EXCHANGE AGREEMENT AMERICAN ECO-ENVIRONMENT CORPORATION FOR THE EXCHANGE OF CAPITAL STOCK OF usip.com, inc. DATED AS OF SEPTEMBER 6, 2006
AMERICAN
ECO-ENVIRONMENT CORPORATION
FOR
THE EXCHANGE OF
CAPITAL
STOCK
OF
▇▇▇▇.▇▇▇,
inc.
DATED
AS OF SEPTEMBER 6, 2006
This
EXCHANGE AGREEMENT, dated as of September 6, 2006 (the “Agreement”) by and among
AMERICAN ECO-ENVIRONMENT CORPORATION,
a
newly-formed Delaware corporation (“AEEC”), ▇▇▇▇.▇▇▇, INC., a Nevada corporation
(“USIP”), and all of the shareholders of AEEC, whose names are set forth on
Exhibit A attached hereto (“SHAREHOLDERS”).
WHEREAS,
SHAREHOLDERS own 100% of the issued and outstanding shares of common stock,
par
value $.01 per share, of AEEC (the "AEEC Shares");
WHEREAS,
SHAREHOLDERS believe it is in their best interest to exchange the AEEC Shares
for certain convertible notes of USIP (“USIP Notes”), and USIP believes it is in
its best interests to acquire the AEEC Shares in exchange for USIP Notes, upon
the terms and subject to the conditions set forth in this Agreement; and
WHEREAS,
it the intention of the parties that: (i) USIP shall acquire 100% of the AEEC
Shares in exchange solely for the amount of USIP Notes set forth herein; (ii)
said exchange of USIP Notes for AEEC Shares shall not qualify as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended (the “Code”); and (iii) said exchange shall qualify as a transaction
in securities exempt from registration or qualification under the Securities
Act
of 1933, as amended and in effect on the date of this Agreement (the “Securities
Act”).
NOW,
THEREFORE, in consideration of the mutual terms, conditions and other agreements
set forth herein, the parties hereto hereby agree as follows:
ARTICLE
I
EXCHANGE
OF SHARES FOR COMMON STOCK
Section
1.1 Agreement
to Exchange AEEC Shares for USIP Notes.
On the
Closing Date (as hereinafter defined) and upon the terms and subject to the
conditions set forth in this Agreement, SHAREHOLDERS shall sell, assign,
transfer, convey and deliver the AEEC Shares (representing 100 AEEC Shares
or
100% of the issued and outstanding AEEC Shares), to USIP, and USIP shall accept
the AEEC Shares from the SHAREHOLDERS in exchange for the issuance to the
SHAREHOLDERS of the number and amount of USIP Notes set forth opposite the
names
of the SHAREHOLDERS on Exhibit A hereto.
Section
1.2 Capitalization.
On the
Closing Date, immediately before the transactions to be consummated pursuant
to
this Agreement, USIP shall have authorized 100,000,000 shares of Common Stock,
par value $.001 per share, of which 49,632,222 shares
shall be issued and outstanding, all of which are duly authorized, validly
issued and fully paid.
Section
1.3 Closing.
The
closing of the exchange to be made pursuant to this Agreement (the "Closing")
shall take place at 10:00 a.m. E.D.T. on the date of this Agreement and upon
the
conditions to closing set forth in Articles V and VI have been satisfied or
waived, or at such other time and date as the parties hereto shall agree in
writing (the "Closing Date"), at the offices of Guzov Ofsink, LLC, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. At the Closing, SHAREHOLDERS shall deliver to USIP
the
stock certificates representing 100% of the AEEC Shares, duly endorsed in blank
for transfer or accompanied by appropriate stock powers duly executed in blank.
In full consideration and exchange for the AEEC Shares, USIP shall issue and
exchange with SHAREHOLDERS USIP
Notes,
as more
particularly set out in Exhibit A hereto.
2
Section
1.4 Tax
Treatment.
The
exchange described herein is not intended to comply with Section 368(a)(1)(B)
of
the Code, and all applicable regulations thereunder.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF USIP
USIP
hereby represents, warrants and agrees as follows:
Section
2.1 Corporate
Organization
a. USIP
is a
corporation duly organized, validly existing and in good standing under the
laws
of Utah, and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted and is duly
qualified to do business in good standing in each jurisdiction in which the
nature of the business conducted by USIP or the ownership or leasing of its
properties makes such qualification and being in good standing necessary, except
where the failure to be so qualified and in good standing will not have a
material adverse effect on the business, operations, properties, assets,
condition or results of operation of USIP (a "USIP Material Adverse Effect");
b. Copies
of
the Articles of Incorporation and By-laws of USIP, with all amendments thereto
to the date hereof, have been furnished to AEEC and the SHAREHOLDERS, and such
copies are accurate and complete as of the date hereof. The minute books of
USIP
are current as required by law, contain the minutes of all meetings of the
Board
of Directors and shareholders of USIP from its date of incorporation to the
date
of this Agreement, and adequately reflect all material actions taken by the
Board of Directors and shareholders of USIP.
Section
2.2 Capitalization
of USIP.
The
authorized capital stock of USIP consists of (a) 100,000,000 shares of Common
Stock, par value $.001 per share, of which 49,632,222 shares are issued and
outstanding, all of which are duly authorized, validly issued and fully paid.
The parties agree that they have been informed of the issuances of these USIP
Notes, and that all such issuances of USIP Notes pursuant to this Agreement
will
be in accordance with the provisions of this Agreement. All of the USIP Notes
to
be issued pursuant to this Agreement have been duly authorized and will be
validly issued and fully paid and no personal liability will attach to the
ownership thereof. As of the date of this Agreement there are and as of the
Closing Date, there will be, no outstanding options, warrants, agreements,
commitments, conversion rights, preemptive rights or other rights to subscribe
for, purchase or otherwise acquire any shares of capital stock or any un-issued
or treasury shares of capital stock of USIP.
3
Section
2.3 Subsidiaries
and Equity Investments.
USIP
has no subsidiaries or equity interest in any corporation, partnership or joint
venture.
Section
2.4 Authorization
and Validity of Agreements.
USIP
has all corporate power and authority to execute and deliver this Agreement,
to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by USIP and
the consummation by USIP of the transactions contemplated hereby have been
duly
authorized by all necessary corporate action of USIP, and no other corporate
proceedings on the part of USIP are necessary to authorize this Agreement or
to
consummate the transactions contemplated hereby.
Section 2.5 No
Conflict or Violation.
The
execution, delivery and performance of this Agreement by USIP does not and
will
not violate or conflict with any provision of its Articles of Incorporation
or
By-laws, and does not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority,
nor violate or result in a breach of or constitute (with due notice or lapse
of
time or both) a default under, or give to any other entity any right of
termination, amendment, acceleration or cancellation of, any contract, lease,
loan agreement, mortgage, security agreement, trust indenture or other agreement
or instrument to which USIP is a party or by which it is bound or to which
any
of their respective properties or assets is subject, nor will it result in
the
creation or imposition of any lien, charge or encumbrance of any kind whatsoever
upon any of the properties or assets of USIP, nor will it result in the
cancellation, modification, revocation or suspension of any of the licenses,
franchises, permits to which USIP is bound.
Section
2.6 Consents
and Approvals.
No
consent, waiver, authorization or approval of any governmental or regulatory
authority, domestic or foreign, or of any other person, firm or corporation,
is
required in connection with the execution and delivery of this Agreement by
USIP
or the performance by USIP of its obligations hereunder.
Section
2.7 Absence
of Certain Changes or Events.
Since
its inception:
a. USIP
has
operated in the ordinary course of business consistent with past practice and
there has not been any material adverse change in the assets, properties,
business, operations, prospects, net income or condition, financial or otherwise
of USIP. As of the date of this Agreement, USIP does not know or have reason
to
know of any event, condition, circumstance or prospective development which
threatens or may threaten to have a material adverse effect on the assets,
properties, operations, prospects, net income or financial condition of
USIP;
4
b. there
has
not been any declaration, setting aside or payment of dividends or distributions
with respect to shares of capital stock of USIP or any redemption, purchase
or
other acquisition of any capital stock of USIP or any other of USIP’s
securities; and
c. there
has
not been an increase in the compensation payable or to become payable to any
director or officer of USIP.
Section
2.8 Disclosure.
This
Agreement and any certificate attached hereto or delivered in accordance with
the terms hereby by or on behalf of USIP in connection with the transactions
contemplated by this Agreement, when taken together, do not contain any untrue
statement of a material fact or omit any material fact necessary in order to
make the statements contained herein and/or therein not misleading.
Section
2.9 Survival.
Each of
the representations and warranties set forth in this Article II shall be deemed
represented and made by USIP at the Closing as if made at such time and shall
survive the Closing for a period terminating on the second anniversary of the
date of this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF AEEC AND SHAREHOLDERS
AEEC
and
each of the SHAREHOLDERS, severally, represent, warrant and agree as
follows:
Section
3.1 Corporate
Organization.
a. AEEC
is a
newly-formed corporation with no prior business activities. It is duly
organized, validly existing and in good standing under the laws of the state
of
Delaware and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted and is duly
qualified to do business in good standing in each jurisdiction in where the
nature of the business conducted by AEEC or the ownership or leasing of its
properties makes such qualification and being in good standing necessary, except
where the failure to be so qualified and in good standing will not have a
material adverse effect on the business, operations, properties, assets,
condition or results of operation of AEEC (an "AEEC Material Adverse Effect").
5
b. Copies
of
the Certificate of Incorporation and By-laws of AEEC, with all amendments
thereto to the date hereof, have been furnished to USIP, and such copies are
accurate and complete as of the date hereof. The minute books of AEEC are
current as required by law, contain the minutes of all meetings of the Board
of
Directors and shareholders of AEEC, and committees of the Board of Directors
of
AEEC from the date of incorporation to the date of this Agreement, and
adequately reflect all material actions taken by the Board of Directors,
shareholders and committees of the Board of Directors of AEEC.
Section
3.2 Capitalization
of AEEC; Title to the AEEC Shares.
On the
Closing Date, immediately before the transactions to be consummated pursuant
to
this Agreement, AEEC shall have authorized One Hundred (100) AEEC Shares, of
which 100 AEEC Shares will be issued and outstanding. The AEEC Shares are the
sole outstanding shares of capital stock of AEEC, and there are no outstanding
options, warrants, agreements, commitments, conversion rights, preemptive rights
or other rights to subscribe for, purchase or otherwise acquire any shares
of
capital stock or any un-issued or treasury shares of capital stock of
AEEC.
Section
3.3 Subsidiaries
and Equity Investments; Assets.
As of
the date hereof and on the Closing Date, except for ▇▇▇▇▇▇ ▇▇▇▇▇▇
Eco-Environment Corp., a corporation organized under the laws of the Peoples
Republic of China which is wholly-owned by AEEC, AEEC does not and will not
directly or indirectly, own any shares of capital stock or any other equity
interest in any entity or any right to acquire any shares or other equity
interest in any entity and AEEC does not and will not have any assets or
liabilities.
Section
3.4 Authorization
and Validity of Agreements.
AEEC
has all corporate power and authority to execute and deliver this Agreement,
to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by AEEC and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action and no other corporate proceedings
on the part of AEEC are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. The SHAREHOLDERS have approved this
Agreement on behalf of AEEC and no other stockholder approvals are required
to
consummate the transactions contemplated hereby. The execution and delivery
of
this Agreement by each SHAREHOLDER which is not a natural person (“Entity
Shareholder”) and the consummation of the transactions contemplated hereby by
each Entity Shareholder have been duly authorized by all necessary action by
the
Entity Shareholder and no other proceedings on the part of AEEC or any
SHAREHOLDER are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.
Section
3.5 No
Conflict or Violation.
The
execution, delivery and performance of this Agreement by AEEC or any SHAREHOLDER
does not and will not violate or conflict with any provision of the constituent
documents of AEEC, and does not and will not violate any provision of law,
or
any order, judgment or decree of any court or other governmental or regulatory
authority, nor violate, result in a breach of or constitute (with due notice
or
lapse of time or both) a default under or give to any other entity any right
of
termination, amendment, acceleration or cancellation of any contract, lease,
loan agreement, mortgage, security agreement, trust indenture or other agreement
or instrument to which AEEC or any SHAREHOLDER is a party or by which it is
bound or to which any of its respective properties or assets is subject, nor
result in the creation or imposition of any lien, charge or encumbrance of
any
kind whatsoever upon any of the properties or assets of AEEC or any SHAREHOLDER,
nor result in the cancellation, modification, revocation or suspension of any
of
the licenses, franchises, permits to which AEEC or any SHAREHOLDER is
bound.
6
Section
3.6 Investment
Representations.
(a) The
USIP Notes will be acquired hereunder solely for the account of the
SHAREHOLDERS, for investment, and not with a view to the resale or distribution
thereof. Each SHAREHOLDER understands and is able to bear any economic risks
associated with such SHAREHOLDER’S investment in the USIP Notes. Each
SHAREHOLDER has had full access to all the information such SHAREHOLDER
considers necessary or appropriate to make an informed investment decision
with
respect to the USIP Notes to be acquired under this Agreement. Each SHAREHOLDER
further has had an opportunity to ask questions and receive answers from USIP’s
directors regarding USIP and to obtain additional information (to the extent
USIP’s directors possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished
to
such SHAREHOLDER or to which such SHAREHOLDER had access. Each SHAREHOLDER
,
other than a SHAREHOLDER who is also a PRC Shareholder (as such term is
hereinafter defined) is an “accredited investor” (as such term is defined in
Rule 501(a) of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act).
(b)
No
offer to enter into this Agreement has been made by USIP to any of ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇ and Bin Feng (each a “PRC Shareholder” and collectively, the “PRC
Shareholders”) in the United States. At the times of the offer and execution of
this Agreement, each PRC Shareholder was domiciled and resided outside the
United States. No PRC Shareholder, nor any affiliate of any PRC Shareholder,
nor
any person acting on behalf of any PRC Shareholder or on behalf of any such
affiliate, has engaged or will engage in any activity undertaken for the purpose
of, or that reasonably could be expected to have the effect of, conditioning
the
markets in the United States for the USIP Notes, including, but not limited
to,
effecting any sale or short sale of securities through any PRC Shareholder
or
any of affiliate of any PRC Shareholder prior to the expiration of any
restricted period contained in Regulation S promulgated under the Securities
Act
(any such activity being defined herein as a “Directed Selling Effort”). To the
best knowledge of each of the PRC Shareholders, this Agreement and the
transactions contemplated herein are not part of a plan or scheme to evade
the
registration provisions of the Securities Act, and the USIP Notes are being
acquired for investment purposes by the PRC Shareholders. Each PRC Shareholder
agrees that all offers and sales of USIP Notes from the date hereof and through
the expiration of the any restricted period set forth in Rule 903 of Regulation
S (as the same may be amended from time to time hereafter) shall not be made
to
U.S. Persons or for the account or benefit of U.S. Persons and shall otherwise
be made in compliance with the provisions of Regulation S and any other
applicable provisions of the Securities Act. Neither any PRC Shareholder nor
the
representatives of any PRC Shareholder have conducted any Directed Selling
Effort as that term is used and defined in Rule 902 of Regulation S and no
PRC
Shareholder nor any representative of any PRC Shareholder will engage in any
such Directed Selling Effort within the United States through the expiration
of
any restricted period set forth in Rule 903 of Regulation S.
7
Section
3.7 Brokers’
Fees. No
SHAREHOLDER has any liability to pay any fees or commissions or other
consideration to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
Section
3.8 Disclosure.
This
Agreement, the schedules hereto and any certificate attached hereto or delivered
in accordance with the terms hereby by or on behalf of AEEC or the SHAREHOLDERS
in connection with the transactions contemplated by this Agreement, when taken
together, do not contain any untrue statement of a material fact or omit any
material fact necessary in order to make the statements contained herein and/or
therein not misleading.
Section
3.8 Survival.
Each of
the representations and warranties set forth in this Article III shall be deemed
represented and made by AEEC and the SHAREHOLDERS at the Closing as if made
at
such time and shall survive the Closing for a period terminating on the second
anniversary of the date of this Agreement.
ARTICLE
IV
COVENANTS
Section
4.1 Certain
Changes and Conduct of Business.
a. From
and
after the date of this Agreement and until the Closing Date, USIP shall conduct
its business solely in the ordinary course consistent with past practices and,
in a manner consistent with all representations, warranties or covenants of
USIP, and without the prior written consent of AEEC will not, except as required
or permitted pursuant to the terms hereof:
|
i.
|
make
any material change in the conduct of its businesses and/or operations
or
enter into any transaction other than in the ordinary course of business
consistent with past practices;
|
|
ii.
|
make
any change in its Articles of Incorporation or By-laws; issue any
additional shares of capital stock or equity securities or grant
any
option, warrant or right to acquire any capital stock or equity securities
or issue any security convertible into or exchangeable for its capital
stock or alter in any material term of any of its outstanding securities
or make any change in its outstanding shares of capital stock or
its
capitalization, whether by reason of a reclassification, recapitalization,
stock split or combination, exchange or readjustment of shares, stock
dividend or otherwise;
|
8
|
iii.
|
A.
|
incur,
assume or guarantee any indebtedness for borrowed money, issue any
notes,
bonds, debentures or other corporate securities or grant any option,
warrant or right to purchase any thereof, except pursuant to transactions
in the ordinary course of business consistent with past practices;
or
|
|
B.
|
issue
any securities convertible or exchangeable for debt or equity securities
of USIP;
|
|
iv.
|
make
any sale, assignment, transfer, abandonment or other conveyance of
any of
its assets or any part thereof, except pursuant to transactions in
the
ordinary course of business consistent with past
practice;
|
|
v.
|
subject
any of its assets, or any part thereof, to any lien or suffer such
to be
imposed other than such liens as may arise in the ordinary course
of
business consistent with past practices by operation of law which
will not
have an USIP Material Adverse
Effect;
|
|
vi.
|
acquire
any assets, raw materials or properties, or enter into any other
transaction, other than in the ordinary course of business consistent
with
past practices;
|
|
vii.
|
enter
into any new (or amend any existing) employee benefit plan, program
or
arrangement or any new (or amend any existing) employment, severance
or
consulting agreement, grant any general increase in the compensation
of
officers or employees (including any such increase pursuant to any
bonus,
pension, profit-sharing or other plan or commitment) or grant any
increase
in the compensation payable or to become payable to any employee,
except
in accordance with pre-existing contractual provisions or consistent
with
past practices;
|
|
viii.
|
make
or commit to make any material capital
expenditures;
|
|
ix.
|
pay,
loan or advance any amount to, or sell, transfer or lease any properties
or assets to, or enter into any agreement or arrangement with, any
of its
affiliates;
|
|
x.
|
guarantee
any indebtedness for borrowed money or any other obligation of any
other
person;
|
9
|
xi.
|
fail
to keep in full force and effect insurance comparable in amount and
scope
to coverage maintained by it (or on behalf of it) on the date
hereof;
|
|
xii.
|
take
any other action that would cause any of the representations and
warranties made by it in this Agreement not to remain true and correct
in
all material aspect;
|
|
xiii.
|
make
any material loan, advance or capital contribution to or investment
in any
person;
|
|
xiv.
|
make
any material change in any method of accounting or accounting principle,
method, estimate or practice;
|
|
xv.
|
settle,
release or forgive any claim or litigation or waive any
right;
|
|
xvi.
|
commit
itself to do any of the foregoing.
|
b. From
and
after the date of this Agreement, AEEC will:
|
1.
|
continue
to maintain, in all material respects, its properties in accordance
with
present practices in a condition suitable for its current
use;
|
|
2.
|
file,
when due or required, federal, state, foreign and other tax returns
and
other reports required to be filed and pay when due all taxes,
assessments, fees and other charges lawfully levied or assessed against
it, unless the validity thereof is contested in good faith and by
appropriate proceedings diligently
conducted;
|
|
3.
|
continue
to conduct its business in the ordinary course consistent with past
practices;
|
|
4.
|
keep
its books of account, records and files in the ordinary course and
in
accordance with existing practices;
and
|
|
5.
|
continue
to maintain existing business relationships with suppliers.
|
Section
4.2 Access
to Properties and Records.
AEEC
shall afford USIP’s accountants, counsel and authorized representatives, and
USIP shall afford to AEEC's accountants, counsel and authorized representatives
full access during normal business hours throughout the period prior to the
Closing Date (or the earlier termination of this Agreement) to all of such
parties’ properties, books, contracts, commitments and records and, during such
period, shall furnish promptly to the requesting party all other information
concerning the other party's business, properties and personnel as the
requesting party may reasonably request, provided that no investigation or
receipt of information pursuant to this Section 4.2 shall affect any
representation or warranty of or the conditions to the obligations of any party.
10
Section
4.3 Negotiations.
From
and after the date hereof until the earlier of the Closing or the termination
of
this Agreement, no party to this Agreement nor its officers or directors
(subject to such director's fiduciary duties) nor anyone acting on behalf of
any
party or other persons shall, directly or indirectly, encourage, solicit, engage
in discussions or negotiations with, or provide any information to, any person,
firm, or other entity or group concerning any merger, sale of substantial
assets, purchase or sale of shares of capital stock or similar transaction
involving any party. A party shall promptly communicate to any other party
any
inquiries or communications concerning any such transaction which they may
receive or of which they may become aware of.
Section
4.4 Consents
and Approvals.
The
parties shall:
|
i.
|
use
their reasonable commercial efforts to obtain all necessary consents,
waivers, authorizations and approvals of all governmental and regulatory
authorities, domestic and foreign, and of all other persons, firms
or
corporations required in connection with the execution, delivery
and
performance by them of this Agreement; and
|
|
ii.
|
diligently
assist and cooperate with each party in preparing and filing all
documents
required to be submitted by a party to any governmental or regulatory
authority, domestic or foreign, in connection with such transactions
and
in obtaining any governmental consents, waivers, authorizations or
approvals which may be required to be obtained connection in with
such
transactions.
|
Section
4.5 Public
Announcement.
Unless
otherwise required by applicable law, the parties hereto shall consult with
each
other before issuing any press release or otherwise making any public statements
with respect to this Agreement and shall not issue any such press release or
make any such public statement prior to such consultation.
Section
4.6 Stock
Issuance.
From
and after the date of this Agreement until the Closing Date, neither USIP nor
AEEC shall issue any additional shares of its capital stock.
Section
4.7 Notwithstanding
anything to the contrary contained herein, it is herewith understood and agreed
that both AEEC and USIP may enter into and conclude agreements and/or financing
transactions as same relate to and/or are contemplated by any separate written
agreements either: (a) annexed hereto as exhibits; or (b) entered into by USIP
with AEEC executed by both parties subsequent to the date hereof. These
Agreements shall become, immediately upon execution, part of this Agreement
and
subject to all warranties, representations and conditions contained
herein.
11
ARTICLE
V
CONDITIONS
TO OBLIGATIONS OF AEEC AND SHAREHOLDERS
The
obligations of AEEC and the SHAREHOLDERS to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before
the
Closing Date, of the following conditions, any one or more of which may be
waived by both AEEC and the SHAREHOLDERS in their sole discretion:
Section
5.1 Representations
and Warranties of USIP.
All
representations and warranties made by USIP in this Agreement shall be true
and
correct on and as of the Closing Date as if again made by USIP as of such date.
Section
5.2 Agreements
and Covenants.
USIP
shall have performed and complied in all material respects to all agreements
and
covenants required by this Agreement to be performed or complied with by it
on
or prior to the Closing Date.
Section
5.3 Consents
and Approvals.
Consents, waivers, authorizations and approvals of any governmental or
regulatory authority, domestic or foreign, and of any other person, firm or
corporation, required in connection with the execution, delivery and performance
of this Agreement shall be in full force and effect on the Closing
Date.
Section
5.4 No
Violation of Orders.
No
preliminary or permanent injunction or other order issued by any court or
governmental or regulatory authority, domestic or foreign, nor any statute,
rule, regulation, decree or executive order promulgated or enacted by any
government or governmental or regulatory authority, which declares this
Agreement invalid in any respect or prevents the consummation of the
transactions contemplated hereby, or which materially and adversely affects
the
assets, properties, operations, prospects, net income or financial condition
of
USIP shall be in effect; and no action or proceeding before any court or
governmental or regulatory authority, domestic or foreign, shall have been
instituted or threatened by any government or governmental or regulatory
authority, domestic or foreign, or by any other person, or entity which seeks
to
prevent or delay the consummation of the transactions contemplated by this
Agreement or which challenges the validity or enforceability of this
Agreement.
Section
5.5 Other
Closing Documents.
AEEC
shall have received such other certificates, instruments and documents in
confirmation of the representations and warranties of USIP or in furtherance
of
the transactions contemplated by this Agreement as AEEC or its counsel may
reasonably request.
12
ARTICLE
VI
CONDITIONS
TO OBLIGATIONS OF USIP
The
obligations of USIP to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing Date, of
the
following conditions, any one or more of which may be waived by USIP in its
sole
discretion:
Section
6.1 Representations
and Warranties of AEEC.
All
representations and warranties made by AEEC in this Agreement shall be true
and
correct on and as of the Closing Date as if again made by AEEC on and as of
such
date.
Section
6.2 Agreements
and Covenants.
AEEC
shall have performed and complied in all material respects to all agreements
and
covenants required by this Agreement to be performed or complied with by it
on
or prior to the Closing Date.
Section
6.3 Consents
and Approvals.
All
consents, waivers, authorizations and approvals of any governmental or
regulatory authority, domestic or foreign, and of any other person, firm or
corporation, required in connection with the execution, delivery and performance
of this Agreement, shall have been duly obtained and shall be in full force
and
effect on the Closing Date.
Section
6.4 No
Violation of Orders.
No
preliminary or permanent injunction or other order issued by any court or other
governmental or regulatory authority, domestic or foreign, nor any statute,
rule, regulation, decree or executive order promulgated or enacted by any
government or governmental or regulatory authority, domestic or foreign, that
declares this Agreement invalid or unenforceable in any respect or which
prevents the consummation of the transactions contemplated hereby, or which
materially and adversely affects the assets, properties, operations, prospects,
net income or financial condition of USIP, taken as a whole, shall be in effect;
and no action or proceeding before any court or government or regulatory
authority, domestic or foreign, shall have been instituted or threatened by
any
government or governmental or regulatory authority, domestic or foreign, or
by
any other person, or entity which seeks to prevent or delay the consummation
of
the transactions contemplated by this Agreement or which challenges the validity
or enforceability of this Agreement.
Section
6.5. Other
Closing Documents.
USIP
shall have received such other certificates, instruments and documents in
confirmation of the representations and warranties of AEEC or in furtherance
of
the transactions contemplated by this Agreement as USIP or its counsel may
reasonably request.
13
ARTICLE
VII
TERMINATION
AND ABANDONMENT
SECTION
7.1 Methods
of Termination.
This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time before the Closing:
a. By
the
mutual written consent of SHAREHOLDERS, AEEC and USIP;
b. By
USIP,
upon a material breach of any representation, warranty, covenant or agreement
on
the part of AEEC or the SHAREHOLDERS set forth in this Agreement, or if any
representation or warranty of AEEC or the SHAREHOLDERS shall become untrue,
in
either case such that any of the conditions set forth in Article VI hereof
would
not be satisfied (an "AEEC Breach"), and such breach shall, if capable of cure,
has not been cured within ten (10) days after receipt by the party in breach
of
a notice from the non-breaching party setting forth in detail the nature of
such
breach;
c. By
AEEC,
upon a material breach of any representation, warranty, covenant or agreement
on
the part of USIP set forth in this Agreement, or, if any representation or
warranty of USIP shall become untrue, in either case such that any of the
conditions set forth in Article V hereof would not be satisfied (a "USIP
Breach"), and such breach shall, if capable of cure, not have been cured within
ten (10) days after receipt by the party in breach of a written notice from
the
non-breaching party setting forth in detail the nature of such
breach;
d. By
either
USIP or AEEC, if the Closing shall not have consummated before ninety (90)
days
after the date hereof; provided, however, that this Agreement may be extended
by
written notice of either AEEC or USIP, if the Closing shall not have been
consummated as a result of USIP or AEEC having failed to receive all required
regulatory approvals or consents with respect to this transaction or as the
result of the entering of an order as described in this Agreement; and further
provided, however, that the right to terminate this Agreement under this Section
7.1(d) shall not be available to any party whose failure to fulfill any
obligations under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before this date.
e. By
either
AEEC or USIP if a court of competent jurisdiction or governmental, regulatory
or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action (which order, decree or ruling the parties hereto
shall use its best efforts to lift), which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this
Agreement.
14
Section
7.2 Procedure
Upon Termination.
In the
event of termination and abandonment of this Agreement by AEEC or USIP pursuant
to Section 7.1, written notice thereof shall forthwith be given to the other
parties and this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned, without further action. If this Agreement is
terminated as provided herein, no party to this Agreement shall have any
liability or further obligation to any other party to this Agreement; provided,
however, that no termination of this Agreement pursuant to this Article VII
shall relieve any party of liability for a breach of any provision of this
Agreement occurring before such termination.
ARTICLE
VIII
POST-CLOSING
AGREEMENTS
Section
8.1 Consistency
in Reporting.
Each
party hereto agrees that if the characterization of any transaction contemplated
in this agreement or any ancillary or collateral transaction is challenged,
each
party hereto will testify, affirm and ratify that the characterization
contemplated in such agreement was the characterization intended by the party;
provided, however, that nothing herein shall be construed as giving rise to
any
obligation if the reporting position is determined to be incorrect by final
decision of a court of competent jurisdiction.
ARTICLE
IX
MISCELLANEOUS
PROVISIONS
Section
9.1 Survival
of Provisions.
The
respective representations, warranties, covenants and agreements of each of
the
parties to this Agreement (except covenants and agreements which are expressly
required to be performed and are performed in full on or before the Closing
Date) shall survive the Closing Date and the consummation of the transactions
contemplated by this Agreement, subject to Sections 2.9, 3.8 and 8.2. In the
event of a breach of any of such representations, warranties or covenants,
the
party to whom such representations, warranties or covenants have been made
shall
have all rights and remedies for such breach available to it under the
provisions of this Agreement or otherwise, whether at law or in equity,
regardless of any disclosure to, or investigation made by or on behalf of such
party on or before the Closing Date.
Section
9.2 Publicity.
No
party shall cause the publication of any press release or other announcement
with respect to this Agreement or the transactions contemplated hereby without
the consent of the other parties, unless a press release or announcement is
required by law. If any such announcement or other disclosure is required by
law, the disclosing party agrees to give the non-disclosing parties prior notice
and an opportunity to comment on the proposed disclosure.
15
Section
9.3 Successors
and Assigns.
This
Agreement shall inure to the benefit of, and be binding upon, the parties hereto
and their respective successors and assigns; provided, however, that no party
shall assign or delegate any of the obligations created under this Agreement
without the prior written consent of the other parties.
Section
9.4 Fees
and Expenses.
Except
as otherwise expressly provided in this Agreement, all legal and other fees,
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
fees,
costs or expenses.
Section
9.5 Notices.
All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been given or made if in writing and
delivered personally or sent by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following addresses:
If
to
AEEC or the SHAREHOLDERS, to:
American
Eco-Environment Corp.
c/o
United Corporate Services, Inc.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇
▇,
▇▇▇▇▇,
▇▇
▇▇▇▇▇
Attn:
▇▇▇
▇▇▇▇
with
a
copy to:
Guzov
Ofsink, LLC
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇▇
If
to
USIP, to:
▇▇▇▇.▇▇▇
, Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
or
to
such other persons or at such other addresses as shall be furnished by any
party
by like notice to the others, and such notice or communication shall be deemed
to have been given or made as of the date so delivered or mailed. No change
in
any of such addresses shall be effective insofar as notices under this Section
9.5 are concerned unless such changed address is located in the United States
of
America and notice of such change shall have been given to such other party
hereto as provided in this Section 9.5
16
Section
9.6 Entire
Agreement.
This
Agreement, together with the exhibits hereto, represents the entire agreement
and understanding of the parties with reference to the transactions set forth
herein and no representations or warranties have been made in connection with
this Agreement other than those expressly set forth herein or in the exhibits,
certificates and other documents delivered in accordance herewith. This
Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating
to
the subject matter of this Agreement and all prior drafts of this Agreement,
all
of which are merged into this Agreement. No prior drafts of this Agreement
and
no words or phrases from any such prior drafts shall be admissible into evidence
in any action or suit involving this Agreement.
Section
9.7 Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible so as to
be
valid and enforceable.
Section
9.8 Titles
and Headings.
The
Article and Section headings contained in this Agreement are solely for
convenience of reference and shall not affect the meaning or interpretation
of
this Agreement or of any term or provision hereof.
Section
9.9 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall be considered one and the
same agreement.
Section
9.10 Convenience
of Forum; Consent to Jurisdiction.
The
parties to this Agreement, acting for themselves and for their respective
successors and assigns, without regard to domicile, citizenship or residence,
hereby expressly and irrevocably elect as the sole judicial forum for the
adjudication of any matters arising under or in connection with this Agreement,
and consent and subject themselves to the jurisdiction of, the courts of the
State of New York located in County of New York, and/or the United States
District Court for the Southern District of New York, in respect of any matter
arising under this Agreement. Service of process, notices and demands of such
courts may be made upon any party to this Agreement by personal service at
any
place where it may be found or giving notice to such party as provided in
Section 9.5.
Section
9.11 Enforcement
of the Agreement.
The
parties hereto agree that irreparable damage would occur if any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of
this Agreement and to enforce specifically the terms and provisions hereto,
this
being in addition to any other remedy to which they are entitled at law or
in
equity.
17
Section
9.12 Governing
Law.
This
Agreement shall be governed by and interpreted and enforced in accordance with
the laws of the State of New York without giving effect to the choice of law
provisions thereof.
Section
9.13 Amendments
and Waivers.
No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by all of the parties hereto.. No waiver by
any
party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior
or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
18
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
AMERICAN
ECO-ENVIRONMENT CORP.
By:
/s/
▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇
Title:
Chief Executive Officer
▇▇▇▇.▇▇▇,
INC.
By:
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
Title:
President
SHAREHOLDERS:
/s/
Yun Wang________________
▇▇▇
▇▇▇▇
/s/
▇▇▇▇▇▇ Jiang______________
▇▇▇▇▇▇
▇▇▇▇▇
/s/
Bin
Feng
Bin
Feng
19
EXHIBIT
A
|
Name
of
SHAREHOLDER
|
Number
of AEEC Shares Being
Exchanged
|
Face
Value of USIP Notes to
be Received
|
||
|
▇▇▇
▇▇▇▇
|
69
|
$3,450,000
|
||
|
▇▇▇▇▇▇
▇▇▇▇▇
|
13
|
$650,000
|
||
|
Bin
Feng
|
18
|
$900,000
|
20