EXCHANGE AGREEMENT
This
Agreement (this "Agreement")
is
entered into as of December 4, 2006 by and among Xxxxxx International Inc.,
a
Washington
corporation (the "Company"),
and
CC
Arbitrage Ltd. (the "Holder"),
as
the
holder of $7,512,000 of the Company's Convertible Senior Subordinated Notes
issued on or about
October
10, 2003
(the
"Notes").
Capitalized
terms used herein and not otherwise defined
shall have the meanings given to them in the Notes.
RECITALS
A. The
Notes, among other things, accrue interest at a rate of 8.5% per annum, payable
semi-annually, and are not redeemable by the Company until October 15,
2008;
B. The
Company has determined that it is in the best interests of the Company and
its
stockholders to exchange 1,084,564 shares of common stock of the Company
("Common
Stock")
at
a
price per share (the "Share
Price")
of
$11.73, (being the closing price of the Common Stock on the Nasdaq Global Market
on the last trading day prior to the date hereof) for the Notes of the Holder
and to cancel such Notes in accordance with the terms hereof.
C. The
Holder has indicated a willingness to exchange the Notes on the terms and
conditions described herein.
AGREEMENT
NOW,
THEREFORE, in exchange for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,
the Company and the Holder hereby agree as follows:
1. Exchange
of the Notes.
Subject
to the satisfaction of the conditions set forth in Section 7 below,
on
the Closing
Date (as defined below), the Holder shall deliver to Xxxxx Fargo Bank, N. A.,
as
trustee, at Sixth and Marquette, X0000-000 Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxxxx Xxxxx, Corporate Trust Services, the certificate(s)
representing the Notes duly endorsed for transfer and assignment (the
"Transfer")
to the
Company or its order (in a form satisfactory to the Company) for exchange into
the Common Stock in accordance with the terms hereof.
2. Issuance
of Common Stock.
The
Company shall cause its transfer agent to credit the Holder's DTC account as
follows:
573
,
or such
other DTC account as the Holder may in writing direct, with an amount
representing the Common Stock at the Share Price against delivery to the Company
of the certificate(s) for the Notes set forth in Section 1 above.
3. Closing.
The
consummation of the transactions contemplated by this Agreement (the
"Closing")
shall
occur at 3:00 p.m. (Pacific Time), or such other time as the parties agree
upon,
on December 5,
2006
or, if the conditions to Closing set forth in Sections 6 and
7
(other than conditions that by their terms can only
be
satisfied on the Closing Date) have not been satisfied or waived by such date,
then on the second business day after the
last
of the conditions to Closing set forth in Sections
6
and 7
(other than conditions that by their terms can only be satisfied on the Closing
Date) have been satisfied or waived by the party entitled to waive the same
or
on any such other date as to which the parties mutually agree in writing (the
"Closing
Date").
4. Representations
and Warranties of the Company.
(a) Authorization;
Issuance; Enforcement. (i)
The
Company has all requisite corporate power and authority to enter into
and
perform this Agreement and to consummate the transactions contemplated hereby
and to issue the Common Stock in accordance with the terms hereof, (ii) the
execution and delivery of this Agreement by the Company and the consummation
by
it of the transactions contemplated hereby (including without limitation, the
issuance of the Common
Stock) have been duly authorized by all necessary corporate action on the part
of the Company, and
(iii)
this Agreement constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforcement may be
limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or
limiting creditors' rights generally.
(b) Valid
Issuance. The
Common Stock to be issued hereunder shall be, upon issuance, validly issued,
fully paid and
non-assessable.
(c) Issuance
of Common Stock.
The
issuance of Common Stock hereunder shall be made in compliance with the
provisions and requirements of Section 3(a)(9) of the Securities
Act of 1933, as amended.
(d) No
Conflict.
The
terms of this Agreement, and the consummation of the transactions contemplated
hereby, do not violate, contravene, conflict with or constitute a default or
create a lien, charge or encumbrance under any organizational documents of
the
Company, any agreements to which the Company is a party or to which its assets
are bound, or any order or decree of any court or regulatory body which would
have a material adverse effect on the Company and its subsidiaries taken as
a
whole.
5. Representations
and Warranties of the Holder.
(a) Title
to Notes.
The
Holder has good and marketable title to all of the outstanding Notes and to
all
of the rights afforded thereunder, free and clear of any and all liens or
adverse claims whatsoever. As of the Closing Date, the Holder shall not have
assigned, conveyed or transferred any interest in the Notes to any third
party.
(b) Information.
The
Holder has been furnished with and has reviewed a copy of the Company's Annual
Report on Form 10-K for the year ended December 31, 2005 (the "2005
10-K"),
all
Quarterly Reports of the Company filed by the Company on Form 10-Q subsequent
to
the 2005 10-K and all Current Reports on Form 8-K and all other filings by
the
Company subsequent to the 2005 10-K. The Holder has also been furnished with
and
has reviewed all other materials relating
to the business, finances and operations of the Company that have been requested
by the Holder or its advisors.
(c) Governmental
Review.
The
Holder understands that no United States federal or state agency or any other
government
or governmental agency has passed upon or made any recommendation or endorsement
of the Common Stock.
(d) Authorization;
Enforcement.
This
Agreement has been duly
and
validly authorized by all necessary corporate action on the part of the Holder.
This Agreement and the Transfer have been
duly
executed and delivered on behalf of the Holder, and this Agreement and the
Transfer constitute legal, valid and binding agreements of the Holder
enforceable in accordance with its terms, except as enforcement may be
limited
by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting
creditors' rights generally.
(e) Residence.
The
Holder is a resident of the United States of America and Holder expressly
advises that it is not a resident of, nor otherwise deemed to be in,
Canada.
6. Conditions
to the Company's Obligations.
The
obligation of the Company hereunder to issue the Common Stock to
the
Holder at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions thereto,
provided that these conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion:
(a) Delivery
of Certificates Representing Notes.
The
Holder shall have duly transferred and assigned the Notes and delivered the
certificate(s) representing the Notes to the Company or its order.
(b) Representations
and Warranties.
The
representations and warranties of the Holder shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time.
(c) No
Prohibition.
No
litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or
in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.
(d) Necessary
Filings.
The
Company shall have made all filings under all applicable federal or state
securities laws necessary to consummate the issuance of the Common Stock
pursuant to this Agreement in compliance with such laws and shall have obtained
all authorizations, approvals and permits necessary to consummate the
transactions contemplated hereby and such authorizations, approvals and permits
shall be effective as of the Closing Date.
7. Conditions
to the Holder's Obligations. The
obligation of the Holder hereunder to deliver the certificate(s) representing
the Notes at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Holder's sole benefit and may be waived by Holder at
any
time in its
sole
discretion:
(a) Representations
and Warranties.
The
representations and warranties of the Company shall be true and correct in
all
material respects as of the date when made and as of the Closing Date as though
made at that time.
(b) No
Prohibition.
No
litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or
in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.
8. Miscellaneous.
(a) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of
Washington applicable to agreements made and to be performed in the State of
Washington (without regard to principles of
conflict of laws). Both parties irrevocably consent to the non-exclusive
jurisdiction of the United States federal courts and the state courts located
in
the City of Seattle, with respect to any suit or proceeding based on or arising
under this Agreement, the agreements entered into in connection herewith or
the
transactions contemplated hereby or thereby and irrevocably agree that all
claims in respect of such suit or proceeding may be determined in such courts.
Both parties irrevocably waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding. Both parties further agree that service
of process upon a party mailed by first class mail shall be deemed in every
respect effective service of process upon the party in any such suit or
proceeding. Nothing herein shall affect either party's right to serve process
in
any other manner permitted by law. Both parties agree that a final
non-appealable judgment in any such suit or proceeding shall be conclusive
and
may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.
(b) Counterparts, Signatures by Facsimile.
This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
This Agreement, once executed by a party, may be delivered to the other
party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
(c) Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(d) Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
(e) Entire
Agreement; Amendments.
This
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor
the
Holder makes any representation, warranty, covenant or undertaking with respect
to such matters. No provision of this Agreement may be waived or amended other
than by an instrument in writing
signed by the parties.
(f) Notices.
Any
notices required or permitted to be given under the terms of this Agreement
shall be sent by certified or registered mail (return receipt requested) or
delivered personally or by courier (including a recognized overnight delivery
service) or by facsimile and shall be effective five days after being placed
in
the mail, if mailed by regular United States mail, or upon receipt, if delivered
personally or by courier (including a recognized overnight delivery service)
or
by facsimile, in each case addressed to a party. The addresses for such
communications shall be:
If
to the
Company:
Xxxxxx
International Inc.
00000
Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
XX 00000 U.S.A.
Attention:
Chief Financial Officer
Facsimile:
(000)
000-0000
If
to the
Holder:
CC
Arbitrage Ltd.
000
Xxxx
Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxx
Facsimile:
(000) 000-0000
Each
party shall provide notice to the other party of any change in
address.
(g) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors
and assigns. Neither the Company nor the Holder shall assign this Agreement
or
any rights or obligations hereunder
without the prior written consent of the other.
(h) Third
Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
(i) Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
(j) No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
IN
WITNESS
WHEREOF,
the
undersigned the Holder and the Company have caused this Agreement to be duly
executed as of the date first above written.
XXXXXX
INTERNATIONAL INC.
By:
/s/
Xxxxx X. Xxxxxxxx
Name:
Xxxxx
X.
Xxxxxxxx
Title:
Chief Financial Officer
CC
ARBITRAGE LTD.
By:
/s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
Managing Director
