Stock
of WEGY 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 as a tax-free
reorganization within the meaning of Section 368 (a)(1)(B) of
the Internal Revenue Code of 1986, as amended (Code).
NOW,
THEREFORE , in
consideration of the premises and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which
are 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 AAEI Shares shall be acquired from UTEK by
WEGY in accordance with the respective corporation laws of their
state and the provisions of this Agreement and the separate
corporate existence of AAEI shall continue after the closing as
a wholly-owned subsidiary of WEGY.
(b)
Effective Date.
The Acquisition shall
become effective (Effective Date or Closing Date) upon the
execution of this Agreement and closing of the
transaction.
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AAEI-WEGY
1.02
Exchange of Stock.
At the Effective Date, by
virtue of the Acquisition, all of the AAEI Shares that are
issued and outstanding at the Effective Date shall be exchanged
for 100,000 Series B Convertible Preferred shares of WEGY stock
as follows:
·
Prior to
closing, WEGY shall have the authority to issue the Series B
Convertible
Preferred stock.
·
100,000
shares of Series B Convertible Preferred Stock issued and delivered
within ten (10) days of closing on this Agreement. The number of
shares of common stock to be received by UTEK upon its conversion
of the Series B Convertible Preferred Stock shall upon conversion
have a common stock price of at least one cent ($0.01) per
share.
·
UTEK is to receive a copy of “World Energy Solutions, Inc.
Series B Convertible Preferred Stock Certificate of
Designations” at closing.
·
Convertible preferred shares may be
converted by holder at any time into common stock prior to the
sixty (60) month anniversary of the execution of this Agreement
into the face value of the debenture which is $3,500,000 worth of
common shares of WEGY, based on the average of the five (5) day
closing price prior to the conversion date, i.e., if the shares
traded at an average five day closing price of $1.00 per share,
then 3,500,000 common shares will be issued upon conversion. Shares
will be salable pursuant to Rule 144.
·
Anytime after six months and before the 60 th month
anniversary of this Agreement, WEGY will have the right (but not
the obligation) at its sole discretion, to repurchase the
convertible preferred shares that have not been converted as
follows:
o
Within
12 months – 105% value
o
Within
13 and 24 months – 110% value
o
Within
25 – 36 months – 115% value
o
Greater than 36 months – 120% value
·
There will be no coupon associated with the
convertible preferred shares
·
No voting rights for
Series B Convertible Preferred Stock
·
WEGY agrees that it will have
authorized the shares of common stock required for the conversion
of the shares within 150 days of the execution of this agreement;
if the number of shares outstanding are not available to facilitate
the conversion of the issued convertible preferred shares, then the
sum of $3,500,000 shall be immediately due and payable in cash at
the 60 th
month anniversary of this
transaction.
1.03
Effect
of Acquisition. At and after the Effective
Date, the holder of each certificate of common stock of AAEI
shall cease to have any rights as a shareholder of
AAEI.
1.04
Closing. Subject to the terms and conditions
of this Agreement, the Closing of the Acquisition shall take
place as of the last to sign and date this agreement.
ARTICLE
2
REPRESENTATIONS AND
WARRANTIES
2.01
Representations and Warranties of
UTEK and AAEI. UTEK and AAEI represent and
warrant
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AAEI-WEGY
to WEGY that the facts set
forth below are true and correct, and will be true and correct as
of the Effective Date:
(a)
Organization.
AAEI 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 AAEI have been provided to WEGY 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 AAEI
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 AAEI 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 AAEI consists of 1,000,000 shares of common stock
with a par value $.01 per share (AAEI Shares). At the date of
this Agreement, 1,000 AAEI Shares are issued and outstanding and
held of record and beneficially by UTEK, free and clear of all
liens, encumbrances, restrictions and claims of very kind. UTEK
has full legal right, power and authority to sell, assign
transfer and convey the AAEI shares so owned by UTEK in
accordance with the terms and conditions of this Agreement. The
delivery to WEGY of the AAEI shares so owned by UTEK pursuant to
the provisions of this Agreement will transfer to WEGY valid
title thereto, free and clear of any and all adverse claims. All
issued and outstanding AAEI 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. AAEI is not authorized
to issue any preferred stock. All dividends on AAEI 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 AAEI
to issue any AAEI Shares or securities convertible into AAEI
Shares to anyone for any reason whatsoever. None of the AAEI
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 AAEI or UTEK is a party and will
not create a default under any such obligation or under any
agreement to which AAEI or UTEK is a party. This Agreement
constitutes a legal, valid and binding obligation of AAEI,
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 AAEI 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 AAEI.
(f)
No
Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by AAEI 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, AAEI or UTEK’s articles of incorporation or
bylaws, the Technology, the License Agreement, or any agreement,
contract, instrument, order, judgment or decree to which AAEI
or
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AAEI-WEGY
UTEK is a party or by which
AAEI 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 AAEI
and UTEK or performance of the obligations of AAEI and UTEK
hereunder or under any other agreement to which AAEI 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 AAEI or its assets or
business.
(h)
Title
to Assets. AAEI 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 AAEI. AAEI has or will by the
Effective 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.
The Board of
Regents (“Board”) of The Florida State University
(“University”) respectively owns and has license to
the Technologies and has all right, power, authority and
ownership and entitlement to file, prosecute and maintain in
effect FSU #’s 05-031, 07-058 and 07-085 ; US Patent
Application No 11/261,128 filed 10/28/2005 and PCT Patent
Pending No PCT/07/83328 filed 11/1/2007, respectively titled
“Methods for Preparing Mechanically and Electrochemically
Stable Electrodes”, “Transition Metal Oxide
Catalysts and Methods for Producing the Same”, and
“Hydrogen Evolution Catalysts for Alkaline Water
Electrolysis” Inventors: Matthew D. Merrill, Ralph C.
Dougherty ;
(the Patent) with respect to the inventions listed in Exhibit A
hereto (the Inventions).
(2)
The
License Agreement between University and AAEI covering the
Inventions will be 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, WEGY acknowledges and understands that AAEI 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
as of this date;
(4)
Neither
AAEI nor UTEK has received a written communication from any
individual, corporation, proprietorship, firm, general or
limited partnership, limited liability company, joint venture,
trust, association, unincorporated organization, governmental
authority or other entity (“Person”) alleging that
the Technology and Intellectual Property contained in the
License Agreement violate any material rights relating to
Intellectual Property of any Person.
(5)
To the knowledge of AAEI and UTEK, and without any
independent investigation, the validity or enforceability of the
Patent or any of the Technology and Intellectual Property
contained in the License Agreement, or the ownership thereof,
has not been questioned in any action, suit, arbitration,
proceeding or other litigation commenced or, to the
Sellers’ knowledge, threatened by any Person or
governmental authority (“Proceeding”) and, to the
knowledge of AAEI and UTEK, no such Proceeding is currently
threatened, and neither AAEI nor UTEK has received a written
communication from any Person (A) asserting an ownership
interest in any of the Technology and Intellectual Property
contained in the License Agreement, or (B) alleging that any of
the Technology and Intellectual Property contained in the
License Agreement is invalid or unenforceable.
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AAEI-WEGY
(6)
Except as otherwise expressly set
forth in this Agreement, AAEI 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 AAEI.
AAEI 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 AAEI, 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 AAEI’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. AAEI
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 AAEI except as
specifically set forth in the financial statements and the other
attached schedules and exhibits. There is no information
known to AAEI or UTEK that would prevent the financial
statements of AAEI 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 AAEI 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
AAEI 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 AAEI by any
taxing authority, have been properly paid, except to the extent
reflected on AAEI’s financial statements, where AAEI 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. AAEI has
not received any notice of assessment or proposed assessment in
connection with any tax returns, nor is AAEI 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. AAEI 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. AAEI 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 AAEI. AAEI 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 latest balance sheet of AAEI provided to WEGY
until the Closing Date, AAEI has not, and without the written
consent of WEGY, 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;
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AAEI-WEGY
(3)
Suffered any
damage, destruction or loss whether or not in control of
AAEI;
(4)
Made any
commitments or agreements for capital expenditures or
otherwise;
(5)
Entered
into any transaction or made any commitment not disclosed to
WEGY in writing;
(6)
Incurred
any obligation or liabili
