EXCHANGE AGREEMENT
Between
AMERICAN INTERNATIONAL ASSETS, INC.
and
AMERICAN INSTITUTE OF TECHNOLOGY, INC.
Dated May 12, 2003
TABLE OF CONTENTS
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF AMERICAN INSTITUTE
OF TECHNOLOGY
1.01 Organization 4
1.02 Capitalization 4
1.03 Subsidiaries and Predecessor Corporations 4
1.04 Information 5
1.05 Options and Warrants 5
1.06 Litigation and Proceedings 5
1.07 Material Contract Defaults 5
1.08 No Conflict With Other Instruments 5
1.09 American Institute of Technology Schedules 5
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF AMERICAN
INTERNATIONAL ASSETS
2.01 Organization 7
2.02 Capitalization 7
2.03 Subsidiaries and Predecessor Corporations 7
2.04 Securities Filings; Financial Statements 7
ARTICLE III PLAN OF EXCHANGE
3.01 The Exchange 8
3.02 Anti-Dilution 8
3.03 Closing 8
3.04 Closing Events 8
ARTICLE IV SPECIAL COVENANTS
4.01 Access to Properties and Records 8
4.02 Delivery of Books and Records 8
4.03 Third Party Consents and Certificates 9
4.04 Consent of American Institute of
Technology Shareholders 9
4.05 Exclusive Dealing Rights 9
4.06 Actions Prior to Closing 9
4.07 Indemnification 10
4.08 Limitation of Subsequent Corporate Actions 10
4.09 Indemnification of Subsequent Corporate Actions 10
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF AMERICAN INTERNATIONAL
ASSETS
5.01 Accuracy of Representations and Performance
of Covenants 11
5.02 Officer's Certificates 11
5.03 No Material Adverse Change 11
5.04 Approval by American Institute of Technology
Shareholders 11
5.05 No Governmental Prohibitions 11
5.06 Consents 11
5.07 Other Items 11
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF AMERICAN INSTITUTE OF
TECHNOLOGY AND AMERICAN INSTITUTE OF TECHNOLOGY SHAREHOLDERS
6.01 Accuracy of Representations and Performance of
Covenants 12
6.02 Officer's Certificate 12
6.03 No Material Adverse Change 12
6.04 No Governmental Prohibition 12
6.05 Consents 12
6.06 Other Items 12
ARTICLE VII MISCELLANEOUS
7.01 No Bankruptcy and No Criminal Convictions 12
7.02 Brokers 13
7.03 Governing Law 13
7.04 Notices 13
7.05 Attorney's Fees 13
7.06 Confidentiality 14
7.07 Public Announcements and Filings 14
7.08 Schedules; Knowledge 14
7.09 Third-Party Beneficiaries 14
7.10 Expenses 14
7.11 Entire Agreement 14
7.12 Survival; Termination 14
7.13 Counterparts 14
7.14 Amendment or Waiver 14
7.15 Best Efforts 14
7.16 Faxed Copies 15
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement") is entered
into as of this 12th day of May, 2003 by and between AMERICAN INTERNATIONAL
ASSETS, INC., a Utah corporation (hereinafter referred to as the "Company") and
AMERICAN INSTITUTE OF TECHNOLOGY, INC., a New York corporation (hereinafter
referred to as "AIT"), upon the following premises:
Premises
--------
WHEREAS, the Company is a publicly held corporation organized under the
laws of the State of Utah;
WHEREAS, AIT is a privately held corporation organized under the laws of
the State of New York;
WHEREAS, management of the constituent corporations have determined that it
is in the best interest of the parties that the Company acquire 100% of the
issued and outstanding securities of AIT in exchange for the issuance of certain
shares of the Company (the "Exchange") and AIT agrees to use its best efforts to
cause its shareholders (the "AIT Shareholders") to exchange their securities of
AIT on the terms described herein; and
WHEREAS, the Company and AIT desire to set forth the terms of the Exchange,
which is intended to constitute a tax-free reorganization pursuant to the
provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986.
Agreement
---------
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND
WARRANTIES OF AMERICAN INSTITUTE OF TECHNOLOGY
As an inducement to, and to obtain the reliance of the Company, except as
set forth on the AIT Schedules (as hereinafter defined), AIT represents and
warrants as follows:
Section 1.01 Organization. AIT is a corporation duly organized,
------------
validly existing, and in good standing under the laws of the State of New York
and has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the states or countries
in which the character and location of the assets owned by it or the nature of
the business transacted by it requires qualification, except where failure to be
so qualified would not have a material adverse effect on its business. Included
in the AIT Schedules are complete and correct copies of the articles of
incorporation, and bylaws of AIT as in effect on the date hereof. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of AIT's
articles of incorporation or bylaws. AIT has taken all actions required by law,
its articles of incorporation, or otherwise to authorize the execution and
delivery of this Agreement. AIT has full power, authority, and legal right and
has taken all action required by law, its articles of incorporation, and
otherwise to consummate the transactions herein contemplated.
Section 1.02 Capitalization. The authorized capitalization of AIT
--------------
consists of 200 shares of common stock, no par value, of which 150 shares are
currently issued and outstanding. All issued and outstanding shares are legally
issued, fully paid, and non-assessable and not issued in violation of the
preemptive or other rights of any person.
Section 1.03 Subsidiaries and Predecessor Corporations. AIT does not
------------------------------------------
have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in Schedule 1.03. For purposes hereinafter, the term "AIT" also
--------------
includes those subsidiaries, if any, set forth on Schedule 1.03.
--------------
Section 1.04 Information. The information concerning AIT set forth in
-----------
this Agreement and in the AIT Schedules is complete and accurate in all material
respects and does not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading. In addition, AIT has
fully disclosed in writing to the Company (through this Agreement or the AIT
Schedules) all information relating to matters involving AIT or its assets or
its present or past operations or activities which (i) indicated or may
indicate, in the aggregate, the existence of a greater than $5,000 liability or
diminution in value, (ii) have led or may lead to a competitive disadvantage on
the part of AIT or (iii) either alone or in aggregation with other information
covered by this Section, otherwise have led or may lead to a material adverse
effect on the transactions contemplated herein or on AIT, its assets, or its
operations or activities as presently conducted or as contemplated to be
conducted after the Closing Date, including, but not limited to, information
relating to governmental, employee, environmental, litigation and securities
matters and transactions with affiliates.
Section 1.05 Options or Warrants. There are no existing options,
---------------------
warrants, calls, or commitments of any character relating to the authorized and
unissued AIT common stock, except options, warrants, calls or commitments, if
any, to which AIT is not a party and by which it is not bound.
Section 1.06 Litigation and Proceedings. Except as set forth in the
----------------------------
AIT Schedules, there are no actions, suits, proceedings, or investigations
pending or, to the knowledge of AIT after reasonable investigation, threatened
by or against AIT or affecting AIT or its properties, at law or in equity,
before any court or other governmental agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind. AIT does not have any knowledge
of any material default on its part with respect to any judgment, order,
injunction, decree, award, rule, or regulation of any court, arbitrator, or
governmental agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a default.
Section 1.07 Material Contract Defaults. AIT is not in default in any
--------------------------
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets or condition of AIT and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which AIT has not taken adequate steps to prevent such a default from
occurring.
Section 1.08 No Conflict With Other Instruments. The execution of this
----------------------------------
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which AIT is a party or to which any of its
properties or operations are subject.
Section 1.09 American Institute Of Technology Schedules. AIT has
----------------------------------------------
delivered to the Company the following schedules, which are collectively
referred to as the "AIT Schedules" and which consist of separate schedules dated
as of the date of execution of this Agreement, all certified by the chief
executive officer of AIT as complete, true, and correct as of the date of this
Agreement in all material respects:
(a) a schedule containing complete and correct copies of the articles of
incorporation, and bylaws of AIT in effect as of the date of this
Agreement;
(b) a Schedule 1.09(b) containing a list indicating the name and address of
each shareholder of AIT together with the number of shares owned by him,
her or it;
(c) a schedule containing a description of all real property owned by AIT,
together with a description of every mortgage, deed of trust, pledge, lien,
agreement, encumbrance, claim, or equity interest of any nature whatsoever
in such real property;
(d) copies of all licenses, permits, and other governmental authorizations
(or requests or applications therefor) pursuant to which AIT carries on or
proposes to carry on its business (except those which, in the aggregate,
are immaterial to the present or proposed business of AIT); and
(e) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the AIT Schedules
by Sections 1.01 through 1.09.
AIT shall cause the AIT Schedules and the instruments and data delivered to
the Company hereunder to be promptly updated after the date hereof up to and
including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by AIT. AIT shall have
until May 31, 2003 to provide such schedules. If AIT cannot or fails to do so,
or if the Company acting reasonably finds any such schedules or updates provided
after the date hereof to be unacceptable according to the criteria set forth
below, the Company may terminate this Agreement by giving written notice to AIT
within five (5) days after the schedules or updates were due to be produced or
were provided. For purposes of the foregoing, the Company may consider a
disclosure in the AIT Schedules to be "unacceptable" only if that item would
have a material adverse impact on the financial statements of the Company.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND
WARRANTIES OF AMERICAN INTERNATIONAL ASSETS
As an inducement to, and to obtain the reliance of AIT and the AIT
Shareholders, except as set forth in the Company Schedules (as hereinafter
defined), the Company represents and warrants as follows:
Section 2.01 Organization. The Company is a corporation duly
------------
organized, validly existing, and in good standing under the laws of the State of
Utah and has the corporate power and is duly authorized, qualified, franchised,
and licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets, to carry on its
business in all material respects as it is now being conducted, and except where
failure to be so qualified would not have a material adverse effect on its
business, there is no jurisdiction in which it is not qualified in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the Company Schedules are
complete and correct copies of the certificate of incorporation and bylaws of
the Company as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of the Company's certificate of incorporation or
bylaws. The Company has taken all action required by law, its certificate of
incorporation, its bylaws, or otherwise to authorize the execution and delivery
of this Agreement, and the Company has full power, authority, and legal right
and has taken all action required by law, its certificate of incorporation,
bylaws, or otherwise to consummate the transactions herein contemplated.
Section 2.02 Capitalization. The Company's authorized capitalization
--------------
consists of 500,000,000 shares, consisting of 490,000,000 shares of common
stock, no par value per share of which approximately 12,000,000 shares will be
issued and outstanding at the Closing as defined in Section 3.03 (the "Original
Company Shares"), as well as 10,000,000 shares of preferred stock of which no
shares of preferred stock will be issued and outstanding at the Closing. All
issued and outstanding shares are legally issued, fully paid, and non-assessable
and not issued in violation of the preemptive or other rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. The Company
-------------------------------------------
does not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in Schedule 2.03. For purposes hereinafter, the term "Company" also
-------------
includes those subsidiaries, if any, set forth on Schedule 2.03.
--------------
Section 2.04 Securities Filings; Financial Statements.
--------------------------------------------
(a) The Company's filed a Form 10KSB which (i) was prepared in accordance
with the requirements of the Securities Exchange Act of 1934 or the
Securities Act of 1933, as appropriate, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(b) Included in the Company Schedules are (i) the audited balance sheets of
the Company and the related statements of operations and cash flows as of
and for the twelve months ended December 31, 2001 and 2002, respectively.
(c) All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved. The Company balance sheets present fairly as of their
respective dates the financial condition of the Company. As of the date of
such balance sheets, except as and to the extent reflected or reserved
against therein, the Company had no liabilities or obligations (absolute or
contingent) which should be reflected in the balance sheets or the notes
thereto prepared in accordance with generally accepted accounting
principles, and all assets reflected therein are properly reported and
present fairly the value of the assets of the Company, in accordance with
generally accepted accounting principles. The statements of operations,
stockholders' equity and cash flows reflect fairly the information required
to be set forth therein by generally accepted accounting principles.
(d) The Company has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and
payable.
(e) The books and records, financial and otherwise, of the Company are in
all material aspects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) All of the Company's assets are reflected on its financial statements,
and, except as set forth in the Company Schedules or the financial
statements of the Company or the notes thereto, the Company has no material
liabilities, direct or indirect, matured or unmatured, contingent or
otherwise.
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. On the terms and subject to the conditions
-------------
set forth in this Agreement, on the Closing Date (as defined in Section 3.03),
each AIT Shareholder who shall elect to accept the exchange offer described
herein (the "Accepting Shareholders"), shall assign, transfer and deliver, free
and clear of all liens, pledges, encumbrances, charges, restrictions or known
claims of any kind, nature, or description, the number of shares of common stock
of AIT set forth on Schedule 1.09(b) attached hereto, in the aggregate
-----------------
constituting 100% of the issued and outstanding shares of common stock of AIT
held by each of such shareholders; the objective of such Exchange being the
acquisition by the Company of 100% of the issued and outstanding common stock of
AIT. In exchange for the transfer of such securities by the AIT Shareholders,
the Company shall issue to the AIT Shareholders an aggregate of 6,000,000 shares
of common stock of the Company (the "Initial Shares"). At the Closing, each AIT
Shareholder shall, on surrender of his certificate or certificates representing
such AIT shares to the Company or its registrar or transfer agent, be entitled
to receive a certificate or certificates evidencing his proportionate interest
in the Initial Shares. Upon consummation of the transaction contemplated
herein, assuming participation by all of the AIT Shareholders, all of the shares
of capital stock of AIT shall be held by the Company.
Section 3.02 Anti-Dilution. The number of shares of the Company's
--------------
common stock issuable upon exchange pursuant to Section 3.01 shall be
appropriately adjusted to take into account any other stock split, stock
dividend, reverse stock split, recapitalization, or similar change in the
Company common stock which may occur (i) between the date of the execution of
this Agreement and the Closing Date, as to the Initial Shares, and (ii) between
the date of the execution of this Agreement and the release date, as to the
Additional Shares.
Section 3.03 Closing. The closing ("Closing") of the transactions
--------
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than April 10, 2003, subject to
the right of the Company or AIT to extend such Closing Date by up to an
additional ten (10) days. Such Closing shall take place at a mutually agreeable
time and place.
Section 3.04 Closing Events. At the Closing, the Company, AIT and each
---------------
of the AIT Accepting Shareholders shall execute, acknowledge, and deliver (or
shall ensure to be executed, acknowledged, and delivered) any and all
certificates, opinions, financial statements, schedules, agreements,
resolutions, rulings or other instruments required by this Agreement to be so
delivered at or prior to the Closing, together with such other items as may be
reasonably requested by the parties hereto and their respective legal counsel in
order to effectuate or evidence the transactions contemplated hereby. Among
other things, the Company shall provide an opinion of counsel acceptable to AIT
as to such matters as AIT may reasonably request, which shall include, but not
be limited to, a statement, to the effect that to such counsel's best knowledge,
after reasonable investigation, from inception until the Closing Date, the
Company has complied with all applicable statutes and regulations of any
federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets or condition of the Company
or except to the extent that noncompliance would not result in the occurrence of
any material liability (such compliance including, but not being limited to, the
filing of all reports to date with federal and state securities authorities).
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. The Company and AIT will
------------------------------------
each afford to the officers and authorized representatives of the other full
access to the properties, books and records of the Company or AIT, as the case
may be, in order that each may have a full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other, and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of the Company or AIT, as
the case may be, as the other shall from time to time reasonably request.
Without limiting the foregoing, as soon as practicable after the end of each
fiscal quarter (and in any event through the last fiscal quarter prior to the
Closing Date), each party shall provide the other with quarterly internally
prepared and unaudited financial statements.
Section 4.02 Delivery of Books and Records. At the Closing, AIT shall
------------------------------
deliver to the Company copies of the corporate minute books, books of account,
contracts, records, and all other books or documents of AIT now in the
possession of AIT or its representatives.
Section 4.03 Third Party Consents and Certificates. The Company and
----------------------------------------
AIT agree to cooperate with each other in order to obtain any required third
party consents to this Agreement and the transactions herein contemplated.
Section 4.04 Consent of American Institute Of Technology Shareholders.
--------------------------------------------------------
AIT shall use its best efforts to obtain the consent of all AIT Shareholders to
participate in the Exchange.
Section 4.05 Exclusive Dealing Rights. Until 5:00 P.M. Eastern
---------------------------
Daylight Time on May 31, 2003.
(a) In recognition of the substantial time and effort which the Company has
spent and will continue to spend in investigating AIT and its business and
in addressing the matters related to the transactions contemplated herein,
each of which may preempt or delay other management activities, neither
AIT, nor any of its officers, employees, representatives or agents will
directly or indirectly solicit or initiate any discussions or negotiations
with, or, except where required by fiduciary obligations under applicable
law as advised by counsel, participate in any negotiations with or provide
any information to or otherwise cooperate in any other way with, or
facilitate or encourage any effort or attempt by, any corporation,
partnership, person or other entity or group (other than the Company and
its directors, officers, employees, representatives and agents) concerning
any merger, sale of substantial assets, sale of shares of capital stock,
(including without limitation, any public or private offering of the common
stock of AIT) or similar transactions involving AIT (all such transactions
being referred to as "AIT Acquisition Transactions"). If AIT receives any
proposal with respect to a AIT Acquisition Transaction, it will immediately
communicate to the Company the fact that it has received such proposal and
the principal terms thereof.
(b) In recognition of the substantial time and effort which AIT has spent
and will continue to spend in investigating the Company and its business
and in addressing the matters related to the transactions contemplated
herein, each of which may preempt or delay other management activities,
neither the Company, nor any of its officers, employees, representatives or
agents will directly or indirectly solicit or initiate any discussions or
negotiations with, or, except where required by fiduciary obligations under
applicable law as advised by counsel, participate in any negotiations with
or provide any information to or otherwise cooperate in any other way with,
or facilitate or encourage any effort or attempt by, any corporation,
partnership, person or other entity or group (other than AIT and its
directors, officers, employees, representatives and agents) concerning any
merger, sale of substantial assets, sale of shares of capital stock,
(including without limitation, any public or private offering of the common
stock of the Company or similar transactions involving the Company (all
such transactions being referred to as "Company Acquisition Transactions").
If the Company receives any proposal with respect to a Company Acquisition
Transaction, it will immediately communicate to AIT the fact that it has
received such proposal and the principal terms thereof.
Section 4.06 Actions Prior to Closing.
----------------------------
(a) From and after the date of this Agreement until the Closing Date and
except as set forth in the Company Schedules or AIT Schedules or as
permitted or contemplated by this Agreement, the Company (subject to
paragraph (d) below) and AIT respectively, will each:
(i) carry on its business in substantially the same manner as it has
heretofore;
(ii) maintain and keep its properties in states of good repair and
condition as at present, except for depreciation due to ordinary wear
and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in amount
and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations under
material contracts, leases, and instruments relating to or affecting
its assets, properties, and business;
(v) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
neither the Company nor AIT will:
(i) make any changes in their articles or certificate of incorporation
or bylaws, except as otherwise provided in this Agreement;
(ii) enter into or amend any contract, agreement, or other instrument
of any of the types described in such party's schedules, except that a
party may enter into or amend any contract, agreement, or other
instrument in the ordinary course of business involving the sale of
goods or services; or
(iii) sell any assets or discontinue any operations (other than the
Divestiture), sell any shares of capital stock (other than as
contemplated in Section 4.06 hereof and the sale of securities
underlying existing warrants or options of the Company) or conduct any
similar transactions other than in the ordinary course of business.
Section 4.07 Indemnification.
----------------
(a) AIT hereby agrees to indemnify the Company and each of the officers,
agents and directors of the Company as of the date of execution of this
Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentations made under Article I of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing
and consummation of the transactions contemplated hereby and termination of
this Agreement.
(b) The Company hereby agrees to indemnify AIT and each of the officers,
agents, and directors of AIT and each of the AIT Shareholders as of the
date of execution of this Agreement against any loss, liability, claim,
damage, or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever),
to which it or they may become subject arising out of or based on any
inaccuracy appearing in or misrepresentation made under Article II of this
Agreement. The indemnification provided for in this paragraph shall survive
the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement.
Section 4.08 Limitation of Subsequent Corporate Actions.
-----------------------------------------------
It is expressly understood and agreed that the Company, the shareholders of
AIT, and their affiliates, will take all steps necessary to ensure that the
assets of AIT shall remain in the Company as part of its business operations;
Section 4.09 Indemnification of Subsequent Corporate Actions.
----------------------------------------------------
(a) No officer, director, controlling shareholder, agent or representative
of the Company, or any other person currently affiliated with the Company,
has offered or agreed to assist in the promotion, market making,
development, enhancement, or support of the Company's business, capital
raising, or securities market.
(b) AIT hereby represents and warrants that it will indemnify and hold
harmless any officer, director, controlling shareholder, agent or
representative of the Company, or any other person affiliated with the
Company, from any decisions, activities, or conduct of the Company
contemporaneous with, or subsequent to this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF AMERICAN INTERNATIONAL ASSETS
The obligations of the Company under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants.
---------------------------------------------------------
The representations and warranties made by AIT in this Agreement were true when
made and shall be true at the Closing Date with the same force and effect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement). AIT shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by AIT prior to or at the Closing.
The Company shall be furnished with a certificate, signed by a duly authorized
executive officer of AIT and dated the Closing Date, to the foregoing effect.
Section 5.02 Officer's Certificates. The Company shall have been
------------------------
furnished with a certificate dated the Closing Date and signed by a duly
authorized officer of AIT to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of AIT
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement, or, to the
extent not disclosed in the AIT Schedules, by or against AIT, which might result
in any material adverse change in any of the assets, properties, business, or
operations of AIT.
Section 5.03 No Material Adverse Change. Prior to the Closing Date,
-----------------------------
there shall not have occurred any change in the financial condition, business,
or operations of AIT nor shall any event have occurred which, with the lapse of
time or the giving of notice, is determined to be unacceptable by the Company.
Section 5.04 Approval by American Institute of Technology Shareholders.
----------------------------------------------------------
The Exchange shall have been approved, and shares delivered in accordance with
Section 3.01, by the holders of not less than one hundred percent (100%) of the
outstanding common stock of AIT, unless a lesser number is agreed to by the
Company.
Section 5.05 No Governmental Prohibitions. No order, statute, rule,
------------------------------
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.06 Consents. All consents, approvals, waivers or amendments
---------
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and AIT after the Closing Date on the basis as
presently operated shall have been obtained.
Section 5.07 Other Items.
-------------
(a) The Company shall have received a list of AIT's shareholders containing
the name, address, and number of shares held by each AIT shareholder as of
the date of Closing, certified by an executive officer of AIT as being
true, complete and accurate; and
(b) The Company shall have received such further opinions, documents,
certificates or instruments relating to the transactions contemplated
hereby as the Company may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF AMERICAN INSTITUTE OF TECHNOLOGY
AND THE AMERICAN INSTITUTE OF TECHNOLOGY SHAREHOLDERS
The obligations of AIT and the AIT Shareholders under this Agreement are
subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants.
---------------------------------------------------------
The representations and warranties made by the Company in this Agreement were
true when made and shall be true as of the Closing Date (except for changes
therein permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, the Company shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
the Company and shall have satisfied the conditions described below prior to or
at the Closing:
(a) Immediately prior to the Closing, the Company shall have approximately
12,000,000 shares of common stock issued and outstanding, excluding any
shares issuable pursuant to the Exchange.
(b) The directors of the Company shall have approved the Exchange and the
related transactions described herein.
AIT shall have been furnished with certificates, signed by duly authorized
executive officers of the Company and dated the Closing Date, to the foregoing
effect.
Section 6.02 Officer's Certificate. AIT shall have been furnished with
----------------------
certificates dated the Closing Date and signed by the duly authorized executive
officer of the Company, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of the Company
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the Company Schedules, by or against the Company, which
might result in any material adverse change in any of the assets, properties or
operations of the Company.
Section 6.03 No Material Adverse Change. Prior to the Closing Date,
-----------------------------
there shall not have occurred any change in the financial condition, business or
operations of the Company nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable by AIT.
Section 6.04 No Governmental Prohibition. No order, statute, rule,
------------------------------
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.05 Consents. All consents, approvals, waivers or amendments
---------
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and AIT after the Closing Date on the basis as
presently operated shall have been obtained.
Section 6.06 Other Items. AIT shall have received further opinions,
-------------
documents, certificates, or instruments relating to the transactions
contemplated hereby as AIT may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Bankruptcy and No Criminal Convictions.
----------------------------------------------
None of the Parties to the Agreement, nor their officers, directors or
affiliates, promoter or control person, nor any predecessor, thereof have been
subject to the following:
(1) Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer within the past five years;
(2) Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; and
(4) Being found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission (the "SEC") or the Commodity Futures
Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended, or vacated.
Section 7.02 Brokers. The Company and AIT agree that, except as set
--------
out on Schedule 7.02 attached hereto, there were no brokers or finders involved
in bringing the parties together or who were instrumental in the negotiation,
execution or consummation of this Agreement. The Company and AIT each agree to
indemnify the other against any claim by any third person other than those
described above for any commission, brokerage, or finder's fee arising from the
transactions contemplated hereby based on any alleged agreement or understanding
between the indemnifying party and such third person, whether express or implied
from the actions of the indemnifying party.
Section 7.03 Governing Law. This Agreement shall be governed by,
---------------
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to the matters of state law, with the laws
of the State of New York without giving effect to principles of conflicts of law
thereunder. Each of the parties (a) irrevocably consents and agrees that any
legal or equitable action or proceedings arising under or in connection with
this Agreement shall be brought exclusively in the federal courts of the United
States, (b) by execution and delivery of this Agreement, irrevocably submits to
and accepts, with respect to any such action or proceeding, generally and
unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives
any and all rights such party may now or hereafter have to object to such
jurisdiction.
Section 7.04 Notices. Any notice or other communications required or
--------
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to the Company, to: AMERICAN INTERNATIONAL ASSETS, INC.
000-00 00xx Xxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
If to AIT, to: AMERICAN INSTITUTE OF TECHNOLOGY, INC.
With copies to: Xxxxx X. Xxxx, Attorney to Law
0000 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.05 Attorney's Fees. In the event that either party
-----------------
institutes any action or suit to enforce this Agreement or to secure relief from
any default hereunder or breach hereof, the prevailing party shall be reimbursed
by the losing party for all costs, including reasonable attorney's fees,
incurred in connection therewith and in enforcing or collecting any judgment
rendered therein.
Section 7.06 Confidentiality. Each party hereto agrees with the other that,
----------------
unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.07 Public Announcements and Filings. Unless required by
------------------------------------
applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
Section 7.08 Schedules; Knowledge. Each party is presumed to have full
---------------------
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.09 Third Party Beneficiaries. This contract is strictly
----------------------------
between the Company and AIT, and, except as specifically provided, no director,
officer, stockholder (other than the AIT Shareholders), employee, agent,
independent contractor or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.
Section 7.10 Expenses. Subject to Section 7.05 above, whether or not
---------
the Exchange is consummated, AIT will bear the expenses, including legal,
accounting and professional fees, incurred in connection with the Exchange or
any of the other transactions contemplated hereby.
Section 7.11 Entire Agreement. This Agreement represents the entire
------------------
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.12 Survival; Termination. The representations, warranties,
-----------------------
and covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
Section 7.13 Counterparts. This Agreement may be executed in multiple
-------------
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.14 Amendment or Waiver. Every right and remedy provided
----------------------
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.15 Best Efforts. Subject to the terms and conditions herein
-------------
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
Section 7.16 Faxed Copies. In this Agreement, a faxed signature constitutes
------------
an original signature.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
AMERICAN INTERNATIONAL ASSETS, INC.
BY: /s/ Xxxxxxxx Xxx
Chief Executive Officer
ATTEST: AMERICAN INSTITUTE OF TECHNOLOGY, INC.
----------------------------------- BY: /s/ Xx. Xxxxxxx Xxxxx
Secretary or Assistant Secretary President
The undersigned AIT Shareholders hereby agree to participate in the Exchange on
the terms set forth above. Subject to Section 7.12 above, each of the
undersigned hereby represents and affirms that he has read each of the
representations and warranties of AIT set out hereof and that, to the best of
his knowledge, all of such representations and warranties are true and correct.
PLEASE RETURN ORIGINAL STOCK CERTIFICATE ALONG WITH THIS EXCHANGE AGREEMENT.
/s/ Xxxxxxxx Xxx , individually No. of Shares 150
-------------------- --------------
Xxxxxxxx Xxx , Printed Name
--------------------------------
