EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is made as of ____________, 1995 by and between
IMRE CORPORATION, a Delaware corporation (hereinafter referred to as the
"Company") and the individual or entity whose name and signature appear on
the signature page below (hereinafter referred to as "Exchanger").
WHEREAS, Exchanger is the owner and holder of the Company's 7%
Convertible Debentures due March 31, 2001 in the principal amount shown
beneath Exchanger's signature and address on the signature page below (the
"Convertible Debentures"); and
WHEREAS, the Company and the Exchanger desire to exchange shares of the
Company's common stock, par value $0.02 per share (the "Common Stock") for
the Convertible Debentures (such exchange being hereinafter referred to as
the "Debt Exchange"), subject to the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and conditions hereinafter set forth, the parties
hereto hereby agree as follows:
SECTION 1. EXCHANGE OF SECURITIES.
1.1 EXCHANGE OF SECURITIES. In reliance upon the representations and
warranties made herein and subject to the terms and conditions hereof: (a)
Exchanger hereby assigns and tenders the Convertible Debentures to the
Company in exchange for Common Stock of the Company, and the Company agrees
to issue Common Stock in exchange for the Convertible Debentures at the
Closing (as herein defined); and (b) if Exchanger elects by signature in the
space below, Exchanger hereby assigns and tenders to the Company Exchanger's
right to receive all interest accrued or to accrue on the Convertible
Debentures up to but not including the Closing Date (the "Accrued Interest"),
and the Company agrees to issue Common Stock in exchange for the Accrued
Interest at the Closing. If Exchanger does not elect by signature in the
space below to the exchange of Accrued Interest for Common Stock, the Company
will pay the Accrued Interest to Exchanger when due under and in accordance
with the terms of the Convertible Debentures.
_____________________________________
Signature of Exchanger electing to
exchange Accrued Interest for Common Stock
By__________________________________
Title:
1.2 EXCHANGE RATIO. The Company agrees that at the Closing it will
issue to Exchanger one (1) share of Common Stock for each $2.25 of (a)
principal amount of the Convertible Debentures and (b) Accrued Interest, if
applicable. The Company will have the right to pay cash to Exchanger in lieu
of issuing fractional shares. The aggregate of such shares to be issued to
Exchanger is referred to hereinafter as the "Shares."
1.3 EXPIRATION DATE. Exchanger acknowledges and understands that this
Agreement shall be effective only if signed by the Exchanger and returned to
the Company prior to 12:00 midnight ,
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Seattle time, on September 15, 1995 (the "Expiration Date"), subject to
extension of the Expiration Date by the Company.
1.4 WITHDRAWAL RIGHTS. Notwithstanding Section 1.1 above, Exchanger
may withdraw Exchanger's assignment and tender of Convertible Debentures and
Accrued Interest, if applicable, hereunder and terminate this Agreement at
any time prior to 12:00 midnight, Seattle time, on the Expiration Date by
notice to the Company. Such notice must be given in accordance with Section
10.4 below, must specify Exchanger's name, the aggregate principal amount of
Convertible Debentures to be withdrawn and the name of the registered holder
if different from that of the person who originally tendered and must bear
the signature of Exchanger or be accompanied by evidence satisfactory to the
Company that the person withdrawing the tender is or has become the holder of
such Convertible Debentures. Any purported notice of withdrawal which lacks
any of the required information or is dispatched to any other address will
not be effective to withdraw any previously tendered Convertible Debentures.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Company in its sole
discretion, which determination will be final and binding.
1.5 TIME AND PLACE OF CLOSING. The closing of the Debt Exchange will
occur at the office of the Company, 000 Xxxxx Xxxx Xxxxxx X., Xxxxxxx,
Xxxxxxxxxx on the first business day after the Expiration Date, as it may be
extended (such closing hereinafter referred to as the "Closing" and such
closing date herein called the "Closing Date").
1.6 CLOSING DELIVERIES. At the Closing, Exchanger shall deliver or
cause to be delivered to the Company free and clear of all restrictions upon
transfer, liens, pledges, charges, and encumbrances of any kind, nature or
restriction the certificates representing the Convertible Debentures duly
registered in the name of Exchanger for cancellation. Concurrently therewith,
the Company shall deliver or cause to be delivered to Exchanger free and
clear of all restrictions upon transfer, liens, pledges, charges, and
encumbrances of any kind, nature or restriction (except as otherwise set
forth herein) certificates representing the Shares duly registered in the
name of Exchanger.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
2.1 MAKING OF REPRESENTATIONS AND WARRANTIES. The Company hereby makes
the following representations and warranties contained in this Section 2.
2.2 ORGANIZATION AND QUALIFICATION OF THE COMPANY. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware with full power and authority to own or
lease its properties and to conduct the business heretofore conducted by it
in the manner and in the places where such properties are owned or leased or
such business is conducted by it. The Company is duly registered or
qualified to do business as a foreign corporation in the State of Washington
and neither the character or location of the properties owned or leased by
the Company nor the nature of the business transacted by the Company makes
registration or qualification in any other jurisdiction necessary, except
where failure to so qualify would not have a material adverse effect on the
Company.
2.3 AUTHORITY OF THE COMPANY; NO CONFLICTS.
(a) The Company has full power and authority to enter into and perform
this Agreement, issue the Shares and consummate the transactions contemplated
hereby. When issued in accordance with this Agreement, the Shares will be
validly issued, fully paid and nonassessable. All necessary action,
corporate or otherwise, has been taken by the Company to authorize the
execution,
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delivery, and performance of this Agreement, and the same is the valid and
binding obligation of the Company enforceable in accordance with its terms.
(b) The execution and delivery of this Agreement by the Company do not,
and the issuance of the Shares and the performance of the terms hereof by the
Company will not, constitute a default or event of default under, or violate,
conflict with, or result in any breach of the terms, conditions, or
provisions of: (i) the corporate charter or By-laws of the Company; (ii) the
laws or regulations of any jurisdiction or any other governmental
requirements; or (iii) any material mortgage, lien, lease, agreement,
contract, instrument, order, arbitration award, injunction, judgment or
decision to which the Company is a party or by which it its property is bound
or materially affected. No approval, authorization, license, permit or other
action by, or filing with, any federal, state, or municipal commission,
board, agency or other governmental authority is required in connection with
the execution and delivery by the Company of this Agreement, the issuance of
the Shares or the consummation of the transaction contemplated hereby.
2.4 CAPITAL STOCK OF THE COMPANY. The authorized capital stock of the
Company is as set forth in the Company's Annual Report on Form 10-K for its
fiscal year ended December 31, 1994.
2.5 DISCLOSURE DOCUMENTS.
(a) The Company has previously furnished to Exchanger a Tender Offer and
Exchange Circular (the "Exchange Circular") and copies of its Annual Report
on Form 10-K (without exhibits) for the year ended December 31, 1994 and its
Quarterly Report on Form 10-Q for the quarterly periods ended March 31 and
June 30, 1995 filed with the Commission under the Securities and Exchange Act
of 1934 ("1934 Act")(collectively the "Disclosure Documents"). None of the
information contained in the Exchange Circular or in the Disclosure Documents
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading, which
misstatement or omission was not corrected in a subsequent Disclosure
Document or in the Exchange Circular.
(b) Each of the balance sheets included in the Disclosure Documents
(including any related notes and schedules) fairly presents the consolidated
financial position of the Company as of its date, and the other financial
statements included in the Disclosure Documents (including related notes and
schedules), fairly present the consolidated results of operation or other
information included therein of the Company for the periods or as of the
dates therein set forth in accordance with generally accepted accounting
principles consistently applied during the periods involved (except that the
interim reports are subject to normal recurring adjustments which might be
required as result of year-end audit, and except as otherwise stated therein).
2.6 CHANGES. Except as set forth in the Disclosure Documents, since
December 31, 1994:
(a) except for continuing operating losses through the date hereof,
there has been no material adverse change in the business, property,
financial condition or results of operations of the Company taken as a whole;
(b) there has not been any direct or indirect redemption, purchase or
other acquisition of any shares of the Company's capital stock by the
Company, or any declaration, setting aside or payment of any dividend or
other distribution by the Company in respect of its capital stock;
(c) except for the transaction contemplated hereby, the Company has not
incurred any material obligation or liability other than in the ordinary
course of its business, has not incurred any
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contingent liability (as guarantor or otherwise) with respect to the
obligations of others, has not transferred or otherwise disposed of any
material assets other than in the ordinary course of business, and has in all
other respects conducted its business in the ordinary course;
(d) there has been no damage, destruction or casualty loss (whether or
not covered by insurance) materially and adversely affecting the business,
property, financial condition or results of operations of the Company taken
as a whole; and
(e) except for the granting of options to purchase shares of Common
Stock, the Company has not incurred any obligation or liability to any
stockholder, director, or officer of the Company other than in the ordinary
course of the Company's business and the Company has not made any loans or
advances to any of its stockholders, directors, or officers, except for
normal advances or reimbursable expenses.
2.7 MISSTATEMENTS AND OMISSIONS. The Company has not made any material
misstatements of fact or omitted to state any material fact necessary or
desirable to make complete, accurate and not misleading every representation,
warranty and agreement set forth herein.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF EXCHANGER.
3.1 MAKING OF REPRESENTATIONS AND WARRANTIES. Exchanger hereby makes
the representations and warranties contained in this Section 3.
3.2 ACCREDITED INVESTOR. Exchanger is an "accredited investor" within
the definition set forth in Rule 501(a) under the 0000 Xxx.
3.3 SHARES NOT REGISTERED. Exchanger understands (i) that the Shares
have not been registered for sale under federal or state securities laws and
that the Shares are being offered and issued to Exchanger pursuant to one or
more exemptions from the registration requirements of such securities laws;
(ii) that in order to satisfy such requirements Exchanger must be acquiring
the Shares for its own account for investment and not with a view to
distribution thereof except in accordance with applicable securities laws and
that the representations and warranties contained in this Section 3 are given
with the intention that the Company may rely thereon for purposes of claiming
such exemption; and (iii) that the Shares cannot be sold unless subsequently
registered under such laws or unless an exemption from such registration is
available.
3.4 SHARES ACQUIRED FOR INVESTMENT; LIMITATION ON DISPOSITION.
Exchanger agrees that the Shares will not be sold or otherwise transferred
unless (i) a registration statement with respect thereto has become effective
under the 1933 Act; or (ii) there is presented to the Company an opinion of
counsel reasonably satisfactory to the Company that registration under
federal and state securities is not required; or (iii) pursuant to the
provisions of Rule 144 promulgated under the 1933 Act (and, in the case of
(i) and (iii), there is presented to the Company an opinion of counsel
reasonably satisfactory to the Company that the sale or transfer will not
subject the Company to any liability under applicable state securities laws).
Exchanger consents that any transfer agent of the Company may be instructed
not to transfer any Shares, unless it receives satisfactory evidence of
compliance with the foregoing provisions, and that there may be endorsed upon
any certificate or other instrument representing the
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Shares (and any certificates or instruments issued in substitution therefor),
a legend calling attention to the foregoing restrictions on transferability
of such shares stating in substance:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER UNITED STATES FEDERALOR STATE
SECURITIES LAW AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED FOR
VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE
SECURITIES BE TRANSFERRED ON THE BOOKS OF THE
CORPORATION, WITHOUT REGISTRATION OF SUCH
SECURITIES UNDER ALL APPLICABLE UNITED STATES
FEDERAL OR STATE SECURITIES LAW OR COMPLIANCE
WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH
COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO
BE EVIDENCED BY AN OPINION OF SHAREHOLDER'S
COUNSEL, IN FORM ACCEPTABLE TO THE CORPORATION,
THAT NO VIOLATION OF SUCH REGISTRATION PROVISIONS
WOULD RESULT FROM SUCH PROPOSED TRANSFER OR
ASSIGNMENT."
3.5 ACCESS TO INFORMATION. Exchanger acknowledges receipt from the
Company of the information referred to in Section 2.5 hereof and access to
information if requested.
SECTION 4. COVENANTS OF THE COMPANY.
4.1 MAKING OF COVENANTS AND AGREEMENTS. The Company makes the
covenants and agreements set forth in this Section 4.
4.2 CONSUMMATION OF AGREEMENT. The Company shall perform and fulfill
all conditions and obligations on its part to be performed and fulfilled
under this Agreement, to the end that the transactions contemplated by this
Agreement shall be carried out. To this end, the Company will obtain all
necessary authorizations or approvals of its Board of Directors or a duly
authorized Board Committee to the execution and performance of this
Agreement, which shall include as integral parts thereof the issuance to
Exchanger of the Shares upon the terms and conditions set forth in this
Agreement.
4.3 CURRENT PUBLIC INFORMATION. The Company will file all reports
required to be filed by it under the 1933 Act or the 1934 Act and the rules
and regulations adopted by the Commission thereunder, and will take such
further action as any Exchanger may reasonably request all to the extent
required to enable each such Exchanger to sell the Shares pursuant to (i)
Rule 144 adopted by the Commission under the 1933 Act, as such rule may be
amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the Commission.
SECTION 5. COVENANTS OF EXCHANGER.
5.1 MAKING OF COVENANTS AND AGREEMENTS. Exchanger makes the covenants
and agreements set forth in this Section.
5.2 CONSUMMATION OF AGREEMENT. Exchanger shall perform and fulfill all
conditions and obligations on its part to be performed and fulfilled under
this Agreement, to the end that the transactions contemplated by this
Agreement shall be carried out.
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5.3 CURRENT PUBLIC INFORMATION. Exchanger shall file all reports
required to be filed by it under the 1934 Act and the rules and regulations
adopted by the Commissioner thereunder, including without limitation, as
applicable, Schedules 13G, 13D, Form 3, Form 4, and Form 5.
5.4 FURNISHING OF INFORMATION. Exchanger shall furnish to the Company
all information, questionnaires and statements reasonably requested by the
Company in connection with the Company's preparation of reports, proxy
materials and other filings under the 1933 Act and the 1934 Act. Exchanger
shall further furnish to the Company all written information and statements
reasonably requested in order for the Company to more fully comply with its
commitment under Section 7 hereof.
SECTION 6. CONDITIONS PRECEDENT TO EXCHANGER'S OBLIGATIONS.
6.1 CONDITIONS. The obligations of Exchanger to consummate this
Agreement and the transactions contemplated hereby are subject to the
satisfaction of the following conditions on or prior to the Closing Date
except to the extent that any such condition can be and is waived by
Exchanger:
(a) BOARD OF DIRECTOR AUTHORIZATION. This Agreement and the
transactions contemplated hereby shall have been duly approved by a majority
vote of the Company's Board of Directors or a duly authorized Board Committee.
(b) REPRESENTATIONS; WARRANTIES; COVENANTS. Each of the representations
and warranties of the Company contained in Section 2 hereof shall be true and
correct in all material respects as though made at the time of and as of the
Closing; and the Company shall, at or before the Closing, have performed all
of its obligations hereunder which by the terms hereof are to be performed on
or before the Closing.
SECTION 7. INDEMNIFICATION.
7.1 INDEMNIFICATION OF EXCHANGER. The Company agrees to indemnify and
hold harmless, to the extent permitted by law, Exchanger against any and all
losses, claims, damages, liabilities and expenses caused by any breach of the
representations, warranties, covenants and agreements of the Company
contained in this Agreement.
7.2 INDEMNIFICATION OF THE COMPANY. Exchanger agrees to indemnify and
hold harmless, to the extent permitted by law, the Company, its directors and
officers and each person who controls the Company (within the meaning of the
0000 Xxx) against any and all losses, claims, damages, liabilities and
expenses caused by any breach of the representations, warranties, covenants
and agreements of Exchanger contained in this Agreement.
7.3 DEFENSE OF ACTION. Any person entitled to indemnification
hereunder will (i) give prompt notice to the indemnifying party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit the indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to
the indemnified party. If such defense is not assumed, the indemnifying
party will not be subject to any liability for any settlement made without
its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim.
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SECTION 8. TERMINATION OF AGREEMENT.
8.1 TERMINATION. At any time prior to the Closing Date this Agreement
may be terminated (i) by mutual consent of the parties; (ii) by the Company,
upon written notice to Exchanger, if there has been a material
misrepresentation, breach of warranty or breach of covenant by the Exchanger
in its representations and warranties or covenants; (iii) by Exchanger, upon
written notice to the Company in accordance with Section 1.4 above.
8.2 EFFECT OF TERMINATION. If this Agreement is terminated as above
provided, all obligations of the parties to be performed on or subsequent to
the effective date of termination as above provided shall terminate without
further liability of either party to the other. In the event that this
Agreement is terminated, each party will return all papers, documents,
financial statements and other data furnished to it by or with respect to
each other party to such party (including any copies thereof made by the
first party).
SECTION 9. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
9.1 SURVIVAL OF WARRANTIES. All representations, warranties,
agreements, covenants and obligations herein or in any schedule, exhibit,
certificate or financial statement delivered by the Company to Exchanger
incident to the transactions contemplated hereby shall be deemed to have been
relied upon by the other party hereto, and with respect to representations
and warranties, shall survive for a period of one (1) year following the
Closing. All agreements, covenants and obligations shall survive the Closing
regardless of any investigation made by or on behalf of either party hereto
and shall not merge in the performance of any obligation by either party
hereto.
SECTION 10. MISCELLANEOUS.
10.1 LAW GOVERNING. This Agreement shall be construed under and
governed by the laws of the State of Washington.
10.2 SOLICITATION FEES.
(a) The Company (i) represents and warrants that it has not paid or
given any commission or other remuneration directly or indirectly for
soliciting the Debt Exchange and (ii) hereby agrees to indemnify and hold
harmless the Exchanger of and from any liability arising from any payment or
other remuneration given directly or indirectly for soliciting the Debt
Exchange (and the costs and expenses of defending against such liability or
asserted liability) for which the Company, or any of its employees or
representatives, are responsible.
(b) Exchanger (i) represents and warrants that Exchanger retained no
finder or broker in connection with the transactions contemplated by this
Agreement (ii) represents and warrants that Exchanger has not paid or given
any commission or other remuneration directly or indirectly for soliciting
the Debt Exchange and (iii) hereby agrees to indemnify and to hold harmless
the Company and all other Exchangers of and from any liability arising from
any payment or other remuneration given directly or indirectly for soliciting
the Debt Exchange (and the costs and expenses of defending against such
liability or asserted liability) for which Exchanger, or any of Exchanger's
employees or representatives, are responsible.
10.3 TRANSFER TAXES. Subject to the following, the Company will pay all
transfer taxes, if any, applicable to the Debt Exchange. The Company will
not pay any transfer taxes, whether imposed on the registered holder or any
other persons, and such transfer taxes will be the sole responsibility of
Exchanger if (a) the Shares and/or substitute Convertible Debentures, for
amounts not tendered or
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exchanged, are to be delivered to, or are to be registered or issued in the
name of any person other than the registered holder of the Convertible
Debentures exchanged hereby, (b) the certificates representing the
Convertible Debentures tendered for exchange are registered in the name of
any person or entity other than the person or entity signing this Agreement,
or (c) a transfer tax is imposed for any reason other than transfer, exchange
or sale of the Convertible Debentures pursuant to the Debt Exchange.
10.4 NOTICES. All notices, requests, demands or other communications
hereunder shall be deemed to have been duly given if delivered, if sent by
facsimile or if mailed by certified or registered mail to Exchanger at the
address indicated on the signature page below and to the Company as follows:
Xx. Xxxx X. xx Xxxx
Chief Financial Officer
IMRE CORPORATION
000 Xxxxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
With copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxx & Xxxxx
0 Xxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
or to such other address of which either party may notify the other party.
10.5 ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties hereto with reference to the subject matter hereof, and all
inducements to the making of this Agreement relied upon by either party
hereto have been expressed herein.
10.6 ASSIGNABILITY. This Agreement may not be assigned by either
Exchanger or the Company without the prior written consent of the other
party. This Agreement shall be enforceable by and shall inure to the benefit
of and be binding upon the parties hereto and their successors and no others.
10.7 FEES AND EXPENSES. Each of the parties will bear its own expenses
in connection with the negotiation and consummation of the transactions
contemplated by this Agreement.
10.8 PUBLICITY AND DISCLOSURE. Except as may be required by federal
securities laws, no press release or public disclosure, either written or
oral, of the transactions contemplated by this Agreement, shall be made by
Exchanger without the prior approval of the Company.
10.9 COUNTERPARTS. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
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10.10 AMENDMENTS AND WAIVERS. Except as otherwise provided herein, any
provision in this Agreement may be amended or waived if the Company shall
obtain the written consent of the holders of a majority in interest of the
Company's 7% Convertible Debentures exchanged pursuant to this Agreement and
other agreements identical hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date set forth above.
IMRE CORPORATION
By___________________________
Its__________________________
_____________________________
Signature of Exchanger
By___________________________
Its__________________________
_____________________________
_____________________________
_____________________________
Print Name and Address of Exchanger
$____________________________
Principal Amount of Convertible
Debentures tendered for exchange
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