Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VV99XoKddEACn0cUDuMubunrdCGRHNR/grWu3HyW8uG+pHcsYvI2q0SSdGKt5nBh N61qj2V3i5gpFuwyd1Dbsg== 0001193125-07-071774.txt : 20070402 0001193125-07-071774.hdr.sgml : 20070402 20070402124701 ACCESSION NUMBER: 0001193125-07-071774 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20070402 DATE AS OF CHANGE: 20070402 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Avalon Oil & Gas, Inc. CENTRAL INDEX KEY: 0000918573 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 841168832 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-49804 FILM NUMBER: 07736954 BUSINESS ADDRESS: STREET 1: 7807 CREEKRIDGE CIRCLE STREET 2: SUITE 105 CITY: MINNEAPOLIS STATE: MN ZIP: 55439 BUSINESS PHONE: 6123599020 MAIL ADDRESS: STREET 1: 7807 CREEKRIDGE CIRCLE STREET 2: SUITE 105 CITY: MINNEAPOLIS STATE: MN ZIP: 55439 FORMER COMPANY: FORMER CONFORMED NAME: XDOGS COM INC DATE OF NAME CHANGE: 20000225 FORMER COMPANY: FORMER CONFORMED NAME: SLED DOGS CO DATE OF NAME CHANGE: 19950112 FORMER COMPANY: FORMER CONFORMED NAME: SNOWRUNNER INC DATE OF NAME CHANGE: 19940203 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: UTEK CORP CENTRAL INDEX KEY: 0001098482 IRS NUMBER: 563603677 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2109 PALM AVENUE CITY: TAMPA STATE: FL ZIP: 33605 BUSINESS PHONE: 8137544330 MAIL ADDRESS: STREET 1: 2109 PALM AVENUE CITY: TAMPA STATE: FL ZIP: 33605 SC 13D 1 dsc13d.htm SCHEDULE 13D Schedule 13D

CUSIP No. 053467106

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )

AVALON OIL & GAS, INC.

(Name of Issuer)

COMMON STOCK

(Title of Class of Securities)

053467106

(CUSIP Number)

Carole Wright

UTEK Corporation

2109 E. Palm Avenue

Tampa, FL 33605

813-754-4330

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

March 28, 2007

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-l(e), 240.13d-l(f) or 240.13d-l(g), check the following box. ¨

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act.

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CUSIP No. 053467106


1.	Names of Reporting Persons I.R.S. Identification Nos. of above persons (entities only)

	UTEK CORPORATION 59-3603677
2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a) ¨
	(b) ¨
3.	SEC Use Only

4.	Source of Funds (See Instructions)

	OO
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨


6.	Citizenship or Place of Organization:

	Delaware


Number of Shares Beneficially Owned by Each Reporting Person With		7. Sole Voting Power

		70,006,142
		8. Shared Voting Power


		9. Sole Dispositive Power

		70,006,142
		10. Shared Dispositive Power


11.	Aggregate Amount Beneficially Owned by Each Reporting Person

	70,006,142
12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)	¨

13.	Percent of Class Represented by Amount in Row (11)

	21.3%*
14.	Type of Reporting Person (See Instructions)

	CO

Based on the number of outstanding shares of common stock of Avalon Oil & Gas, Inc. disclosed in the Avalon Oil & Gas, Inc. Form 10-QSB for quarter ended December 31, 2006, plus shares issued in a transaction with UTEK Corporation and reported on Form 8-K March 30, 2007 and held by UTEK Corporation as of March 28, 2007.

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CUSIP No. 053467106

Item 1.

Security and Issuer

The class of equity security to which this statement relates is the common stock, par value $.001 per share (the “Common Stock”), of Avalon Oil & Gas, Inc., a Nevada corporation (“Avalon Oil & Gas “). The address of the principal executive offices of Avalon Oil & Gas is 7000 Flour Exchange Building, 310 Fourth Avenue South, Minneapolis, Minnesota 55415.

Item 2.

Identity and Background

This statement on Schedule 13D (this “Statement”) is being filed by UTEK Corporation, a Delaware corporation (“UTEK”). UTEK is a publicly-held specialty finance company focused on technology transfers. UTEK’s services enable companies to acquire innovative technologies from universities and research laboratories worldwide. UTEK facilitates the identification and acquisition of external technologies for clients in exchange for their equity securities. In addition, UTEK offers companies the tools to search, analyze and manage university intellectual properties. UTEK is a business development company with operations in the United States, United Kingdom and Israel. UTEK’s principal business office is located at 2109 E. Palm Avenue, Tampa, Florida 33605.

To the best of UTEK’s knowledge as of the date hereof, set forth in Schedule I to this Schedule 13D and incorporated herein by reference is the following information with respect to each director and executive officer of UTEK:

(1)name;

(2) business address;

(3) present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted; and

(4) citizenship.

During the last five years, neither UTEK nor, to the best of UTEK ‘s knowledge, any of its directors or executive officers has been (1) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding has been or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws.

Item 3.

Source and Amount of Funds or Other Consideration

On May 4, 2006, UTEK entered into a Strategic Alliance Agreement with Avalon Oil & Gas, pursuant to which UTEK agreed to perform certain services for Avalon Oil & Gas during the subsequent 12-month period, relating to the identification and acquisition of new technology, in consideration of a payment of 693,642 shares of the common stock of Avalon Oil & Gas. Such shares are delivered in advance and earned ratably over the 12-month period.

On July 12, 2006, UTEK received 15,437,500 shares of common stock of Avalon Oil & Gas in connection with the sale of its wholly-owned subsidiary, Ultrasonic Mitigation Technologies, Inc. (“UMT”), to Avalon Oil & Gas. At the time of the sale, UMT held $300,000 in cash and technology licensed from the University of Wyoming.

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CUSIP No. 053467106

On November 8, 2006, UTEK received 19,000,000 shares of common stock of Avalon Oil & Gas in connection with the sale of its wholly-owned subsidiary, Intelli Well Technologies, Inc. (“IWT”), to Avalon Oil & Gas. At the time of the sale, IWT held $250,000 in cash and technology licensed from the Lawrence Livermore National Laboratory.

On March 28, 2007, UTEK received 36,710,526 shares of common stock of Avalon Oil & Gas in connection with the sale of its wholly-owned subsidiary, Leak Location Technologies, Inc. (“LLT”), to Avalon Oil & Gas. At the time of the sale, LLT held $100,000 in cash and technology licensed from the Rensselaer Polytechnic Institute. Under an agreement with Aware Capital Consultants, Inc. in which UTEK is obligated to pay Aware Capital Consultants, Inc. a fee of 5% of the stock received in any transaction with a customer introduced by Aware Capital Consultants, Inc., UTEK transferred 1,835,526 of these shares to Aware Capital Consultants, Inc.

UTEK has no present plans or proposals relating to Avalon Oil & Gas which relate to or would result in:

(a)	The acquisition by any person of additional securities of Avalon Oil & Gas;

(b)	An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Avalon Oil & Gas or any of its subsidiaries;

(c)	A sale or transfer of a material amount of assets of Avalon Oil & Gas or any of its subsidiaries;

(d)	Any change in the present board of directors or management of Avalon Oil & Gas, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board;

(e)	Any material change in the present capitalization or dividend policy of Avalon Oil & Gas;

(f)

Any other material change in Avalon Oil & Gas’s business or corporate structure including but not limited to, if Avalon Oil & Gas is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940;

(g)	Changes in Avalon Oil & Gas’ charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of Avalon Oil & Gas by any person;

(h)	Causing a class of securities of Avalon Oil & Gas to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;

(i)	A class of equity securities of Avalon Oil & Gas becoming eligible for termination of registration pursuant to Section 12(g)(4)of the Act; or

(j)	Any action similar to any of those enumerated above.

UTEK intends to sell the shares of common stock it presently holds of Avalon Oil & Gas, Inc. as permitted under SEC Rule 144 and as market conditions permit.

Item 4.

Purpose of Transaction

See Item 3 above.

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CUSIP No. 053467106

Item 5.

Interest in Securities of Avalon Oil & Gas

As of March 28, 2007, UTEK was the beneficial owner of 70,006,142 shares of common stock of Avalon Oil & Gas, All of such shares of common stock would constitute approximately 21.3% of the 329,280,834 shares of common stock that would be outstanding after the recent transaction (based on the number of shares outstanding as contained in the most recently available filing with the Commission by Avalon Oil & Gas plus shares issued in a transaction with UTEK Corporation and reported on Form 8-K March 30, 2007). UTEK has the sole power to vote and dispose of all of such shares.

In the past 60 days, there were no transactions in the shares of Avalon Oil & Gas by UTEK or any of its officers or directors.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of Avalon Oil & Gas

Except for the agreement with Aware Capital Consultants, Inc. described in Item 3 pursuant to which UTEK transferred shares to Aware Capital Consultants, Inc. there are no contracts, arrangements, understandings or relationships (legal or otherwise) of Avalon Oil & Gas held by UTEK, among the persons named in Item 2 and between such persons and any person with respect to any securities of Avalon Oil & Gas, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

Item 7.

Material to Be Filed as Exhibits

The following documents are attached hereto as exhibits:

Exhibit No.:


7.1		Strategic Alliance Agreement between UTEK Corporation and Avalon Oil & Gas, Inc., dated May 4, 2006.

7.2		Agreement and Plan of Acquisition, dated July 12, 2006, among Ultrasonic Mitigation Technologies, Inc., UTEK Corporation and Avalon Oil & Gas, Inc.

7.3		Agreement and Plan of Acquisition, dated November 8, 2006, among Intelli Well Technologies, Inc., UTEK Corporation and Avalon Oil & Gas, Inc.

7.4		Agreement and Plan of Acquisition, dated March 28, 2007, among Leak Location Technologies, Inc., UTEK Corporation and Avalon Oil & Gas, Inc

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CUSIP No. 053467106

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

March 30, 2007

/s/ Carole R. Wright

Signature

Carole R. Wright, Chief Financial Officer

Name/Title

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CUSIP No. 053467106


SCHEDULE I

NAME	WORK ADDRESS	OCCUPATION	CITIZENSHIP
Stuart Brooks, M.D.	University of South Florida 13201 Bruce B. Downs Blvd. Tampa, FL 33612	Professor of Medicine & Director of NIOSH Education & Research Center at USF	US



Arthur Chapnik	500 East 77^th Street, #1826 New York, NY 10162	President, Harrison McJade & Co., Ltd.	US


Clifford M. Gross, Ph.D.	UTEK Corporation 2109 E. Palm Avenue Tampa, FL 33605	Chairman & Chief Executive Officer of UTEK	US



Kwabena Gyimah-Brempong	USF – Economics Dept. 4202 E. Fowler Avenue, BSN3403 Tampa, FL 33620	Chairman & Professor of Economics USF School of Business	US



Holly Callen Hamilton	Callen & Associates Financial Assoc. 7903 Wyoming Court Minneapolis, MN 55438	President, Callen & Associates Financial Services, Inc.	US



Rt. Hon. Francis Maude	25 Victoria Street London, SW1H 0DL United Kingdom	Member of Parliament and Chairman of the Conservative Party	United Kingdom



John J. Micek III, J.D.	300 Hamilton Avenue, 4^th Floor Palo Alto, CA 94301	Managing Director, Silicon Prairie Partners, LP	US


Sam I. Reiber, J.D.	2109 E. Palm Avenue Tampa, FL 33605	Attorney at Law (VP and General Counsel for UTEK)	US


Keith A. Witter, J.D.	423 3^rd Avenue SE Rochester, MN 55904	President, FFP Investment Advisors, Inc.	US

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EX-7.1 2 dex71.htm STRATEGIC ALLIANCE AGREEMENT Strategic Alliance Agreement

Exhibit 7.1

LOGO

STRATEGIC ALLIANCE AGREEMENT

This Strategic Alliance Agreement is made and entered into this 4^th day of May 2006, by and between UTEK Corporation (“UTEK”), a Florida Corporation, 202 South Wheeler Street, Plant City, Florida 33563, and Avalon Oil and Gas, Inc. (“AOGS”), a Nevada Corporation, 7000 Flour Exchange Building, 310 Fourth avenue South, Minneapolis, Minnesota 55415.

WITNESSETH:

WHEREAS, AOGS desires to engage UTEK to provide the services as set forth in this Agreement, and

WHEREAS, UTEK is agreeable to provide these services.

NOW THEREFORE, in consideration of the mutual promise made in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

I. SERVICES

To identify technology acquisition opportunities for AOGS from research universities and government laboratories, while maintaining AOGS’s confidentiality.

In conjunction with the Services, UTEK agrees to:

Make itself available at the offices of AOGS or at another mutually agreed upon place, during normal business hours, for reasonable periods of time, subject to reasonable advance notice and mutually convenient scheduling.

II.

Make itself available for telephone conferences with the principal officer(s) of AOGS during normal business hours.

AOGS will have 30-days from receipt of information to determine if they wish to go forward with the technology license. UTEK, after 30 days, shall have the right to present the technology to other clients.

AOGS acknowledges that the sources of technologies represented by UTEK are 3^rd party research institutions for which UTEK does not control whether the technology will be shown to other parties by the licensor.

At AOGS’s request and upon mutual agreement between AOGS and UTEK, UTEK will negotiate and seek to acquire a license to the requested technology for subsequent sale to and acquisition by AOGS.

On a case-by-case basis, at AOGS’s request and UTEK’s sole discretion, UTEK will propose an equity-financing plan for AOGS’s consideration, to finance select technology acquisition opportunities for AOGS.

AOGS will not seek to acquire any technologies presented to AOGS by UTEK from the technology developer directly or indirectly for a period of 24 months following the termination of this Strategic Alliance Agreement.

-1-

UTEK shall devote such time and efforts, as it deems commercially reasonable, under the circumstances to the affairs of AOGS, as is commercially reasonable and adequate to render the Services contemplated by this Agreement.

UTEK cannot guarantee results on behalf of AOGS, but shall pursue all reasonable avenues available through its network of contacts. The acceptance and consumption of any transaction is subject to acceptance of the terms and conditions by in its sole discretion.

AOGS will cooperate with UTEK and will promptly provide UTEK with all pertinent materials and requested information in order for UTEK to perform its Services pursuant to this Agreement

II. INDEPENDENT CONTRACTOR

UTEK shall be, and in all respects be deemed to be, an independent contractor in the performance of its duties hereunder.

AOGS shall be solely responsible for making all payments to and on behalf of its employees and UTEK shall in no event be liable for any debts or other liabilities of AOGS.

UTEK shall not have or be deemed to have, fiduciary obligations or duties to, and shall be able to pursue, conduct and carry on for its own account (or for the account of others) such activities, ventures, businesses and other pursuits as UTEK in its sole, absolute and unfettered discretion, may elect.

Notwithstanding the above, no activity, venture, business or other pursuit of UTEK, during the term of this Agreement shall conflict with UTEK’s obligations under this Agreement.

III. EXPENSES

It is expressly agreed and understood that each party shall be responsible for its own normal and reasonable out-of-pocket expenses.

IV. COMPENSATION

In consideration for providing these Services, AOGS shall pay UTEK $120,000 in the form of unregistered shares of common stock (693,642 shares) upon the execution of this Strategic Alliance Agreement. 1/12^th of the shares (57,803) shall vest each month during the term of this Agreement. In lieu of payment of shares, AOGS shall have the option of paying UTEK $10,000 per month for the Services described in this Agreement.

If this Agreement is terminated any unvested shares will be returned to AOGS.

In consideration for the services to be provided herein, AOGS agrees that it will remit the agreed upon stock certificate or cash payment within five (5) days of both parties executing this Agreement. If no consideration is received in the timeline, UTEK has the unilateral option to terminate this Agreement.

AOGS agrees that UTEK shall be entitled to additional compensation as follows:

Technology Transfer: When a technology is shown to AOGS that AOGS wants to acquire, UTEK will seek to acquire the license to a technology through one of its subsidiaries. UTEK will then seek to provide a term sheet to AOGS outlining the consideration to be paid by AOGS for the acquisition of this technology. If AOGS executes the term sheet, agreeing to the terms set forth, UTEK shall transfer this subsidiary to AOGS in a stock for stock exchange under an “Agreement and Plan of Acquisition.” The consideration to be paid by AOGS to UTEK will be based upon a markup to the value of the license and other assets in the subsidiary as determined by UTEK and agreed to by both parties.

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V. TERM AND TERMINATION

The term of the Agreement will be for 12 months unless terminated sooner. This Agreement may be renewed upon mutual, written agreement of the parties. Either party may terminate this Agreement at any time with 30 days written notice.

VI. LEGAL COMPLIANCE

AOGS agrees that it will put in place, if it has not already done so, policies and procedures relating to and addressing, with the commercially reasonable intent to ensure compliance with, applicable securities laws, rules and regulations, including, but not limited to:

Disclosure requirements regarding the required disclosure of the nature and terms of UTEK’s relationship with, including, but not limited to press releases, publications on its web site, letters to investors and telephone or other personal communication with potential or current investors.

No press releases or any other forms of communication to third parties, which mention both UTEK and AOGS, shall be released without the prior written consent and approval of both UTEK and AOGS.

UTEK represents to AOGS that a) it has the experience as may be necessary to perform all the required, b) all Services will be performed in a professional manner, and c) all individuals it provides to perform the Services will be appropriately qualified and subject to appropriate agreements concerning the protection of trade secrets and confidential information of which such persons may have access to over the term of this Agreement.

Until termination of the engagement, AOGS will notify UTEK promptly of the occurrence of any event, which might materially affect the condition (financial or otherwise), or prospects of AOGS.

VII. CONFIDENTIAL DATA

UTEK shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of AOGS, obtained by UTEK as a result of its engagement hereunder, unless authorized, in writing by AOGS. UTEK represents and warrants that it has established appropriate internal procedures for protecting the trade secrets and confidential information of, AOGS including, without limitation, restrictions on disclosure of such information to employees and other persons who may be engaged in such information to employees and other persons who may be engaged in rendering services to any person, firm or entity which may be a competitor of.

AOGS shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of UTEK or confidential information revealed by UTEK obtained as a result of its engagement hereunder, unless authorized, in writing, by UTEK.

UTEK shall not be required in the performance of its duties to divulge to AOGS, or any officer, director, agent or employee of AOGS, any secret or confidential information, knowledge, or data concerning any other person, firm or entity (including, but not limited to, any such person, firm or entity which may be a competitor or potential competitor of) which UTEK may have or be able to obtain other than as a result of the relationship established by this Agreement.

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VIII. OTHER MATERIAL TERMS AND CONDITIONS

INDEMNITY.

UTEK shall indemnify, defend and hold harmless AOGS from and against any and all losses incurred by AOGS which arise out of or result from misrepresentation, breach of warranty or breach or non- fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by UTEK pursuant hereto or in connection with this Agreement.

AOGS shall indemnify, defend and hold harmless UTEK from and against any and all losses incurred by UTEK which arise out of or result from misrepresentation, breach of warranty or breach or non-fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by AOGS pursuant hereto or in connection with this Agreement.

PROVISIONS. Neither termination nor completion of the assignment shall affect the provisions of this Agreement, and the Indemnification Provisions that are incorporated herein, which shall remain operative and in full force and effect.

SOLICITATION. AOGS agrees that for a twenty four months (24) following the execution of this Agreement, AOGS shall not, without UTEK's prior written consent, directly or indirectly solicit for employment any present employee of UTEK, or request, induce or advise any employee of UTEK to leave the employ of UTEK. In turn, UTEK agrees that it will not directly or indirectly solicit any present employee of AOGS.

ADDITIONAL INSTRUMENTS. Each of the parties shall from time to time, at the request of others, execute, acknowledge and deliver to the other party any and all further instruments that may be reasonably required to give full effect and force to the provisions of this Agreement.

ENTIRE AGREEMENT. Each of the parties hereby covenants that this Agreement, is intended to and does contain and embody herein all of the understandings and agreements, both written or oral, of the parties hereby with respect to the subject matter of this Agreement, and that there exists no oral agreement or understanding expressed or implied liability, whereby the absolute, final and unconditional character and nature of this Agreement shall be in any way invalidated, empowered or affected. There are no representations, warranties or covenants other than those set forth herein.

ASSIGNMENTS. The benefits of the Agreement shall inure to the respective successors and assignees of the parties and assigns and representatives, and the obligations and liabilities assumed in this Agreement by the parties hereto shall be binding upon their respective successors and assigns; provided that the rights and obligations of UTEK under this Agreement may not be assigned or delegated without the prior written consent of AOGS and any such purported assignment shall be null and void. Notwithstanding the foregoing, UTEK may assign this Agreement or any portion of its Compensation as outlined herein to its subsidiaries in its sole discretion.

ORIGINALS. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original and constitute one and the same agreement.

NOTICES. All notices that are required to be or may be sent pursuant to the provision of this Agreement shall be sent by certified mail, return receipt requested, or by overnight package delivery service to each of the parties at the addresses appearing herein, and shall count from the date of mailing or the validated air bill.

MODIFICATION AND WAVIER. A modification or waiver of any of the provisions of this Agreement shall be effective only if made in writing and executed with the same formality as this Agreement. The failure of any party to insist upon strict performance of any of the provisions of this Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature or of any other nature.

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INJUNCTIVE RELIEF. Solely by virtue of their respective execution of this Agreement and in consideration for the mutual covenants of each other, AOGS and UTEK hereby agree, consent and acknowledge that, in the event of a breach of any material term of this Agreement, the non-breaching party will be without adequate remedy-at-law and shall therefore, be entitled to immediately redress any material breach of this Agreement by temporary or permanent injunctive or mandatory relief obtained in an action or proceeding instituted in any court of competent jurisdiction without the necessity of proving damages and without prejudice to any other remedies which the non-breaching party may have at law or in equity.

ATTORNEY’S FEES. If any arbitration, litigation, action, suit, or other proceeding is instituted to remedy, prevent or obtain relief from a breach of this Agreement, in relation to a breach of this Agreement or pertaining to a declaration of rights under this Agreement, the prevailing party will recover all such party’s attorneys’ fees incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions there from. As used in this Agreement, attorneys’ fees will be deemed to be the full and actual cost of any legal services actually performed in connection with the matters involved, including those related to any appeal to the enforcement of any judgment calculated on the basis of the usual fee charged by attorneys performing such services.

INVESTMENT COMPANY STATUS. AOGS represents that it is not an investment company, registered or unregistered.

APPROVED AND AGREED:


UTEK Corporation		COMPANY NAME

By:	/s/ Clifford M. Gross	By:	/s/ Kent Rodriguez
	Clifford M. Gross, Ph.D.		Kent Rodriguez
	Chief Executive Officer		Chief Executive Officer

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EX-7.2 3 dex72.htm AGREEMENT AND PLAN OF ACQUISITION Agreement and Plan of Acquisition

EXHIBIT 7.2

ACQUISITION OF ULTRASONIC MITIGATION TECHNOLOGIES, INC.

AVALON OIL AND GAS, INC.

AGREEMENT AND PLAN OF ACQUISITION

This Agreement and Plan of Acquisition (Agreement) is entered into by and between Ultrasonic Mitigation Technologies, Inc., a Florida corporation, (UMTI), UTEK CORPORATION, a Delaware corporation, (UTEK), and Avalon Oil and Gas, Inc., a Nevada corporation, (AOGS)

WHEREAS, UTEK owns 100% of the issued and outstanding shares of common stock of UMTI (UMTI Shares); and

WHEREAS, before the Closing Date, UMTI 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 UMTI will be acquired by AOGS in a stock-for-stock exchange (Acquisition) in accordance with the respective corporation laws of their state, upon consummation of which all UMTI Shares will be owned by AOGS, and all issued and outstanding UMTI Shares will be exchanged for common stock of AOGS 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 UMTI Shares shall be acquired from UTEK by AOGS in accordance with the respective corporation laws of their state and the provisions of this Agreement and the separate corporate existence of UMTI, as a wholly-owned subsidiary of AOGS, 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.

Page 1 of 19

1.02 Exchange of Stock. At the Effective Date, by virtue of the Acquisition, all of the UMTI Shares that are issued and outstanding at the Effective Date shall be exchanged for 16,250,000 unregistered shares of common stock of AOGS


Shareholder		Number of Common AOGS Shares
UTEK Corporation		15,437,500
Aware Capital Consultants		812,500

1.03 Effect of Acquisition.

(a) Rights in UMTI Cease. At and after the Effective Date, the holder of each certificate of common stock of UMTI shall cease to have any rights as a shareholder of UMTI.

(b) Closure of UMTI Shares Records. From and after the Effective Date, the stock transfer books of UMTI shall be closed, and there shall be no further registration of stock transfers on the records of UMTI.

1.04 Closing. Subject to the terms and conditions of this Agreement, the Closing of the Acquisition shall take place , 2006.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

2.01 Representations and Warranties of UTEK and UMTI. UTEK and UMTI represent and warrant to AOGS that the facts set forth below are true and correct:

(a) Organization. UMTI 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 UMTI have been provided to AOGS 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 UMTI 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 UMTI 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 UMTI consists of 1,000,000 shares of common stock with a par value $.01 per share. At the date of this Agreement, 1,000 UMTI Shares are issued and outstanding as follows:

All issued and outstanding UMTI 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

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person or any applicable laws. UMTI is not authorized to issue any preferred stock. All dividends on UMTI 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 UMTI to issue any UMTI Shares or securities convertible into UMTI Shares to anyone for any reason whatsoever. None of the UMTI 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 UMTI or UTEK is a party and will not create a default under any such obligation or under any agreement to which UMTI or UTEK is a party. This Agreement constitutes a legal, valid and binding obligation of UMTI, 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 UMTI 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 UMTI.

(f) No Conflicting Agreements. Neither the execution and delivery of this Agreement nor the fulfillment of or compliance by UMTI 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, UMTI or UTEK’s articles of incorporation or bylaws, the Technology, the License Agreement, or any agreement, contract, instrument, order, judgment or decree to which UMTI or UTEK is a party or by which UMTI 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 UMTI and UTEK or performance of the obligations of UMTI and UTEK hereunder or under any other agreement to which UMTI 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 UMTI or its assets or business.

(h) Title to Assets. UMTI 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 UMTI. UMTI 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.

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(i) Intellectual Property

(1) The University of Wyoming (UWYO) 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 UWYO and UMTI 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, AOGS acknowledges and understands that UMTI 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, UMTI 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 UMTI. UMTI 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 UMTI, 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 UMTI’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. UMTI 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 UMTI except as specifically set forth in the financial statements and the other attached schedules and exhibits. There is no information known to UMTI or UTEK that would prevent the financial statements of UMTI 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 UMTI 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 UMTI 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 UMTI by any taxing authority, have been properly paid, except to the extent reflected on UMTI’s financial statements, where UMTI 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. UMTI has not received any notice of assessment or proposed assessment in connection with any tax returns, nor is UMTI 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. UMTI 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. UMTI 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 UMTI. UMTI is not and has never been a party to any tax sharing agreements with any other person or entity.

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(m) Absence of Certain Changes or Events. From the date of the full execution of the Term Sheet until the Closing Date, UMTI has not, and without the written consent of AOGS, 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 UMTI;

(4) Made any commitments or agreements for capital expenditures or otherwise;

(5) Entered into any transaction or made any commitment not disclosed to AOGS;

(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 UMTI; or

(8) Taken any action, which could reasonably be foreseen to make any of the representations or warranties made by UMTI 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 UMTI 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 AOGS 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 UMTI in accordance with their respective terms and will continue to be valid and enforceable following the Acquisition. UMTI 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 UMTI; and

(2) There are no outstanding operating agreements, lease agreements or similar agreements by which UMTI is bound; and

(3) The complete final drafts of the License Agreement have been provided to AOGS; 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

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(5) There are no outstanding agreements or commitments to sell, lease or otherwise dispose of any of UMTI’s property; and

(6) There are no breaches of any agreement to which UMTI is a party.

(o) Compliance with Laws. UMTI 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 UMTI or UTEK, threatened against UMTI, the Technology, or License Agreement, affecting its assets or business (financial or otherwise), and neither UMTI 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 UMTI 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 UMTI or the transactions contemplated.

(q) Employees. UMTI has no and never had any employees. UMTI is not a party to or bound by any employment agreement or any collective bargaining agreement with respect to any employees. UMTI is not in violation of any law, regulation relating to employment of employees.

(r) Adverse Effect. Neither UMTI nor UTEK has any knowledge of any or threatened existing occurrence, action or development that could cause a material adverse effect on UMTI or its business, assets or condition (financial or otherwise) or prospects.

(s) Employee Benefit Plans. UMTI 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 UMTI 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 UMTI 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 UMTI 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.

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2.02 Representations and Warranties of AOGS. AOGS represents and warrants to UTEK and UMTI that the facts set forth are true and correct.

(a) Organization. AOGS is a corporation duly organized, validly existing and in good standing under the laws of Nevada, 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 AOGS; 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 AOGS consists of 1,000,000,000 (One Billion) shares of common stock with a par value $0.001 per share (AOGS Common Shares) and on the Effective Date of the Acquisition 188,298,543 (One Hundred, Eighty-Eight Million, Two Hundred, Ninety-Eight Thousand, Five Hundred, Forty-Three) AOGS Shares (which will include the 16,250,000 (Sixteen Million, Two Hundred, Fifty Thousand) AOGS Common Shares issued at the closing of the Acquisition) will be issued and outstanding. All issued and outstanding AOGS 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 AOGS is a party and will not create a default hereunder, and this Agreement constitutes a legal, valid and binding obligation of AOGS, 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 AOGS.

(f) No Conflicting Agreements. Neither the execution and delivery of this Agreement nor the fulfillment of or compliance by AOGS 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 UMTI’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

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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 AOGS or its assets or business.

(h) Financial Statements. The unaudited financial statements of AOGS 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. AOGS 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 AOGS except as specifically set forth in the AOGS financial statements.

(i) Full Disclosure. All representations or warranties of AOGS 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. AOGS 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.

(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 AOGS, threatened against AOGS materially affecting its assets or business (financial or otherwise), and AOGS 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. AOGS has no knowledge of any existing or threatened occurrence, action or development that could cause a material adverse affect on AOGS or its business, assets or condition (financial or otherwise) or prospects.

(l) Development. AOGS 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.

(m) Investment Company Status. AOGS is not an investment company, either registered or unregistered.

2.03 Investment Representations of UTEK. UTEK represents and warrants to AOGS that:

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diligence concerning AOGS 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 AOGS concerning AOGS Shares and the business and financial condition of and prospects for AOGS, and the officers and directors of AOGS 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 AOGS Shares will not be registered and UTEK will not be permitted to sell or otherwise transfer the AOGS Shares in any transaction in contravention of the following legend, which will be imprinted in substantially the following form on the stock certificate representing AOGS 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. During the first two years following the purchase of the AOGS Shares pursuant to this Agreement, the AOGS Shares may be transferred pursuant to an applicable exemption from the registration requirements of the Securities Act, including but not limited to Rule 144. Pursuant to and subject to the restrictions of Rule 144(k), at any time after the second full year following this Agreement, AOGS agrees to and shall direct its transfer agent to remove the above legend upon the issuance of a legal opinion from AOGS or UTEK’s counsel that the above legend can be removed from the AOGS Shares. UTEK agrees to and promptly shall provide any information requested by AOGS or its counsel. AOGS shall give direction to its transfer agent as necessary for such removal of the legend, or for the approval of the sale of such restricted shares under Rule 144 or other available exemption from registration. A sample letter from AOGS instructing its transfer agent to reissue the share certificates without the restrictive legend, provided that the conditions of Rule 144(k) are met, is attached as Exhibit D.

(d) If at any time AOGS fails to give the appropriate opinion to its transfer agent within fifteen business (15) days after a written request by UTEK, AOGS shall be liable to UTEK for an additional fee of ten percent (10%) of the current value of the shares subject to the request from UTEK, as well as any and all attorneys fees and costs that UTEK may incur as a result of AOGS failing to comply with this request.

(e) Stock Transfer Restrictions. UTEK will have “piggyback” registration rights for all of the common shares it will receive in this transaction.

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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. 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 UMTI Shares or the right of UMTI 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 UMTI, the License Agreement are valid and in full force and effect without any default in this Agreement.

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4.07. AOGS shall have received, at or within 5 days of Closing Date, each of the following:

(a) the stock certificates representing the UMTI Shares, duly endorsed (or accompanied by duly executed stock powers) by UTEK for cancellation;

(b) all documentation relating to UMTI’s business, all in a form and substance satisfactory to AOGS;

(d) copies of the general ledgers and books of account of UMTI, and all federal, state and local income, franchise, property and other tax returns filed by UMTI since the inception of UMTI;

(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 UMTI in Florida;

(f) the original corporate minute books of UMTI, including the articles of incorporation and bylaws of UMTI, and all other documents filed in this Agreement;

(g) all consents, assignments or related documents of conveyance to give AOGS 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 AOGS and UMTI, and

(i) such other documents, instruments or certificates as AOGS, or their counsel may reasonably request.

4.08. AOGS shall have completed due diligence investigation of UMTI to AOGS’s satisfaction in their sole discretion.

4.09. AOGS shall receive the resignation effective the Closing Date of each director and officer of UMTI.

ARTICLE 5

INDEMNIFICATION AND LIABILITY LIMITATION

5.01. Survival of Representations and Warranties.

(a) The representations and warranties made by UTEK and UMTI 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 AOGS 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.

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5.02 Limitations on Liability. AOGS agrees that UTEK shall not be liable under this agreement to AOGS 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. AOGS 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. AOGS 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. AOGS 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 sue 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

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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 AOGS, 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.

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(Signatures on the following page)

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AVALON OIL AND GAS, INC.		ULTRASONIC MITIGATION TECHNOLOGIES, INC.

By:	/s/ Kent Rodriguez	By:	/s/ Joel Edelson
	Kent Rodriguez,	Joel Edelson
	Chief Executive Officer	President

	Address:	Address:
	7000 Flour Exchange Building	2109 East Palm Avenue
	310 Fourth Avenue South	Tampa, Florida 33605
	Minneapolis, MN 55415

	Date: July 7, 2006	Date: July 12, 2006


		UTEK CORPORATION.

		By:		/s/ Clifford M. Gross, Ph.
		Clifford M. Gross, Ph.D.
		Chief Executive Officer

		Address:
		2109 East Palm Avenue
		Tampa, Florida 33605

Date: July 12, 2006


UTEK CORPORATION

By:		/s/ Doug Schaedler
		Doug Schaedler
		Chief Compliance Officer

		Address:
		2109 East Palm Avenue
		Tampa, Florida 33605

Date: July 12, 2006

Page 15 of 19

EXHIBIT A

Outstanding Agreements

from the University of Wyoming

1) License Agreement

Page 16 of 19

EXHIBIT B

ULTRASONIC MITIGATION TECHNOLOGIES, INC.

Financial Statements as of

Page 17 of 19

EXHIBIT C

AVALON OIL AND GAS, INC.

Unaudited Financial Statements

for the quarter ended September, 2005

Page 18 of 19

EXHIBIT D

AVALON OIL AND GAS, INC.

Stock Transfer Letter

, 2006

Corporate Stock Transfer

3200 Cherry Creek Drive South

Suite 430

Denver, CO 80209

Dear Sir or Madam:

Re:

Transfer of Avalon Oil and Gas, Inc. Stock to UTEK Corporation

This letter does hereby authorize Corporate Stock Transfer, upon request by UTEK Corporation or its authorized agent, to issue to UTEK Corporation a new stock certificate representing 15,437,500 shares in Avalon Oil and Gas, Inc. These new shares issued shall be issued without a restricted transfer legend.

The authorization for this letter shall become effective one year from the date of this letter.

Signed,

Kent Rodriquez

Chief Executive Officer

Page 19 of 19

EX-7.3 4 dex73.htm AGREEMENT AND PLAN OF ACQUISITION Agreement and Plan of Acquisition

EXHIBIT 7.3

ACQUISITION OF INTELLI-WELL TECHNOLOGIES, INC.

AVALON OIL AND GAS, INC.

AGREEMENT AND PLAN OF ACQUISITION

This Agreement and Plan of Acquisition (Agreement) is entered into by and between Intelli-Well Technologies, Inc., a Florida corporation, (IWTI), UTEK CORPORATION, a Delaware corporation, (UTEK), and Avalon Oil and Gas, Inc., a Nevada corporation, (AOGS)

WHEREAS, UTEK owns 100% of the issued and outstanding shares of common stock of IWTI (IWTI Shares); and

WHEREAS, before the Closing Date, IWTI will acquire the licenses for the fields of use as described in the License Agreements as described and which are attached hereto as part of Exhibit A and made a part of this Agreement (License Agreements) and the rights to develop and market a proprietary technology for the fields of uses specified in the License Agreements (Technology).

WHEREAS, the parties desire to provide for the terms and conditions upon which IWTI will be acquired by AOGS in a stock-for-stock exchange (Acquisition) in accordance with the respective corporation laws of their state, upon consummation of which all IWTI Shares will be owned by AOGS, and all issued and outstanding IWTI Shares will be exchanged for common stock of AOGS 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).

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 IWTI Shares shall be acquired from UTEK by AOGS in accordance with the respective corporation laws of their state and the provisions of this Agreement and the separate corporate existence of IWTI, as a wholly-owned subsidiary of AOGS, 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.

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1.02 Exchange of Stock. At the Effective Date, by virtue of the Acquisition, all of the IWTI Shares that are issued and outstanding at the Effective Date shall be exchanged for 20,000,000 unregistered shares of common stock of AOGS (the number of shares will be adjusted the day of closing to a value of $1,200,000 based of the then best bid price)


To:		Number of Common AOGS Shares
UTEK Corporation		19,000,000
Aware Capital Consultants		1,000,000

1.03 Effect of Acquisition.

(a) Rights in IWTI Cease. At and after the Effective Date, the holder of each certificate of common stock of IWTI shall cease to have any rights as a shareholder of IWTI.

(b) Closure of IWTI Shares Records. From and after the Effective Date, the stock transfer books of IWTI shall be closed, and there shall be no further registration of stock transfers on the records of IWTI.

1.04 Closing. Subject to the terms and conditions of this Agreement, the Closing of the Acquisition shall take place October , 2006.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

2.01 Representations and Warranties of UTEK and IWTI. UTEK and IWTI represent and warrant to AOGS that the facts set forth below are true and correct:

(a) Organization. IWTI 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 IWTI have been provided to AOGS 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 IWTI 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 IWTI 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 IWTI consists of 1,000,000 shares of common stock with a par value $.01 per share. At the date of this Agreement, 1,000 IWTI Shares are issued and outstanding as follows:

All issued and outstanding IWTI 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. IWTI is not authorized to issue any preferred stock. All dividends on IWTI

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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 IWTI to issue any IWTI Shares or securities convertible into IWTI Shares to anyone for any reason whatsoever. None of the IWTI 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 IWTI or UTEK is a party and will not create a default under any such obligation or under any agreement to which IWTI or UTEK is a party. This Agreement constitutes a legal, valid and binding obligation of IWTI, 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 IWTI 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 IWTI.

(f) No Conflicting Agreements. Neither the execution and delivery of this Agreement nor the fulfillment of or compliance by IWTI 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, IWTI or UTEK’s articles of incorporation or bylaws, the Technology, the License Agreement, or any agreement, contract, instrument, order, judgment or decree to which IWTI or UTEK is a party or by which IWTI 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 IWTI and UTEK or performance of the obligations of IWTI and UTEK hereunder or under any other agreement to which IWTI 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 IWTI or its assets or business.

(h) Title to Assets. IWTI 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 IWTI. IWTI 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) The Regents of the University of California (RUC) 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.

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(2) The License Agreement between RUC and IWTI 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, AOGS acknowledges and understands that IWTI 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, IWTI 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 IWTI. IWTI 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 IWTI, 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 IWTI’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. IWTI 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 IWTI except as specifically set forth in the financial statements and the other attached schedules and exhibits. There is no information known to IWTI or UTEK that would prevent the financial statements of IWTI 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 IWTI 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 IWTI 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 IWTI by any taxing authority, have been properly paid, except to the extent reflected on IWTI’s financial statements, where IWTI 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. IWTI has not received any notice of assessment or proposed assessment in connection with any tax returns, nor is IWTI 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. IWTI 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. IWTI 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 IWTI. IWTI is not and has never been a party to any tax sharing agreements with any other person or entity.

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(m) Absence of Certain Changes or Events. From the date of the full execution of the Term Sheet until the Closing Date, IWTI has not, and without the written consent of AOGS, 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;

(3) Suffered any damage, destruction or loss whether or not in control of IWTI;

(4) Made any commitments or agreements for capital expenditures or otherwise;

(5) Entered into any transaction or made any commitment not disclosed to AOGS;

(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 IWTI; or

(8) Taken any action, which could reasonably be foreseen to make any of the representations or warranties made by IWTI 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 IWTI 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 AOGS 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 IWTI in accordance with their respective terms and will continue to be valid and enforceable following the Acquisition. IWTI is not in default of any of the Contracts. In addition:

(2) There are no outstanding operating agreements, lease agreements or similar agreements by which IWTI is bound; and

(3) The complete final drafts of the License Agreement have been provided to AOGS; 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

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(5) There are no outstanding agreements or commitments to sell, lease or otherwise dispose of any of IWTI’s property; and

(6) There are no breaches of any agreement to which IWTI is a party.

(o) Compliance with Laws. IWTI 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 IWTI or UTEK, threatened against IWTI, the Technology, or License Agreement, affecting its assets or business (financial or otherwise), and neither IWTI 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 IWTI 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 IWTI or the transactions contemplated.

(q) Employees. IWTI has no and never had any employees. IWTI is not a party to or bound by any employment agreement or any collective bargaining agreement with respect to any employees. IWTI is not in violation of any law, regulation relating to employment of employees.

(r) Adverse Effect. Neither IWTI nor UTEK has any knowledge of any or threatened existing occurrence, action or development that could cause a material adverse effect on IWTI or its business, assets or condition (financial or otherwise) or prospects.

(s) Employee Benefit Plans. IWTI 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 IWTI 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 IWTI 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 IWTI 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.

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2.02 Representations and Warranties of AOGS. AOGS represents and warrants to UTEK and IWTI that the facts set forth are true and correct.

(a) Organization. AOGS 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 AOGS; 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 AOGS consists of 1,000,000,000 (One Billion) shares of common stock with a par value $0.001 per share (AOGS Common Shares), of which 255,875,000 (Two Hundred Fifty-Five Million, Eight Hundred, Seventy-Five Thousand) AOGS Common Shares (which will include the 20,000,000 (Twenty Million) AOGS Common Shares issued at the closing of the Acquisition) will be issued and outstanding on the Effective Date of the Acquisition, and 1,000,000 (One Million) shares of preferred stock with a par value $.10 per share, of which 100 (One Hundred) shares of preferred stock will be issued and outstanding on the Effective Date of the Acquisition. All issued and outstanding AOGS Common 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 16,131,142 common shares of AOGS, and will be acquiring an additional 19,000,000 unregistered shares of AOGS totaling 35,131,142 unregistered shares; and based on a total of 255,875,000 issued shares this total will represent a 13.7% ownership position in AOGS Common Shares. For a period of twelve months from the Effective Date of this Agreement, the aggregate number of AOGS Common Shares that UTEK has received shall be adjusted proportionately by the Board of Directors of AOGS for any increase in the number of outstanding shares of stock of AOGS resulting from the issuance of any additional equity securities by AOGS to any of its current list of management and directors as of the Effective Date; provided, however, that the anti-dilution rights set forth in this paragraph (d) shall not apply to any issuance of additional equity securities by AOGS to any of its current list of management and directors pursuant to the conversion of presently issued preferred stock.

(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 AOGS is a party and will not create a default hereunder, and this Agreement constitutes a legal, valid and binding obligation of AOGS, 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.

(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 AOGS.

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(g) No Conflicting Agreements. Neither the execution and delivery of this Agreement nor the fulfillment of or compliance by AOGS 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 IWTI’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 AOGS or its assets or business.

(i) Financial Statements. The unaudited financial statements of AOGS 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. AOGS 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 AOGS except as specifically set forth in the AOGS financial statements.

(j) Full Disclosure. All representations or warranties of AOGS 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. AOGS 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 AOGS, threatened against AOGS materially affecting its assets or business (financial or otherwise), and AOGS 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. AOGS has no knowledge of any existing or threatened occurrence, action or development that could cause a material adverse affect on AOGS or its business, assets or condition (financial or otherwise) or prospects.

(m) Development. AOGS 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. AOGS further agrees that it will provide UTEK with copies of progress reports made to the university as required under the subject license agreement on a quarterly basis.

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(n) Investment Company Status AOGS is not an investment company, either registered or unregistered.

2.03 Investment Representations of UTEK. UTEK represents and warrants to AOGS 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 AOGS Shares pursuant to the Acquisition. It is able to bear the economic risk of the investment in AOGS Shares, including the risk of a total loss of the investment in AOGS Shares. The acquisition of AOGS 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 AOGS is true and correct. It has conducted all investigations and due diligence concerning AOGS 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 AOGS concerning AOGS Shares and the business and financial condition of and prospects for AOGS, and the officers and directors of AOGS 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.

(c) Legend. During the first two years following the purchase of the AOGS Shares pursuant to this Agreement, the AOGS Shares may be transferred pursuant to an applicable exemption from the registration requirements of the Securities Act, including but not limited to Rule 144. Pursuant to and subject to the restrictions of Rule 144(k), at any time after the second full year following this Agreement, AOGS agrees to and shall direct its transfer agent to remove the above legend upon the issuance of a legal opinion from AOGS’s counsel that the above legend can be removed from the AOGS Shares. UTEK agrees to and promptly shall provide any information requested by AOGS or its counsel. AOGS shall give direction to its transfer agent as necessary for such removal of the legend, or for the approval of the sale of such restricted shares under Rule 144 or other available exemption from registration. A sample letter from AOGS instructing its transfer agent to reissue the share certificates without the restrictive legend, provided that the conditions of Rule 144(k) are met, is attached as Exhibit D.

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(e) Stock Transfer Restrictions. UTEK will have “piggyback” registration rights for all of the common shares it will receive in this transaction.

ARTICLE 3

TRANSACTIONS PRIOR TO CLOSING

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

(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

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.

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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 IWTI Shares or the right of IWTI 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 IWTI, the License Agreement are valid and in full force and effect without any default in this Agreement.

4.07. AOGS shall have received, at or within 5 days of Closing Date, each of the following:

(a) the stock certificates representing the IWTI Shares, duly endorsed (or accompanied by duly executed stock powers) by UTEK for cancellation;

(b) all documentation relating to IWTI’s business, all in a form and substance satisfactory to AOGS;

(d) copies of the general ledgers and books of account of IWTI, and all federal, state and local income, franchise, property and other tax returns filed by IWTI since the inception of IWTI;

(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 IWTI in Florida;

(f) the original corporate minute books of IWTI, including the articles of incorporation and bylaws of IWTI, and all other documents filed in this Agreement;

(g) all consents, assignments or related documents of conveyance to give AOGS 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 AOGS and IWTI, and

(i) such other documents, instruments or certificates as AOGS, or their counsel may reasonably request.

4.08. AOGS shall have completed due diligence investigation of IWTI to AOGS’s satisfaction in their sole discretion.

4.09. AOGS shall receive the resignation effective the Closing Date of each director and officer of IWTI.

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ARTICLE 5

INDEMNIFICATION AND LIABILITY LIMITATION

5.01. Survival of Representations and Warranties.

(a) The representations and warranties made by UTEK and IWTI 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.

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ARTICLE 6

REMEDIES

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 AOGS, one by UTEK and a third by the two selected arbitrators. The third arbitrator shall be the chairman of the panel.

ARTICLE 8

MISCELLANEOUS

8.02. 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.

Page 13 of 19

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.

(Signatures on the following page)

Page 14 of 19


AVALON OIL AND GAS, INC.		INTELLI-WELL TECHNOLOGIES, INC.

By:	/s/ Kent Rodriguez	By:	/s/ Jennifer Willis
	Kent Rodriguez,		Jennifer Willis
	Chief Executive Officer		President

	Address:		Address:
	7808 Creekridge Circle, Suite 105		2109 East Palm Avenue
	Minneapolis, Minnesota 55439		Tampa, Florida 33605

	Date: October 20, 2006		Date: November 8, 2006


UTEK CORPORATION

By:		Clifford M. Gross, Ph.D.
		Clifford M. Gross, Ph.D.
		Chief Executive Officer

		Address:
		2109 East Palm Avenue
		Tampa, Florida 33605

Date: November 8, 2006


UTEK CORPORATION

By		Doug Schaedler
		Doug Schaedler
		Chief Compliance Officer

		Address:
		2109 East Palm Avenue
		Tampa, Florida 33605

Date: November 8, 2006

Page 15 of 19

EXHIBIT A

Outstanding Agreements

1) License Agreement with the Regents of the University of California

Page 16 of 19

EXHIBIT B

INTELLI-WELL TECHNOLOGIES, INC.

Financial Statements as of

Page 17 of 19

EXHIBIT C

AVALON OIL AND GAS, INC.

Unaudited Financial Statements

for Avalon Oil and Gas, Inc.

for the QUARTER ended June 30, 2006

Page 18 of 19

EXHIBIT D

AVALON OIL AND GAS, INC.

Stock Transfer Letter

October , 2006

Corporate Stock Transfer

3200 Cherry Creek Drive South, Suite 430

Denver, CO 80209

Dear Sir or Madam:

Re:	Transfer of Avalon Oil and Gas, Inc. Stock to UTEK Corporation (“UTEK”)

For the first two years following the date of this letter, UTEK’s shares of Avalon Oil and Gas, Inc. Stock (the “Shares”) may only be transferred pursuant to registration under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an applicable exemption from the registration requirements of the Securities Act, including, but not limited to, Rule 144 under the Securities Act. If Shares are transferred pursuant to an applicable exemption from the registration requirements of the Securities Act within the first two years after the date of this letter, Corporate Stock Transfer shall issue a new stock certificate to UTEK representing the remaining Shares, and such certificate shall be issued with a restricted transfer legend.

Beginning on the date two years after the date of this letter, Shares may be transferred pursuant to registration under the Securities Act or pursuant to Rule 144(k) under the Securities Act.

Commencing on a date two years after the date of this letter, if Shares are registered under the Securities Act or are eligible for transfer pursuant to Rule 144(k) under the Securities Act, Corporate Stock Transfer shall issue a new stock certificate to UTEK representing the Shares without a restricted transfer legend.

Signed,

Kent Rodriguez

Chief Executive Officer

Page 19 of 19

EX-7.4 5 dex74.htm AGREEMENT AND PLAN OF ACQUISITION Agreement and Plan of Acquisition

EXHIBIT 7.4

ACQUISITION OF LEAK LOCATION TECHNOLOGIES, INC.

AVALON OIL AND GAS, INC.

AGREEMENT AND PLAN OF ACQUISITION

This Agreement and Plan of Acquisition (Agreement) is entered into by and between Leak Location Technologies, Inc., a Florida corporation, (LLTI), UTEK CORPORATION, a Delaware corporation, (UTEK), and Avalon Oil and Gas, Inc., a Nevada corporation, (AOGS)

WHEREAS, UTEK owns 100% of the issued and outstanding shares of common stock of LLTI (LLTI Shares); and

WHEREAS, before the Closing Date, LLTI will acquire the licenses for the fields of use as described in the License Agreements as described and which are attached hereto as part of Exhibit A and made a part of this Agreement (License Agreements) and the rights to develop and market a proprietary technology for the fields of uses specified in the License Agreements (Technology).

WHEREAS, the parties desire to provide for the terms and conditions upon which LLTI will be acquired by AOGS in a stock-for-stock exchange (Acquisition) in accordance with the respective corporation laws of their state, upon consummation of which all LLTI Shares will be owned by AOGS, and all issued and outstanding LLTI Shares will be exchanged for common stock of AOGS 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).

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 LLTI Shares shall be acquired from UTEK by AOGS in accordance with the respective corporation laws of their state and the provisions of this Agreement and the separate corporate existence of LLTI, as a wholly-owned subsidiary of AOGS, 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 LLTI Shares that are issued and outstanding at the Effective Date shall be exchanged for 36,710,526 unregistered shares of common stock of AOGS


To:		Number of Common AOGS Shares
UTEK Corporation		36,710,526

1.03 Effect of Acquisition.

(a) Rights in LLTI Cease. At and after the Effective Date, the holder of each certificate of common stock of LLTI shall cease to have any rights as a shareholder of LLTI.

(b) Closure of LLTI Shares Records. From and after the Effective Date, the stock transfer books of LLTI shall be closed, and there shall be no further registration of stock transfers on the records of LLTI.

1.04 Closing. Subject to the terms and conditions of this Agreement, the Closing of the Acquisition shall take place March , 2007.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

2.01 Representations and Warranties of UTEK and LLTI. UTEK and LLTI represent and warrant to AOGS that the facts set forth below are true and correct:

(a) Organization. LLTI 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 LLTI have been provided to AOGS 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 LLTI 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 LLTI 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 LLTI consists of 1,000,000 shares of common stock with a par value $.01 per share. At the date of this Agreement, 1,000 LLTI Shares are issued and outstanding as follows:

All issued and outstanding LLTI 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. LLTI is not authorized to issue any preferred stock. All dividends on LLTI 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 LLTI to issue any LLTI Shares or securities convertible into LLTI Shares to anyone for any reason whatsoever. None of the LLTI

Page 2 of 18

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 LLTI or UTEK is a party and will not create a default under any such obligation or under any agreement to which LLTI or UTEK is a party. This Agreement constitutes a legal, valid and binding obligation of LLTI, 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 LLTI 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 LLTI.

(f) No Conflicting Agreements. Neither the execution and delivery of this Agreement nor the fulfillment of or compliance by LLTI 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, LLTI or UTEK’s articles of incorporation or bylaws, the Technology, the License Agreement, or any agreement, contract, instrument, order, judgment or decree to which LLTI or UTEK is a party or by which LLTI 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 LLTI and UTEK or performance of the obligations of LLTI and UTEK hereunder or under any other agreement to which LLTI 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 LLTI or its assets or business.

(h) Title to Assets. LLTI 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 LLTI. LLTI 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) Rensselaer Polytechnic Institute (RPI) owns the Technology and has all right, power, authority and ownership and entitlement to file, prosecute and maintain in effect the Patent with respect to the Inventions listed in Exhibit A hereto.

(2) The License Agreement between RPI and LLTI covering the Inventions is legal, valid, binding and will be enforceable in accordance with its terms as contained in Exhibit A.

Page 3 of 18

(3) Except as otherwise set forth in this Agreement, AOGS acknowledges and understands that LLTI 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, LLTI 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 LLTI. LLTI 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 LLTI, 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 LLTI’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. LLTI 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 LLTI except as specifically set forth in the financial statements and the other attached schedules and exhibits. There is no information known to LLTI or UTEK that would prevent the financial statements of LLTI 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 LLTI 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 LLTI 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 LLTI by any taxing authority, have been properly paid, except to the extent reflected on LLTI’s financial statements, where LLTI 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. LLTI has not received any notice of assessment or proposed assessment in connection with any tax returns, nor is LLTI 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. LLTI 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. LLTI 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 LLTI. LLTI 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, LLTI has not, and without the written consent of AOGS, 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;

Page 4 of 18

(3) Suffered any damage, destruction or loss whether or not in control of LLTI;

(4) Made any commitments or agreements for capital expenditures or otherwise;

(5) Entered into any transaction or made any commitment not disclosed to AOGS;

(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 LLTI; or

(8) Taken any action, which could reasonably be foreseen to make any of the representations or warranties made by LLTI 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 LLTI 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 AOGS 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 LLTI in accordance with their respective terms and will continue to be valid and enforceable following the Acquisition. LLTI is not in default of any of the Contracts. In addition:

(2) There are no outstanding operating agreements, lease agreements or similar agreements by which LLTI is bound; and

(3) The complete final drafts of the License Agreement have been provided to AOGS; 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 LLTI’s property; and

(6) There are no breaches of any agreement to which LLTI is a party.

(o) Compliance with Laws. LLTI 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.

Page 5 of 18

(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 LLTI or UTEK, threatened against LLTI, the Technology, or License Agreement, affecting its assets or business (financial or otherwise), and neither LLTI 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 LLTI 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 LLTI or the transactions contemplated.

(q) Employees. LLTI has no and never had any employees. LLTI is not a party to or bound by any employment agreement or any collective bargaining agreement with respect to any employees. LLTI is not in violation of any law, regulation relating to employment of employees.

(r) Adverse Effect. Neither LLTI nor UTEK has any knowledge of any or threatened existing occurrence, action or development that could cause a material adverse effect on LLTI or its business, assets or condition (financial or otherwise) or prospects.

(s) Employee Benefit Plans. LLTI 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 LLTI 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) Full Disclosure. All representations or warranties of UTEK and LLTI 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 AOGS. AOGS represents and warrants to UTEK and LLTI that the facts set forth are true and correct.

(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 AOGS; 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.

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(c) Capitalization. The authorized capital of AOGS consists of 1,000,000,000 (One Billion) shares of common stock with a par value $0.001 per share (AOGS Common Shares), of which 329,280,834 (Three Hundred Twenty-Nine Million, Two Hundred Eighty Thousand, Eight Hundred Thirty-Four) AOGS Common Shares (which will include the 36,710,526 (Thirty-Six Million, Seven Hundred Ten Thousand, Five Hundred Twenty-Six) AOGS Common Shares issued at the closing of the Acquisition) will be issued and outstanding on the Effective Date of the Acquisition. All issued and outstanding AOGS Common 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 35,131,142 common shares of AOGS, and will be acquiring an additional 36,710,526 unregistered shares of AOGS totaling 71,841,668 unregistered shares; and based on a total of 329,280,834 issued shares this total will represent a 21.8% ownership position in AOGS Common Shares. For a period of twelve months from the Effective Date of this Agreement, the aggregate number of AOGS Common Shares that UTEK has received shall be adjusted proportionately by the Board of Directors of AOGS for any increase in the number of outstanding shares of stock of AOGS resulting from the issuance of any additional equity securities by AOGS to any of its current list of management and directors as of the Effective Date; provided, however, that the anti-dilution rights set forth in this paragraph (d) shall not apply to any issuance of additional equity securities by AOGS to any of its current list of management and directors pursuant to the conversion of presently issued preferred stock.

(h) Consents. Assuming the correctness of UTEK and LLTI’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 AOGS or its assets or business.

(i) Financial Statements. The unaudited financial statements of AOGS attached as Exhibit C present fairly its financial position and the results of its operations on the dates and for the periods

Page 7 of 18

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. AOGS 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 AOGS except as specifically set forth in the AOGS financial statements.

(n) Investment Company Status AOGS is not an investment company, either registered or unregistered.

2.03 Investment Representations of UTEK. UTEK represents and warrants to AOGS that:

Page 8 of 18

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.

(c) Legend. During the first two years following the purchase of the AOGS Shares pursuant to this Agreement, the AOGS Shares may be transferred pursuant to an applicable exemption from the registration requirements of the Securities Act, including but not limited to Rule 144. Pursuant to and subject to the restrictions of Rule 144(k), at any time after the second full year following this Agreement, AOGS agrees to and shall direct its transfer agent to remove the above legend upon the issuance of a legal opinion from AOGS’s counsel that the above legend can be removed from the AOGS Shares. UTEK agrees to and promptly shall provide any information requested by AOGS or its counsel. AOGS shall give direction to its transfer agent as necessary for such removal of the legend, or for the approval of the sale of such restricted shares under Rule 144 or other available exemption from registration. A sample letter from AOGS instructing its transfer agent to reissue the share certificates without the restrictive legend, provided that the conditions of Rule 144(k) are met, is attached as Exhibit D.

(e) Stock Transfer Restrictions. UTEK will have “piggyback” registration rights for all of the common shares it will receive in this transaction.

ARTICLE 3

TRANSACTIONS PRIOR TO CLOSING

Page 9 of 18

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

(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

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 challenge the right, title and interest of UTEK in the LLTI Shares or the right of LLTI 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 LLTI, the License Agreement are valid and in full force and effect without any default in this Agreement.

4.07. AOGS shall have received, at or within 5 days of Closing Date, each of the following:

(a) the stock certificates representing the LLTI Shares, duly endorsed (or accompanied by duly executed stock powers) by UTEK for cancellation;

(b) all documentation relating to LLTI’s business, all in a form and substance satisfactory to AOGS;

Page 10 of 18

(d) copies of the general ledgers and books of account of LLTI, and all federal, state and local income, franchise, property and other tax returns filed by LLTI since the inception of LLTI;

(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 LLTI in Florida;

(f) the original corporate minute books of LLTI, including the articles of incorporation and bylaws of LLTI, and all other documents filed in this Agreement;

(g) all consents, assignments or related documents of conveyance to give AOGS 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 AOGS and LLTI, and

(i) such other documents, instruments or certificates as AOGS, or their counsel may reasonably request.

4.08. AOGS shall have completed due diligence investigation of LLTI to AOGS’s satisfaction in their sole discretion.

4.09. AOGS shall receive the resignation effective the Closing Date of each director and officer of LLTI.

ARTICLE 5

INDEMNIFICATION AND LIABILITY LIMITATION

5.01. Survival of Representations and Warranties.

(a) The representations and warranties made by UTEK and LLTI 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.

Page 11 of 18

ARTICLE 6

REMEDIES

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 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 AOGS, one by UTEK and a third by the two selected arbitrators. The third arbitrator shall be the chairman of the panel.

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ARTICLE 8

MISCELLANEOUS

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.

8.07. 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.

(Signatures on the following page)

Page 13 of 18


AVALON OIL AND GAS, INC.		LEAK LOCATION TECHNOLOGIES, INC.

By:	/s/ Kent Rodriguez	By:	/s/ Jennifer Willis
	Kent Rodriguez, Chief Executive Officer		Jennifer Willis President

	Address: 7808 Creekridge Circle, Suite 105 Minneapolis, Minnesota 55439		Address: 2109 East Palm Avenue Tampa, Florida 33605

	Date: March 25, 2007		Date: March 27, 2007


UTEK CORPORATION

By:		Clifford M. Gross, Ph.D.
		Clifford M. Gross, Ph.D. Chief Executive Officer

		Address: 2109 East Palm Avenue Tampa, Florida 33605

		Date: March 28, 2007


UTEK CORPORATION

By		Doug Schaedler
		Doug Schaedler Chief Compliance Officer

		Address: 2109 East Palm Avenue Tampa, Florida 33605

		Date: March 28, 2007

Page 14 of 18

EXHIBIT A

Outstanding Agreements

1) License Agreement with Rensselaer Polytechnic Institute

Page 15 of 18

EXHIBIT B

LEAK LOCATION TECHNOLOGIES, INC.

Financial Statements as of

March , 2007

Page 16 of 18

EXHIBIT C

AVALON OIL AND GAS, INC.

Unaudited Financial Statements

for Avalon Oil and Gas, Inc.

for the QUARTER ended December 31, 2006

Page 17 of 18

EXHIBIT D

AVALON OIL AND GAS, INC.

Stock Transfer Letter

March , 2007

Corporate Stock Transfer

3200 Cherry Creek Drive South, Suite 430

Denver, CO 80209

Dear Sir or Madam:

Re:	Transfer of Avalon Oil and Gas, Inc. Stock to UTEK Corporation (“UTEK”)

Beginning on the date two years after the date of this letter, Shares may be transferred pursuant to registration under the Securities Act or pursuant to Rule 144(k) under the Securities Act.

Signed,

Kent Rodriguez

Chief Executive Officer

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