Exhibit 10.1
EXCHANGE AGREEMENT
This Exchange Agreement (this "Agreement") is entered into as of May 2, 2006 by
and between Electroglas, Inc. (the "Company"), and ____________________ (the
"Exchanging Holder") on the basis of the following:
A. The Company has outstanding 5.25% Convertible Subordinated Notes Due
2007 (the "Convertible Securities").
B. The Convertible Securities are currently convertible by the holders
thereof into the Company's common stock, par value $0.01 per share ("the
Common Stock"), at a stated conversion rate of 97.6029 shares of Common
Stock per $1,000 principal amount of Convertible Securities.
C. The Exchanging Holder is the Holder of at least $___________ Convertible
Securities.
D. Exchanging Holder has indicated to the Company its desire to exchange
the Convertible Securities for Common Stock of the Company and cash and,
after negotiation between the parties hereto, such parties have agreed
to effect such exchange on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE ONE: AGREEMENT TO EXCHANGE SECURITIES.
1.1 Exchange of Securities. On the terms and subject to the conditions set
forth herein, the Exchanging Holder shall sell, assign, deliver and
transfer to the Company all of its right, title and interest in and to
the $_________ Convertible Securities in exchange for ___________ shares
of Common Stock and $__________
1.2 Closing. The Completion of the transactions contemplated by this
Agreement ("the "Closing") shall take place as soon as practical and, in
any event, prior to 5:00 p.m., EST, on May 5, 2006 (the "Closing Date")
as follows:
(a) The Exchanging Holder shall deliver or cause to be delivered to
the Company or the Company's agent the Convertible Securities to
be exchanged hereunder in such a manner as shall be acceptable
to the Company and effective to convey all right, title and
interest of the Exchanging Holder in the Convertible Securities
to the Company against delivery by the Company of (A) the number
of shares of Common Stock provided for herein, through the
Depositary Trust Company or such other means as shall be
acceptable to the Exchanging Holder registered in such names as
the Exchanging Holder shall specify to the Company prior to the
Closing and (B) $___________ by wire transfer to an account
specified by the Exchanging Holder for that purpose.
(b) The consideration to be paid pursuant to the Agreement for each
of the Convertible Securities offered to herein has been
negotiated between the Company and the Exchanging Holder. The
Company will pay to the Exchanging Holder on the Closing Date
all accrued and unpaid interest on the Convertible Notes to, but
not including, the Closing Date. The Exchanging Holder will not
be entitled to any other payment or amount with respect to the
Convertible Securities being exchanged herein.
ARTICLE TWO: REPRESENTATIONS AND WARRANTIES
2.1 Mutual Representations and Warranties. Each party hereto (and, with
respect to Section 2.1(b)(ii) below only, each person signing this
Agreement) hereby makes the following representations and warranties to
the other party hereto:
(a) It is duly organized and validly existing, in good standing
under the laws of its jurisdiction of incorporation or
organization.
(b) (i) It has full power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby, and (ii)
the person who has executed this Agreement on its behalf is duly
authorized to do so and thereby bind the party on whose behalf
he or she is purporting to act.
(c) This Agreement is its valid and binding agreement, enforceable
against it in accordance with its terms.
(d) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will
violate, result in a breach of any of the terms or provisions
of, constitute a default (or any event that, with the giving of
notice or the passage of time or both would constitute a
default) under, accelerate any obligations under, or conflict
with, (i) its charter, articles or certificate of incorporation,
partnership agreement or bylaws (or other organizational
documents), if applicable, or any agreement, indenture or other
instrument to which it is a party or by which it or its
properties are bound, (ii) any judgement, decree, order or award
or any court, governmental body or arbitrator to which it is
subject or (iii) any law, rule or regulation applicable to it.
2.2 Representations and Warranties of the Company. The Company hereby
represents and warrants to the Exchanging Holder that (a) upon issuance,
the Common Stock to be issued by it hereunder will be duly and validly
authorized and issued, fully paid and nonassessable, and the Exchanging
Holder will acquire such Common Stock free and clear of any liens,
encumbrances, pledges, security interest or other restrictions or claims
of third parties, other than any of the foregoing created by the
Exchanging Holder; and (b) the Common Stock to be issued by the Company
to the Exchanging Holder pursuant to this Exchange Agreement is not
required to be registered under the Securities Act of 1933 in order to
make the Common Stock in the hands of the Exchanging Holder freely
saleable into the public market, provided that (x) the Exchanging holder
is not an "affiliate" of the Company as that term is defined under the
Securities Act of 1933 (the "Act") and the Convertible Securities held
by the Exchanging Holder were acquired in a transaction that was (A)
registered under the Act pursuant to Registration Statement No.
333-96817, as amended, and were sold by a selling security holder listed
therein pursuant to such registration statement, or (y) the Exchanging
Holder is not an "affiliate" of the Company and has not been an
"affiliate" during the preceding three months and a period of at least
two years has elapsed since the date the Convertible Securities were
acquired from the Company or from an "affiliate" of the Company.
2.3 Representations and Warranties of the Exchanging Holder. The Exchanging
Holder hereby represents and warrants to the Company that the Exchanging
Holder: (a) is the sole legal and beneficial owner of the Convertible
Securities, and, upon the Closing, the Company will acquire the
Convertible Securities free and clear of any liens, encumbrances,
pledges, security interests or other restrictions or claims of third
parties, other than any of the foregoing created by the Company; (b) is
an "accredited investor" (as defined in Regulation D under the Act) and
is acquiring the Common Stock for its own account and not with a view to
any distribution thereof except in compliance with the Act; and (c) has
(i) made all investigations that it deems necessary or desirable in
connection with the transactions contemplated by this Agreement and has
received and has had full opportunity to review the Company's Annual
Report on Form 10-K with respect to its fiscal year ended December 31,
2004; its Quarterly Transition Report on Form 10-QT with respect to its
transitional quarter ended May 31, 2005; its Quarterly Reports on Form
10-Q with respect to its fiscal quarters ended September 3, 2005,
December 3, 2005 and March 4, 2006; its Form 8-K filed on April 14,
2006; and its Proxy Statement filed on January 4, 2006, (ii) had an
opportunity to ask questions of and receive answers from the Company and
its management regarding such reports and filings, (iii) such knowledge
and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the Common Stock.
2.4 Survival of Representations and Warranties. All representations,
warranties and agreements of each party hereto shall survive the
Closing.
ARTICLE THREE: MISCELLANEOUS
3.1 Further Assurances. Each party hereto shall promptly execute and deliver
such further agreements and instruments, and take such further actions,
as the other party may reasonably request in order to carry out the
purpose and intent of this Agreement.
3.2 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally or by facsimile transmission (with subsequent letter
confirmation by mail) or two days after being mailed by certified or
registered mail, postage prepaid, return receipt requested, to the
parties, their successors in interest or their assignees at the
following addresses, or at such other addresses as the parties may
designate by written notice in the manner aforesaid:
If to the Exchanging Holder:
_________________
_________________
_________________
_________________
If to the Company:
Electroglas, Inc.
0000 Xxxxxxxxx Xxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Vice President and CFO
Facsimile: (000) 000-0000
3.3 Assignability and Parties in Interest. This Agreement shall not be
assignable by any of the parties hereto without the consent of the other
party hereto. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and
assigns.
3.4 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal substantive law, and not the
law pertaining to conflicts or choice of law, of the State of New York.
3.5 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
3.6 Complete Agreement. This Agreement is an integrated agreement containing
the entire agreement between the parties hereto with respect to the
subject matter hereof and shall supersede all previous, and all
contemporaneous oral or written negotiations, commitments or
understandings.
3.7 Modifications, Amendments and Waivers. This agreement may be modified,
amended or otherwise supplemented only by a writing signed by the party
against whom it is sought to be enforced. No waiver of any right or
power hereunder shall be deemed effective unless and until a writing
waiving such right or power is executed by the party waiving such right
or power.
3.8 No Third Party Beneficiaries. There are no third party beneficiaries
under this Agreement or intended by any party hereto.
3.9 Expenses. Each party hereto shall bear its own costs and expenses,
including, without limitation, attorneys' fees, incurred in connection
with this Agreement and the transactions contemplated hereby.
ELECTROGLAS, INC.
By: ______________________________________
Name: ________________________________
Title: _______________________________
____________________
By: ______________________________________
Name: ________________________________
Title: _______________________________
